As filed with the Securities and Exchange Commission on
August 5, 1998
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GOOD TIMES RESTAURANTS INC.
(Exact name of issuer as specified in its charter)
Nevada 84-1133368
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
601 Corporate Circle, Golden, Colorado 80401
(Address of Principal Executive Offices) (Zip Code)
Good Times Restaurants Inc. 401(K) Savings and Investment Plan
Good Times Restaurants Inc. - 1992 Incentive Stock Option Plan
Good Times Restaurants Inc. - 1992 Non-Statutory Stock Option
Plan
(Full title of the plans)
Boyd E. Hoback, President
601 Corporate Circle
Golden, Colorado 80401
(Name and address of agent for service)
(303) 384-1400
(Telephone number, including area code, of agent for service)
Copy to:
Roger V. Davidson, Esq.
Andrew L. Pidcock, Esq.
Cohen Brame & Smith Professional Corporation
1700 Lincoln Street, Suite 1800
Denver, Colorado 80203
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount
to be Amount to be Price Offering of Reg
Registered Registered Per Share Price Fee
Common Stock,
$.001 par value 300,000(1) $2.625(2) $787,500(1) $233
(1 The number of shares of Common Stock includes a maximum of
150,000 shares available for issuance under the Good Times
Restaurants Inc. - 1992 Incentive Stock Option Plan, a
maximum of 60,000 available for issuance under the Good
Times Restaurants Inc. - 1992 Non-Statutory Stock Option
Plan and 90,000 shares which the Company estimates will be
issued under its 401(k) Savings and Investment Plan over the
next several years. This Registration Statement also covers
an indeterminate number of additional shares as may be
issuable under the Plans by reason of adjustments in the
number of shares covered thereby as described in the Plans
and Prospectus.
(2 Estimated solely for purposes of calculation of the
registration fee. Based upon the closing bid price of the
Common Stock as quoted on NASDAQ on June 23, 1998, pursuant
to Rule 457(c).
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are deemed to be incorporated
by reference in this registration statement and to be a part hereof.
1. The Registrant's annual report on form 10-KSB for
its fiscal year ended September 30, 1997.
2. All other reports filed by the Registrant pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") since October 1, 1997.
3. The description of the Registrant's common stock
which is contained in the Registrant's registration statement
filed pursuant to Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant with
the Securities and Exchange Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference into this registration statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Incorporated by reference.
Item 5. Interests of Named Experts and Counsel.
Attorneys at the Company's counsel, Cohen Brame &
Smith, own an aggregate of less than 1,000 shares of the
Company's Common Stock.
Item 6. Indemnification of Directors and Officers.
Article IX of the Bylaws of the Registrant, in
accordance with the Nevada General Corporation Law, provides as
follows:
Section 1. Indemnification Against Third Party
Claims. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an
action by or in the right of the corporation, by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action, suit or
proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and that, with respect to
any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
Section 2. Indemnification Against Derivative
Claims. The corporation shall further indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred
by him in connection with the defense or settlement of the action
or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation; provided that indemnification shall not
be made for any claim, issue or matter as to which such a person
has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the corporation,
unless and only to the extent that the court in which the action
or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances
of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
Section 3. Rights to Indemnification. To the
extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections 1 and 2, or in defense of any claim, issue or matter
therein, he shall be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.
Section 4. Authorization of Indemnification. Any
indemnification under subsections 1 and 2, unless ordered by a
court or advanced pursuant to subsection 5, shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The
determination shall be made: (a) by the stockholders, (b) by the
Board of Directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding,
(c) if a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by
independent legal counsel in a written opinion, or (d) if a
quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
Section 5. Advancement of Expenses. The expenses
of officers and directors incurred in defending a civil or
criminal action, suit or proceeding, by reason of the fact that
he was a director or officer of the corporation, shall be paid by
the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection 5 do not affect
any rights to advancement of expenses to which corporate
personnel other than directors and officers may be entitled under
any contract or otherwise by law.
Section 6. Indemnification by Court Order. The
indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section (a) does not exclude
any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under these Articles
of Incorporation or the Bylaws of the corporation, or any other
agreement, vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection
2 hereof or for the advancement of the expenses made pursuant to
subsection 5 hereof, may not be made to or on behalf of any
director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a
knowing violation of the law and was material to the cause
of action and (b) continues for a person who has ceased to be a
director, officer, employee or agent and inures to the benefit of
the heirs, executors and administrators of such a person.
Section 7. Insurance. The Board of Directors may,
in its discretion, direct that the corporation purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or
rising out of his status as such, whether or not the corporation
would have the power to indemnify him against liability under the
provision of this Section.
Section 8. Settlement by Corporation. The right of
any person to be indemnified shall be subject always to the right
of the corporation by the Board of Directors, in lieu of such
indemnification, to settle any such claim, action, suit or
proceeding at the expense of the corporation by the payment of
the amount of such settlement and the costs and expenses incurred
in connection therewith.
Article IX of the Articles of Incorporation of the
Registrant provides as follows:
The Corporation shall indemnify all officers,
directors and agents of the Corporation to the fullest extent
permitted by Nevada law, as the same exists or may hereafter be
amended. Such indemnification shall include, but not be limited
to, indemnification against monetary damages for breach of
fiduciary duty.
Article XIV of the Articles of Incorporation of the
Registrant provides as follows:
No director or officer of the Corporation shall
have any personal liability to the Corporation or its stock
holders for damages for breach of fiduciary duty as a director or
officer; provided that directors and officers shall not be
exonerated from personal liability for (a) acts or omissions
which involve intentional misconduct, fraud or a knowing
violation of law or (b) the payment of distributions in violation
of Section 78.300 of the Nevada Revised Statutes.
Item 7. Exemption From Registration Claimed.
Inapplicable.
Item 8. Exhibits.
4.1 1992 Incentive Stock Option Plan of the
Registrant, as amended
4.2 1992 Non-Statutory Stock Option Plan of the
Registrant, as amended
4.3 Nonstandardized Prototype Cash or Deferred
Profit-Sharing Plan and Trust/Custodial Account for Good Times
Drive Thru, Inc. as a Subsidiary of Good Times Restaurants, Inc.
4.4 Good Times Drive Thru, Inc. as a Subsidiary of
Good Times Restaurants, Inc. 401(k) Savings and Investment Plan
Summary Plan Description
5.1 Opinion of Cohen Brame & Smith Professional
Corporation re legality of the Common Stock offered hereby
23.1 Consent of Cohen Brame & Smith Professional
Corporation (included in Exhibit 5.1 to this registration
statement)
23.2 Consent of Hein & Associates LLP independent
certified public accountants
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers
or sells securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or
events which, individually or together, represent a fundamental
change in the information set forth in the registration
statement;
(iii) Include any additional or changed
material information on the plan of distribution.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form
S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
July 6, 1998
Trustees of the
Good Times Restaurants Inc.
401(k) Savings and Investment Plan
Golden, Colorado
We have audited the accompanying statements of net assets available
for benefits of Good Times Restaurants Inc. 401(k) Savings and
Investment Plan as of September 30, 1997 and 1996 and the related
statement of changes in net assets available for benefits with fund
information for the years then ended, and the supplemental schedules
of assets held for investment purposes as of September 30, 1997 and
1996 and the supplemental schedules of reportable transactions for the
years ended September 30, 1997 and 1996. These financial statements
and supplementary schedules are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based upon our audits.
Except as discussed in the following paragraph, 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.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, investment assets held by
Wells Fargo, the custodian of the Plan, and transactions in those
assets were excluded from the scope of our audit of the Plan's
September 30, 1996 financial statements, except for comparing the
information provided by the trustee, which is summarized in Note 3,
with the related information included in the financial statements.
Because of the significance of the information that we did not audit
(summarized in Note 3), we are unable to, and do not, express an
opinion on the Plan's financial statements as of September 30, 1996.
The form and content of the information included in the September 30,
1996 financial statements, other than that derived from the
information certified by the trustee, have been audited by us and, in
our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974.
In our opinion, the financial statements referred to above of Good
Times Restaurants Inc. 401(k) Savings and Investment Plan as of
September 30, 1997 and for the year then ended present fairly, in all
material respects, the financial status of Good Times Restaurants Inc.
401(k) Savings and Investment Plan as of September 30, 1997, and
changes in its financial status for the year then ended in conformity
with generally accepted accounting principles.
Certified Public Accountants
Denver, Colorado
<PAGE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
September 30,
1997 1996
ASSETS
Investments, at Fair Value:
Mutual funds $295,900 $200,800
Good Times Restaurants Inc. common stock 64,900 37,500
Loans to participants 10,000 7,900
Receivables:
Employer contribution 17,900 39,000
Participant contributions 7,500 7,400
Total Assets 396,200 292,600
Liabilities - -
Net Assets Available for Benefits $396,200 $292,600
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH
FUND
INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 1997
<CAPTION>
Fidelity
S&P Advisor Invesco Fidelity
500 Stock Equity Select Adv. Equity
Fund* Growth* Income Income*
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest & dividends $ 18,600 $ 600 $ 800 $ 500
Net investment gain (loss) (10,800) 5,300 700 4,900
Net earnings on investments 7,800 5,900 1,500 5,400
Contributions:
Employer (non-cash) - - - -
Participants 4,700 6,600 4,700 9,300
Total Contributions 4,700 6,600 4,700 9,300
Total additions to net assets 12,500 12,500 6,200 14,700
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits & distributions paid to
participants 9,200 1,400 1,100 500
Net increase (decrease) prior to
interfund transfers 3,300 11,100 5,100 14,200
Interfund transfers 2,400 (1,400) (3,700) (7,700)
Net increase (decrease) 5,700 9,700 1,400 6,500
Net assets available for benefits:
Beginning of year 21,100 18,500 12,900 17,000
End of year $26,800 $28,200 $14,300 $23,500
_______________
* Investments account for 5% or more of the Plan's net assets available
for benefits at September 30, 1997.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1997
<CAPTION>
Stagecoach Scudder
Invesco Treasury Growth
Dynamics Janus Money and
Fund* Fund* Market Income*
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest & dividends $ 2,300 $ 5,000 $ 500 $ 1,700
Net investment gain (loss) 5,800 8,100 100 7,300
Net earnings on investments 8,100 13,100 600 9,000
Contributions:
Employer (non-cash) - - - -
Participants 6,700 20,500 9,600 6,600
Total Contributions 6,700 20,500 9,600 6,600
Total additions to net assets 14,800 33,600 10,200 15,600
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits & distributions paid to
participants 6,600 1,500 6,300 1,600
Net increase (decrease) prior to
interfund transfers 8,200 32,100 3,900 14,000
Interfund transfers 7,500 1,100 (11,100) 8,700
Net increase (decrease) 15,700 33,200 (7,200) 22,700
Net assets available for benefits:
Beginning of year 23,700 36,600 13,100 12,300
End of year $39,400 $69,800 $ 5,900 $35,000
_______________
* Investments account for 5% or more of the Plan's net assets available
for benefits at September 30, 1997.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1997
<CAPTION>
Strong Strong Templeton Westcore
Total Government Foreign Midco
Return Securities Fund Growth
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest & dividends $ 600 $ 800 $ 700 $ 1,600
Net investment gain (loss) 400 500 2,400 2,200
Net earnings on investments 1,000 1,300 3,100 3,800
Contributions:
Employer - - - -
Participants 1,300 3,800 5,400 4,500
Total Contributions 1,300 3,800 5,400 4,500
Total additions to net assets 2,300 5,100 8,500 8,300
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits & distributions paid to
participants - 6,000 1,800 900
Net increase (decrease) prior to
interfund transfers 2,300 (900) 6,700 7,400
Interfund transfers (800) (2,900) (3,300) (1,100)
Net increase (decrease) 1,500 (3,800) 3,400 6,300
Net assets available for benefits:
Beginning of year 3,600 15,800 13,400 12,800
End of year $5,100 $12,000 $16,800 $19,100
_______________
* Investments account for 5% or more of the Plan's net assets available for
benefits at September 30, 1997.
</TABLE>
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1997
<CAPTION>
Good Times Participant
Stock* Loans Other Total
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest & dividends $ - $ - $ - $33,700
Net investment gain (loss) (11,600) - - 15,300
Net earnings on investments (11,600) - - 49,000
Contributions:
Employer - - 17,900 17,900
Participants - - - 83,700
Total Contributions - - 17,900 101,600
Total additions to net assets (11,600) - 17,900 150,600
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits & distributions paid to
participants 8,300 1,800 - 47,000
Net increase (decrease) prior to
interfund transfers (19,900) (1,800) 17,900 103,600
Interfund transfers 47,300 3,900 (38,900) -
Net increase (decrease) 27,400 2,100 (21,000) 103,600
Net assets available for benefits:
Beginning of year 37,500 7,900 46,400 292,600
End of year $ 64,900 $ 10,000 $ 25,400 $ 396,200
_______________
* Investments account for 5% or more of the plan's net assets available
for benefits at September 30, 1997.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH
FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<CAPTION>
Fidelity
Money Equity Advisor Invesco
Market Index Equity Select
Account Fund* Growth* Income
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest on participants loans $ - $ - $ - $ -
Other interest - 100 100 500
Net investment gain (loss) - 1,900 1,300 (500)
Net earning on investments - 2,000 1,400 -
Contributions:
Employer (non-cash) - - - -
Participants - 6,600 7,600 6,900
Total Contributions - 6,600 7,600 6,900
Total additions to net assets - 8,600 9,000 6,900
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Other expense 2,100 - - -
Benefits & distributions paid to
participants 45,800 10,400 1,100 4,300
Total deductions from net assets 47,900 10,400 1,100 4,300
Net increase (decrease) prior to
interfund transfers (47,900) (1,800) 7,900 2,600
Interfund transfers (93,300) 22,900 10,600 10,300
Net increase (decrease) (141,200) 21,100 18,500 12,900
Net assets available for benefits:
Beginning of year 141,200 - - -
End of year $ - $ 21,100 $ 18,500 $ 12,900
_______________
* Investments account for 5% or more of the Plan's net assets
available for benefits at September 30, 1996.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH
FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<CAPTION>
Stagecoach Scudder
Fidelity Invesco Treasury Growth
Adv. Equity Dynamics Janus Money and
Income* Fund* Fund* Market Income
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest on participants loans $ - $ - $ - $ - $ -
Other interest 300 300 400 400 300
Net investment gain (loss) 300 1,800 2,700 - 600
Net earning on investments 600 2,100 3,100 400 900
Contributions:
Employer (non-cash) - - - - -
Participants 9,300 7,900 19,400 1,600 5,500
Total Contributions 9,300 7,900 19,400 1,600 5,500
Total additions to net assets 9,900 10,000 22,500 2,000 6,400
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Other expense - - - - -
Benefits & distributions paid to
participants 1,500 1,200 18,900 21,200 5,600
Total deductions from
net assets 1,500 1,200 18,900 21,200 5,600
Net increase (decrease) prior to
interfund transfers 8,400 8,800 3,600 (19,200) 800
Interfund transfers 8,600 14,900 33,000 32,300 11,500
Net increase (decrease) 17,000 23,700 36,600 13,100 12,300
Net assets available for benefits:
Beginning of year - - - - -
End of year $ 17,000 $ 23,700 $ 36,600 $ 13,100 $ 12,300
_______________
* Investments account for 5% or more of the Plan's net assets available for
benefits at September 30, 1996.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<CAPTION>
Strong Strong Templeton Westcore
Total Government Foreign Midco
Return Securities* Fund Growth
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest on participants loans $ - $ - $ - $ -
Other interest - 500 100 100
Net investment gain (loss) 100 (500) 700 1,200
Net earning on investments 100 - 800 1,300
Contributions:
Employer - - - -
Participants 1,900 7,000 7,000 4,800
Total Contributions 1,900 7,000 7,000 4,800
Total additions to net assets 2,000 7,000 7,800 6,100
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Other expense - - - -
Benefits & distributions paid to
participants 500 5,900 3,500 600
Total deductions from net assets 500 5,900 3,500 600
Net increase (decrease) prior to
interfund transfers 1,500 1,100 4,300 5,500
Interfund transfers 2,100 14,700 9,100 7,300
Net increase (decrease 3,600 15,800 13,400 12,800
Net assets available for benefits:
Beginning of year - - - -
End of year $ 3,600 $ 15,800 $ 13,400 $ 12,800
_______________
* Investments account for 5% or more of the Plan's net assets available
for benefits at September 30, 1996.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(K) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<CAPTION>
Good Times Participant
Stock* Loans Other Total
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Earning on Investments:
Interest on participants loans $ - $ 400 $ - $ 400
Other interest - - - 3,100
Net investment gain (loss) (47,800) - - (38,200)
Net earning on investments (47,800) 400 - (34,700)
Contributions:
Employer - - 39,000 39,000
Participants 13,600 - 7,400 106,500
Total Contributions 13,600 - 46,400 145,500
Total additions to net assets (34,200) 400 46,400 110,800
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Other expense - - - 2,100
Benefits & distributions paid to
participants 8,500 - - 129,000
Total deductions from net assets 8,500 - - 131,100
Net increase (decrease) prior to
interfund transfers (42,700) 400 46,400 (20,300)
Interfund transfers (24,100) 1,100 (61,000) -
Net increase (decrease (66,800) 1,500 (14,600) (20,300)
Net assets available for benefits:
Beginning of year 104,300 6,400 61,000 312,900
End of year $ 37,500 $ 7,900 $ 46,400 $ 292,600
_______________
* Investments account for 5% or more of the Plan's net assets available
for benefits at September 30, 1996.
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
1. Summary Description of the Plan:
The following description of the Good Times Restaurants Inc.
(the "Company" or "Employer") 401(k) Savings and Investment
Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions. The Plan
receives all contributions from the Company.
Nature of Operations - The Plan became effective on April 1,
1992, and has a year-end of September 30.
The Plan is a defined contribution profit sharing plan
covering all employees who have completed a year of service
and are at least 21 years old. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
The Plan is intended to be a "Qualified" plan under Internal
Revenue Code (IRC) Section 401(a). As such, contributions
made to the Plan are not taxable to the participant until
distributed.
Contributions - Each participant may contribute up to 14% of
eligible compensation, subject to the limits of IRC
Section 402(g). Management of the Company may also elect to
make matching contributions to the Plan. For the years
ended September 30, 1997 and 1996, management of the Company
elected to make a matching contributions equal to 25% and
50%, respectively, of each participant's salary deferrals,
up to a maximum matching contribution of 6% of eligible
compensation. Management of the Company may also elect to
make discretionary contributions to the Plan. Management
can elect to make discretionary contributions to either all
non-highly compensated employees, or to all eligible
employees. Management of the Company elected to make no
discretionary contributions for the plan years ended
September 30, 1997 and 1996. Total employer and participant
contributions must not exceed the annual limitation set
forth by IRC Section 402(g). All matching contributions are
made by the Company in the form of Good Times Inc. common
stock, which is valued at the quoted market price as of the
last day of the Plan year.
Participant Accounts - Each participant's account is
credited with the employee's contributions and an allocation
of the employer's contribution. Allocation of employer
contributions are based on the ratio of each individual
participant's eligible compensation to the eligible
compensation of all participants who receive contributions.
Plan income is allocated to participant accounts on a pro
rata basis based on account balances.
Vesting - Participants are immediately vested in their
elective contributions plus actual earnings thereon.
Vesting in the remainder of their accounts is based on years
of continuous service. A participant becomes 100% vested
after five years of credited service. A participant's
account also becomes fully vested in the event of total
disability or death, or upon reaching the normal retirement
age of 65.
Payment of Benefits - A participant's account balance may be
distributed when the participant terminates from service,
retires, or dies. Benefits may be received in a lump sum,
an annuity, or a combination of both.
Participant Loans - Participants may borrow from the Plan in
an amount greater than $1,000 up to a maximum of the lesser
of $50,000 or 50 percent of the participant's vested account
balance. Loans must be repaid within five years (unless the
loan is for the purchase of a home) and bear interest at
rates similar to those being charged by local commercial
banks. Interest rates on participant loans ranged from
10.3% to 11.8% for the years ended September 30, 1997 and
1996.
Administrative Expenses - The Company pays certain expenses
related to the Plan including payroll and other general and
administrative expenses of administering the Plan, and audit
fees.
Forfeited Accounts - At September 30, 1997 and 1996,
forfeitures totaled $2,600 and $2,300, respectively. These
amounts were used to reduce the employer matching
contribution.
2. Summary of Significant Accounting Policies:
Basis of Accounting - The financial statements of the Plan
are presented on the accrual basis of accounting.
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 assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Investment Valuation - The Plan's investments are stated at
fair value. Shares of registered investment companies are
valued at quoted market prices which represent the net asset
value of shares held by the Plan at year-end. Participant
loans are valued at cost which approximates fair value.
Payments of Benefits - Benefits are recorded when paid.
Fair Value of Financial Instruments - The Company's
financial instruments include investments and loans to
participants. Investments are recorded at fair value. The
difference between the fair value and the carrying value of
participant loans is immaterial to the financial statements
taken as a whole.
3. Investments:
The Plan's custodian has certified that the following
information is complete and accurate:
Investments at September 30, 1996:
Equity Index Fund $ 21,100
Fidelity Advisor Equity Growth 18,500
Invesco Select Income 12,900
Fidelity Advisor Equity Income 17,000
Invesco Dynamics Fund 23,700
Janus Fund 36,600
Stagecoach Treasury Money Market 13,100
Scudder Growth and Income 12,300
Strong Total Return 3,600
Strong Government Securities 15,800
Templeton Foreign Fund 13,400
Westcore Midco Growth 12,800
Good Times Common Stock 37,500
Total investments $238,300
Participant Loans $ 7,900
Earnings (loss) from investments for the year ended September 30,
1996:
Equity Index Fund $ 2,000
Fidelity Advisor Equity Growth 1,400
Invesco Select Income -
Fidelity Advisor Equity Income 600
Invesco Dynamics Fund 2,100
Janus Fund 3,100
Stagecoach Treasury Money Market 400
Scudder Growth and Income 900
Strong Total Return 100
Strong Government Securities -
Templeton Foreign Fund 800
Westcore Midco Growth 1,300
Good Times Common Stock (47,800)
Interest on Participant Loans 400
Total (loss) $(34,700)
Upon enrolling in the Plan, participants may direct that
contributions be invested in any of the following
investments, and in any percentage determined by the
participant:
Wells Fargo S&P 500 Stock Fund - The Fund seeks to provide
total returns comparable to the returns of the S&P 500 stock
index.
Fidelity Advisor Equity Growth - The Fund seeks aggressive
capital growth by investing in growth stocks, preferred
stocks, convertible securities, and corporate debt
obligations.
Invesco Select Income - The Fund seeks a high level of
current income by investing in government and corporate debt
securities.
Fidelity Advisor Equity Income - The Fund seeks income by
investing in income-producing common stocks, preferred
stocks, convertible securities, and corporate debt
obligations.
Invesco Dynamics Fund - The Fund seeks capital appreciation
by investing primarily in common stocks.
Janus Fund - The Fund seeks capital appreciation consistent
with preservation of capital by investing primarily in
common stocks of companies and industries experiencing
favorable demand for their products and services.
Stagecoach Treasury Money Market Accounts - The Fund is an
AAA rated fund by Moody's and Standard & Poor's, which seeks
to provide current income while preserving principal by
investing only in U.S. Treasury obligations or repurchase
agreements which are collateralized by U.S. Treasury
obligations.
Scudder Growth and Income - The Fund seeks growth of
capital, current income, and growth of income by investing
in dividend-paying common stocks, preferred stocks, and
convertible securities with growth potential.
Strong Total Return - The Fund seeks income and capital
appreciation consistent with reasonable risk. The Fund
invests primarily in common stocks, corporate bonds and
debentures, and money market instruments.
Strong Government Securities - The Fund seeks current income
by investing in fixed income securities issued or guaranteed
by the U.S. government and its agencies or instrumentalities
and in investment-grade corporate securities.
Templeton Foreign Fund - The Fund seeks long-term capital
appreciation by investing in stocks and debt obligations of
companies and governments outside the United States.
Westcore Midco Growth - The Fund seeks long-term capital
appreciation by investing in growth stocks of medium-size
companies which are likely to show strong earnings growth.
Good Times Common Stock - Good Times Restaurants Inc. common
stock.
4. Plan Termination:
Although it has not expressed any intent to do so, the
Employer reserves the right to terminate the Plan at any
time by resolution of its Board of Directors. If
termination occurs, the balances of all participants become
fully vested and each participant will receive a total lump
sum distribution.
5. Party in Interest:
The Plan has investments in a money market account and an
S&P 500 stock fund that are managed by Wells Fargo. Wells
Fargo is the custodian of the Plan's assets and, therefore,
transactions occur in these accounts are party-in-interest
transactions.
6. Reconciliation of Financial Statements to Form 5500:
The Form 5500 was prepared on the cash basis of accounting
and the financial statements were prepared on the accrual
basis of accounting. Following is a reconciliation between
these financial statements and the Form 5500:
Net Assets Available for
Benefits at September 30,
1997 1996
Total per the financial statements $396,200 $292,600
Less, employer contribution receivable (17,900) (39,000)
Less, employee contribution receivable* (7,500) -
Total per Form 5500 (rounded) $370,800 $253,600
________________________
* Included on Form 5500 for the plan year ended September
30, 1996.
7. Tax Status:
The Internal Revenue Service has determined and informed the
Company by a letter dated in April 1997, that the prototype
plan adopted by the Company is designed in accordance with
applicable sections of the IRC. The Plan has been amended
since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the
Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(k) SAVINGS AND INVESTMENT PLAN
EIN 84-1133368
PLAN NO. 001
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1997
<CAPTION>
(C)
Description of Investment
Including
(B) Maturity Date, Rate of (E)
Identity of Issue, Borrower, Interest, Collateral, Par, (D) Current
(A)** Lessor, or Similar Party or Maturity Value Cost Value
<S> <C> <C>
* Stagecoach Treasury Money Market Money Market Fund $ 5,900 $ 5,900
Strong Government Securities Mutual Fund 11,900 12,000
Invesco Select Income Mutual Fund 13,900 14,300
Strong Total Return Mutual Fund 4,600 5,100
Wells Fargo S&P 500 Stock Fund Mutual Fund 28,300 26,800
Janus Mutual Fund 59,300 69,800
Scudder Growth & Income Mutual Fund 27,600 35,000
Fidelity Advisor Equity Income Mutual Fund 19,000 23,500
Westcore Midco Growth Mutual Fund 16,000 19,100
Invesco Dynamics Mutual Fund 32,400 39,400
Fidelity Advisor Equity Growth Mutual Fund 22,400 28,200
Templeton Foreign Mutual Fund 14,000 16,800
Good Times Common Stock Stock Fund 70,300 64,900
Participant Loans Interest Rates Range
from 10.3% to 11.8% - 10,000
</TABLE>
** This column will have an asterisk on each line which is identified as a
party-in-interest to the Plan. Wells Fargo acts as the Plan's custodian
and manages the Stagecoach Treasury Money Market account and the Wells
Fargo S&P 500 Stock Fund.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(k) SAVINGS AND INVESTMENT PLAN
EIN 84-1133368
PLAN NO. 001
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1996
<CAPTION>
(C)
Description of Investment
Including
(B) Maturity Date, Rate of (E)
Identity of Issue, Borrower, Interest, Collateral, Par, (D) Current
(A)** Lessor, or Similar Party or Maturity Value Cost Value
<S> <C> <C>
* Stagecoach Treasury Money Market Money Market Fund $ 10,400 $ 10,400
Strong Government Securities Mutual Fund 16,200 15,800
Invesco Select Income Mutual Fund 13,200 12,900
Strong Total Return Mutual Fund 3,400 3,600
Equity Index Mutual Fund 19,400 21,100
Janus Mutual Fund 33,900 36,600
Scudder Growth & Income Mutual Fund 11,700 12,300
Fidelity Advisor Equity Income Mutual Fund 16,800 17,000
Westcore Midco Growth Mutual Fund 11,700 12,800
Invesco Dynamics Mutual Fund 22,000 23,700
Fidelity Advisor Equity Growth Mutual Fund 17,300 18,500
Templeton Foreign Mutual Fund 12,700 13,400
Good Times Common Stock Stock Fund 32,500 37,500
Good Times Stock Liquidity Stock Liquidity Fund 2,700 2,700
Participant Loans Interest Rates Range
from 8% to 10.9% - 7,900
</TABLE>
** This column will have an asterisk on each line which is identified
as a party-in-interest to the Plan. Wells Fargo acts as the Plan's
custodian and manages the money market account.
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(k) SAVINGS AND INVESTMENT PLAN
EIN 84-1133368
PLAN NO. 001
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
<CAPTION>
(H)
Current
(A) Identity of Party Value of (I)
Involved and (C) (D) (G) Asset on Net
(B) Description Purchase Selling Cost of Transaction Gain
of Asset Price Price Asset Date (Loss)
<S> <C> <C> <C> <C>
Strong Government Securities $ 10 $ - $ 5,300 $ 5,300 $ -
Strong Government Securities - 10 9,700 9,600 (100)
Wells Fargo S&P 500 Stock Fund 26 - 28,300 28,300 -
Wells Fargo S&P 500 Stock Fund - 28 19,400 11,900 (7,500)
Janus Fund 26 - 30,300 30,300 -
Janus Fund - 26 4,900 5,100 200
Scudder Growth and Income 24 - 18,100 18,100 -
Scudder Growth and Income - 24 2,200 2,500 300
Fidelity Advisor Equity Income 23 - 11,100 11,100 -
Fidelity Advisor Equity Income - 22 8,800 9,400 600
Invesco Dynamics Fund 13 - 17,300 17,300 -
Invesco Dynamics Fund - 14 6,900 7,400 500
Fidelity Advisor Equity Growth 44 - 12,100 12,100 -
Fidelity Advisor Equity Growth - 44 7,100 7,700 600
Good Times Common Stock 1 - 51,200 51,200 -
Good Times Common Stock - 1 13,500 12,200 (1,300)
</TABLE>
<PAGE>
<TABLE>
GOOD TIMES RESTAURANTS INC.
401(k) SAVINGS AND INVESTMENT PLAN
EIN 84-1133368
PLAN NO. 001
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<CAPTION>
(H)
Current
(A) Identity of Party Value of (I)
Involved and (C) (D) (G) Asset on Net
(B) Description Purchase Selling Cost of Transaction Gain
of Asset Price Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C>
Stagecoach Money Market $ 1 $ $ 31,600 $ 31,600 $ -
Stagecoach Money Market 1 21,200 21,200 -
Stock Liq. Stock Liquidity 1 25,700 25,700 -
Stock Liq. Stock Liquidity 1 24,600 24,600 -
Stock Fund 1 23,700 23,700 -
Stock Fund 1 17,700 10,100 (7,600)
Scudder Mutual Fund 20 18,300 18,300 -
Scudder Mutual Fund 22 6,500 6,700 200
Strong Gvt. Mutual Fund 11 22,200 22,200 -
Strong Gvt. Mutual Fund 10 6,000 5,900 (100)
Templeton Mutual Fund 10 16,100 16,100 -
Templeton Mutual Fund 10 3,300 3,500 200
Equity Mutual Fund 202 29,600 29,600 -
Equity Mutual Fund 211 9,800 10,400 600
Fidelity Adv. Mutual Fund 39 19,400 19,400 -
Fidelity Adv. Mutual Fund 40 2,000 2,100 100
Invesco Select Mutual Fund 6 18,700 18,700 -
Invesco Select Mutual Fund 6 5,600 5,300 (300)
Fid. Adv. Equity Port Mutual Fund 21 19,300 19,300 -
Fid. Adv. Equity Port Mutual Fund 21 2,400 2,500 100
Invesco Dynamic Mutual Fund 13 23,200 23,200 -
Invesco Dynamic Mutual Fund 13 1,300 1,200 (100)
Janus Mutual Fund 25 53,700 53,700 -
Janus Mutual Fund 25 19,700 19,900 200
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Denver and State of Colorado on the 31st day of
July, 1998.
GOOD TIMES RESTAURANTS INC.
By:/s/ Boyd E. Hoback
Boyd E. Hoback, Director,Chief
Executive Officer and
President (a principal
executive officer and
director)
<PAGE>
GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each person whose signature
appears below, hereby authorizes, constitutes and appoints Boyd
E. Hoback his true and lawful attorney-in-fact and agent with
full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign this
registration statement for the registration under the Securities
Act of 1933, as amended, of securities of Good Times Restaurants
Inc. and any and all pre-effective and post-effective amendments
to this registration statement, together with any and all
exhibits thereto and other documents required to be filed with
respect hereto and thereto and to file the same with the
Securities and Exchange Commission and any other regulatory
authority, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite or necessary to be done, hereby ratifying and
confirming all that said attorney-in-fact and agent or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof and incorporate such changes as such
attorney-in-fact deems appropriate.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/Geoffrey R. Bailey Chairman of the Board of July 31, 1998
Geoffrey R. Bailey Directors, Director
/s/ Boyd E. Hoback Director, Chief Executive July 31, 1998
Boyd E. Hoback Officer, and President
(a principal executive
officer and director)
/s/ Dan W. James II Director July 31, 1998
Dan W. James II
/s/ Richard J. Stark Director July 31, 1998
Richard J. Stark
/s/ Thomas P. McCarty Director July 31, 1998
Thomas P. McCarty
/s/ Alan A. Teran Director July 31, 1998
Alan A. Teran
/s/ David E. Bailey Director July 31, 1998
David E. Bailey
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit No. Page No.
4.1 1992 Incentive Stock Option Plan of the Registrant,
as amended
4.2 1992 Non-Statutory Stock Option Plan of the Registrant,
as amended
4.3 Nonstandardized Prototype Cash or Deferred
Profit-Sharing Plan and Trust/Custodial Account for
Good Times Drive Thru, Inc. as a Subsidiary of Good
Times estaurants, Inc.
4.4 Good Times Drive Thru, Inc. as a Subsidiary of Good
Times Restaurants, Inc. 401(k) Savings and Investment
Plan Summary Plan Description
5.1 Opinion of Cohen Brame & Smith Professional Corporation
re legality of the Common Stock offered hereby
23.1 Consent of Cohen Brame & Smith Professional Corporation
(included in Exhibit 5.1 to this registration
statement)
23.2 Consent of Hein & Associates, LLP independent certified
public accountants
<PAGE>
REOFFER PROSPECTUS
Subject to Completion, August 5, 1998
GOOD TIMES RESTAURANTS INC.
90,000 Shares of Common Stock ($.001 par value)
210,000 Shares of Common Stock Underlying Options
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS."
This Prospectus relates to (a) 90,000 shares ("401(k) Shares")
of common stock, $.001 par value per share ("Common Stock"), of
GOOD TIMES RESTAURANTS INC. (the "Company" or "Good Times") issued
or issuable pursuant to the Company's 401(k) Savings and Investment
Plan (the "401(k) Plan); and (b) 210,000 shares ("Option Shares") of
Common Stock underlying incentive and non-statutory stock options
issued or issuable pursuant to the Company's 1992 Incentive Stock
Option Plan ("ISO") and 1992 Non-Statutory stock Option Plan ("NSO"
and together with the ISO, the "Option Plans"). The 401(k) Shares
and Option Shares are together hereinafter referred to as the
"Shares." The Shares may be offered by certain shareholders of the
Company (the "Selling Shareholders") from time to time (i) in
transactions in the over-the-counter market, in negotiated transac-
tions, through the writing of options on the Shares, or a combination of
such methods of sale, and (ii) at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Selling Shareholders may effect such transactions by selling
the Shares to or through securities broker-dealers, and such
broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Shareholders and/or
the purchasers of the Shares for whom such broker-dealers may act
as agent or to whom they sell as principal, or both (which
compensation as to a particular broker-dealer might be in excess of
customary commissions). See "Selling Shareholders" and "Sale of
Shares."
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company will
however receive proceeds from the exercise of the stock options
issued pursuant to the Option Plans. The Company has agreed to
bear all expenses (other than underwriting discounts, selling
commissions and underwriter expense allowance, and fees and
expenses of counsel and other advisers to the Selling Shareholders)
in connection with the registration and sale of the Shares being
offered by the Selling Shareholders.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK (SEE "RISK
FACTORS") INCLUDING:
- NEITHER THE COMPANY NOR ITS SUBSIDIARY GOOD TIMES DRIVE
THRU INC. HAS EARNED A PROFIT DURING ANY FISCAL YEAR
- SUBSTANTIAL COMPETITION
- NEED FOR ADDITIONAL FINANCING IN ORDER TO FULLY IMPLEMENT
BUSINESS PLAN
- SUBSTANTIAL AMOUNT OF SHARES ELIGIBLE FOR FUTURE SALE
- IMMEDIATE AND SUBSTANTIAL DILUTION
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and in accordance therewith, files reports and other information
with the Securities and Exchange Commission (the "Commission").
Proxy statements, reports and other information concerning the
Company can be inspected and copied at Room 1024 of the Commis-
sion's office at 450 Fifth Street, N.W., Washington, D.C. 20549,
and the Commission's Regional Offices in New York (Room 1228, 75
Park Place, New York, New York 10007), and Chicago (Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60621-2511), and copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. This
Prospectus does not contain all information set forth in the
Registration Statement of which this Prospectus forms a part and
exhibits thereto which the Company has filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act")
and to which reference is hereby made.
RISK FACTORS
These securities involve a high degree of risk. Prospective
purchasers should consider carefully, among other factors set forth
in this Prospectus, the following:
Risks Relating to the Company
Neither the Company Nor Drive Thru Has Earned a Profit During
Any Fiscal Year. As of September 30, 1997, the Company had a
working capital deficit of ($534,000) and a net worth of
$2,893,000. Losses from inception to that date aggregated
$8,945,000. The Company's wholly owned subsidiary, Good Times
Drive Thru Inc. ("Drive Thru") which owns and operates the restaurants,
has incurred losses every year since inception. Management
believes the losses at Drive Thru are a result of high general and
administrative expenses, expenses associated with training and
regional management and other costs associated with preparing Good
Times for significant growth. As additional Good Times units are
developed, the increase in operating income generated by those
units is anticipated to improve Good Times' financial results.
However, no assurance can be given that the Company will achieve
profitability on a consistent basis.
Limited Site Selection. Location of restaurants for Good Times
in high-traffic and readily accessible areas is an important factor
to its success. Drive through restaurants require sites with
specific characteristics which limit the number of sites available
in a market. Suitable locations are in great demand and may be
difficult to obtain at a reasonable cost. Furthermore, there is no
assurance that sites selected by management will be successful.
Substantial Competition. Good Times competes with many
recognized national and regional fast-food hamburger restaurant
chains that have a well-established customer base as well as small,
regional and local hamburger and other fast-food restaurants, many
of which feature drive-through service. Most of Good Times'
competitors have financial resources, advertising budgets,
marketing programs and name recognition exceeding that of Good
Times. Moreover, since only a relatively small capital investment
is required to establish a Good Times' restaurant, other firms may
compete with Good Times for consumer sales and available locations
by establishing restaurants similar to those of Good Times. Good
Times ability to compete in times of inflation may be hindered as
it may not have the same ability to absorb increased costs as would
better capitalized competing hamburger chains. No assurance can be
given that Good Times will be able to successfully compete on a
profitable basis.
Restaurant companies that currently compete with Good Times in
the Denver market include McDonald's, Burger King, Wendy's and
Carl's Jr.
Need for Additional Financing in Order to Fully Implement
Business Plan. In order to fully develop the Denver and Colorado
Springs ADIs and to expand into markets outside of Colorado with
Good Times restaurants, Drive Thru will require additional
financing. No assurance can be given that any required financing
will be available at all or on reasonable terms.
Dependence on Management. The current operations and future
success of the Company are dependent largely on the efforts and
abilities of its management and, in particular, Boyd E. Hoback.
While the Company has entered into an employment agreement with Mr.
Hoback, the Company does not maintain key-man insurance on Mr.
Hoback's life. The loss or unavailability to the Company of Mr.
Hoback could have a material adverse effect upon its business.
Lack of Federal Trademark Protection. Drive Thru has registered its mark
"Good Times! Drive Thru Burgers"SM in the State of
Colorado and will endeavor to register such mark in each state it
or a franchisee intends to open a restaurant. No assurance can be
given, however, that Good Times will be able to register the mark
in each such state. Good Times relies solely upon common law
trademark protection and state registration. Such reliance will
not protect Good Times against a prior user of the mark. If prior
use is established, Good Times may not be able to use the mark in
the area of such use. Drive Thru has applied for federal trademark
registration. No assurance can be given that any such registration
will issue or, if it does issue, that Good Times' right to the name
will be protected in all desirable jurisdictions.
Dependence on Franchises. As of the date of this Prospectus,
13 franchises have been sold but no assurance can be given that
Drive Thru will be able to sell additional franchises or that its
existing franchisees will fulfill their obligations under their
respective franchise agreements. The development of the Denver and
Colorado Springs ADIs by Good Times would be adversely impacted by
its inability to sell franchises or the existing franchisees'
inability to fulfill their obligations to Drive Thru.
Substantial Cost of Compliance With Government Regulations.
Operation of any restaurant is subject to a multitude of federal,
state and local rules and regulations relating, among other things,
to food preparation and cleanliness; safety in the work place;
accommodations for the disabled; wage and hour requirements; and
discrimination or discriminatory practices based upon race,
religion, sex and other factors. Furthermore, federal government
proposals regarding healthcare may result in higher costs for the
Company and Drive Thru and may have an adverse impact on earnings.
Although to date Drive Thru has not experienced any significant
regulatory problems, no such continued assurances can be given.
The development and opening of new restaurants may be delayed as a
result of government regulations which may require certain licenses
and approvals prior to opening. Management will have no control
over any delays caused by such government regulations. As a
result, Drive Thru may incur losses due to such delays or may have
to abandon a site completely if the required approvals and licenses
are not obtained. Drive Thru will endeavor to work with government
officials to obtain any required licenses or approvals on a timely
basis.
Uninsured Losses and Perils. The Company has obtained
comprehensive insurance, including fire, general and products
liability and extended coverage, of the types and in amounts
customarily obtained by companies in the restaurant industry.
However, there are certain types of losses (generally of a
catastrophic nature, such as earthquakes and floods) which are
either uninsurable or not economically insurable. An uninsured or
partially insured loss could have a material adverse effect upon
the Company.
Dependence Upon Availability of and Low Cost for Supplies and
Labor. Profitable operation of restaurants is partially dependent
upon the availability of adequate food supplies at reasonable
prices and an adequate labor supply. The cost and availability of
food supplies is subject to seasonal and local factors beyond
management's control. Labor is typically paid on an hourly basis
in amounts at or moderately above the minimum wage. Future
increases in the minimum wage could have a material adverse effect
upon the Company.
Risks of Ground Lease Financing. Ground leases are often an
attractive method of financing the acquisition of real estate for
the development of restaurants. However, such arrangements offer
risks which may not otherwise be present. Drive Thru may lease the
land and, at its cost, may construct the improvements thereon. Any
default by Drive Thru under the lease may, subject to cure rights,
give the lessor the right to terminate the ground lease, thereby
depriving Drive Thru not only of any interest in the land, but also
of the improvements. Also, rent may increase over the term of the
lease based upon increases in the applicable price index or
otherwise. Finally, the resale value of a lessee's interest in a
ground lease may be less than if the land were owned, particularly
toward the end of the lease term.
No Dividends. The Company has never paid dividends on its
Common Stock and does not anticipate paying dividends in the
foreseeable future. The Company's ability to pay future dividends
will necessarily depend upon its earnings and financial condition.
In addition, since restaurant development is capital intensive, it
is the intent of the Company to retain earnings to satisfy capital
requirements.
Effect of Issuance of Preferred Stock. The Company has
authorized 1,000,000 shares of Preferred Stock. 200,000 of such
shares are designated Series A Convertible Preferred Stock and are
currently issued and outstanding. Such 200,000 shares of Series A
Convertible Preferred Stock are convertible into a maximum of
426,667 shares of Common Stock. The rights of the holder of the
Series A Convertible Preferred Stock and any other series of
preferred stock issued from time to time by Good Times could
materially adversely effect the rights of the holders of Common Stock.
Market Risks
Substantial Market Overhang. The Company has outstanding
Derivative Securities (securities such as options and warrants with
a conversion, exercise, exchange or other right or privilege to
acquire Common Stock) for the purchase of up to 664,093 shares for
an aggregate purchase price of approximately $6,051,925 or an
average of $9.11 per share. It is unlikely that the right to
acquire shares of Common Stock will be exercised by the holders of
the Derivative Securities unless the then market price of the
Common Stock significantly exceeds the acquisition price. However,
if the acquisition right is exercised, it is likely that the Common
Stock issued upon such exercise will be sold soon thereafter, which
may have a depressive effect on the then market price of the Common
Stock.
No Assurance of Public Trading Market. At the present time the
Company's shares trade on the Nasdaq Small Cap service mark Market
System ("Nasdaq"). The maintenance requirements of Nasdaq require
among others that the Company's share price remain above $1.00 per
share and that the Company has minimum net tangible assets of in
excess of $2 million, to avoid delisting. The Company recently was
required to obtain shareholder approval for a reverse split in
order to maintain its listing on Nasdaq. If, for whatever reason,
the Company were delisted from Nasdaq its securities could continue
to trade over the counter on the Bulletin Board maintained by the
NASD. However, there is no assurance that such a market would
develop or that it would be liquid if it did develop.
USE OF PROCEEDS
The Company intends to use the net proceeds received from the
exercise of the stock options issued pursuant to the Option Plans
to satisfy the Company's cash requirements and for other general
business purposes. The Company does not receive any proceeds in
connection with the 401(k) Shares.
SELLING SHAREHOLDERS
This Prospectus covers 210,000 shares of Common Stock underlying stock
options issued or issuable pursuant to the Option Plans
and 90,000 shares of Common Stock issued or issuable pursuant to
the 401(k) Plan. The selling shareholders consists of the
following:
(a) 401(k) Plan Participants. All participants in the
Company's 401(k) Plan. The eligible participants in the 401(k)
Plan are those employees of the Company who are at least 21
years of age and have been employed by the Company for at least
six months and completed 1,000 hours of service for the
Company. There are approximately 100 employees of the Company
eligible to participant in the 401(k) Plan on the date of this
Prospectus. Any selling shareholders owning less than 1,000
shares may resell their shares pursuant to this Prospectus
without being named herein. To Company's knowledge, as of the
date of this Prospectus, no employee intends at this time to
resell their 401(k) Shares and/or Option Shares.
(b) Incentive Stock Option Holders. All holders of the
Company's Incentive Stock Options which are issuable only to
key employees, including officers, of the Company; and
(c) Non-Statutory Stock Option Holders. All holders of
the Company's Non-Statutory Stock Options which are issuable
to key employees, Directors of the Company and such other
persons who, in the opinion of the Board of Directors of the
Company, are primarily responsible for the promotion and
protection of the interests of the Company.
PLAN OF DISTRIBUTION
The sale of the 401(k) Shares and Option Shares by the Selling
Shareholders may be effected from time to time (i) in transactions
in the over-the-counter market, in negotiated transactions, through
the writing of options on the Shares, or through a combination of
such methods of sale, and (ii) at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Selling Shareholders may effect such transactions by selling
the Shares to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions, or
commissions from the Selling Shareholders and/or the purchasers of
the Shares for which such broker-dealers may act as agent or to
whom they may sell, as principal, or both (which compensation as to
a particular broker-dealer may be in excess of customary compensa-
tion).
The Selling Shareholders and any broker-dealers who act in
connection with the sale of the Shares hereunder may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities
Act, and any commissions received by them and profit on any resale
of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act. The Company
has agreed to indemnify the Selling Shareholders and any securities
broker-dealers who may be deemed to be underwriters against certain
liabilities, including liabilities under the Securities Act as
underwriters or otherwise.
The Company has advised the Selling Shareholders that they and
any securities broker-dealers or others who may be deemed to be
statutory underwriters may be subject to the Prospectus delivery
requirements under the Securities Act of 1933. The Company has
also advised each Selling Shareholder that in the event of a
"distribution" of his or its shares, such Selling Shareholder, any
"affiliated purchasers," and any broker-dealer or other person who
participates in such distribution may be subject to Regulation M
under the Securities Exchange Act of 1934 ("1934 Act") until his or
its participation in that distribution is completed. A "distribu-
tion" is defined in Regulation M as an offering of securities "that
is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling
efforts and selling methods."
Regulation M limits the conditions under which any person who
is participating in a distribution to bid for or purchase stock of
the same class as is the subject of the distribution. If Regulation M
applies to the offer and sale of any of the Shares, then
participating broker-dealers may be obligated to cease certain
market making activities five business days prior to their
participation in the offer and sale of such Shares and may not
recommence market making activities until their participation in
the distribution has been completed. If Regulation M applies to one
or more of the principal market makers in the Company's Common
Stock, the market price of such stock could be adversely affected.
DESCRIPTION OF COMMON STOCK
The shares of Common Stock covered by this Prospectus are fully
paid and nonassessable. Holders of the Common Stock have no
preemptive rights. Each stockholder is entitled to one vote for
each share of Common Stock held of record by such stockholder.
There is no right to cumulate votes for election of directors.
Upon liquidation of the Company, the assets then legally available
for distribution to holders of the Common Stock (after distribution
to preferred stockholders with superior distribution rights) will
be distributed ratably among such shareholders in proportion to
their stock holdings. Holders of Common Stock are entitled to
dividends when, as and if declared by the Board of Directors out of
funds legally available therefor.
LEGAL MATTERS
The law firm of Cohen Brame & Smith Professional Corporation,
1700 Lincoln Street, Suite 1800, Denver, Colorado 80203, will pass
upon the legality of the Shares offered hereby.
EXPERTS
The audited financial statements of Good Times Restaurants Inc.'s
401(k) Savings and Investment Plan included in the Registration
Statement and the audited consolidated financial statements of the
Company incorporated by reference into this Prospectus have been audited by
HEIN + ASSOCIATES, LLP certified public accountants, to the extent and
for the periods indicated in their reports with respect thereto,
and are incorporated herein in reliance upon the authority of such
firm as experts in accounting and auditing.
DOCUMENTS INCORPORATED BY REFERENCE
The Company has provided, without charge, to each holder of any
Options or Shares; including any beneficial owner, a copy of the
Company's Annual Report on 10-KSB for the fiscal year ended
September 30, 1997, The Company will also provide, without charge,
to each person to whom a copy of this Prospectus is delivered,
including any beneficial owner, upon the written or oral request of
such person, a copy of any or all of the other documents incorporated by
reference herein (other than exhibits to such documents,
unless such exhibits are specifically incorporated by reference
into the information that the Prospectus incorporates). Requests
should be directed to:
Good Times Restaurants Inc.
601 Corporate Circle
Golden, Colorado 80401
Telephone number: (303) 384-1400
Attention: Boyd E. Hoback, President & CEO
The following documents filed with the Commission by the
Company (File Number 0-16365) are hereby incorporated by reference
into this Prospectus:
(1) The Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30,1997;
(2) The Company's Quarterly Report on Form 10-QSB for the
quarter ended December 31, 1997; and
(3) The Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1998.
All documents filed with the Commission by the Company pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act subse-
quent to the date of this Prospectus and prior to the termination
of the offering registered hereby shall be deemed to be incorpo-
rated by reference into this Prospectus and to be a part hereof
from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Such statement so modified or supersed-
ed shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
HEREIN CONTAINED AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS TO
ANY OF THE TIME SUBSEQUENT TO ITS DATE.
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURI-
TIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
Index
Page
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . 2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risks Relating to the Company . . . . . . . . . . . . . 2
Market Risks. . . . . . . . . . . . . . . . . . . . . . 3
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 4
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . 4
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . 4
DESCRIPTION OF COMMON STOCK . . . . . . . . . . . . . . . . . 5
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 5
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . . . 5
<PAGE>
GOOD TIMES RESTAURANTS INC.
1992 INCENTIVE STOCK OPTION PLAN
(as revised 3-31-94)
1. Purpose. The purpose of this 1992 Incentive Stock
Option Plan (the "Plan") is to grant to employees of Good Times
Restaurants Inc., a Nevada corporation (the "Company"), options to
purchase its stock so that they may have an increased incentive to
promote the interests of the Company.
2. Eligible Employees. Key employees of the Company
who, in the opinion of the Board of Directors of the Company, are
primarily responsible for the management, promotion and protection
of the interests of the Company shall be eligible to be granted
options under the Plan. A key employee shall not be ineligible
because such person is also a director of the Company. One or more
additional options may be granted to persons who at that time hold
an option or options.
3. Option Shares and Option Price. The aggregate
number of shares of the common stock, $.001 par value ("Common
Stock"), of the Company with respect to which such options may be
granted under the Plan shall be 750,000. The purchase price for
each share of Common Stock purchased by exercise of an option
granted under the Plan shall be at least 100% of the fair market
value of such share at the time such option is granted, and shall
not be exercisable after the expiration of ten years from the date
such option is granted; provided, however, that any options granted
to any eligible employee who is, at the time of grant of such
option, the owner of stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of
its parent or subsidiary corporation shall have a purchase price
equal to at least 110% of the fair market value of the stock
subject to the option and shall not be exercisable after the
expiration of five years from the date such option is granted. In
the event of any change in the Company's corporate structure
through merger, consolidation, reorganization, recapitalization,
stock dividend or other change, appropriate proportionate adjust-
ment shall be made in the number and purchase price of the shares
subject to options granted under the Plan. To the extent the
aggregate fair market value (determined at the grant date) of the
stock which is exercisable for the first time by an employee in any
calendar year under any stock option granted to such employee under
this Plan and any other incentive stock option plan of the Company,
its parent or subsidiaries, exceeds $100,000, such options shall be
treated as options which are not incentive stock options.
4. Effective Date and Term of Plan. The Effective Date
of the Plan is April 23, 1992, which is the date of adoption of the
Plan by the Board of Directors (and which precedes the date of
approval of the Plan by shareholders). Unless this Plan is sooner
terminated, any option granted pursuant to this Plan shall be
granted within ten years from the Effective Date.
5. Exercise of Option. Any option granted under the
Plan may be exercised in accordance with the specific terms and
conditions relating thereto set forth in such option, consistent
with the Plan, provided, however, that such option shall be
exercisable at the rate of no less than 20% per year over a five
year period beginning with the date on which such option is
granted. Exercise shall be accompanied by delivery to the Company
of written notice specifying the number of shares with respect to
which such option is exercised and full payment of the purchase
price for such shares. Options may be exercised only with respect
to full shares. No fractional share of stock will be issued.
6. Acceleration of the Option. Any option granted
under the Plan shall become fully exercisable (i) immediately prior
to the completion of the merger or sale of substantially all of the
stock or assets of the Company in a transaction in which the
Company is not the survivor (see paragraph 11), except for the
merger of the Company into a wholly-owned subsidiary; or (ii) upon
termination of the employee's employment because of his death or
disability or for any other reason, except termination for cause by
the Company or its subsidiaries or termination by the employee for
any reason.
7. Expiration of Option.
(a) Subject to specific provisions of each option
agreement, each option granted under the Plan shall expire upon the
earliest to occur of (i) five or ten years from the date such
option is granted; or (ii) upon completion of the merger or sale of
substantially all of the stock or assets of the Company with or to
another company in a transaction in which the Company is not the
survivor (see paragraph 11), except for the merger of the Company
into a wholly-owned subsidiary, provided that the Company shall
have given the employee at least 60 days' prior written notice of
its intent to enter into such merger or sale; or (iii) three months
immediately following the termination of the employment of the
employee to whom such option is granted for any reason, except for
termination for cause by the Company or termination because of such
employee's death or disability.
(b) If an employee to whom an option was granted
under the Plan shall cease to be employed by the Company for any
reason, except for termination for cause by the Company or termi-
nation because of such employee's death or disability, such
employee may, but only within the period of three months immedi-
ately following such termination of employment and in no event
after the expiration date of such option, exercise such option to
the extent that he was entitled to exercise such option at the date
of his termination of employment. If the employment of an employee
to whom an option was granted by the Company is terminated for
cause, all rights under any option of such employee shall expire
immediately upon notice to the employee of such termination.
(c) In the event of the death or disability of an
employee while in the employ of the Company or within the three-month period
referred to in subparagraph (a)(iii) above, the person
to whom the option held by such employee at the time of his death
is transferred by will or the laws of descent and distribution in
the case of death (including the decedent's personal representa-
tive), or the employee or his guardian in the case of disability of
the employee, may, but only to the extent such employee was
entitled to exercise such option immediately prior to his death or
disability exercise such option at any time within a period of one
year succeeding the date of death or disability of such employee,
but in no event after the expiration date of such option.
(d) The term "disability" as used herein shall be
as defined in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended.
8. Employment Obligation. In consideration for the
granting of an option under the Plan, the employee to whom such
option is granted shall agree to remain in the employment of the
Company for a period and under terms and conditions determined and
approved by the Board of Directors of the Company and such
employee.
9. Investment Intent. Each option granted under the
Plan shall be granted only to an employee who agrees to purchase
any shares acquired by his exercise of the option for investment
purposes only and agrees not to resell any of such shares in any
manner violating the Securities Act of 1933 or any applicable state
statute.
10. Transferability. Options granted under the Plan
shall not be transferable other than by will or the laws of descent
and distribution and may be exercised during the lifetime of the
employee to whom such option is granted only by such employee.
11. Administration of the Plan. The Plan shall be
administered by the Board of Directors of the Company or a
committee of two or more directors, as determined by the Board of
Directors. The interpretation and construction of any provision of
the Plan by the Board of Directors shall be final, unless otherwise
determined by the Board of Directors. The term "survivor,"
however, as used in subsection (i) of paragraph 6 and subsection
(a) (ii) of paragraph 7 shall not apply to the Company in a reverse
triangular merger where the Company has become a wholly owned
subsidiary of another corporation. No member of the Board of
Directors shall be liable for any action or determination made by
him in good faith.
12. Intent and Construction. It is the intention of the
Company that all options granted under the Plan shall constitute
incentive stock options within the meaning of the Code, and the
Plan shall be construed and administered in order to effect such
intention.
GOOD TIMES RESTAURANTS INC.
1992 NON-STATUTORY STOCK OPTION PLAN
(as revised 3-31-94)
1. Purpose. The purpose of this 1992 Non-Statutory
Stock Option Plan (the "Plan") is to grant to employees and
directors of Good Times Restaurants Inc., a Nevada corporation (the
"Company"), and such other persons as may be determined by the
Board of Directors, options to purchase stock so that they may have
an increased incentive to promote the interests of the Company.
2. Eligible Participants. Key employees, directors of
the Company and such other persons who, in the opinion of the Board
of Directors of the Company, are primarily responsible for the
promotion and protection of the interests of the Company shall be
eligible to be granted options under the Plan. One or more addi-
tional options may be given to persons who at that time hold an
option or options. Persons granted options under the Plan who are
not key employees of the Company shall annually receive financial
statements of the Company.
3. Option Shares and Option Price. The aggregate
number of shares of the common stock, $.001 par value ("Common
Stock"), of the Company with respect to which options may be
granted under the Plan shall be 300,000. The purchase price for
each share of Common Stock purchased by exercise of an option
granted under the Plan shall be at least 100% of the fair market
value of such share at the time such option is granted, and shall
not be exercisable after the expiration of five years from the date
such option is granted; provided, however, that any options granted
to any eligible employee who is, at the time of grant of such
option, the owner of stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of
its parent or subsidiary corporation shall have a purchase price
equal to at least 110% of the fair market value of the stock
subject to the option.
4. Effective Date and Term of Plan. The Effective Date
of the Plan is April 23, 1992, which is the date of adoption of the
Plan by the Board of Directors. Unless sooner terminated, the Plan
shall remain in effect for a period of ten years from the Effective
Date.
5. Exercise of Option. Any option granted under the
Plan may be exercised in accordance with the specific terms and
conditions relating thereto set forth in such option, consistent
with the Plan, provided, however, that such option shall be
exercisable at the rate of no less than 20% per year over a five
year period beginning with the date on which such option is
granted. Exercise shall be accomplished by delivery to the Company
of written notice specifying the number of shares with respect to
which such option is exercised and full payment of the purchase
price for such shares. Options may be exercised only with respect
to full shares. No fractional share of stock will be issued.
6. Adjustment of Option. In the event of any change in
the Company's corporate structure through merger, consolidation,
reorganization, recapitalization, stock dividend or other change,
appropriate proportionate adjustment shall be made in the number
and purchase price of shares subject to options granted under the
Plan.
7. Expiration of Option. Each option granted under the
Plan shall expire upon the earliest to occur of (i) five years from
the date such option is granted; or (ii) the date of completion of
the merger or sale of substantially all of the stock or assets of
the Company with or to another company in a transaction in which
the Company is not the survivor (see paragraph 10), except for the
merger of the Company into a wholly-owned subsidiary, provided that
the Company shall have given the optionee at least 60 days' prior
written notice of its intent to enter into such merger or sale;
(iii) if the optionee is an employee of the Company, 180 days
following the optionee's death or termination of the optionee's
employment because of disability; or (iv) if the optionee is an
employee of the Company, 60 days following the termination of the
optionee's employment by the Company for any reason other than
death or disability or termination for cause; provided, however,
that this subsection (iv) shall not be operative if the optionee,
upon termination of employment, remains on, or becomes a member of,
the Board of Directors of the Company. The term "disability" as
used herein shall be as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended. If the employment of an employee
to whom an option was granted by the Company under the Plan is
terminated for cause, all rights under any option of such employee
shall expire immediately upon notice to the employee of such
termination.
8. Investment Intent. Each option granted under the
Plan shall be granted only to a participant who agrees to purchase
any shares acquired by his exercise of the option for investment
purposes only and agrees not to resell any of such shares in any
manner violating the Securities Act of 1933 or any applicable state
statute.
9. Transferability. Options granted under the Plan
shall not be transferable other than by will or the laws of descent
and distribution and may be exercised during the lifetime of the
participant to whom such option is granted only by such
participant.
10. Administration of the Plan. The Plan shall be
administered by the Board of Directors of the Company or a
committee of two or more directors, as determined by the Board of
Directors. The interpretation and construction of any provision of
the Plan by the Board of Directors shall be final, unless otherwise
determined by the Board of Directors. The term "survivor,"
however, as used in subsection (ii) of paragraph 7 shall not apply
to the Company in a reverse triangular merger where the Company has
become a wholly owned subsidiary of another corporation. No member
of the Board of Directors shall be liable for any action or
determination made by him in good faith.
11. Intent and Construction. It is the intention of the
Company that all options granted under the Plan shall constitute
non-statutory stock options, and the Plan shall be construed and
administered in order to effect such intention.
NONSTANDARDIZED
PROTOTYPE CASH OR DEFERRED
PROFIT-SHARING PLAN AND
TRUST/CUSTODIAL ACCOUNT
for
Good Times Drive Thru, Inc. as a Subsidary of
Good Times Restaurants, Inc.
SPONSORED BY
WELLS FARGO BANK, N.A.
Effective Date: February 1, 1998
<PAGE>
Plan #004
NONSTANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST/CUSTODIAL ACCOUNT
Sponsored by
WELLS FARGO BANK, N.A.
The Employer named below hereby establishes a Cash or Deferred
Profit-Sharing Plan for eligible Employees as provided in this
Adoption Agreement and the accompanying Basic Prototype Plan and
Trust/Custodial Account Basic Plan Document #04.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan,
complete this section based on the lead Employer.
Additional Employers may adopt this Plan by
attaching executed signature pages to the back of
the Employer's Adoption Agreement.
(a) NAME AND ADDRESS:
Good Times Drive Thru, Inc. as a Subsidary of
Good Times Restaurants, Inc.
8680 Wolf Court, Suite # 330
Westminster, CO 80030
(b) TELEPHONE NUMBER: (303)427-4221
(c) TAX ID NUMBER: 84-1133368
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[x] (iii)Corporation
[ ] (iv) "S"Corporation (formerly known as
SubchapterS)
[ ] (v) Other:
(e) NAME OF INDIVIDUAL AUTHORIZED TO ISSUE
INSTRUCTIONS TO THE TRUSTEE/CUSTODIAN:
See Designation of Committee Form
(f) NAME OF PLAN: Good Times Drive Thru, Inc. as a Subsidary
of Good Times Restaurants, Inc. 401(k)
Savings and Investment Plan
(g) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 001
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of
.
(b) This is an amended Plan.
The effective date of the original Plan was April 1,
1992 .
The effective date of the amended Plan is February 1,
1998 .
(c) If different from above, the Effective Date for the
Plan's Elective Deferral provisions shall be
. [If no date is entered, the effective
date for Elective Deferrals is the same as 2(a) or
2(b)].
3. DEFINITIONS
(a) "Collective or Commingled Funds" (Applicable to
institutional Trustees only.) Investment in
collective or commingled funds as permitted at
paragraph 13.3(b) of the Basic Plan Document #04
shall only be made to the following specifically
named fund(s):
See Attachment 3(a)
Funds made available after the execution of this
Adoption Agreement will be listed on schedules
attached to the end of this Adoption Agreement.
(b) "Compensation" Compensation shall be determined on
the basis of the:
[x] (i) Plan Year. If elected, Compensation is
based on the period during which the
Employee is a Participant in the Plan.
[ ] (ii) Employer's Taxable Year.
[ ] (iii)Calendar Year.
Compensation shall be determined on the basis of the
following safe-harbor definition of Compensation in
IRS Regulation Section 1.414(s)-1(c):
[x] (iv) Code Section 6041 and 6051 Compensation,
[ ] (v) Code Section 3401(a) Compensation, or
[ ] (vi) Code Section 415 Compensation.
For purposes of the Plan, Compensation shall be
limited to $ , the maximum amount which will be
considered for Plan purposes. [If an amount is
specified, it will limit the amount of contributions
allowed on behalf of higher compensated Employees.
Completion of this section is not intended to
coordinate with the $200,000 of Code Section 415(d),
thus the amount should be less than $200,000 as
adjusted for cost-of-living increases.]
(vii) Exclusions From Compensation:
(1) overtime.
(2) bonuses.
(3) commissions.
(4) Contributions made pursuant to a salary
reduction agreement as defined at paragraph
1.12 of Basic Plan Document #04.
(5)
Compensation for Purposes of: Exclusion(s)
Determining Employee Elective Deferrals
expressed as a percentage of Compensation
[Section 7(b)]
Determining Employer Matching Contributions
[Section 7(c)]
Allocating Employer Qualified Non-Elective
Contributions [Section 7(d)] and Non-Elective
Contributions [Section 7(e)]
Determining Actual Deferral and Contribution
Percentages in connection with the
antidiscrimination tests. Such definition
must satisfy Code Section 414(s).
(c) "Entry Date"
[ ] (i) The first day of the Plan Year nearest the
date on which an Employee meets the
eligibility requirements.
[ ] (ii) The earlier of the first day of the Plan
Year or the first day of the seventh month
of the Plan Year coinciding with or
following the date on which an Employee
meets the eligibility requirements.
[ ] (iii) The first day of the Plan Year
following the date on which the
Employee meets the eligibility
requirements. If this election is
made, the Service requirement at
4(a)(ii) may not exceed 1/2 year and
the age requirement at 4(b)(ii) may
not exceed 20-1/2.
[ ] (iv) The first day of the month coinciding with
or following the date on which an Employee
meets the eligibility requirements.
[x] (v) The first day of the Plan Year, or the
first day of the fourth month, or the first
day of the seventh month or the first day
of the tenth month, of the Plan Year
coinciding with or following the date on
which an Employee meets the eligibility
requirements.
(d) "Hours of Service" Shall be determined on the basis
of the method selected below. Only one method may be
selected. The method selected shall be applied to all
Employees covered under the Plan as follows:
[x] (i) On the basis of actual hours for which an
Employee is paid or entitled to payment.
[ ] (ii) On the basis of days worked.
An Employee shall be credited with ten (10)
Hours of Service if under paragraph 1.42 of
the Basic Plan Document #04 such Employee
would be credited with at least one (1)
Hour of Service during the day.
[ ] (iii) On the basis of weeks worked.
An Employee shall be credited with forty-five
(45) Hours of Service if under
paragraph 1.42 of the Basic Plan Document
#04 such Employee would be credited with at
least one (1) Hour of Service during the
week.
[ ] (iv) On the basis of semi-monthly payroll
periods.
An Employee shall be credited with ninety-five
(95) Hours of Service if under
paragraph 1.42 of the Basic Plan Document
#04 such Employee would be credited with at
least one (1) Hour of Service during the
semi-monthly payroll period.
[ ] (v) On the basis of months worked.
An Employee shall be credited with one-hundred-ninety
(190) Hours of Service if
under paragraph 1.42 of the Basic Plan
Document #04 such Employee would be
credited with at least one (1) Hour of
Service during the month.
(e) "Limitation Year" The 12-consecutive month period
commencing on October 1 and ending on September 30.
If applicable, the Limitation Year will be a short
Limitation Year commencing on
and ending on . Thereafter, the Limitation Year
shall end on the date last specified above.
(f) "Net Profit"
[x] (i) Not applicable (profits will not be
required for any contributions to the
Plan).
[ ] (ii) As defined in paragraph 1.49 of the Basic
Plan Document #04.
[ ] (iii) Shall be defined as:
(Only use if definition in paragraph 1.49 of the
Basic Plan Document #04 is to be superseded.)
(g) "Plan Year" The 12-consecutive month period
commencing on October 1 and ending on September 31.
If applicable, the Plan Year will be a short Plan
Year commencing on and ending on .
Thereafter, the Plan Year shall end on the date last
specified above.
(h) "Qualified Early Retirement Age" For purposes of
making distributions under the provisions of a
Qualified Domestic Relations Order, the Plan's
Qualified Early Retirement Age with regard to the
Participant against whom the order is entered [x] shall
[ ] shall not be the date the order is determined to
be qualified. If "shall" is elected, this will only
allow payout to the alternate payee(s).
(i) "Qualified Joint and Survivor Annuity" The safe-harbor
provisions of paragraph 8.7 of the Basic Plan
Document #04 [x] are [ ] are not applicable. If not
applicable, the survivor annuity shall be % (50%,
66-2/3%, 75% or 100%) of the annuity payable during
the lives of the Participant and Spouse. If no
answer is specified, 50% will be used.
(j) "Taxable Wage Base" [paragraph 1.79]
[x] (i) Not Applicable - Plan is not integrated
with Social Security.
[ ] (ii) The maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
[ ] (iii) % (not more than 100%) of the amount
considered wages for such Plan Year
under Code Section 3121(a).
[ ] (iv) $ , provided that such amount is not in
excess of the amount determined under
paragraph 3(j)(ii) above.
[ ] (v) For the 1989 Plan Year $10,000. For all
subsequent Plan Years, 20% of the maximum
earnings considered wages for such Plan
Year under Code Section 3121(a).
NOTE: Using less than the maximum at (ii) may
result in a change in the allocation
formula in Section 7.
(k) "Valuation Date(s)" Allocations to Participant
Accounts under a daily valuation system will be
performed in accordance with paragraph 5.4(b) of the
Basic Plan Document #04. Allocatons to Participant
Accounts under a balance forward valuation system
will be performed in accordance with paragraph 5.4(a)
of Basic Plan Document #04:
(i) Monthly (iv) Semi-Annually
(ii) Bi-Monthly (v) Annually
(iii) Quarterly
Indicate Valuation Date(s) to be used by specifying
option from list above:
Type of Contribution(s) Valuation
Date(s)
After-Tax Voluntary Contributions [Section 6] iii
Elective Deferrals [Section 7(b)] iii
Matching Contributions [Section 7(c)] iii
Qualified Non-Elective Contributions
[Section 7(d)] iii
Non-Elective Contributions
[Section 7(e), (f) and (g)] iii
Minimum Top-Heavy Contributions
[Section 7(i)] iii
(l) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive
month period during which an Employee is
credited with 1000 (not more than 1,000) Hours
of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive
month period during which an
Employee is credited with 1000 (not more than
1,000) Hours of Service.
(iii) For Vesting Purposes: The 12-consecutive
month period during which an Employee is
credited with 1000 (not more than 1,000)
Hours of Service.
4. ELIGIBILITY REQUIREMENTS
(a) Service:
[ ] (i) The Plan shall have no service requirement.
[x] (ii) The Plan shall cover only Employees having
completed at least 1 [not more than three
(3)] Years of Service. If more than one
(1) is specified, for Plan Years beginning
in 1989 and later, the answer will be
deemed to be one (1).
NOTE: If the eligibility period selected is less
than one year, an Employee will not be
required to complete any specified number
of Hours of Service to receive credit for
such period.
(b) Age:
[ ] (i) The Plan shall have no minimum age
requirement.
[x] (ii) The Plan shall cover only Employees having
attained age 21 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the
age and service requirements with the following
exceptions:
[ ] (i) No exceptions.
[x] (ii) The Plan shall exclude Employees included
in a unit of Employees covered by a
collective bargaining agreement between the
Employer and Employee Representatives, if
retirement benefits were the subject of
good faith bargaining. For this purpose,
the term "Employee Representative" does not
include any organization more than half of
whose members are Employees who are owners,
officers, or executives of the Employer.
[ ] (iii) The Plan shall exclude Employees who
are nonresident aliens and who receive
no earned income from the Employer
which constitutes income from sources
within the United States.
[ ] (iv) The Plan shall exclude from participation
any nondiscriminatory classification of
Employees determined as follows:
(d) Employees on Effective Date:
[x] (i) Not Applicable. All Employees will be
required to satisfy both the age and
Service requirements specified above.
[ ] (ii) Employees employed on the Plan's Effective
Date do not have to satisfy the Service
requirements specified above.
[ ] (iii) Employees employed on the Plan's
Effective Date do not have to satisfy
the age requirements specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees
retire upon reaching a specified age, the Normal
Retirement Age selected below may not exceed the
Employer imposed mandatory retirement age.
[x] (i) Normal Retirement Age shall be 65 (not
to exceed age 65).
[ ] (ii) Normal Retirement Age shall be the later of
attaining age (not to exceed age 65)
or the (not to exceed the 5th) an-
niversary of the first day of the first
Plan Year in which the Participant
commenced participation in the Plan.
(b) Early Retirement Age:
[x] (i) Not Applicable.
[ ] (ii) The Plan shall have an Early Retirement Age
of (not less than 55) and
completion of Years of Service.
6. EMPLOYEE CONTRIBUTIONS
[x] (a) Participants shall be permitted to make Elective
Deferrals in any amount from 1% up to 14
% of their Compensation.
If (a) is applicable, Participants shall be
permitted to amend their Salary Savings
Agreements to change the contribution percentage
as provided below:
[ ] (i) On the Anniversary Date of the Plan,
[ ] (ii) On the Anniversary Date of the Plan
and on the first day of the seventh
month of the Plan Year,
[x] (iii) On the Anniversary Date of the
Plan and on the first day
following any Valuation Date, or
[ ] (iv) Upon 30 days notice to the Employer.
[ ] (b) Participants shall be permitted to make after
tax Voluntary Contributions in any amount from
% up to % of their Compensation.
[ ] (c) Participants shall be required to make after tax
Voluntary Contributions as follows (Thrift
Savings Plan):
[ ] (i) % of Compensation.
[ ] (ii) A percentage determined by the
Employee on his or her enrollment
form.
[ ] (d) If necessary to pass the Average Deferral
Percentage Test, Participants [ ] may [ ] may
not have Elective Deferrals recharacterized as
Voluntary Contributions.
NOTE: The Average Deferral Percentage Test will apply
to contributions under (a) above. The Average
Contribution Percentage Test will apply to
contributions under (b) and (c) above, and may
apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the
Plan in accordance with the formula or formulas
selected below. The Employer's contribution
shall be subject to the limitations contained in
Articles III and X. For this purpose, a
contribution for a Plan Year shall be limited
for the Limitation Year which ends with or
within such Plan Year. Also, the integrated
allocation formulas below are for Plan Years
beginning in 1989 and later. The Employer's
allocation for earlier years shall be as
specified in its Plan prior to amendment for the
Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or Accumulated Net Profits are required
for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contributions.
[ ] (C) discretionary contributions.
(ii) No Net Profits are required for:
[x] (A) Matching Contributions.
[x] (B) Qualified Non-Elective Contributions.
[x] (C) discretionary contributions.
NOTE: Elective Deferrals can always be contributed
regardless of profits.
[x] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each
Participant's account an amount equal to the amount
withheld from the Compensation of such Participant
pursuant to his or her Salary Savings Agreement. If
applicable, the maximum percentage is specified in
Section 6 above.
An Employee who has terminated his or her election
under the Salary Savings Agreement other than for
hardship reasons may not make another Elective
Deferral:
[ ] (i) until the first day of the next Plan Year.
[x] (ii) until the first day of the next valuation
period.
[ ] (iii) for a period of month(s) (not
to exceed 12 months).
[x] (c) Matching Employer Contribution [See paragraphs (h)
and (i)]:
[ ] (i) Percentage Match: The Employer shall
contribute and allocate to each eligible
Participant's account an amount equal to
% of the amount contributed and allocated
in accordance with paragraph 7(b) above and
(if checked) % of [ ] the amount of
Voluntary Contributions made in accordance
with paragraph 4.1 of the Basic Plan
Document #04. The Employer shall not match
Participant Elective Deferrals as provided
above in excess of $ or in excess of
% of the Participant's Compensation or if
applicable, Voluntary Contributions in
excess of $ or in excess of % of
the Participant's Compensation. In no
event will the match on both Elective
Deferrals and Voluntary Contributions
exceed a combined amount of $ or %.
[x] (ii) Discretionary Match: The Employer shall
contribute and allocate to each eligible
Participant's account a percentage of the
Participant's Elective Deferral contributed
and allocated in accordance with paragraph
7(b) above. The Employer shall set such
percentage prior to the end of the Plan
Year. The Employer shall not match
Participant Elective Deferrals in excess of
$ or in excess of 6 % of the
Participant's Compensation.
[ ] (iii) Tiered Match: The Employer shall
contribute and allocate to each
Participant's account an amount equal
to % of the first % of the
Participant's Compensation, to the
extent deferred.
% of the next % of the
Participant's Compensation, to the extent
deferred.
% of the next % of the
Participant's Compensation, to the extent
deferred.
NOTE: Percentages specified in (iii) above may not
increase as the percentage of Participant's
contribution increases.
[ ] (iv) Flat Dollar Match: The Employer shall
contribute and allocate to each
Participant's account $ if the
Participant defers at least 1% of
Compensation.
[ ] (v) Percentage of Compensation Match: The
Employer shall contribute and allocate to
each Participant's account % of Com-
pensation if the Participant defers at
least 1% of Compensation.
[ ] (vi) Proportionate Compensation Match: The
Employer shall contribute and allocate to
each Participant who defers at least 1% of
Compensation, an amount determined by
multiplying such Employer Matching Contri-
bution by a fraction the numerator of which
is the Participant's Compensation and the
denominator of which is the Compensation of
all Participants eligible to receive such
an allocation. The Employer shall set such
discretionary contribution prior to the end
of the Plan Year.
[ ] (vii) Qualified Match: Employer Matching
Contributions will be treated as
Qualified Matching Contributions to
the extent specified below:
[ ] (A) All Matching Contributions.
[ ] (B) None.
[ ] (C) % of the Employer's
Matching Contribution.
[ ] (D) Up to % of each Par-
ticipant's Compensation.
[ ] (E) The amount necessary to meet the
[ ] Average Deferral Percentage
(ADP) Test, [ ] Average
Contribution Percentage (ACP)
Test, [ ] Both the ADP and ACP
Tests.
(viii) Matching Contribution Computation
Period: The time period upon which
matching contributions will be based
shall be
[ ] (A) weekly
[ ] (B) bi-weekly
[ ] (C) semi-monthly
[ ] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[x] (G) annually
(ix) Eligibility for Match: Employer Matching
Contributions, whether or not Qualified,
will only be made on Employee Contributions
not withdrawn prior to the end of the
applicable [ ] payroll period
[ ] valuation period [x] Plan Year.
[x] (d) Qualified Non-Elective Employer Contribution - [See
paragraphs (h) and (i)] These contributions are fully
vested when contributed.
The Employer shall have the right to make an
additional discretionary contribution which shall be
allocated to each eligible Employee in proportion to
his or her Compensation as a percentage of the
Compensation of all eligible Employees. This part of
the Employer's contribution and the allocation
thereof shall be unrelated to any Employee
contributions made hereunder. The amount of
Qualified non-Elective Contributions taken into
account for purposes of meeting the ADP or ACP test
requirements is:
[x] (i) All such Qualified non-Elective
Contributions.
[ ] (ii) The amount necessary to meet [ ] the ADP
test, [ ] the ACP test, [ ] Both the ADP
and ACP tests.
Qualified non-Elective Contributions will be made to:
[ ] (iii) All Employees eligible to participate.
[x] (iv) Only non-Highly Compensated Employees
eligible to participate.
[x] (e) Additional Employer Contribution Other Than Qualified
Non-Elective Contributions - Non-Integrated [See
paragraphs (h) and (i)]
The Employer shall have the right to make an
additional discretionary contribution which shall be
allocated to each eligible Employee in proportion to
his or her Compensation as a percentage of the
Compensation of all eligible Employees. This part of
the Employer's contribution and the allocation
thereof shall be unrelated to any Employee
contributions made hereunder.
[ ] (f) Additional Employer Contribution - Integrated
Allocation Formula [See paragraphs (h) and (i)]
The Employer shall have the right to make an
additional discretionary contribution. The
Employer's contribution for the Plan Year plus any
forfeitures shall be allocated to the accounts of
eligible Participants as follows:
(i) First, to the extent contributions and forfei-
tures are sufficient, all Participants will
receive an allocation equal to 3% of their Com-
pensation.
(ii) Next, any remaining Employer Contributions and
forfeitures will be allocated to Participants
who have Compensation in excess of the Taxable
Wage Base (excess Compensation). Each such
Participant will receive an allocation in the
ratio that his or her excess compensation bears
to the excess Compensation of all Participants.
Participants may only receive an allocation of
3% of excess Compensation.
(iii) Next, any remaining Employer contributions
and forfeitures will be allocated to all
Participants in the ratio that their
Compensation plus excess Compensation bears
to the total Compensation plus excess
Compensation of all Participants.
Participants may only receive an allocation
of up to 2.7% of their Compensation plus
excess Compensation, under this allocation
method. If the Taxable Wage Base defined
at Section 3(j) is less than or equal to
the greater of $10,000 or 20% of the
maximum, the 2.7% need not be reduced. If
the amount specified is greater than the
greater of $10,000 or 20% of the maximum
Taxable Wage Base, but not more than 80%,
2.7% must be reduced to 1.3%. If the
amount specified is greater than 80% but
less than 100% of the maximum Taxable Wage
Base, the 2.7% must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy
minimum contribution or benefit is provided
under another Plan [see Section 11(c)(ii)]
covering the same Employees, sub-paragraphs (i)
and (ii) above may be disregarded and 5.7%, 4.3%
or 5.4% may be substituted for 2.7%, 1.3% or
2.4% where it appears in (iii) above.
(iv) Next, any remaining Employer contributions and
forfeitures will be allocated to all Partici-
pants (whether or not they received an allo-
cation under the preceding paragraphs) in the
ratio that each Participant's Compensation bears
to all Participants' Compensation.
[ ] (g) Additional Employer Contribution-Alternative
Integrated Allocation Formula. [See paragraph (h)
and (i)]
The Employer shall have the right to make an
additional discretionary contribution. To the extent
that such contributions are sufficient, they shall be
allocated as follows:
% of each eligible Participant's Compensation
plus % of Compensation in excess of the Taxable
Wage Base defined at Section 3(j) hereof. The
percentage on excess compensation may not exceed the
lesser of (i) the amount first specified in this
paragraph or (ii) the greater of 5.7% or the
percentage rate of tax under Code Section 3111(a) as
in effect on the first day of the Plan Year
attributable to the Old Age (OA) portion of the OASDI
provisions of the Social Security Act. If the
Employer specifies a Taxable Wage Base in Section
3(j) which is lower than the Taxable Wage Base for
Social Security purposes (SSTWB) in effect as of the
first day of the Plan Year, the percentage
contributed with respect to excess Compensation must
be adjusted. If the Plan's Taxable Wage Base is
greater than the larger of $10,000 or 20% of the
SSTWB but not more than 80% of the SSTWB, the excess
percentage is 4.3%. If the Plan's Taxable Wage Base
is greater than 80% of the SSTWB but less than 100%
of the SSTWB, the excess percentage is 5.4%.
NOTE: Only one plan maintained by the Employer may be
integrated with Social Security.
(h) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above
results in an Excess Amount, such excess, after
distribution of Employee related contributions
pursuant to paragraph 10.2 of the Basic Plan Document
shall be:
[ ] (i) Suspense Account - placed in a suspense
account accruing no gains or losses for the
benefit of the Participant.
[x] (ii) Spillover - reallocated as additional
Employer contributions to all other
Participants to the extent that they do not
have any Excess Amount.
(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy,
the sum of the contributions and forfeitures as
allocated to eligible Employees under paragraphs
7(d), 7(e), 7(f), 7(g) and 9 of this Adoption
Agreement shall not be less than the amount required
under paragraph 14.2 of the Basic Plan document #04.
Top-Heavy minimums will be allocated to:
[x] (i) all eligible Participants.
[ ] (ii) only eligible non-Key Employees who are
Participants.
(j) Return of Excess Contributions and/or Excess
Aggregate Contributions:
In the event that one or more Highly Compensated
Employees is subject to both the ADP and ACP tests
and the sum of such tests exceeds the Aggregate
Limit, the limit will be satisfied by reducing:
[ ] (i) the ADP of the affected Highly Compensated
Employees.
[ ] (ii) the ACP of the affected Highly Compensated
Employees.
[x] (iii) a combination of the ADP and/or ACP of
the affected Highly Compensated
Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
[ ] (a) The Employer will not allocate Employer related
contributions to Employees who terminate during
a Plan Year, unless required to satisfy the
requirements of Code Section 401(a)(26) and
410(b). (These requirements are effective for
1989 and subsequent Plan Years.)
[x] (b) The Employer will allocate Employer matching and
other related contributions as indicated below
to Employees who terminate during the Plan Year
as a result of:
Matching Other
[x] [x] (i) Retirement.
[x] [x] (ii) Disability.
[x] [x] (iii) Death.
[ ] [ ] (iv) Other termination of employment
provided that the Participant has
completed a Year of Service as
defined for Allocation Accrual
Purposes.
[ ] [ ] (v) Other termination of employment
even though the Participant has
not completed a Year of Service.
[ ] [ ] (vi) Termination of employment (for
any reason) provided that the
Participant had completed a Year
of Service for Allocation Accrual
Purposes.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to
forfeitures of amounts other than Excess Aggregate
Contributions.
(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such
allocations shall be done in the same manner as the
Employer's contribution.
[ ] (i) Not Applicable. All contributions are
always fully vested.
[x] (ii) Forfeitures attributable to Employer
discretionary contributions and Top-Heavy
minimums:
[ ] will be allocated to:
[ ] all eligible Participants.
[ ] only those Participants
eligible for an allocation
of Employer contributions in
the current year.
[ ] only those Participants
eligible for an allocation
of matching contributions in
the current year.
[x] will be applied to reduce the
Employer's contribution for such
Plan Year.
[ ] shall be applied to offset
administrative expenses of the
Plan. If forfeitures exceed
these expenses, the excess will
be applied to reduce the
Employer's contribution for such
Plan Year.
[x] (iii) Forfeitures attributable to Employer
Matching contributions:
[ ] will be allocated to:
[ ] all eligible Participants.
[ ] only those Participants
eligible for an allocation
of Employer contributions in
the current year.
[ ] only those Participants
eligible for an allocation
of matching contributions in
the current year.
[x] will be applied to reduce the
Employer's contribution for such
Plan Year.
[ ] shall be applied to offset
administrative expenses of the
Plan. If forfeitures exceed
these expenses, the excess will
be applied to reduce the
Employer's contribution for such
Plan Year.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former
Participant, sub-section (i) below will apply to such
Participant even if the Employer elects (ii), (iii)
or (iv) below as its normal administrative policy.
[ ] (i) Forfeitures shall be reallocated at the end
of the Plan Year during which the former
Participant incurs his or her fifth
consecutive one year Break In Service.
[ ] (ii) Forfeitures will be reallocated as of the
next Valuation Date following the date on
which the former Participant receives
payment of his or her vested benefit.
[ ] (iii) Forfeitures shall be reallocated at
the end of the Plan Year during which
the former Employee incurs his or her
(1st, 2nd, 3rd, or 4th) consecutive
one year Break In Service.
[x] (iv) Forfeitures will be reallocated as of the
end of the Plan Year during which the
former Participant receives payment of his
or her vested benefit.
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year
Breaks in Service, the Funds for restoration of
account balances will be obtained from the following
resources in the order indicated (fill in the
appropriate number):
[1] (i) Current year's forfeitures.
[2] (ii) Additional Employer contribution.
[3] (iii) Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall
be:
[x] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures
under the Plan, to the Matching
Contribution account of each non-Highly
Compensated Participant who made Elective
Deferrals or Voluntary Contributions in the
ratio which each such Participant's
Compensation for the Plan Year bears to the
total Compensation of all such Participants
for such Plan Year. Such forfeitures
cannot be allocated to the account of any
Highly Compensated Employee.
Forfeitures of Excess Aggregate Contributions will be
so applied at the end of the Plan Year in which they
occur.
10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect
to defer to the Plan, an amount not to exceed
% of any Employer paid cash bonus made for
such Participant for any year. A Participant
must file an election to defer such contribution
at least fifteen (15) days prior to the end of
the Plan Year. If the Employee fails to make
such an election, the entire Employer paid cash
bonus to which the Participant would be entitled
shall be paid as cash and not to the Plan.
Amounts deferred under this section shall be
treated for all purposes as Elective Deferrals.
Notwithstanding the above, the election to defer
must be made before the bonus is made available
to the Participant.
[x] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS
[x] This is the only Plan the Employer maintains or ever
maintained, therefore, this section is not
applicable.
[ ] The Employer does maintain or has maintained another
Plan (including a Welfare Benefit Fund or an
individual medical account (as defined in Code
Section 415(l)(2)), under which amounts are treated
as Annual Additions) and has completed the proper
sections below.
Complete (a), (b) and (c) only if the Employer
maintains or ever maintained another qualified plan,
including a Welfare Benefit Fund or an individual
medical account [as defined in Code Section
415(l)(2)] in which any Participant in this Plan is
(or was) a participant or could possibly become a
participant.
(a) If the Participant is covered under another qualified
Defined Contribution Plan maintained by the Employer,
other than a Master or Prototype Plan:
[ ] (i) the provisions of Article X of the Basic
Plan Document #04 will apply, as if the
other plan were a Master or Prototype Plan.
[ ] (ii) Attach provisions stating the method under
which the plans will limit total Annual
Additions to the Maximum Permissible
Amount, and will properly reduce any Excess
Amounts, in a manner that precludes
Employer discretion.
(b) If a Participant is or ever has been a participant in
a Defined Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0
limitation of Code Section 415(e). Such language
must preclude Employer discretion. The Employer must
also specify the interest and mortality assumptions
used in determining Present Value in the Defined
Benefit Plan.
(c) The minimum contribution or benefit required under
Code Section 416 relating to Top-Heavy Plans shall be
satisfied by:
[ ] (i) this Plan.
[ ] (ii)
(Name of other qualified plan of the
Employer).
[ ] (iii) Attach provisions stating the method
under which the minimum contribution
and benefit provisions of Code Section
416 will be satisfied. If a Defined
Benefit Plan is or was maintained, an
attachment must be provided showing
interest and mortality assumptions
used in the Top-Heavy Ratio.
12. VESTING
Employees shall have a fully vested and nonforfeitable
interest in any Employer contribution and the investment
earnings thereon made in accordance with paragraphs
(select one or more options) [ ] 7(c), [ ] 7(e),
[ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions
under paragraph 7(b), 7(c)(vii) and 7(d) are always fully
vested. If one or more of the foregoing options are not
selected, such Employer contributions shall be subject to
the vesting table selected by the Employer.
Each Participant shall acquire a vested and nonforfeitable
percentage in his or her account balance attributable to
Employer contributions and the earnings thereon under the
procedures selected below except with respect to any Plan
Year during which the Plan is Top-Heavy, in which case the
Two-twenty vesting schedule [Option (b)(iv)] shall
automatically apply unless the Employer has already
elected a faster vesting schedule. If the Plan is
switched to option (b)(iv), because of its Top-Heavy
status, that vesting schedule will remain in effect even
if the Plan later becomes non-Top-Heavy until the Employer
executes an amendment of this Adoption Agreement
indicating otherwise.
(a) Computation Period:
The computation period for purposes of determining
Years of Service and Breaks in Service for purposes
of computing a Participant's nonforfeitable right to
his or her account balance derived from Employer
contributions:
[ ] (i) shall not be applicable since Participants
are always fully vested,
[ ] (ii) shall commence on the date on which an
Employee first performs an Hour of Service
for the Employer and each subsequent 12-consecutive month
period shall commence on
the anniversary thereof, or
[x] (iii) shall commence on the first day of the
Plan Year during which an Employee
first performs an Hour of Service for
the Employer and each subsequent 12-consecutive
month period shall commence on the anniversary thereof.
A Participant shall receive credit for a Year of Service
if he or she completes at least 1,000 Hours of Service [or
if lesser, the number of hours specified at 3(l)(iii) of
this Adoption Agreement] at any time during the 12-consecutive
month computation period. Consequently, a
Year of Service may be earned prior to the end of the
12-consecutive month computation period and the Participant
need not be employed at the end of the 12-consecutive
month computation period to receive credit for a Year of
Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a
Participant who has at least one Hour of Service
during or after the 1989 Plan Year. If applicable,
Participants who separated from Service prior to the
1989 Plan Year will remain under the vesting schedule
as in effect in the Plan prior to amendment for the
Tax Reform Act of 1986.
(i) Full and immediate vesting.
Years of Service
1 2 3 4 5 6 7
(ii) % 100%
(iii) % % 100%
(iv) % 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) 0 % 40 % 60 % 80 % 100%
(viii) % % % % % % 100%
NOTE: The percentages selected for schedule (viii) may not
be less for any year than the percentages shown at
schedule (v).
[x] All contributions other than those which are
fully vested when contributed will vest under
schedule vii above.
[ ] Contributions other than those which are
fully vested when contributed will vest as
provided below:
Vesting Type Of Employer
Option Selected Contribution
7(c) Employer Match
on Salary Savings
7(c) Employer Match on
Employee Voluntary
7(e)
Employer Discretionary
7(f) & (g) Employer Discretionary-
Integrated
(c) Service disregarded for Vesting:
[x] (i) Not Applicable. All Service shall be
considered.
[ ] (ii) Service prior to the Effective Date of
this Plan or a predecessor plan shall
be disregarded when computing a
Participant's vested and
nonforfeitable interest.
[ ] (iii) Service prior to a Participant
having attained age 18 shall be
disregarded when computing a
Participant's vested and nonfor-
feitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for
eligibility, Hours of Service shall include Service with
the following predecessor organization(s):
(These hours will also be used for vesting purposes.)
RTC Express, Inc.
Round The Corner Restaurants, Inc.
14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3
of the Basic Plan Document #04, [x] shall [ ] shall
not be permitted. If permitted, Employees [ ] may
[x] may not make Rollover Contributions prior to
meeting the eligibility requirements for
participation in the Plan.
(b) Transfer Contributions, as described at paragraph 4.4
of the Basic Plan Document #04 [x] shall [ ] shall
not be permitted. If permitted, Employees [ ] may
[x] may not make Transfer Contributions prior to
meeting the eligibility requirements for
participation in the Plan.
NOTE: Even if available, the Employer may refuse to accept
such contributions if its Plan meets the safe-harbor
rules of paragraph 8.7 of the Basic Plan Document
#04.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of
the Basic Plan Document #04, [x] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.5 of
the Basic Plan Document #04, [x] are [ ] are not
permitted. If permitted, repayments of principal and
interest shall be repaid to [x] the Participant's
segregated account or [ ] the general Fund.
17. INSURANCE POLICIES
The insurance provisions of paragraph 13.6 of the Basic
Plan Document #04 [ ] shall [x] shall not be applicable.
18. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth
in paragraph 13.7 of the Basic Plan Document #04,
[x] shall [ ] shall not be applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set
forth in paragraph 13.8 of the Basic Plan Document
#04, [x] shall [ ] shall not be applicable.
If applicable, Participants may direct their
investments:
[x] (i) among funds offered by the Trustee.
[ ] (ii) among any allowable investments.
(b) Participants may direct the following kinds of
contributions and the earnings thereon (check all
applicable):
[ ] (i) All Contributions
[x] (ii) Elective Deferrals
[ ] (iii) Employee Voluntary Contributions
(after-tax)
[ ] (iv) Employee Mandatory Contributions (after-tax)
[ ] (v) Employer Qualified Matching Contributions
[ ] (vi) Other Employer Matching Contributions
[ ] (vii) Employer Qualified Non-Elective
Contributions
[ ] (viii) Employer Discretionary Contributions
[x] (ix) Rollover Contributions
[ ] (x) Transfer Contributions
[ ] (xi) All of above which are checked, but only to
the extent that the Participant is vested
in those contributions.
NOTE: To the extent that Employee investment direction was
previously allowed, the Trustee shall have the right
to either make the assets part of the general Trust,
or leave them as separately invested subject to the
rights of paragraph 13.8.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to
retirement, death or Disability [x] may [ ] may not
make application to the Employer requesting an early
payment of his or her vested account balance.
(b) A Participant who has attained age 59-1/2 and who has
not separated from Service [x] may [ ] may not obtain
a distribution of his or her vested Employer
contributions. Distribution can only be made if the
Participant is 100% vested.
(c) A Participant who has attained the Plan's Normal
Retirement Age and who has not separated from Service
[x] may [ ] may not receive a distribution of his or
her vested account balance.
NOTE: If the Participant has had the right to withdraw his
or her account balance in the past, this right
may not be taken away. Notwithstanding the above, to
the contrary, required minimum distributions will be
paid. For timing of distributions, see item 21(a)
below.
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death,
Disability or retirement, benefits shall be paid:
[ ] (i) As soon as administratively feasible,
following the close of the valuation period
during which a distribution is requested or
is otherwise payable.
[ ] (ii) As soon as administratively feasible
following the close of the Plan Year during
which a distribution is requested or is
otherwise payable.
[x] (iii) As soon as administratively feasible,
following the date on which a
distribution is requested or is
otherwise payable.
[ ] (iv) As soon as administratively feasible, after
the close of the Plan Year during which the
Participant incurs consecutive one-year Breaks in Service.
[ ] (v) Only after the Participant has achieved the
Plan's Normal Retirement Age, or Early
Retirement Age, if applicable.
In cases of death, Disability or retirement, benefits
shall be paid:
[ ] (vi) As soon as administratively feasible,
following the close of the valuation period
during which a distribution is requested or
is otherwise payable.
[ ] (vii) As soon as administratively feasible
following the close of the Plan Year
during which a distribution is
requested or is otherwise payable.
[x] (viii) As soon as administratively feasible,
following the date on which a
distribution is requested or is
otherwise payable.
(b) Optional Forms of Payment:
[x] (i) Lump Sum.
[x] (ii) Installment Payments.
[ ] (iii) Life Annuity*.
[ ] (iv) Life Annuity Term Certain*.
Life Annuity with payments guaranteed for
years (not to exceed 20 years,
specify all applicable).
[ ] (v) Joint and [ ] 50%, [ ] 66-2/3%, [ ] 75%
or [ ] 100% survivor annuity* (specify all
applicable).
[ ] (vi) Other form(s) specified:
*Not available in Plan meeting provisions of
paragraph 8.7 of Basic Plan Document #04.
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan,
Participants and/or their Spouse (Surviving Spouse)
[x] shall [ ] shall not have the right to have their
life expectancy recalculated annually.
If "shall",
[ ] only the Participant shall be recalculated.
[ ] both the Participant and Spouse shall be
recalculated.
[x] who is recalculated shall be determined by the
Participant.
22. SPONSOR CONTACT
Employers should direct questions concerning the language
contained in and qualification of the Prototype to:
Henry P. Schneider, APA
(Job Title) Assistant Vice President
(Phone Number) (619) 622-6701
In the event that the Sponsor amends, discontinues or
abandons this Prototype Plan, notification will be
provided to the Employer's address provided on the first
page of this Agreement.<PAGE>
23. SIGNATURES:
Due to the significant tax ramifications, the Sponsor
recommends that before you execute this Adoption
Agreement, you contact your attorney or tax advisor, if
any.
(a) EMPLOYER:
Name and address of Employer if different than
specified in Section 1 above.
This agreement and the corresponding provisions of
the Plan and Trust/Custodial Account Basic Plan
Document #04 were adopted by the Employer the
day of , 19 .
Signed for the Employer by:
Title:
Signature:
The Employer understands that its failure to properly
complete the Adoption Agreement may result in
disqualification of its Plan.
Employer's Reliance: An Employer who adopts a
Standardized Plan and who maintains or has ever
maintained or who later adopts any Plan [including,
after December 31, 1985, a Welfare Benefit Fund, as
defined in Section 419(e) of the Code, which provides
post-retirement medical benefits allocated to
separate accounts for Key Employees, as defined in
Section 419A(d)(3)] or an individual medical account,
as defined in Code Section 415(l)(2) in addition to
this Plan may not rely on the opinion letter issued
by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under
Section 401 of the Code. If the Employer who adopts
or maintains multiple Plans wishes to obtain reliance
that such Plan(s) are qualified, application for a
determination letter should be made to the
appropriate Key District Director of Internal
Revenue. The Employer understands that its failure
to properly complete the Adoption Agreement may
result in disqualification of its plan.
The Employer may not rely on the opinion letter
issued by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under
Section 401 of the Code unless the terms of the Plan,
as herein adopted or amended, that pertain to the
requirements of Sections 401(a)(4), 401(a)(17),
401(l), 401(a)(5), 410(b) and 414(s) of the Code, as
amended by the Tax Reform Act of 1986 or later laws,
(a) are made effective retroactively to the first day
of the first Plan Year beginning after December 31,
1988 (or such other date on which these requirements
first become effective with respect to this Plan); or
(b) are made effective no later than the first day on
which the Employer is no longer entitled, under
regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior
provisions of the Plan constitute such an
interpretation.
An Employer who adopts a Nonstandardized Plan may not
rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence
that the Plan is qualified under Code Section 401.
In order to obtain reliance with respect to Plan
qualification, the Employer must apply to the
appropriate Key District Office for a determination
letter.
This Adoption Agreement may only be used in
conjunction with Basic Plan Document #04.
<PAGE>
[x] (b) TRUSTEE:
Name of Trustee:
Wells Fargo Bank, N.A.
4365 Executive Drive, Suite 1700
San Diego, CA 92121-2130
The assets of the Fund shall be invested in
accordance with paragraph 13.3 of the Basic Plan
Document #04 as a Trust. As such, the Employer's
Plan as contained herein was accepted by the Trustee
the day of , 19 .
Signed for the Trustee by:
Tony Scarabino Brian Dinh
Title: Assistant Vice President Trust Officer
Signature:
[ ] (c) CUSTODIAN:
Name of Custodian:
The assets of the Fund shall be invested in
accordance with paragraph 13.4 of the Basic Plan
Document #04 as a Custodial Account. As such, the
Employer's Plan as contained herein was accepted by
the Custodian the day of
, 19 .
Signed for the Custodian by:
Title:
Signature:
<PAGE>
(d) SPONSOR:
The Employer's Agreement and the corresponding
provisions of the Plan and Trust/Custodial Account
Basic Plan Document #04 were accepted by the Sponsor
the day of , 19 .
Signed for the Sponsor by: Henry P. Schneider, APA
Title: Assistant Vice President Compliance
Signature:
Good Times Drive Thru, Inc. as a Subsidary of
Good Times Restaurants, Inc. 401(k) Savings and
Investment Plan
SUMMARY PLAN DESCRIPTION
February 1, 1998
SUMMARY PLAN DESCRIPTION
TABLE OF CONTENTS
PAGE
I INTRODUCTION 1
II PLAN DATA 1
Agent For Service Of Legal Process 1
Effective Date 1
Employer 1
Plan Administrator 1
Plan Year 1
Trustee 1
Type Of Administration 1
III DEFINITIONS 1
Break In Service 1
Compensation 2
Disability 2
Effective Date 2
Elective Deferral 2
Entry Date 2
Family Member 2
Highly Compensated Employee 2
Hour Of Service 3
Maternity/Paternity Leave 3
Normal Retirement Age 3
Spouse 3
Year Of Service 4
IV ELIGIBILITY REQUIREMENTS AND PARTICIPATION 4
V EMPLOYEE CONTRIBUTIONS 4
Elective Deferrals 4
Rollover And Transfer Contributions 5
VI EMPLOYER CONTRIBUTIONS 5
Contribution Formula 5
Eligibility For Allocation 6
VII GOVERNMENT REGULATIONS 6
VIII PARTICIPANT ACCOUNTS 7
IX VESTING 7
Determining Vested Benefit 7
Payment Of Vested Benefit 8
Loss Of Benefits 8
Timing of Forfeitures 8
Reemployment 9
X TOP-HEAVY RULES 10
XI RETIREMENT BENEFITS AND DISTRIBUTIONS 10
Retirement Benefits 10
Distributions During Employment 11
Hardship Withdrawals 11
Beneficiary 12
Death Benefits 12
Form Of Payment 12
Rollover Of Payment 13
Time Of Payment 14
XII INVESTMENTS 14
Trust Fund 14
Investment Responsibility 14
Employee Investment Direction 14
Participant Loans 15
XIII ADMINISTRATION 15
Plan Administrator 15
Trustee 15
XIV AMENDMENT AND TERMINATION 16
XV LEGAL PROVISIONS 16
Rights Of Participants 16
Fiduciary Responsibility 17
Employment Rights 17
Benefit Insurance 17
Claims Procedure 17
Assignment 18
Questions 18
Conflicts With Plan 18
<PAGE>
I INTRODUCTION
Your Employer has established a retirement
plan to help supplement your retirement
income. Under the program, the Employer makes
contributions to a Trust Fund which will pay
you a benefit at retirement. Details about
how the Plan works are contained in this
summary. While the summary describes the
principal provisions of the Plan, it does not
include every limitation or detail. If there
is a discrepancy between this booklet and the
official Plan document, the Plan document
shall govern. You may obtain a copy of the
Plan document from the Plan Administrator.
The Plan Administrator may charge a reasonable
fee for providing you with the copy.
II PLAN DATA
A. Agent For Service Of Legal Process: The
Employer or Trustee.
B. Effective Date: The Effective Date of
the original Plan
was April 1, 1992; the
Effective Date of the
amended Plan
is February 1, 1998.
C. Employer: Good Times Drive Thru,
Inc. as a Subsidary of
Good Times Restaurants,
Inc. 401(k) Savings and
Investment PLan
Address: 8680 Wolf Court,
Suite #330
Westminster, CO 80030
Telephone No.: (303)427-4221
Tax I.D. No.: 84-1133368
Plan No.: 001
D. Plan Administrator: The Employer has
been designated to serve as Plan
Administrator.
E. Plan Year: The 12-month period beginning
on October 1 and ending on September 31.
F. Trustee(s): Wells Fargo Bank, N.A.
Address: 4365 Executive Drive,
17th Floor
San Diego, CA 92121-2130
Telephone No.: (619) 622-6701
G. Type Of Administration: Trust Fund
III DEFINITIONS
A. Break In Service. A 12 consecutive month
period during which you are not credited
with or are not paid for more than 500
hours. If you go into the military
service of the United States, you are not
considered terminated as long as you
return to work within the time required
by law. If you separate from employment
and incur a Break in Service, all
contributions to your various accounts
are suspended. [See special rules
relating to maternity and paternity leave
below. Also, see Section VI(B) to
determine your eligibility to share in
the Employer's Contribution if you
separate from employment, but do not
incur a Break in Service.] If a Break in
Service occurs and you return to full
time employment with the Employer, your
rights are explained in the section
entitled "Vesting".
B. Compensation. Your total salary, pay, or
earned income from the Employer, as
reflected on tax Form W-2, even if not
subject to withholding taxes when earned.
Compensation will include amounts
received by you during the Plan Year and
earned while a Participant. Compensation
shall be limited to $150,000 as adjusted
for inflation.
C. Disability. A potentially permanent
illness or injury, as certified to by a
physician who is approved by the
Employer, which prevents you from
engaging in work for which you are
qualified for a period of at least 12
months.
D. Effective Date. The date on which the
Plan starts or an amendment is effective.
E. Elective Deferral. Employer
contributions made to the Plan at your
election, instead of being given to you
in cash as part of your salary. You can
elect to defer a portion of your salary,
instead of receiving it in cash, and your
Employer will contribute it to the Plan
on your behalf.
F. Entry Date. The date on which you enter
the Plan. Your Entry Date will be the
first day of the Plan Year, or the first
day of the fourth month, the first day of
the seventh month, or the first day of
the tenth month of the Plan Year
coinciding with or following the date you
satisfy the eligibility requirements.
G. Family Member. The Spouse or lineal
ascendant or descendant (or Spouse
thereof) of either a more than 5% owner
of the Employer or one of the ten highest
compensated Highly Compensated Employees
of the Employer.
H. Highly Compensated Employee. Any
Employee who during the current or prior
Plan Year (1) was a more than 5% owner,
(2) received more than $75,000 in
Compensation as adjusted for inflation
(3) received more than $50,000 in
Compensation as adjusted for inflation
and was in the top 20% of Employees when
ranked by Compensation, or (4) was an
officer receiving more than $45,000 in
Compensation as adjusted for inflation.
Family Members of any 5% owner, or Highly
Compensated Employee in the group of the
ten Employees with the greatest
Compensation, will be combined as if they
were one person for purposes of
Compensation and contributions. If you
are not currently or never were Highly
Compensated, or a Family Member of a
Highly Compensated Employee, you are a
Non-highly Compensated Employee.
I. Hour Of Service. You will receive credit
for each hour you are (1) paid for being
on your job, (2) paid even if you are not
at work (vacation, sickness, leave of
absence, or disability), or (3) paid for
back pay if hours were not already
counted. A maximum of 501 hours will be
credited in any year for periods during
which you are not at work but are paid.
Hours of Service will be calculated based
on actual hours you are entitled to
payment. Your Hours of Service with RTC
Express, Inc. and Round The Corner
Restaurants, Inc. are included for
eligibility and vesting in this Plan.
J. Maternity/Paternity Leave. You may be
eligible for additional Hours of Service
if you leave employment, even if
temporarily, due to childbirth or
adoption. If this is the case, you will
be credited with enough hours (up to 501)
of service to prevent a Break in Service,
either in the year you leave employment
or the following year. For example, if
you have 750 Hours of Service in the year
that your child is born, you would not
get any more hours credited for that Plan
Year since you do not have a Break in
Service. Therefore, if you do not return
to employment the following year, you
will get 501 Hours of Service so you will
not have a Break in Service in that year.
Alternatively, if you do return the
following year, but work only 300 hours,
you will receive an additional 201 hours
in order to prevent a break. These Hours
of Service for maternity or paternity
leave must all be used in one Plan Year.
They are used only to prevent a Break in
Service and not for calculating your
Years of Service for eligibility, vesting
or benefits.
K. Normal Retirement Age. The attainment of
age 65.
L. Spouse. The person to whom you are or
were legally married, or your common law
Spouse if common law marriage is
recognized by the state in which you
live. In order for your Spouse to
receive a benefit under this Plan, he or
she may not predecease you. A former
Spouse may be treated as a "Spouse" under
this definition if recognized as such
under a Qualified Domestic Relations
Order as explained at Section XV(F) of
this Summary Plan Description.
M. Year Of Service.
Eligibility
For purposes of determining your
eligibility to participate in the Plan, a
Year of Service is a 12-consecutive month
period beginning on your date of hire
during which you are credited with at
least 1000 Hours of Service.
Contribution
For purposes of determining whether or
not you are entitled to have a
contribution allocated to your account, a
Year of Service is a 12-consecutive month
period, which is the same as the Plan
Year, during which you are credited with
at least 1000 Hours of Service.
Vesting
For purposes of determining the extent to
which you are vested in your account
balance, a Year of Service is a 12-consecutive month period,
which is the same as the Plan Year, during which you
are credited with 1000 Hours of Service.
IV ELIGIBILITY REQUIREMENTS AND PARTICIPATION
You are eligible to participate in this Plan
upon completing 1 Year of Service and
attaining age 21. You are considered to have
completed 1 Year of Service for purposes of
eligibility on the anniversary of your first
day of employment, provided that you worked at
least 1000 hours during that 12-month period.
The second and subsequent measuring periods,
if applicable, shall be the Plan Year. The
Plan will not cover Employees covered by a
collective bargaining agreement.
Your participation in the Plan will begin on
the Entry Date defined at Section III.
V EMPLOYEE CONTRIBUTIONS
A. Elective Deferrals
You, as an eligible Employee, may
authorize the Employer to withhold from
1% up to 14% of your Compensation, not to
exceed $7,000 as adjusted for inflation,
and to deposit such amount in the Plan
fund. If you participate in a similar
plan of an unrelated employer and your
Elective Deferrals under this Plan and
the other plan exceed the $7,000 limit,
for a given year you must designate one
of the Plans as receiving an excess
amount. If you choose this Plan as the
one receiving the excess, you must notify
the Plan Administrator by March 1 of the
following year so that the excess and any
income thereon may be returned to you by
April 15. You may increase, decrease, or
terminate your Elective Deferral
percentage on the anniversary date of the
Plan and on the first day following any
Valuation Date.
If you terminate contributions, you may
not reinstate payroll withholding until
the first day of the next valuation
period. The Employer may also reduce or
terminate your withholding if required to
maintain the Plan's qualified status.
B. Rollover And Transfer Contributions
Rollover and Transfer Contributions are
permitted. In order to make a Rollover
or Transfer Contribution, you must be a
Participant. An Employer can refuse to
allow Transfer Contributions to its
profit-sharing Plan if the transfer will
affect the Plan's ability to offer lump
sum distributions as the normal form of
distribution.
A rollover or transfer of your retirement
benefits may originate from another
qualified retirement plan or special
individual retirement arrangement (known
as a "conduit" IRA) to this Plan. If you
have already received a lump-sum payment
from another qualified retirement plan,
or if you received payment from another
qualified plan and placed it in a
separate "conduit" IRA, you may be
eligible to redeposit that payment to
this Plan. The last day you may make a
Rollover Contribution to this Plan is the
60th day after you receive the
distribution from the other plan or IRA.
A transfer occurs when the trustee of the
old plan transfers your assets to this
Plan. If you believe you qualify for a
transfer or rollover, see the Plan
Administrator for more details.
VI EMPLOYER CONTRIBUTIONS
A. Contribution Formula
Elective Deferrals:
The Employer will contribute all
Compensation which you elect to defer to
the Plan within the limits outlined in
Section V(A).
Matching Contributions:
The Employer may make a Matching
Contribution to each Participant based on
his or her Elective Deferrals in a
percentage set by the Employer prior to
the end of each Plan Year. The Employer
shall not match your Elective Deferrals
that are in excess of 6% of your
Compensation.
The time period which will be used for
determining the amount of Matching
Contributions owed shall be annually.
Employer Matching Contributions will only
be made on Elective Deferrals made to the
Plan. Elective Deferrals withdrawn prior
to the end of the Plan Year will not
receive Matching Contributions.
Qualified Non-Elective Contributions:
The Employer may also contribute an
additional amount determined in its sole
judgement. This additional contribution,
if any, will be allocated to only Non-highly Compensated
Participants, in proportion to each eligible Employee's
Compensation as a ratio of all eligible
Employees' Compensation. These
Contributions will be nonforfeitable and
subject to withdrawal restrictions.
Discretionary:
The Employer may also contribute an
additional amount determined in its sole
judgement. Such additional contribution,
if any, shall be allocated to each
Participant in proportion to his or her
Compensation for the Plan Year while a
Participant.
B. Eligibility For Allocation
The Employer's Contribution will be made
to all Participants who are employed at
the end of the Plan Year provided that
the Participant has completed a Year of
Service during the Plan Year. The
Employer shall also make matching and
other related contributions as indicated
below to Employees who terminate during
the Plan Year as a result of:
Matching Other
x x (i) Retirement.
x x (ii) Disability.
x x (iii) Death.
VII GOVERNMENT REGULATIONS
The federal government sets certain limitations
on the level of contributions which may be made
to a Plan such as this. There is also a
"percentage" limitation which means that the
percentage of Compensation which you may
contribute (Elective Deferrals) depends on the
average percentage of Compensation that the
other Participants are contributing. Simply
stated, all Participants are divided into 2
categories: Highly Compensated and Non-highly
Compensated and the average for each group is
calculated. The average contribution that the
Highly Compensated may make is based on the
average contribution that the Non-highly
Compensated make. If a Highly Compensated
Participant is contributing more than he or she
is allowed, the excess, plus or minus any gain
or loss, will be returned. Keep in mind that
if you are a 5% owner of the business or one of
the ten highest paid Highly Compensated
employees, your Family Member's contribution
percentages and Compensations will be combined
with yours for purposes of determining your
contributions under the Plan.
VIII PARTICIPANT ACCOUNTS
The Employer will set up a record keeping
account in your name to show the value of your
retirement benefit. The Employer will make the
following additions to your account:
A. your allocated share of the Employer's
Contribution (including your Elective
Deferrals),
B. the amount of your personal Transfer
Contributions and Rollover Contributions,
if any,
C. your share of forfeited accounts of former
employees. (These are amounts left behind
by employees who terminated before becoming
100% vested in their benefit), and
D. your share of investment earnings and
appreciation in the value of investments.
The Employer will make the following
subtractions from your account:
E. any withdrawals or distributions made to
you, and
F. your share of investment losses and
depreciation in the value of investments.
G. your share of administrative fees and
expenses paid out of the Plan, if
applicable.
The Employer will value your account quarterly.
The Employer will provide you with a statement
of account activity at least once annually.
IX VESTING
A. Determining Vested Benefit
Vesting refers to your earning or acquiring
a nonforfeitable right to the full amount
of your account. Any Elective Deferrals,
Qualified Non-Elective Contributions,
Rollover Contributions, Transfer
Contributions, plus or minus any earnings
or losses, are always 100% vested and
cannot be forfeited for any reason. Any
contribution (including forfeitures) not
listed in the previous sentence, and the
earnings or losses thereon, will vest in
accordance with the following table:
Years of Service
1 2 3 4 5 6 7
0% 40% 60% 80% 100%
You are considered to have completed 1 Year
of Service for purposes of vesting upon the
completion of 1000 Hours of Service at any
time during a Plan Year.
You automatically become fully vested,
regardless of the vesting table, upon
attainment of Normal Retirement Age, upon
retirement due to Disability, upon death,
and upon termination of the Plan.
B. Payment Of Vested Benefit
If you separate from Service before your
retirement, death or Disability, you may
request early payment of your vested
benefit by submitting a written request to
the Plan Administrator. If your vested
account balance at the time of termination
or at the time of any prior distributions
exceeds or exceeded $3,500, you may defer
the payment of your benefit until April 1
of the calendar year following the calendar
year during which you attain age 70-1/2. The
portion of your account balance to which
you are not vested is called a "forfeiture"
and remains in the Plan. Forfeitures of
Employer Discretionary, Top-Heavy, and
Matching contributions shall be used to
reduce the Employer's contribution.
C. Loss Of Benefits
There are only two events which can cause
the loss of all or a portion of your
account. One is termination of employment
before you are 100% vested according to the
vesting provisions described at IX(A) and
the other is a decrease in the value of
your account from investment losses or
administrative expenses and other costs of
maintaining the Plan.
D. Timing of Forfeitures
If you terminate employment and receive
payment of the vested portion of your
account the nonvested portion of your
account will be forfeited at the time you
receive your payment. If you have not
received a distribution of your vested
balance, your nonvested portion will be
forfeited at the end of the Plan Year
during which you incur your fifth
consecutive 1-year Break in Service.
E. Reemployment
If you terminate service with you Employer,
then are reemployed in a Plan Year
subsequent to the Plan Year you terminated,
then you will become a Participant as of
the earlier of the next Valuation Date or
the next Entry Date [see Section III]
following your return to employment. If
you are reemployed in the same Plan Year
that you terminated service with your
Employer, then you shall become a
Participant immediately and all Service and
Compensation, for the entire Plan Year,
shall be considered. If you are not a
member of a class of employees eligible to
participate in the Plan and later become a
member of the eligible class, you will
participate upon reaching the next Entry
Date if you have satisfied the minimum age
and service requirements. Should you
become ineligible to share in future
Contributions and forfeitures because you
are no longer a member of an eligible
class, you shall again share upon your
return to an eligible class. All years of
prior Service will be counted when
calculating your vested percentage in your
new account balance. The following rules
apply in connection with reemployed
Participants.
(a) Terminated Partially Vested
Participants. If you terminate
employment and receive payment of the
vested portion of your account, the
nonvested portion of your account will
be forfeited at the time you receive
your payment. If you are reemployed
prior to incurring five consecutive 1-year
Breaks in Service you may have
the Plan restore your forfeiture by
repaying the amount of the
distribution you received attributable
to Employer contributions. This
repayment right applies only if you do
not incur five consecutive 1-year
Breaks in Service. You must make this
repayment within five years of your
date of reemployment. If you do not
repay the amount you received, the
forfeited portion will not be restored
to your account. Whether you repay or
not, your prior Service will count
toward vesting service for future
Employer contributions.
For example, assume that you terminate
your job with your current Employer.
At the time of termination you had
accrued a total benefit of $10,000
under the retirement Plan. Although
this amount had been allocated to your
account, you were only 40% vested in
that amount when you left. You
decided to take a distribution of your
vested account balance (40% of
$10,000, or $4,000) when you quit.
The nonvested balance of your account
($6,000) was forfeited. Three years
later, you became reemployed by the
same Employer. Since you were
reemployed within 5 years, you have
the right to repay the $4,000
distribution you received when you
quit. You would have to repay the
$4,000 within 5 years of being
rehired. If you do so, the nonvested
portion of your account ($6,000) will
be restored to your account. After
restoration, you will be vested in 40%
of this account, but your vested
percentage will increase based on your
Years of Service after your
reemployment. Your prior Service will
always count towards vesting of
Employer Contributions which you
receive after reemployment, whether or
not you decide to repay and restore
your prior account.
(b) Terminated Nonvested Participants. If
you were not vested in any portion of
your Employer Contribution account
prior to your separation from service
and are reemployed before incurring
five consecutive one-year Breaks in
Service, you will be credited for
vesting with all pre-break and post-break service.
Your prior unpaid account balance will automatically be
restored and you will continue to vest
in that account. If you are
reemployed after incurring five
consecutive one-year Breaks in
Service, you will lose your prior
account balance, but your pre-break
Years of Service will count towards
vesting, in your new account balance.
X TOP-HEAVY RULES
A "top-heavy" plan is one in which more than
60% of the contributions or benefits are
attributable to certain "key employees", such
as owners, officers and stockholders. The Plan
Administrator is responsible for determining
each year if the Plan is "top-heavy". If the
Plan becomes top-heavy special rules apply to
the allocation of the Employer's contribution.
These special rules require that all
Participants will generally receive an
allocation of the Employer's contribution equal
to 3% of compensation, or if less, the greatest
percentage allocated to the account of any key
employee. All participants are entitled to
receive a minimum allocation upon completing at
least one Hour of Service in the top-heavy Plan
Year provided they are employed on the last day
of the Plan Year. The Employer's minimum
contribution can be satisfied by another
Employer sponsored retirement plan, if so
elected by the Employer. The following vesting
schedule shall apply for the Plan Year the Plan
becomes top-heavy, for any type of Employer
Contribution, unless the Employer has already
elected a faster schedule:
Years of Service
1 2 3 4 5 6
0% 20% 40% 60% 80% 100%
XI RETIREMENT BENEFITS AND DISTRIBUTIONS
A. Retirement Benefits
The full value of your account balance is
payable at your Normal Retirement Age, even
if you continue to work, or you may defer
payment until April 1 following the year
you reach age 70-1/2. If you work beyond
your Normal Retirement Age, you will
continue to fully participate in the Plan.
B. Distributions During Employment
Upon attainment of age 59-1/2, benefits
attributable to Employer contributions,
allocated to your account(s) in excess of
two years, are available for withdrawal if
you are 100% vested in those benefits.
If applicable, benefits attributable to
your rollovers are available for withdrawal
upon request to the Plan Administrator.
Transfers Contributions may be withdrawn
only if they originate from plans meeting
certain safe harbor provisions.
C. Hardship Withdrawals
You may file a written request for a
hardship withdrawal of the portion of your
account balance attributable to Elective
Deferrals and certain Employer
Contributions to the extent vested.
Earnings on Elective Deferrals up to the
last day of the Plan Year prior to July 1,
1989 may be included in any hardship
withdrawal, but earnings on Elective
Deferrals after that date may not be
included. You must generally have your
Spouse's written consent for a hardship
withdrawal unless you are advised otherwise
by the Plan Administrator. Prior to
receiving a hardship distribution, you must
take any other distribution and borrow the
maximum non-taxable loan amount allowed
under this and any other plans of the
Employer. Note, however, that if the
effect of the loan would be to increase the
amount of your financial need, you are not
required to take the loan. For example, if
you need funds to purchase a principal
residence, and a plan loan would disqualify
you from obtaining other necessary
financing, you do not have to take the
loan. Hardship withdrawals may be
authorized by the Employer for the
following reasons:
(a) to assist you in purchasing a personal
residence which is your primary place
of residence (not including mortgage
payments),
(b) to assist you in paying tuition and
related educational expenses for you,
your Spouse, or your dependents, for
the next twelve months of post-secondary education,
(c) to assist you in paying expenses
incurred or necessary on behalf of
you, your Spouse, or your dependents
for hospitalization, doctor or surgery
expenses which are not covered by
insurance, or
(d) to prevent your eviction from or
foreclosure on your principal
residence.
Any hardship distribution is limited to the
amount needed to meet the financial need.
Hardship withdrawals must be approved by
the Employer and will be administered in a
non-discriminatory manner. Such
withdrawals will not affect your
eligibility to continue to participate in
Employer Contributions to the Plan,
although, your right to make Elective
Deferrals will be suspended for twelve
months. Any withdrawals you receive under
these rules may not be recontributed to the
Plan and may be subject to taxation, as
well as an additional 10% penalty tax if
the withdrawal is received before you reach
age 59-1/2. These payments shall also be
subject to a mandatory 20% withholding for
income tax purposes.
D. Beneficiary
Every Participant or former Participant
with Plan benefits may designate a person
or persons who are to receive benefits
under the Plan in the event of his or her
death. The designation must be made on a
form provided by and returned to the Plan
Administrator. You may change your
designation at any time. If you are
married, your beneficiary will
automatically be your Spouse. If you and
your Spouse wish to waive this automatic
designation, you must complete a
beneficiary designation form. The form
must be signed by you and, if applicable,
your Spouse in front of a Plan
representative or a Notary Public.
E. Death Benefits
In the event of your death, the full value
of your account is payable to your
beneficiary in a lump sum, or in
installments payable over any period which
does not exceed the life expectancy of your
beneficiary. If you die after benefit
payments have started under an installment
option and after the attainment of age 70-1/2,
your beneficiary will continue to
receive payments in accordance with the
payment option you selected.
F. Form Of Payment
When benefits become due, you or your
representative should apply to the Employer
requesting payment of your account and
specifying the manner of payment. The
normal or automatic form of payment is
generally a lump sum unless the Plan
Administrator notifies you otherwise. If
you do not wish to receive the normal form
of payment when your payments are due to
start, you may request to receive your
benefit in any of the optional forms
indicated:
- lump sum.
- installment payments.
In some cases, election of one of the
optional forms of payment will require the
written consent of your Spouse. Also,
payments may not be made over a period
which exceeds the life expectancy of you
and your beneficiary. The Plan
Administrator will advise you if any
special rules apply in connection with the
payments of your benefits.
G. Rollover Of Payment
If your benefits qualify as eligible
rollovers, you have the option of having
them paid directly to you, when they become
due, or having them directly rolled over to
another qualified plan or an IRA. If you
do not choose to have the benefits directly
rolled over, the Plan is required to
automatically withhold 20% of your payment
for tax purposes. If you do choose to have
the payment made to you, you still have the
option of rolling over the payment yourself
to a qualified plan or an IRA within sixty
days (first check with a tax advisor to
make sure it is an eligible rollover).
However, 20% of your payment will still be
withheld. The following example
illustrates how this works:
If you have $100,000 in your vested account
balance and choose to have the payment of
your benefits made directly to an IRA or
another qualified plan, the entire $100,000
will be transferred to the trustee of the
other plan or the IRA, and you will treat
the entire amount as a rollover on your tax
return so that you will not pay taxes on
the entire amount. If you choose not to
have the account transferred directly to an
IRA or qualified plan, 20% or $20,000 will
automatically be withheld from your
payment. Thus, you will receive only
$80,000 as a distribution of your benefits.
In order to roll the entire amount over
into your IRA, you would have to come up
with $20,000 out of your own pocket to make
up the difference. If this is done, the
$20,000 which was withheld may be returned
when you file your taxes at the end of the
year. However, if you are unable to
produce the extra cash, the rollover amount
will only be $80,000, and the other $20,000
which was withheld will be treated as
taxable income to you. If you are under
age 591/2 when you receive your benefit
payment, the withheld amount will also be
subject to the 10% early distribution
penalty. However, if you receive your
benefit payment due to a separation of
service, after attainment of age 55, there
will be no 10% early distribution penalty.
Certain benefit payments are not eligible
for rollover and therefore will also not be
subject to the 20% mandatory withholding.
They are as follows:
1. annuities paid over life;
2. installments for a period of at
least 10 years; and
3. minimum required distributions at
age 70-1/2.
There are also several operational
exceptions and a "de minimis" exception for
payments of less than $200. Also Employee
Voluntary contributions are not eligible
for rollover.
H. Time Of Payment
If you retire, become disabled, or die,
payments will start as soon as
administratively feasible following the
date on which a distribution is requested
by you or is otherwise payable.
If you terminate for a reason other than
death, Disability, or retirement, payments
will start as soon as administratively
feasible following the date on which a
distribution is requested by you or is
otherwise payable.
XII INVESTMENTS
A. Trust Fund
The monies contributed to the Plan may be
invested in any security or form of
property considered prudent for a
retirement plan. Such investments include,
but are not limited to, common and
preferred stocks, exchange traded put and
call options, bonds, money market
instruments, mutual funds, savings
accounts, certificates of deposit, Treasury
bills, or insurance contracts. An
institutional Trustee may invest in its own
deposits or those of affiliates which bear
a reasonable interest rate, or in a group
or collective trust maintained by such
Trustee.
B. Investment Responsibility
The Plan's assets are held by the Trustee
who is identified in Section II of this
Summary. The Trustee is responsible for
the safekeeping of Plan assets and for the
investment management of such assets unless
the Employer elects to direct investments,
appoints an outside investment manager or
permits Participants to direct the
investment of their individual accounts.
C. Employee Investment Direction
Participants may direct the investments of
their accounts among alternative
investment funds provided under the Plan.
The following contributions are available
for making an investment election:
Elective Deferrals
Rollover Contributions
The procedures for making an election are
shown in a separate Investment Election
Form which can be obtained from the Plan
Administrator. You may change your
investment selection and move monies from
one fund to another in accordance with the
rules established by the Plan
Administrator.
D. Participant Loans
Participant loans are permitted under the
Plan. In order to get a loan from the
Plan, you must make application to the Plan
Administrator. Loans must be approved by
the Plan Administrator and are subject to a
strict set of rules established by law.
The rules are covered in a separate Loan
Application Form and Promissory Note Form.
These Forms are available from the Plan
Administrator.
XIII ADMINISTRATION
The Plan will be administered by the following
parties:
A. Plan Administrator
The Employer is the party who has
established the Plan and who has overall
control and authority over administration
of the Plan. The Employer's duties as Plan
Administrator include:
(a) appointing the Plan's professional
advisors needed to administer the Plan
including, but not limited to, an
accountant, attorney, actuary, or
administrator,
(b) directing the Trustee with respect to
payments from the Fund,
(c) communicating with Employees regarding
their participation and benefits under
the Plan, including the administration
of all claims procedures and domestic
relations orders,
(d) filing any returns and reports with
the Internal Revenue Service,
Department of Labor, or any other
governmental agency,
(e) reviewing and approving any financial
reports, investment reviews, or other
reports prepared by any party
appointed by the Employer,
(f) establishing a funding policy and
investment objectives consistent with
the purposes of the Plan and the
Employee Retirement Income Security
Act of 1974, and
(g) construing and resolving any question
of Plan interpretation. The Plan
Administrator's interpretation and
application thereof is final.
B. Trustee
The Trustee shall be responsible for the
administration of investments held in the
Fund. These duties shall include:
(a) receiving contributions under the
terms of the Plan,
(b) investing Plan assets unless
investment responsibility is delegated
to another party by the Employer,
(c) making distributions from the Fund in
accordance with written instructions
received from the Plan Administrator,
(d) keeping accounts and records of the
financial transactions of the Fund,
and
(e) rendering an annual report of the Fund
showing the financial transactions for
the Plan Year.
XIV AMENDMENT AND TERMINATION
The Employer may amend the Plan at any time,
provided that no amendment will divert any part
of the Plan's assets to any purpose other than
for the exclusive benefit of you and the other
Participants in the Plan or eliminate an
optional form of distribution. The Employer
may also terminate the Plan. In the event of
an actual Plan termination, all amounts
credited to your account will be fully vested
and will be paid to you. Depending on the
facts and circumstances, a partial termination
may be found to occur where a significant
number of Employees are terminated by the
Employer or excluded from Plan participation.
In case of a partial termination, only those
affected will become 100% vested.
XV LEGAL PROVISIONS
A. Rights Of Participants
As a Plan Participant, you have certain
rights and protection under the Employee
Retirement Income Security Act of 1974
(ERISA). The law says that you are
entitled to:
(a) Examine, without charge, all documents
relating to the operation of the Plan
and any documents filed with the U.S.
Department of Labor. These documents
are available for review in the
Employer's offices during regular
business hours.
(b) Obtain copies of all Plan documents
and other Plan information upon
written request to the Employer. The
Employer may impose a reasonable
charge for producing the copies.
(c) Receive from the Employer at least
once each year a summary of the Plan's
annual financial report.
(d) Obtain, at least once a year, a
statement of the total benefits
accrued for you, and your
nonforfeitable (vested) benefits, if
any. The Plan provides that you will
receive this statement automatically.
If you are not vested, you may request
a statement showing the date when your
account will begin to become
nonforfeitable.
(e) File suit in a federal court, if any
materials requested are not received
within 30 days of your request, unless
the materials were not sent because of
matters beyond the control of the
Employer. If you are improperly
denied access to information you are
entitled to receive, the Employer may
be required to pay up to $100 for each
day's delay until the information is
provided to you.
B. Fiduciary Responsibility
ERISA imposes obligations upon the persons
who are responsible for the administration
of the Plan. These persons are referred to
as "fiduciaries." Fiduciaries must act
solely in your interest as a Plan
Participant and they must exercise prudence
in the performance of their duties.
Fiduciaries who violate ERISA may be
removed and required to reimburse any
losses they have caused you or other
Participants in the Plan.
C. Employment Rights
Participation in the Plan is not a
guarantee of employment. However, the
Employer may not fire you or discriminate
against you to prevent you from becoming
eligible for the Plan or from obtaining a
benefit or exercising your rights under
ERISA.
D. Benefit Insurance
Your benefits under this Plan are not
insured by the Pension Benefit Guaranty
Corporation since the law does not provide
plan termination insurance for this type of
Plan.
E. Claims Procedure
If you feel you are entitled to a benefit
under the Plan, mail or deliver your
written claim to the Plan Administrator.
The Plan administrator will notify you,
your beneficiary, or authorized
representative of the action taken within
60 days of receipt of the claim. If you
believe that you are being improperly
denied a benefit in full or in part, the
Administrator must give you a written
explanation of the reason for the denial.
If the Administrator denies your claim, you
may, within 60 days after receiving the
denial, submit a written request asking the
Administrator to review your claim for
benefits. Any such request should be
accompanied by documents or records in
support of your appeal. You, your
beneficiary, or your authorized
representative may review pertinent
documents and submit issues and comments in
writing. If you get no satisfaction from
the Administrator, you have the right to
request assistance from the U.S. Department
of Labor or you can file suit in a state or
federal court. Service of legal process
may be made on the Plan Administrator at
the address of the Employer. If you are
successful in your lawsuit, the court may
require the Employer to pay your legal
costs, including your attorney's fees. If
you lose, and the court finds that your
claim is frivolous, you may be required to
pay the Employer's legal fees.
F. Assignment
Your rights and benefits under this Plan
cannot be assigned, sold, transferred or
pledged by you or reached by your creditors
or anyone else except under a qualified
domestic relations order or as provided by
state law. A qualified domestic relations
order (QDRO) is a court order issued under
state domestic relations law relating to
divorce, legal separation, custody, or
support proceedings. The QDRO recognizes
the right of someone other than you to
receive your Plan benefits. You will be
notified if a QDRO relating to your Plan
benefits is received. Receipt of a
qualified domestic relations order shall
allow for an earlier than normal
distribution to the person(s) other than
the Participant listed in the order.
G. Questions
If you have any questions about this
statement of your rights under ERISA,
please contact the Employer or the Pension
and Welfare Benefits Administration, Room
N-5644, U.S. Department of Labor, 200
Constitution Ave., N.W., Washington, D.C.
20210.
H. Conflicts With Plan
This booklet is not the Plan document, but
only a Summary Plan Description of its
principal provisions and not every
limitation or detail of the Plan is
included. Every attempt has been made to
provide concise and accurate information.
However, if there is a discrepancy between
this booklet and the official Plan
document, the Plan document shall prevail.
August 3, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D. C. 20549
Re: Good Times Restaurants Inc. -
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Good Times Restaurants Inc.,
a Nevada corporation (the "Company"), with respect to the legality
of 300,000 shares of common stock, $.001 par value (the "Shares"),
to be offered by the Company pursuant to its 401(k) Savings and
Investment Plan, 1992 Incentive Stock Option Plan and 1992 Non-Statutory
Stock Option Plan. The Shares are being registered
pursuant to the Company's Registration Statement on Form S-8 and
are being offered by the Prospectus delivered to the Company's
employees.
In our opinion, the Shares being offered, upon issuance and
payment therefor, will be duly authorized, validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
COHEN BRAME & SMITH
Professional Corporation
/s/ Cohen Brame & Smith
Professional Corporation
cc: Good Times Restaurants Inc.
August 3, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D. C. 20549
Re: Good Times Restaurants Inc. -
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Good Times Restaurants Inc.,
a Nevada corporation (the "Company"), with respect to the legality
of 300,000 shares of common stock, $.001 par value (the "Shares"),
to be offered by the Company pursuant to its 401(k) Savings and
Investment Plan, 1992 Incentive Stock Option Plan and 1992
Non-Statutory Stock Option Plan. The Shares are being registered
pursuant to the Company's Registration Statement on Form S-8 and
are being offered by the Prospectus delivered to the Company's
employees.
In our opinion, the Shares being offered, upon issuance and
payment therefor, will be duly authorized, validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
COHEN BRAME & SMITH
Professional Corporation
/s/ Cohen Brame & Smith
Professional Corporation
cc: Good Times Restaurants Inc.
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in the Registration Statement and
Prospectus of Good Times Restaurants Inc. 401(k) Savings and
Investment Plan, 1992 Incentive Stock Option Plan, and 1992 Non-Statutory
Stock Option Plan of our report dated July 6, 1998,
accompanying the consolidated financial statements of Good Times
Restaurants Inc. 401(k) Savings and Investment Plan contained in
such Registration Statement and to the incorporation by reference
of our report dated November 11, 1997, accompanying the
consolidated financial statements of Good Times Restaurants Inc.,
incorporated by reference in the registration statement, and to
the use of our name and the statements with respect to us, as
appearing under the heading "Experts" in the Prospectus.
HEIN + ASSOCIATES, LLP
Certified Public Accountants
/s/ HEIN + ASSOCIATES, LLP
Denver, Colorado
July 29, 1998
