<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 1996.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------
COOKER RESTAURANT CORPORATION
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
OHIO 69-1292102
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
5500 VILLAGE BOULEVARD
WEST PALM BEACH, FLORIDA 33407
(407)615-6000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
with copies to:
<TABLE>
<S> <C> <C>
ROBERT S. SCHWARTZ, ESQ. G. ARTHUR SEELBINDER DAN BUSBEE, ESQ.
SCHWARTZ, WARREN & RAMIREZ CHAIRMAN OF THE BOARD LOCKE PURNELL RAIN HARELL
A LIMITED LIABILITY COMPANY COOKER RESTAURANT CORPORATION (A PROFESSIONAL CORPORATION)
41 SOUTH HIGH STREET 5500 VILLAGE BOULEVARD 2200 ROSS AVENUE, SUITE 2200
COLUMBUS, OHIO 43215 WEST PALM BEACH, FLORIDA 33407 DALLAS, TEXAS 75201-6776
(614) 222-3000 (407) 615-6000 (214) 740-8000
(Name, address, including zip
code, and telephone number,
including area code, of
registrant's agent for
service)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: as soon as
possible after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED BE REGISTERED(2) PER SHARE(3) OFFERING PRICE(3) REGISTRATION FEE
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Common Shares, without
par value(1)............... 2,875,000 $14.0625 $40,429,687 $13,941
==================================================================================================
<FN>
(1) Each Common Share carries one Right to purchase a unit which currently
consists of one-hundredth of a Class A Junior Participating Preferred Share,
without par value, pursuant to a Rights Agreement dated February 1, 1990.
(2) Includes 375,000 Common Shares which the Underwriters have the option to
purchase to cover over-allotments, if any.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 promulgated under the Securities Act of 1933 and based upon the
average high and low prices reported on the New York Stock Exchange on April
17, 1996.
</TABLE>
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 19, 1996
2,500,000 SHARES
[LOGO]
COMMON SHARES
All of the 2,500,000 Common Shares, without par value (the "Common
Shares"), offered hereby are being sold by Cooker Restaurant Corporation
("Cooker" or the "Company"). The Common Shares of the Company are listed on The
New York Stock Exchange under the symbol "CGR." On April 17, 1996, the last
reported sale price of the Common Shares on The New York Stock Exchange was
$14.125 per share. See "Price Range of Common Shares."
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN PURCHASING THE COMMON
SHARES OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
========================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- ----------------------------------------------------------------------------------------
Per Share...................... $ $ $
Total(3)....................... $ $ $
========================================================================================
<FN>
(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting certain expenses payable by the Company estimated at
$300,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 375,000 additional Common Shares solely to cover over-allotments, if any.
If the Underwriters exercise this option in full, the Price to Public will
total $ , the Underwriting Discounts and Commissions will total $
and the Proceeds to Company will total $ . See "Underwriting."
</TABLE>
The Common Shares are offered by the Underwriters named herein, subject to
receipt and acceptance by them and subject to their right to reject any order in
whole or in part. It is expected that delivery of the certificates representing
such shares will be made against payment therefor at the office of Montgomery
Securities on or about , 1996.
------------------------
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
May , 1996
<PAGE> 3
[PHOTO]
COOKER RESTAURANT/EXTERIOR PHOTO
[PHOTO]
SERVER W/MENU & GUESTS
[PHOTO]
AVOCADO W/SIDE OF SOUP
"Cooker Bar and Grille(R)" and design and "The Southern Cooker -- Home
Style Restaurant & Bar(R)" and design are registered servicemarks of the
Company. The Company also uses the word "CookerSM" as a servicemark in
combination with words and designs other than those used in the registered
marks.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and Financial Statements, including the notes thereto,
appearing elsewhere in this Prospectus or incorporated by reference herein.
Except as otherwise specified, all information in this Prospectus (i) assumes no
exercise of the Underwriters' over-allotment option and (ii) gives retroactive
effect to the one-for-three reverse stock split which was effective on April 29,
1991 and the two-for-one stock split on April 13, 1992. See "Underwriting."
THE COMPANY
The Company operates 39 full-service "Cooker" restaurants (the
"Restaurants") in Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, North
Carolina, Ohio, Tennessee and Virginia. Restaurants average approximately 7,600
square feet and 245 seats, and are designed to provide traditional and
comfortable dining experiences rather than a theme atmosphere or menu. The
Company provides an attractive value to customers by offering a
moderately-priced, full menu of high quality food served in generous portions.
The menu includes appetizers, soups, salads, chicken, fish, beef and pasta
entrees, sandwiches, burgers and desserts, most of which are created from
original recipes and prepared from scratch using fresh ingredients. Entree
selections generally range in price from $4.45 to $14.95 and, for the three
months ended March 31, 1996, the average guest check was approximately $10.60.
The Company is committed to providing prompt, friendly and efficient customer
service as reflected by its "100% Satisfaction Guarantee" policy and by its
having what the Company believes is a higher ratio of service personnel to
customers and a greater number of managers per Restaurant than many of its
competitors.
In 1994, the Company began an aggressive program designed to enhance
operational execution, broaden and strengthen senior and Restaurant-level
management talent, and reduce operating costs. The Company's rapid expansion in
1993, opening nine Restaurants on a base of 20, overextended its
Restaurant-level management. In addition, several of these new Restaurants
produced lower sales than the Company's existing Restaurants since they were
located in new markets where the Company's concept was not established. As a
result, the Company slowed its growth and opened only six Restaurants in 1994
and three Restaurants in 1995. These Restaurants primarily were opened in
markets where the Cooker reputation was already known and where it could
capitalize on distribution and supervisory efficiencies. During this period, the
Company focused its attention more closely on improving operations at existing
Restaurants. In 1994 and 1995, the Company strengthened its senior-level
management team by adding three key executives: Phillip L. Pritchard, President
and Chief Operating Officer, formerly with General Mills Restaurants Inc.
("GMRI"); David C. Sevig, Vice President -- Chief Financial Officer, formerly
with GMRI and Blockbuster Entertainment Group; and Jeffrey M. Karla, Human
Resources Director, previously with McDonald's. Additionally, the Company
strengthened its Restaurant-level management teams by implementing an ongoing,
comprehensive development program. Furthermore, rather than staffing all
Restaurants with the same number of managers, the Company began to staff
Restaurants according to sales volume, which significantly reduced the Company's
cost of labor as a percentage of sales by decreasing the average number of
managers per Restaurant from approximately 8.3 to 5.5.
The implementation of these programs has positioned the Company to focus
its efforts on expansion. The Company has opened two Restaurants to date in 1996
and intends to open seven additional Restaurants in 1996, six of which are
scheduled to open in the second quarter. The Company intends to open 11 to 13
Restaurants in 1997. A majority of potential locations for openings in 1997 has
been tentatively identified and negotiations for those locations are currently
in progress. In order to effectively control its operational and administrative
costs, as well as take advantage of name recognition, the Company anticipates
that further expansion will be in medium to large metropolitan areas in the
Midwest, East and Southeast regions of the United States, primarily in areas
where the Company currently operates Restaurants. The Company intends to locate
Restaurants in freestanding buildings and in retail developments in proximity to
high density, high traffic, office, residential and retail areas.
The Company is an Ohio corporation and is the surviving corporation of a
merger of affiliated corporations in 1988. The Company's executive offices are
located at 5500 Village Boulevard, West Palm Beach, Florida 33407. Its telephone
number is (407) 615-6000.
3
<PAGE> 5
THE OFFERING
Common Shares to be offered........... 2,500,000 shares
Common Shares to be outstanding after
the offering.......................... 9,651,222 shares(1)
Use of proceeds....................... To repay bank debt, to finance the
development of new Restaurants and
for general corporate purposes.
New York Stock Exchange symbol........ CGR
- ---------------
(1) Based on shares outstanding as of March 31, 1996. Does not include (i)
1,271,282 Common Shares issuable upon exercise of options outstanding as of
March 31, 1996 and (ii) 807,884 Common Shares issuable upon conversion of
outstanding 6 3/4% Convertible Subordinated Debentures Due 2002 (the
"Convertible Debentures").
SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
FISCAL YEARS (1) --------------------
----------------------------------------------- APRIL 2, MARCH 31,
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales................................. $39,516 $53,028 $66,688 $84,169 $91,678 $22,899 $25,486
Restaurant operating income........... 7,145 9,894 9,921 10,008 14,461 3,556 4,186
Net income............................ 2,615 3,980 3,494 2,965 4,432 1,005 1,360
Earnings per common share(2).......... $ 0.38 $ 0.52 $ 0.45 $ 0.41 $ 0.60 $ 0.14 $ 0.18
Weighted average number of common
shares and common equivalent shares
outstanding......................... 6,923 7,715 7,846 7,254 7,387 7,236 7,556
RESTAURANT OPERATING DATA:
Number of Restaurants open at end of
period.............................. 15 20 29 35 37 34 39
Restaurant operating income as a
percentage of sales................. 18.1% 18.7% 14.9% 11.9% 15.8% 15.5% 16.4%
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
AS
ACTUAL ADJUSTED(3)
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................................................. $ 1,071 $ 7,476
Total assets........................................................................... 92,496 98,901
Long-term debt......................................................................... 44,174 17,420
Shareholders' equity................................................................... 38,863 72,022
- ---------------
<FN>
(1) Ended December 29, 1991, January 3, 1993, January 2, 1994, January 1, 1995,
December 31, 1995.
(2) Earnings per common share has been calculated using the weighted average
number of Common Shares outstanding during the period, including Common
Share equivalents. The Convertible Debentures have not been included as
Common Share equivalents due to their antidilutive effect.
(3) As adjusted to give effect to the sale of 2,500,000 Common Shares by the
Company at the assumed offering price of $14.125 per share and the
application of the estimated net proceeds therefrom. See "Use of Proceeds"
and "Capitalization."
</TABLE>
4
<PAGE> 6
RISK FACTORS
In addition to the other information contained in this Prospectus or
incorporated by reference herein, prospective investors should carefully
consider the following factors in evaluating an investment in the Common Shares
offered hereby.
EXPANSION PLANS; CAPITAL RESOURCE REQUIREMENTS
Future growth will depend to a substantial extent on the Company's ability
to increase the number of its Restaurants. The Company has opened two
Restaurants to date in 1996, and intends to open seven additional Restaurants in
1996 and 11 to 13 Restaurants in 1997. The Company's ability to expand will
depend on a number of factors, including the selection and availability of
suitable locations, hiring and training sufficiently skilled management and
personnel, adequate financing, constructing or acquiring Restaurants at a
reasonable cost and other factors, some of which are beyond the control of the
Company. While the Company has in the past successfully opened new Restaurants,
there can be no assurance that the Company will be able to continue to open new
Restaurants or that, if opened, those Restaurants can be operated profitably.
The three Restaurants opened by the Company in 1995 and the two Restaurants
opened to date in 1996 required an initial investment, including land, building,
fixtures, furniture, equipment and pre-opening costs, averaging approximately
$2.35 million. The Company expects that the average cost of developing and
opening a Restaurant in the future also will be approximately $2.35 million, as
will the cost of converting an existing facility into a Restaurant. However,
these costs may vary greatly depending on the site selected or the quality and
condition of the existing facility. There can be no assurance that the estimated
cost of developing and opening a Restaurant in the future or the cost of
converting an existing facility into a Restaurant will not increase. See
"Business -- Expansion and Site Selection" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."
COMPETITION; CONSUMER PREFERENCES
The restaurant and food service industry is highly competitive and
fragmented. There are numerous restaurants and other food service operations
that compete directly and indirectly with the Company. Many competitors have
been in existence longer, have a more established market presence and have
significantly greater financial, marketing and other resources and higher total
sales volume and profits than does the Company. In addition to other restaurant
companies, the Company competes with numerous other businesses for suitable
locations for its Restaurants.
The restaurant industry may be adversely affected by changes in consumer
tastes, discretionary spending priorities, national, regional or local economic
conditions, demographic trends, consumer confidence in the economy, traffic
patterns, weather conditions, employee availability and the type, number and
location of competing restaurants. Changes in any of these factors could
adversely affect the Company. In addition, factors such as inflation and
increased food, liquor, labor and other costs could adversely affect the
Company. See "Business -- Competition."
GOVERNMENT REGULATION
The Company's business is subject to various federal, state and local
government regulations, including those relating to the sale of food and
alcoholic beverages. While the Company to date has not experienced an inability
to obtain or maintain any necessary governmental licenses, permits or approvals,
the failure to maintain food and liquor licenses could have a material adverse
effect on the Company's operating results. In addition, Restaurant operating
costs are affected by increases in the minimum hourly wage, unemployment tax
rates, sales taxes and similar costs over which the Company has no control.
Since many of the Company's employees are paid at rates based on the federal
minimum wage, increases in the minimum wage will result in an increase in the
Company's labor costs. The Company is subject to "dram shop" statutes in certain
states which generally provide a person injured by an intoxicated person with
the right to recover damages from an establishment that served alcoholic
beverages to the intoxicated person. Difficulties or failure in obtaining
required licenses and approvals will result in delays in, or cancellation of,
the opening of new Restaurants. Although the Company has satisfied restaurant,
liquor and retail licensing for its existing Restaurants, no assurance can be
given that the Company will be able to maintain existing approvals or obtain
such further approvals at other locations. The development and construction of
additional Restaurants will be subject to compliance with applicable zoning,
land use and environmental regulations. There can be no assurance that
5
<PAGE> 7
the Company will be able to obtain necessary variances or other approvals on a
cost effective and timely basis in order to construct and develop Restaurants in
the future. See "Business -- Government Regulation."
DEPENDENCE ON KEY OFFICERS
The Company's success will depend largely on the abilities of the Company's
senior management, including G. Arthur Seelbinder, the Chairman of the Board and
Chief Executive Officer of the Company, Phillip L. Pritchard, President and
Chief Operating Officer, and Glenn W. Cockburn, Senior Vice President --
Operations of the Company. The Company does not have an employment or
non-competition agreement with any of these officers. The Company has an
insurance policy with death benefits of $2 million on the life of Mr.
Seelbinder. The loss of the services of any one of them could adversely affect
the Company. See "Management."
RESTRICTIONS ON CHANGE IN CONTROL
The Company adopted a shareholder rights plan in 1990. Certain provisions
of the shareholder rights plan and certain of the Company's charter provisions
and applicable corporate laws could be used to hinder or delay a takeover bid
for the Company. Such provisions may inhibit takeover bids and decrease the
chance of shareholders realizing a premium over market price for their Common
Shares as a result of a takeover bid. See "Description of Securities."
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Common Shares, like that of the securities of many
other companies, has been and is likely to continue to be highly volatile. The
price at which the Common Shares trade is determined in the marketplace and may
be affected by many factors, including the performance of the Company, investor
expectations for the Company, the trading volume in the Common Shares, general
economic and market conditions, and competition. In addition, the stock market
has experienced and continues to experience price and volume fluctuations which
have affected the market price of many companies and which have often been
unrelated to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Common Shares.
NOTE GUARANTY AND PLEDGE OF COMMON SHARES
The Company has guaranteed the payment of a $5,000,000 loan made by a
commercial bank to G. Arthur Seelbinder, Chairman of the Board and Chief
Executive Officer of the Company. In addition to the Company's guaranty, the
$5,000,000 loan and three other loans made to Mr. Seelbinder by the Bank,
aggregating $2,975,000 in principal amount, are secured by a pledge by Mr.
Seelbinder of 570,000 Common Shares. The guaranty agreement between the Company
and the Bank provides that, in the event of a default, the proceeds from the
sale by the Bank of the pledged shares will be applied first to the $5,000,000
note guaranteed by the Company. The guaranty agreement also provides that in the
event the Bank is unable to liquidate the pledged shares within 120 days after
the occurrence of a default, the Company will pay the unsatisfied portion of the
$5,000,000 loan. A sale of all or part of the pledged shares by the Bank could
have a significant adverse effect on the market price of the Common Shares. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
6
<PAGE> 8
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,500,000 of Common
Shares offered by the Company at an assumed offering price of $14.125 per share
are estimated to be approximately $33.2 million ($38.2 million if the
over-allotment option is exercised in full). The Company intends to use the net
proceeds as follows: (i) to repay the outstanding balance of the Company's
revolving/term loan (the "Credit Agreement") (approximately $30.0 million) and
(ii) to finance the development of new Restaurants and for other general
corporate purposes. Borrowings under the Credit Agreement have been used to
develop new Restaurants, remodel existing or purchased properties, redeem
outstanding Convertible Debentures and for working capital. Borrowings under the
Credit Agreement mature on December 31, 1998 and bear interest, payable
quarterly, at the Company's option, at LIBOR plus 1.25% up to LIBOR plus 2.00%
or prime up to prime plus 0.50%, based on a financial ratio as defined in the
Credit Agreement. Interest on borrowings at December 31, 1995 ranged from 7.43%
to 8.75%. See "Business -- Expansion and Site Selection" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources." Pending such uses, the Company plans to invest
the net proceeds of this offering in short-term investment grade,
interest-bearing securities.
PRICE RANGE OF COMMON SHARES
The Company's Common Shares were designated on the NASDAQ-National Market
System under the symbol "COKR" until May 11, 1994 when the shares were listed on
the New York Stock Exchange under the symbol "CGR." The following table
summarizes the high and low sale prices per share of the Common Shares for the
periods indicated, as reported on the NASDAQ-NMS or NYSE, as appropriate.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1994
1st Quarter................................................. $13.25 $ 8.50
2nd Quarter................................................. 9.38 7.00
3rd Quarter................................................. 8.00 6.13
4th Quarter................................................. 8.13 5.88
1995
1st Quarter................................................. $ 7.75 $ 6.13
2nd Quarter................................................. 12.00 7.00
3rd Quarter................................................. 13.13 9.75
4th Quarter................................................. 11.50 9.38
1996
1st Quarter................................................. $14.00 $11.00
2nd Quarter (through April 17, 1996)........................ 15.00 13.25
</TABLE>
As of April 17, 1996, there were approximately 2,642 holders of Common
Shares. On April 17, 1996, the last reported sale price on the NYSE for the
Common Shares was $14.125.
7
<PAGE> 9
DIVIDEND POLICY
The Company paid cash dividends of $0.05 per Common Share in February 1994
and 1995 and $0.06 per Common Share in February 1996. Under the Credit
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. Payment of future cash dividends
by the Company, if any, will be at the discretion of the Company's Board of
Directors and will depend upon the earnings and financial condition of the
Company and on such other factors as the Board of Directors may consider
relevant at the time. See "Description of Securities."
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1996 and as adjusted to reflect the sale by the Company of 2,500,000
Common Shares offered hereby at the assumed public offering price of $14.125 per
share and the application of the net proceeds therefrom. This table should be
read in conjunction with the Financial Statements and notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current maturities................................ $44,174 $17,420
Shareholders' equity:
Common shares -- without par value; authorized 30,000,000; issued
7,664,606; 10,164,606 issued as adjusted(1)...................... 26,068 59,227
Retained earnings................................................. 18,944 18,944
Treasury stock, at cost, 513,384 shares........................... (6,149) (6,149)
------- ---------
Total shareholders' equity................................... 38,863 72,022
------- ---------
Total capitalization.................................... $83,037 $89,442
======= =========
- ---------------
<FN>
(1) Does not include (i) 1,271,282 Common Shares issuable upon exercise of
options outstanding and (ii) 807,884 Common Shares issuable upon conversion
of outstanding Convertible Debentures.
</TABLE>
8
<PAGE> 10
SELECTED FINANCIAL DATA
The selected financial data presented below should be read in conjunction
with the Company's Financial Statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Prospectus. The selected financial data for 1993
through 1995 have been derived from the financial statements audited by Price
Waterhouse LLP, the Company's independent accountants, and for 1991 and 1992
have been audited by another firm of independent accountants. The selected
financial data for the three months ended April 2, 1995 and March 31, 1996 have
not been audited and are not necessarily indicative of the results to be
expected for the full year. The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. In the opinion of management, all adjustments,
consisting of normal recurring accruals, considered necessary for a fair
presentation have been included.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
------------------
FISCAL YEARS (1) APRIL MARCH
----------------------------------------------- 2, 31,
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- ------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales.................................. $39,516 $53,028 $66,688 $84,169 $91,678 $22,899 $25,486
------- ------- ------- ------- ------- ------- --------
Cost of sales:
Food and beverages................... 11,264 15,181 18,780 24,193 26,218 6,457 7,167
Labor................................ 13,615 17,944 23,384 31,389 31,977 8,116 8,817
Restaurant operating expenses........ 6,060 8,062 10,540 13,549 15,065 3,677 4,312
Restaurant depreciation and
amortization....................... 1,432 1,947 4,063 5,030 3,957 1,093 1,004
------- ------- ------- ------- ------- ------- --------
32,371 43,134 56,767 74,161 77,217 19,343 21,300
------- ------- ------- ------- ------- ------- --------
Restaurant operating income............ 7,145 9,894 9,921 10,008 14,461 3,556 4,186
------- ------- ------- ------- ------- ------- --------
Other expenses (income):
General and administrative........... 2,952 3,606 3,710 4,532 5,785 1,261 1,517
Interest expense..................... 133 221 1,105 1,787 1,848 499 544
Gain on sale of property............. -- -- -- -- (305) (2) --
Interest and other income............ (102) (293) (409) (72) (30) (8) --
------- ------- ------- ------- ------- ------- --------
2,983 3,534 4,406 6,247 7,298 1,750 2,061
------- ------- ------- ------- ------- ------- --------
Income before income taxes and
extraordinary item................... 4,162 6,360 5,515 3,761 7,163 1,806 2,125
Provision for income taxes before
extraordinary item................... 1,547 2,380 2,021 1,280 2,731 801 765
------- ------- ------- ------- ------- ------- --------
Income before extraordinary item....... 2,615 3,980 3,494 2,481 4,432 1,005 1,360
Extraordinary gain, net of income
taxes................................ -- -- -- 484 -- -- --
------- ------- ------- ------- ------- ------- --------
Net income............................. $ 2,615 $ 3,980 $ 3,494 $ 2,965 $ 4,432 $ 1,005 $ 1,360
======== ======== ======== ======== ======== ======== ========
Earnings per common share:
Before extraordinary item............ $ 0.38 $ 0.52 $ 0.45 $ 0.34 $ 0.60 $ 0.14 $ 0.18
Extraordinary item................... -- -- -- 0.07 -- -- --
------- ------- ------- ------- ------- ------- --------
Total........................... $ 0.38 $ 0.52 $ 0.45 $ 0.41 $ 0.60 $ 0.14 $ 0.18
======== ======== ======== ======== ======== ======== ========
Dividends per common share............. $ 0.03 $ 0.035 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.06
Weighted average number of common
shares and common equivalent shares
outstanding.......................... 6,923 7,715 7,846 7,254 7,387 7,236 7,556
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents.............. $ 4,762 $ 1,979 $ 4,132 $ 2,087 $ 1,299 $ 2,552 $ 1,071
Total assets........................... 31,659 62,068 66,598 70,852 83,181 70,910 92,496
Long-term debt......................... -- 23,000 23,000 28,600 35,976 28,345 44,174
Shareholders' equity................... 28,226 33,619 35,968 33,908 37,946 34,534 38,863
- ---------------
<FN>
(1) Ended December 29, 1991, January 3, 1993, January 2, 1994, January 1, 1995
and December 31, 1995.
</TABLE>
9
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company operates 39 restaurants in ten states in the Midwest, East and
Southeast regions of the United States, and intends to open seven additional
Restaurants during the remainder of 1996 and 11 to 13 Restaurants in 1997.
Although the Company historically has been able to open its Restaurants in a
timely and cost-effective manner, there can no assurance that new Restaurants
can be opened on anticipated opening dates or at anticipated cost levels in the
future.
A new Restaurant is included in the same store sales calculation at the
beginning of the first quarter following the Restaurant's first full five
quarters of operation. At March 31, 1996, there were 33 Restaurants included in
the calculation of same store sales.
The Company's labor costs per Restaurant traditionally have been higher
than those of its competitors due to the Company's strategy of striving to
provide superior service to its customers. During 1993 and 1994, labor costs as
a percentage of sales increased to a level higher than had been experienced in
the past. As a result of changes initiated by new management, the Company's
labor costs as a percentage of sales decreased from 37.3% in 1994 to 34.9% in
1995 by reducing the average number of managers per Restaurant from
approximately 8.3 to 5.5.
Pre-opening costs consist primarily of costs for employee training and
relocation and supplies incurred in connection with the opening of a new
Restaurant. These costs are accumulated to the date that the Restaurant is
opened and are amortized on a straight-line basis over one year from the date of
opening. Prior to 1993, pre-opening costs were amortized on a straight-line
basis over three years. At January 1, 1996, the unamortized portion of
pre-opening costs for new Restaurants was $302,000, all of which will be charged
against earnings during 1996.
This Prospectus contains forward-looking statements which involve risks and
uncertainties relating to future events. Prospective investors are cautioned
that the Company's actual events or results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
actual results to differ materially from those indicated by such forward-looking
statements include the matters set forth under the caption "Risk Factors."
10
<PAGE> 12
RESULTS OF OPERATIONS
The operating results of the Company expressed as a percentage of sales
were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEARS(1) ----------------------
------------------------- APRIL 2, MARCH 31,
1993 1994 1995 1995 1996
----- ----- ----- -------- ---------
<S> <C> <C> <C> <C> <C>
Sales............................................ 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -------- -------
Cost of sales:
Food and beverages............................. 28.2 28.7 28.6 28.2 28.1
Labor.......................................... 35.0 37.3 34.9 35.4 34.6
Restaurant operating expenses.................. 15.8 16.1 16.4 16.1 16.9
Restaurant depreciation and amortization....... 6.1 6.0 4.3 4.8 4.0
----- ----- ----- -------- -------
85.1 88.1 84.2 84.5 83.6
----- ----- ----- -------- -------
Restaurant operating income...................... 14.9 11.9 15.8 15.5 16.4
----- ----- ----- -------- -------
Other (income) expenses:
General and administrative..................... 5.6 5.4 6.3 5.5 6.0
Interest expense............................... 1.7 2.1 2.0 2.1 2.1
Gain on sale of property....................... -- -- (0.3) -- --
Interest and other income...................... (0.6) (0.1) -- -- --
----- ----- ----- -------- -------
6.7 7.4 8.0 7.6 8.1
----- ----- ----- -------- -------
Income before income taxes and extraordinary
item........................................... 8.2 4.5 7.8 7.9 8.3
Provision for income taxes before extraordinary
item........................................... 3.0 1.5 3.0 3.5 3.0
----- ----- ----- -------- -------
Income before extraordinary item................. 5.2 3.0 4.8 4.4 5.3
Extraordinary gain, net of income taxes.......... -- 0.5 -- -- --
----- ----- ----- -------- -------
Net income....................................... 5.2% 3.5% 4.8% 4.4% 5.3%
===== ===== ===== ======= =======
- ---------------
<FN>
(1) Ended on January 2, 1994, January 1, 1995 and December 31, 1995,
respectively.
</TABLE>
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED APRIL 2, 1995
Sales increased $2,587,000, or 11.3%, from $22,899,000 for the three months
ended April 2, 1995 to $25,486,000 for the three months ended March 31, 1996.
The increase was due primarily to sales at new Restaurants opened after April 2,
1995. The openings included Gainesville, Florida, Sylvania (Toledo), Ohio, and
Solon (Cleveland), Ohio opened in 1995 and Hamilton Road (Columbus), Ohio and
Murfreesboro (Nashville), Tennessee opened in 1996. Same store sales decreased
0.9% for the three months ended March 31, 1996 from the comparable period in
1995, primarily as a result of severe winter weather in January. However, same
store sales increased in both February and March and average sales for all
stores increased 2.1% for the three months ended March 31, 1996.
Restaurant operating income increased $630,000, or 17.7%, from $3,556,000
for the three months ended April 2, 1995 to $4,186,000 for the three months
ended March 31, 1996. Restaurant operating income as a percentage of sales
increased from 15.5% for the three months ended April 2, 1995 to 16.4% for the
three months ended March 31, 1996. The increase was primarily the result of
continued lower labor expenses and lower amortization of pre-opening expenses.
The cost of food and beverages as a percentage of sales decreased from
28.2% for the three months ended April 2, 1995 to 28.1% for the three months
ended March 31, 1996. The decrease was the result of minor changes in the mix of
menu items sold in 1996.
Labor costs as a percentage of sales decreased from 35.4% for the three
months ended April 2, 1995 to 34.6% for the three months ended March 31, 1996.
The reduction was due to changes in store management staffing implemented during
1995.
11
<PAGE> 13
Restaurant operating expenses as a percentage of sales increased from 16.1%
for the three months ended April 2, 1995 to 16.9% for the three months ended
March 31, 1996. The increase was primarily attributable to increased repair and
maintenance, snow removal, utilities and property taxes.
Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased from 4.8% for the three months ended April 2, 1995
to 4.0% for the three months ended March 31, 1996. This decrease was due to
lower amortization of pre-opening expenses which resulted from the slowdown in
the number of new Restaurants opened in 1995.
General and administrative expenses as a percentage of sales increased from
5.5% for the three months ended April 2, 1995 to 6.0% for the three months ended
March 31, 1996. This increase resulted from higher labor and related training
expenses for the increased number of manager trainees in 1996. During the three
months ended April 2, 1995, the Company slowed its new Restaurant opening rate
and reduced the number of managers per Restaurant. During the three months ended
March 31, 1996, the Company significantly increased its hiring of management
trainees in anticipation of an accelerated opening schedule.
The provision for income taxes as a percentage of income before income
taxes decreased from 44.4% for the three months ended April 2, 1995 to 36.0% for
the three months ended March 31, 1996. The provision for the three months ended
April 2, 1995 was higher due to the inclusion of the Company's estimate of
additional liabilities for prior years.
1995 COMPARED TO 1994
Sales increased $7,509,000, or 8.9%, from $84,169,000 in 1994 to
$91,678,000 in 1995. The increase was primarily due to sales generated from new
Restaurants opened during 1995 and those opened late in 1994. The 1995 openings
included Restaurants in Gainesville, Florida; Sylvania (Toledo), Ohio and Solon
(Cleveland), Ohio. Same store sales increased during 11 of the 12 months of 1995
with an average annual increase of 0.8%.
Restaurant operating income increased $4,453,000, or 44.5%, from
$10,008,000 in 1994 to $14,461,000 in 1995. Restaurant operating income as a
percentage of sales increased from 11.9% in 1994 to 15.8% in 1995. The increase
was due primarily to a reduction in store management staffing as well as changes
to the Company's hourly employee staffing schedules and related payroll tax and
benefit savings. Labor costs as a percentage of sales decreased from 37.3% in
1994 to 34.9% in 1995.
The Company experienced unusually high produce prices in the second quarter
of 1995 and higher than normal chicken prices in the second and third quarters
of 1995. However, changes in the items on the menu made during 1995 offset these
temporary cost increases and cost of food and beverages as a percentage of sales
decreased from 28.7% in 1994 to 28.6% in 1995. No significant menu price
increases were made during 1995.
Restaurant operating expenses as a percentage of sales increased from 16.1%
in 1994 to 16.4% in 1995. Most of this increase was the result of higher repair
and maintenance spending.
Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased from 6.0% in 1994 to 4.3% in 1995. This change was
due to lower amortization of pre-opening expenses which was a result of the
slowdown in the number of new Restaurants opening in 1994.
General and administrative expenses as a percentage of sales increased from
5.4% in 1994 to 6.3% in 1995. This increase was the result of the payment of
higher management bonuses in 1995 due to significantly stronger Company
performance and the addition of the President-Chief Operating Officer for all of
1995.
The provision for income taxes increased as a percentage of income before
income taxes from 34.0% in 1994 to 38.1% in 1995. The 1995 provision included a
$205,000 provision for the Company's estimate of additional tax liability.
1994 COMPARED TO 1993
Sales increased $17,481,000, or 26.2%, from $66,688,000 in 1993 to
$84,169,000 in 1994. The increase was primarily due to sales generated from new
Restaurants opened during 1994 and those opened late in 1993. The 1994 openings
included Restaurants 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
12
<PAGE> 14
improvement during the second half of the year and ended with fourth quarter
1994 sales matching fourth quarter 1993 sales.
Restaurant operating income increased $87,000, or 0.9%, from $9,921,000 in
1993 to $10,008,000 in 1994. Restaurant operating income as a percentage of
sales decreased from 14.9% in 1993 to 11.9% in 1994. The decline was primarily
due to a moderate increase in commodity costs for raw materials and lower
average sales in some of the newer Restaurants.
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 as a percentage of sales increased from 35.0% in 1993 to 37.3%
in 1994. Since a significant portion of labor costs is 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
reviewed store staffing models in 1994 and tested a reduced labor staffing model
in several markets. The new staffing model reduced the amount of fixed labor
expenses and provided more flexibility in improving the labor costs in stores
with lower sales volumes.
Restaurant operating expenses as a percentage of sales increased from 15.8%
in 1993 to 16.1% in 1994, primarily as a result of lower average sales volumes
in newer Restaurants.
Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased 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 in 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 as a percentage of sales decreased from
5.6% in 1993 to 5.4% in 1994 primarily due to these expenses being spread over
an increasing number of Restaurants.
The provision for income taxes before extraordinary items as a percentage
of income before income taxes and extraordinary items decreased from 36.6% in
1993 to 34.0% in 1994, 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 Convertible Debentures in the open market for a discounted
purchase price of $1,617,500 which resulted in an after tax extraordinary gain
of $484,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements arise from the development and
opening of new Restaurants. The Company's primary sources of working capital are
cash flow from operations and borrowings under the Credit Agreement. The
Company's cash flow from operations was $6,203,000, $7,571,000, $9,495,000 and
$2,607,000 for 1993, 1994, 1995 and the three months ended March 31, 1996,
respectively. The Credit Agreement provides for a $33,000,000 line of credit and
as of March 31, 1996, the Company had outstanding borrowings of $26,754,000
under the Credit Agreement. The Company estimates that at the time of this
offering, the outstanding balance will be approximately $30,000,000 and that a
portion of the net proceeds of this offering will be used to repay this
outstanding balance.
Capital expenditures were $23,627,000, $11,318,000, $17,200,000 and
$10,616,000 for 1993, 1994, 1995 and the three months ended March 31, 1996,
respectively. The Company has opened two Restaurants to date in 1996, and
intends to open seven additional Restaurants in 1996 and 11 to 13 Restaurants in
1997. Total capital expenditures are estimated to be approximately $18,500,000
in 1996 and approximately $30,000,000 in 1997. The Company believes that cash
flow from operations, borrowings from the Credit Agreement and proceeds from
this offering will be sufficient to fund the planned expansion as well as the
ongoing maintenance and remodeling of existing Restaurants through 1997.
In 1992, the Company issued its Convertible Debentures in the principal
amount of $23,000,000 in a public offering. Under the terms of the Indenture
pursuant to which the Convertible Debentures were issued,
13
<PAGE> 15
the Company is required to redeem up to $1,150,000 principal amount on November
1 of each year if timely request is made by holders. In 1994 and 1995, the
Company redeemed $1,150,000 and $1,150,000, respectively, of the Convertible
Debentures as a result of requests by holders. In addition, the Company is
required to redeem up to $25,000 per deceased holder during each fiscal year. In
1994, 1995 and the three months ended March 31, 1996, the Company redeemed
$50,000, $30,000, and $50,000, respectively, of the Convertible Debentures by
reason of the death of holders. In 1994, the Company purchased $2,500,000
principal amount of the Convertible Debentures on the open market at a market
price of $1,618,000, in 1995 purchased $250,000 principal amount at a market
price of $222,000 and in the first quarter of 1996, purchased $400,000 principal
amount at $363,000. All of the redemptions and purchases of Convertible
Debentures during 1994 and 1995 were made with funds obtained from loans under
the Company's revolving term loan agreement.
In March 1994, the Company entered into a guaranty agreement with First
Union National Bank of Tennessee ("First Union") pursuant to which the Company
guaranteed the payment of a $5,000,000 loan to G. Arthur Seelbinder, Chairman of
the Board and Chief Executive Officer of the Company. First Union also is the
lender to the Company under the Credit Agreement. In 1995, the Company requested
that Mr. Seelbinder refinance the $5,000,000 loan with a bank that was not a
lender to the Company. In July 1995, Mr. Seelbinder refinanced the loan with
NationsBank of Tennessee N.A. ("NationsBank") and incurred refinancing costs of
approximately $42,000, which were paid by the Company. As a condition to the
refinancing, NationsBank required that the Company reaffirm its guaranty of the
$5,000,000 loan to Mr. Seelbinder. The NationsBank loan bears interest at a per
annum rate equal to 0.25% over the prime rate of interest charged by NationsBank
from time to time and is due and payable on August 1, 1997. Mr. Seelbinder
pledged 570,000 of his Common Shares to NationsBank as collateral for the
$5,000,000 loan and as collateral for three additional loans aggregating
$2,975,000 in principal amount made to Mr. Seelbinder by NationsBank. The loan
agreement between Mr. Seelbinder and NationsBank provides that if there were a
default with respect to any of the four loans or a default by the Company under
the Credit Agreement, NationsBank would be able to declare all four loans
immediately due and payable. The guaranty agreement provides that the Bank will
apply the proceeds from the sale of the pledged shares first to the $5,000,000
loan guaranteed by the Company. The guaranty agreement also provides that in the
event the Bank is unable to liquidate the pledged shares within 120 days after
the occurrence of a default, the Company will pay the unsatisfied portion of the
$5,000,000 note. Mr. Seelbinder agreed to pay the Company an annual fee in the
amount of 0.25% of the principal amount of the loan during each year that the
Company's guaranty is outstanding.
SFAS NO. 123
In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation."
SFAS No. 123 establishes financial accounting and reporting standards for stock
based employee compensation plans. The statement defines a "fair value based
method" of accounting for employee stock options or similar equity instruments
and encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. However, SFAS No. 123 also allows an entity
to continue to measure compensation costs for those plans using the "intrinsic
value based method" of accounting, which the Company currently uses. The Company
currently plans on adopting SFAS No. 123 for fiscal 1996 and intends to retain
the intrinsic value method of accounting for stock based compensation.
IMPACT OF INFLATION
The Company does not believe that inflation has materially affected
earnings during the past three years. Substantial increases in costs,
particularly labor, employee benefits or food costs, could have a significant
impact on the Company.
14
<PAGE> 16
BUSINESS
GENERAL
The Company operates 39 full-service "Cooker" Restaurants in Florida,
Georgia, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Tennessee
and Virginia. Restaurants average approximately 7,600 square feet and 245 seats,
and are designed to provide traditional and comfortable dining experiences
rather than a theme atmosphere or menu. The Company provides an attractive value
to customers by offering a moderately-priced, full menu of high quality food
served in generous portions. The menu includes appetizers, soups, salads,
chicken, fish, beef and pasta entrees, sandwiches, burgers and desserts, most of
which are created from original recipes and prepared from scratch using fresh
ingredients. Entree selections generally range in price from $4.45 to $14.95
and, for the three months ended March 31, 1996, the average guest check was
approximately $10.60. The Company is committed to providing prompt, friendly and
efficient customer service as reflected by its "100% Satisfaction Guarantee"
policy and by its having what the Company believes is a higher ratio of service
personnel to customers and a greater number of managers per Restaurant than many
of its competitors.
In 1994, the Company began an aggressive program designed to enhance
operational execution, broaden and strengthen senior and Restaurant-level
management talent, and reduce operating costs. The Company's rapid expansion in
1993, opening nine Restaurants on a base of 20, overextended its
Restaurant-level management. In addition, several of these new Restaurants
produced lower sales than the Company's existing Restaurants since they were
located in new markets where the Company's concept was not established. As a
result, the Company slowed its growth and opened only six Restaurants in 1994
and three Restaurants in 1995. These Restaurants primarily were opened in
markets where the Cooker reputation was already known and where it could
capitalize on distribution and supervisory efficiencies. During this period, the
Company focused its attention more closely on improving operations at existing
Restaurants. In 1994 and 1995, the Company strengthened its senior-level
management team by adding three key executives: Phillip L. Pritchard, President
and Chief Operating Officer, formerly with GMRI; David C. Sevig, Vice
President -- Chief Financial Officer, formerly with GMRI and Blockbuster
Entertainment Group; and Jeffrey M. Karla, Human Resources Director, previously
with McDonald's. Additionally, the Company strengthened its Restaurant-level
management teams by implementing an ongoing, comprehensive development program.
Furthermore, rather than staffing all Restaurants with the same number of
managers, the Company began to staff Restaurants according to sales volume,
which significantly reduced the Company's cost of labor as a percentage of sales
by decreasing the average number of managers per Restaurant from approximately
8.3 to 5.5.
THE COOKER CONCEPT
The key features of the Cooker concept include the following:
"100% Satisfaction Guarantee." The Company is committed to providing high
quality food, friendly and efficient service and comfortable, clean
surroundings. Restaurant managers visit tables to make sure every customer is
satisfied with the Cooker experience. If a customer is not satisfied with any
part of the visit, particularly the food and service, the Restaurant staff is
authorized to provide that customer with a free meal.
Original Recipes Made From Scratch. Cooker provides an attractive value to
customers by offering a moderately-priced, full menu of high quality food served
in generous portions. Most of the items on Cooker's menu are created from
original recipes and prepared from scratch using fresh ingredients, which the
Company believes results in more flavorful foods. The menu is re-evaluated in
June and December of each year when the least popular items from each category
(appetizers, entrees, desserts) are removed from the menu and replaced with new
items created by the Company's culinary team. Each menu item is researched and
tested in Cooker's test kitchen and in Restaurants to ensure customer
acceptance.
Commitment to Staffing. The Company's commitment to meeting the highest
standards of customer service is reflected in having what the Company believes
is a higher ratio of service personnel to customers and having a greater number
of managers per Restaurant than many of its competitors. The Company believes
that higher staffing levels permit its staff to interact with customers,
resulting in an enhanced dining experience. This strategy results in repeat
customer visits, as well as "word-of-mouth" advertising from current customers
that attracts new customers.
15
<PAGE> 17
Timeless Atmosphere. The Company's Restaurants are designed to create a
traditional and comfortable atmosphere suitable for any occasion. This
atmosphere is enhanced by friendly service and a menu that appeals to a broad
segment of the population and encourages customers to visit the Company's
Restaurants more often. Unlike many casual dining restaurants that center around
a "theme," the Company believes its Restaurants are not as sensitive to changing
customer preferences and trends.
Dedicated Employees. The Company hires its personnel only after extensive
interviews, and seeks to recruit employees who share the Company's commitment to
high standards of customer service. Each new non-management employee is
initially trained for a minimum of seven to ten days or longer if hired for a
new Restaurant. Regardless of their background, new management personnel undergo
90 to 120 days of training that includes gaining exposure to all areas of
Restaurant operations and attending training classes at the Company's
headquarters. The Company encourages a sense of personal commitment from its
employees at every level by providing extensive training, employee development
and competitive compensation. Management believes its personnel policies result
in a low rate of employee turnover.
MENU
The Company provides an attractive value to customers by offering a
moderately-priced, full menu of high quality food and beverage items served in
generous portions. The menu features 66 items including appetizers, soups,
salads, chicken, fish, beef and pasta entrees, sandwiches, burgers and desserts.
Most of the items on the menu are created from original recipes and prepared
from scratch using fresh ingredients, which the Company believes results in more
flavorful food. Lunch and dinner entrees generally range in price from $4.45 to
$14.95 and, for the three months ended March 31, 1996, lunch accounted for
approximately 40% of sales. The average check per person for the three months
ended March 31, 1996 was approximately $10.60. Each Restaurant offers alcoholic
beverages including liquor, wine and beer, which constituted approximately 11%
of sales for the three months ended March 31, 1996. The Company re-evaluates its
menu in June and December of each year, and the least popular items from each
category are removed from the menu and replaced with new items created by the
Company's culinary team. Each menu item and recipe is researched and tested in
Cooker's test kitchen and in the Restaurants to ensure customer acceptance.
DESIGN
The Restaurants are designed to be comfortable and functional, with a decor
that includes materials such as mahogany, slate, marble and tile. The average
Restaurant is approximately 7,600 square feet (of which approximately 40% is
devoted to kitchen and service areas) with seating for approximately 245
customers. However, seven of the nine Restaurants planned to be opened in 1996
will have in excess of 8,000 square feet and will seat approximately 270
customers. This increase is a result of the size of the existing facilities that
the Company plans to convert into Restaurants and does not reflect a management
decision to increase the size of future Restaurants. The majority of the seating
is in booths, which enhances customer privacy and comfort. Each Restaurant also
has a separate bar area which has stool and booth seating. The Company believes
that the typical Restaurant kitchen is comparatively large by industry standards
and is designed for quality and speed of food preparation. These kitchens permit
the Company to be flexible in the types of food items which can be prepared and
to adapt to changing consumer tastes and preferences.
16
<PAGE> 18
RESTAURANTS LOCATIONS
The following table reflects the existing 39 Restaurant locations and the
seven additional Restaurant locations scheduled to open during the remainder of
1996.
<TABLE>
<CAPTION>
LOCATION METROPOLITAN AREA
- ------------------------------ ------------------------
<S> <C>
FLORIDA
Altamonte Springs........... Orlando
Ft. Myers................... Ft. Myers
Gainesville................. Gainesville
Melbourne................... Melbourne
Palm Harbor................. Tampa-St. Petersburg
GEORGIA
Alpharetta.................. Atlanta
Gwinnett*................... Atlanta
Towne Center*............... Atlanta
Wildwood.................... Atlanta
INDIANA
Keystone.................... Indianapolis
Willow Lake................. Indianapolis
KENTUCKY
Hurstbourne Plaza........... Louisville
MARYLAND
Bethesda.................... Washington, DC
MICHIGAN
Ann Arbor................... Detroit
Auburn Hills................ Detroit
Livonia..................... Detroit
Novi........................ Detroit
Sterling Heights*........... Detroit
NORTH CAROLINA
Raleigh..................... Raleigh-Durham
<CAPTION>
LOCATION METROPOLITAN AREA
- ------------------------------------ ------------------
<S> <C>
OHIO
Governor's Hill................... Cincinnati
Paxton Road....................... Cincinnati
Springdale........................ Cincinnati
Rockside.......................... Cleveland
Beachwood......................... Cleveland
Westlake.......................... Cleveland
Solon............................. Cleveland
Bethel Road....................... Columbus
Cleveland Avenue.................. Columbus
East Main St...................... Columbus
Hamilton Rd....................... Columbus
Morse Road*....................... Columbus
North High St..................... Columbus
Beaver Creek*..................... Dayton
Miamisburg Centerville............ Dayton
Poe Road*......................... Dayton
Toledo............................ Toledo
Sylvania.......................... Toledo
Boardman Township*................ Youngstown
TENNESSEE
Memphis........................... Memphis
Regalia Center.................... Memphis
Hermitage......................... Nashville
Murfreesboro...................... Nashville
Parkway........................... Nashville
Rivergate......................... Nashville
West End.......................... Nashville
VIRGINIA
Fairfax........................... Washington, DC
<FN>
* Restaurants scheduled to open during remainder of 1996.
</TABLE>
The Company leases 15 Restaurants from unaffiliated lessors with terms
ranging from 16 to 48 years, that include options to extend such leases
exercisable by the Company. See Note 10 to the Financial Statements for
information relating to lease commitments. The Company owns the remaining
Restaurants, six of which are subject to a mortgage granted to the First Union
National Bank of Tennessee to secure the Credit Agreement.
UNIT ECONOMICS
For the fifty-two week period ended March 31, 1996, the 34 Restaurants open
for the period generated average sales of approximately $2.6 million, average
operating income of approximately $434,000, or 16.7% of sales, and average cash
flow of approximately $521,000, or 20.1% of sales. Average cash flow represents
average operating income before depreciation and amortization. Average cash flow
is commonly used as an additional measure of operating profitability in the
restaurant industry, although it should not be considered an alternative to
operating income as an indicator of the Company's operating performance or an
alternative to cash flow from operating activities as a measure of liquidity.
The three Restaurants opened by the Company in 1995 and the two Restaurants
opened in 1996 required an initial investment, including land, building,
fixtures, furniture, equipment and pre-opening costs, averaging approximately
$2.35 million. The Company expects that the average cost of developing and
opening a Restaurant in the future also will be approximately $2.35 million, as
will the cost of converting an existing facility into a Restaurant. However,
these costs may vary greatly depending on the site selected or the quality and
condition of the existing facility. There can be no assurance that the estimated
cost of developing and opening a Restaurant in the future or the cost of
converting an existing facility into a Restaurant will not increase.
<PAGE> 19
EXPANSION AND SITE SELECTION
The Company has opened two Restaurants to date in 1996 and intends to open
an additional seven Restaurants this year. On January 4, 1996, the Company
purchased six properties from a subsidiary of Darden Restaurants, Inc. for a
cash purchase price of approximately $11.2 million. The properties purchased by
the Company had been operated as part of a chain of "China Coast Restaurants."
This chain closed in 1995. The Company is in the process of remodeling these six
properties to conform to its specifications and plans to open them during the
second quarter of 1996. The Company intends to open 11 to 13 Restaurants in
1997. A majority of potential locations for openings in 1997 have been
tentatively identified and negotiations for those locations are currently in
progress. There can be no assurance that the Company will be able to open the
number of Restaurants planned to be opened by them or that such Restaurants will
be opened on schedule.
The Company 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 effectively control its operational
and administrative costs, as well as take advantage of name recognition, the
Company anticipates that further expansion will be in medium to large
metropolitan areas in the Midwest, East and Southeast regions of the United
States, primarily in areas where the Company currently operates Restaurants. The
Company intends to locate Restaurants in freestanding buildings and in retail
developments in proximity to high density, high traffic, office, residential and
retail areas. The Company owns and leases the sites for its existing facilities,
although the Company prefers to own the property.
RESTAURANT OPERATIONS
Management and Employees. The Company currently has eight regional
managers who are each responsible for supervising between four and six of the
Company's Restaurants and continuing the development of a Restaurant's
management team. Through regular visits to the Restaurants, the regional
managers ensure that the Company's concept, strategy and standards of quality
are being adhered to in all aspects of restaurant operations. Each of the
Company's Restaurants typically has one general manager, one assistant general
manager, one kitchen manager and between two and four assistant managers. The
general manager of each Restaurant has primary responsibility for the day-to-day
operations of the entire Restaurant and is responsible for maintaining the
standards of quality and performance established by the Company. The average
number of hourly employees in each Restaurant is approximately 85. Management
believes that its success is in part attributable to its high level of service
and interaction between its employees and guests.
The Company seeks to attract and retain high quality managers and hourly
employees by providing attractive financial incentives and flexible working
schedules. Financial incentives provided to attract high quality managers
include competitive salaries, bonuses and stock options based upon position,
seniority and performance criteria. Also, management believes that the Company
attracts qualified managers by providing a higher overall quality of life
characterized by a five-day work schedule.
Prior to 1994, the Company maintained an average of approximately 8.3
managers for each Restaurant. During 1994, management implemented a program to
better match the number of managers with the sales of a particular Restaurant.
As a result of this program, management has reduced the average number of
managers per Restaurant to approximately 5.5, thereby reducing the Company's
cost of labor as a percentage of sales.
Training and Development. The Company hires its personnel only after
extensive interviews, and seeks to recruit employees who share the Company's
commitment to high standards of customer service. Each new non-management
employee is initially trained for a minimum of seven to ten days or longer if
hired for a new Restaurant. Regardless of their background, new management
personnel undergo 90 to 120 days of training that includes gaining exposure to
all areas of Restaurant operations and attending training classes at the
Company's headquarters. The Company encourages a sense of personal commitment
from its employees at every level by providing extensive training, employee
development and competitive compensation. Management believes its personnel
policies result in a low rate of employee turnover.
Restaurant Reporting Systems. The Company uses integrated management
information systems that include a point-of-sale system to facilitate the
movement of food and beverage orders between the customer areas and kitchen
operations, control cash, handle credit card authorizations, and gather data on
sales by menu item and hours worked by employees. In addition, Restaurant
systems have been developed to record accounts
18
<PAGE> 20
payable and inventories. Sales, cash control, and summary payroll data are
transferred to the Company's headquarters nightly. Detailed payroll, accounts
payable and inventory data are transferred to the Company's headquarters weekly.
These Restaurant information systems provide data for posting directly to the
Company's general ledger, to other accounting subsystems and to other systems
developed to evaluate Restaurant performance.
The Restaurant system also provides hourly, daily and weekly reports for
each Restaurant manager to evaluate current performance and to plan for future
staffing and food production needs. The headquarters' systems also provide a
variety of management reports comparing current results to prior periods and
predetermined operating budgets. The results are reported to and reviewed with
Company management by accounting personnel. Included among the reports produced
are (i) daily reports of revenue and labor cost by Restaurant, (ii) weekly
summary profit and loss statement by Restaurant and an analysis of sales by menu
item, and (iii) monthly detailed profit and loss statements by Restaurant as
well as analytical reports on a variety of Restaurant performance
characteristics.
Purchasing. Purchasing specifications are determined by the Company's
corporate offices. Each Restaurant's management team determines the daily
quantities of food items needed and orders such quantities from major suppliers
at prices often negotiated directly with the Company's corporate offices. The
Company purchases its food products and supplies from a variety of national,
regional and local suppliers. The Company is not dependent upon any one supplier
and has not experienced significant delays in receiving its food and beverage
inventories, restaurant supplies or equipment. Management believes that the
diversity of the Company's menu enables its overall food costs to be less
dependent upon the price of a particular product. The Company also tests various
new products in an effort to obtain the highest quality products possible and to
be responsive to changing customer tastes.
Advertising and Marketing. The Company relies primarily on "word of mouth"
advertising to attract customers to its Restaurants. Management believes its
"100% Satisfaction Guarantee," made-from-scratch menu items and focus on
high-quality service generates a high level of repeat customers and new customer
visits. The Company focuses its limited advertising expenses on local promotions
and public relations efforts.
Hours of Operation. 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. All menu items (other than alcoholic beverages) are
available for carry-out.
COMPETITION
The restaurant and food service industry is highly competitive and
fragmented. There are numerous restaurants and other food service operations
that compete directly and indirectly with the Company. Many competitors have
been in existence longer, have a more established market presence and have
significantly greater financial, marketing and other resources and higher total
sales volume and profits than does the Company. In addition to other restaurant
companies, the Company competes with numerous other businesses for suitable
locations for its restaurants.
The restaurant industry may be adversely affected by changes in consumer
tastes, discretionary spending priorities, national, regional or local economic
conditions, demographic trends, consumer confidence in the economy, traffic
patterns, weather conditions, employee availability and the type, number and
location of competing restaurants. Changes in any of these factors could
adversely affect the Company. In addition, factors such as inflation and
increased food, liquor, labor and other costs could adversely affect the
Company.
GOVERNMENT REGULATION
The Company's business is subject to various federal, state and local
government regulations, including those relating to the sale of food and
alcoholic beverages. While the Company to date has not experienced an inability
to obtain or maintain any necessary governmental licenses, permits or approvals,
the failure to maintain food and liquor licenses could have a material adverse
effect on the Company's operating results. In addition, Restaurant operating
costs are affected by increases in the minimum hourly wage, unemployment tax
rates, sales taxes and similar costs over which the Company has no control.
Since many of the Company's employees are paid at rates based on the federal
minimum wage, increases in the minimum wage will result in an increase in the
Company's labor costs. The Company is subject to "dram shop" statutes in certain
states
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<PAGE> 21
which generally provide a person injured by an intoxicated person with the right
to recover damages from an establishment that served alcoholic beverages to the
intoxicated person. Difficulties or failure in obtaining required licenses and
approvals will result in delays in, or cancellation of, the opening of new
Restaurants. Although the Company has satisfied restaurant, liquor and retail
licensing for its existing Restaurants, no assurance can be given that the
Company will be able to maintain existing approvals or obtain such further
approvals at other locations. The development and construction of additional
Restaurants will be subject to compliance with applicable zoning, land use and
environmental regulations. There can be no assurance that the Company will be
able to obtain necessary variances or other approvals on a cost effective and
timely basis in order to construct and develop Restaurants in the future.
EMPLOYEES
At March 31, 1996, the Company had approximately 3,530 employees, of which
3,250 were Restaurant employees, 250 were Restaurant management personnel, and
30 were corporate staff personnel. None of the Company's employees is
represented by a labor union or a collective bargaining unit. The Company
considers relations with its employees to be satisfactory.
MARKS
The Company has registered the service marks "Cooker Bar and Grille" and
Design and "The Southern Cooker -- Home Style Restaurant & Bar" and Design with
the United States Patent and Trademark Office. The Company also uses the word
Cooker 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
Company'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 Company should be in a reasonably good position to resist adverse claims.
This same extensive third party use means, however, that the Company 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 Company to limit
such use, even though the Company has a federal registration.
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<PAGE> 22
MANAGEMENT
The directors and executive officers of the Company, their ages and
positions are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------- ---- ------------------------------------------
<S> <C> <C>
G. Arthur Seelbinder.................... 52 Chairman of the Board, Chief Executive
Officer and Director
Phillip L. Pritchard.................... 46 President, Chief Operating Officer and
Director
Glenn W. Cockburn....................... 40 Senior Vice President -- Operations and
Director
David C. Sevig.......................... 52 Vice President -- Chief Financial Officer
Margaret A. Epperson.................... 50 Secretary and Treasurer
Henry R. Hillenmeyer.................... 52 Director
David L. Hobson......................... 59 Director
Robin V. Holderman...................... 44 Director
David T. Kollat......................... 57 Director
Joseph E. Madigan....................... 63 Director
Margaret T. Monaco...................... 48 Director
</TABLE>
G. Arthur Seelbinder is one of the founders of the Company. He has served
as Chairman of the Board, Chief Executive Officer and a director of the Company
since 1986. From September 1989 to December 1994, Mr. Seelbinder served as
President of the Company. From 1984 to the time it was merged into the Company
in 1988, Mr. Seelbinder served as Chairman of the Board of Cooker Corporation, a
predecessor of the Company. Mr. Seelbinder also is the President and a director
of Financial Land Corporation, a real estate holding company.
Phillip L. Pritchard has served as President, Chief Operating Officer and a
director of the Company since November 1994. From March 1972 to December 1994,
Mr. Pritchard was employed by GMRI where he served in a number of positions,
including Executive Vice President, Operations, for GMRI's Red Lobster
restaurants and Executive Vice President, Operations, for GMRI's China Coast
restaurants.
Glenn W. Cockburn is one of the founders of the Company. Mr. Cockburn has
served as a director of the Company since October 1989 and as the Company's
Senior Vice President -- Operations since August 1991. From 1988 to August 1991,
Mr. Cockburn served as Vice President -- Food Services of the Company. From 1986
to the time it was merged into the Company in 1988, Mr. Cockburn served as Vice
President of Food Operations of Cooker Corporation.
David C. Sevig has served as Vice President -- Chief Financial Officer of
the Company since June 1995. From May 1994 to May 1995, Mr. Sevig was employed
by Blockbuster Entertainment Group in connection with its development of the
Block Party entertainment concept. From 1967 to March 1994, Mr. Sevig was
employed by GMRI where he served in a number of positions, including Vice
President -- Controller of international restaurants and Vice
President -- Controller of Red Lobster restaurants.
Margaret A. Epperson has served as Secretary and Treasurer of the Company
since 1986. Ms. Epperson also has served as the Secretary and Treasurer of
Financial Land Corporation since 1988.
Henry R. Hillenmeyer has served as a director of the Company since October
1994. Since March 1995, Mr. Hillenmeyer has served as the Chairman and Chief
Executive Officer of Skill Search Corporation, a resume database company. From
May 1988 to October 1994, Mr. Hillenmeyer served as Chairman and President of
Southern Hospitality Corporation, a Wendy's franchise operator based in
Nashville, Tennessee.
David L. Hobson has been a director of the Company since 1986. Mr. Hobson
has served as a member of the United States House of Representatives since
January 1991. From 1982 to December 1990, Mr. Hobson served as a member of the
Ohio Senate and from November 1988 to December 1990 served as its president
pro-tem. Mr. Hobson has been involved in the restaurant industry for more than
18 years.
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<PAGE> 23
Robin V. Holderman has served as a director of the Company since 1986. Mr.
Holderman has served as President of Ruscilli Development Co., Ltd., a real
estate development company, since May 1995. From April 1994 to May 1995, Mr.
Holderman served as Manager of Industrial Development of Duke Realty
Investments, Inc., a real estate development company. From December 1992 to
April 1994, Mr. Holderman served as President of Conquest Corporation, a
commercial and industrial real estate development company located in Columbus,
Ohio, which he founded. From June 1990 to December 1992, Mr. Holderman served as
the Director of Development for the Columbus, Ohio office of the
Miller-Valentine Group, a commercial real estate development and construction
company based in Dayton, Ohio.
David T. Kollat has served as a director of the Company since 1988. Mr.
Kollat has served as Chairman of 22 Inc., a company specializing in research and
consulting for retailers and consumer goods manufacturers, since October 1987.
Mr. Kollat currently serves as a director for Consolidated Stores, Inc., The
Limited, Inc., Wolverine World Wide, Inc. and Audio Environment, Inc.
Joseph E. Madigan has served as a director of the Company since 1989. Mr.
Madigan has served as the President of Madigan Associates, a consulting firm,
since it was established in 1988 and has served as Chairman of the Board of
Cardinal Realty Services, Inc., a multi-family housing enterprise, since 1995.
Mr. Madigan currently serves as a director for Skyline Chili, Inc., a fast food
service restaurant and food production company.
Margaret T. Monaco has served as a director of the Company since April
1994. Ms. Monaco has served as a principal with Probus Advisors, a management
and financial consulting firm, since July 1993. From October 1987 to June 1993,
Ms. Monaco served as Vice President and Treasurer of The Limited, Inc. Ms.
Monaco currently serves as a director for Barnes & Noble, Inc. and Crown America
Realty Trust.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 31, 1996, certain information
regarding the beneficial ownership of Common Shares for (i) each person known to
the Company to own beneficially more than 5% of the Common Shares, (ii) each
director, (iii) each of the executive officers whose compensation equaled or
exceeded $100,000 in 1995, and (iv) the Company's directors and executive
officers as a group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF COMMON PERCENTAGE OF COMMON
BENEFICIALLY SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)(2) OWNED PRIOR TO THE OFFERING OWNED AFTER THE OFFERING
- ---------------------------- --------- --------------------------- ------------------------
<S> <C> <C> <C>
G. Arthur Seelbinder(3) 838,576(4)(5)(6) 11.7% 8.7%
Glenn W. Cockburn 280,778(4) 3.9% 2.9%
Henry R. Hillenmeyer 7,000(6)(7) * *
David L. Hobson 61,874(6) * *
David T. Kollat 109,325(6) 1.5% 1.1%
Robin V. Holderman 17,318(6) * *
Joseph E. Madigan 23,289(8) * *
Margaret T. Monaco 3,000 * *
Phillip L. Pritchard 131,910(4) 1.8% 1.4%
All directors and executive
officers as a group
(11 persons) 1,485,996(4)(6)(8) 20.8% 15.4%
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated, the beneficial owner has sole voting and
dispositive power over these shares subject to the spousal rights, if any,
of the spouses of those beneficial owners who have spouses.
(2) Includes Common Shares subject to stock options outstanding and exercisable
as of March 31, 1996: for Mr. Seelbinder, 95,013 Common Shares; for Mr.
Cockburn, 75,934 Common Shares; for Mr. Hobson, 19,442 Common Shares; for
Mr. Holderman, 15,236 Common Shares; for Mr. Kollat, 35,693 Common Shares;
for Mr. Madigan, 20,625 Common Shares; for Mr. Pritchard, 37,500 Common
Shares; and for all directors and executive officers as a group, 301,061
Common Shares.
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<PAGE> 24
(3) G. Arthur Seelbinder's address is c/o the Company, 5500 Village Boulevard,
West Palm Beach, Florida 33407.
(4) Includes Common Shares beneficially owned through the ESOP: for Mr.
Cockburn, 4,843 Common Shares; for Mr. Seelbinder, 5,441 Common Shares; for
Mr. Pritchard, six Common Shares; and for all directors and executive
officers as a group, 12,505 Common Shares.
(5) Mr. Seelbinder has pledged 570,000 of his Common Shares to a commercial bank
as collateral for loans made to him. See "Risk Factors -- Note Guaranty and
Pledge of Common Shares" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
(6) The ESOP holds approximately 312,707 Common Shares, constituting
approximately 4.4% of the outstanding Common Shares as of March 31, 1996.
Margaret A. Epperson, Secretary and Treasurer of the Company, is the trustee
of the ESOP. Under certain circumstances, Ms. Epperson has investment power
over Common Shares held by the ESOP and may, to such extent, be deemed the
beneficial owner of such shares. Messrs. Kollat, Hobson, Hillenmeyer and
Holderman, as members of the Compensation Committee, have shared voting and,
in certain circumstances, investment power over unallocated Common Shares
held by the ESOP and may, to such extent, be deemed the beneficial owners of
such shares. Messrs. Kollat, Hobson, Hillenmeyer and Holderman disclaim
beneficial ownership of all Common Shares held by the ESOP.
(7) Includes 3,000 Common Shares owned of record by his spouse and children, as
to which beneficial ownership is disclaimed.
(8) Includes 1,332 Common Shares as to which Mr. Madigan shares voting and
investment power.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 30,000,000 Common
Shares, without par value, 300,000 Class A Junior Participating Preferred
Shares, without par value ("Class A Preferred Shares"), none of which is
outstanding, and 4,700,000 Class B Preferred Shares, without par value ("Class B
Preferred Shares"), none of which is outstanding. The following brief
description of the Company's capital stock is qualified in its entirety by
reference to its Amended and Restated Articles of Incorporation (the
"Articles"), Amended and Restated Code of Regulations (the "Regulations") and
the Rights Agreement, each of which are exhibits to the Registration Statement
of which this Prospectus forms a part. See "Available Information."
COMMON SHARES
The issued and outstanding Common Shares are, and the Common Shares
issuable in this offering will be, upon receipt of payment therefor and delivery
thereof, duly authorized, validly issued, fully paid and nonassessable. Holders
of Common Shares are entitled to one vote per share on all matters that properly
come before the shareholders, including the election of directors. The Common
Shares do not have cumulative voting rights and, therefore, a simple majority of
the Common Shares present and voting at a meeting of shareholders will be able
to elect all of the directors to be elected at such meeting. Holders of Common
Shares are entitled to receive dividends when, as and if declared by the Board
of Directors of the Company out of funds legally available therefor. Under the
Company's Credit Agreement, dividends may be declared only 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. See "Dividend Policy."
In the event of the liquidation, dissolution or winding up of the affairs of the
Company, holders of Common Shares are entitled to receive ratably the net assets
of the Company available for distribution after the Company's creditors are
paid. Holders of Common Shares have no preemptive, redemption or conversion
rights.
SHAREHOLDER RIGHTS PLAN
Adoption of the Shareholder Rights Plan. On January 16, 1990, the Board of
Directors adopted a shareholder rights plan for the Company. The purpose of the
shareholder rights plan is to protect the interests of the Company's
shareholders if the Company is confronted with coercive or unfair takeover
tactics by encouraging third parties interested in acquiring the Company to
negotiate with the Board of Directors.
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<PAGE> 25
The shareholder rights plan is a plan by which the Company has distributed
rights ("Rights") to purchase (at the rate of 1.5 Rights per Common Share) one
hundredth of a Class A Preferred Share at an exercise price of $15 per Right.
The Rights are attached to Common Shares and are not exercisable until after 20%
of the Common Shares has been acquired. At this point, they would be separately
traded and exercisable. Upon certain events, including a third party obtaining
20% or more of the Common Shares, the Rights would "flip-in" (but not the Rights
of such substantial shareholder) and become Rights to acquire, upon payment of
the exercise price, Common Shares (or, in certain circumstances, other
consideration) with a value of twice the exercise price of the Right. If a third
party were to take certain action to acquire the Company, such as a merger, the
Rights would "flip-over" and entitle the holder to acquire shares of the
acquiring person with a value of twice the exercise price. The Rights are
redeemable by the Company at any time before they become exercisable for $.01
per Right and expire on January 16, 2000. The number of Rights per Common Share
originally was one, but such number was adjusted to reflect the impact of the
April 29, 1991 three-for-one share combination and the April 13, 1992
two-for-one share split, and the number of Rights per Common Share will be
adjusted in the future to reflect future splits and combinations of, and Common
Share dividends on, the Common Shares. The exercise price of the Rights will be
adjusted to reflect changes in the Class A Preferred Shares.
Class A Preferred Shares. The Class A Preferred Shares purchasable upon
exercise of the Rights will be redeemable at a price equal to the product of
66 2/3 multiplied by the current per share market price of the Common Shares at
the time of redemption, together with any accrued but unpaid dividends. Each
Class A Preferred Share will have a minimum preferential quarterly dividend of
$0.05 per share and will be entitled to an aggregate dividend of 66 2/3 times
the dividend declared on the Common Shares. In the event of liquidation, the
holders of the Class A Preferred Shares will receive a preferred liquidation
payment equal to $0.10 per share and, after the Common Shares have received a
proportionate distribution, will share in the remaining assets on a
proportionate basis with the Common Shares. If dividends on Class A Preferred
Shares are in arrears in an amount equal to six quarterly dividend payments, all
holders of Preferred Shares of the Company (including holders of Class A
Preferred Shares) with dividends in arrears equal to such amount, voting as a
class, will have the right to elect two directors of the Company. Shares of
issued and outstanding Class A Preferred Shares will rank senior to the
Company's Common Shares but junior to any other outstanding class of Preferred
Shares of the Company as to both the payment of dividends and the distribution
of assets. Each Class A Preferred Share will have 66 2/3 votes on all matters
submitted to the shareholders. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Class A Preferred
Share will be entitled to receive 66 2/3 times the amount received per Common
Share. It was the intention of the Company that each Class A Preferred Share
approximate 100 Common Shares as they existed on March 5, 1990, the date the
Rights were first distributed; therefore, the redemption price, dividend,
liquidation price and voting rights have been, and will in the future be,
adjusted to reflect splits and combinations of, and Common Share dividends on,
the Common Shares.
Anti-Takeover Effects. The Company's shareholder rights plan is designed
to deter coercive takeover tactics and otherwise to encourage persons interested
in acquiring the Company to negotiate with the Board of Directors. The
shareholder rights plan will confront a potential acquirer of the Company with
the possibility that the Company's shareholders will be able to substantially
dilute the acquirer's equity interest by exercising Rights to buy additional
shares in the Company or, in certain cases, shares in the acquirer, at a
substantial discount. The Board of Directors may redeem the Rights at a nominal
consideration if it considers the proposed acquisition of the Company to be in
the best interests of the Company and its shareholders. Accordingly, the
shareholder rights plan should not interfere with any merger or other business
combination which has been approved by the Board of Directors. Any plan or
arrangement which effectively requires an acquiring company to negotiate with
the Company's management may be characterized as increasing such management's
ability to maintain its position with the Company, including the approval of a
transaction which provides less value to the shareholders while providing
benefits to management.
CLASS B PREFERRED SHARES
The Board of Directors has the authority, without shareholder approval, to
issue Class B Preferred Shares having voting or conversion rights which could
adversely affect the voting power of holders of Common Shares. The issuance of a
series or class of Class B Preferred Shares could be used to hinder or delay a
takeover bid for the Company which might have the effect of inhibiting such bids
and decreasing the chance
24
<PAGE> 26
of the shareholders realizing a premium over market price for their Common
Shares as a result of such a takeover bid. The Company does not have any current
plan, arrangement or understanding to issue any of the Class B Preferred Shares.
CERTAIN CHARTER PROVISIONS
Certain provisions of the Articles and the Regulations may have the effect
of deterring companies or other persons from making takeover bids for control of
the Company or may be used to hinder or delay a takeover bid thereby decreasing
the chance of the shareholders of realizing a premium over market price for
their Common Shares as a result of such bids. The relevant provisions of the
Articles are (a) a provision that requires the approval of holders of 75% of the
Company's voting shares and holders of a majority of the voting shares held by
disinterested persons for certain business combinations involving shareholders
who beneficially own more than 20% of the Company's outstanding shares and (b) a
provision authorizing the Company to purchase its capital shares by action of
the Board of Directors. The relevant provisions of the Regulations are (i) a
provision that divides the Board of Directors into three classes with staggered
three year terms, (ii) a provision that restricts the right of shareholders to
nominate directors from the floor at the annual meeting, (iii) a provision that
requires a vote of holders of 75% of the voting shares to remove a director,
(iv) a provision that requires the approval of an amendment to the Code of
Regulations by holders of 75% of the voting shares if it is not approved by at
least three-fourths of the directors, (v) a provision that restricts the right
of shareholders to call a special meeting of shareholders unless holders of 50%
of the voting shares join in the request for a call, and (vi) a provision that
requires a vote of holders of 75% of the voting shares to change the number of
directors although such number may be changed within the range of 3 to 15
without shareholder approval.
CERTAIN LAWS
The Company is subject to the Ohio Control Share Acquisition Law, which
requires that, subject to certain exemptions, any acquisition of shares having
one-fifth to one-third, one-third to one-half or a majority or more of the
Company's voting power be made only with the prior authorization of the holders
of a majority of the voting shares present at the meeting held to obtain such
authorization and a majority of the holders of shares who are disinterested. The
Company is also subject to Chapter 1704 of the Ohio Revised Code. Under Chapter
1704, the Company may not engage in a Chapter 1704 transaction (a term that
broadly includes mergers, asset and stock sales and other financing
transactions) with an interested shareholder (a person or entity that controls
10% or more of the Company's voting power) for three years after such
shareholder became an interested shareholder unless the directors of the Company
approve the transaction or the purchase of shares by the interested shareholder
in advance. Chapter 1704 transactions between an interested shareholder that has
held such shares for three years and the Company that were not approved by the
directors in advance are subject to additional shareholder approval requirements
or fairness criteria. The provisions of Chapter 1704 may deter or prevent
takeover bids that have not been approved in advance by the directors and may
decrease the chances of shareholders realizing a premium over market price for
their Common Shares as the result of such a takeover bid.
TRANSFER AGENT AND RIGHTS AGENT
First Union National Bank of North Carolina, Two First Union Center, 12th
Floor, Charlotte, North Carolina 28288-1154 is the transfer agent for the Common
Shares and the rights agent for the shareholder rights plan.
25
<PAGE> 27
UNDERWRITING
Montgomery Securities and Equitable Securities Corporation (the
"Underwriters") have severally agreed subject to the terms and conditions
contained in the underwriting agreement (the "Underwriting Agreement") by and
among the Company and the Underwriters to purchase from the Company the number
of Common Shares indicated below opposite their respective names at the public
offering price less the underwriting discount set forth on the cover page of
this Prospectus. The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters are committed to purchase all of the Common Shares if they purchase
any.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER COMMON SHARES
---------------------------------------------------------------- -------------
<S> <C>
Montgomery Securities...........................................
Equitable Securities Corporation................................
-------------
Total................................................. 2,500,000
=============
</TABLE>
The Company has been advised that the Underwriters propose initially to
offer the Common Shares to the public on the terms set forth on the cover page
of this Prospectus. The Underwriters may allow to selected dealers a concession
of not more than $ per share; and the Underwriters may allow, and such
dealers may reallow, a concession of not more than $ per share to certain
other dealers. After the offering, the public offering price and other selling
terms may be changed by the Underwriters. The Common Shares are offered subject
to receipt and acceptance by the Underwriters and to certain other conditions,
including the right to reject orders in whole or in part.
The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 375,000 additional Common Shares to cover over-allotments, if any, at the
same price per share as the initial shares to be purchased by the Underwriters.
To the extent that the Underwriters exercise this option, the Underwriters will
be committed subject to certain conditions to purchase such additional shares in
approximately the same proportion as set forth in the above table. The
Underwriters may purchase such shares only to cover over-allotments made in
connection with this offering.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act of 1933, as amended, or will contribute to payments the
Underwriters may be required to make in respect thereof.
The Company's directors and executive officers have all agreed that for a
period of 120 days from the date of this Prospectus they will not offer, sell or
otherwise dispose of any of their Common Shares or options to acquire Common
Shares without the prior written consent of Montgomery Securities, subject to
certain limited exceptions. The Company has agreed not to sell any Common Shares
for a period of 120 days from the date of this Prospectus without the prior
written consent of Montgomery Securities, except that the Company may issue
without consent Common Shares upon the exercise of outstanding stock options or
the conversion of outstanding Convertible Debentures.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus: (1) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 as amended by Amendment
Number 1 thereto on Form 10-K/A(Commission File Number 1-13044); (2) the
Company's current report on Form 8-K filed with the Commission on January 12,
1996; (3) the description of the Common Shares contained in the Company's
registration statement on Form 8-A (Commission File Number 1-13044) and the
description of the Rights contained in the Company's registration statement on
Form 8-A (Commission File Number 1-13044); and (4) all documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Shares
described herein.
26
<PAGE> 28
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated herein (not including
exhibits to information unless such exhibits are specifically incorporated by
reference into the information incorporated herein). Requests should be directed
to Cooker Restaurant Corporation, 5500 Village Boulevard, West Palm Beach, FL
33407; Attention: Margaret A. Epperson, Secretary; telephone (407) 615-6000.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Copies of such reports, proxy statements and other information can be inspected
and copied at prescribed rates at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following Regional Offices of the Commission: 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300,
New York New York 10048. Copies of such material may be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Company's Common Shares are listed on The New
York Stock Exchange. Reports, proxy statements and other information concerning
the Company may be inspected at the offices of The New York Stock Exchange, 20
Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended,
with respect to the Common Shares offered hereby. This Prospectus, which is a
part of such Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain parts of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit or incorporated by reference to the
Registration Statement of which this Prospectus forms a part. Each such
statement is qualified in all respects by such reference. For further
information with respect to the Company and the Common Shares offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
thereto. Copies of the Registration Statement and the exhibits and schedules
thereto can be inspected, and copied at prescribed rates, at the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.
LEGAL MATTERS
The validity of the securities offered hereunder will be passed upon for
the Company by Schwartz, Warren & Ramirez a Limited Liability Company, Columbus,
Ohio and for the Underwriters by Locke Purnell Rain Harrell (A Professional
Corporation), Dallas, Texas.
EXPERTS
The financial statements as of December 31, 1995 and January 1, 1995 and
for each of the three fiscal years in the period ended December 31, 1995
included in this Prospectus have been so included in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
27
<PAGE> 29
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Report of Independent Accountants................................................. F-2
Balance Sheet at January 1, 1995 and December 31, 1995............................ F-3
Statement of Income for the Fiscal Years ended January 2, 1994, January 1, 1995
and December 31, 1995........................................................... F-4
Statement of Changes in Shareholders' Equity for the Fiscal Years ended January 2,
1994, January 1, 1995 and December 31, 1995..................................... F-5
Statement of Cash Flows for the Fiscal Years ended January 2, 1994, January 1,
1995 and December 31, 1995...................................................... F-6
Notes to Financial Statements..................................................... F-7
Balance Sheet at December 31, 1995 and March 31, 1996 (unaudited)................. F-17
Statement of Income for the Three Month Period ended April 2, 1995 and March 31,
1996 (unaudited)................................................................ F-18
Statement of Cash Flows for the Three Month Period ended April 2, 1995 and March
31, 1996 (unaudited)............................................................ F-19
</TABLE>
F-1
<PAGE> 30
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 December 31, 1995, and the results of its
operations and its cash flows for each of the three fiscal years in the period
ended December 31, 1995, 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.
Price Waterhouse LLP
Columbus, Ohio
January 29, 1996
F-2
<PAGE> 31
COOKER RESTAURANT CORPORATION
BALANCE SHEET
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-----------------------------
JANUARY 1, DECEMBER 31,
ASSETS 1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................... $ 2,087 $ 1,299
Inventory................................................... 830 914
Preoperational costs........................................ 678 302
Prepaid expenses and other current assets................... 739 511
------------ ------------
Total current assets................................ 4,334 3,026
Property and equipment........................................ 64,481 78,127
Other assets.................................................. 2,037 2,028
------------ ------------
$ 70,852 $ 83,181
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................ $ 2,604 $ 2,421
Accrued liabilities......................................... 4,433 5,543
Income taxes payable........................................ 633 783
Deferred income taxes....................................... 79 79
------------ ------------
Total current liabilities........................... 7,749 8,826
Long-term debt................................................ 28,600 35,976
Deferred income taxes......................................... 595 433
------------ ------------
Total liabilities................................... 36,944 45,235
------------ ------------
Shareholders' equity:
Common shares -- without par value; authorized,
30,000,000 shares; issued 7,651,000 and 7,663,000 shares
at January 1, 1995 and December 31, 1995, respectively... 26,003 26,082
Retained earnings........................................... 13,939 18,013
Treasury stock, at cost, 500,000 and 513,000 shares
at January 1, 1995 and December 31, 1995, respectively... (6,034) (6,149)
Commitments (Note 13)
------------ ------------
33,908 37,946
------------ ------------
$ 70,852 $ 83,181
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 32
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Sales.............................................. $ 66,688 $ 84,169 $ 91,678
------------ ------------ ------------
Cost of sales:
Food and beverages............................... 18,780 24,193 26,218
Labor............................................ 23,384 31,389 31,977
Restaurant operating expenses.................... 10,540 13,549 15,065
Restaurant depreciation and amortization......... 4,063 5,030 3,957
------------ ------------ ------------
56,767 74,161 77,217
------------ ------------ ------------
Restaurant operating income........................ 9,921 10,008 14,461
------------ ------------ ------------
Other expenses (income):
General and administrative....................... 3,710 4,532 5,785
Interest expense................................. 1,105 1,787 1,848
Gain on sale of property......................... -- -- (305)
Interest and other income........................ (409) (72) (30)
------------ ------------ ------------
4,406 6,247 7,298
------------ ------------ ------------
Income before income taxes and extraordinary
item............................................. 5,515 3,761 7,163
Provision for income taxes before extraordinary
item............................................. 2,021 1,280 2,731
------------ ------------ ------------
Income before extraordinary item................... 3,494 2,481 4,432
Extraordinary gain, net of income taxes............ -- 484 --
------------ ------------ ------------
Net income......................................... $ 3,494 $ 2,965 $ 4,432
============ ============ ============
Earnings per common share:
Before extraordinary item........................ $ 0.45 $ 0.34 $ 0.60
Extraordinary item............................... -- 0.07 --
------------ ------------ ------------
Total.................................... $ 0.45 $ 0.41 $ 0.60
============ ============ ============
Weighted average number of common shares and common
equivalent shares outstanding.................... 7,846 7,254 7,387
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 33
COOKER RESTAURANT CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON SHARES TREASURY STOCK
----------------- RETAINED -----------------
SHARES AMOUNTS EARNINGS SHARES AMOUNTS TOTAL
------ ------- -------- ------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance, January 3, 1993.......... 7,591 $25,393 $ 8,226 -- $ -- $33,619
Purchase of treasury stock...... -- -- -- 105 (1,347) (1,347)
Issuance of common shares under
stock option plans........... 55 338 -- -- -- 338
Tax benefits of stock options
exercised.................... -- 244 -- -- -- 244
Dividends paid $.05 per share... -- -- (380) -- -- (380)
Net income...................... -- -- 3,494 -- -- 3,494
------ ------- -------- ------ ------- -------
Balance, January 2, 1994.......... 7,646 25,975 11,340 105 (1,347) 35,968
Purchase of treasury stock...... -- -- -- 395 (4,687) (4,687)
Issuance of common shares under
stock option plans........... 5 22 -- -- -- 22
Tax benefits of stock options
exercised.................... -- 6 -- -- -- 6
Dividends paid $.05 per share... -- -- (366) -- -- (366)
Net income...................... -- -- 2,965 -- -- 2,965
------ ------- -------- ------ ------- -------
Balance, January 1, 1995.......... 7,651 26,003 13,939 500 (6,034) 33,908
Addition to treasury stock...... -- -- -- 13 (115) (115)
Issuance of common shares under
stock option plans........... 12 52 -- -- -- 52
Tax benefits of stock options
exercised.................... -- 27 -- -- -- 27
Dividends paid $.05 per share... -- -- (358) -- -- (358)
Net income...................... -- -- 4,432 -- -- 4,432
------ ------- -------- ------ ------- -------
Balance, December 31, 1995........ 7,663 $26,082 $18,013 513 $(6,149) $37,946
====== ======== ======== ====== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 34
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income....................................... $ 3,494 $ 2,965 $ 4,432
Adjustments to reconcile net income to net cash
providing by operating activities:
Depreciation and amortization................. 4,482 5,464 4,375
Gain on sale of property...................... -- -- (305)
Gain on repurchase of debentures, net of
income taxes................................ -- (484) (23)
(Increase) in inventory....................... (207) (192) (84)
(Increase) in preoperational costs............ (2,441) (1,348) (444)
Decrease (increase) in prepaid expenses and
other current assets........................ (756) (327) 237
(Increase) decrease in other assets........... 130 (131) (276)
Increase in accounts payable.................. (336) 683 460
Increase in accrued liabilities............... 985 475 1,110
Increase in income taxes payable.............. 752 625 175
Decrease (increase) in deferred income
taxes....................................... 100 (159) (162)
------------ ------------ ------------
Net cash provided by operating activities..... 6,203 7,571 9,495
------------ ------------ ------------
Cash flows from investing activities:
Purchases of property and equipment.............. (23,627) (11,318) (17,200)
Proceeds from sales of property and equipment.... 108 206 459
Proceeds from sales of short-term investments.... 18,628 749 --
Advances to related party........................ (375) -- --
Payments from related party...................... 375 -- --
------------ ------------ ------------
Net cash used in investing activities......... (4,891) (10,363) (16,741)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from borrowings......................... -- 9,300 8,811
Repurchase of debentures......................... -- (1,200) (1,180)
Redemption of debentures......................... -- (975) (893)
Exercise of stock options........................ 337 22 78
Purchases of treasury stock...................... -- (6,034) --
Dividends paid................................... (379) (366) (358)
------------ ------------ ------------
Net cash provided by (used in) financing
activities.................................. (42) 747 6,458
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents...................................... 1,270 (2,045) (788)
Cash and cash equivalents at beginning of year..... 2,862 4,132 2,087
------------ ------------ ------------
Cash and cash equivalents at end of year........... $ 4,132 $ 2,087 $ 1,299
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 35
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cooker Restaurant Corporation (the Company) owns and operates 37
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 1993, 1994 and 1995 consisted of 52
weeks.
Cash and cash equivalents. Cash and cash equivalents consist of cash on
hand and in banks and credit card receivables. Credit card receivables are
considered cash equivalents because of their short collection period. The
carrying amount of credit card receivables approximates fair value.
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 $611,000 or $0.08 per share. Accumulated
amortization of preoperational costs was $711,000 and $136,000 at January 1,
1995 and December 31, 1995, 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 primarily in connection with the construction of
new restaurants. Capitalized interest is amortized over the asset's estimated
useful life. Interest costs of $429,000, $291,000 and $291,000 were capitalized
in fiscal 1993, 1994 and 1995, 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.
Financial instruments. The carrying amounts of financial instruments,
including cash and cash equivalents, accounts payable and other current
liabilities approximate their estimated fair values. The carrying amount of
borrowings under the Amended and Restated Loan Agreement (see Note 5)
approximates fair value at December 31, 1995. The fair value of the convertible
subordinated debentures is determined using discounted future cash flows based
on similar types of borrowing arrangements. At December 31, 1995, the carrying
amount and fair value of the convertible subordinated debentures are $17,870,000
and $15,569,000, respectively.
Income taxes. Income taxes are accounted for under the liability method in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes.
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.
F-7
<PAGE> 36
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
Use of estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Reclassifications. Certain fiscal 1993 and 1994 amounts have been
reclassified to conform with fiscal 1995 presentations.
2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Land......................................... $ 17,512 $ 19,595
Buildings and leasehold improvements......... 39,135 43,097
Furniture, fixtures and equipment............ 15,961 16,836
Construction in progress..................... 858 11,013
Land held for sale........................... 1,089 882
------------ ------------
74,555 91,423
Less accumulated depreciation and
amortization............................... (10,074) (13,296)
------------ ------------
$ 64,481 $ 78,127
=============== ==========
</TABLE>
3. OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Deferred financing costs, net of accumulated
amortization of $465,000 and $573,000...... $ 753 $ 764
Prepaid lease, net of accumulated
amortization of $33,000 and $46,000........ 617 643
Advances to Employee Stock Ownership Plan.... 298 270
Liquor licenses, net of accumulated
amortization of $73,000 and $90,000........ 224 209
Other........................................ 145 142
------------ ------------
$ 2,037 $ 2,028
=============== ==========
</TABLE>
F-8
<PAGE> 37
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
4. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Salaries and wages........................... $ 2,274 $ 3,221
Gift certificates payable.................... 567 608
Sales tax payable............................ 442 466
Property taxes............................... 485 298
Other........................................ 665 950
------------ ------------
$ 4,433 $ 5,543
=============== ==========
</TABLE>
5. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Convertible subordinated debentures.......... $ 19,300 $ 17,870
Revolving line of credit..................... 9,300 18,106
------------ ------------
$ 28,600 $ 35,976
=============== ==========
</TABLE>
The convertible subordinated debentures (the "Debentures") mature October
1, 2002. The Debentures bear interest at 6.75% which is payable quarterly on the
first day of each January, April, July and October. 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 of the Company as defined in the indenture relating
to the Debentures.
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 (excluding the redemption
option on the death of the holder) of $1,150,000. During fiscal years 1994 and
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. During
fiscal years 1994 and 1995, the Company redeemed debentures subject to this
provision of $50,000 and $30,000, respectively.
The Debentures are 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 $734,000
($484,000 after taxes) in connection with the repurchase of debentures in the
principal amount of $2,500,000. In December 1995, the Company repurchased
debentures in the principal amount of $250,000 resulting in a gain of $23,000.
These transactions were financed through funds available under the revolving
line of credit.
On December 22, 1995, the Company entered into a Revolving/Term Loan under
an Amended and Restated Loan Agreement (the Agreement) with a bank for
borrowings up to $33,000,000. Borrowings under
F-9
<PAGE> 38
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
the Agreement may be used for general working capital purposes and costs
incurred in expansion of the restaurant business. The Agreement is secured by
certain properties owned by the Company. Beginning January 1, 1998, borrowing
availability will be reduced quarterly by a maximum of $1,650,000. Borrowings
are due December 31, 1998.
Interest, payable quarterly, is at the Company's option at LIBOR plus 1.25%
up to LIBOR plus 2.00% or prime up to prime plus 0.50%, based on a financial
ratio as defined in the Agreement. Interest on borrowings at December 31, 1995
ranged from 7.43% to 8.75%.
The Agreement contains certain restrictive covenants, including maintenance
of a minimum tangible net worth and fixed charge coverage ratio and limitations
on indebtedness, stock acquisitions, encumbrances and new restaurant expansion.
In addition, provided that net income of the prior year exceeds $2,000,000,
dividends can be declared but cannot exceed 15% of the prior year's net income.
6. SHAREHOLDERS' EQUITY
The Company has authorized 5,000,000 shares of Class A participating
preferred stock, none of which have 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 December 31, 1995, approximately
10,725,000 rights were outstanding.
7. INCOME TAXES
The provision for income taxes for the following fiscal years then ended
consists of:
<TABLE>
<CAPTION>
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current taxes:
Federal................................ $ 1,453 $ 1,037 $ 2,412
State and local........................ 468 402 481
---------- ---------- ----------
1,921 1,439 2,893
Deferred taxes........................... 100 (159) (162)
---------- ---------- ----------
Provision for income taxes before
extraordinary item..................... 2,021 1,280 2,731
Provision for income taxes on
extraordinary item..................... -- 249 --
---------- ---------- ----------
Provision for income taxes............... $ 2,021 $ 1,529 $ 2,731
========== ========== ==========
</TABLE>
F-10
<PAGE> 39
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
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:
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
--------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Income tax expense on income before
extraordinary item based on the Federal
statutory rate......................... $ 1,875 $ 1,279 $ 2,435
State taxes, net of Federal tax
benefit................................ 258 265 317
Reserve for tax examination.............. -- -- 205
FICA tip tax credit...................... -- (250) (376)
Tax-exempt income and other.............. (112) (14) 150
---------- ---------- ----------
$ 2,021 $ 1,280 $ 2,731
========== ========== ==========
</TABLE>
Deferred income taxes are recorded based upon the difference between the
book and tax bases of assets and liabilities, primarily property and equipment,
preoperational costs and accrued liabilities. Deferred tax assets at January 1,
1995 and December 31, 1995 were $137,000 and $373,000, respectively. Deferred
tax liabilities at January 1, 1995 and December 31, 1995 were $811,000 and
$885,000, respectively.
8. 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% 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. Contributions of $73,000 were made to the ESOP during fiscal
1995. No contributions were made during fiscal 1994 and 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 1995 will be reallocated to
remaining participants as of the end of the plan year, as was done for shares
forfeited due to participant withdrawals from the ESOP during fiscal 1994.
As of January 1, 1995, and December 31, 1995, the ESOP owns 363,000 and
335,000, respectively, of the Company's common shares, all of which are
allocated to eligible participants.
9. 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 73,000 and 200,000 for issuance to nonmanagement
directors under the 1988 Plan and 1992 Plan, respectively.
F-11
<PAGE> 40
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
Changes in the number of shares under the stock option plans are summarized
as follows:
<TABLE>
<CAPTION>
OPTIONS PRICE
-------- -------------
<S> <C> <C>
Balance at January 3, 1993.......................... 536,000 $ 4.03-$17.75
Granted........................................ 282,000 17.75- 21.75
Canceled....................................... (1,000) 4.03- 4.41
Exercised...................................... (55,000) 4.03- 11.19
-------- -------------
Balance at January 2, 1994.......................... 762,000 4.03- 21.75
Granted........................................ 772,000 6.63- 12.88
Canceled....................................... (634,000) 4.03- 21.75
Exercised...................................... (6,000) 4.03- 4.41
-------- -------------
Balance at January 1, 1995.......................... 894,000 4.03- 21.75
Granted........................................ 65,000 6.75- 11.00
Canceled....................................... (17,000) 6.75- 11.19
Exercised...................................... (11,000) 4.03- 7.63
-------- -------------
Balance at December 31, 1995........................ 931,000 $ 4.03-$21.75
======== ============
</TABLE>
At December 31, 1995, options were exercisable to purchase 417,000 common
shares.
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 398,000 options under the 1988 and 1992 Plans. The
remaining 143,000 canceled options were made available for subsequent
reissuance.
10. LEASES
The Company leases buildings for certain of its restaurants under long-term
operating leases which expire over the next twenty-five 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
totaled $1,394,000, $1,637,000 and $1,378,000, including percentage rent of
$245,000, $247,000 and $262,000 for the fiscal years ended January 2, 1994,
January 1, 1995 and December 31, 1995, respectively.
Minimum rental commitments for noncancelable leases as of December 31, 1995
are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING AMOUNT
- ----------------------------------- --------------
(IN THOUSANDS)
<S> <C>
1996.......................... $ 1,494
1997.......................... 1,498
1998.......................... 1,519
1999.......................... 1,545
2000.......................... 1,462
Thereafter.................... 14,761
-----------
$ 22,279
===========
</TABLE>
11. SUPPLEMENTAL CASH FLOW INFORMATION
During 1995, the Company received $115,000 of its common stock from the
ESOP for partial repayment of the advances to the ESOP. The common stock
received was recorded as treasury stock.
F-12
<PAGE> 41
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
During fiscal 1993, the Company acquired treasury stock of $1,347,000 which
was included in accounts payable at January 2, 1994 and was paid in fiscal 1994.
Also, as described in Note 5, $643,000 related to the repurchase of Debentures
was included in accounts payable at January 1, 1995 and was paid during 1995.
Cash paid for interest for fiscal 1993, 1994 and 1995 was $1,007,000,
$2,175,000 and $1,489,000, respectively.
Cash paid for taxes for fiscal 1993, 1994 and 1995 was $1,169,000, $895,000
and $2,581,000, respectively.
12. RELATED PARTIES
During October 1993, the Company advanced $375,000 to the Chairman of the
Board of Directors (the Chairman). This advance bore interest at 7%. Principal
and interest were repaid in December 1993 and March 1994, respectively.
Effective March 9, 1994, the Board of Directors (the Board) authorized the
Company to execute a Guaranty and Suretyship Agreement whereby the Company
guaranteed $5,000,000 of personal indebtedness of the Chairman. This
indebtedness is secured by a pledge of 570,000 common shares owned by the
Chairman. 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. A fee of .25% per annum is charged on the amount of the guarantee. On
June 27, 1995, the Board requested the Chairman to refinance his personal
indebtedness with another bank. On December 27, 1995, the Board authorized the
Company to reimburse the Chairman $42,000 for refinancing costs incurred in
executing the request. The Company does not consider it necessary to provide for
a potential loss related to the guarantee in the financial statements at this
time.
13. SUBSEQUENT EVENT
In January 1996, the Company borrowed an additional $7,050,000 on its
revolving line of credit to finance the purchase of land and buildings for which
commitments existed at December 31, 1995.
F-13
<PAGE> 42
COOKER RESTAURANT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
14. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for fiscal 1994 and 1995 are summarized as
follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1994 QUARTER QUARTER QUARTER QUARTER
---------------------------------------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
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 tax)......... -- -- -- 484
Net income.............................. 652 554 549 1,210
Earnings per common share before
extraordinary item.................... $0.09 $0.08 $0.07 $0.10
Earnings per common share from
extraordinary gain.................... -- -- -- $0.07
Earnings per common share............... $0.09 $0.08 $0.07 $0.17
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1995 QUARTER QUARTER QUARTER QUARTER
---------------------------------------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales................................... $22,899 $22,694 $22,758 $23,327
Restaurant operating income(a).......... 3,556 3,547 3,615 3,743
Income before income taxes.............. 1,806 1,723 1,733 1,901
Net income.............................. 1,005 1,102 1,109 1,216
Earnings per common share............... $0.14 $0.15 $0.15 $0.16
- ---------------
<FN>
(a) Sales less food and beverages, labor, restaurant operating expenses and
depreciation and amortization.
</TABLE>
F-14
<PAGE> 43
COOKER RESTAURANT CORPORATION
UNAUDITED FINANCIAL STATEMENTS
THREE MONTH PERIOD ENDED
MARCH 31, 1996
F-15
<PAGE> 44
[THIS PAGE INTENTIONALLY LEFT BLANK]
F-16
<PAGE> 45
COOKER RESTAURANT CORPORATION
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
ASSETS 1995 1996
------------ ---------
(IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................... $ 1,299 $ 1,071
Inventory.......................................................... 914 918
Preoperational costs............................................... 302 271
Prepaid expenses and other current assets.......................... 511 610
------------ ---------
Total current assets....................................... 3,026 2,870
Property and equipment............................................... 78,127 87,884
Other assets......................................................... 2,028 1,742
------------ ---------
$ 83,181 $92,496
========== =======
LIABILITIES
Current liabilities:
Accounts payable................................................... $ 2,421 $ 1,812
Accrued liabilities................................................ 5,543 5,848
Income taxes payable............................................... 783 1,287
Deferred income taxes.............................................. 79 79
------------ ---------
Total current liabilities.................................. 8,826 9,026
Long-term debt....................................................... 35,976 44,174
Deferred income taxes................................................ 433 433
------------ ---------
Total liabilities.......................................... 45,235 53,633
------------ ---------
Shareholders' equity:
Common shares -- without par value; authorized, 30,000,000 shares;
issued 7,663,000 and 7,664,000 at December 31, 1995 and March
31, 1996, respectively.......................................... 26,082 26,068
Retained earnings.................................................. 18,013 18,944
Treasury stock at cost, 513,000 and 513,000 shares at December 31,
1995 and March 31, 1996, respectively........................... (6,149) (6,149)
------------ ---------
37,946 38,863
------------ ---------
$ 83,181 $92,496
========== =======
</TABLE>
F-17
<PAGE> 46
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
---------------------
APRIL 2, MARCH 31,
1995 1996
------- ---------
<S> <C> <C>
Sales................................................................. $22,899 $25,486
------- ---------
Cost of sales:
Food and beverages................................................. 6,457 7,167
Labor.............................................................. 8,116 8,817
Restaurant operating expenses...................................... 3,677 4,312
Restaurant depreciation and amortization........................... 1,093 1,004
------- ---------
19,343 21,300
------- ---------
Restaurant operating income........................................... 3,556 4,186
------- ---------
Other expenses (income):
General and administrative......................................... 1,261 1,517
Interest expense................................................... 499 544
Gain on sale of property........................................... (2) --
Interest and other income.......................................... (8) --
------- ---------
1,750 2,061
------- ---------
Income before income taxes and extraordinary item..................... 1,806 2,125
Provision for income taxes before extraordinary item.................. 801 765
------- ---------
Income before extraordinary item...................................... 1,005 1,360
Extraordinary gain, net of income taxes............................... -- --
------- ---------
Net income............................................................ $ 1,005 $ 1,360
======= =======
Earnings per common share:
Before extraordinary item.......................................... $ 0.14 $ 0.18
Extraordinary item................................................. -- --
------- ---------
Total......................................................... $ 0.14 $ 0.18
======= =======
Weighted average number of common shares and common equivalent shares
outstanding........................................................ 7,236 7,556
======= =======
</TABLE>
F-18
<PAGE> 47
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
APRIL 2, MARCH 31,
1995 1996
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net Income......................................................... $ 1,005 $ 1,360
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................... 1,211 1,128
(Increase) in current assets.................................... (23) (316)
(Increase) decrease in deposits and other assets................ (48) 33
Increase in current liabilities................................. 637 402
------- --------
Net cash provided by operating activities....................... $ 2,782 $ 2,607
Cash flows from investing activities:
Purchase of property and equipment................................. (1,039) (10,616)
Cash flows from financing activities:
Proceeds from borrowings........................................... (255) 8,648
Repurchase of debentures........................................... (643) (400)
Redemption of debentures........................................... -- (50)
Exercise of stock options.......................................... -- 12
Dividends paid..................................................... (380) (429)
------- --------
Net cash provided by (used in) financing activities............. (1,278) 7,781
Net increase (decrease) in cash and cash equivalents................. 465 (228)
Cash and cash equivalents at beginning of period..................... 2,087 1,299
Cash and cash equivalents at end of period........................... $ 2,552 $ 1,071
======= ========
</TABLE>
F-19
<PAGE> 48
Registrant's six page camera ready menu.
<PAGE> 49
[PHOTO]
KITCHEN PREP
[PHOTO]
RESTAURANT SEATING
[PHOTO]
2 FEMALE SERVERS W/FOOD
<PAGE> 50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering,
other than those made in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any of the Underwriters. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the shares of Common Shares to which it relates, or an offer to, or a
solicitation of, any person in any jurisdiction where such offer or solicitation
would be unlawful. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to the date
hereof.
----------------------------
TABLE OF CONTENTS
----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 5
Use of Proceeds....................... 7
Price Range of Common Shares.......... 7
Dividend Policy....................... 8
Capitalization........................ 8
Selected Financial Data............... 9
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 10
Business.............................. 15
Management............................ 21
Principal Shareholders................ 22
Description of Securities............. 23
Underwriting.......................... 26
Incorporation of Certain Documents by
Reference........................... 26
Available Information................. 27
Legal Matters......................... 27
Experts............................... 27
Index to Financial Statements......... F-1
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2,500,000 SHARES
LOGO
COMMON SHARES
------------------------
PROSPECTUS
------------------------
MONTGOMERY SECURITIES
EQUITABLE SECURITIES
CORPORATION
May , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 51
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses to be borne by the
registrant, other than underwriting discounts and commissions, in connection
with the issuance and distribution of the Common Shares hereunder.
<TABLE>
<CAPTION>
PAYABLE
BY THE
REGISTRANT
---------
<S> <C>
SEC registration fee.................................................... $ 14,000
NASD filing fee......................................................... 4,543
New York Stock Exchange listing fee..................................... 8,750
Accounting fees and expenses............................................ 25,000
Legal fees and expenses................................................. 50,000
Printing costs.......................................................... 70,000
Blue Sky fees and expenses.............................................. 5,000
Miscellaneous........................................................... 122,707
---------
Total.............................................................. $300,000
=========
</TABLE>
The foregoing items, except for the SEC registration fee, the NASD filing
fee and the New York Stock Exchange listing fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13(E) of the Ohio Revised Code ("ORC") provides that directors
and officers of Ohio corporations may, under certain circumstances, be
indemnified against expenses (including attorneys' fees) and other liabilities
actually and reasonably incurred by them as a result of any suit brought against
them in their capacity as a director or officer, if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful.
Section 1701.13(E) of the ORC also provides that directors and officers may
also be indemnified against expenses (including attorneys' fees) incurred by
them in connection with a derivative suit, if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation. This indemnification is not available if such director or
officer is adjudged to have committed an act of negligence or misconduct in the
performance of his duty to the corporation. Section 5.02 of the Company's
Amended and Restated Code of Regulations provides that no director of the
corporation shall be found to have committed an act of negligence or misconduct
unless such director has been adjudged to be liable to the corporation for
damages pursuant to ORC Section 1701.59(D). That section of the law says a
director is liable for damages for actions he takes as a director only if it is
proven by clear and convincing evidence that those actions were undertaken with
deliberate intent to cause injury to the corporation or with reckless disregard
for the best interests of the corporation. This provision applies only to
directors and may not affect a director's liability for violations of the
federal securities laws.
Under Section 1701.13(E) of the ORC, expenses, including attorneys' fees,
incurred by a director in defending a lawsuit, must be paid by the corporation
as they are incurred, before the end of the lawsuit, upon receipt of an
undertaking by the director to repay such amount if it is proved by clear and
convincing evidence that his actions involved deliberate intent to cause injury
to the corporation or were undertaken with reckless disregard for the best
interests of the corporation and to reasonably cooperate with the corporation
concerning the lawsuit.
II-1
<PAGE> 52
Article 5 of the Company's Amended and Restated Code of Regulations has
provisions requiring the Company to indemnify its officers, directors, employees
and agents which are in substantially the same wording as Section 1701.13(E).
The Underwriting Agreement provides for indemnification by the Underwriter
of directors, officers and controlling persons of the Company for certain
liabilities, including certain liabilities under the Act, under certain
circumstances. The Underwriting Agreement provides for indemnification by the
Company of the Underwriter and its directors, officers and controlling persons
of the Underwriter for certain liabilities, including certain liabilities under
the Act, under certain circumstances.
ITEM 16. EXHIBITS.
The following exhibits are part of this Registration Statement:
<TABLE>
<S> <C>
(1) UNDERWRITING AGREEMENT
1.1. Form of Underwriting Agreement.
1.2. Master Agreement Among Underwriters.
1.3. Selected Dealers Agreement.
(4) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS, INCLUDING INDENTURES
4.1. See Articles FOURTH, FIFTH and SIXTH of the 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 No. 0-16806).
4.2. See Articles One, Four, Seven and Eight of the 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).
4.3. 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).
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 Amended and Restated Loan Agreement dated December 22, 1995
between Registrant and First Union National Bank of Tennessee (incorporated by
reference to Exhibit 10.4 of Registrant's annual report on Form 10-K for the fiscal
year ended December 31, 1995; Commission File No. 1-13044).
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).
(5) OPINION REGARDING LEGALITY
5.1. Opinion of Schwartz, Warren & Ramirez a Limited Liability Company as to the legality
of the Common Stock being registered.
(23) CONSENTS
23.1. Consent of Price Waterhouse LLP.
23.2. Consent of Schwartz, Warren & Ramirez a Limited Liability Company is set forth as
part of Exhibit 5.1 above.
</TABLE>
II-2
<PAGE> 53
<TABLE>
<S> <C>
(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.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) If securities are registered pursuant to Rule 415 under the Securities
Act the Registrant will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to;
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; (notwithstanding the foregoing, any
increase or decrease in volume of securities (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.)
(iii) Include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) For the purpose of determining any liability under the Securities
Act of 1933, treat each such post-effective amendment as a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time as the initial bona fide offering thereof; and
(3) Remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to the court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 54
(i) If the Registrant relies on Rule 430A under the Securities Act, it
will:
(1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this registration statement as
of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-4
<PAGE> 55
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbus, State of Ohio, on April 18, 1996.
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)
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed on April 18, 1996, by the following
persons in the capacities stated.
<TABLE>
<CAPTION>
SIGNATURES CAPACITY
- --------------------------------------------- --------------------------------------------
<C> <S>
/s/ G. ARTHUR SEELBINDER Chairman of the Board, Chief Executive
- --------------------------------------------- Officer and Director (principal executive
G. Arthur Seelbinder officer)
/s/ PHILLIP L. PRITCHARD* President, Chief Operating Officer and
- --------------------------------------------- Director
Phillip L. Pritchard
/s/ GLENN W. COCKBURN* Senior Vice President -- Operations and
- --------------------------------------------- Director
Glenn W. Cockburn
/s/ DAVID C. SEVIG* Vice President -- Chief Financial Officer
- --------------------------------------------- (principal financial and accounting officer)
David C. Sevig
/s/ JOSEPH E. MADIGAN* Director
- ---------------------------------------------
Joseph E. Madigan
/s/ ROBIN V. HOLDERMAN* Director
- ---------------------------------------------
Robin V. Holderman
/s/ DAVID T. KOLLAT* Director
- ---------------------------------------------
David T. Kollat
/s/ DAVID L. HOBSON* Director
- ---------------------------------------------
David L. Hobson
/s/ HENRY R. HILLENMEYER* Director
- ---------------------------------------------
Henry R. Hillenmeyer
/s/ MARGARET T. MONACO* Director
- ---------------------------------------------
Margaret T. Monaco
*By /s/ G. ARTHUR SEELBINDER
- ---------------------------------------------
G. Arthur Seelbinder
Attorney-in-Fact
</TABLE>
<PAGE> 56
EXHIBITS.
<TABLE>
<S> <C>
(1) UNDERWRITING AGREEMENT
1.1. Form of Underwriting Agreement.
1.2. Master Agreement Among Underwriters.
1.3. Selected Dealers Agreement.
(4) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS, INCLUDING INDENTURES
4.1. See Articles FOURTH, FIFTH and SIXTH of the 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 No. 0-16806).*
4.2. See Articles One, Four, Seven and Eight of the 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).*
4.3. 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).*
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 Amended and Restated Loan Agreement dated December 22, 1995
between Registrant and First Union National Bank of Tennessee (incorporated by
reference to Exhibit 10.4 of Registrant's annual report on Form 10-K for the fiscal
year ended December 31, 1995; Commission File No. 1-13044).*
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).*
(5) OPINION REGARDING LEGALITY
5.1. Opinion of Schwartz, Warren & Ramirez a Limited Liability Company as to the legality
of the Common Stock being registered.
(23) CONSENTS
23.1. Consent of Price Waterhouse LLP.
23.2. Consent of Schwartz, Warren & Ramirez a Limited Liability Company is set forth as
part of Exhibit 5.1 above.
(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.
</TABLE>
* Incorporated by reference
<PAGE> 1
Exhibit 1.1
2,500,000 SHARES
COOKER RESTAURANT CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
April ____, 1996
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
c/o Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
Dear Sirs:
SECTION 1. INTRODUCTORY. Cooker Restaurant Corporation, an Ohio
corporation (the "Company"), proposes to issue and sell 2,500,000 shares of its
authorized but unissued Common Stock, having no par value per share (the
"Common Stock"), to the underwriters named in Schedule A annexed hereto
("Underwriters"). Said shares are herein referred to as the "Firm Common
Shares." In addition, the Company proposes to grant to the Underwriters an
option to purchase up to 375,000 additional shares of Common Stock (the
"Optional Common Shares"), as provided in Section 4 hereof. The Firm Common
Shares and, to the extent such option is exercised, the Optional Common Shares,
are hereinafter collectively referred to as the "Common Shares."
You have advised the Company that the Underwriters propose to make a
public offering of the Common Shares on the effective date of the registration
statement hereinafter referred to, or as soon thereafter as in their judgment
is advisable.
The Company hereby confirms its agreement with respect to the purchase
of the Common Shares by the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-______) with respect to the Common Shares has been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, and has been filed with the Commission.
The Company has met all of the
<PAGE> 2
eligibility requirements for the use of a registration statement on
Form S-3. There have been delivered to the Underwriters two signed
copies of such registration statement and amendments, together with
two copies of each exhibit filed therewith. Conformed copies of such
registration statement and amendments (but without exhibits) and of
the related preliminary prospectus have been delivered to each of the
Underwriters in such reasonable quantities as each of them has
requested. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement,
a further amendment thereto, including the form of final prospectus,
or (ii) a final prospectus in accordance with Rules 430A and 424(b) of
the Rules and Regulations. As filed, such amendment and form of final
prospectus, or such final prospectus, shall include all Rule 430A
Information and, except to the extent that the Underwriters shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to the Underwriters prior to the date
and time that this Agreement was executed and delivered by the parties
hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as the
Company shall have previously advised the Underwriters would be
included or made therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the First Closing Date
(as hereinafter defined), shall also mean such registration statement
as so amended; provided, however, that such term shall also include
all Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement at the time it becomes
effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the
Common Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, shall mean the form of final prospectus included in the
Registration Statement at the time such registration statement becomes
effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A of the Rules and Regulations. Any reference
herein to the Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment," or
"supplement," with respect to the Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated
by reference therein.
-2-
<PAGE> 3
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements
of the Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
at the time the Registration Statement becomes effective, and at all
times subsequent thereto up to and including each Closing Date
hereinafter mentioned, the Registration Statement and the Prospectus,
and any amendments or supplements thereto, will contain all material
statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects
conform to the requirements of the Act and the Rules and Regulations,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of circumstances under which they were made; provided, however,
no representation or warranty contained in this subsection 2(b) shall
be applicable to information contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter
specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio with requisite corporate power and authority to own, lease and
operate its properties, to conduct the business in which it is engaged
as described in the Prospectus, and to enter into this Agreement. The
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the
ownership or leasing of its property or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the assets or business affairs
of the Company and the Subsidiaries (as hereinafter defined),
considered as one enterprise; and, to the Company's knowledge, no
proceeding has been instituted in any such jurisdiction revoking,
limiting, or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(d) The Company has no subsidiaries, and does not
beneficially own any shares of any other corporation.
(e) The Company has an authorized and outstanding capital
stock as set forth under the headings "Prospectus Summary - The
Offering" and "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and conform to the description
thereof contained in the Prospectus and the documents incorporated by
reference in the Prospectus.
-3-
<PAGE> 4
As of the respective Closing Dates (as hereinafter defined), the
Company will have no outstanding shares of preferred stock. Except as
disclosed in or contemplated by the Prospectus and the financial
statements of the Company and the related notes thereto included in or
incorporated by reference in the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's
outstanding stock options and other stock plans or arrangements and
the options or other rights granted and exercised thereunder set forth
in the Prospectus, or in the documents incorporated by reference in
the Prospectus, accurately and fairly present in all material respects
the information required to be shown with respect to such options,
plans, arrangements, and rights.
(f) The Common Shares to be sold by the Company have been
duly authorized and, when issued, delivered and paid for in the manner
set forth in this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable, and will conform to the description
thereof contained in the Prospectus and the documents incorporated by
reference in the Prospectus, good and marketable title thereto will
pass to the Underwriters free and clear of any liens, security
interests, adverse claims, equities or other encumbrances of any kind
or character, except as may have been created by any Underwriter. No
preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of any of the Common Shares by
the Company pursuant to this Agreement. No stockholder of the Company
has any right that has not been waived in writing to require the
Company to register the sale of any shares owned by such stockholder
under the Act in the public offering contemplated by this Agreement.
(g) The Company has full legal right, corporate power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that (i) the validity
and binding effect and enforcement of this Agreement may be limited by
any applicable bankruptcy, reorganization, moratorium, or similar laws
of general application, (ii) the availability of equitable remedies
may be limited by principles of equity, whether considered in a
proceeding at law or in equity, and (iii) the terms thereof may be
limited by applicable securities laws and the policies embodied
therein. The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions herein
contemplated will not violate any provisions of the Company's Amended
and Restated Articles of Incorporation or Amended and Restated Code of
Regulations and will not result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or
both, a default under any material agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other material
instrument to which the Company is a party or by which the Company or
any of its properties may be bound or affected, or any statute or any
authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its properties.
No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or
-4-
<PAGE> 5
other governmental body is required for the execution and delivery of
this Agreement or the consummation of the transactions contemplated by
this Agreement, except for compliance with the Act, the Blue Sky laws
and Canadian securities laws applicable to the public offering of the
Common Shares by the Underwriters and the issuance of a no objection
letter with respect to such offering by the National Association of
Securities Dealers, Inc. (the "NASD").
(h) Price Waterhouse LLP, who have expressed their opinion
with respect to the Company's financial statements filed with the
Commission as a part of the Registration Statement and included or
incorporated by reference in the Prospectus and in the Registration
Statement, are independent accountants as required by the Act and the
Rules and Regulations.
(i) The consolidated financial statements of the Company and
the related notes thereto included in the Registration Statement and
the Prospectus, present fairly the consolidated financial position of
the Company as of the respective dates of such financial statements,
and the results of operations and changes in financial position of the
Company for the respective periods covered thereby. Such financial
statements and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis, except that all interim financial data shall be subject to
normal year-end adjustments consistent with past practice. The
Financial Statements and related notes thereto for the Company's
fiscal years ended January 2, 1994, January 1, 1995 and December 31,
1995, which are included in the Prospectus, have been certified by
Price Waterhouse LLP, the Company's independent accountants. No other
financial statements or schedules are required to be included in, or
incorporated by reference in, the Registration Statement. The
selected financial data set forth in the Prospectus under the captions
"Summary Financial Data," "Capitalization" and "Selected Financial
Data" fairly present the information set forth therein on the basis
stated in the Prospectus. The financial information and statistical
data set forth in the Prospectus under the captions "Use of Proceeds,"
"Price Range of Common Stock," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business,"
"Management" and "Principal Stockholders" are materially accurate.
(j) The Company is not in violation or default of any
provision of its Certificate of Incorporation; none of the
Subsidiaries is in violation or default of its Amended and Restated
Articles of Incorporation or its Amended and Restated Code of
Regulations. Except as disclosed in the Prospectus and except as to
defaults that individually or in the aggregate would not have a
material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company, the Company is in
breach of or default with respect to any provision of any judgment,
decree or order, or is in breach of or default with respect to any
provision of any material agreement, mortgage, deed of trust, lease,
loan agreement, security agreement, license, indenture, permit or
other instrument to which
-5-
<PAGE> 6
it is a party or by which it or any of its properties are bound; and,
to the Company's knowledge, there does not exist any state of facts
which constitutes an event of default on the part of the Company or
which, with notice or lapse of time or both, would constitute such an
event of default.
(k) There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are in full force and effect on the date
hereof; and the Company is not in breach of or default under any
material provision of any such contract which would have a material
adverse effect on the Company.
(l) Except as disclosed in the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best
knowledge of the Company, threatened to which the Company is or may be
a party or with respect to which material property owned or leased by
the Company is or may be the subject, or related to environmental,
employment of aliens, sexual harassment or discrimination matters,
which actions, suits or proceedings would, individually or in the
aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, business, or results
of operations of the Company, and no labor disturbance by the
employees of the Company exists or, to the knowledge of the Company,
is imminent which would be expected to result in a material adverse
change in the condition (financial or otherwise), properties, business
or results of operations of the Company. The Company is not a party
to, or subject to the provisions of, any material injunction,
judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(m) The Company has good and marketable title to all the
properties and assets reflected as owned by it in the financial
statements included in the Prospectus (or as reflected or described in
the Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such
financial statements (or as described in the Prospectus), or (ii)
those which do not materially and adversely affect the use made and
proposed to be made of such property by the Company. The Company
holds its leased properties under valid and binding leases, with such
exceptions as do not have a material adverse effect on the business of
the Company. Except as disclosed in the Prospectus, the Company owns
or leases all such properties as are necessary to its operations as
now conducted.
(n) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
described in or specifically contemplated by the Prospectus (i) the
Company has not incurred any material liabilities or obligations,
direct, indirect or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary
course of business; (ii) the Company has not sustained any material
loss or interference with its properties from fire, flood, windstorm,
-6-
<PAGE> 7
accident or other calamity, whether or not covered by insurance; (iii)
the Company has not paid or declared any dividends or other
distributions with respect to its capital stock, and the Company is
not in default in the payment of principal or interest on any
outstanding debt obligations, except such default as would not have a
material adverse effect on the Company; (iv) there has not been any
change in the capital stock or indebtedness material to the Company;
and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties or results of
operations of the Company.
(o) The Company has validly registered in the principal
register with the U.S. Patent and Trademark Office the trademarks
service marks "Cooker Bar and Grill(R)", "The Southern Cooker - Home
Style Restaurant & Bar(R)" and "Cooker(SM)", and the Company has
sufficient trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals and governmental authorizations to
conduct its business as now conducted; the Company has no knowledge of
any infringement by the Company of trademarks, trade name rights,
patent rights, mask works, copyrights, licenses, trade secret or other
similar rights of others; the Company has no knowledge of any
infringement by others of its trademarks, trade name rights, patent
rights, mask works, copyrights, licenses, trade secrets or other
similar rights that would be material to the business or financial
condition of the Company; and there is no claim currently pending
against the Company regarding trademark, trade name, patent right,
mask work, copyright, license, trade secret or other infringement
which could have a material adverse effect on the condition (financial
or otherwise), business or results of operations of the Company.
(p) Except as disclosed in the Prospectus, the Company has
not been advised, and has no reason to believe, that either it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and federal
employment, truth-in-advertising, licensing, discrimination,
immigration, alcoholic beverage and environmental laws and
regulations, except where failure to be so in compliance would not
materially adversely affect the condition (financial or otherwise),
business or results of operations of the Company.
(q) The Company has filed all federal, state and foreign
income and franchise tax returns or extensions therefor required to be
filed and has paid all taxes shown as due thereon; and the Company has
no knowledge of any tax deficiency which has been or might be asserted
or threatened against the Company which would materially and adversely
affect the business, operations or properties of the Company.
(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; and (iii) the recorded
-7-
<PAGE> 8
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(s) The Company is not required to make, and following
receipt of the proceeds from the sale of the Common Shares will not be
required to make, any filing or to register under the Investment
Company Act of 1940, as amended.
(t) There is no proceeding pending or to the knowledge of the
Company, threatened which seeks the revocation, suspension,
termination or nonrenewal of any certificate, order, license, permit,
easement, consent, waiver, approval, franchise, grant, authorization
or concession required to conduct the business of the Company as now
conducted and which revocation, suspension, termination or nonrenewal
would have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company.
(u) The documents incorporated by reference in the
Registration Statement and Prospectus comply in all material respects
with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, and any additional documents deemed to be
incorporated by reference in the Prospectus will, when they are filed
with the Commission, comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and both the documents incorporated by
reference in the Prospectus and any additional documents deemed to be
incorporated by reference in the Prospectus do not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they
are made, not misleading.
(v) The Company has not taken and will not take, directly or
indirectly, any action that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
(w) The Company does not conduct business with the Government
of Cuba, or in Cuba, or with any Cuban business entity or enterprise.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Underwriters represent and warrant to the Company that the information set
forth (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of the offering and (ii) in
the stabilization paragraph on the second page of the Prospectus and (iii)
under "Underwriting" in the Prospectus furnished to the Company by the
Underwriters for use in connection with the preparation of the Registration
Statement and the Prospectus is correct in all material respects. The Company
acknowledges that this information is the sole information furnished to the
Company by the Underwriters for inclusion in the Registration Statement, any
Preliminary Prospectus, any Prospectus, or any amendment or supplement thereto.
-8-
<PAGE> 9
SECTION 4. PURCHASE, SALE AND DELIVERY OF COMMON SHARES. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriters 2,500,000 Firm Common Shares, and the
Underwriters agree, severally and not jointly, to purchase from the Company the
number of Firm Common Shares set forth opposite their respective names in
Schedule A hereto. The purchase price per share to be paid by the Underwriters
to the Company shall be $ per share.
Delivery of the certificate(s) for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made by or on
behalf of the Company to the Underwriters or to the account of Montgomery
Securities, at the Depositary Trust Corporation, New York, New York ("DTC"), as
the Representatives may direct, for the respective accounts of the
Underwriters. In the event certificates are delivered to the Underwriters
other than through DTC, such delivery shall be made at the offices of
(or such other place as may be agreed upon by the Company and the
Representatives). Delivery of certificates, whether through DTC or otherwise,
shall be made at such time and date, not later than the third (or, if the Firm
Common Shares are priced, as contemplated by Rule 15c6-1(c) promulgated under
the Securities Exchange Act of 1934, as amended, after 4:30 p.m., Washington
D.C. time, the fourth) full business day following the first date that any of
the Firm Common Shares are released by the Underwriters for sale to the public,
as the Underwriters shall designate (the "First Closing Date"); provided,
however, that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later
of the third or fourth, as the case may be, full business day following the
first date that any of the Common Shares are released by the Underwriters for
sale to the public or the date that is 48 hours after the date that the
Prospectus has been so recirculated. The certificates for the Firm Common
Shares shall be registered in such names and denominations as the Underwriters
shall have requested at least two full business days prior to the First Closing
Date, and shall be made available for checking and packaging on the business
day preceding the First Closing Date at a location in New York, New York, as
may be designated by the Representatives. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters. Payment by the Underwriters
of the purchase price of the Firm Common Shares shall be made by wire transfer
in same day funds to the Company's account at
Bank, Account Number .
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters to purchase up
to 375,000 Optional Common Shares at the purchase price per share to be paid
for the Firm Common Shares, for use solely in covering any over-allotments made
by the Underwriters in the sale and distribution of the Firm Common Shares.
The options granted hereunder may be exercised at any time (but not more than
once) within 30 days after the first date that any of the Firm Common Shares
are released by the Underwriters for sale to the public upon notice by the
Underwriters to the Company setting forth the aggregate number of Optional
Common Shares as to which the Underwriters are exercising the options, the
names and denominations in which the certificates for such shares are to be
registered and the time and place at
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<PAGE> 10
which such certificates will be delivered. Such time of delivery (which may
not be earlier than the First Closing Date), being herein referred to as the
"Second Closing Date," shall be determined by the Underwriters, but if at any
time other than the First Closing Date shall not be earlier than three nor
later than five full business days after delivery of such notice of exercise.
The number of Optional Common Shares to be purchased by each Underwriter shall
be determined by multiplying the aggregate number of Optional Common Shares to
be sold by the Company pursuant to such notice of exercise by a fraction, the
numerator of which is the number of Firm Common Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator of
which is 2,500,000 (subject to such adjustments to eliminate any fractional
share purchases as the Underwriters in their discretion may make).
Certificates for the Optional Common Shares will be made available for checking
and packaging on the business day preceding the Second Closing Date at a
location in New York, New York, designated by the Representatives. The manner
of payment for and delivery of the Optional Common Shares shall be the same as
for the Firm Common Shares purchased, as specified in this paragraph 4. At any
time before lapse of the options, the Underwriters may cancel such options by
giving written notice of such cancellation to the Company. If the options are
canceled or expire unexercised in whole or in part, the Company will deregister
under the Act the number of Optional Common Shares as to which the option has
not been exercised.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Firm Common
Shares, and of the Optional Common Shares, if and to the extent that the
Underwriters exercise their option to purchase Optional Common Shares, as soon
after the effective date of the Registration Statement as in the judgment of
the Underwriters is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the Prospectus.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) The Company will use its reasonable best efforts to cause
the Registration Statement and any amendment thereof, if not effective
at the time and date that this Agreement is executed and delivered by
the parties hereto, to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A of the
Rules and Regulations, or the filing of the Prospectus is otherwise
required under Rule 424(b) of the Rules and Regulations, the Company
will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations
within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. The Company
will promptly advise the Underwriters in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission
for amendment of or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or
the Prospectus or for additional information, (iii) when the
Registration Statement shall have become effective and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose. If the Commission shall enter any
such stop order at any time, the Company will use its reasonable best
efforts to obtain the
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<PAGE> 11
lifting of such order at the earliest possible moment. The Company
will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus of which the Underwriters
have not been furnished with a copy a reasonable time prior to such
filing or to which the Underwriters reasonably object in writing or
which is not in compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the Underwriters' request, any amendments or supplements
to the Registration Statement or the Prospectus which in the
Underwriters' judgment may be necessary or advisable to enable the
several Underwriters to continue the distribution of the Common Shares
and will use its best efforts to cause the same to become effective as
promptly as possible. The Company will fully and completely comply
with the provisions of Rule 430A of the Rules and Regulations with
respect to information omitted from the Registration Statement in
reliance upon such Rule.
(c) If at any time within the nine-month period referred to
in Section 10(a)(3) of the Act during which a prospectus relating to
the Common Shares is required to be delivered under the Act any event
occurs, as a result of which the Prospectus, including any amendments
or supplements, would include an untrue statement of a material fact,
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or if it is
necessary at any time to amend the Prospectus, including any
amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise the Underwriters thereof
and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment or supplement which will effect such
compliance and will use its reasonable best efforts to cause the same
to become effective as soon as possible; and, in case any Underwriter
is required to deliver a prospectus after such nine-month period, the
Company, upon request, but at the expense of such Underwriter, will
promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Act.
(d) As soon as practicable, but not later than 45 days after
the end of the first fiscal quarter ending after one year following
the "effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need
not be audited) covering a period of 12 consecutive months beginning
after the effective date of the Registration Statement which will
satisfy the provisions of the last paragraph of Section 11(a) of the
Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred
to in Section 10(a)(3) of the Act, will furnish to the Underwriters
copies of the Registration Statement, the Prospectus, the Preliminary
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<PAGE> 12
Prospectus and all amendments and supplements to any such documents
in each case as soon as available and in such quantities as the
Underwriters may reasonably request, for the purposes contemplated by
the Act.
(f) The Company shall cooperate with the Underwriters and
their counsel in order to qualify or register the Common Shares for
sale under (or obtain exemptions from the application of) the Blue Sky
laws of such jurisdictions, and, in the case of jurisdictions in
Canada, under Canadian securities laws, as the Underwriters designate,
and will comply with such laws and continue such qualifications,
registrations and exemptions in effect so long as reasonably required
for the distribution of the Common Shares. The Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to taxation as a
foreign corporation. The Company will advise the Underwriters
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale
or trading in any jurisdiction or any initiation or overt threat of
any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption,
the Company, with the Underwriters' cooperation, will use its
reasonable best efforts to obtain the withdrawal thereof.
(g) During the period of three years hereafter, the Company
will furnish to the Underwriters: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report to Stockholders
of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally
to holders of its Common Stock.
(h) During the period of days from the date of the
Prospectus, without the prior written consent of Montgomery Securities
(the giving or withholding of such written consent being in the sole
discretion of Montgomery Securities), the Company will not issue,
offer, sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities or any other securities convertible
into or exchangeable with its Common Stock or other equity security,
except for the grant of options in the ordinary course of business
pursuant to existing stock option plans.
(i) The Company will apply the net proceeds of the sale of
the Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
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<PAGE> 13
(j) The Company will use its reasonable best efforts to
qualify or register its Common Stock for sale in non-issuer
transactions under (or obtain exemptions from the application of) the
Blue Sky laws of the State of California (and thereby permit market
making transactions and secondary trading in the Company's Common
Stock in California), will comply with such Blue Sky laws and will use
its reasonable best efforts to maintain such qualifications,
registrations and exemptions in effect for a period of three years
after the date hereof.
The Underwriters may, in their sole discretion, waive in
writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or
is terminated, the Company agrees to pay all costs, fees and expenses incurred
in connection with the performance of its obligations and the obligations of
the Selling Stockholders hereunder, including without limiting the generality
of the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses
of the Company's counsel, Selling Stockholders' counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution to the
Underwriters and dealers of the Registration Statement, each Preliminary
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, this Agreement, the
Agreement Among Underwriters, the Selected Dealers Agreement, the Underwriters'
Questionnaire, the Underwriters' Power of Attorney and the preliminary Blue Sky
memorandum and final Blue Sky memorandum, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the Blue Sky laws and applicable Canadian securities laws, (vii) the filing
fees incident to, and the fees and expenses of counsel for the Underwriters in
connection with, securing any required review by the NASD of the terms of sale
of the Common Shares, and (viii) all other fees, costs and expenses referred to
in Item 14 of the Registration Statement. Except as provided in this Section 6,
Section 8 and Section 10 hereof, the Underwriters shall pay all of their own
expenses, including the fees and disbursements of their counsel (excluding
those relating to qualification, registration or exemption under the Blue Sky
laws, Canadian securities laws, the Blue Sky memoranda and relating to review
by the NASD referred to above).
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase and pay for the Firm Common Shares
on the First Closing Date and the Optional Common Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties on
the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of Company officers made pursuant to the provisions
of this Agreement, to the
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<PAGE> 14
performance by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 p.m., Washington D.C. time, on the date of this
Agreement, or at such later time as shall have been consented to by
you; if the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) of the Rules and Regulations, the
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations; prior to
such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or shall be pending or, to the
knowledge of the Company or the Underwriters, shall be contemplated by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement, or otherwise,
shall have been complied with to the Underwriters' reasonable
satisfaction.
(b) The Underwriters shall be satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock (other than pursuant to the exercise of director,
officer or employee stock options disclosed in the Registration
Statement or Prospectus and outstanding as of the date of the
Prospectus) of the Company or any material change in the indebtedness,
(other than in the ordinary course of business) of the Company, (ii)
except as set forth in or contemplated by the Registration Statement
or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company which is not
in the ordinary course of business and which reasonably could be
expected to result in a material reduction in the future earnings of
the Company, (iii) no loss or damage (whether or not insured) to the
property of the Company shall have been sustained which materially and
adversely affects the condition (financial or otherwise), business or
results of operations of the Company, (iv) no legal or governmental
action, suit or proceeding affecting the Company which could have a
material adverse effect upon the Company, or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened in writing and (v) there shall not have been
any material adverse change in the condition (financial or otherwise),
business, management or results of operations of the Company which
makes it impractical or inadvisable in the judgment of the
Underwriters to proceed with the public offering or purchase of the
Common Shares as contemplated hereby.
(c) There shall have been furnished to the Underwriters on
each Closing Date, in form and substance satisfactory to the
Underwriters, the following documents and certificates:
(i) An opinion of Schwartz, Warren & Ramirez,
counsel for the Company, addressed to the Underwriters and
dated the First Closing Date, or the Second Closing Date, as
the case may be, to the effect that:
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<PAGE> 15
(1) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation, to the knowledge of such counsel is
duly qualified to do business and is in good standing
as a foreign corporation in all other jurisdictions
where the ownership or leasing of properties or the
conduct of its business requires such qualification,
except for jurisdictions in which the failure to so
qualify would not have a material adverse effect on
the Company, and the Company has requisite corporate
power and authority to own its properties and conduct
its business as described in the Registration
Statement;
(2) The authorized capital stock of the
Company was as set forth under the caption
"Capitalization" in the Prospectus as of the dates
stated therein; all necessary and proper corporate
proceedings have been taken in order to validly
authorize such authorized Common Stock and to validly
issue such issued and outstanding Common Stock; all
outstanding shares of Common Stock (including the
Firm Common Shares and Optional Common Shares, if
any) have been duly authorized and validly issued,
are fully paid and nonassessable, were not issued in
violation of any statutory preemptive rights, and to
the knowledge of such counsel, will not be issued in
violation of any other preemptive rights or other
rights to subscribe for or purchase any securities;
neither the Amended and Restated Articles of
Incorporation nor Amended and Restated Code of
Regulations of the Company contain any restriction
upon the voting or transfer of any of the shares of
capital stock of the Company (including the Firm
Common Shares and the Optional Common Shares), except
such restrictions as may be imposed by federal, state
or Canadian securities laws or as may be expressly
described in the Prospectus;
(3) The certificate(s) evidencing the Common
Shares to be delivered hereunder are in due and
proper form under Ohio law, and when delivered to the
Underwriters or to the order of the Underwriters
against payment of the agreed consideration therefor
in accordance with the provisions of this Agreement,
and the Common Shares represented by such
certificate(s) will be duly authorized and validly
issued, fully paid and nonassessable, will not have
been issued in violation of or subject to any
statutory preemptive rights and, to the knowledge of
such counsel, were not issued in violation of any
other preemptive or other similar rights to subscribe
for or purchase securities, and will conform in all
material respects to the description thereof
contained in the Prospectus;
(4) Except as disclosed or specifically
described in the Prospectus, to such counsel's
knowledge, there are no outstanding options, warrants
or other rights calling for the issuance of, and no
commitments or obligations
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<PAGE> 16
to issue, any shares of capital stock of the Company
or any security convertible into or exchangeable for
capital stock of the Company;
(5) (a) The Registration Statement has
become effective under the Act, and, to such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been
instituted or are pending or overtly threatened by
the Commission; any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of
the Rules and Regulations has been made in the manner
and within the time period required by such Rule
424(b);
(b) The Registration Statement, the
Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules
and other statistical data and schedules included
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Act and the Rules and
Regulations; and
(c) To such counsel's knowledge, there
are no written license agreements, dealer agreements,
leases, contracts, agreements or documents of a
character required to be disclosed in the
Registration Statement, the Prospectus, or to be
filed as exhibits to the Registration Statement which
are not disclosed or filed, as required;
(6) The Company has requisite corporate
power and authority to enter into this Agreement and
to sell and deliver the Common Shares to be sold by
it to the Underwriters; this Agreement has been duly
authorized by all necessary corporate action by the
Company, has been duly executed and delivered by and
on behalf of the Company, and no approval,
authorization, order, consent, registration, filing,
qualification, license or permit of or with any
court, regulatory, administrative or other
governmental body of the United States of America or
the States of Ohio or Florida is required for the
execution and delivery of this Agreement by the
Company or the consummation of the transactions
described in this Agreement, except (i) such as have
been obtained under the Act and (ii) such as may be
required under applicable Blue Sky laws and
applicable Canadian securities laws in connection
with the purchase and distribution of the Common
Shares by the Underwriters and the obtaining of a
letter of no objection from the NASD with respect to
such offering, as to which such counsel need express
no opinion.
(7) The execution and performance of this
Agreement, the sale of the Common Shares and the
consummation of the transactions herein
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<PAGE> 17
described will not violate any of the provisions of
the Amended and Restated Articles of Incorporation or
Amended and Restated Code of Regulations of the
Company, or, to such counsel's knowledge, result in
the breach of or constitute, either by itself or upon
notice or the passage of time or both, a default
under any material written agreement, mortgage, deed
of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company is a
party or by which the Company or any of its property
may be bound or affected, which is material to the
Company, or, to such counsel's knowledge, violate any
statute, judgment, decree, order, rule or regulation
of any court or government body having jurisdiction
over the Company or any of its property, except where
such violation of such statute, judgment, decree,
order, rule or regulation would not materially and
adversely affect the Company (other than clearance by
the NASD of the fairness of the underwriting
arrangements and state securities or Blue Sky laws or
Canadian securities laws and regulations as to which
counsel need not express any opinion);
(8) The Company is not in violation of its
Amended and Restated Articles of Incorporation or
Amended and Restated Code of Regulations;
(9) To such counsel's knowledge, there are
no legal actions, suits or governmental proceedings
pending or threatened before any court or
governmental agency, authority or body which is
required to be described in the Prospectus that is
not described as required;
(10) To such counsel's knowledge, no holders
of securities of the Company have rights that have
not been waived in writing to the registration of
shares of Common Stock or other securities which
would be required to be included in the Registration
Statement filed by the Company or included in the
offering contemplated thereby; and
(11) No transfer taxes are required to be
paid under the laws of the States of Ohio or Florida
in connection with the sale and delivery of the
Common Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely, as
to matters of fact, on certificates of the officers of the
Company and of governmental officials, in which case their
opinion shall state that they are so doing and copies of such
certificates are to be delivered to Underwriters and their
counsel.
In addition, such counsel shall state that they have
participated in conferences with officers, employees and other
representatives of the Company, counsel for the Underwriters,
representatives of the independent public accountants for the
Company and representatives of the Underwriters at which the
contents of
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<PAGE> 18
the Registration Statement and Prospectus and related matters
were discussed and, although such counsel is not passing upon
and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and Prospectus and has not made any
independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to a large extent upon
the statements of officers, employees and other
representatives of the Company), no facts have come to such
counsel's attention that lead them to believe that either the
Registration Statement at the time such Registration Statement
became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein in light
of the circumstances in which they were made, not misleading,
or the Prospectus as of its date contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except that such counsel need express no opinion with respect
to the financial statements, schedules and other statistical
data included in the Registration Statement or Prospectus.
(ii) Such opinion or opinions of Locke Purnell Rain
Harrell (A Professional Corporation), counsel for the
Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate
proceedings and other legal matters relating to this
Agreement, the validity of the Common Shares, the Registration
Statement and the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they reasonably
may request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may
rely on representations or certificates of the officers of the
Company and governmental officials.
(iii) A certificate of the Company executed by the
Chairman of the Board and Chief Executive Officer and the
Chief Financial or Accounting Officer of the Company, dated
the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied on or prior to such Dates, respectively;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the
Registration Statement or any amendment thereto; no
stop order
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<PAGE> 19
suspending the effectiveness of the Registration
Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings
for that purpose have been instituted or are pending
or overtly threatened under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein regarding the Company and its subsidiaries,
and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement,
written or oral, transaction or event has occurred
which should have been set forth in an amendment to
the Registration Statement or in a supplement to or
amendment of any Prospectus which has not been
disclosed in such a supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, there has not been
any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), business, properties,
results of operations, management or prospects of the
Company; no legal or governmental action, suit or
proceeding is pending or threatened against the
Company or its Subsidiaries which is material to the
Company, whether or not arising from transactions in
the ordinary course of business, or which may
adversely affect the transactions contemplated by
this Agreement; the Company has not entered into any
verbal or written agreement or other transaction
which is not in the ordinary course of business or
which reasonably could be expected to result in a
material reduction in the future earnings of the
Company, or incurred any material liability or
obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change
in its short-term debt or long-term debt or
repurchased or otherwise acquired any of the
Company's capital stock; and the Company has not
declared or paid any dividend, or declared or made
any other distribution, with respect to its
outstanding capital stock payable to stockholders of
record, except as disclosed in the Prospectus, on a
date prior to the First Closing Date or Second
Closing Date, as the case may be; and
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<PAGE> 20
(6) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and except as disclosed in or
contemplated by the Prospectus, neither the Company
nor any of the Subsidiaries has sustained a material
loss or damage by strike, fire, flood, windstorm,
accident or other calamity (whether or not insured).
(v) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing
Date, letters addressed to the Underwriters from Price
Waterhouse LLP, independent accountants, the first one to be
dated the day before the date of this Agreement, the second
one to be dated the First Closing Date and the third one (in
the event of a Second Closing) to be dated the Second Closing
Date, in form and substance satisfactory to you.
(vi) On or before the First Closing Date, letters
from each director and officer of the Company and from each
person or entity named under the caption "Principal
Stockholders" in the Prospectus, in form and substance
satisfactory to you, confirming that for a period of _____
days from the date of the Prospectus such person or entity
will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right
to acquire such shares without the prior written consent of
Montgomery Securities, which consent may be withheld at the
sole discretion of Montgomery Securities; provided that such
persons may exercise stock options granted in the ordinary
course of business pursuant to the Company's existing stock
option plans.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are
reasonably satisfactory to the Underwriters and to Locke Purnell Rain
Harrell (A Professional Corporation), counsel for the Underwriters.
The Company shall furnish the Underwriters with such manually signed
or conformed copies of such opinions, certificates, letters and
documents as the Underwriters request. Any certificate signed by any
officer of the Company and delivered to the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so
satisfied, this Agreement at the election of the Underwriters will
terminate upon notification by the Underwriters to the Company without
liability on the part of any Underwriter or the Company, except for
the expenses to be paid or reimbursed by the Company pursuant to
Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. Notwithstanding
any other provisions hereof, if this Agreement shall be terminated by you
pursuant to the termination provisions of Section 13 by reason of the
inaccuracy of the representations and warranties of the Company set forth in
this Agreement or the inaccuracy of the statements of Company officers made
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<PAGE> 21
pursuant to the provisions of this Agreement or the failure of any other
condition to the obligations of the Underwriters set forth in Section 7 hereof
to be fulfilled, or if the sale to the Underwriters of the Common Shares at the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Underwriters
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Underwriters in connection with the proposed purchase and the
sale of the Common Shares, including but not limited to fees and disbursements
of Underwriters' counsel, printing expenses, travel expenses, postage, telecopy
charges and telephone charges relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party
to any other party, except that the provisions of this Section 8, Section 6 and
Section 10 shall at all times be effective and shall apply.
SECTION 9. EFFECTIVENESS OF REGISTRATION STATEMENT. The Underwriters
and the Company will use their respective best efforts to cause the
Registration Statement to become effective, to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement and, if such
stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter
or such controlling person may become subject, under the Act, the
Exchange Act, or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of
the Company), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, any amendment
or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required
to be stated therein or necessary to make the statements in any of
them not misleading; and will reimburse each Underwriter and each such
controlling person for any legal and other expenses as such expenses
are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action;
provided, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with the
information furnished to the Company by the Underwriters pursuant to
Section 3 hereof; and provided further, that with respect to any
untrue statement or omission or alleged untrue statement or omission
made in any Preliminary Prospectus, the indemnity agreement contained
in this paragraph shall not inure
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<PAGE> 22
to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the
Common Shares concerned (or to the benefit of any person controlling
such Underwriter) to the extent that any such loss, claim, damage,
liability or expense of such Underwriter or controlling person results
from the fact that a copy of the Prospectus was not sent or given to
such person at or prior to the written confirmation of sale of such
Common Shares to such person as required by the Act, and if the untrue
statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of noncompliance
by the Company with its obligations under Section 6(e) hereof.
(b) In addition to their other obligations under this Section
10 the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform the obligations
of the Company hereunder, all as described in Section 10(a), the
Company will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligations to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper,
each Underwriter shall promptly return such payment to the Company,
together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Bank of
America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(c) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses to which the Company,
or any such director, officer, or controlling person may become
subject under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only
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<PAGE> 23
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity
with the information furnished to the Company pursuant to Section 3
hereof (which information is the sole information furnished to the
Company by the Underwriters for inclusion in the Registration
Statement, any Preliminary Prospectus, any Prospectus, or any
amendment or supplement thereto); and will reimburse the Company, or
any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. In addition to its
other obligations under this Section 10(c), each Underwriter severally
agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or
omission, described in this Section 10(c) which relates to information
furnished to the Company pursuant to Section 3 hereof, it will
reimburse the Company (and, to the extent applicable, each officer,
director or controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such
expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have
been improper, the Company (and, to the extent applicable, each
officer, director or controlling person) shall promptly return such
payment to the Underwriters, together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made within 30 days of a request
for reimbursement, shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party for contribution or otherwise
hereunder to the extent it is not materially prejudiced as a proximate
result of such failure. In case any such action is brought against
any indemnified party and such indemnified party notifies an
indemnifying party of the commencement thereof and seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying
party
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<PAGE> 24
and the indemnified party shall have reasonably concluded that there
may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the
indemnified party of counsel, which approval shall not be unreasonably
withheld, the indemnifying party will not be liable to such
indemnified party under this Section for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Underwriters in the case of Section 10(a), representing the
indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(e) If the indemnification provided for in this Section 10 is
required by its terms, but for any reason is held to be unavailable to
or otherwise insufficient to hold harmless any indemnified party under
paragraphs (a), (b), (c) or (d) in respect of any losses, claims,
damages, liabilities or expenses as referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Underwriters from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, then such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Underwriters in
connection with the statements or omissions or inaccuracies in their
representations and warranties herein which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits
received by the Company and the Underwriters shall be deemed to be in
the same proportion, in the case of the Company as the total price
paid to the Company for the Common Shares sold by it to the
Underwriters (before deducting expenses), and in the case of
Underwriters as the underwriting commissions received by them, bears
to the total of such amounts paid to the Company and the amounts
received by the Underwriters as underwriting commissions. The
relative fault of the Company and the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged
inaccurate representations and/or warranty relates to the information
supplied by the Company or the
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<PAGE> 25
Underwriters and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
subsection (d) of this Section 10, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in subsection
(c) of this Section 10 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under
this subsection (e); provided, however, that no additional notice
shall be required with respect to any action for which notice has been
given under subsection (d) for the purposes of indemnification. The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined
solely by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred
to in this subsection (e). Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount
in excess of the amount of the total underwriting commissions received
by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within a meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to
their respective underwriting commitments and not joint.
(f) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in this
Section 10, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled
by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc.
or pursuant to the Code of Arbitration Procedure of the NASD. Any
such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited
to the operation of the interim reimbursement provisions contained in
this Section 10 and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is
created by the provisions of this Section 10.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to this
Agreement and the obligation of the Company to sell and deliver the Common
Shares hereunder, and of each Underwriter to purchase the Common Shares in the
manner described herein, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all the Common
Shares agreed to be purchased by such Underwriter hereunder upon tender to the
Underwriters of all such shares in accordance with the terms hereof. If ANY
UNDERWRITER defaults in its obligation to purchase Common Shares hereunder on
either the First or Second Closing Date
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<PAGE> 26
and the aggregate number of Common Shares that such defaulting Underwriter
agreed but failed to purchase on such Closing Date does not exceed 10% of the
total number of Common Shares which the Underwriters are obligated severally,
in proportion to their respective commitments hereunder, to purchase on such
Closing Date, the non-defaulting Underwriters shall be obligated to purchase
the Common Shares that such defaulting Underwriter agreed but failed to
purchase on such Closing Date. If any Underwriter so defaults and the
aggregate number of Common Shares with respect to which such default occurs is
more than the above percentage and arrangements satisfactory to the
Underwriters and the Company of such Common Shares for the purchase of such
Common Shares by other persons are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of the
non-defaulting Underwriters or the Company (except for the expenses to be paid
by the Company pursuant to Section 6 hereof and except to the extent provided
in Section 10 hereof).
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties,
the Underwriters or the sellers of such Common Shares shall have the right to
postpone the First or Second Closing Date, as the case may be, for not more
than three business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any
other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective at
such time as the Registration Statement has become effective and you shall have
released the Firm Common Shares for sale to the public; provided, however, that
the provisions of Sections 6, 8, 10, 13 and 14 hereof shall at all times be
effective. For the purposes of this Section 12, the Firm Common Shares shall
be deemed to have been so released upon the release by the Underwriters for
publication, at any time after the Registration Statement has become effective,
of any newspaper advertisement relating to any of the Common Shares, or upon
the release by the Underwriters of any of the Common Shares for sale to the
public, whichever may occur first.
SECTION 13. TERMINATION. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to the Underwriters or by the Underwriters by notice to the Company at
any time prior to the time this Agreement shall become effective as to
all its provisions, and any such termination shall be without
liability on the part of the Company to the Underwriters (except for
the expenses to be paid or reimbursed by the Company pursuant to
Sections 6 and 8 hereof and except to the extent provided in Section
10) or of any Underwriter to the Company (except to the extent
provided in Section 10).
(b) This Agreement may also be terminated by the Underwriters
prior to the First Closing Date or prior to the Second Closing Date,
as the case may be, by notice to the
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<PAGE> 27
Company and the Selling Stockholders (i) if additional material
governmental restrictions not in force and effect on the date hereof
shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the
New York Stock Exchange or on the American Stock Exchange or in the
NASDAQ National Market or in the over the counter market by the NASD,
or trading in securities generally shall have been suspended on either
such Exchange or in the NASDAQ National Market or in the over the
counter market by the NASD or the Commission, or a general banking
moratorium shall have been established by federal, New York, Ohio,
Florida or California authorities, (ii) if an outbreak of hostilities
or other national or international calamity or any material change in
political, financial or economic conditions shall have occurred or
shall have accelerated to such an extent that the effect on the
financial markets shall, in the judgment of the Underwriters, affect
adversely the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or the Prospectus or any
document incorporated by reference into the Prospectus or which is not
reflected in the Registration Statement or the Prospectus or any
document incorporated by reference into the Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened,
or there shall have been any development involving particularly the
business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the judgment of
the Underwriters, may materially and adversely affect the business or
earnings of the Company or makes it impracticable to offer or sell the
Common Shares. Any termination pursuant to this subsection (b) shall
be without liability on the part of the Underwriters to the Company or
on the part of the Company to the Underwriters (except for expenses to
be paid or reimbursed by the Company pursuant to Sections 6 or 8
hereof and except to the extent provided in Section 10).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or the
Company, or any of their partners, officers or directors or any controlling
person, as the case may be, and will survive delivery of and payment for the
Common Shares sold hereunder and any termination of this Agreement.
SECTION 15. NOTICES. All communications hereunder shall be in
writing and, if sent to the Underwriters, shall be mailed, delivered or
telecopied or telegraphed and confirmed to the Underwriters at Montgomery
Securities, 600 Montgomery Street, San Francisco, California 94111, Attention:
General Counsel, and Equitable Securities Corporation, 800 Nashville City
Center, Nashville, Tennessee 37219, Attention:
, with a copy to Locke Purnell Rain Harrell (A Professional
Corporation), 2200 Ross Avenue, Suite 2200, Dallas, Texas 75201, Attention: Dan
Busbee; and if sent to the Company or the Selling Stockholders shall be mailed,
delivered or telecopied or telegraphed and confirmed to the Company at 5500
Village Blvd., West
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<PAGE> 28
Palm Beach, Florida 33407, Attention: G. Arthur Seelbinder, with a copy to
Schwartz, Warren & Ramirez, 41 South High Street, Columbus, Ohio 43215. The
Company or the Underwriters may change the address for receipt of
communications hereunder by giving notice to the other.
SECTION 16. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 11 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 10, and in each case their
respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall
not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 19. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, subsection, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, subsection, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 20. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of Ohio.
SECTION 21. GENERAL. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Representatives.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 29
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters, all in accordance with its terms.
<TABLE>
<S> <C>
Very truly yours,
COOKER RESTAURANT CORPORATION
By:
------------------------------
</TABLE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written
by the undersigned Underwriters.
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
By: MONTGOMERY SECURITIES
By:____________________________________________________
Its: Managing Director
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<PAGE> 30
SCHEDULE A
<TABLE>
<CAPTION>
Number of Firm Common
Name of Underwriter Shares to be Purchased
- ---- -- ----------- ------ -- -- ---------
<S> <C>
Montgomery Securities -----
Equitable Securities Corporation -----
TOTAL =====
</TABLE>
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<PAGE> 1
EXHIBIT 1.2
MASTER AGREEMENT AMONG UNDERWRITERS
May 13, 1988
MONTGOMERY SECURITIES
600 Montgomery Street
San Francisco, California 94111
Ladies and Gentlemen:
1. General. We understand that from time to time you may act as
Representative or as one of the Representatives of the several underwriters of
offerings of securities of various issuers. This Agreement shall apply to any
such offering of securities in which we elect to act as an underwriter after
receipt of an invitation from your Syndicate Department which shall identify
the issuer, contain information regarding certain terms of the securities to be
offered and specify the amount of our proposed participation (subject to
increase as provided in the applicable Underwriting Agreement), and the names of
the other Representatives, if any. At or prior to the time of an offering, you
will advise us, to the extent applicable, as to the expected offering date, the
expected closing date, the initial public offering price, the interest or
dividend rate (or the method by which such rate is to be determined), the
conversion price, the underwriting discount, the management fee, the selling
concession and the reallowance, except that if the public offering price of the
securities is to be determined by a formula based upon the market price of
certain securities (such procedure being hereinafter referred to as "Formula
Pricing"), you shall so advise us and shall specify the maximum underwriting
discount, management fee and selling concession. Such information may be
conveyed by you in one or more communications in the form of letters, wires,
telexes or other written communications or by telephone calls (provided any
such telephone calls are promptly confirmed in writing) (such communications
received by us with respect to an offering are hereinafter collectively
referred to as the "Invitation"). If the Underwriting Agreement (as
hereinafter defined) provides for the granting of an option to purchase
additional securities to cover over-allotments, you will notify us, in the
Invitation, of such option.
This Agreement, as amended or supplemented by the Invitation, shall
become effective with respect to our participation in an offering of securities
if you have received our oral or written acceptance and you do not subsequently
receive a written communication revoking our acceptance prior to the time and
date specified in the Invitation (our unrevoked acceptance after expiration of
such time and date bing hereinafter referred to as our "Acceptance"). Our
Acceptance will constitute our confirmation that, except as otherwise stated in
such Acceptance, each statement included in the Master Underwriters'
Questionnaire set forth as Exhibit A hereto (or otherwise furnished to us) is
correct.
The issuer of the securities in any offering of securities made
pursuant to this Agreement is hereinafter referred to as the "Company." If the
Underwriting Agreement does not provide for an over-allotment option, the
securities to be purchased are hereinafter referred to as the "Securities"; if
the Underwriting Agreement provides for an over-allotment option, the
securities the Underwriters (as hereinafter defined) are initially obligated to
purchase pursuant to the Underwriting Agreement are hereinafter called the
"Firm Securities" and any additional securities which may be purchased upon
exercise of the over-allotment option are hereinafter called the "Additional
Securities," with the Firm Securities and all or any part of the Additional
Securities being hereinafter collectively referred to as the "Securities." Any
underwriters of Securities under this Agreement, including the Representatives
(as hereinafter defined), are hereinafter collectively referred to as the
"Underwriters." The term "underwriting obligation," as used in this Agreement
with respect to any Underwriter, shall refer to the amount of Securities,
including any Additional Securities (plus such additional Securities as may be
required by the Underwriting Agreement in the event of a default by one or more
of the Underwriters) which such Underwriter is obligated to purchase pursuant
to the provisions of the Underwriting Agreement. All references herein to
"you" or to the "Representatives" shall mean Montgomery Securities and the
other firm or firms, if any, which are named as Representatives in the
invitation. The
<PAGE> 2
Securities to be offered may, but need not, be registered for a delayed or
continuous offering pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act").
The following provisions of this Agreement shall apply separately to
each individual offering of Securities. This Agreement may be supplemented or
amended by you by written notice to us and, except for supplements or
amendments set forth in an Invitation relating only to a particular offering of
Securities, any such supplement or amendment to this Agreement shall be
effective with respect to any offering of Securities to which this Agreement
applies after this Agreement is so amended or supplemented.
2. Underwriting Agreement; Authority of Representatives. We authorize
you to execute and deliver an underwriting or purchase agreement and any
amendment or supplement thereto and any associated pricing agreement or other
similar agreement (collectively, the "Underwriting Agreement") on our behalf
with the Company and/or any selling securityholder(s) with respect to
Securities in such form as you determine. We will be bound by all terms of the
Underwiting Agreement as executed. We understand that changes may be made in
those who are to be Underwriters and in the amount of Securities to be
purchased by them, but the amount of Securities to be purchased by us in
accordance with the terms of this Agreement and the Underwriting Agreement,
including the amount of Additional Securities, if any, which we may become
obligated to purchase by reason of the exercise of any over-allotment option
provided in the Underwriting Agreement, shall not be changed without our
consent. Without limiting the foregoing, we authorize you to (a) determine all
matters relating to advertising and communications with dealers or others, (b)
extend the time within which the Registration Statement (as hereinafter
defined) may become effective, (c) postpone the closing date or dates for any
offering, and (d) exercise any right of cancellation or termination.
As Representatives of the Underwriters, you are authorized to take such
action as you deem necessary or advisable to carry out this Agreement, the
Underwriting Agreement, and the purchase, sale and distribution of the
Securities, and to agree to any waiver or modification of any provision of the
Underwriting Agreement. To the extent applicable, you are also authorized to
determine (i) the amount of Additional Securities, if any, to be purchased by
the Underwriters pursuant to any over-allotment option, and (ii) with respect
to offerings using Formula Pricing, the initial public offering price and the
price at which the Securities are to be purchased by the Underwriters in
accordance with the Underwriting Agreement. Authority with respect to matters
to be determined by you, or by you and the Company pursuant to the Underwriting
Agreement, shall survive the termination of this Agreement. Your authority
hereunder and under the Underwriting Agreement may be exercised by the
Representatives jointly or by Montgomery Securities acting alone.
3. Registration Statement and Prospectus. You will furnish to us, to
the extent made available to you by the Company, copies of the registration
statement, the related prospectus and the amendment(s) thereto (excluding
exhibits but including any documents incorporated by reference therein) filed
with the Securities and Exchange Commission (the "Commission") in respect of
the Securities, and our Acceptance of the Invitation with respect to an
offering of Securities will serve to confirm that we are willing to accept the
responsibility of an Underwriter thereunder and to proceed as therein
contemplated. Such Acceptance will further confirm that the statements made
under the heading "Underwriting" in the proposed final form of prospectus,
insofar as they relate to us, do not contain any untrue statment of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. As hereinafter
mentioned, the "Registration Statement" and the "Prospectus" refer to the
Registration Statement and Prospectus included as a part thereof, in the form
in which the Registration Statement becomes effective (including all
information deemed to be a part thereof pursuant to Rule 430A promulgated under
the Securites Act) and the form in which the Prospectus is filed pursuant to
Rule 424(b) under the Securities Act or, if no such filing is required, the
form in which the Prospectus is in at the time the Registration Statement in
which it is contained becomes effective, with respect to the Securities. Each
preliminary prospectus with respect to the Securities is herein referred to as
a "Preliminary Prospectus." The use of our name in the Prospectus and any
Preliminary Prospectus, as one of the Underwriters, has our consent. You are
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authorized, with the approval of counsel for the Underwriters, to approve on
our behalf any further amendments or supplements to the Registration Statement
or the Prospectus which may be necessary or appropriate.
4. Compensation. As our share of the compensation to be paid for your
services, we will pay you, and we authorize you to charge our account therefor,
a management fee as specified in the Invitation for the offering. If there is
more than one Representative, such compensation will be divided among the
Representatives in such proportion as you may determine.
5. Public Offering. In connection with the public offering of the
Securities, we authorize you, in your discretion:
(a) to determine the time of the initial public offering, the
initial public offering price, the purchase price of the Securities to the
Underwriters, and the concessions and discounts to Selected Dealers (as
defined below) to change the public offering price and such concessions and
discounts (and we agree to be bound by any such change), to furnish the
Company with the information to be included in the Registration Statement
and any amendment or supplement thereto with respect to the terms of the
offering, and to determine all matters relating to advertising and
communications with Selected Dealers and others;
(b) to reserve for sale to dealers selected by you, among whom
any of the Underwriters may be included ("Selected Dealers"), who shall be
either (i) members of the National Association of Securities Dealers, Inc.
(the "Association") who agree in writing to comply with Section 24 of
Article III of the Association's Rules of Fair Practice or (ii) foreign
dealers not eligible for membership in the Association who agree in writing
not to make sales within the United States, its territories or possessions
or to persons who are citizens or residents therein, to comply with the
Association's Interpretation with Respect to Free-Riding and Withholding,
and to comply with Sections 8, 24, 25 (as such Sections apply to foreign
non-members of the Association) and 36 of Article III of the Association's
Rules of Fair Practice, and to others, all or any part of the Securities to
be purchased by us, such reservations for sales to Selected Dealers to be
in such proportions as you may determine and such reservations for sales to
others to be as nearly as practicable in proportion to the respective
underwriting obligations of the Underwriters unless you agree to a smaller
proportion at the request of any Underwriter, and from time to time to add
to the reserved Securities any Securities retained by us remaining unsold
and to release to us any of our Securities reserved but not sold;
(c) to sell reserved Securities as nearly as practicable in
proportion to the respective reservations, (i) to Selected Dealers, under
Selected Dealers Agreements in substantially the form attached hereto as
Exhibit B or otherwise, at the public offering price less the applicable
Selected Dealers' concession, and (ii) to others at the public offering
price; and
(d) to buy Securities for our account from Selected Dealers at the
initial public offering price less such amount not in excess of the
applicable Selected Dealers' concession as you determine.
After, and only after, advice from you that the Securities are released
for public offering, we will offer to the public in conformity with the terms
of the offering as set forth in the Prospectus or any amendment or supplement
thereto such of the Securities to be purchased by us as you advise us are not
reserved.
We will comply with any and all restrictions which may be set forth in
the Invitation. The initial public advertisement with respect to the
Securities shall appeal on such date, and shall include the names of such of
the Underwriters, as you may determine.
6. Additional Provisions Regarding Sales. Any Securities sold by us
(otherwise than through you) which you purchase in the open market or otherwise
prior to the termination of this Agreement as provided in Section 12, shall be
repurchased by us on demand at the cost to you of such purchase plus commissions
and taxes on redelivery. Securities delivered on such repurchase need not be
the
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<PAGE> 4
identical Securities so purchased. In lieu of such action, you may, in your
discretion, sell for our account the Securities so purchased and debit or
credit our account for the loss or profit resulting from such sale, or charge
our account with an amount not in excess of the Selected Dealers' concession
with respect to such Securities.
Sales of Securities among the Underwriters may be made with your prior
consent or as you deem advisable for Blue Sky law purposes.
In connection with offers to sell and sales of the Securities, we will
comply with all applicable laws and all applicable rules, regulations and
interpretations of all governmental and self-regulatory agencies.
7. Payment and Delivery. At or before such time, on such dates as you
may specify in the Invitation and at your offices unless you otherwise specify
in the Invitation, we will deliver to you a certified or bank cashier's check
in such funds as are specified in the Invitation, payable to the order of
Montgomery Securities (unless otherwise specified in the Invitation) in an
amount equal to, as you direct, either (i) the public offering price or prices
plus accrued interest, amortization of original issue discount or dividends, if
any, set forth in the Prospectus less the concession to Selected Dealers in
respect of the amount of Securities to be purchased by us in accordance with
the terms of this Agreement, or (ii) the amount set forth in the Invitation
with respect to the Securites to be purchased by us. We authorize you to make
payment for our account of the purchase price for the Securities to be
purchased by us against delivery to you of such Securities (which, in the case
of Securities which are debt obligations, may be in temporary form), and the
difference between such purchase price of the Securities and the amount of our
funds delivered to you therefor shall be credited to our account.
You may, in your discretion, make payment of such purchase price on our
behalf as provided in Section 8 hereof, but any such payment shall not relieve
us of any of our obligations under the Underwriting Agreement or under this
Agreement and we agree to pay you on demand the amount so advanced for our
account. We authorize you, as our custodian, to take delivery of our Securities
and to hold the same for our account, in your name or otherwise subject to the
provisions of this Agreement, and to deliver our reserved Securities against
sales. Delivery to us of Securities retained by us for direct sale shall be
made by you as soon as practicable after your receipt of the Securities. Upon
termination of the provisions of this Agreement as provided in Section 12, you
shall deliver to us any Securities reserved for our account for sale to
Selected Dealers and others which remain unsold at that time, except that if,
upon such termination, the aggregate of all reserved and unsold Securities of
all Underwriters does not exceed 10% of the total amount of Securities
underwritten, you are authorized in your discretion to sell such Securities for
the accounts of the several Underwriters at such price or prices as you may
determine. After you receive payment for reserved Securities sold for our
account, you shall remit to us the purchase price paid by us for such
Securities and debit or credit our account with the difference (if any) between
the sale price and such purchase price.
If we are a member of The Depository Trust Company or any other
depository or similar facility, you are authorized to make appropriate
arrangements for payment for and/or delivery through its facilities of the
Securities to be purchased by us, or, if we are not a member, settlement may be
made through a correspondent that is a member pursuant to our timely
instructions to you.
In the event that the Underwriting Agreement for an offering provides
for the payment of a commission or other compensation to the Underwriters, we
authorize you to receive such commission or other compensation for our account.
8. Authority to Borrow. In connection with the purchase or
carrying for our account of any of the Securities to be purchased by us under
this Agreement or the Underwriting Agreement or any other securities purchased
for our account pursuant to Section 9 hereof, we authorize you, in your
discretion, to advance your funds for our account, charging current interest
rates (but not in excess of the amount permitted by law), to arrange loans for
our account, and in connection therewith to execute and deliver any notes or
other instruments and hold or pledge as security any of our Securities
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<PAGE> 5
or other securities purchased for our account. Any lender may rely upon your
instructions in all matters relating to any such loan.
Any Securities held by you for our account may be delivered to us for
carrying purposes, and if so delivered will be redelivered to you upon demand.
9. Stabilization and Over-Allotment. We authorize you, in your
discretion, to make purchases and sales of the Securities, any other securities
of the Company of the same class and series, any securities of the Company into
which the Securities are convertible or exchangeable and any other securities of
the Company which you may designate, in the open market or otherwise, for long
or short account, on such terms and for such prices as you deem advisable, and
to over-allot in arranging sales. Such purchases and sales and over-allotments
will be made for the accounts of the Underwriters as nearly as practicable in
proportion to their respective underwriting obligations. It is understood that
you may have made purchases of securities of the Company for stabilizing
purposes prior to the time when we become one of the Underwriters, and we agree
that any securities so purchased shall be treated as having been purchased for
the respective accounts of the Underwriters pursuant to the foregoing
authorization. We authorize you, in your discretion, to cover any short
position or liquidate any long position incurred pursuant to this Section 9 by
purchasing or selling Securities on such terms and at such times and prices
during the term of this Agreement or after its termination as you deem
advisable. At no time will the amount of our net commitment either for long or
short account under this Section 9 exceed 15% of our underwriting obligation.
Soley for the purposes of the immediately preceding sentence, our "underwriting
obligation" shall be deemed to exclude any Securities which we are obligated to
purchase solely by virtue of the exercise of an over-allotment option. We will
on demand take up and pay at cost Securities so purchased and deliver any
Securities so sold or overalloted for our account, and, if any Underwriter
defaults in any such obligation, each non-defaulting Underwriter will assume
its proportionate share of such obligation without relieving the defaulting
Underwriter from liability. The provisions of this Section 9 do not constitute
an assurance that the price of the Securities will be stabilized or that
stabilization, if commenced, may not be discontinued at any time.
Upon request, we will advise you of the Securities retained by us and
unsold and will sell to you for the account of one or more of the Underwriters
such of the unsold Securities retained by us and at such price, not less than
the applicable net price to Selected Dealers nor more than the public offering
price, as you may determine.
We and each other Underwriter authorize you, as our Representative, to
file with the Securities and Exchange Commssion (the "Commission") any notices
and reports which may be required as a result of any transactions made by you
for the accounts of the Underwriters pursuant to this Section 9. We understand
that, in the event that you effect stabilization pursuant to this Section, you
will notify us promptly of the date and time when the first stabilizing
purchase is effected and the date and time when stabilizing terminated. We
agree that stabilizing by us may be effected only with your consent, and we
will furnish you with such information and reports relating to such
stabilization as are required by the rules and regulations of the Commission
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
10. Open Market Transactions. Until termination of this Agreement,
unless this restriction is sooner terminated by you, we agree not to bid for,
purchase, sell or attempt to induce others to purchase or sell, directly or
indirectly, any of the Securities or securities exchangeable for, or convertible
into, or exercisable against the Securities, any security of the same class and
series as the Securities and any right to purchase the Securities or any such
security, including trading in any put or call option on any such security other
than (a) as provided for in this Agreement or in the Underwriting Agreement or
(b) as a broker in executing unsolicited orders.
We represent that we have not participated in any transaction
prohibited by the preceding paragraph and that we have at all times complied
with the provisions of Rule 10b-6 of the Commission applicable to the offering
of the Securities.
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11. Expenses and Settlement. You may charge our account with all
transfer taxes on sales or purchases made of Securities purchased for our
account and with our proportionate share (based upon our underwriting
obligation or upon sales for our accounts, as you shall determine in your sole
discretion) of all other expenses incurred by you under this Agreement or in
connection with the purchase, carrying, sale or distribution of the Securities.
With respect to each offering of Securities to which this Agreement applies,
the respective accounts of the Underwriters shall be settled as promptly as
practicable after the termination of this Agreement as provided in Section 12,
but you may reserve such amount as you deem advisable for additional expenses.
Your determination of the amount to be paid to or by us will be conclusive. You
may at any time make partial distributions of credit balances or call for
payment of debit balances. Any of our funds in your hands may be held with your
general funds without segregation and without accountability for interest.
Notwithstanding any settlement, we will remain liable for taxes on transfers
for our account and for our proportionate share (based upon our underwriting
obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters with respect to each offering of Securities to
which this Agreement applies.
12. Termination. With respect to each offering of Securities to which
this Agreement applies, all limitations in this Agreement on the price at which
the Securities may be sold, the periods of time referred to in Sections 6, 7,
11 and 18, the authority granted by the first sentence of Section 9, and the
restrictions contained in Section 10, shall terminate at the close of business
on the 30th day after the commencement of the offering of such Securities. You
may terminate any or all of such provisions at any time prior thereto by notice
to the Underwriters. All other provisions of this Agreement shall survive the
termination of such provisions and shall remain operative and in full force and
effect with respect to such offering.
13. Default by Underwriters. Default by one or more Underwriters
hereunder or under the Underwriting Agreement shall not release the other
Underwriters from their obligations or affect the liability of any defaulting
Underwriter to the other Underwriters for damages resulting from such default.
If one or more Underwriters default under the Underwriting Agreement, you may
(but shall not be obligated to) arrange for the purchase by others, including
you or other non-defaulting Underwriters, of the Securities not taken up by the
defaulting Underwriter or Underwriters.
In the event that such arrangements are made, the respective
underwriting obligations of the non-defaulting Underwriters and the amounts of
the Securities to be purchased by others, if any, shall be taken as the basis
for all rights and obligations hereunder; but this shall not in any way affect
the liability of any defaulting Underwriter to the other Underwriters for
damages resulting from its default, nor shall any such default relieve any
other Underwriter of any of its obligations hereunder or under the Underwriting
Agreement except as herein or therein provided. In addition, in the event of
default by one or more Underwriters in respect of their obligations under the
Underwriting Agreement to purchase the Securities agreed to be purchased by
them thereunder and, to the extent that arrangements shall not have been made
by you for any person to assume the obligations of such defaulting Underwriter
or Underwriters, we agree, if provided in the Underwriting Agreement, to assume
our proportionate share, based upon our underwriting obligation, of the
obligations of each such defaulting Underwriter (subject to the limitations
contained in the Underwriting Agreement) without relieving such defaulting
Underwriter of its liability therefor.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take up and pay for any shares of
Securities purchased by you for their respective accounts pursuant to Section 9
hereof, or to deliver any such shares of Securities sold or over-allotted by
you for their respective accounts pursuant to any provision of this Agreement,
and to the extent that arrangements shall not have been made by you for other
persons to assume the obligations of such defaulting Underwriter or
Underwriters, each non-defaulting Underwriter shall assume its proportionate
share of the aforesaid obligations of each such defaulting Underwriter without
relieving any such defaulting Underwriter of its liability therefor.
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14. Position of Representatives; No Liability for Certain Matters. You
shall be under no liability to us for any act or omission except for your lack
of good faith in the performance of the obligations expressly assumed by you in
this Agreement, but no obligations on your part shall be implied or inferred
herefrom. Without limitation, you shall be under no liability for or in
respect of the validity or value of, or title to, the Securities; the form of,
or the statements contained in, or the validity of, the Registration Statement
as initially filed, any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement to any of them, or any other
letters or instruments executed by or on behalf of the Company or others; the
form or validity of the Underwriting Agreement, the Selected Dealers Agreement
or this Agreement; the delivery of the Securities; the performance by the
Company or others of any agreement on its or their part to be performed; the
qualification of the Securities for sale under the laws of any jurisdiction; or
any matter in connection with any of the foregoing. The rights and liabilities
of the Underwriters are several and not joint and nothing shall constitute the
Underwriters a partnership, association or separate entity.
If the Underwriters are deemed to constitute a partnership for federal
income tax purposes, we elect to be excluded from the application of Subchapter
K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended,
and agree not to take any position inconsistent with such election, and you are
authorized, in your discretion, to execute on behalf of the Underwriters such
evidence of such election as may be required by the Internal Revenue Service.
15. Indemnification. We will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act, to the extent and upon the terms
upon which each Underwriter agrees to indemnify the Company and other specified
persons as set forth in the Underwriting Agreement.
If at any time claim or claims (whether alone or together with another
claim or claims) shall be asserted against you, individually or as
Representative of the Underwriters, or against any other Underwriter, or
against any person who controls either you or such other Underwriter within the
meaning of Section 15 of the Securities Act, which claim or claims arise out of
or are based in whole or in part upon (i) any actual or alleged untrue or
misleading statement in or omission from any version of the Registration
Statement or Prospectus, or any amendment or supplement to any of them, (ii)
any actual or alleged action or omission to act by you or any other
Underwriter or any other person in connection with the preparation for and
management or other effectuation of any of the transactions contemplated by
this Agreement, the Selected Dealers Agreement or the Underwriting Agreement or
(iii) any other actual or alleged action or omission in connection with or
related to the offer or sale of the Securities, we authorize you to make such
investigation, to retain or arrange for or approve the retaining of such
attorneys (including, in your discretion, separate attorneys for any single
Underwriter or group of Underwriters) and to take such other action as you
shall deem necessary or desirable under the circumstances, including settlement
of any such claim or claims. We will pay you, on request, our proportionate
share (based upon the underwriting obligation of all Underwwriters
participating in such indemnification) of all expenses incurred by you to the
date of each such request (including, without limitation, cost of investigation
and the fees and disbursements of your attorneys and any other attorneys
retained by you or whose retaining you arrange for or approve) in
investigating, defending against and negotiating with respect to such claim or
claims, and our similar proportionate share of any liability incurred to the
date of each such request by you, by any such other Underwriter or by any such
controlling person in respect of such claim or claims, whether such liability
shall be the result of a judgment or the result of any such settlement. In
determining the amount of our obligation under this paragraph, appropriate
adjustment may be made by you to reflect any amounts received by any one or
more Underwriters in respect of such claim from the Company pursuant to the
Underwriting Agreement or otherwise. If any Underwriter or Underwriters
default in their obligation to make any payments under this second paragraph of
Section 15, each non-defaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon such Underwriter's
underwriting obligation as related to the underwriting obligations of all
non-defaulting Underwriters. Nothing herein shall relieve a defaulting
Underwriter from liability for its
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default. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
In addition and without limitation, we will indemnify and hold harmless
you, each other Underwriter and each person, if any, who controls you and each
Underwriter within the meaning of Section 15 of the Securities Act, against any
claim or claims, liabilities and expenses (including, without limitation, costs
of investigation, attorneys' fees and disbursements and amounts paid upon
judgment or settlement) to which you, any such other Underwriters and any such
controlling persons may become subject or incur, in whole or in part, as a
result of our actual or alleged failure to timely perform our obligations under
this Agreement, the Underwriting Agreement or under applicable law or the
inaccuracy of any of our representations in this Agreement or the Master
Underwriters' Questionnaire (as attached hereto as Exhibit A), and we will,
upon such request as may be made from time to time, pay to you, each such other
Underwriter and each such controlling person (i) such expenses as have been
incurred by you, such other Underwriters and such controlling persons to the
date of each such request (including, without limitation, costs of
investigation and attorneys' fees and disbursements) in whole or in part in
investigating, defending against and negotiating with respect to such claim or
claims, and (ii) any liabilities incurred by you, such other Underwriters or
such controlling persons to the date of each such request, in whole or in part,
as a result of such claim or claims, whether such liability shall be the result
of a judgment or the result of any settlement made by you, such other
Underwriter or such controlling person.
You shall give us reasonably prompt notice of the assertion of any such
claim or claims referred to in this Section 15, as well as such reports from
time to time as you shall deem reasonable as to the status thereof and as to
the actions taken by you in respect thereof pursuant to the foregoing
authorizations and indemnifications, although your failure to do so shall not
affect our obligations hereunder. In addition, we will cooperate with you and
attorneys retained by you (or which you arranged for or approved the retaining
of) in investigating and defending against any such claim or claims referred to
in this Section 15 and will make available all relevant records and documents
and appropriate personnel. We understand that the discharge of any obligations
that we may have under the provisions of the preceding two paragraphs of this
Section 15 shall not relieve us of any obligation that we may have under the
first paragraph of this Section 15. The foregoing indemnifications will be in
addition to, and will not supersede, any other indemnification to which you,
any such other Underwriter and any such controlling person shall be entitled
from us by virtue of this Agreement, by operation of law or otherwise.
The provisions of Section 14 hereof and our agreements contained in
this Section 15 shall remain in full force and effect regardless of any
investigation made by or on behalf of you, any other Underwriter or any
controlling person and shall survive the delivery of the Securities and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters.
16. Reports and Blue Sky Matters. We authorize you to file with the
Commission and any other governmental agency any reports required in connection
with any transactions effected by you for our account pursuant to this
Agreement and the Underwriting Agreement, and we will furnish any information
needed for such reports. As provided in Section 9 hereof, we agree to notify
you in writing of the information specified in Rule 17a-2(d) of the Commission
promulgated under the Exchange Act. You shall not have any responsibility with
repect to the right of any Underwriter or other person to sell the Securities
in any jurisdiction, notwithstanding any information you may furnish in that
connection.
We are familiar with Rule 15c2-8 promulgated under the Exchange Act
relating to the distribution of preliminary and final prospectuses for
securities of an issuer (whether or not the issuer is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act) and confirm that we
will comply therewith in connection with any sale of Securities.
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17. NASD Membership. We understand that you are a member in good
standing of the Association. We confirm that we are actually engaged in the
investment banking or securities business and are either a member in good
standing of the Association or foreign dealer not eligible for membership in
the Association who has agreed not to make sales within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein, to comply with the requirements of the Association's Interpretation
with Respect to Free-Riding and Withholding in making sales of the Securities
and not to use any means of interstate commerce to effect such sales unless we
are registered under the Exchange Act. In connection with our sale of the
Securities, and without limiting the foregoing, we specifically agree to comply
with Section 24 of Article III of the Rules of Fair Practice of the Association
or, if we are a foreign dealer not a member of the Association, we agree to
comply as though we were a member with Sections 8, 24 and 36 of said Article
and with Section 25 of said Article as that Section applies to non-member
brokers or dealers in a foreign country.
We authorize you to file on our behalf with the Association such
documents and information, if any, which are available or have been furnished
to you for filing pursuant to applicable rules, statements and interpretations
of the Association.
18. Representations and Agreements. (a) We understand that it is our
responsibility to examine the Registration Statement, the Prospectus, any
amendment or supplement thereto relating to the offering of the Securities, any
preliminary prospectus and the material, if any, incorporated by reference
therein and we will familiarize ourselves with the terms of the Securities and
the other terms of the offering thereof which are to be reflected in the
Prospectus and the Invitation with respect thereto. You are authorized, with
the approval of counsel for the Underwriters, to approve on our behalf any
amendments or supplements to the Registration Statement or the Prospectus.
(b) We confirm that the information that we have given or are deemed
to have been given in response to the Master Underwriters' Questionnaire
attached as Exhibit A hereto (which information has been furnished to the
Company for use in the Registration Statement or the Prospectus) is correct.
We will notify you immediately if any development occurs before the termination
of this Agreement under Section 12 as to the offering of Securities which makes
untrue or incomplete any information that we have given or are deemed to have
been given in response to the Master Underwriters' Questionnaire.
(c) Unless we have promptly notified you in writing otherwise, our
name as it should appear in the Prospectus and our address are as set forth on
the signature page hereof.
(d) We agree that if we are advised by you that the Company was not,
immediately prior to the filing of the Registration Statement, subject to the
requirements of Section 13(a) or 15(d) of the Exchange Act, we will not,
without your consent, sell any of the Securities to an account over which we
exercise discretionary authority.
19. Capital Requirements. We confirm that our net capital and the
ratio of our aggregate indebtedness to our net capital is such that we may, in
accordance with and pursuant to Rule 15c3-1 promulgated by the Commission under
the Exchange Act, and other applicable laws, rules and regulations relating to
us, agree to purchase the Securities that we are obligated to purchase
hereunder and under the Underwriting Agreement.
20. Notices. All notices to us will be considered duly given if
mailed or telegraphed to our address as set forth on the signature page hereof
(as such address may be changed by written notice to you). All notices to you
will be considered duly given if mailed or telegraphed to Montgomery Securities
at the address set forth above, directed to the attention of the Syndicate
Department, or to such other address as you may specify to us in writing from
time to time.
21. General Provisions. Subject to the provisions of Section I
hereof, this Agreement may be amended or modified by notication in writing by
you to us. This Agreement will be governed by and construed in accordance with
the laws of th State of California. The invalidity or unenforceability of
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<PAGE> 10
any provision or portion of this Agreement shall not affect the
validity or enforceability of the other provisions hereof. If any provision or
portion of this Agreement shall be invalid or unenforceable for any reason,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
Neither this Agreement nor any rights hereunder may be directly or
indirectly assigned (whether by merger, reverse merger, sale of stock or
assets, operation of law or, without limitation, otherwise) by us. This
Agreement shall inure to the benefit of and be binding upon the permissible
successors and assigns and the heirs, executors and administrators of the
parties hereto. No such assignment will relieve us of our obligations
hereunder.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
executed in several counterparts, each one of which shall be an original and
all of which shall constitute one and the same document.
Very truly yours,
--------------------------------------
Name of Firm
By
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
Confirmed, as of the
date first above written.
MONTGOMERY SECURITIES
By
---------------------------------
Partner
10
<PAGE> 1
EXHIBIT 1.3
SELECTED DEALERS AGREEMENT
May 13, 1988
MONTGOMERY SECURITIES
600 Montgomery Street
San Francisco, California 94111
Ladies and Gentlemen:
1. General. We understand that Montgomery Securities is entering into
this Agreement with us and other firms who may be offered the right to purchase
as principal a portion of securities being distributed to the public. The terms
and conditions of this Agreement shall be applicable to any public offering of
securities ("Securities") pursuant to a registration statement filed under the
Securities Act of 1933 (the "Securities Act") wherein Montgomery Securities
(acting for its own account or for the account of any underwriting or similar
group or syndicate) is responsible for managing or otherwise implementing the
sale of the Securities to selected dealers ("Selected Dealers") and has
expressly informed us that such terms and conditions shall be applicable. Any
such offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the
account of any underwriting or similar group or syndicate ("Underwriters"), the
terms and conditions of this Agreement shall be for the benefit of, and binding
upon, such Underwriters, including, in the case of any Offering in which you
are acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities;
the term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, either filed
pursuant to Rule 424(b) or Rule 424(c) under the Securities Act or, if no such
filing is required, the form of final prospectus contained in the related
registration statement at the time that it first becomes effective.
2. Conditions of Offering; Acceptance and Purchase. Any Offering
will be subject to delivery of the Securities and their acceptance by you and
any other Underwriters, may be subject to the approval of certain legal matters
by counsel and the satisfaction of other conditions, and may be made on the
basis of reservation of Securities or an allotment against subscription. You
will advise us by telegram, telex, or other form of written communication
("Written Communication") of the particular method and supplementary terms and
conditions (including, without limitation, the information as to prices and
offering date referred to in section 3(b)) of any Offering in which we are
invited to participate. To the extent such supplementary terms and conditions
are inconsistent with any provision herein, such terms and conditions shall
supersede any such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with respect to any
Offering should be sent to Montgomery Securities, 600 Montgomery Street, San
Francisco, California 94111. You reserve the right to reject any acceptance in
whole or in part. Payment for Securities purchased by us is to be made at such
office as you may designate, at the public offering price, or if you shall so
advise us, at such price less the concession to dealers or at the price set
forth or indicated in a Written Communication, on such date as you shall
determine, on one days' prior notice to us, by certified or official bank check
payable in next day funds to the order of Montgomery Securities, against
delivery of certificates evidencing such Securities. If payment is made for
Securities purchased by us at the public offering price, the concession to
which we shall be entitled will be paid to us upon termination of the
provisions of Section 3(b) hereof with respect to such Securities.
Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, payment for and delivery of Securities purchased by us
will be made through such facilities if we are a member, or if we are not a
member, settlement may be made through our ordinary correspondent who is a
member.
<PAGE> 2
3. Representations, Warranties, and Agreement.
(a) Prospectuses. You shall provide us with such number of copies of
each preliminary prospectus, the Prospectus and any supplement thereto relating
to each Offering as we may reasonably request for the purposes contemplated by
the Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act")
and the applicable rules and regulations of the Securities and Exchange
Commission thereunder. We represent that we are familiar with Rule 15c2-8 under
the Exchange Act relating to the distribution of preliminary and final
prospectuses and agree that we will comply therewith. We agree to keep an
accurate record of our distribution (including dates, number of copies, and
persons to whom sent) of copies of the Prospectus or any preliminary prospectus
(or any amendment or supplement to any thereof), and promptly upon request by
you, to bring all subsequent changes to the attention of anyone to whom such
material shall have been furnished. We agree to furnish to persons who receive
a confirmation of sale a copy of the Prospectus. We agree that in purchasing
Securities in an Offering we will rely upon no statements in the Prospectus
delivered to us by you. We will not be authorized by the issuer or other seller
of Securities offered pursuant to a Prospectus or by any Underwriters to give
any information or to make any representation not contained in the Prospectus
in connection with the sale of such Securities.
(b) Offer and Sale to the Public. With respect to any offering of
Securities, you will inform us by a Written Communication of the public
offering price, the selling concession, the reallowance (if any) to dealers,
and the time when we may commence selling Securities to the public. After such
public offering has commenced, you may change the public offering price, the
selling concession, and the reallowance to dealers. With respect to each
Offering of Securities, until the provisions of this Section 3(b) shall be
terminated pursuant to Section 4, we agree to offer Securities to the public
only at the public offering price, except that if a reallowance is in effect, a
reallowance from the public offering price not in excess of such reallowance
may be allowed as consideration for services rendered in distribution to
dealers who are actually engaged in the investment banking or securities
business, who execute the written agreement prescribed by Section 24(c) of
Article III of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") and who are either members in good
standing of the NASD or foreign brokers or dealers not eligible for membership
in the NASD who represent to us that they will promptly reoffer such Securities
at the public offering price and will abide by the conditions with respect to
foreign brokers and dealers set forth in Section 3(e) hereof.
(c) Stabilization and Overallotment. You may, with respect to any
Offering, be authorized to overallot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that you may designate for long or short account, and to stabilize or maintain
the market price of the Securities. We agree to advise you from time to time
upon request, prior to the termination of the provisions of Section 3(b) with
respect to any Offering, of the amount of Securities purchased by us hereunder
remaining unsold and we will, upon your request, sell to you, for the accounts
of the Underwriters, such amount of Securities as you may designate, at the
public offering price thereof less an amount to be determined by you not in
excess of the concession to dealers. In the event that prior to the later of
(i) the termination of the provisions of Section 3(b) with respect to any
Offering, or (ii) the covering by you of any short position created by you in
connection with such Offering for your account or the account of one or more
Underwriters, you purchase or contract to purchase for the account of any of
the Underwriters, in the open market or otherwise, any Securities theretofore
delivered to us, you reserve the right to withhold the above-mentioned
concession to dealers on such Securities if sold to us at the public offering
price, or if such concession has been allowed to us through our purchase at a
net price, we agree to repay such concession upon your demand, plus in each case
any taxes on redelivery, commissions, accrued interest, and dividends paid in
connection with such purchase or contract to purchase.
2
<PAGE> 3
(d) Open Market Transactions. We agree not to bid for, purchase,
attempt to purchase, or sell, directly or indirectly, any Securities, any other
securities of the issuer of the Securities of the same class and series, or any
other securities of such issuer as you may designate, except as brokers
pursuant to unsolicited orders and as otherwise provided in this Agreement. If
the Securities are common stock or securities convertible into common stock, we
agree not to effect, or attempt to induce others to effect, directly or
indirectly, any transactions in or relating to put or call options on any stock
of such issuer, except to the extent permitted by Rule 10b-6 under the Exchange
Act as interpreted by the Securities and Exchange Commission.
(e) NASD. We represent that we are actually engaged in the
investment banking or securities business and we are either a member in good
standing of the NASD, or, if not such a member, a foreign dealer not eligible
for membership. If we are such a member, we agree that in making sales of the
Securities we will comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding and
Withholding and Section 24 of Article III of the Rules of Fair Practice. If we
are such a foreign dealer, we agree not to offer or sell any Securities in the
United States of America except through you and in making sales of Securities
outside the United States of America we agree to comply as though we were a
member with such Interpretation and Sections 8, 24, and 36 of Article III of
the NASD's Rules of Fair Practice and to comply with Section 25 of such Article
III as it applies to a non-member broker or dealer in a foreign country.
(f) Relationship among Underwriters and Selected Dealers. You may
buy Securities from or sell Securities to any Underwriter or Selected Dealer
and, with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized
to act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any Written Communication from you shall constitute the Selected
Dealers partners with you or any Underwriter or with one another. Neither you
nor any Underwriter shall be under any obligation to us except for obligations
assumed hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering, we agree to pay our proportionate
share of any claim, demand, or liability asserted against us, and the other
Selected Dealers or any of them, or against you or the Underwriters, if any,
based on any claim that such Selected Dealers or any of them constitute an
association, unincorporated business, or other separate entity, including in
each case our proportionate share of any expense incurred in defending against
any such claim, demand, or liability.
(g) Blue Sky Laws. Upon application to you, you will inform us as
to the jurisdictions in which you believe the Securities have been qualified for
sale under the respective securities or "blue sky" laws of such jurisdictions.
We understand and agree that compliance with the securities or "blue sky" laws
in each jurisdiction in which we shall offer or sell any of the Securities
shall be our sole responsibility and that you assume no responsibility or
obligations as to the eligibility of the Securites for sale or our right to
sell the Securities in any jurisdiction.
(h) Compliance with Law. We agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of the
issuer or other seller of such Securities), we will comply with the applicable
provisions of the Securities Act and the Exchange Act, the applicable rules and
regulations of the Securites and Exchange Commission thereunder and the
applicable rules and regulations of any securities exchange having jurisdiction
over the Offering. You shall have full authority to take such action as you may
deem advisable in respect of all matters pertaining to any Offering. Neither
you nor any Underwriter shall be under any liability to us, except for lack of
good faith and for obligations expressly assumed by you in this Agreement;
provided, however, that nothing in this sentence shall be deemed to relieve you
from any liability imposed by the Securities Act.
3
<PAGE> 4
4. Termination; Supplements and Amendments. This Agreement may be
terminated by either party hereto upon five business days' written notice to
the other party; provided that with respect to any Offering for which Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d)
hereof with regard to any Offering will terminate at the close of business on
the thirtieth day after the date of the initial public offering of the
Securities to which such Offering related, but such terms and conditions, upon
notice to us, may be terminated by you at any time.
5. Successor and Assigns. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified or
indicated in Section 1 hereof, and the respective successors and assigns of
each of them; provided, however, that we may not assign our rights or delegate
any of our duties under this Agreement without your prior written consent.
6. Governing Law. This Agreement and the terms and condition set
forth herein with respect to any Offering together with such supplementary
terms and conditions with respect to such Offering as may be contained in any
Written Communication from you to us in connection therewith shall be governed
by, and construed in accordance with, the laws of the State of California.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of such shall
constitute a binding agreement between us and you, individually, or as a
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 hereof are true and
correct at that time and (iii) confirmation that our agreements set forth in
Sections 2 and 3 hereof have been and will be fully performed by us to the
extent and at the times required thereby.
Very Truly Yours,
---------------------------------------
(Name of Firm)
By: -----------------------------------
Name: ---------------------------------
Title: --------------------------------
Confirmed, as of the date
first above written.
MONTGOMERY SECURITIES
By: ---------------------------------
Partner
4
<PAGE> 1
Exhibit 5.1
SCHWARTZ, WARREN & RAMIREZ
A LIMITED LIABILITY COMPANY * ATTORNEYS AT LAW
41 SOUTH HIGH STREET * COLUMBUS, OHIO 43215-6188
(614) 222-3000 * FAX (614) 224-0360
DAYTON, OHIO (513) 228-0144
http://www.swrlaw.com
April 17, 1996
Cooker Restaurant Corporation
5500 Village Boulevard
P. O. Box 11448
West Palm Beach, Florida 33419-1448
Re: Offering of Common Shares
Gentlemen:
You have requested our opinion in connection with the offering (the
"Offering") of up to 2,875,000 common shares, $.001 par value (the "Common
Shares"), of Cooker Restaurant Corporation, an Ohio corporation (the
"Company"), which securities are registered on a Registration Statement on Form
S-3 filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933 (the "Registration Statement").
Although we have acted as counsel to the Company in connection with the
Offering and various other matters in the past, our advice to and
representation of the Company have been limited to the specific matters
referred to us from time to time by the Company; accordingly, we may be unaware
of certain matters of a legal nature concerning the Company.
We have examined and relied upon the following documents and instruments
for the purpose of giving this opinion which, to our knowledge and in our
judgment, are all of the documents and instruments that are necessary for us to
examine for such purpose.
i. The Registration Statement and the prospectus filed therewith (the
"Prospectus") and all exhibits thereto;
ii. The corporate minute books of the Company, including copies of the
Company's Amended and Restated Articles of Incorporation and Amended and
Restated Code of Regulations;
iii. An officer's certificate executed by an officer of the Company
certifying certain factual information; and
iv. A secretary's certificate executed by the secretary of the Company
certifying certain corporate information.
In giving our opinion, we have assumed, without investigation, the
authenticity of any document or instrument submitted to us as an original, the
conformity to the authentic original
Celebrating 75 years of service to the business community
<PAGE> 2
Neoprobe Corporation
March 8, 1996
Page 2
of any document or instrument submitted to us as a certified, conformed or
photostatic copy, the genuineness of all signatures on such originals or copies
and the authority and capacity of each signatory.
Based upon the foregoing, we are of the opinion that when the Common Shares
sold in the Offering described in the Registration Statement have been duly
issued and delivered and fully paid for, they will be validly issued, fully
paid and nonassessable.
The opinion set forth above is subject to the following qualifications:
A. No opinion is expressed herein as to the application of any state
securities or Blue Sky laws.
B. Members of our firm are qualified to practice law in the State of Ohio
and nothing contained herein shall be deemed to be an opinion as to any law
other than the General Corporation Law of the State of Ohio and the federal law
of the United States.
C. The opinions set forth herein are expressed as of the date hereof and
we do not have any obligation to advise you of any changes, after the date
hereof, in the facts or the law upon which these opinions are based.
D. This opinion is furnished by us solely for your benefit and is
intended to be used as an exhibit to the Registration Statement and filings
with various state securities authorities in connection with the Offering, and
such entities may rely on this opinion as if it were addressed to and had been
delivered to them on the date hereof. Except for such use, neither this
opinion nor copies hereof may be relied upon by, delivered to any person or
entity, or quoted in whole or in part without our prior written consent.
E. We consent to the reference to our firm name under the caption LEGAL
MATTERS in the Prospectus and to the use of our opinion as an exhibit to the
Registration Statement. In giving these consents, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
SCHWARTZ, WARREN & RAMIREZ
A LIMITED LIABILITY COMPANY
By: /s/ Robert S. Schwartz
-------------------------------------------
Robert S. Schwartz, a member of the firm
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated January 29, 1996 relating
to the financial statements of Cooker Restaurant Corporation, which appears in
such Prospectus. We also consent to the references to us under the headings
"Experts" and "Selected Financial Data" in such Prospectus. However, it should
be noted that Price Waterhouse LLP has not prepared or certified such "Selected
Financial Data."
PRICE WATERHOUSE LLP
Columbus, Ohio
April 18, 1996
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11th day of
April, 1996.
/s/ G.A. 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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11th day of
April, 1996.
/s/ Phillip L. Pritchard
---------------------------------
Phillip L. Pritchard
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11th day of
April, 1996.
/s/ Glenn W. Cockburn
---------------------------------
Glenn W. Cockburn
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11th day of
April, 1996.
/s/ David C. Sevig
---------------------------------
David C. Sevig
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 ___ day of
April, 1996.
/s/ Joseph E. Madigan
---------------------------------
Joseph E. Madigan
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11th day of
April, 1996.
/s/ Robin V. Holderman
---------------------------------
Robin V. Holderman
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 ___ day of
April, 1996.
/s/ David T. Kollat
---------------------------------
David T. Kollat
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 11 day of
April, 1996.
/s/ David L. Hobson
---------------------------------
David L. Hobson
<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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 ___ day of
April, 1996.
/s/ Henry R. Hillenmeyer
---------------------------------
Henry R. Hillenmeyer
<PAGE> 10
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 a Registration
Statement on Form S-1, Form S-3 or other appropriate form and any
amendments thereto relating to the sale of the Company's securities to the
public for cash; 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
Registration Statement or amendments thereto, 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 or 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 14th day of
April, 1996.
/s/ Margaret Monaco
---------------------------------
Margaret T. Monaco
<PAGE> 1
Exhibit 24.2
SECRETARY'S CERTIFICATE
I, Robert S. Schwartz, certify that I am the duly elected, qualified and
acting Assistant 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 a Registration
Statement of the Corporation 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, which resolution has not been amended, modified or rescinded:
RESOLVED, that each officer and director of the Corporation who may be
required to execute the Registration Statement or any amendments 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, each with
full power of substitution and resubstitution, as his or her true and lawful
attorney and agent to execute in his or her name, place and stead (in any
capacity) the Registration Statement and any and all amendments thereto and any
other documents or instruments necessary in connection therewith, with full
power and authority to do and perform, in the name of and on behalf of each of
said officers and directors, or both, as the case may be, every act whatsoever
necessary or advisable to be done in the premises as fully as such officer or
director would do in person; and further
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of April,
1996.
/s/ Robert S. Schwartz
---------------------------------------
Robert S. Schwartz, Assistant Secretary
