<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 28, 1998
-----------------
[_] 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
--------
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN (Employer
Identification Number 33-0147725, Plan Number 002)
- --------------------------------------------------------------------------------
(Full title of plan)
CHART HOUSE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of issuer of securities held pursuant to the plan)
640 North LaSalle, Suite 295, Chicago, Illinois, 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
Date: June 23, 1999 /s/ SUSAN M. MORLOCK
____________________________________
Susan M. Morlock
Member
/s/ WILLIAM M. SULLIVAN
____________________________________
William M. Sullivan
Member
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(K) PLAN
(EMPLOYER INDENTIFICATION NUMBER 33-0147725, PLAN NUMBER 002)
FINANCIAL STATEMENTS AND SCHEDULES AS OF
DECEMBER 28, 1998 AND DECEMBER 29, 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To 401(k) Plan Committee of the Chart House Enterprises, Inc. Restaurant
Employees 401(k) Plan:
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 28, 1998 and December 29, 1997, and the related statement of
changes in net assets available for plan benefits, with fund information, for
the year ended December 28, 1998. These financial statements and the schedules
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedules 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 28, 1998
and December 29, 1997, and the changes in net assets available for plan
benefits, with fund information, for the year ended December 28, 1998, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
For Investment Purposes, Reportable Transactions and Nonexempt Transactions are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
June 23, 1999
2
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
(Employer Identification Number 33-0147725, Plan Number 002)
Statements of Net Assets Available for Plan Benefits
As of December 28, 1998 and December 29, 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Cash $ - $ 38
---------- ----------
Receivables:
Participant Contributions 9,973 -
Company Contributions 1,628 -
From Trustee - 71,125
---------- ----------
11,601 71,163
---------- ----------
Investments, at Market Value:
Stable Value Fund 330,778 -
Income Fund 128,270 -
Growth and Income Fund 832,329 -
International Fund 2,619 -
Pathway Series-Balanced Fund 417,925 -
Pathway Series-Growth Fund 361 -
Baron Asset Fund 5,735 -
Company Stock Fund 169,821 -
Company Stock Pending Fund 5,190 -
----------
Total Investment in Master Trust - 1,771,421
---------- ----------
Total Assets 1,904,629 1,842,584
Payables:
Excess Annual Additions - (57,198)
Non-Allocable Forfeitures (3,766) (2,782)
---------- ----------
Net Assets Available for Plan Benefits $ 1,900,863 $ 1,782,604
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
CHART HOUSE ENTERPRISES, INC.
RESTAURANT EMPLOYEES 401(K) PLAN
(Employer Identification Number 33-0147725, Plan Number 002)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the year ended December 28, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Funds held by SBS Trust Company Funds held by Scudder Trust Company
---------------------------------------------------------------------------
Money Stable Growth &
Market Income Balanced Equity Value Income Income
Fund Fund Fund Fund Fund Fund Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants' $ 18,476 $ 15,432 $ 34,906 $ 77,162 $ 17,307 $ 12,433 $ 69,827
Employer's 5,962 5,222 14,962 3,809 3,041 2,071 10,926
Receivable from trustee - - - - - - -
Investment income:
Net appreciation (depreciation) in fair value 8,524 2,162 55,791 155,880 8,996 2,745 (44,284)
--------------------------------------------------------------------------
Total additions 32,962 22,816 105,659 236,851 29,344 17,249 36,469
Deductions from net assets attributed to:
Benefits paid to participants & excess 24,267 28,223 55,063 81,911 39,740 10,659 102,159
annual additions
Non-allocable forfeitures - - - - - - -
--------------------------------------------------------------------------
Total deductions 24,267 28,223 55,063 81,911 39,740 10,659 102,159
Net increase (decrease) prior to interfund transfers 8,695 (5,407) 50,596 154,940 (10,396) 6,590 (65,690)
Interfund transfers (350,766) (129,925) (436,963) (871,098) 341,174 121,680 898,019
--------------------------------------------------------------------------
Net increase (decrease) (342,071) (135,332) (386,367) (716,158) 330,778 128,270 832,329
Net assets available for plan benefits:
Beginning of year $ 342,071 $ 135,332 $ 386,367 $ 716,158 $ - $ - $ -
--------------------------------------------------------------------------
End of year $ - $ - $ - $ - $330,778 $ 128,270 $832,329
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
---------------------------------------------------------------
Funds held by Scudder Trust Company
---------------------------------------------------------------
Pathway Pathway Baron Company Company
International Series- Series- Asset Stock Stock 1998
Fund Balanced Growth Fund Fund Pending Other Total
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants' $ 37 $ 31,075 $ - $ - $ 27,575 $ - $ 9,973 $ 314,203
Employer's 6 5,186 - - 3,234 - 1,628 56,047
Receivable from trustee - - - - - - (13,965) (13,965)
Investment income:
Net appreciation (depreciation)
in fair value 23 (6,536) - - 2,610 - - 185,911
-----------------------------------------------------------------------------------
Total additions 66 29,725 - - 33,419 - (2,364) 542,196
Deductions from net assets attributed to:
Benefits paid to participants & excess - 45,273 - - 24,315 11,343 - 422,953
annual additions
Non-allocable forfeitures - - - - - - 984 984
-----------------------------------------------------------------------------------
Total deductions - 45,273 - - 24,315 11,343 984 423,937
Net increase (decrease) prior to interfund 66 (15,548) - - 9,104 (11,343) (3,348) 118,259
transfers
Interfund transfers 2,553 433,473 361 5,735 (41,959) 16,533 11,183 -
-----------------------------------------------------------------------------------
Net increase (decrease) 2,619 417,925 361 5,735 (32,855) 5,190 7,835 118,259
Net assets available for plan benefits:
Beginning of year $ - $ - $ - $ - $202,676 $ - $ - $1,782,604
-----------------------------------------------------------------------------------
End of year $ 2,619 $417,925 $361 $5,735 $169,821 $ 5,190 $ 7,835 $1,900,863
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
--------------------------------------------------------------
(Employer Indentification Number 33-0147725, Plan Number 002)
-------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 28, 1998 AND DECEMBER 29, 1997
---------------------------------------
(1) PLAN DESCRIPTION
----------------
Chart House Enterprises, Inc. (the "Company") established the Chart House
Enterprises, Inc. Restaurant Employees 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), as amended. As of July 1998, the Plan is administered by, and all
Plan investments are held by, Scudder Trust Company (the "Trustee"). Prior to
July 1998, the Plan was administered by Willam Mercer, Inc. and all Plan
Investments were held by SBS Trust Company, a division of Smith Barney Shearson
Company. Participation in the Plan is available to substantially all restaurant
employees with a job title classification J01 through J99, who have completed at
least one year and 1,000 hours of service and who have reached the age of 21. In
1996 the Plan changed its year end to conform with the Company's reporting
method, a 52/53-week fiscal year ending on the last Monday closest to the
calendar year end.
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 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. At December 28, 1998 and December
29, 1997, forfeited nonvested amounts totaled $3,766 and $2,782, respectively.
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 the remaining balance distributed at the end of the quarter. If
the termination of service 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.
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.
5
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan have been prepared under the accrual method
of accounting. Certain prior year balances have been reclassified to conform to
the 1998 presentation.
Description and Valuation of Investments
- ----------------------------------------
Investment funds available for participant investment from July 1998 and
currently include
(1) a stock fund (Growth and Income Fund) which invests primarily in common
stocks and convertible securities of established companies;
(2) a stock fund (Value Fund) which invests primarily in undervalued common
stocks of medium to large U.S. companies;
(3) a stock fund (Baron Asset Fund) which invests primarily in securities of
small and medium sized companies with undervalued assets;
(4) a stock fund (International Fund) which invests primarily in foreign
stocks;
(5) a balanced fund (Pathway Series-Balanced Fund) which invests in a
diversified portfolio with emphasis on growth and current income;
(6) a balanced fund (Pathway Series-Conservative Fund) which invests in a
diversified portfolio with emphasis on high current income; secondarily,
long term growth of capital;
(7) a balanced fund (Pathway Series-Growth Fund) which invests in a diversified
portfolio with emphasis on long term capital growth;
(8) a bond fund (Income Fund) which invests in intermediate and long term, high
grade corporate bonds;
(9) a collective investment trust (Stable Value Fund) which invests in
guaranteed investment contracts, money market securities, and treasury
bills. Fair market value of the fund approximates contract value; and
(10) the Company stock fund.
Investment funds available for participant investment in 1997 and through June
1998 included
(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.
Participants can elect to allocate their contributions between any and all of
the investment funds available in increments of 1%. Changes in investment
choices and allocations can be made twice per year effective on January 1 or
July 1.
6
<PAGE>
Investments in securities are valued at their quoted market prices.
Master Trust Allocation
- -----------------------
Until July 1998, the assets of the Plan were included in a Master Trust.
Effective July 1, 1998 the Master Trust was eliminated and the Plan was part of
a single trust. Under the Master Trust, investment income and administrative
expenses were 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 statement of net assets available for plan
benefits. A summary of the net assets of the Master Trust as of December 29,
1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Investments, at Market Value:
Equity Account $2,957,197
Balanced Account 2,217,987
Income Account 503,030
Money Market Account 906,963
Company Stock 1,030,752
Contribution and Disbursement Account (195)
----------
7,615,734
Receivables 205,648
Liabilities (156,196)
----------
Net Assets of the Master Trust $7,665,186
==========
</TABLE>
7
<PAGE>
Allocations of the net assets of the Master Trust to participating plans as of
December 29, 1997 is as follows:
<TABLE>
<CAPTION>
Amount Percent
----------- -------
<S> <C> <C>
Chart House Enterprises, Inc.
Corporate Employees 401(k) Plan $5,882,582 76.74
Chart House Enterprises, Inc.
Restaurant Employees 401(k) Plan 1,782,604 23.26
---------- -------
$7,665,186 100.00
========== =======
</TABLE>
Income from the Master Trust allocated to the participating plans for the year
ended December 29, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Interest Income $ 50,382
Income on Equity Account 23,877
Income on Balanced Account 33,736
Income on Income Account 33,370
Income on Money Market Account 40,985
Income on Company Stock Account 337
Income on Contribution and Disbursement
Account 402
Net Appreciation in Fair Value of
Investments 820,514
----------
Net Investment Income $1,003,603
==========
</TABLE>
The net appreciation in the fair value of investments in the Master Trust by
major investment category for the year ended December 29, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Equity Account $251,178
Balanced Account 301,410
Income Account 7,912
Company Stock Account 259,884
Contribution and Disbursement
Account 130
--------
Net Appreciation in Fair Value of
Investments $820,514
========
</TABLE>
8
<PAGE>
Income Tax Status
- -----------------
The Plan obtained its last determination letter from the Internal Revenue
Service on June 26, 1995. At that time the Plan was deemed to be designed to
satisfy the qualification requirements, and consequently the related trust
appeared to satisfy the tax exempt requirement of the Internal Revenue Code. The
Company believes that the Plan is currently designed and being operated in
compliance with the qualification requirements of the Internal Revenue Code and
that, therefore, the Plan qualifies under Section 401(a) and the related trust
is tax exempt as of the financial statement date. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
Reconciliation to Form 5500
- ---------------------------
At December 28, 1998 the Plan had $167,749 of pending distributions to
participants. This amount is recorded as a liability in the Plan's Form 5500;
however, this amount is not recorded as a liability in accordance with generally
accepted accounting principles.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the year ended
December 28, 1998:
<TABLE>
<CAPTION>
Total Payments to Net Assets Available
Liabilities Participants for Benefits
---------------------------------------------------------------------
<S> <C> <C> <C>
Per Financial Statements $ 3,766 $422,953 $1,900,863
Accrued Benefit Payments 167,749 167,749 (167,749)
-------- -------- ----------
Per Form 5500 $171,515 $590,702 $1,733,114
======== ======== ==========
</TABLE>
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets available for benefits and changes
therein. Actual results could differ from those estimates.
(3) ADMINISTRATIVE EXPENSES
-----------------------
The Company pays the Plan's administrative expenses. 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.
9
<PAGE>
(4) NONEXEMPT TRANSACTION
---------------------
Due to a change in the Plans trustee in July 1998, there was a delay in the
transfer of data relating to 401(k) contributions. The Plan Administrator is
closely monitoring transfer of contributions to control nonexempt transactions
in the future.
10
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
(Employer Identification Number 33-0147725, Plan Number 002)
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
As of December 28, 1998
<TABLE>
<CAPTION>
Fair
Identity of Party Involved/Description Cost Value
-------------------------------------- ---------- ----------
<S> <C> <C>
* SCUDDER TRUST COMPANY:
Stable Value Fund $ 330,778 $ 330,778
Income Fund 131,691 128,270
Growth and Income Fund 874,851 832,329
International Fund 2,597 2,619
Pathway Series - Balanced Fund 425,689 417,925
Pathway Series - Growth Fund 361 361
Baron Asset Fund 5,735 5,735
Company Stock Fund 220,069 169,821
Company Stock Pending Fund 5,190 5,190
---------- ----------
Total investments held $1,996,961 $1,893,028
========== ==========
</TABLE>
*Party-in-interest.
The accompanying Notes to Financial Statements and Schedules are an integral
part of this Schedule.
11
<PAGE>
<TABLE>
<CAPTION>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(K) PLAN
(Employer Identification Number 33-0147725, Plan Number 002)
ITEM 27(d)--SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 28, 1998
Identity of Party Number of Purchase Number of Selling Cost of Net Gain
Involved Description of Assets Transactions Price Transactions Price Asset (Loss)
- ----------------- --------------------- ------------ -------- ------------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Scudder Trust Co. Stable Value Fund 35 371,761 9 44,202 44,202 0
Income Fund 28 142,924 8 11,353 11,233 120
Growth and Income Fund 31 994,176 13 112,473 119,285 (6,812)
Pathway Series-Balanced Fund 27 478,941 15 51,209 53,174 (1,965)
Company Stock Fund 28 246,932 5 13,180 20,468 (7,288)
The accompanying Notes to Financial Statements and Schedules are an integral part of this Schedule.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
(Employer Identification Number 33-0147725, Plan Number 002)
ITEM 27(e)--SCHEDULE OF NONEXEMPT TRANSACTIONS (Note 4)
For the Year Ended December 28, 1998
Relationship of Description of Transaction, Including Interest
Identity of Plan, Employer or Other Maturity Date, Rate of Interest, Amount Incurred
Party Involved Party in Interest Collateral, Par or Maturity Value Loaned on Loan (a)
- -------------- ----------------------- ------------------------------------- ------ -----------
<S> <C> <C> <C> <C>
Chart House Employer Lending of monies from the Plan to the Employer
Enterprises, Inc. (contributions not remitted to the Plan) as follows-
Deemed loan occurred July 22 and August 21, 1998,
maturity of August 24, 1998, with interest at
various rates $12,159 $ 62
======= ======
(a) Earnings to be remitted to participants by June 25, 1999.
The accompanying Notes to Financial Statements and Schedule are an integral part of this Schedule.
</TABLE>
13
<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.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
June 23, 1999
14
