<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee required)
For the fiscal year ended: January 1, 1995 Commission file number: 1-13044
COOKER RESTAURANT CORPORATION
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OHIO 69-1292102
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(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
1530 Bethel Road, Columbus, Ohio 43220
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (614) 457-8500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Shares, without par value
--------------------------------------------------------------------------------
(Title of Class)
Rights to Purchase Class A Junior Participating Preferred Shares,
without par value
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(Title of Class)
6 3/4% Convertible Subordinated Debentures Due 2002
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(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
-----
The aggregate market value of Common Shares held by non-affiliates of the
Registrant on March 3, 1995 was $45,276,587.
The number of Common Shares outstanding on March 3, 1995 was 7,151,090.
The following documents have been incorporated by reference into this Form
10-K:
Document Part of Form 10-K
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The Registrant's definitive Proxy Statement for Part III
its 1995 Annual Meeting of Shareholders dated
March 17, 1995
<PAGE> 2
PART I
ITEM 1. BUSINESS.
GENERAL
The Registrant owns and operates 35 full service "Cookersm" restaurants
(the "Restaurants") in Ohio, Tennessee, Indiana, Kentucky, Florida, North
Carolina, Georgia, Virginia, Maryland and Michigan. The Registrant's strategy
is to provide consistent food quality, menu variety and value combined with a
special emphasis on service and customer satisfaction. The Restaurants are
designed to provide traditional and comfortable dining experiences rather than
emphasizing a "theme" atmosphere or menu. The Restaurants feature moderately
priced menu items prepared from original recipes using high quality fresh
ingredients. The menu includes appetizers, soups, salads, chicken, fish, beef
and pasta entrees, sandwiches, burgers and desserts, as well as alcoholic
beverages. Entree selections range in price from $4.95 to $14.95.
RESTAURANT OPERATIONS
The Registrant strives to maintain quality control and uniformity in the
Restaurants through careful training and supervision of personnel, use of a
standard Restaurant operations manual relating to preparation of food and
beverages, maintenance of premises and conduct of personnel, and consistent
Restaurant layout and design.
The Restaurants generally offer food service from 11:00 a.m. to 11:00 p.m.,
Sunday through Thursday, and 11:00 a.m. to midnight on Friday and Saturday.
SERVICE
Management believes that the Registrant's commitment to high standards of
service, quality and value, backed by a guarantee of customer satisfaction, is
the most effective approach to attracting customers. The Registrant focuses
its resources on providing superior service to existing customers in the
Restaurants and relies primarily on word of mouth and the reputation of the
Restaurants to attract new and repeat customers.
The Registrant's commitment to meeting the highest standards of customer
service is reflected in its 1994 labor costs which were 37.3% of 1994 sales,
which the Registrant believes is a higher percentage than that of many other
full service restaurant companies. The Company's Restaurants have a general
manager, a kitchen manager and up to six assistant managers, which the
Registrant believes is a higher number of managers per operating unit than that
of many other full service restaurant companies. The Registrant believes its
high level of Restaurant management staffing is important in seeking to meet
its goal of 100% customer satisfaction.
The Registrant hires personnel only after extensive interviews. Prior
restaurant experience is not a prerequisite for employment. Instead, the
Registrant seeks to recruit employees who share the Registrant's commitment to
high standards of customer service and whose personalities are compatible with
the Registrant's philosophy. Each new non-management employee is initially
trained for a minimum of seven to ten days, or longer if hired for a new
Restaurant. New management personnel undergo 90 to 120 days training.
FOOD AND BEVERAGES
The Restaurants offer a varied menu of approximately 60 items including
appetizers, soups, salads, chicken, fish, beef and pasta entrees, sandwiches,
burgers, desserts, and beverages. Most menu food items are prepared on
premises using fresh ingredients according to original recipes. The Registrant
places special emphasis on the prompt preparation and delivery of food and
beverages to the customers. All menu items (other than alcoholic beverages)
are available for carry out. Each Restaurant offers alcoholic beverages,
including liquor, wine, and beer, which constituted approximately 11% of sales
in 1994.
<PAGE> 3
DESIGN
The Restaurants are designed to be comfortable and functional, with a
casual, contemporary decor featuring wood, brass, and framed graphic art. The
typical Restaurant is approximately 7,200 square feet (of which approximately
40% is devoted to kitchen and service areas) with seating for approximately 230
customers. The majority of the seating is in booths, which enhances customer
privacy and comfort. Each Restaurant has a separate bar area which has stool
and booth seating.
The typical Restaurant kitchen is comparatively large by industry standards
and is designed for quality and speed of food preparation. These kitchens
permit the Registrant to be flexible in the types of food items which can be
prepared and to adapt to changing consumer tastes and preferences.
EXPANSION
The Registrant opened six Restaurants in 1994 and plans to open five or six
Restaurants in 1995. The Registrant anticipates that cash on hand along with
funds generated from operations and bank borrowings will be sufficient to
finance these Restaurants. Further expansion will be dependent on, among other
things, the Registrant's future operations, the availability of capital,
desirable site locations, the ability to attract qualified employees, securing
appropriate local government approvals, and future economic conditions. The
Registrant has no definite commitments to develop Restaurants after 1995 and
there can be no assurance that the Registrant will be able to locate and
acquire suitable sites for expansion.
The Registrant considers the specific location of a Restaurant to be
critical to its long-term success and devotes significant effort to the
investigation and evaluation of potential sites. In order to efficiently
control its operations and administrative costs, the Registrant anticipates
that further expansion will be in medium to large size metropolitan areas in
the Midwest, East and Southeast, primarily in areas where the Registrant
currently operates Restaurants. Within these market areas, the Registrant
intends to locate Restaurants in freestanding buildings and in retail
developments in proximity to high density, high traffic, residential, office,
and retail areas. To date, the Registrant has developed new Restaurants and
has converted existing facilities into Restaurants. While development costs
vary depending on location, the cost of developing and opening a Restaurant
(land, building, fixtures, furnishings, equipment, and pre-opening expenses) is
approximately $1.9 million and the cost of converting an existing facility into
a Restaurant (renovation, fixtures, furnishings, equipment, and pre-opening
expenses exclusive of land and building) is approximately $1 million.
COMPETITION
The food service industry is intensely competitive with respect to price,
service, location, and food quality. The Registrant is not a significant
factor in the industry and there are many well-established competitors with
greater financial and other resources than the Registrant. Such competitors
may have been in existence for a substantially greater period of time than the
Registrant and may be better established in the areas where the Restaurants are
or will be located. The restaurant business is often affected by changes in
consumer tastes, economic conditions, population, traffic patterns,
availability of employees, and cost increases.
GOVERNMENT REGULATION
The Registrant's restaurant operations are subject to various health,
sanitation, and safety standards as well as to state and local licensing and
regulation of the sale of alcoholic beverages. A significant (though
declining) portion of the revenues of the Restaurants is attributable to the
sale of alcoholic beverages. Each Restaurant has a liquor license from state
liquor regulatory authorities allowing it to sell liquor, beer and wine, and in
some states or localities, to provide service for extended hours and on Sunday.
Each Restaurant has food service licenses from local health authorities, and
similar licenses would be required for each new Restaurant. The failure to
obtain or retain liquor or food service licenses could adversely affect, or in
an extreme case, terminate, the operations of an affected Restaurant. However,
each Restaurant is operated in accordance with standardized procedures designed
to assure compliance with all applicable codes and regulations. The
development and construction of additional
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<PAGE> 4
Restaurants will be subject to compliance with applicable zoning, land use and
environmental regulations. The Registrant's restaurant operations are also
subject to federal and state minimum wage laws and other laws governing such
matters as working conditions, overtime and tip credits.
EMPLOYEES
At January 8, 1995, the Registrant had approximately 3,329 employees, of
which 1,749 were full-time Restaurant employees, 1,315 were part-time
Restaurant employees, 232 were Restaurant management personnel, and 33 were
corporate staff personnel. None of the Registrant's employees is represented
by a labor union or a collective bargaining unit. The Registrant considers
relations with its employees to be satisfactory.
MARKS
The Registrant has registered the service marks "Cooker Bar and Grille(R)"
and Design and "The Southern Cooker -- Home Style Restaurant & Bar(R)" and
Design with the United States Patent and Trademark Office. The Registrant also
uses the word Cookersm as a service mark in combination with words and designs
other than those used in the registered marks. Other providers of restaurant
services use trade names that include the word "cooker." Some of these users
may resist the Registrant's use of its marks, as it expands into new
territories. However, in view of the extensive third party use of such trade
names, management believes that the Registrant should be in a reasonably good
position to resist adverse claims. This same extensive third party use means,
however, that the Registrant may in the future have difficulty blocking use by
others of marks incorporating the word "cooker." It is possible for prior
users to develop rights in such marks in their geographic territories and it
would be difficult for the Registrant to limit such use, even though the
Registrant has a federal registration.
ITEM 2. PROPERTIES.
At January 8, 1995, the Registrant operated 35 Restaurants. The following
table sets forth certain information regarding the Restaurants:
<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(2) LEASED(3)
<S> <C> <C> <C> <C> <C>
Altamonte Altamonte Springs, May 1994 7,200 235 owned
Springs Florida
Ft. Myers Ft. Myers, Florida December 1992 8,200 252 leased
Melbourne Melbourne, Florida August 1992 8,000 260 owned
Palm Harbor Palm Harbor, Florida April 1995 7,200 235 owned
Alpharetta Atlanta, Georgia September 1994 7,200 235 leased
Wildwood Atlanta, Georgia October 1993 7,200 242 leased
Keystone Indianapolis, Indiana June 1988 8,200 262 leased
Willow Lake Indianapolis, Indiana March 1993 7,865 262 owned
Florence Florence, Kentucky May 1993 7,865 264 owned
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(2) LEASED(3)
<S> <C> <C> <C> <C> <C>
Hurstbourne Louisville, Kentucky October 1991 8,000 250 leased
Plaza
Bethesda Bethesda, Maryland January 1994 7,200 242 owned
Ann Arbor Ann Arbor, Michigan October 1994 7,200 235 leased
Auburn Hills Detroit, Michigan May 1992 8,200 252 owned
Livonia Detroit, Michigan December 1989 7,300 230 leased
Novi Novi, Michigan October 1993 7,200 242 owned
Raleigh Raleigh, North December 1993 7,200 242 owned
Carolina
Governor's Hill Cincinnati, Ohio December 1990 9,100 254 owned(4)
Paxton Road Cincinnati, Ohio June 1994 6,800 210 leased
Beachwood Cleveland, Ohio July 1987 8,100 228 leased
Westlake Cleveland, Ohio November 1992 6,700 210 owned
Bethel Road Columbus, Ohio November 1985(1) 7,200 216 leased
Cleveland Ave. Columbus, Ohio December 1987 7,800 226 owned(4)
East Main St. Columbus, Ohio August 1990 7,240 220 owned(4)
North High St. Columbus, Ohio December 1992 8,200 252 owned
Miamisburg Dayton, Ohio November 1991 7,700 243 owned
Centerville
Rockside Independence, Ohio November 1991 8,400 275 leased
Springdale Cincinnati, Ohio May 1993 9,433 286 owned
Toledo Toledo, Ohio October 1993 7,200 242 owned
Memphis II Memphis, Tennessee October 1993 7,200 242 owned
Regalia Center Memphis, Tennessee March 1989 7,800 232 leased
Hermitage Nashville, Tennessee April 1984(1) 6,100 188 owned(4)
Parkway Nashville, Tennessee December 1986 7,200 220 owned(4)
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(2) LEASED(3)
<S> <C> <C> <C> <C> <C>
Rivergate Nashville, Tennessee October 1988 8,100 255 owned(4)
West End Nashville, Tennessee October 1984(1) 10,000 255 leased
Fairfax Fairfax, Virginia December 1993 7,200 242 owned
<FN>
(1) Hermitage and West End were opened by Southern Hospitality Corporation and
Bethel Road was opened by CTI Restaurants, Inc.
(2) Includes seating capacity in bar area.
(3) All leases are with unaffiliated lessors. The lease terms, including
options exercisable by the Registrant, range from 16 to 48 years. The
Registrant maintains its executive offices at a 15,000 square foot location
in Columbus, Ohio which it rents under a lease with an unaffiliated third
party for a term through 1999. See Note 9 to the Financial Statements of
the Registrant for information relating to lease commitments.
(4) Subject to a mortgage granted to the First Union National Bank of Tennessee
to secure the $16.3 million revolving credit/term loan agreement provided
by the bank to the Registrant pursuant to a Loan Agreement dated as of
August 26, 1991.
Additionally, the Registrant has purchased two sites for the construction of
Restaurants in the future.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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<PAGE> 7
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Set forth below is information regarding the executive officers of the
Registrant as of January 1, 1995:
G. ARTHUR SEELBINDER, age 51, is a founder of the Registrant. He has been
Chairman of the Board, Chief Executive Officer and a director of the Registrant
since 1986 and served as President from September 1989 until December 1994. He
was Chairman of the Board of Cooker Corporation (a predecessor of the
Registrant) from 1984 until 1988 when it was merged into the Company.
PHILLIP L. PRITCHARD, age 45, has been President and Chief Operating
Officer of the Company since December 1994. Prior to joining the Company, Mr.
Pritchard spent 22 years with General Mills Restaurants Inc. Most recently,
Mr. Pritchard served as Executive Vice President, Operations for Red Lobster
Restaurants from September 1986 through August 1992 and Executive Vice
President, Operations for China Coast from September 1992 to June 1993.
GLENN W. COCKBURN, age 39, is a founder of the Registrant. He has been a
director of the Registrant since 1989. In 1991, he was elected Senior Vice
President - Operations of the Registrant. He was Vice President - Food
Services of the Registrant from 1988 to 1991 and was Vice President of Food
Operations of Cooker Corporation from 1986 to 1988.
MARGARET A. EPPERSON, age 49, has been Secretary and Treasurer of the
Registrant since 1986.
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<PAGE> 8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Common Shares traded in the NASDAQ-National Market System ("NASDAQ-NMS")
until May 11, 1994 when the shares began trading on the New York Stock Exchange
("NYSE") under the symbol "CGR". The prices set forth below reflect high and
low sale prices for Common Shares in each of the quarters of 1993 and 1994 as
reported by the NASDAQ-NMS or NYSE, as appropriate.
<TABLE>
<CAPTION>
1993 HIGH LOW
<S> <C> <C>
1st Quarter $22-1/2 $16-1/4
2nd Quarter $22-3/4 $15
3rd Quarter $17 $14-3/4
4th Quarter $15-3/4 $10-3/4
1994 HIGH LOW
1st Quarter $13-1/4 $ 8-1/2
2nd Quarter $ 9-3/8 $ 7
3rd Quarter $ 8 $ 6-1/8
4th Quarter $ 8-1/8 $ 5-7/8
</TABLE>
On March 3, 1995, the Company had approximately 2,179 shareholders of record.
The Company paid a cash dividend of $.05 per Common Share on February 26,
1993 to holders of record on February 12, 1993 and $.05 per Common Share on
February 25, 1994 to holders of record on February 11, 1994. Under the
Company's bank revolving credit/term loan agreement, dividends may only be
declared if the Company's net income for the previous 12 months exceeds
$2,000,000 and such dividends, together with all other dividends paid within
the last 12 months, do not exceed 15% of the Company's net income for such
12-month period.
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
The following table presents selected financial and operating data of the
Company and is qualified in its entirety by the more detailed Financial
Statements presented elsewhere in this Annual Report.
<CAPTION>
(in thousands, except per share data(1))
FISCAL YEAR(2)
-------------------------------------------------------
1994 1993 1992 1991 1990
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales $84,169 $66,688 $53,028 $39,516 $33,768
Income:
Before Extraordinary Item 2,481 3,494 3,980 2,615 1,964
Extraordinary Gain 484 - - - -
Total 2,965 3,494 3,980 2,615 1,964
Earnings per share(1):
Before Extraordinary Item .34 .45 .52 .38 .27
Extraordinary Gain .07 - - - -
Total .41 .45 .52 .38 .27
Long-Term Debt 28,600 23,000 23,000 - 236
Total Assets 70,858 66,598 62,068 31,659 20,002
Dividends per share(1) .05 .05 .035 .03 -
</TABLE>
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<PAGE> 9
(1) Per share data is adjusted to reflect the 1-for-3 reverse stock split which
was effective April 29, 1991, and the 2-for-1 stock split on April 13,
1992.
(2) Ended January 1, 1995, January 2, 1994, January 3, 1993, December 29, 1991
and December 30, 1990.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table sets forth as a percentage of sales certain items
appearing in the Registrant's statement of income.
<TABLE>
<CAPTION>
FISCAL YEAR(1)
--------------------------------------------------------
1994 1993(2) 1992(2)
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<S> <C> <C> <C>
Sales 100.0% 100.0% 100.0%
Cost of Sales:
Food and Beverages 28.7 28.2 28.6
Labor 37.3 35.0 33.8
Restaurant Operating Expenses 16.1 15.8 15.2
Restaurant Depreciation and Amortization 6.0 6.1 3.7
Total Cost of Sales 88.1 85.1 81.3
Restaurant Operating Income 11.9 14.9 18.7
Other (Income) Expenses:
General and Administrative 5.4 5.5 6.8
Interest Expense 2.1 1.7 0.4
Interest and Other Income (0.1) (0.5) (0.5)
Total Other 7.4 6.7 6.7
Income Before Income Taxes and Extraordinary Item 4.5 8.2 12.0
Income Taxes Before Extraordinary Item 1.5 3.0 4.5
Income Before Extraordinary Item 3.0 5.2 7.5
Gain from Extraordinary Item, Net of Income Taxes 0.5 - -
Net Income 3.5 5.2 7.5
<FN>
-----------------------
(1) The fiscal years ended on January 1, 1995, January 2, 1994 and January 3,
1993, respectively.
(2) Certain fiscal 1993 and 1992 amounts have been reclassified to conform with
fiscal 1994 presentations.
</TABLE>
1994 COMPARED WITH 1993
Sales increased $17,480,784 or 26.2% in 1994 over 1993. The increase was
primarily due to sales generated from new restaurants opened during fiscal 1994
and those opened late in fiscal 1993. The 1994 openings included units in
Bethesda, Maryland; Tampa and Orlando, Florida; Cincinnati, Ohio; Atlanta,
Georgia; and Detroit, Michigan. Same store sales declined 3.4% for the year
but showed improvement during the second half of the year and ended with fourth
quarter sales matching fourth quarter 1993 sales.
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<PAGE> 10
Restaurant operating income as a percent of sales decreased to 11.9% in 1994
as compared to 14.9% in 1993. The decline was primarily due to a moderate
increase in commodity costs for raw materials and below company average sales
volumes in some of the newer stores. Food and beverage costs as a percentage
of sales increased from 28.2% in 1993 to 28.7% in 1994 primarily as a result of
the commodity cost increase noted above. Labor costs increased from 35.0% in
1993 to 37.3% in 1994. Since a significant portion of our labor costs are
fixed, labor expense increases as a percentage of sales as average sales
volumes decline. As a result of the lower sales volumes experienced in some of
the newer stores, the Company began reviewing store staffing models in 1994 and
is presently testing a reduced labor staffing model in several markets. When
fully implemented, the new staffing model is expected to reduce the amount of
fixed labor expenses and provide more flexibility in improving the labor costs
in stores with lower sales volumes.
Restaurant operating expenses, including relatively fixed occupancy costs,
were also negatively impacted by the lower sales volumes and increased from
15.8% in 1993 to 16.1% in 1994.
Restaurant depreciation and amortization, including amortization of store
pre-opening expenses, decreased as a percent of sales from 6.1% in 1993 to 6.0%
in 1994. This change is the result of an increase in depreciation as a percent
of sales due primarily to lower sales volume offset by a relative reduction of
pre-opening expenses. Beginning January 1993 the Company began amortizing
store preoperational expenses over a 12-month period as compared to the
36-month period used previously. In addition to the change in the amortization
period, the Company expensed an additional $950,000 of preoperational expenses
in the fourth quarter of 1993 for stores that were opened before 1993 so that
accounting treatment would be consistent for all Restaurants.
General and administrative expenses declined from 5.5% of sales in 1993 to
5.4% in 1994 primarily due to these expenses being spread over an increasing
number of Restaurants.
Interest expense increased from 1.7% of sales in 1993 to 2.1% of sales in
1994. The increase reflects interest expense incurred on the Company's
revolving term note which was not drawn on in 1993 and had an average
outstanding balance of $6,683,000 during 1994 and interest expense on the
subordinated convertible debenture issued in October 1992 (see Liquidity and
Capital Resources discussion below).
The 1994 provision for income taxes before extraordinary items was 34.0% of
income before income taxes and extraordinary items, reflecting approximately
$250,000 of credits from the FICA tip tax credit.
During the fourth quarter of 1994 the Company repurchased $2,500,000
principal of its 6 3/4% Convertible Subordinated Debentures Due 2002 in the
open market for a discounted purchase price of $1,617,500 which resulted in an
after tax extraordinary gain of $484,000.
1993 COMPARED WITH 1992
Sales for 1993 increased $13,660,006 or 25.8% over sales in 1992. The
increase was primarily due to the nine new units opened during the year.
During 1993 two Restaurants were opened in the Cincinnati area along with
Restaurants opened in Indianapolis, Detroit, Memphis, Toledo, Atlanta, Raleigh
and Fairfax. Sales at the 15 Restaurants in operation during all of 1992 and
1993 decreased by 2.0%.
Restaurant operating income as a percent of sales decreased to 14.9% in 1993
as compared to 18.7% in 1992. While food and beverage costs reduced 40 basis
points as a result of more favorable pricing from suppliers, labor costs
increased from 33.8% in 1992 to 35.0% in 1993. This was a result of lower
average sales per Restaurant in 1993 versus 1992 due to new Restaurants not
achieving sales equal to the average achieved by existing Restaurants. Because
a significant portion of labor costs is fixed, labor stated as a percent of
sales increases as sales per Restaurant decreases.
Restaurant operating expenses including relatively fixed occupancy expenses
were also impacted by the lower average sales noted above. Restaurant
operating expenses increased from 15.2% of sales in 1992 to 15.8%.
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<PAGE> 11
Restaurant depreciation and amortization expenses, including amortization of
preopening expenses, increased from 3.7% in 1992 to 6.1% in 1993 primarily due
to changes in the method of amortizing preopening expenses and a one-time
charge of $950,000 described below. Beginning January 1993 the Company reduced
the period over which store preopening costs are expensed from 36 months to 12
months. In addition, outstanding preoperational costs from Restaurants opened
in 1991 and 1992 of $950,000 were expensed in the fourth quarter of 1993 so
that accounting treatment would be consistent for all Restaurants. The
after-tax effect of this one-time expense was $611,138.
General and administrative expenses were 5.5% of sales as compared with 6.8%
the prior year primarily due to the expenses being spread over an increased
number of Restaurants. In addition, bonuses to senior management, which
comprise a significant portion of compensation, were lower in 1993.
Interest expense increased from 0.4% of sales in 1992 to 1.7% of sales
reflecting interest on $23,000,000 in subordinated convertible debentures
issued in October 1992 (see Liquidity and Capital Resources discussion below).
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of working capital are cash flows from
operations and borrowings under a revolving term note agreement which provides
a $10,000,000 line of credit. At January 1, 1995, the Company had outstanding
borrowings of $9,300,000 under the revolving term note agreement. Subsequent
to year end on January 11, 1995, the Company completed an amendment to the
revolving term note agreement which expanded the line of credit from the
previous balance of $10,000,000 to a new limit of $16,300,000. $1,300,000 of
the expanded credit was used for the open market purchase of the Company's
outstanding Convertible Subordinated Debentures described below and the
remaining $5,000,000 is available for general working capital purposes and
restaurant expansion.
During 1994 the Company opened six new units. Capital expenditures for
these new units and the refurbishing and remodeling of existing units totalled
$11,318,000 and were funded by cash flows of $8,450,000 from operations and
borrowings from the $10,000,000 line of credit. The Company plans to open five
or six units in 1995. Total cash expenditures for the 1995 expansion are
estimated to be approximately $11,000,000. The Company believes that cash flow
from operations together with borrowings from the expanded revolving term note
agreement will be sufficient to fund the planned expansion as well as the
ongoing maintenance and remodeling of existing restaurants.
During the first quarter of 1994 the Company completed the repurchase of
500,000 of its Common Shares in accordance with a plan announced in December
1993. Approximately $6,000,000 was expended in this year for this repurchase.
The Company has no plans to repurchase any additional Common Shares at this
time.
The Company completed a registered public offering of $23,000,000 in October
1992 of 6 3/4% Convertible Subordinated Debentures Due 2002. These debentures
are subject to limited annual redemption by the bondholders and to limited
redemption on the death of a beneficial owner. The annual redemption is capped
at 5% of the original gross proceeds and occurs on each November 1.
Redemptions on death are subject to a cap of $25,000 per holder per year.
Pursuant to these two redemption options the Company redeemed $1,200,000 of
principal during 1994 and expects a similar principal redemption to occur in
1995. During December 1994 the Company repurchased $2,500,000 principal of
these convertible subordinated debentures in the open market for a discounted
purchase price of $1,617,500 with settlement dates in December 1994 and January
1995. As a result of these transactions, which were funded through additional
draws on the Company's revolving term note, the remaining outstanding balance
of the debentures at January 1, 1995 is $19,300,000. The Company believes that
cash flow from operations and additional borrowings from the expanded revolving
term note will be sufficient to fund the expected principal redemptions in
1995.
During the first quarter of 1994, the Board of Directors approved a guaranty
by the Company of a loan of $5,000,000 to the Chairman of the Board from First
Union National Bank of Tennessee. The loan bears interest at
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<PAGE> 12
such Bank's prime rate plus 1/4%, had an initial term of 18 months and is
secured by a pledge of 570,000 Common Shares to the Bank. The guaranty
provides that the Bank will sell the pledged shares and apply the proceeds
thereof to the loan prior to calling on the Company for its guaranty. At March
3, 1995, the undiscounted fair market value of the pledged shares was
approximately $4,200,000. The loan is scheduled to mature in the third quarter
of 1995. The guaranty secures the loan until it is repaid or refinanced
without a guaranty. The Company expects that the Chairman will repay or
refinance the loan before its presently scheduled maturity. If the loan is not
so repaid or refinanced, the Company would fund any obligation it incurs under
the terms of its guaranty from additional borrowings under its line of credit.
The Company does not believe that it will be required to make any material
payment under the guaranty in 1995; however, there can be no assurance that the
loan will be repaid or refinanced on terms that will not result in continuing
the guaranty or in a material payment.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Registrant, and the related notes, together
with the report of Price Waterhouse LLP dated January 24, 1995, are set forth
at pages F-1 through F-14 attached hereto.
The following table sets forth unaudited quarterly operating results for the
eight fiscal quarters beginning January 3, 1993 and ending January 1, 1995.
The Company believes all necessary adjustments have been included in the
amounts stated below to present fairly the following selected quarterly
information when read in conjunction with the financial statements included
elsewhere herein. The information includes all normal recurring adjustments
the Company considers necessary for a fair presentation thereof in accordance
with generally accepted accounting principles.
<TABLE>
<CAPTION>
(in thousands, except per share data(1))
1994(2) | 1993(2)
------------------------------------------|-------------------------------------------
1ST 2ND 3RD 4TH | 1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER | QUARTER QUARTER QUARTER QUARTER
------------------------------------------|-------------------------------------------
<S> <C> <C> <C> <C> | <C> <C> <C> <C>
Sales $20,120 $20,830 $21,226 $21,993 | $15,612 $16,464 $16,623 $17,988
Restaurant Operating |
Income(3) 2,473 2,159 2,452 2,924 | 2,760 2,949 2,791 1,421
Income before Income |
Taxes and Extraordinary |
Item 1,003 814 820 1,124 | 1,561 1,833 1,899 222
Income Before |
Extraordinary Item 652 554 549 726 | 989 1,145 1,218 142
Extraordinary Gain (net of |
income taxes) - - - 484 | - - - -
Net Income 652 554 549 1,210 | 989 1,145 1,218 142
Earnings per share(1) |
Before Extraordinary |
Item .09 .08 .07 .10 | .13 .15 .16 .01
Extraordinary Gain - - - .07 | - - - -
Total .09 .08 .07 .17 | .13 .15 .16 .01
<FN>
-----------------------
(1) Adjusted for stock splits; see Note 1 under the heading "Fiscal Year
Results."
(2) Certain amounts related to fiscal 1993 and the first three quarters of
fiscal 1994 have been reclassified to conform to fiscal 1994 fourth quarter
presentations.
(3) Represents sales less food and beverages, labor, restaurant operating
expenses and depreciation and amortization.
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The information required by this item was previously reported by the
Registrant in Item 5 of the Registrant's quarterly report on Form 10-Q for the
fiscal quarter ended April 4, 1993 (Commission File No. 0-16806).
-11-
<PAGE> 13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Registrant's directors is set forth at "ELECTION
OF DIRECTORS; Nominees for Election as Directors" in the Registrant's Proxy
Statement for its 1995 Annual Meeting of Shareholders dated March 17, 1995 (the
"1995 Proxy Statement") which information is incorporated herein by reference.
Information regarding the Registrant's executive officers is set forth in PART
I of this report at "Supplemental Item. Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is set forth at "COMPENSATION OF
MANAGEMENT" in the 1995 Proxy Statement which information is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is set forth at "SECURITY OWNERSHIP
OF PRINCIPAL SHAREHOLDERS, DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS" in the
1995 Proxy Statement which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is set forth at "CERTAIN
TRANSACTIONS" in the 1995 Proxy Statement which information is incorporated
herein by reference.
-12-
<PAGE> 14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THIS FORM 10-K.
(1) Financial Statements:
Independent Accountants' Report dated January 24, 1995
Balance Sheet as of January 1, 1995 and January 2, 1994
Statement of Income for the Fiscal Years Ended January 1, 1995,
January 2, 1994 and January 3, 1993
Statement of Changes in Shareholders' Equity for the Fiscal Years
Ended January 1, 1995, January 2, 1994 and January 3, 1993
Statement of Cash Flows for the Fiscal Years Ended January 1,
1995, January 2, 1994 and January 3, 1993
Notes to Financial Statements for the Fiscal Years Ended January
1, 1995, January 2, 1994 and January 3, 1993
(2) FINANCIAL STATEMENT SCHEDULES:
Not applicable.
(3) The following exhibits are filed as part of this Form 10-K.
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
3.1. Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 28.2 of
Registrant's quarterly report on Form 10-Q for the quarterly
period ended March 29, 1992; Commission File Number
0-16806).
3.2. Amended and Restated Code of Regulations of the Registrant
(incorporated by reference to Exhibit 4.5 of the
Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended April 1, 1990; Commission File No. 0-16806).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS.
4.1. See Articles FOURTH, FIFTH and SIXTH of the Amended and
Restated Articles of Incorporation of the Registrant (see
3.1 above).
4.2. See Articles One, Four, Seven and Eight of the Amended and
Restated Code of Regulations of the Registrant (see 3.2
above).
4.3. Rights Agreement dated as of February 1, 1990 between the
Registrant and National City Bank (incorporated by reference
to Exhibit 1 of the Registrant's Form 8-A filed with the
Commission on February 9, 1990; Commission File No.
0-16806).
-13-
<PAGE> 15
4.4. Amendment to Rights Agreement dated as of November 1, 1992
between the Registrant and National City Bank (incorporated
by reference to Exhibit 4.4 of Registrant's annual report on
Form 10-K for the fiscal year ended January 3, 1993 (the
"1992 Form 10-K"); Commission File No. 0-16806).
4.5. Letter dated October 29, 1992 from the Registrant to First
Union National Bank of North Carolina (incorporated by
reference to Exhibit 4.5 to the 1992 Form 10-K).
4.6. Letter dated October 29, 1992 from National City Bank to the
Registrant (incorporated by reference to Exhibit 4.6 to the
1992 Form 10-K).
4.7. See Section 7.4 of the Loan Agreement dated as of August 26,
1991 between the Registrant and First Union National Bank of
Tennessee, as amended (see 10.1, 10.2 and 10.17 below).
4.8. Indenture dated as of October 28, 1992 between Registrant
and First Union National Bank of North Carolina, as Trustee
(incorporated by reference to Exhibit 2.5 of Registrant's
Form 8-A filed with the Commission on November 10, 1992;
Commission File Number 0-16806).
(10) MATERIAL CONTRACTS (* Management contract or compensatory
plan or arrangement.)
10.1. Loan Agreement dated as of August 26, 1991 between the
Registrant and First Union National Bank of Tennessee
(incorporated by reference to Exhibit 4.1 of the
Registrant's quarterly report on Form 10-Q for the quarterly
period ended September 29, 1991; Commission File No.
0-16806).
10.2. First Amendment to Loan Agreement dated as of June 29, 1993
between the Registrant and First Union National Bank of
Tennessee (incorporated by reference to Exhibit 10.5 of the
Registrant's quarterly report on Form 10-Q for the quarterly
period ended July 4, 1993 (the "2nd Quarter 1993 Form
10-Q"); Commission File No. 0-16806).
10.3. Contingent Employment Agreement dated as of January 16, 1990
between G. Arthur Seelbinder and the Registrant
(incorporated by reference to Exhibit 10.44 of Registrant's
annual report on Form 10-K for the fiscal year ended
December 31, 1989 (the "1989 Form 10-K"; Commission File No.
0-16806).
10.4. Contingent Employment Agreement dated as of January 16, 1990
between Glenn W. Cockburn and the Registrant (incorporated
by reference to Exhibit 10.45 of the 1989 Form 10-K).*
10.5. Contingent Employment Agreement dated as of January 16, 1990
between William Z. Esch and the Registrant (incorporated by
reference to Exhibit 10.46 of the 1989 Form 10-K).*
10.6. Contingent Employment Agreement dated as of January 16, 1990
between Margaret A. Epperson and the Registrant
(incorporated by reference to Exhibit 10.47 of the 1989 Form
10-K).*
10.7. The Registrant's 1988 Employee Stock Option Plan, as amended
and restated (incorporated by reference to Exhibit 10.12 of
the Registrant's annual report on Form 10-K for the fiscal
year ended December 29, 1991 (the "1991 Form 10-K",
Commission File No. 0-16806).*
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.13 to the 1991 Form 10-K).*
-14-
<PAGE> 16
10.9. The Registrant's 1992 Employee Stock Option Plan
(incorporated by reference to Exhibit 10.14 to the 1991 Form
10-K).*
10.10. The Registrant's 1992 Directors Stock Option Plan
(incorporated by reference to Exhibit 10.15 to the 1991 Form
10-K).*
10.11. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.15 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1994 (the "1993 Form 10-K")
Commission File No. 0-16806).*
10.12. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.16 of the 1993 Form 10-K).*
10.13. Guaranty and Suretyship Agreement dated March 22, 1994
between the Registrant and First Union National Bank of
Tennessee (incorporated by reference to Exhibit 10.17 of the
1993 Form 10-K).
10.14. Promissory Note dated October 7, 1994 (sic) from G. Arthur
Seelbinder to Registrant (incorporated by reference to
Exhibit 10.18 of the 1993 Form 10-K).
10.15. Contingent Employment Agreement dated as of January 26,
1995 between Phillip L. Pritchard and the Registrant.*
10.16. Separation Agreement and General Release dated October 26,
1994 between Registrant and William Z. Esch.*
10.17. Second Amendment to Loan Agreement dated January 11, 1995
between Registrant and First Union National Bank of
Tennessee.
(16) LETTER RE CHANGE IN CERTIFYING ACCOUNTANT.
16.1 Letter dated May 18, 1993 from Deloitte & Touche to the
Securities and Exchange Commission (incorporated by
reference to Exhibit 16.1 to the 2nd Quarter 1993 Form
10-Q).
(23) CONSENTS OF EXPERTS AND COUNSEL.
23.1. Consent of Deloitte & Touche LLP.
23.2 Consent of Price Waterhouse LLP.
(24) POWERS OF ATTORNEY.
24.1. Powers of Attorney.
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Company to sign pursuant to a power of attorney.
(27) FINANCIAL DATA SCHEDULE.
27.1. Financial Data Schedule.
(B) REPORTS ON FORM 8-K.
No current report on Form 8-K was filed by the Registrant during the
fourth quarter of fiscal 1994.
-15-
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: March 30, 1995
COOKER RESTAURANT CORPORATION
(the "Registrant")
By: /s/ G. Arthur Seelbinder
-----------------------------------
G. Arthur Seelbinder
Chairman of the Board,
Chief Executive Officer and Director
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ G. Arthur Seelbinder Chairman of the Board, March 30, 1995
--------------------------------- Chief Executive Officer and Director
G. Arthur Seelbinder (principal executive officer)
/s/ Phillip L. Pritchard* President, Chief Operating March 30, 1995
--------------------------------- Officer and Director
Phillip L. Pritchard
/s/ Glenn W. Cockburn* Senior Vice President - Operations March 30, 1995
--------------------------------- and Director
Glenn W. Cockburn
/s/ Charles G. Ernst Acting Principal Accounting Officer March 30, 1995
---------------------------------
Charles G. Ernst
/s/ Joseph E. Madigan* Director March 30, 1995
---------------------------------
Joseph E. Madigan
/s/ Robin V. Holderman* Director March 30, 1995
---------------------------------
Robin V. Holderman
/s/ David T. Kollat* Director March 30, 1995
---------------------------------
David T. Kollat
/s/ David L. Hobson* Director March 30, 1995
---------------------------------
David L. Hobson
*By: /s/ G. Arthur Seelbinder
---------------------------------
G. Arthur Seelbinder
Attorney-in-Fact
</TABLE>
<PAGE> 18
<TABLE>
COOKER RESTAURANT CORPORATION
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants......................................................................... F-1
Balance Sheet at January 1, 1995 and January 2, 1994...................................................... F-2
Statement of Income for the fiscal years ended January 1, 1995, January 2, 1994
and January 3, 1993....................................................................................... F-3
Statement of Changes in Shareholders' Equity for the fiscal years ended January 1, 1995,
January 2, 1994 and January 3, 1993....................................................................... F-4
Statement of Cash Flows for the fiscal years ended January 1, 1995, January 2, 1994 and
January 3, 1993.......................................................................................... F-5
Notes to Financial Statements............................................................................ F-7
</TABLE>
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Cooker Restaurant Corporation
In our opinion, the accompanying balance sheet and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Cooker Restaurant Corporation
(the Company) at January 1, 1995 and January 2, 1994, and the results of its
operations and its cash flows for the fiscal years then ended in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above. The
financial statements of Cooker Restaurant Corporation for the fiscal year ended
January 3, 1993 were audited by other independent accountants whose report
dated February 5, 1993 expressed an unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Columbus, Ohio
January 24, 1995
F-1
<PAGE> 20
COOKER RESTAURANT CORPORATION
BALANCE SHEET
JANUARY 1, 1995 AND JANUARY 2, 1994
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
January 1, January 2
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash $ 1,855,676 $ 3,046,679
Short-term investments - 359,991
Accounts receivable 308,507 1,131,457
Refundable income taxes 6,396 406,184
Inventory 829,998 638,191
Preoperational costs 677,723 1,570,905
Prepaid expenses and other
current assets 662,345 794,216
----------- -----------
Total current assets 4,340,645 7,947,623
Property and equipment 64,481,038 56,257,148
Other assets 2,036,691 2,392,940
----------- -----------
$70,858,374 $66,597,711
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 3,268,623 $ 2,996,668
Accrued salaries and wages 2,273,877 1,784,187
Gift certificates payable 567,059 541,621
Sales tax payable 442,300 366,209
Accrued property taxes 484,371 466,999
Accrued interest - 388,125
Income taxes payable 639,894 252,542
Deferred income taxes 79,047 383,825
----------- -----------
Total current liabilities 7,755,171 7,180,176
Long-term debt 28,600,000 23,000,000
Deferred income taxes 594,857 449,329
----------- -----------
Total liabilities 36,950,028 30,629,505
----------- -----------
Shareholders' equity
Common shares - without par value; authorized,
30,000,000 shares; issued 7,651,344 and
7,645,931 shares at January 1, 1995 and
January 2, 1994, respectively 26,003,475 25,974,614
Retained earnings 13,939,087 11,340,279
Treasury stock, at cost, 500,000 and
104,848 shares at January 1, 1995 and
January 2, 1994, respectively (6,034,216) (1,346,687)
----------- -----------
33,908,346 35,968,206
----------- -----------
$70,858,374 $66,597,711
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE> 21
<TABLE>
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
FISCAL YEARS ENDED JANUARY 1, 1995, JANUARY 2, 1994 AND JANUARY 3, 1993
--------------------------------------------------------------------------------
<CAPTION>
January 1, January 2, January 3,
1995 1994 1993
<S> <C> <C> <C>
Sales $84,168,854 $66,688,070 $53,028,064
----------- ----------- -----------
Cost of sales:
Food and beverages 24,193,168 18,780,248 15,181,025
Labor 31,388,592 23,384,540 17,943,943
Restaurant operating expenses 13,549,309 10,539,825 8,061,789
Restaurant depreciation and
amortization 5,030,240 4,062,795 1,947,579
----------- ----------- -----------
74,161,309 56,767,408 43,134,336
----------- ----------- -----------
Restaurant operating income 10,007,545 9,920,662 9,893,728
----------- ----------- -----------
Other expenses (income):
General and administrative 4,532,493 3,668,914 3,605,578
Interest expense 1,786,685 1,105,065 220,573
Interest and other income (72,464) (368,236) (292,577)
----------- ----------- -----------
6,246,714 4,405,743 3,533,574
----------- ----------- -----------
Income before income taxes and
extraordinary item 3,760,831 5,514,919 6,360,154
Provision for income taxes before
extraordinary item 1,279,534 2,021,000 2,380,154
----------- ----------- -----------
Income before extraordinary item 2,481,297 3,493,919 3,980,000
Extraordinary gain, net of income taxes 484,000 - -
----------- ----------- -----------
Net income $ 2,965,297 $ 3,493,919 $ 3,980,000
=========== =========== ===========
Earnings per common share:
Before extraordinary item $.34 $.45 $.52
Extraordinary item .07 - -
----------- ----------- -----------
Total $.41 $.45 $.52
=========== =========== ===========
Weighted average number of common
shares and common equivalent
shares outstanding 7,254,115 7,846,383 7,714,606
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 22
<TABLE>
COOKER RESTAURANT CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FISCAL YEARS ENDED JANUARY 1, 1995, JANUARY 2, 1994 AND JANUARY 3, 1993
--------------------------------------------------------------------------------
<CAPTION>
Common Shares Treasury Stock
------------------------- Retained ---------------------------
Shares Amounts Earnings Shares Amounts Total
----------- ------------ ----------- ---------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, Dec. 29, 1991 7,420,532 $23,720,142 $ 4,505,556 - - $28,225,698
Issuance of common
shares under stock
option plans 170,358 1,025,824 - - - 1,025,824
Tax benefits of stock
options exercised - 647,000 - - - 647,000
Dividends paid -
$.035 per share - - (259,719) - - (259,719)
Net income - - 3,980,000 - - 3,980,000
--------- ----------- ----------- ------- ------------ -----------
Balance, Jan. 3, 1993 7,590,890 25,392,966 8,225,837 - - 33,618,803
Purchase of treasury
stock - - - 104,848 $ (1,346,687) (1,346,687)
Issuance of common
shares under stock
option plans 55,041 337,343 - - - 337,343
Tax benefits of stock
options exercised - 244,305 - - - 244,305
Dividends paid -
$.05 per share - - (379,477) - - (379,477)
Net income - - 3,493,919 - - 3,493,919
--------- ----------- ----------- ------- ------------ -----------
Balance, Jan. 2, 1994 7,645,931 25,974,614 11,340,279 104,848 (1,346,687) 35,968,206
Purchase of treasury
stock - - - 395,152 (4,687,529) (4,687,529)
Issuance of common
shares under stock
option plans 5,413 22,465 - - - 22,465
Tax benefits of stock
options exercised - 6,396 - - - 6,396
Dividends paid -
$.05 per share - - (366,489) - - (366,489)
Net income - - 2,965,297 - - 2,965,297
--------- ----------- ----------- ------- ------------ -----------
Balance, Jan. 1, 1995 7,651,344 $26,003,475 $13,939,087 500,000 $ (6,034,216) $33,908,346
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 23
<TABLE>
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
PAGE 1 OF 2
FISCAL YEARS ENDED JANUARY 1, 1995, JANUARY 2, 1994 AND JANUARY 3, 1993
--------------------------------------------------------------------------------
<CAPTION>
January 1, January 2, January 3,
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers $84,991,804 $ 65,917,020 $ 52,960,045
Cash paid to suppliers and employees (73,541,527) (57,748,459) (45,833,392)
Interest received 72,464 368,236 222,910
Interest paid (2,174,810) (1,007,145) -
Income taxes paid (894,714) (1,168,607) (2,369,734)
----------- ------------ ------------
Net cash provided by
operating activities 8,453,217 6,361,045 4,979,829
----------- ------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (11,318,138) (23,627,049) (16,401,223)
Sales of property and equipment 206,250 108,301 -
Net decrease (increase) in short-term
investments 748,558 18,627,996 (15,197,414)
Advances to related party - (375,000) -
Payments from related party - 375,000 -
----------- ------------ ------------
Net cash used in
investing activities (10,363,330) (4,890,752) (31,598,637)
----------- ------------ ------------
Cash flows from financing activities:
Proceeds from issuance of
convertible debentures - - 23,000,000
Proceeds from borrowings 9,300,000 - -
Redemption of debentures (1,200,000) - -
Repurchase of debentures (975,000) - -
Exercise of stock options 22,465 337,343 1,025,824
Dividends paid (366,489) (379,477) (259,719)
Advances to employee stock
ownership plan (27,650) (158,495) -
Purchases of treasury stock (6,034,216) - -
----------- ------------ ------------
Net cash provided by (used in)
financing activities 719,110 (200,629) 23,766,105
----------- ------------ ------------
Net (decrease) increase in cash (1,191,003) 1,269,664 (2,852,703)
Cash at beginning of period 3,046,679 1,777,015 4,629,718
----------- ------------ ------------
Cash at end of period $ 1,855,676 $ 3,046,679 $ 1,777,015
=========== ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 24
<TABLE>
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
PAGE 2 OF 2
FISCAL YEARS ENDED JANUARY 1, 1995, JANUARY 2, 1994 AND JANUARY 3, 1993
--------------------------------------------------------------------------------
<CAPTION>
January 1, January 2, January 3,
1995 1994 1993
<S> <C> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 2,965,297 $ 3,493,919 $ 3,980,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain on repurchase of
debentures, net of income taxes (484,000) - -
Depreciation and amortization 5,464,225 4,481,769 2,179,446
Decrease (increase) in accounts
receivable 822,950 (771,050) (68,019)
Decrease (increase) in refundable
income taxes 406,184 667,121 (182,000)
(Increase) in inventory (191,807) (206,726) (156,504)
(Increase) in preoperational costs (1,348,087) (2,440,602) (1,074,653)
(Increase) decrease in prepaid
expenses and other current
assets (268,129) 173,235 (414,478)
(Increase) decrease in other assets (131,397) 130,060 (1,145,302)
Increase in accounts payable 1,018,879 251,409 369,778
Increase in accrued salaries and
wages 489,690 14,234 817,216
Increase in gift certificates
payable 25,438 151,018 152,646
Increase in sales tax payable 76,091 6,508 129,792
Increase in accrued property taxes 17,372 126,958 160,282
(Decrease) increase in accrued
interest (388,125) 97,920 290,205
Increase (decrease) in income
taxes payable 137,886 85,118 (309,580)
(Decrease) increase in deferred
income taxes (159,250) 100,154 251,000
----------- ----------- -----------
Net cash provided by operating activities $ 8,453,217 $ 6,361,045 $ 4,979,829
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 25
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Cooker Restaurant Corporation (the Company) owns and operates 35
restaurants in Tennessee, Ohio, Indiana, Kentucky, Michigan, Florida,
Georgia, North Carolina, Virginia, and Maryland which have been developed
under the Cooker concept.
Fiscal year. The Company's fiscal year ends on the Sunday closest to
December 31 of each year. Fiscal years 1994 and 1993 consisted of 52
weeks. Fiscal year 1992 consisted of 53 weeks.
Short-term investments. Short-term investments consist primarily of
municipal bonds and are stated at cost which approximates market.
Inventories. Inventories consist primarily of food and beverages, and are
stated at the lower of cost or market. Cost is determined by the first-in,
first-out (FIFO) method.
Preoperational costs. Preoperational costs consist primarily of costs for
employee training and relocation and supplies incurred in connection with
the opening of each restaurant. These costs are accumulated to the date
the restaurant is opened and are amortized on the straight-line method over
one year commencing from that date. Prior to fiscal 1993, preoperational
costs were amortized on the straight-line method over three years. This
change in estimate decreased fiscal 1993 net income by $611,138 or $.08 per
share. Accumulated amortization of preoperational costs was $710,900 and
$630,432 at January 1, 1995 and January 2, 1994, respectively.
Property and equipment. Property and equipment, including capital
improvements, are recorded at cost. Depreciation is computed by the
straight-line method over the estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over
the shorter of the useful life of the improvements or the remaining lease
term.
Maintenance and repairs are charged directly to expense as incurred. When
property and equipment are sold or otherwise disposed of, the related cost
and accumulated depreciation are removed from the accounts and the
resulting gains or losses are reported in operations.
Interest is capitalized in connection with the construction of new
restaurants. Capitalized interest is amortized over the asset's estimated
useful life. Interest costs of $291,229, $428,918 and $69,632 were
capitalized in fiscal 1994, 1993 and 1992, respectively.
Deferred financing costs. Deferred financing costs are being amortized
over the term of the related debt.
Prepaid lease. Prepaid lease represents prepayment of a long-term land
lease and is being amortized over the lease term.
Income taxes. During fiscal 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes. The
effect of adoption of this standard was immaterial. In fiscal 1992, income
taxes were accounted for in accordance with Statement of Financial
Accounting Standards No. 96.
Earnings per share. Earnings per share is calculated using the weighted
average number of common shares outstanding including common share
equivalents, which consist of stock options. The convertible subordinated
debentures have not been included as common share equivalents due to their
antidilutive effect.
Reclassifications. Certain fiscal 1993 and 1992 amounts have been
reclassified to conform with fiscal 1994 presentations.
F-7
<PAGE> 26
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. PROPERTY AND EQUIPMENT
<TABLE>
Property and equipment consist of the following:
<CAPTION>
January 1, January 2,
1995 1994
----------- -----------
<S> <C> <C>
Land $17,511,650 $16,900,040
Buildings and leasehold improvements 39,134,862 30,702,482
Furniture, fixtures and equipment 15,961,079 12,889,163
Construction in progress 857,820 2,171,841
Land held for sale 1,089,539 914,000
----------- -----------
74,554,950 63,577,526
Less accumulated depreciation and
amortization (10,073,912) (7,320,378)
----------- -----------
$64,481,038 $56,257,148
=========== ===========
3. OTHER ASSETS
Other assets consist of the following:
January 1, January 2,
1995 1994
----------- -----------
Deferred financing costs, net of
accumulated amortization of $464,614
and $183,602 $ 752,763 $ 1,033,775
Prepaid lease, net of accumulated
amortization of $32,500 and $19,500 617,500 630,500
Advances to Employee Stock Ownership Plan 297,828 270,178
Liquor licenses, net of accumulated
amortization of $72,944 and $57,910 223,564 238,598
Note receivable from sale of land - 206,250
Other 145,036 13,639
----------- -----------
$ 2,036,691 $ 2,392,940
=========== ===========
</TABLE>
F-8
<PAGE> 27
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
4. LONG-TERM DEBT
<TABLE>
Long-term debt consists of the following:
<CAPTION>
January 1, January 2,
1995 1994
----------- -----------
<S> <C> <C>
Convertible subordinated debentures $19,300,000 $23,000,000
Revolving line of credit 9,300,000 -
----------- -----------
$28,600,000 $23,000,000
=========== ===========
</TABLE>
In October 1992, the Company issued $23,000,000 of convertible subordinated
debentures (the "Debentures") maturing October 1, 2002. The Debentures bear
interest at 6 3/4% which is payable quarterly on the first day of each
January, April, July and October beginning January 1, 1993 through
maturity. The Debentures are convertible at any time before maturity,
unless previously redeemed, into common shares of the Company at a
conversion price of $21.5625 per share, subject to adjustment for stock
splits. The Debentures are subordinated to all existing and future Senior
Indebtedness, as defined in the prospectus.
At the holder's option, the Company is obligated to redeem Debentures
tendered during the period from August 1 through October 1 of each year,
commencing August 1, 1994, at 100% of their principal amount plus accrued
interest, subject to an annual aggregate maximum of $1,150,000. During the
year ended January 1, 1995, the Company redeemed the annual aggregate
maximum amount required by the holder's option. The Company is also
required to redeem Debentures at 100% of their principal plus accrued
interest in the event of death of a Debenture holder up to a maximum of
$25,000 per year per deceased Debenture holder. The Company redeemed
approximately $50,000 of Debentures during fiscal 1994 subject to this
provision.
The Debentures are also redeemable at any time on or after October 1, 1994
at the option of the Company, in whole or in part, at declining premiums.
In addition, upon the occurrence of certain changes of control of the
Company, the Company is obligated to purchase Debentures at the holder's
option at par plus accrued interest.
In December 1994, the Company recorded an extraordinary gain of $733,500
($484,000 after taxes) in connection with the repurchase of $2,500,000
principal amount of the Debentures. The purchase price was financed
through funds available under the Revolving Credit and Term Loan.
The Company has a Revolving Credit and Term Loan Agreement (the Agreement)
with a bank for borrowings up to $10,000,000 at January 1, 1995. The
Agreement is secured by certain properties owned by the Company and a life
insurance policy on the Chairman of the Board. Interest was payable
quarterly at the bank's prime rate plus 1/4% (8.75% at January 1, 1995).
On January 11, 1995, the Agreement was amended to increase the Company's
borrowing limit from $10,000,000 to $16,300,000 during fiscal 1995,
$1,300,000 of which is to be used to reduce the outstanding balance of
Debentures. Beginning January 1, 1996, borrowing availability will be
reduced by $250,000 or $300,000 per calendar quarter, depending on the
maximum borrowings during fiscal 1995. Interest on borrowings under the
amended Agreement will be determined at the Company's option at (a) the
bank's prime rate less 1/4%; or (b) LIBOR plus 150 basis points. These
rates will be increased to the bank's prime rate or LIBOR plus 200 basis
points, respectively, depending on the Company's compliance with covenants
and a defined fixed charge coverage ratio. Borrowings are due on November
1, 1997.
The Agreement, as amended, contains covenants that provide for, among other
things, certain minimum requirements as to net worth and fixed charge
coverage and limitations on new restaurant expansions and indebtedness. In
addition, dividends shall not exceed 15% of the prior year's net income
provided also that net income of the prior year exceeds $2,000,000.
F-9
<PAGE> 28
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
5. SHAREHOLDERS' EQUITY
The Company has authorized 5,000,000 preferred shares, none of which has
been issued.
In January 1990, the Board of Directors approved a Shareholder Rights Plan,
as amended, which provides that, in the event that a third party purchases
20% or more of total outstanding stock of the Company, a dividend
distribution of one and one-half rights for each outstanding common share
will be made. These rights expire ten years from date of issuance, if not
earlier redeemed by the Company, and entitle the holder to purchase, under
certain conditions, preferred shares or common shares of the Company. As
of January 1, 1995, approximately 10,727,016 rights were outstanding.
6. INCOME TAXES
<TABLE>
The provision for income taxes for the following fiscal years consists of:
<CAPTION>
January 1, January 2, January 3,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Current taxes:
Federal $ 1,037,284 $ 1,453,000 $ 1,579,154
State and local 401,500 468,000 550,000
----------- ----------- -----------
1,438,784 1,921,000 2,129,154
Deferred taxes (159,250) 100,000 251,000
----------- ----------- -----------
Provision for income taxes before
extraordinary item 1,279,534 2,021,000 2,380,154
Provision for income taxes on
extraordinary item 249,466 - -
----------- ----------- -----------
Provision for income taxes $ 1,529,000 $ 2,021,000 $ 2,380,154
=========== =========== ===========
</TABLE>
<TABLE>
A reconciliation of the differences between income taxes calculated at the
Federal statutory tax rate and the provision for income taxes before
extraordinary item is as follows:
<CAPTION>
Fiscal year ended
--------------------------------------------------------
January 1, January 2, January 3,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Income tax expense on income
before extraordinary item based
on the Federal statutory rate $ 1,278,683 $ 1,875,028 $ 2,162,452
State taxes, net of federal tax
benefit 264,990 258,000 217,702
FICA tip tax credit (250,000) - -
Tax-exempt income and other (14,139) (112,028) -
----------- ----------- -----------
$ 1,279,534 $ 2,021,000 $ 2,380,154
=========== =========== ===========
</TABLE>
F-10
<PAGE> 29
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
Deferred income taxes are recorded based upon the difference between the
financial statements and tax bases of assets and liabilities. Deferred tax
assets and liabilities at January 1, 1995 and January 2, 1994 consist of
the following:
<CAPTION>
January 1, January 2,
1995 1994
---------- ----------
<S> <C> <C>
Deferred tax assets:
Accrued vacation $ 65,060 $ 73,100
Accrued health insurance 56,173 9,279
State and local taxes 2,005 39,763
Liquor license fees 14,328 28,657
--------- ---------
Gross deferred tax assets 137,566 150,799
--------- ---------
Deferred tax liabilities:
Preoperational costs (216,613) (520,295)
Property and equipment (594,857) (463,658)
--------- ---------
Gross deferred tax liabilities (811,470) (983,953)
--------- ---------
Net liability $(673,904) $(833,154)
========= =========
</TABLE>
7. EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the Company established an Employee Stock Ownership Plan (the
"ESOP" or the "Plan"). All employees who have reached the age of 21 years
are participants in the Plan. Participants vest in the Plan based upon a
graduated schedule providing 20 percent after three years of service and
each year thereafter, with full vesting after seven years.
The amount and frequency of contributions to the Plan are at the discretion
of the Company. In fiscal 1992, the Company contributed $60,000 to the
ESOP. No contributions were made to the ESOP during fiscal 1994 or fiscal
1993. Dividends on shares held by the ESOP are used to reduce the
Company's receivable from the ESOP prior to allocation to ESOP participant
accounts. Shares forfeited due to participant withdrawals from the ESOP
during fiscal 1994 and 1993 have been reallocated to remaining participants
as of the end of the respective plan years.
As of January 1, 1995, the ESOP owns 362,633 of the Company's common shares
all of which have been allocated to eligible participants.
8. STOCK OPTION PLANS
The Company has employee stock option plans adopted in 1988 (1988 Plan) and
1992 (1992 Plan). Under these plans, employees and nonmanagement directors
are granted stock options and stock appreciation rights as determined by a
committee appointed by the Board of Directors (the Committee). Each option
permits the holder to purchase one share of common stock of the Company at
the stated exercise price up to ten years from the date of grant. The
stated exercise price is the market value of the stock on the date of
grant. Options vest at a rate of 25% per year. The Company has reserved
620,000 and 600,000 common shares for issuance to employees and 73,334 and
200,000 common shares for issuance to nonmanagement directors under the
1988 Plan and 1992 Plan, respectively.
F-11
<PAGE> 30
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
Changes in the number of shares under the stock option plans are summarized
as follows:
<CAPTION>
Options Price
-------- -----------------
<S> <C> <C>
Balance at December 29, 1991 686,340 $ 4.03 - $11.18
Granted 27,340 17.75
Cancelled (7,780) 4.03 - 4.41
Exercised (170,358) 4.03 - 11.18
------------ -----------------
Balance at January 3, 1993 535,542 4.03 - 17.75
Granted 281,750 17.75 - 21.75
Cancelled (708) 4.03 - 4.41
Exercised (55,041) 4.03 - 11.19
------------ -----------------
Balance at January 2, 1994 761,543 4.03 - 21.75
Granted 775,161 6.63 - 12.88
Cancelled (633,983) 4.03 - 21.75
Exercised (5,413) 4.03 - 4.41
------------ -----------------
Balance at January 1, 1995 897,308 $ 4.03 - $21.75
============ =================
</TABLE>
At January 1, 1995, options to purchase 246,466 common shares were
exercisable.
During fiscal 1994, the Committee changed the exercise price of certain
options through the authorization of the surrender and cancellation of
541,000 options and the reissuance of 397,990 options under the 1988 and
1992 Plans. The remaining 143,010 cancelled options were made available
for subsequent reissuance.
9. LEASES
The Company leases buildings for certain of its restaurants and its
Corporate office facility under long-term operating leases which expire
over the next twenty-four years. In addition to the minimum rental for
these leases, the Company also pays, in certain instances, additional rent
based on a percentage of sales, and its pro rata share of the lessor's
direct operating expenditures. Several of the leases provide for option
renewal periods and scheduled rent increases. Rental expense totalled
$1,636,687, $1,393,976, and $1,400,605, including percentage rent of
$246,684, $244,900, and $287,655 for the fiscal years ended January 1,
1995, January 2, 1994, and January 3, 1993, respectively.
F-12
<PAGE> 31
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
Minimum rental commitments for noncancelable leases as of January 1,
1995 are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ -----------
<S> <C>
1995 $ 1,369,677
1996 1,347,802
1997 1,351,377
1998 1,372,331
1999 1,398,451
Thereafter 13,940,763
-----------
$20,780,401
===========
</TABLE>
10. COMMON STOCK
On February 27, 1992, the Company announced a two-for-one common stock
split, payable April 13, 1992 to shareholders of record on March 20, 1992.
Accordingly, common share and per share amounts have been retroactively
adjusted to reflect the stock split.
11. SUPPLEMENTAL CASH FLOW INFORMATION
During fiscal 1993, the Company acquired treasury stock of $1,346,687 which
is included in accounts payable at January 2, 1994. Also, as described in
Note 4, $642,500 related to the repurchase of Debentures is included in
accounts payable at January 1, 1995.
In fiscal 1994 and 1993, the Company received tax benefits from the
exercise of stock options totalling $6,396 and $244,305, respectively.
12. RELATED PARTIES
During October 1993, the Company advanced $375,000 to the Chairman of the
Board. This advance bore interest at 7%. Principal and interest were
repaid in December 1993 and March 1994, respectively.
During February 1994, the Board of Directors authorized the Company to
guarantee $5,000,000 of personal indebtedness to the Chairman of the Board.
A fee of .25% per annum is charged on the amount of the guarantee.
F-13
<PAGE> 32
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
Quarterly financial data for fiscal year 1994 and 1993 are summarized as
follows:
<CAPTION>
First Second Third Fourth
1994 (b) Quarter Quarter Quarter Quarter
--------------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
(in thousands, except per share data)
Sales $20,120 $20,830 $21,226 $21,993
Restaurant operating
income (a) 2,473 2,159 2,452 2,924
Income before income
taxes and
extraordinary item 1,003 814 820 1,124
Extraordinary gain (net
of income taxes) - - - 484
Net income 652 554 549 726
Earnings per share before
extraordinary
item $.09 $.08 $.07 $.10
Earnings per share
from extraordinary
gain - - - $.07
Earnings per share $.09 $.08 $.07 $.17
First Second Third Fourth
1993 (b) Quarter Quarter Quarter Quarter
--------------------------------- ------- ------- ------- -------
(in thousands, except per share data)
Sales $15,612 $16,464 $16,623 $17,988
Restaurant operating
income (a) 2,760 2,949 2,791 1,421
Income before income
taxes 1,561 1,833 1,899 222
Net income 989 1,145 1,218 142
Earnings per share $.13 $.15 $.16 $.01
<FN>
(a) Sales less food and beverages, labor, restaurant operating
expenses and depreciation and amortization.
(b) Certain amounts related to fiscal 1993 and the first three
quarters of fiscal 1994 have been reclassified to conform to
fiscal 1994 fourth quarter presentations.
</TABLE>
F-14
<PAGE> 33
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
COOKER RESTAURANT CORPORATION
_______________________
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED:
JANUARY 1, 1995
_______________________
EXHIBITS
_______________________
================================================================================
<PAGE> 34
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT+ REFERENCE
<S> <C> <C> <C>
3.1. Amended and Restated Articles of Incorporation of
the Registrant. 13 *
3.2. Amended and Restated Code of Regulations of the
Registrant. 12 *
4.1. See Articles FOURTH, FIFTH and SIXTH of the Amended
and Restated Articles of Incorporation of the
Registrant (see 3.1 above). 13 *
4.2. See Articles One, Four, Seven and Eight of the
Amended and Restated Code of Regulations of the
Registrant (see 3.2 above). 12 *
4.3. Rights Agreement dated as of February 1, 1990
between the Registrant and National City Bank. 65 *
4.4. Amendment to Rights Agreement dated as of November
1, 1992 between the Registrant and National City Bank. 1 *
4.5. Letter dated October 29, 1992 from the Registrant
to First Union National Bank of North Carolina. 1 *
4.6. Letter dated October 29, 1992 from National City
Bank to the Registrant. 1 *
4.7. See Section 7.4 of the Loan Agreement dated as of
August 26, 1991 between the Registrant and First
Union National Bank of Tennessee (see 10.1, 10.2 and
10.17 below). 45 *
4.8. Indenture dated as of October 28, 1992 between
Registrant and First Union National Bank of North
Carolina, as Trustee. 61 *
10.1. Loan Agreement dated as of August 26, 1991 between
the Registrant and First Union National Bank of
Tennessee. 45 *
10.2. First Amendment to Loan Agreement dated as of
June 29, 1993 between the Registrant and First
Union National Bank of Tennessee. 2 *
10.3. Contingent Employment Agreement dated as of
January 16, 1990 between G. Arthur Seelbinder and
the Registrant. 9 *
10.4. Contingent Employment Agreement dated as of
January 16, 1990 between Glenn W. Cockburn and the
Registrant. 9 *
10.5. Contingent Employment Agreement dated as of
January 16, 1990 between William Z. Esch and the Registrant. 9 *
</TABLE>
+The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment
of a fee of fifty cents ($.50) per page.
E-1
<PAGE> 35
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT+ REFERENCE
<S> <C> <C> <C>
10.6. Contingent Employment Agreement dated as of
January 16, 1990 between Margaret A. Epperson and
the Registrant. 9 *
10.7. The Registrant's 1988 Employee Stock Option Plan,
as amended and restated. 14 *
10.8. The Registrant's 1988 Directors Stock Option Plan,
as amended and restated. 7 *
10.9. The Registrant's 1992 Employee Stock Option Plan. 13 *
10.10. The Registrant's 1992 Directors Stock Option Plan. 7 *
10.11. The Registrant's 1988 Directors Stock Option Plan,
as amended and restated. 6 *
10.12. The Registrant's 1992 Directors Stock Option Plan,
as amended and restated. 6 *
10.13. Guaranty and Suretyship Agreement dated March 22,
1994 between the Registrant and First Union
National Bank of Tennessee. 7 *
10.14. Promissory Note dated October 7, 1994 (sic) from G.
Arthur Seelbinder to Registrant. 1 *
10.15. Contingent Employment Agreement dated as of January
26, 1995 between Phillip L. Pritchard and Registrant 9
10.16 Separation Agreement and General Release dated
October 26, 1994 between Registrant and William Z. Esch 8
10.17. Second Amendment to Loan Agreement dated January
11, 1995 between Registrant and First Union
National Bank of Tennessee. 8
16.1 Letter dated May 18, 1993 from Deloitte & Touche to
the Securities and Exchange Commission. 1 *
23.1. Consent of Deloitte & Touche LLP. 1
23.2 Consent of Price Waterhouse LLP. 1
24.1. Powers of Attorney. 9
24.2. Certified resolution of the Registrant's Board of
Directors authorizing officers and directors
signing on behalf of the Company to sign pursuant
to a power of attorney. 1
27.1 Financial Data Schedules (submitted electronically
for SEC information only). 4
</TABLE>
+The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment
of a fee of fifty cents ($.50) per page.
E-2
<PAGE> 1
EXHIBIT 10.15
EMPLOYMENT AGREEMENT
January 26, 1995
COOKER RESTAURANT CORPORATION, an Ohio corporation, with its principal
place of business at 1530 Bethel Road, Columbus, Ohio 43220 (the "Company");
and PHILLIP L. PRITCHARD, who resides at 3031 Alatka Court, Longwood, Florida
32779 (the "Executive") agree as follows:
PREAMBLE:
1. The Executive is employed by the Company.
2. The Company believes that the Executive's skill and knowledge
are important to its continued success.
3. The Executive desires to be protected from arbitrary dismissal
if there is a change in the control of the Company.
4. The Company believes that the Executive's desire to be so
protected is legitimate and that such protection will be in the best interest
of the Company and its shareholders because such protection will allow the
Company to retain the Executive and will allow the Executive to give advice
concerning any prospective change in control without concern for his own
interests and with consideration for the best interests of the Company and its
shareholders only.
TERMS:
SECTION 1. Effectiveness of this Agreement.
1.1. Conditions Precedent. This Agreement shall not be effective
between the Company and the Executive unless and until a Change in Control of
the Company (as defined in Section 1.2 below) has occurred while the Executive
is an employee of the Company. Furthermore, this Agreement shall not be
effective between the Company and the Executive unless at the time such Change
in Control has occurred, the Company has met or exceeded the financial ratio
target set forth in Section 1.3 below.
1.2. Definition. For the purpose of this Agreement, a Change in
Control of the Company has occurred when:
1.2.1. any person (defined for the purposes of this Section
1.2 to mean any person within the meaning of Section 13(d) of the Securities
Exchange Act of 1934 (the "Exchange Act")), other than the Company or an
employee benefit plan established by its Board of Directors, acquires,
directly or indirectly, the beneficial ownership (determined under Rule 13d-3
of the regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company having
20% or more of the voting power of all of the voting securities issued by the
Company in the
<PAGE> 2
election of directors at the next meeting of the holders of voting securities
to be held for such purpose, and such person acquired such beneficial
ownership without the prior consent of the Board of Directors of the Company;
or
1.2.2. a majority of the directors elected at any meeting of
the holders of voting securities of the Company are persons who were not
nominated for such election by the Board of Directors of the Company or a duly
constituted committee of the Board of Directors of the Company having authority
in such matters; or
1.2.3. the Company merges or consolidates with or transfers
substantially all of its assets to another person and the Board of Directors
does not adopt a resolution, before the Company enters into any agreement for
such merger, consolidation or transfer, determining that it is not a Change in
Control.
1.3. Financial Ratio Targets. The financial ratio target referred to
in Section 1.1 above is:
1.3.1. for a Change in Control in 1994 and thereafter, the
Company had an average annual return on assets of 10% in the previous three
fiscal years and an average annual growth in earnings per share of 15% over
such period of time.
1.3.2. For the purposes of this Section 1.3, return on assets
shall be determined by dividing the net earnings of the Company as shown on its
audited financial statement for such fiscal year by the sum of (i) its total
assets on the last day of the previous fiscal year and (ii) its total assets of
the last day of the fiscal year in question, divided by two. Earnings per share
shall be as shown on its audited financial statements for such fiscal year.
1.4. Cancellation of Agreement before Effectiveness. Anything else in
this Agreement to the contrary notwithstanding, this Agreement may be cancelled
by the Board of Directors of the Company or a duly constituted committee
thereof having authority in such matters at any time before the occurrence of a
Change in Control and will be cancelled by the termination of the Executive's
employment by the Company at any time before the occurrence of a Change in
Control for any reason. If this Agreement is so cancelled before the
occurrence of a Change in Control, it shall not thereafter become effective
between the Company and the Executive.
SECTION 2. Employment.
2.1. Term. The term of employment of the Executive under this
Agreement (the "Term of Employment") shall begin upon the first occurrence of a
Change in Control after December 5, 1994 (a "Trigger Event"), and shall
continue until the last day of the fiscal quarter of the Company ending on or
following the fifth anniversary of the date of the occurrence of such Trigger
Event.
2.2. Hiring. The Company hereby agrees to employ Executive during the
Term of Employment and the Executive hereby accepts such employment with the
Company and agrees to perform his duties as an employee of the Company in
accordance with the terms of this Agreement.
2.3. Duties. During the Term of Employment, the Executive shall have
such titles, authorities and responsibilities as he had immediately before the
Trigger Event and shall have such additional titles, authority and
responsibilities as may be prescribed from time to time by the Board of
Directors of the Company.
-2-
<PAGE> 3
2.4. Extent of Service. During the Term of Employment, the Executive
shall devote substantially all of his business hours and attention, reasonable
vacation time and absences for sickness excepted, to the business of the
Company, as necessary to fulfill his duties as an employee of the Company. The
Executive shall perform his duties as an employee of the Company with fidelity
and to the best of his ability. The Executive's duties under this Section 2.4
shall not be construed to prevent him from acting as a director of other
corporations or from engaging in civic, charitable, religious or similar
activities.
2.5. Location. During the Term of Employment, the Executive shall not
be required to perform his duties as an employee of the Company at any location
other than the location at which he performed his duties as an employee of the
Company immediately before the Trigger Event. The Company shall provide the
Executive with an office and assistant and clerical employees at such location
that are comparable to the office and assistant and clerical employees
available to him immediately before the Trigger Event and that are reasonably
necessary for him to discharge his duties hereunder. The Company shall not
require the Executive to travel away from such location for longer times or
greater distances than were required by the Company immediately before the
Trigger Event nor are reasonably necessary for him to perform his duties
hereunder.
SECTION 3. Compensation. As consideration for the services rendered
by the Executive to the Company hereunder during the Term of Employment, the
Company shall pay Executive the types and amounts of compensation as follows:
3.1. Base Salary. The Company shall pay the Executive a base salary,
in monthly or more frequent installments, at not less than the rate that the
Executive was receiving immediately before the Trigger Event. Such base salary
shall be increased at or before the end of each fiscal year of the Company
during the Term of Employment to reflect any increases in the Consumer Price
Index (all urban consumers) since the Trigger Event. The Executive shall have
the opportunity to receive other increases in his base salary comparable to
those awarded to other executives of the Company and commensurate with his
title, authority, responsibility, tenure and performance. No such increase
shall affect any of the Executive's other rights under this Agreement.
3.2. Bonus. The Executive shall be eligible to participate on a
reasonable basis in bonus, stock option, restricted stock and other incentive
compensation plans which provide opportunities to receive compensation which
are the greater of the opportunities provided by the Company for executives
with comparable duties or the opportunities under any such plans in which he
was participating immediately before the Trigger Event.
3.3. Benefits. The Executive shall have the right to receive
vacation, sick pay, life, dental, medical, hospitalization and disability
benefits and other fringe benefits and perquisites that are at least as
valuable to him as those provided by the Company to the Executive immediately
before the Trigger Event or such benefits and perquisites as are provided to
other executives of the Company who have similar titles, authorities,
responsibilities or base salary to the Executive, if such benefits and
perquisites would be more valuable to him.
3.4. Expenses. The Company shall reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in the performance of his
duties hereunder, including expenses for travel, entertainment and similar
items, promptly after the presentation by the Executive, from time to time, of
an itemized account of such expenses.
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<PAGE> 4
SECTION 4. Covenant Not to Compete. For so long as the Executive is
employed by the Company during the Term of Employment, the Executive shall not
engage, directly or indirectly, in the medium priced full service restaurant
business (other than as an investor owning less than 5% of the voting
securities of any corporation having more than 500 securityholders) within 50
miles of any such restaurant operated by the Company if such activity is
reasonably likely to cause material injury to the Company, unless such activity
was disclosed to the Board of Directors of the Company before the Trigger Event
and the Board of Directors did not disapprove of such activity.
SECTION 5. Confidential Information. Executive recognizes and
acknowledges that the customer lists, trade secrets and proprietary information
of the Company ("Confidential Information") are valuable business assets of the
Company. Executive shall not, during or after the Term of Employment, disclose
any such Confidential Information to any person other than directors, officers,
employees, counsel, accountants and agents of the Company and persons, such as
suppliers and contractors, to whom such disclosure is made in furtherance of
the interests of the Company, nor use any such Confidential Information for his
own benefit or the benefit of any person other than the Company if such
disclosure or use would cause a material injury to the business of the Company.
Upon termination of the Term of Employment or at any subsequent time upon
request, Executive will promptly return to the Company all records relating to
Confidential Information which are then in his possession. Confidential
Information shall not include any information known generally to the public or
any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that of the Company.
SECTION 6. Intellectual Property. Executive shall disclose to the
Company all methods, systems, designs, inventions, products, writings and other
similar items that are related to the business of the Company ("Intellectual
Property") invented, developed or created by the Executive with resources
provided by the Company and in the ordinary course of his duties hereunder
during the Term of Employment, and agrees that all such Intellectual Property
shall be the property of the Company. Executive hereby agrees to assign to the
Company all of Executive's rights in any such Intellectual Property and agrees
to cooperate with the Company in the preparation and filing of such patent
applications and other documents as are reasonably necessary to protect the
Company's rights in such Intellectual Property.
SECTION 7. Termination.
7.1. Methods of Termination.
7.1.1. During the Term of Employment, the employment of the
Executive hereunder may only be terminated by:
(A) the death of the Executive;
(B) the voluntary retirement or resignation of the
Executive, which shall become effective upon the delivery of a notice thereof
to the Company or such later date as may be specified in such notice;
(C) the determination of the Board of Directors of the
Company that the Executive is Permanently and Totally Disabled (as defined in
Section 7.2.1 below); or
(D) the determination of the Board of Directors of the
Company that the Executive has
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<PAGE> 5
(i) willfully failed to perform material obligations
under this Agreement;
(ii) committed acts of deliberate dishonesty
involving the business of the Company; or
(iii) been convicted of a felony involving the business
of the Company and all rights of appeal have been
exhausted or lapsed and such conviction has not
been reversed or vacated.
Such determination may only be made after (A) the Company notifies the
Executive of the events or actions that are alleged to constitute the basis for
making such determination, (B) the Executive fails to substantially cure his
failure or the injury to the business of the Company within thirty (30) days
after he receives such notice and (C) the Board of Directors thereafter
conducts a hearing on such allegations and failure at which the Executive may
present evidence and witnesses on his behalf, be represented by legal counsel
and confront his accusers and the witnesses against him. A court may fully
review any determination made by the Board of Directors under clauses (c) or
(d) of this Section 7.1.1.
7.1.2. The Executive is "Permanently and Totally Disabled" for
the purposes of this Agreement if he is unable to perform his duties hereunder
for a continuous period of six months due to a physical or mental condition
that, in the opinion of a licensed physician, will be of indefinite duration or
is without a reasonable probability of recovery. The Executive agrees to
submit to an examination by a licensed physician of his choice in order to
obtain such opinion upon notice by the Company, given after the Executive has
been absent from his place of employment for at least six months, that it
desires to determine whether or not Executive is Permanently and Totally
Disabled. Such examination shall be paid for in advance by the Company. Any
physical or mental condition of the Executive that impairs his performance of
his duties hereunder, other than being Permanently and Totally Disabled, shall
not be the basis for the termination of his employment and shall not affect the
Company's obligations hereunder, as the Company has assumed the risk of such
physical and mental conditions.
7.2. Severance Payment. If the employment of the Executive by the
Company is terminated by the Company before the end of the Term of Employment
and the Board of Directors of the Company has not made a determination as
provided in Section 7.1.1(c) or (d) above or if the Executive resigns before
the end of the Term of Employment, because he has determined in good faith that
his titles, authorities, responsibilities, salary, salary increase and bonus
opportunities, benefits or perquisites have been diminished or that an adverse
change in his working conditions has occurred or that the Company has breached
this Agreement:
7.2.1. the Company shall pay to the Executive an amount equal
to the maximum amount permitted to be paid under Section 280G of the Internal
Revenue Code of 1986, as now in effect ("Section 280G"), which would not result
in the making of an excess parachute payment, as defined in Section 280G;
7.2.2. if such payment is not made on the date of such
termination or resignation, the amount payable under Section 7.2.1 above shall
bear interest at the rate used for discounting payments to present value under
Section 280G;
7.2.3. the Executive shall be released from any further
obligations to the Company under Sections 2.4, 4, 5 and 6 of this Agreement or
created by law; and
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<PAGE> 6
7.2.4. any payment made under this Section 7.2 shall be
accompanied by a statement signed by an executive officer of the Company
setting forth in reasonable detail the amount of such payment and how it was
calculated.
7.3. Effect of Termination. Upon the termination of the employment of
the Executive by the Company, whether or not at the end of the Term of
Employment, the Company shall pay to the Executive any amounts due to him under
Section 3 for services rendered to the Company before such termination, and
shall provide him with all benefits to which he or his beneficiaries are vested
under any employee benefit plans in which he participated. Neither the
termination of the Executive's employment by the Company nor the end of the
Term of Employment shall relieve the Company of its obligations under Sections
7, 8, 9 and 10 of this Agreement which shall continue to be effective in
accordance with their terms.
7.4. Damages. The amounts payable to the Executive under Section 7.2
above are severance pay only and shall not be deemed to be in lieu of any
damages payable by the Company to the Executive for wrongful discharge or
otherwise. The Executive shall make reasonable efforts to mitigate damages
payable to him by the Company for wrongful discharge, breach of this Agreement
or other similar causes by seeking other employment; provided, however, that he
shall not be required to accept employment of substantially different character
than the highest position held by him with the Company or in a different
location than the one established under Section 2.5 above. Any compensation or
benefits from such other employment shall not reduce the amount payable to the
Executive as severance pay under Section 7.2 above.
SECTION 8. Enforcement Costs. The Company is aware that upon the
occurrence of a Change in Control, the Board of Directors or a shareholder of
the Company may then cause or attempt to cause the Company to refuse to comply
with its obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to take, other action
to deny the Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Company that the Executive not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by
litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the
Executive hereunder, nor be bound to negotiate any settlement of his rights
hereunder under threat of incurring such expenses. Accordingly, if following a
Change in Control, it should appear to the Executive that the Company has
failed to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation or other legal
action designed to deny, diminish or to recover from the Executive the benefits
intended to be provided to the Executive hereunder, and that the Executive has
complied with all of his obligations under this Agreement, the Company
irrevocably authorizes the Executive from time to time to retain counsel of his
choice at the expense of the Company as provided in this Section 8, to
represent the Executive in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer, shareholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to the Executive entering into an attorney-client relationship with
such counsel, and in that connection, the Company and the Executive agree that
a confidential relationship shall exist between the Executive and such counsel.
The reasonable fees and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or reimbursed to the Executive
by the Company on a regular periodic basis upon presentation by the Executive
of a statement or statements prepared by such counsel in accordance with its
customary practices. The payment of such fees and expenses shall not be
contingent upon the success of such counsel.
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<PAGE> 7
SECTION 9. Indemnification. The Company shall indemnify the Executive
if he 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 (including, without limitation, an action by or
in the right of the Company) by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, trustee, officer, employee, partner,
joint venturer 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 such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. No
indemnification shall be made in respect of any derivative claim, issue or
matter as to which the Executive shall have been adjudged to be liable to the
Company unless, and only to the extent that, the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
the Executive is fairly and reasonably entitled to indemnify for such expenses.
Expenses (including attorneys' fees) incurred in defending any civil or
criminal action, suit or proceeding referred to in this Section shall be paid
by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the Executive to
repay such amount, unless it shall ultimately be determined that he is entitled
to be indemnified by the Company as authorized in the preceding sentences. The
indemnification provided by this Section shall not be deemed exclusive of any
other rights to which the Executive may be entitled under the common law, the
Ohio General Corporation Law or the Articles of Incorporation or Code of
Regulations of the Company or any agreement, vote of its shareholders or
directors, or otherwise, both or as to action in his official capacity or as to
action in another capacity while holding such office.
SECTION 10. General.
10.1. Payment Obligations. The Company's obligation during and after
the Term of Employment to pay the Executive the amounts and to make the
arrangements provided herein is absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the Company may have
against him or anyone else. All amounts payable by the Company hereunder shall
be paid without notice or demand. Each payment made hereunder by the Company
shall be final and the Company will not seek to recover any part of such
payment from the Executive or anyone else, for any reason. The Company may
withhold from amounts to be paid to the Executive hereunder any federal, state
or local withholding or other taxes or charges which it is from time to time
required by law to withhold.
10.2. This Agreement. This Agreement sets forth the entire
understanding between the parties hereto with respect to the subject matter
hereof. There are no agreements, understandings or representations (oral or
written) between the parties hereto relating to the subject matter of this
Agreement other than those set forth herein. There are no oral conditions
precedent to the effectiveness of this Agreement.
10.3. Non-Waiver. Neither the failure of nor any delay by any party
to this Agreement to enforce any right hereunder or to demand compliance with
its terms is a waiver of any right hereunder. No action taken pursuant to this
Agreement on one or more occasions is a waiver of any right hereunder or
constitutes a course of dealing that modifies this Agreement.
-7-
<PAGE> 8
10.4. Waivers; Amendments. No waiver of any right or remedy under
this Agreement and no amendment, change or modification of the terms hereof or
rescission or termination hereof shall be binding on any party hereto unless it
is in writing and is signed by the party to be charged. No such waiver of any
right or remedy under any term of this Agreement shall in any event be deemed
to apply to any subsequent default under the same or any other term contained
herein.
10.5. Severability. The terms of this Agreement are severable and the
invalidity of all or any part of any term of this Agreement shall not render
invalid the remainder of this Agreement or the remainder of such term. If any
term of this Agreement is so broad as to be unenforceable, such term shall be
interpreted to be only so broad as is enforceable.
10.6. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and assigns and
shall be binding upon and inure to the benefit of the Executive and his legal
representatives and heirs. If the Company transfers a majority or more of its
operating assets to one or more persons who do not assume the Company's
obligations under this Agreement by agreement or operation of law, such
transfer shall be deemed to be a material breach of this Agreement by the
Company. This Agreement shall not be terminated by the dissolution,
liquidation or winding up of the Company or by the cessation of its business.
10.7. Notices. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to be
properly given when delivered in person or three days after being sent by
certified or registered United States mail, return receipt requested, postage
prepaid, and addressed to the party to whom it is directed at the address first
set forth above. Either party may change his or its address for notices in the
manner set forth above.
10.8. Rules of Construction. In this Agreement, unless the context
otherwise requires, words in the singular number include the plural, and in the
plural include the singular; and words of the masculine gender include the
feminine and the neuter, and when the sense so indicates, words of the neuter
gender may refer to any gender. The names of the parties hereto, the date and
the preamble first above written are part of this Agreement. The captions and
section numbers appearing in this Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or intent of the
terms of this Agreement.
10.9. Choice of Law. The validity, terms, performance and enforcement
of this Agreement shall be governed by those laws of the State of Ohio that are
applicable to agreements which are negotiated, executed, delivered and
performed solely in the State of Ohio.
10.10. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
either party hereto may execute this Agreement by signing one or more
counterparts.
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<PAGE> 9
S I G N A T U R E S :
COOKER RESTAURANT CORPORATION
By: /s/ G. Arthur Seelbinder
----------------------------------------
G. Arthur Seelbinder
Chairman of the Board of Directors
THE EXECUTIVE
/s/ Phillip L. Pritchard
-------------------------------------------
Phillip L. Pritchard
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<PAGE> 1
EXHIBIT 10.16
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (hereinafter the
"Agreement") is made and entered into this 26th day of October, 1994, by and
between Cooker Restaurant Corporation, an Ohio corporation (hereinafter
"Employer"), and William Z. Esch, (hereinafter "Employee").
1. In consideration of the promises made by Employer as set forth below:
(a) Employee hereby resigns as an officer and an employee of the
Employer effective as of the close of business on October 26,
1994 and waives all rights to recall, reinstatement,
reemployment, and past or future wages from Employer;
(b) Employee agrees that he will never seek reemployment with
Employer, its parent company, its subsidiary companies, or any
affiliated company;
(c) Employee hereby releases and forever discharges Employer, and
its parents, subsidiaries and affiliates, from any and all
liabilities, obligations, causes of action, claims and rights
that Employee has or may have against Employer, whether or not
Employee knows of them as of the date hereof, including but
not limited to, any claims which arose out of the employment
relationship between Employee and Employer;
(d) The above release specifically discharges any claims or
charges of discrimination, including age discrimination,
Employee has or may have against Employer;
(e) Employee hereby covenants and agrees that he will not,
directly or indirectly, commence or maintain any action, suit
or proceeding concerning any matter as to which he has granted
a release herein.
(f) Employee represents and warrants that he has not assigned,
conveyed, transferred or encumbered any cause of action, claim
or right that he has or has had in the past against Employer;
(g) At the request of Employer during the period ending March 31,
1995, Employee shall make himself available on reasonable
notice at reasonable times and places in Columbus, Ohio
designated by Employer to perform consulting services based
upon his knowledge of Employer's business and at no cost or
expense to Employee or Employer, up to a maximum of five (5)
hours per month;
(h) Employee shall hold in a fiduciary capacity for the benefit of
Employer for all time any secret or confidential information,
knowledge or data, including all software
<PAGE> 2
and special computer programs, relating to Employer or any
affiliates or their respective businesses, which were obtained
or was learned during his employment with Employer or its
affiliates, unless Employee can demonstrate that he knew by
objective means that such information was in the public domain
before he disclosed it, or he had obtained prior written
consent from Employer's chief executive officer;
(i) Employee shall not disparage Employer, its affiliates or their
respective businesses, business methods, executives, agents or
employees, and Employee shall not, and shall not cause,
instigate, solicit nor encourage any other person, to file,
maintain or prosecute any action or claim of any type against
Employer, its affiliates or its officers or agents;
(j) During the period that ends on the second anniversary of the
date of this Agreement, Employee shall not solicit, persuade
or attempt to solicit or persuade, for his own benefit or on
behalf of another, any person who is or was employed by
Employer at any time during Employee's tenure of employment to
resign from or otherwise terminate employment with Employer;
(k) Employee releases and waives all claims and rights he has or
may have in the future under the Contingent Employment
Agreement dated January 16, 1990 between the Employee and the
Employer; and
(l) Employee hereby represents and warrants to Employer that
Employee has not, as an officer or employee of Employer,
knowingly caused or allowed Employer to incur any obligation
or liability, whether liquidated, contingent, contractual or
otherwise, that was not duly authorized by its board of
directors and was not fully disclosed to its independent
accountants and reflected in the books and records of
Employer.
2. In consideration of the promises made by Employee as set forth above:
(a) Employer shall pay Employee through October 26, 1995, payments
equal to Employee's current bi-weekly compensation less all
tax, FICA and other payroll deductions, as a separation
payment;
(b) Employer shall not oppose a claim for Ohio unemployment
compensation filed by Employee, but shall report in response
to OBES inquiry any amounts paid under this Agreement;
(c) Employee's last day of employment for all purposes shall be
October 26, 1994.
(d) Employee shall be able to purchase health insurance benefits
on a COBRA basis, but shall be solely responsible for the cost
thereof;
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<PAGE> 3
(e) Employer shall pay Employee the previously unpaid portion of
his regular base salary through the end of his last day of
employment by mailing him a check payable to his order in the
amount of such base salary, less all legally required or
Employee authorized deductions, at the end of the current
payroll period. Further, Employee shall be eligible to
receive a payments under the Employer's incentive bonus plan
for the second half of 1994 which will be determined on the
basis of his 1994 incentive compensation level of 40% and the
par percentage determined for the second half of 1994 by the
Compensation Committee for all executive officers and prorated
for the number of days between the beginning of the second
half of fiscal 1994 and October 26, 1994; and
(f) Employee was granted stock options under the Employer's Stock
Option Plan described on Schedule A hereto; Employer hereby
agrees that all options which are vested and exercisable as of
the date hereof shall continue to be vested and exercisable,
subject to the express terms thereof, except that such options
shall not lapse and terminate by reason of the termination of
the Employee's employment by the Employer and, with respect to
those options granted on October 14, 1991 and thereafter, that
they will continue to vest and become exerciseable as if the
Employee continued to be employed by the Employer through
October 26, 1995 and that all options which have vested and
become exercisable as of October 26, 1995 will not lapse and
terminate by reason of the termination of Employee's
employment by the Employer pursuant to the terms of this
Agreement but will become vested and exercisable, subject to
the other express terms of the original option grants. Any
options which have not vested and become exercisable as of
October 26, 1995 shall lapse and terminate on that date.
Employer will provide Employee with a copy of the resolutions
of the Compensation Committee of its Board of Directors which
approved this Agreement within thirty (30) days after the date
hereof; and
(g) Employer hereby releases and forever discharges Employee from
any and all liabilities, obligations, causes of action, claims
and rights that Employer has or may have against Employee,
whether or not Employer knows of them as of the date hereof;
(h) Employer hereby covenants and agrees that it will not,
directly or indirectly, commence or maintain any action, suit
or proceeding concerning any matter as to which it has granted
a release herein.
3. It is understood and agreed by all parties that this Agreement is a
settlement of doubtful and disputed claims and it or the fact of
settlement does not constitute an admission of liability or wrongdoing
on the part of Employer, under any state or federal statute, common
law or regulation. It purely represents an offer of compromise.
4. Except to the extent necessary to enforce this Agreement, it is
further agreed that neither it nor any part of it is to be used or
admitted into evidence in any proceeding of any char-
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<PAGE> 4
acter, judicial or otherwise, now pending or otherwise instituted,
except as provided at Paragraph 9 below.
5. All parties intend that this Agreement will be legally binding upon
themselves, their relatives or affiliates (by blood or legal
relationship), estates, heirs, personal representatives and/or
assigns.
6. The parties understand that any vested rights Employee may have under
Employer's investment or retirement plans, other than those
specifically referenced above, are excluded from the scope of this
Agreement and are not terminated or released by it. No right or
obligation created by this Agreement is discharged by reason of any
release or covenant not to sue set forth herein.
7. All parties affirm that the only consideration for signing this
Agreement are the terms stated herein, that no other promises or
agreement of any kind have been made to or with any of the parties or
any other person or entity whatsoever, and that they fully understand
the meaning and intent of this instrument.
8. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this
instrument shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
9. Both parties agree that such parties shall hold all events,
transactions and occurrences involving the the other party and the
terms, provisions and conditions of this Agreement as strictly
confidential information, which shall not be reported, divulged,
publicized or in any way revealed to any person, corporation, agency
or entity not a party to this agreement, except attorneys and
immediate family or otherwise as required by law or the regulations of
the Securities and Exchange Commission and the New York Stock Exchange
and for purposes of reporting taxes or filing for unemployment
compensation. Employer will issue to Employee, and to any person
inquiring about Employee, the letter attached hereto as Exhibit B.
All references and communications made by Employer or any of its
officers, directors, employees, agents or represenatives with respect
to Employee shall state only the information set forth in Exhibit B.
The parties shall prepare a mutually acceptable joint press release
regarding Employee's employment and his resignation, which press
release shall be utilized for public dissemination. Employer may file
a copy of this Agreement with the Securities and Exchange Commission
and the New York Stock Exchange and make disclosures concerning this
Agreement as required by their regulations.
10. Employee understands that Section 1 above includes a release of claims
under the Age Discrimination in Employment Act and the Older Workers
Benefit Protection Act. He understands that this Agreement and the
Release do not waive rights or claims that arise after the date of its
execution shown below. Further, Employee acknowledges he has been
advised on October 12, 1994 by the Employer that he may consult with
legal counsel regarding this Agreement and the Release, and that he
may be represented or accompanied
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<PAGE> 5
by a nonlawyer representative during discussions. Employee
acknowledges that he has consulted with legal counsel before signing
this Agreement.
11. Employee acknowledges he may have at least twenty-one (21) days to
review and consider this Agreement and the Release if he desires; and,
as a result, enters into this Agreement and Release willingly and
voluntarily.
12. Employee is aware as of the date of execution of this document that he
has seven (7) days beyond that date below during which he may notify
Employer that he revokes the Agreement and Release. Upon such
notification by Employee, this document becomes null and void and
shall have no force or effect as to either party. In the above event,
Employee will forfeit all money and other benefits of this instrument
and the stock options listed on Schedule A hereto will terminate and
lapse in accordance with their terms.
13. For federal, state, and local income tax reporting and withholding
purposes, Employer shall treat the entire amount paid to Employee
under paragraph 2(a) above as the payments of wages subject to
federal, state, and local withholding taxes. In so characterizing the
payments as wages, Employer is not intending to make any
representation regarding the appropriate tax treatment of the payments
as wages or as damages for personal injuries. Employer understands
that Employee may claim that $0 of the payments are not subject to
federal income taxation because such amount is excludable from income
under Internal Revenue Code Section 104(a)(2) as damages for personal
injury, and Employer will not dispute such a claim.
14. This Agreement and General Release and the representations herein
constitute the entire understanding and agreement between the parties
hereto.
WITNESS: EMPLOYEE:
/s/ Lawrence F. Feheley /s/ William Z. Esch
----------------------- -------------------
William Z. Esch
DATE: October 26, 1994
WITNESS: EMPLOYER:
/s/ Margaret A. Epperson /s/ G. Arthur Seelbinder
------------------------- ------------------------
G. Arthur Seelbinder,
President and CEO
DATE: October 26, 1994
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<PAGE> 6
SCHEDULE A
<TABLE>
<CAPTION>
EXERCISE NUMBER OF SHARES VESTED AS OF VESTED AS OF
GRANT DATE PRICE ($) 10/21/94 10/24/94
<S> <C> <C> <C> <C>
10/18/89 4.41 1,666 1,666 1,666
10/16/90 4.035 6,666 6,666 6,666
10/14/91 11.185 30,000 22,500 30,000
1/18/93 21.75 10,000 2,500 5,000
1/17/94 12.875 10,000 0 2,500
</TABLE>
<PAGE> 1
EXHIBIT 10.17
SECOND AMENDMENT TO LOAN AGREEMENT
This Second Amendment to Loan Agreement is entered into the 11th day
of January, 1995, by and between COOKER RESTAURANT CORPORATION ("Borrower"), an
Ohio corporation, and FIRST UNION NATIONAL BANK OF TENNESSEE ("Lender"), a
national banking association.
WHEREAS, Borrower and Lender have previously entered into a Loan
Agreement dated August 26, 1991 (the "Loan Agreement"), pursuant to which
Lender agreed to loan Borrower up to Ten Million Dollars ($10,000,000.00) on
the terms and conditions set forth therein; and
WHEREAS, Borrower and Lender have previously amended the Loan
Agreement by instrument dated June 29, 1993; and
WHEREAS, Borrower and Lender desire to further modify the Loan
Agreement as set forth below;
NOW, THEREFORE, as an inducement to cause Lender to extend credit to
Borrower, and for other valuable consideration, the receipt and sufficiency of
all of which are hereby acknowledged, the parties hereto agree that the Loan
Agreement is hereby amended as follows:
1. Sections 2.1., 2.2, 2.3 and 2.4 of the Loan Agreement are
hereby deleted and the following is substituted therefor:
2.1 AMOUNT. The principal indebtedness of Borrower to
Lender under the Revolving/Term Loan shall not exceed Sixteen
Million Three Hundred Thousand and No/100 Dollars
($16,300,000.00). Provided, however, the amount of the
Revolving/Term Loan shall never exceed $15,000,000 unless the
excess is used to reduce the Subdebt (as defined below).
Additionally, beginning on January 1, 1996, availability under
the Revolving/Term Loan shall be reduced by $300,000 per
calendar quarter. Provided, finally, if the maximum amount of
the Revolving/Term Loan never exceeds $15,000,000 then
beginning on January 1, 1996, and on the first day of each
calendar quarter thereafter, availability under the
Revolving/Term Loan shall be reduced by $250,000 per quarter.
2.2 INTEREST RATE.
(a) Interest shall accrue on each Advance under
the Revolving/Term Loan at a rate (the "Applicable Rate")
based upon the Prime Rate or the LIBOR Rate, as Borrower may
elect, subject to adjustment based upon the performance of
Borrower.
<PAGE> 2
(b) As used herein, the "Applicable Rate" means:
1. If ((i) Borrower's Fixed Charge
Coverage Ratio (as defined below) is greater than or equal to
2:1 for the one-year period including the previous four fiscal
quarters and ((ii) no default or event of default exists under
the terms or provisions of any of the documents evidencing or
securing the indebtedness evidenced by the Note, and no
condition exists which, subject to any applicable requirement
of notice or grace or cure period, then the Applicable Rate
shall be (x) in the case of an advance bearing interest at the
Prime Rate, the Prime Rate less one-quarter of one percent
(1/4%) or (y) in the case of an advance bearing interest at the
LIBOR Rate, the LIBOR Rate plus 150 basis points.
2. At any time the conditions (i) and
(ii) above are not satisfied, the Applicable Rate for all new
or outstanding Advances shall be (x) in the case of an advance
bearing interest at the Prime Rate, the Prime Rate or (y) in
the case of an Advance bearing interest at the LIBOR Rate, the
LIBOR Rate plus 200 basis points.
(c) Unless notified by Borrower, in writing, by
telephone or by telecopy to the contrary the Prime Rate option
set forth above shall apply to all Advances under the
Revolving/Term Loan.
(d) In the case of any Advances to which Borrower
elects to choose the LIBOR Rate option: (i) such Advances
must be in increments of $500,000 (e.g., $1,000,000.00;
$1,500,000.00; and $2,000,000.00); (ii) Borrower shall, not
less than three (3) days before prior to the beginning of the
ninety (90) day period for which Borrower desires to elect the
LIBOR Rate, notify Lender of its intention to choose such
option; and (iii) Borrower may, by giving the Lender three (3)
days notice prior to the expiration of any 90-day period in
which the LIBOR Rate is in effect, elect the LIBOR Rate for
the succeeding 90-day period.
(e) At no time shall more than four (4) Advances
be outstanding that bear interest based upon the LIBOR Rate.
(f) As used herein, LIBOR Rate shall mean that
rate (rounded upwards, if necessary, to the next higher 1/100
of 1%) for deposits in United States Dollars for a maturity of
ninety (90) days, which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) London business
days prior to the effective date of the applicable LIBOR Rate,
as such rate is adjusted in accordance with Lender's standard
practices for reserves and other requirements. (Lender will
only adjust for reserves to the extent it is actually
obligated to maintain reserves and will certify this fact to
Borrower.)
-2-
<PAGE> 3
(g) As used herein, "Prime Rate" shall be that
rate announced by Lender from time to time as its Prime Rate
and is one of several interest rate bases used by Lender.
Lender lends at rates both above and below the Prime Rate and
Borrower acknowledges that the Prime Rate is not represented
or intended to be the lowest or most favorable rate of
interest offered by Lender.
(h) After maturity (by acceleration or
otherwise), the principal amount outstanding under the
Revolving/Term Loan shall bear interest at the rate of five
percent (5%) over the Prime Rate; provided, however, that in
no event shall the rate of interest provided hereunder exceed
the Maximum Lawful Rate.
(i) In the case of an advance where the
Applicable Rate is based on the LIBOR Rate, each prepayment of
the principal, in whole or in part and whether voluntary,
mandatory, upon acceleration or otherwise, shall be
accompanied by an additional amount necessary to compensate
Lender for any losses, costs or expenses which Lender may
incur as a result of such prepayment. Compensation due Lender
shall be determined in accordance with the following formula:
PREPAYMENT COMPENSATION = (A - B) X C X D
A = The LIBOR Rate determined as of the
funding date of the advance, on a
per annum basis for deposits in
United States Dollars for a maturity
of 90 days which appeared on the
Telerate Page 3750 at 11:00 a.m.
London time two business days prior
to the effective date of the
applicable LIBOR Rate, as such rate
was adjusted in accordance with
Lender's standard practices for
reserves and other requirements.
B = The LIBOR Rate determined as of the
prepayment date on a per annum basis
for deposits in United States
Dollars for a maturity of 90 days
which appeared on the Telerate Page
3750 at 11:00 a.m. London time on
such date, as such rate is adjusted
in accordance with Lender's standard
practices for reserves and other
requirements.
C = Principal Amount Prepaid.
-3-
<PAGE> 4
D = Number of days from the date of
prepayment to the end of the fixed
rate period divided by a year base
of 360 days.
As used herein, the "fixed rate period" shall be the period
during which the applicable fixed rate is to remain in effect.
In addition, in the event the amount determined as variable B
above is greater than the amount determined as variable A
above, no prepayment compensation shall be due hereunder. The
determination of prepayment compensation due Lender hereunder
shall be made by Lender in good faith using such methodology
as Lender deems appropriate and customary under the
circumstances and shall be conclusive absent manifest error.
2.3 PAYMENTS. Payment of all obligations arising under
the Revolving/Term Loan shall be made as follows:
(a) INTEREST INSTALLMENTS. Interest on the
outstanding principal balance under the Revolving/Term Loan
shall be paid in arrears on the first day of each successive
January, April, July and October beginning in January, 1995.
Provided, however, in the case of an advance where the
Applicable Rate is based upon the LIBOR Rate, then accrued
interest shall be due and payable upon the expiration of any
90-day period in which the LIBOR Rate is in effect.
(b) PRINCIPAL INSTALLMENTS. [intentionally
deleted]
(c) VOLUNTARY PREPAYMENT. Except in the case of
LIBOR Rate borrowings, voluntary prepayments of principal or
accrued interest may be made, in whole or in part, at any time
without penalty.
(d) ALL AMOUNTS DUE. All remaining principal,
interest and expenses outstanding under the Revolving/Term
Loan shall be due and payable November 1, 1997. Borrower may
from time to time request and repay Advances under the
Revolving/Term Loan, provided the total principal amount
outstanding under the Revolving/Term Loan shall not at any
time exceed the amount stated in Section 2.1 above.
2.4 USE OF PROCEEDS. The proceeds of the Revolving/Term
Loan shall be used for general working capital purposes and
restaurant expansion and up to $1,300,000 may be used to
finance the proposed redemption of $2,000,000 in par value of
those certain Convertible Subordinated Debentures ("Subdebt")
issued by Borrower in 1992. In the event the proposed
redemption is not consummated by January 31, 1995, then the
amount of the Revolving/Term Loan may not exceed $15,000,000.
-4-
<PAGE> 5
2. The first three sentences of Section 2.5 are hereby deleted
and the following is substituted therefor:
From the Closing Date until October 31, 1997, Borrower may
from time to time request and repay Advances under the
Revolving/Term Loan shall not at any time exceed the amount
stated in Section 2.1 above. Advances under the
Revolving/Term Loan shall be disbursed as follows:
3. Section 2.5(b) is hereby amended to insert the name "Dan
Haley" for the name "Bill J. Nutter" and by deleting the sentence which reads
"Draws shall be made in increments of One Hundred Thousand Dollars ($100,000)."
and by inserting "Except as provided above in the case of LIBOR Rate draws, all
draws shall be made in increments of One Hundred Thousand Dollars ($100,000)."
4. Section 2.7 shall be amended to read as follows:
2.7 FEE. As additional compensation to Lender for making
the Revolving/Term Loan facility available to Borrower,
Borrower shall pay a nonrefundable fee to Lender
simultaneously with the execution hereof in the amount of
$18,750.00. In the event the Subdebt is redeemed causing the
amount of the Revolving/Term Loan to exceed $15,000,000 then a
fee of an additional $13,000 shall be due and payable.
5. Sections 6.1, 6.2, 6.3 and 6.4 are hereby deleted and the
following is substituted therefor:
6.1 NET WORTH. Borrower shall at all times maintain a
minimum Net Worth for each fiscal quarter from the date of
closing until fiscal year end 1995 of equal to or greater than
$32 million; then beginning at fiscal year end 1995 and until
fiscal year end 1996 Borrower shall maintain a minimum Net
Worth equal to or greater than $35 million; and then beginning
on fiscal year end 1996 and at all times thereafter, Borrower
shall maintain a minimum Net Worth equal to or greater than
$40 million. As used herein "Net Worth" shall mean
stockholders' equity determined according to GAAP.
6.2 FIXED CHARGE COVERAGE. Borrower shall maintain a
minimum Fixed Charge Coverage Ratio calculated for each fiscal
quarter on a rolling four quarter basis of not less than
1.50:1.0 until June 30, 1995 and of not less than 1.55:1.0 at
all times thereafter. As used herein, "Fixed Charge Coverage
Ratio" shall be calculated as follows:
-5-
<PAGE> 6
Net income + Depreciation + Amortization + Interest Expenses +
Lease and/or Rental Expense
__________________________________________________
*CMLTD + Subordinated Debt Redeemed + Interest Expense + Lease and/or
Rental Expense + 20% of Avg. Outstanding on Revolving/Term Loan
*Excludes Required Revolving Term/Loan Reductions and, if
applicable, the proposed early redemption of the Subdebt
6.3 Intentionally Delete.
6.4 Intentionally Delete.
6. Section 7.2 is hereby deleted.
7. Section 7.4 is hereby amended to read as follows:
7.4 DISTRIBUTIONS. Borrower shall not declare or pay a
distribution or dividend (of cash, property or stock), except
that cash dividends may be declared in an amount that,
together with all other cash dividends declared within such
fiscal year, will not exceed fifteen percent (15%) of net
income for the previous fiscal year. Provided, however, no
dividend may be declared unless the net income for the
previous fiscal year exceeds Two Million Dollars ($2,000,000).
8. The Loan Agreement is hereby amended to add a new Section
7.4.1 and 7.4.2 to read as follows:
7.4.1 NEW RESTAURANT EXPANSION. Without Lender's prior
written consent, Borrower shall limit new restaurant expansion
to 6 in fiscal year 1994, 5 in fiscal year 1995, 8 in fiscal
year 1996, and 10 in Fiscal year 1997. The permitted
expansion schedule in 1996 and 1997 is conditioned upon the
Lender's prior review and approval of the Borrower's annual
budget.
7.4.2 PURCHASE MONEY ACQUISITION DEBT. Borrower shall be
allowed to incur purchase money acquisition debt in an
aggregate amount not to exceed $2,500,000 for the acquisition
of land and buildings for new restaurant sites.
9. The Loan Agreement remains in full effect, as amended hereby.
All representations, warranties and covenants of Borrower contained therein are
reaffirmed as of the date hereof.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties have executed this Amendment to Loan
Agreement as of the day and date first above written.
FIRST UNION NATIONAL BANK OF TENNESSEE
By: /s/ Dan Haley
------------------------------------
Dan Haley, Vice President
COOKER RESTAURANT CORPORATION
By: /s/ G. A. Seelbinder
------------------------------------
G.A. Seelbinder,
Chairman and Chief Executive Officer
-7-
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-45467, 33-45965, 33-48396 and 33-48397 of Cooker Restaurant Corporation on
Form S-8 of our report dated February 5, 1993 and incorporated by reference in
the Annual Report on Form 10-K of Cooker Restaurant Corporation for the year
ended January 1, 1995.
/s/ Deloitte & Touche LLP
-------------------------
DELOITTE & TOUCHE LLP
Nashville, Tennessee
March 29, 1995
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-45467, 33-46475, 33-46965, 33-48396 and
33-48397) of Cooker Restaurant Corporation of our report dated January 24, 1995
appearing on page F-2 of the Annual Report to Shareholders of Cooker Restaurant
Corporation for the fiscal year ended January 1, 1995.
PRICE WATERHOUSE LLP
Columbus, Ohio
March 29, 1995
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ G. Arthur Seelbinder
------------------------
G. Arthur Seelbinder
<PAGE> 2
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ Glenn W. Cockburn
---------------------
Glenn W. Cockburn
<PAGE> 3
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ David L. Hobson
-------------------
David L. Hobson
<PAGE> 4
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 30th day of
January, 1995.
/s/ Robin V. Holderman
----------------------
Robin V. Holderman
<PAGE> 5
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ David T. Kollat
-------------------
David T. Kollat
<PAGE> 6
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ Joseph E. Madigan
---------------------
Joseph E. Madigan
<PAGE> 7
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ Henry R. Hillenmeyer
------------------------
Henry R. Hillenmeyer
<PAGE> 8
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the State
of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ Margaret T. Monaco
----------------------
Margaret T. Monaco
<PAGE> 9
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L.
Pritchard to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full
power of substitution to act in the name and on behalf of the
undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended January 1, 1995,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of
such Annual Report, and generally to act for and in the name of the
undersigned with respect to such filings as fully as could the
undersigned if then personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power
conferred upon him herein shall be exercised and the terms and
conditions of any instrument, certificate or document which may be
executed by him pursuant to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments
negotiated, executed, delivered and performed solely within the
State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1995.
/s/ Phillip L. Pritchard
------------------------
Phillip L. Pritchard
<PAGE> 1
Exhibit 24.2
SECRETARY'S CERTIFICATE
I, Margaret A. Epperson, certify that I am the duly elected, qualified
and acting Secretary of Cooker Restaurant Corporation, an Ohio Corporation (the
"Corporation"), that I am authorized and empowered to execute this Certificate
on behalf of the Corporation with respect to the Annual Report on Form 10-K and
further certify that the following is a true, complete and correct copy of a
resolution adopted by the Board of Directors of the Corporation on January 26,
1995, which resolution has not been amended, modified or rescinded:
RESOLVED, that each officer and director who may be required to
execute an annual report on Form 10-K or any amendment or supplement
thereto (whether on behalf of the Corporation or as an officer or
director thereof or otherwise) be, and each of them hereby is,
authorized to execute a power of attorney appointing G. Arthur
Seelbinder and Phillip L. Pritchard and each of them severally, his
true and lawful attorneys and agents to execute in his name, place and
stead (in any such capacity) said Form 10-K and all instruments or
reports necessary or in connection therewith, and to file the same
with the Securities and Exchange Commission, each of said attorneys
and agents to have the power to act with or without the other, to have
full power and authority to do and to perform in the name and on
behalf of each of said officers and directors, or both, as the case
may be, every act which is necessary or advisable to be done as fully,
and to all intents and purposes, as any such officer or director might
or could do in person; and further
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of March,
1995.
/s/ Margaret A. Epperson
-----------------------------------
Margaret A. Epperson, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COOKER
RESTAURANT CORPORATION 1994 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832412
<NAME> COOKER RESTAURANT CORPORATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-01-1995
<PERIOD-END> JAN-01-1995
<CASH> 1,855,676
<SECURITIES> 0
<RECEIVABLES> 308,507
<ALLOWANCES> 0
<INVENTORY> 829,998
<CURRENT-ASSETS> 4,340,645
<PP&E> 64,481,038
<DEPRECIATION> 10,073,912
<TOTAL-ASSETS> 70,858,374
<CURRENT-LIABILITIES> 7,755,171
<BONDS> 28,600,000
<COMMON> 26,003,475
0
0
<OTHER-SE> 7,904,871
<TOTAL-LIABILITY-AND-EQUITY> 70,858,374
<SALES> 84,168,854
<TOTAL-REVENUES> 84,241,318
<CGS> 74,161,309
<TOTAL-COSTS> 80,480,487
<OTHER-EXPENSES> 6,319,178
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,786,685
<INCOME-PRETAX> 3,760,831
<INCOME-TAX> 1,279,534
<INCOME-CONTINUING> 2,481,297
<DISCONTINUED> 0
<EXTRAORDINARY> 484,000
<CHANGES> 0
<NET-INCOME> 2,965,297
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0
</TABLE>
