<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ]Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Cooker Restaurant Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
COOKER RESTAURANT CORPORATION
5500 VILLAGE BOULEVARD
WEST PALM BEACH, FLORIDA 33407
1997 ANNUAL MEETING OF SHAREHOLDERS
March 19, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
of Cooker Restaurant Corporation which will be held at 9:00 a.m., Eastern
Daylight Time, on April 14, 1997 at our headquarters, 5500 Village Boulevard,
West Palm Beach, Florida. The matters on the meeting agenda are described in the
Notice of 1997 Annual Meeting of Shareholders and Proxy Statement which
accompany this letter.
We hope you will be able to attend the meeting, but, whatever your plans,
we ask that you please complete, execute and date the enclosed proxy card and
return it in the envelope provided so that your shares will be represented at
the meeting.
Very truly yours,
/s/ G. Arthur Seelbinder
G. Arthur Seelbinder
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
COOKER RESTAURANT CORPORATION
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 14, 1997
TO THE SHAREHOLDERS OF
COOKER RESTAURANT CORPORATION:
The Annual Meeting of Shareholders of Cooker Restaurant Corporation (the
"Company") will be held at our headquarters, 5500 Village Boulevard, West Palm
Beach, Florida, on Monday, April 14, 1997 at 9:00 a.m., Eastern Daylight Time,
for the following purposes:
1. To elect three directors, each to serve for a term of three years or
until their successors are duly elected and qualified.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on February 28, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof. A list of
shareholders will be available for examination by any shareholder at the Annual
Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
/s/ G. Arthur Seelbinder
G. Arthur Seelbinder
Chairman of the Board and
Chief Executive Officer
West Palm Beach, Florida
March 14, 1997
<PAGE> 4
COOKER RESTAURANT CORPORATION
----------------------------
1997 ANNUAL MEETING OF SHAREHOLDERS
APRIL 14, 1997
----------------------------
PROXY STATEMENT
DATED MARCH 19, 1997
----------------------------
GENERAL INFORMATION
Solicitation. This Proxy Statement is furnished to the shareholders of
Cooker Restaurant Corporation, an Ohio corporation (the "Company"), in
connection with the solicitation by the Board of Directors of the Company (the
"Board of Directors") of proxies to be voted at the 1997 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held on April 14, 1997
and any adjournment thereof. This Proxy Statement and the accompanying proxy
card are first being mailed to shareholders on or about March 19, 1997.
Voting Rights. Shareholders of record at the close of business on
February 28, 1997 are entitled to notice of and to vote at the Annual Meeting.
As of that date, there were approximately 10,035,000 Common Shares of the
Company, without par value ("Common Shares"), issued and outstanding. Each
shareholder of record on February 28, 1997 is entitled to one vote per Common
Share held of record on all matters which may be brought before the Annual
Meeting.
Authorization. All shares represented by properly executed proxies received
by the Company pursuant to this solicitation will be voted in accordance with
the shareholders' directions specified on the proxy card. If no directions have
been specified by marking the appropriate square on the accompanying proxy card,
the shares represented by such proxy will be voted in accordance with the
recommendation of the Board of Directors, which is FOR the election of Glenn W.
Cockburn, David T. Kollat and Harvey M. Palash as directors of the Company. The
proxy will also be voted at the discretion of the persons acting under the proxy
to transact such other business as may properly come before the Annual Meeting
and any adjournment thereof.
Revocation. Any shareholder returning the accompanying proxy has the power
to revoke it at any time before its exercise by giving written notice of
revocation to the Company (addressed to the attention of the Secretary), by
giving oral notice of revocation to the Company at the Annual Meeting, by duly
executing and delivering to the Company a proxy card bearing a later date, or by
voting in person at the Annual Meeting.
Tabulation. Under Section 1701.51 of the Ohio Revised Code ("ORC") and the
Code of Regulations of the Company, a quorum must be present at the Annual
Meeting in order for any valid action, including the election of directors and
voting on the other matters presented to the meeting, other than adjournment, to
be taken thereat. The Code of Regulations of the Company provides that a quorum
consists of the holders of a majority of the voting shares present in person or
by proxy. Shares represented by signed proxies that are returned to the Company
will be counted toward the quorum in all matters even though they are marked as
"Abstain," "Against" or "Withhold Authority" on one or more or all matters or
they are not marked at all (see "Authorization"). Broker/dealers, who hold their
customers' shares in street name, may, under the applicable rules of the
exchange and other self-regulatory organizations of which the broker/dealers are
members, sign and submit proxies for such shares and may vote such shares on
routine matters,
<PAGE> 5
which, under such rules, typically include the election of directors, but
broker/dealers may not vote such shares on other matters, which typically
include amendments to the articles of incorporation of the Company and the
approval of stock compensation plans, without specific instructions from the
customer who owns such shares. Proxies signed and submitted by broker/dealers
which have not been voted on certain matters as described in the previous
sentence are referred to as broker non-votes. Such proxies count toward the
establishment of a quorum.
Under Section 1701.55 of the ORC, directors are elected by a plurality of
the votes for the respective nominees. Therefore, proxies that are marked
"Withhold Authority" and broker non-votes, if any, will not affect the election
of directors.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
At the Annual Meeting, three nominees will be elected as directors. See
"General Information - Tabulation." Directors elected at the Annual Meeting will
hold office for a three-year term expiring at the Annual Meeting of Shareholders
in 2000 or until their successors are elected and qualified. The Company has no
reason to believe that any of the nominees will not stand for election or serve
as a director. If any person nominated fails to stand for election, the proxies
will be voted for the election of such other person as shall be designated by
the persons named in the proxy.
THE BOARD OF DIRECTORS HAS NOMINATED THE FOLLOWING PERSONS TO SERVE AS
DIRECTORS OF THE COMPANY:
GLENN W. COCKBURN, age 41, is one of the founders of the Company. He has
been a director of the Company since 1989. In 1991, he was elected Senior Vice
President - Operations of the Company. He was Vice President - Food Services of
the Company from 1988 to 1991 and was Vice President of Food Operations of
Cooker Corporation (a predecessor of the Company) from 1986 to 1988 when it was
merged into the Company. He is a graduate of the Culinary Institute of America
in Hyde Park, New York.
DAVID T. KOLLAT, age 58, has been a director of the Company since 1988 and
is Chairman of 22 Inc., a company specializing in research and consulting for
retailers and consumer goods manufacturers. He is a director of Consolidated
Stores, Inc., The Limited, Inc., Wolverine Worldwide, Inc. and Audio
Environments, Inc. He earned his Doctor of Business Administration degree at
Indiana University, and was a Professor of Marketing in the College of
Administrative Sciences of The Ohio State University from 1965 to 1972.
HARVEY M. PALASH, age 63, has been a director of the Company since January
1997. He has been a director of the National Hot Rod Association since 1979 and
has served as Vice Chairman since 1986. He also served as a director of Southern
Hospitality Corporation, a Wendy's franchise operator based in Nashville,
Tennessee, from 1988 to 1994. He has been a consultant for Hubbard Broadcasting
since January 1990. He was a consultant for the Nashville Network from 1990 to
1992. In 1985, he founded Diamond P Video, Inc. and served as Chief Executive
Officer until he sold the company in January 1990. In 1980, he founded Diamond P
Sports, Inc. and served as Chief Executive Officer until he sold the company in
January 1990. He has a J.D. degree from the Loyola Law School. He received his
license to practice law in California in 1966.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 1998 ANNUAL MEETING:
DAVID L. HOBSON, age 60, has been a director of the Company since 1986. Mr.
Hobson became a member of the United States House of Representatives in January
1991. Before being elected to the House of Representatives, he served as a
member of the Ohio Senate for more than five years and was its president Pro
Tem.
ROBIN V. HOLDERMAN, age 45, has been a director of the Company since 1986.
Mr. Holderman has been an Executive Vice President of Corporate Development of
Karrington Health, Inc., an assisted living facilities operating and development
company, since November of 1996. He served as President of Ruscilli Development
Co., Ltd., a real estate development company, from May 1995 to November 1996. He
served as Manager of Industrial Development
2
<PAGE> 6
of Duke Realty Investments, Inc., a real estate development company, from April
1994 to May 1995, and prior thereto was President of Conquest Corporation, a
commercial and industrial real estate development company located in Columbus,
Ohio, which he founded more than nine years ago. From 1990 through 1992, he was
the Director of Development for the Columbus office of the Miller-Valentine
Group, a Dayton, Ohio-based commercial real estate developer and design/build
contractor.
G. ARTHUR SEELBINDER, age 53, is one of the founders of the Company. He has
been Chairman of the Board, Chief Executive Officer and a director of the
Company since 1986 and served as President from September 1989 until December
1994. He was Chairman of the Board of Cooker Corporation from 1984 until 1988
when it was merged into the Company. Mr. Seelbinder is also a director and the
President of Financial Land Corporation, a real estate holding company. Mr.
Seelbinder was a general partner in a single-asset real estate limited
partnership that owned and managed an office building in central Ohio. As part
of the foreclosure process, a state court appointed a receiver to take over the
property owned by the Partnership in December, 1994. The Partnership filed a
Chapter 11 petition in the United States Bankruptcy Court for the Southern
District of Ohio, Eastern Division, in December, 1995. The Bankruptcy Court
dismissed the case in December, 1996.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 1999 ANNUAL MEETING:
HENRY R. HILLENMEYER, age 53, has been a director of the Company since
1994. Since March 1995, Mr. Hillenmeyer has served as the Chairman and Chief
Executive Officer of Skill Search Corporation, a resume database company. He
also was Chairman and President of Southern Hospitality Corporation, a Wendy's
franchise operator based in Nashville, Tennessee, from May 1988 to October 1994.
MARGARET T. MONACO, age 49, has served as a director of the Company since
1994. She has been a corporate financial consultant with Probus Advisors, a
management/financial consulting firm, since July 1993. From October 1987 to June
1993, she was Vice President and Treasurer of The Limited, Inc. She is a
director of Barnes & Noble, Inc. and Crown America Realty Trust. She has an MBA
degree from Columbia Graduate School of Business Administration.
PHILLIP L. PRITCHARD, age 47, has been a director of the Company since 1994
and has served as the President and Chief Operating Officer of the Company since
December 1994. Prior to joining the Company, Mr. Pritchard spent 22 years with
General Mills Restaurants, Inc., ("GMRI"). Most recently, Mr. Pritchard served
as Executive Vice President, Operations for GMRI's Red Lobster restaurants from
1986 through 1992 and Executive Vice President, Operations for GMRI's China
Coast restaurants from 1992 to 1993. He has an MBA degree from Rollins College
Graduate School of Business Administration.
BOARD OF DIRECTORS MEETINGS
The Board of Directors held five meetings in fiscal 1996 and each of the
directors attended at least 75 percent of the aggregate number of meetings of
the Board of Directors and committees (if any) on which he served.
COMMITTEES
The Company has a standing Audit Committee and a standing Compensation
Committee. The Company does not have a committee whose functions include
nominating directors.
The Audit Committee (comprised of Robin V. Holderman, David T. Kollat and
Margaret T. Monaco as of the end of fiscal 1996) recommends the firm to be
employed by the Company as its independent auditors; reviews, in consultation
with the independent auditors, their report of audit, or proposed report of
audit, and the management letter, if any; consults with the independent auditors
(periodically and, as appropriate, out of the presence of management) with
regard to the adequacy of the internal accounting controls; and approves
transactions between the Company and its officers. The Audit Committee held
three meetings in fiscal 1996.
3
<PAGE> 7
The Compensation Committee (comprised of Henry R. Hillenmeyer, David L.
Hobson, and David T. Kollat) establishes the compensation of all officers and
management employees of the Company, adopts compensation plans for them,
approves employment agreements with such persons, administers and interprets the
1988 and 1992 Employee Stock Option Plans and the 1996 Officers' Stock Option
Plan, takes any action that is permitted to be taken by a committee of the Board
of Directors under the terms of such plans, including the granting of options,
and provides instructions to the trustee of the Company's employee stock
ownership plan (the "ESOP") with respect to the voting of unallocated Common
Shares thereunder. The Compensation Committee held three meetings in fiscal
1996.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS,
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of February 28, 1997, certain
information with respect to the beneficial ownership of Common Shares by (i)
each person known to the Company to be the beneficial owner of more than five
percent of the outstanding Common Shares, (ii) each director or nominee for
director of the Company, (iii) each of the Named Executives (as defined in
"Compensation of Management" below) and (iv) the Company's directors and
executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
SHAREHOLDER BENEFICIALLY OWNED (a) PERCENT OF CLASS
<S> <C> <C>
G. Arthur Seelbinder (b) 919,007 (c)(d) 9.0%
Glenn W. Cockburn 314,632 (c)(d) 3.1%
Henry R. Hillenmeyer 10,600 (c)(e)(f) (g)
David L. Hobson 61,874 (c)(e) (g)
Robin V. Holderman 28,918 (c) (g)
David T. Kollat 124,344 (c)(e) 1.2%
Margaret T. Monaco 8,600 (c) (g)
Phillip L. Pritchard 275,410 (c)(d) 2.7%
Harvey M. Palash 175,000 1.7%
David C. Sevig 32,261 (c)(h) (g)
All directors and executive officers
as a group (11 persons) 1,956,633 (c)(d)(e) 18.5%
Dimensional Fund Advisors Inc. 685,762 (i) 6.8%
Public Employees Retirement System of Ohio 600,000 (j) 6.0%
- -----------------
<FN>
(a) 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.
(b) G. Arthur Seelbinder's address is c/o the Company, 5500 Village Boulevard,
West Palm Beach, Florida 33407.
(c) Includes Common Shares subject to stock options outstanding and exercisable
within 60 days of February 28, 1997; for Mr. Seelbinder, 175,444 Common
Shares; for Mr. Cockburn, 104,787 Common Shares; for Mr. Hillenmeyer, 3,600
Common Shares; for Mr. Hobson, 19,442 Common Shares; for Mr. Holderman,
26,836 Common Shares; for Mr. Kollat, 50,712 Common Shares; for Ms. Monaco,
3,600 Common Shares; for Mr. Pritchard, 112,500 Common Shares; for Mr.
Sevig, 12,500 Common Shares; and for all directors and executive officers
as a group, 513,157 Common Shares.
(d) Includes Common Shares beneficially owned through the ESOP; for Mr.
Seelbinder, 5,776 Common Shares; for Mr. Cockburn, 5,169 Common Shares; for
Mr. Pritchard, 331 Common Shares; and for all directors and executive
officers as a group, 13,864 Common Shares.
(e) The ESOP holds approximately 272,000 Common Shares, constituting
approximately 2.7 percent of the outstanding Common Shares as of February
28, 1997. 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, and Hillenmeyer, 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.
</TABLE>
4
<PAGE> 8
(f) Includes 3,000 Common Shares owned of record by his spouse and children, as
to which beneficial ownership is disclaimed.
(g) Less than one percent.
(h) Includes 3,500 Common Shares owned of record by his spouse, as to which
beneficial ownership is disclaimed.
(i) Dimensional Fund Advisors Inc.'s address is 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401. Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 685,762 Common Shares as of December 31, 1996, all
of which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional Fund Advisors Inc. serves
as investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(j) Public Employees Retirement System of Ohio's address is 277 East Town
Street, Columbus, Ohio 43215-4642.
COMPENSATION OF MANAGEMENT
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the annual
and long term compensation for the last three fiscal years of the Chief
Executive Officer of the Company and the other executive officers whose total
annual salary and bonus exceeded $100,000 during the last fiscal year (the
"Named Executives").
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
------
Securities
Annual Compensation Underlying
Name and --------------------------------- Options All Other
Principal Position Year Salary Bonus (Shares) Compensation
- ------------------ ---- ------ ----- -------- ------------
<S> <C> <C> <C> <C> <C>
G. Arthur Seelbinder 1996 $215,000 $437,259 75,000 $ --
Chairman of the Board- 1995 175,000 314,606 -0- 3,660 (a)
Chief Executive Officer 1994 175,000 31,719 246,723(b) 1,830 (a)
Phillip L. Pritchard 1996 180,000 256,860 150,000 --
President-Chief 1995 150,000 105,000 -0- 3,660
Operating Officer 1994(c) 2,885 -0- 150,000 35
Glenn W. Cockburn 1996 143,750 141,574 25,000 --
Senior Vice-President 1995 125,000 95,250 -0- 43,992 (a)(d)
Operations 1994 125,000 9,375 90,414(e) 1,778 (a)
David C. Sevig 1996 115,000 92,019 20,000 --
Vice President-Chief 1995(f) 48,461 5,250 30,000 1,352
Financial Officer
<FN>
- ----------
(a) The amounts listed for 1994 and 1995 are allocations to the accounts of
each Named Executive in the ESOP, which is an employee stock ownership
plan under the Code. The allocation for 1996 has not been made. The
amounts shown for 1994 and 1995 represent Common Shares allocated to the
accounts of each Named Executive as of the end of each such year. Such
allocations were made during the next year. Common Shares were valued at
$6.00 at the end of 1994 and at $11.25 at the end of 1995. The Company
may, in its sole discretion, make contributions to the ESOP in the form of
cash or Common Shares. These contributions and forfeiture of invested
accounts are allocated to the individual account of every employee of the
Company who is age 21 and employed on December 31 of each year in
proportion to such employee's relative compensation for the year. The
accounts become 20 percent vested after three years of employment
increasing to 100 percent vested after seven years of employment. Upon
termination of employment, the vested amount of his account is delivered
to the terminated employee.
</TABLE>
5
<PAGE> 9
(b) This represents a grant made to Mr. Seelbinder on November 14, 1994, which
grant was conditioned upon the surrender of an option to purchase 125,000
Common Shares granted on January 14, 1994, an option to purchase 125,000
shares granted on January 18, 1993 and an option to purchase 90,000 shares
granted on October 14, 1991.
(c) Hired December 5, 1994.
(d) This includes a one-time moving allowance in connection with the relocation
of the Company's headquarters from Columbus, Ohio to West Palm Beach,
Florida.
(e) This represents a grant made to Mr. Cockburn on November 14, 1994, which
grant was conditioned upon the surrender of an option to purchase 35,000
Common Shares granted on January 14, 1994, an option to purchase 35,000
shares granted on January 18, 1993 and an option to purchase 50,000 shares
granted on October 14, 1991.
(f) Hired June 5, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning grants of
stock options to the Named Executives during the last fiscal year.
<TABLE>
<CAPTION>
Individual Grants (a) Grant Date Value (b)
-------------------------------------------------------------------- --------------------
Percent of
Number of Total Options
Securities Underlying granted Exercise of
Options Granted to Employees Base Price Expiration Grant Date
Name (shares)(a) in Fiscal Year ($/share) Date Present Value $
---- ------- -------------- --------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
G. Arthur Seelbinder 75,000 20.1% $11.625 1/30/06 $417,000
Glenn W. Cockburn 25,000 6.7% $11.625 1/30/06 139,000
Phillip L. Pritchard 150,000 40.2% $11.625 1/30/06 834,000
David C. Sevig 20,000 5.4% $11.625 1/30/06 111,200
<FN>
- ----------
(a) All options were granted on January 29, 1996 and the exercise price is the market value of the Common Shares on that date. Each
option vests in four equal installments on each of the first four anniversaries of the date of grant and lapses 90 days after
death or disability or 30 days after termination of employment. All unvested options vest upon a change in control, see "Change
in Control Arrangements."
(b) The per share weighted-average fair value of stock options during 1996 was $5.56 on the date of grant using the Black Scholes
option-pricing model with the following weighted average assumptions: expected dividend yield of .49%, risk-free interest rate
of 5.6%, an expected life of 7 years, and volatility of 37%.
</TABLE>
FISCAL YEAR-END STOCK OPTION VALUES
The following table sets forth certain information concerning the exercise
of stock options by the Named Executives during the last fiscal year and the
number and value of unexercised stock options held by each of them at the end
thereof.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
UnexercisedOptions at Fiscal Year-End Options at Fiscal Year-End
Name (Exercisable/Unexerciseable) (Exercisable/Unexerciseable)
---- -------------------------- --------------------------
<S> <C> <C> <C>
G. Arthur Seelbinder 156,694 / 198,362 $898,557 / $657,026
Glenn W. Cockburn 98,537 / 70,207 $623,180 / $240,462
Phillip L. Pritchard 75,000 / 225,000 $384,375 / $403,125
David C. Sevig 7,500 / 42,500 $23,438 / $72,813
</TABLE>
6
<PAGE> 10
COMMON SHARE PERFORMANCE
The following graph shows the yearly percentage change in the cumulative
total return to holders of Common Shares, assuming dividend reinvestment, and
the cumulative total return, assuming dividend reinvestment, of the Russell 2000
Index and the Value Line Restaurant Industry Index since the market close on the
last trading day before the beginning of the Company's fifth preceding fiscal
year (1992), through and including the end of the Company's last completed
fiscal year (1996). The Russell 2000 Index is a capitalization weighted index of
domestic equities traded on The New York and American Stock Exchanges and the
Nasdaq National Market which excludes the 1,000 largest capitalization equities
of the 3,000 such equities. Common Shares are traded on The New York Stock
Exchange and fit within the Russell 2000 Index definition. The Value Line
Restaurant Industry Index is published in the Value Line Industry Review. The
graph is based upon an assumed investment of $100.00 in each of Common Shares,
the Russell 2000 Index and the Value Line Restaurant Industry Index on the last
trading day before the beginning of the Company's fifth preceding fiscal year.
COMMON SHARE PERFORMANCE
<TABLE>
<CAPTION>
Years Common Shares Russell 2000 VLRI
<S> <C> <C> <C>
Begin 100 100 100
1992 153.78 118.41 120.42
1993 89.20 140.80 115.85
1994 41.75 138.01 91.39
1995 78.76 177.26 120.61
1996 81.80 206.48 103.67
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The primary purpose of the Company's executive compensation system as set
forth in the Company's Long Range Strategic Plan for the Fiscal Years 1997
through 2001, is to promote, support and reward exceptional growth and premium
profitability and thereby to maximize the value of the Company to its
shareholders.
The Company's executive compensation system consists of three components:
salary and fringe benefits, cash bonus payments and stock options. All of the
Named Executives, including the Chief Executive Officer, are compensated under
this system which is administered by the Compensation Committee.
Salary and fringe benefits (e.g., group health and life insurance,
ESOP) are intended to be no higher than the median of the base salaries and
benefits paid by comparable restaurant companies. The Committee's objective is
to minimize this component and increases in it so as to minimize fixed costs and
break-even levels. Base salaries are reviewed and adjusted by the Committee
based upon management's recommendations annually. The Committee's review
includes a review of salaries paid by comparable restaurant companies to
comparable officers, including the chief executive officer, as shown in their
proxy statements and by a trade association survey. These companies consist of
publicly-traded full-service restaurants in the casual dining segment of the
restaurant industry.
7
<PAGE> 11
Cash bonus payments are a function of the Company's incentive bonus plan,
which is administered by the Compensation Committee. The bonuses payable under
the incentive bonus plan are determined by the multiplication of three factors:
the individual executive's base salary during the period of determination, which
is usually one-half of a fiscal year, the bonus percentage amount set for each
executive by the Compensation Committee at the same time that his base salary is
set, and the par percentage of the Company as a whole for the period of
determination. The par percentage of the Company is determined by the
Compensation Committee as follows: at the beginning of each fiscal half-year
period, management submits its operating budget for that half-year to the
Committee. The pre-tax net operating income (without ESOP accruals) of the
Company shown in the budget approved by the Committee becomes 100 percent of
par. At the beginning of each half-year, the Compensation Committee establishes
increments by which the par percentage is increased or decreased if the actual
pre-tax net operating income achieved for the half-year exceeds or falls short
of the budgeted amount. At the end of each half-year, the Compensation Committee
reviews the Company's financial performance for that half-year and determines
the par percentage, which determination may include such adjustments as the
Committee deems advisable. The determination of cash bonus is a mechanical
exercise after the determination of the par percentage. Thus, if an executive's
annual base salary is $80,000, his bonus percentage is 35 percent of base salary
and the Company's pre-tax net operating income for the half-year exceeded budget
by a sufficient amount so that the Compensation Committee set the percentage
payout at 125 percent of par, the executive's bonus for the fiscal half-year
would be 1/2 x $80,000 x 35 percent x 125 percent or $17,500. The sum of salary
and cash bonus payments at par should raise the executive's total compensation
to the third quartile of total compensation paid by comparable restaurant
companies to comparable officers. The incentive bonus plan has been operated by
the Committee since the Company's initial public offering in 1989. During that
time, par percentages have varied from a low of zero percent to a high of 154
percent. The cumulative average par percentage payout under the incentive bonus
plan through the end of fiscal year 1996 is 98.9 percent.
The final element of the Company's executive compensation system is the
grant of stock options. The Compensation Committee grants options to the
executives periodically under the Company's Employee Stock Option Plans which
are administered by the Compensation Committee. Options generally have a ten
year term, become exercisable as to 25 percent of the grant on each of the first
four anniversaries of the date of grant (subject to change in control provisions
discussed below under "Change in Control Arrangements"), lapse after termination
of employment and have an exercise price equal to the market price of Common
Shares on the date of grant. Assuming a constant price to earnings ratio, stock
options, like cash bonus payments, reward profitability. Additionally, since
profitable earnings growth should raise the price to earnings ratio above the
Company's competitors, stock options should reward growth and the commensurate
increase in the Company's value to its shareholders.
The addition of stock options to the compensation system should raise the
Company's compensation levels provided to its executives to a superior level in
the marketplace which should allow the Company to attract and retain superior
talent. At the same time, the Company and its shareholders are protected by the
large variable amount of compensation which is paid only if superior results are
achieved and by the nature of the incentives to maximize income and growth built
into the system.
Under Section 162(m) of the Code, compensation paid by the Company to a
Named Executive which is in excess of $1,000,000 in a year will be nondeductible
by the Company for purposes of determining its federal taxable income unless
such compensation is paid under a performance-based plan which is approved by
the shareholders of the Company. Under the Internal Revenue Service Regulations
promulgated under Section 162(m), the Company's 1988 and 1992 employee stock
option plans and the 1996 Officers' Stock Option Plan should be deemed to be
performance-based compensation plans and amounts realized by the Named
Executives under such plans should continue to be deductible by the Company.
Because of the favorable treatment of the Company's employee stock option plans
and the remoteness of the possibility that base compensation and cash bonus
levels will exceed $1,000,000 during fiscal 1996 and the years thereafter, the
Committee did not consider the impact of Section 162(m) on its decisions
concerning compensation.
Compensation Committee: David T. Kollat (Chairman), Henry R. Hillenmeyer
and David L. Hobson.
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CHANGE IN CONTROL ARRANGEMENTS
The Compensation Committee has authorized the Company to enter into
contingent employment agreements with the present and future Chairmen of the
Board, Presidents, Vice Presidents, Secretaries or Treasurers of the Company.
These employment agreements will be effective only after a change in control of
the Company has occurred. A change in control includes (a) the acquisition of 20
percent or more of the Company's Common Shares without the prior approval of the
Board of Directors, (b) a majority of the directors elected at any meeting of
shareholders being persons who are not nominated by the Company's then current
Board of Directors, or (c) any merger, consolidation or transfer of
substantially all of the Company's assets without approval by the Board of
Directors. Furthermore, these agreements become effective only if the Company
had a 10 percent return on assets and 15 percent earnings per share growth
during the year preceding the year during which a change in control occurred. If
a change in control occurs and the Company has met the profitability and growth
targets set forth in the agreements, the employees who were party to the
agreements will be employed by the Company for at least five years after the
change in control with authority, responsibility and compensation not less than
they had before the change in control. The agreements provide that, while the
employees are employed by the Company after a change in control, they will not
compete with the Company and will protect the Company's confidential information
and intellectual property. If an employee's employment is terminated by the
Company without cause (defined for this purpose to include willful failure to
perform material employment obligations, acts of deliberate dishonesty involving
the business of the Company or conviction of a felony involving the business of
the Company, as determined by the Board of Directors after notice, opportunity
to cure and a hearing), or if the employee resigns because he has determined in
good faith that his authority, responsibility or compensation has been
diminished, the Company must pay a severance payment equal to the maximum amount
payable under Section 280G of the Code, which is generally three times the
employee's average compensation over the previous five years. Under the
agreements, the Company must bear all costs and legal fees associated with the
agreement's enforcement by the employee and indemnify the employee against all
claims by third parties or the Company unless the employee has been determined
to be liable to the Company in a derivative action and a court refuses to grant
him indemnification. The agreements may be canceled by the Board of Directors at
any time before a change in control has occurred. To date, the Company has
entered into contingent employment agreements with G. Arthur Seelbinder, Phillip
L. Pritchard, Glenn W. Cockburn, David C. Sevig, and Margaret A. Epperson.
The Company's stock option plans each contain a provision providing that
each option granted under the plan will become immediately exercisable as to 100
percent of the Common Shares subject to such option upon any change in control
of the Company. A change in control is defined under the plans to include (a)
the acquisition of 20 percent or more of the Company's Common Shares without the
prior approval of the Board of Directors, (b) a majority of the directors
elected in any annual meeting of shareholders being persons who are not
nominated by the Company's then current Board of Directors, or (c) any merger,
consolidation or transfer of substantially all of the Company's assets without
approval by the Board of Directors.
COMPENSATION OF NON-MANAGEMENT DIRECTORS
In 1996 each director of the Company who was not an employee of the Company
received $2,200 per quarter, $500 per board meeting attended, and $500 per
committee meeting attended as compensation for his services as a director. In
1996, the chairman of the strategic planning committee received a retainer of
$15,500 for his services as chairman of that committee. David L. Hobson, who is
a member of the United States House of Representatives, is precluded from
receiving any compensation from the Company for his services as a director by
the rules of the House and has waived the payment of all such compensation.
Each director of the Company who is not an employee is eligible to receive
options under the 1992 Director Plan. Only non-incentive options may be granted
under the Directors Plan. The Directors Plan provides that options on a total of
24,000 shares will be granted at the time of the annual meeting of shareholders
to the non-employee directors who attended 75 percent of the meetings of the
Board of Directors held since the previous annual meeting. The options will be
allocated among the eligible directors equally and will be exercisable at a
price of 100 percent of the value of the Common Shares on the date of grant.
Each option will become exercisable as to 25 percent of the shares which are
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<PAGE> 13
subject to the option on completion of each full year of directorship after the
grant and will terminate after 10 years and one day, 90 days after termination
of directorship due to death or disability or 30 days after any other
termination of directorship. Payment for Common Shares purchased upon exercise
of an option must be made in full in cash at the time of exercise.
CERTAIN TRANSACTIONS
In 1994, the Board of Directors approved a guaranty by the Company of a
loan of $5,000,000 to G. Arthur Seelbinder, the Chairman of the Board, which
was secured by a pledge of 570,000 Common Shares owned by the Chairman. In the
first quarter of 1997, the loan was acquired by The Chase Manhattan Bank of New
York. The loan has a term of one year, bears interest at the Bank's prime rate
or LIBOR plus 2%, continues to be secured by 570,000 Common Shares of the
Company, is secured by a cross-collateralization of a mortgage on Mr.
Seelbinder's personal residence, and is guaranteed by the Company as to
principal and accrued but unpaid interest. Mr. Seelbinder has also agreed to
apply his share of the net proceeds of the sale of his residence, in excess of
the mortgage thereon, to reduce the principal and interest outstanding on the
indebtedness, at the Board's request. 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. On March 4, 1997, Mr. Seelbinder
exercised options to purchase 100,000 Common Shares, sold the shares in a block
transaction through a broker at $11.50 per share, the then current trading
price on the New York Stock Exchange and the Company purchased 100,000 Common
Shares in a block transaction through the same broker at the same time. The
transaction was approved by the Board of Directors in advance. The gain on the
transaction is taxable to Mr. Seelbinder and deductible by the Company.
$438,000 of the proceeds of this transaction after payment of the option
exercise price and withholding taxes were used to reduce the principal of the
guaranteed loan. At March 13, 1997, the amount of the loan including
capitalized and accrued interest was $5,520,535 and the undiscounted fair
market value of the pledged shares was approximately $6,412,500. Upon the
exercise of his options, Mr. Seelbinder received a grant of options to purchase
a like number of shares, with an exercise price of $11.50 per share, having the
same expiration dates as the options that had been exercised but with new
vesting periods. Mr. Seelbinder paid a guaranty fee of 1/4 percent of the
principal amount of the loan to the Company at the time the loan was guaranteed
and will also pay such fee on each anniversary of the guaranty as long as it is
outstanding.
INDEPENDENT ACCOUNTANTS
On August 12, 1996, the Company engaged KPMG Peat Marwick LLP ("KPMG") as
its independent accountants to audit its financial statements for the fiscal
year 1996 which ended December 29, 1996. Price Waterhouse LLP ("Price
Waterhouse") served as the Company's independent accountants for the fiscal year
1995 (ended December 31, 1995) and 1994 (ended January 1, 1995) and audited the
financial statements of the Company for each of the past three fiscal years. The
Audit Committee of the Company approved the engagement of KPMG and the
consequent non-reengagement of Price Waterhouse. Price Waterhouse's report on
the financial statements of the Company for each of the fiscal years 1994 and
1995 did not contain an adverse opinion nor a disclaimer of opinion nor was such
report qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the Company's fiscal years 1995
and 1994 and the period of the fiscal year 1996 ending on the date of the
engagement of KPMG, the Company had no disagreements with Price Waterhouse on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of Price Waterhouse would have caused them to make reference
thereto in their report on the financial statements for such years.
A representative of KPMG has been invited and is expected to be present at
the Annual Meeting. The representative will have an opportunity to make a
statement if he so desires and is expected to be available to respond to
appropriate questions of shareholders.
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<PAGE> 14
OTHER BUSINESS
The Board of Directors does not intend to present, and has no knowledge
that others will present, any other business at the meeting. If, however, any
other matters are properly brought before the meeting, it is intended that the
persons named in the enclosed proxy will vote the shares represented thereby in
accordance with their best judgment.
COST OF SOLICITATION OF PROXIES
The cost of this solicitation will be paid by the Company. The Company has
retained Corporate Investor Communications, Inc. ("CIC") to distribute proxy
materials and solicit proxies in connection with the Annual Meeting. The Company
will pay CIC $4,000 plus $3 per shareholder contacted plus reasonable
out-of-pocket expenses for such activities. The Company will reimburse CIC for
all printing costs, postage and freight charges incurred in connection with the
delivery of the Company's proxy materials. In addition to the solicitation of
proxies by mail, CIC may solicit proxies personally or by telephone. The company
may request persons holding shares in their names for others to forward
soliciting materials to their principals to obtain authorization for the
execution of proxies, and the Company will reimburse such persons for their
expenses in so doing.
SHAREHOLDER PROPOSALS
A shareholder proposal intended for inclusion in the proxy statement and
form of proxy for the Annual Meeting of Shareholders of the Company to be held
in 1998 must be received by the Company before November 19, 1997, at its offices
at 5500 Village Boulevard, West Palm Beach, Florida 33407, Attention: Secretary.
A shareholder who wishes to nominate a candidate for election to the Board
of Directors must follow the procedures outlined in Section 2.04 of the
Company's Code of Regulations. A copy of the Code of Regulations is available
upon request from the Secretary of the Company, 5500 Village Boulevard, West
Palm Beach, Florida 33407. One of the procedural requirements in the Code of
Regulations is timely written notice of the nomination, in a form complying with
the Code of Regulations. In order to nominate a candidate for the Board of
Directors election at the 1998 Annual Meeting, this notice must be delivered to
the Secretary of the Corporation before November 19, 1997.
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<PAGE> 15
COOKER RESTAURANT CORPORATION THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints G. Arthur Seelbinder, Phillip L. Pritchard
and Margaret A. Epperson, and each of them, severally, with full power of
substitution, as proxies for the undersigned and hereby authorizes them to
represent and to vote, as designated below, all of the Common Shares, without
par value, of Cooker Restaurant Corporation held of record by the undersigned on
February 28, 1997, at the Annual Meeting of Shareholders to be held on April 14,
1997, or any adjournment thereof, with all the power the undersigned would
possess if present in person.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF ALL NOMINEES.
TO ELECT AS DIRECTORS THE NOMINEES NAMED BELOW FOR A TERM OF THREE YEARS AND
UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
NOMINEES: Glenn W. Cockburn, David T. Kollat, Harvey M. Palash
[ ] FOR all nominees listed above (except as marked to the contrary).
[ ]WITHHOLD AUTHORITY to vote for all nominees listed above.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME LISTED ABOVE.)
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Shareholders or any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED TO ELECT ALL NOMINEES LISTED ABOVE.
(Continued, and to be dated and signed, on the reverse side.)
(Continued from the other side.)
The undersigned hereby acknowledges receipt with this Proxy of a copy of
the Notice of Annual Meeting and Proxy Statement dated March 14, 1997 and a copy
of the Company's 1996 Annual Report to Shareholders.
Date: , 1997
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Signature
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Signature (if held jointly)
IMPORTANT: Please sign exactly as
name or names appear to the left.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
Corporations should sign in their
full corporate name by their
president or other authorized
officer. If a partnership, please
sign in partnership name by an
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
