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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
<TABLE>
<S> <C>
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 29, 1996 Commission file number: 1-13044
COOKER RESTAURANT CORPORATION
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(Exact name of registrant as specified in its charter)
OHIO
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(State or other jurisdiction of incorporation or organization)
5500 Village Boulevard, West Palm Beach, Florida
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(Address of principal executive offices)
62-1292102
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(I.R.S. Employer Identification No.)
33407
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(Zip Code)
Registrant's telephone number, including area code: (561) 615-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of exchange on which registered
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Common Shares, without par value The New York Stock Exchange
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Rights to Purchase Class A Junior Participating Preferred Trades with the Common Shares
Shares, without par value
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Securities registered pursuant to Section 12(g) of the Act:
6 3/4% Convertible Subordinated Debentures Due 2002
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(Title of Class)
</TABLE>
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of Common Shares held by non-affiliates of the
Registrant on February 28, 1997 was $98,798,000.
The number of Common Shares outstanding on February 28, 1997 was
10,035,000.
The following documents have been incorporated by reference into this Form
10-K:
<TABLE>
<CAPTION>
Document Part of Form 10-K
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<S> <C>
The Registrant's definitive Proxy Statement for
its 1997 Annual Meeting of Shareholders dated Part III
March 19, 1997
</TABLE>
The report of Price Waterhouse LLP on the financial statements of the
Registrant for the fiscal years ended January 1, 1995 and December 31, 1995 is
unavailable and has been omitted pursuant to Rule 12b-25(e)(1).
1
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PART I
ITEM 1. BUSINESS.
GENERAL
At March 17, 1997 the Registrant owned and operated 52 full-service
"Cooker(sm)" restaurants (the "Restaurants") in Florida, Georgia, Indiana,
Kentucky, Maryland, Michigan, North Carolina, Ohio, Tennessee and Virginia.
Restaurants average approximately 7,900 square feet and 255 seats, and are
designed to provide traditional and comfortable dining experiences rather than a
theme atmosphere or menu. The Registrant 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, in 1996, the average check per person was approximately $10.60. The
Registrant is committed to providing prompt, friendly and efficient customer
service as reflected by its "100% Satisfaction Guarantee" policy and by its
having what the Registrant 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 Registrant began an aggressive program designed to enhance
operational execution, broaden and strengthen senior and Restaurant-level
management talent, and reduce operating costs. The Registrant'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 Registrant's existing Restaurants since they were
located in new markets where the Registrant's concept was not established. As a
result, the Registrant slowed its growth and opened only six Restaurants in 1994
and three Restaurants in 1995. The 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 Registrant
focused its attention more closely on improving operations at existing
Restaurants. In 1994 and 1995, the Registrant strengthened its senior-level
management team by adding two key executives: Phillip L. Pritchard, President
and Chief Operating Officer, formerly with General Mills Restaurants, Inc.
("GMRI") and David C. Sevig, Vice President - Chief Financial Officer, formerly
with GMRI and Blockbuster Entertainment Group. Additionally, the Registrant
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 Registrant began to staff
Restaurants according to sales volume, which significantly reduced the
Registrant'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 Registrant 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
Registrant believes results in more flavorful food. The menu is re-evaluated in
June and December of each year when the least popular items from each category
(appetizers, entrees and desserts) are removed from the menu and replaced with
new items created by the Registrant's culinary team. Each menu item is
researched and tested in the Registrant's test kitchen and in Restaurants to
ensure customer acceptance.
Commitment to Staffing. The Registrant's commitment to meeting the highest
standards of customer service is reflected in having what the Registrant
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
Registrant 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 by
current customers that attracts new customers.
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Timeless Atmosphere. The 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 Restaurants more often. Unlike
many casual dining restaurants that center around a "theme," the Registrant
believes its Restaurants are not as sensitive to changing customer preferences
and trends.
Dedicated Employees. The Registrant hires its personnel only after
extensive interviews, and seeks to recruit employees who share the Registrant'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
Registrant's headquarters. The Registrant 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
Cooker 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 dishes 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 Registrant believes results in
more flavorful food. Lunch and dinner entrees generally range in price from
$4.45 to $14.95 and in 1996 lunch accounted for approximately 40% of sales. The
average check per person in 1996 was approximately $10.60. Each Restaurant
offers alcoholic beverages including liquor, wine and beer, which constituted
approximately 11% of sales in 1996. The Registrant 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 Registrant's
culinary team. Each menu item and recipe is researched and tested in the
Registrant'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 7,900 square feet (of which approximately 40% is
devoted to kitchen and services areas) with seating for approximately 255
customers. Most of the Restaurants opened in 1996 have in excess of 8,000 square
feet and seat approximately 270 customers. This increase is a result of the size
of the existing facilities that the Registrant converted 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 Registrant 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 Registrant to be
flexible in the types of food items which can be prepared and to adapt to
changing customer tastes and preferences.
UNIT ECONOMICS
In 1996, the 36 Restaurants open for the year generated average sales of
approximately $2.6 million, average Restaurant operating income of approximately
$.43 million or 17.1% of sales, and average cash flow (Restaurant operating
income plus depreciation and amortization) of approximately $.53 million or
20.4% of sales. 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
Registrant's operating performance or an alternative to cash flow from operating
activities as a measure of liquidity. The 11 Restaurants opened by the
Registrant in 1996 required an initial investment, including land, building,
fixtures, furniture, equipment and pre-opening costs, averaging approximately
$2.5 million. The Registrant expects that the average cost of developing and
opening a Restaurant in the future also will be approximately $2.4 million to
$2.5 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.
2
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DEVELOPMENT AND EXPANSION
The Registrant is an Ohio corporation which was the surviving corporation
of the merger of affiliated corporations in 1988. At that time the Registrant
operated six restaurants. The following table sets forth the Registrant's unit
growth since 1988:
<TABLE>
<CAPTION>
YEAR 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RESTAURANTS OPEN AT
START OF YEAR 8 10 12 15 20 29 35 37
RESTAURANTS OPENED
DURING YEAR 2 2 3 5 9 6 3* 11*
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<FN>
* The Registrant closed one Restaurant in Florence, Kentucky in 1995 and one
in Palm Harbor, Florida in 1996. Both locations have been leased to third
parties.
</TABLE>
The Registrant opened eleven Restaurants in 1996 and has opened five
Restaurants to date in 1997. The Registrant purchased six properties from a
subsidiary of Darden Restaurants, Inc. for a cash purchase price of
approximately $11,200,000 in January 1996. The properties purchased by the
Registrant had been used by Darden or its subsidiaries and their respective
predecessors as "China Coast Restaurants," but Darden and its subsidiaries, or
their predecessors, closed them prior to putting them up for sale. The
Registrant remodeled these properties extensively to conform to its requirements
prior to opening them as Cooker Bar and Grille(R) restaurants in the second
quarter of 1996. In a separate transaction in September, 1996 the Registrant
purchased five more properties from Darden for a purchase price of approximately
$7,400,000. These properties were likewise remodeled and opened as Restaurants
in the first quarter of 1997.
The Registrant intends to open an additional six to eight Restaurants in
1997. A majority of potential future locations for openings in 1997 are either
under construction or negotiations for those locations are currently in
progress. The Registrant anticipates that cash on hand along with funds
generated from operations and bank borrowings will be sufficient to finance
these Restaurants. Further expansion will be dependent on, among other things,
the Registrant's future operations, the availability of capital, desirable site
locations, the ability to attract qualified employees, securing appropriate
local government approvals, and future economic conditions. The Registrant has
no definite commitments to develop Restaurants after 1997 and there can be no
assurance that the Registrant will be able to locate and acquire suitable sites
for expansion. There can be no assurance that the Registrant will be able to
open the number of Restaurants planned to be opened by it or that such
Restaurants will be opened on schedule.
The Registrant considers the specific location of a Restaurant to be
critical to its long-term success and devotes significant effort to the
investigation and evaluation of potential sites. In order to effectively control
its operational and administrative costs, as well as take advantage of name
recognition, the Registrant 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 freestanding buildings and in retail developments in
proximity to high density, high traffic, office, residential and retail areas.
The Registrant owns and leases the sites for its existing facilities, although
the Registrant prefers to own the property.
RESTAURANT OPERATIONS
Management and Employees. The Registrant currently has 10 regional managers
who are each responsible for supervising between four and six Restaurants and
continuing the development of their management teams. Through regular visits to
the Restaurants, the regional managers ensure that the Registrant's concept,
strategy and standards of quality are being adhered to in all aspects of
restaurant operations. Each of the 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 Registrant. 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.
3
<PAGE> 5
The Registrant 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
Registrant attracts qualified managers by providing a higher overall quality of
life characterized by a five-day work schedule.
Prior to 1994, the Registrant 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 Registrant's
cost of labor as a percentage of sales.
Training and Development. The Registrant hires its personnel only after
extensive interviews, and seeks to recruit employees who share the Registrant'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
Registrant's headquarters. The Registrant 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 Registrant 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 payable and inventories. Sales,
cash control, and summary payroll data are transferred to the Registrant's
headquarters nightly. Detailed payroll, accounts payable and inventory data are
transferred to the Registrant's headquarters weekly. These Restaurant
information systems provide data for posting directly to the Registrant's
general ledger, to other accounts 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
Registrant 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 statements 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 Registrant'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 Registrant's corporate offices. The
Registrant purchases its food products and supplies from a variety of national,
regional and local suppliers. The Registrant 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 Registrant's menu enables its overall food costs to be less
dependent upon the price of a particular product. The Registrant 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 Registrant relies primarily on "word of
mouth" advertising to attract customers to its Restaurants. Management believes
the "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 Registrant 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.
4
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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 Registrant. 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 Registrant. In addition to other
restaurant companies, the Registrant 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 Registrant. In addition, factors such as inflation and
increased food, liquor, labor and other costs could adversely affect the
Registrant.
GOVERNMENT REGULATIONS
The Registrant'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 Registrant 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 Registrant'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 Registrant
has no control. Since many of the Registrant's employees are paid at rates based
on the federal minimum wage, increases in the minimum wage may result in an
increase in the Registrant's labor costs. Some states have set minimum wage
requirements higher than the federal level. The Registrant 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 Registrant has
satisfied restaurant, liquor and retail licensing for its existing Restaurants,
no assurance can be given that the Registrant 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 Registrant 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 2, 1997, the Registrant had approximately 4,950 employees, of
which approximately 4,605 were Restaurant employees, approximately 317 were
Restaurant management personnel, and approximately 28 were corporate staff
personnel. None of the Registrant's employees is represented by a labor union or
a collective bargaining unit. The Registrant considers relations with its
employees to be satisfactory.
MARKS
The Registrant has registered the service mark "Cooker Bar and Grille" and
Design with the United States Patent and Trademark Office. The Registrant
previously registered the service mark "The Southern Cooker - Home Style
Restaurant & Bar" and Design with the United States Patent and Trademark Office
but did not renew the registration when its initial term expired. The Registrant
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 Registrant's use of its marks, as it expands into new
territories. However, in view of the extensive third party use of such trade
names, management believes that the Registrant should be in a reasonably good
position to resist adverse claims. This same extensive third party use means,
however, that the Registrant may in the future have difficulty blocking use by
others of marks incorporating the word "cooker." It is possible for prior users
to develop rights in such marks in their geographic territories and it would be
difficult for the Registrant to limit such use, even though the Registrant has a
federal registration.
5
<PAGE> 7
ITEM 2. PROPERTIES.
At March 17, 1997, the Registrant operated 52 Restaurants in the following
locations:
<TABLE>
<CAPTION>
METROPOLITAN AREA LOCATION
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<S> <C>
FLORIDA
Orlando ............................ Altamonte Springs
Ft. Myers-Cape Coral ............... Ft. Myers
Gainesville ........................ Gainesville
Melbourne-Titusville-Palm Bay ...... Melbourne
Tampa-St. Petersburg-Clearwater .... Tampa
GEORGIA
Atlanta ............................ Alpharetta
Atlanta ............................ Gwinnett
Atlanta ............................ Kennesaw
Atlanta ............................ Wildwood
INDIANA
Indianapolis ....................... Keystone
Indianapolis ....................... Willow Lake
KENTUCKY
Louisville ......................... Hurstbourne Plaza
MARYLAND
Washington, D C .................... Bethesda
MICHIGAN
Detroit ............................ Ann Arbor
Detroit ............................ Auburn Hills
Detroit ............................ Livonia
Detroit ............................ Novi
Detroit ............................ Sterling Heights
Grand Rapids ....................... Grand Rapids
Flint-Saginaw....................... Saginaw
NORTH CAROLINA
Raleigh-Durham-Chapel Hill ......... Raleigh
<CAPTION>
METROPOLITAN AREA LOCATION
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<S> <C>
OHIO
Cincinnati ......................... Beechmont
Cincinnati ......................... Governor's Hill
Cincinnati ......................... Paxton Road
Cincinnati ......................... Springdale
Cleveland .......................... Rockside
Cleveland .......................... Beachwood
Cleveland .......................... Westlake
Cleveland .......................... Solon
Columbus ........................... Bethel Road
Columbus ........................... Cleveland Avenue
Columbus ........................... East Main Street
Columbus ........................... Hamilton Road
Columbus ........................... Lane Avenue
Columbus ........................... Morse Road
Columbus ........................... North High Street
Dayton ............................. Beaver Creek
Dayton ............................. Miamisburg-Centerville
Dayton ............................. Vandalia
Toledo ............................. Toledo
Toledo ............................. Sylvania
Youngstown ......................... Boardman Township
TENNESSEE
Johnson City ....................... Johnson City
Memphis ............................ Memphis
Memphis ............................ Regalia Center
Nashville .......................... Hermitage
Nashville .......................... Murfreesboro
Nashville .......................... Parkway
Nashville .......................... Rivergate
Nashville .......................... West End
VIRGINIA
Norfolk ............................ Chesapeake
Washington, D C .................... Fairfield
</TABLE>
The Registrant leases 17 Restaurants from unaffiliated lessors with terms
ranging from 15 to 40 years, that include options to extend such leases
exercisable by the Registrant. See Note 11a to the Financial Statements for
information relating to the lease commitments. The Registrant owns the remaining
Restaurants, six of which are subject to a mortgage granted to the First Union
National Bank of Tennessee.
The Registrant owns a 32,000 square foot office building in West Palm
Beach, Florida where its executive offices are located. Currently the Registrant
leases 40 percent of that facility to an unaffiliated lessee. The lease term
runs through May, 1998. The Registrant leases a 15,000 square foot location in
Columbus, Ohio from an unaffiliated third party for a term through 1999 which
was the Registrant's headquarters before 1995. The Registrant is attempting to
dispose of the property. The Registrant closed a restaurant in Florence,
Kentucky in 1995 and a restaurant in Palm Harbor, Florida in 1996 and is
currently leasing the sites to unaffiliated third parties.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
6
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SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Set forth below is information regarding the executive officers of the
Registrant as of December 29, 1996:
G. ARTHUR SEELBINDER, age 53, is a founder of the Registrant. He has been
Chairman of the Board, Chief Executive Officer and a director of the Registrant
since 1986 and served as President from September 1989 until December 1994. He
was Chairman of the Board of Cooker Corporation (a predecessor of the
Registrant) from 1984 until 1988 when it was merged into the Registrant. 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.
PHILLIP L. PRITCHARD, age 47, has been a director of the Registrant since
1994 and has served as the President and Chief Operating Officer of the
Registrant since December 1994. Prior to joining the Registrant, Mr. Pritchard
spent 22 years with 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.
DAVID C. SEVIG, age 53, has been Vice President - Chief Financial Officer
of the Registrant since June 1995. Prior to joining the Registrant, Mr. Sevig
was with GMRI from 1967 through 1994 where he served as Vice President -
Controller of international restaurants for six years and Vice President -
Controller of Red Lobster restaurants for 10 years before that. From May 1994
through May 1995, he was with Blockbuster Entertainment developing the Block
Party entertainment concept.
GLENN W. COCKBURN, age 41, is a founder of the Registrant. He has been a
director of the Registrant since 1989. In 1991, he was elected Senior Vice
President - Operations of the Registrant. He was Vice President - Food Services
of the Registrant from 1988 to 1991 and was Vice President of Food Operations of
Cooker Corporation from 1986 to 1988 when it was merged into the Registrant. He
is a graduate of the Culinary Institute of America in Hyde Park, New York.
MARGARET A. EPPERSON, age 51, has been Secretary and Treasurer of the
Registrant since 1986.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Common Shares are traded on the New York Stock Exchange ("NYSE") under the
symbol "CGR". The prices set forth below reflect high and low sale prices for
Common Shares in each of the quarters of 1995 and 1996 as reported by the NYSE.
<TABLE>
<CAPTION>
1996 HIGH LOW
<S> <C> <C>
1st Quarter $14 $11
2nd Quarter $15 1/4 $12 1/8
3rd Quarter $13 3/8 $10 3/8
4th Quarter $12 1/2 $10 1/4
<CAPTION>
1995 HIGH LOW
<S> <C> <C>
1st Quarter $ 7 5/8 $ 6 1/8
2nd Quarter $12 $ 7 1/8
3rd Quarter $13 1/8 $ 9 3/4
4th Quarter $11 3/8 $ 9 3/8
</TABLE>
7
<PAGE> 9
On February 28, 1997, the Registrant had approximately 2,300 shareholders
of record.
The Registrant declared and paid an annual cash dividend of $.07 per Common
Share for fiscal 1996 and of $.06 per Common Share for fiscal 1995, in each
case, in February of the following year. Under the Registrant's bank revolving
credit/term loan agreement, dividends may be declared in any fiscal year during
which the Registrant's net income for that year exceeds $2,000,000 and such
dividends, together with all other dividends paid within such fiscal year, do
not exceed 15% of the Registrant's net income for the previous fiscal year.
ITEM 6. SELECTED FINANCIAL DATA.
The following table presents selected financial and operating data of the
Registrant and is qualified in its entirety by the more detailed Financial
Statements presented elsewhere in this Annual Report.
<TABLE>
<CAPTION>
(in thousands, except per share data(1))
FISCAL YEAR(2)
1996 1995 1994 1993 1992
-------------- ---------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Sales $110,273 $91,678 $84,169 $66,688 $53,028
Income:
Before extraordinary item 6,732 4,432 2,481 3,494 3,980
Extraordinary gain --- --- 484 --- ---
Total 6,732 4,432 2,965 3,494 3,980
Earnings per share1
Before extraordinary item .72 .60 .34 .45 .52
Extraordinary gain --- --- .07 --- ---
Total .72 .60 .41 .45 .52
Long-term debt 16,822 35,976 28,600 23,000 23,000
Total assets 114,633 83,181 70,852 66,598 62,068
Dividends per share1 .06 .05 .05 .05 .035
- ----------------------------
<FN>
(1) Per share data is adjusted to reflect the 2-for-1 stock split on April 13,
1992.
(2) The fiscal years ended on December 29, 1996, December 31, 1995, January 1,
1995, January 2, 1994 and January 3, 1993, respectively.
</TABLE>
8
<PAGE> 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
The following table sets forth as a percentage of sales certain items
appearing in the Registrant's statement of income.
<TABLE>
<CAPTION>
FISCAL YEAR(1)
1996 1995 1994(2)
------------ -------------- ------------
<S> <C> <C> <C>
Sales 100.0% 100.0% 100.0%
Cost of sales:
Food and beverages 28.4 28.6 28.7
Labor 34.5 34.9 37.3
Restaurant operating expenses 16.8 16.4 16.1
Restaurant depreciation and amortization 4.2 4.3 6.0
Total cost of sales 83.9 84.2 88.1
Restaurant operating income 16.1 15.8 11.9
Other (income) expenses:
General and administrative 5.6 6.3 5.4
Interest expense 1.2 2.0 2.1
Gain on sale of property -- (0.3) --
Interest and other income (0.2) -- (0.1)
Total other 6.6 8.0 7.4
Income before income taxes and extraordinary item 9.5 7.8 4.5
Income taxes before extraordinary item 3.4 3.0 1.5
Income before extraordinary item 6.1 4.8 3.0
Gain from extraordinary item, net of income taxes -- -- 0.5
Net Income 6.1 4.8 3.5
<FN>
(1) The fiscal years ended on December 29, 1996, December 31, 1995 and January
1, 1995, respectively.
(2) Certain fiscal 1994 amounts have been reclassified to conform with fiscal
1995 presentations.
</TABLE>
1996 COMPARED WITH 1995
Sales increased $18,595,000 or 20.3% in 1996 over 1995. The increase was
primarily due to sales generated from new Restaurants opened during fiscal 1996
and those opened late in fiscal 1995. The 1996 openings included Restaurants in:
Dayton, Ohio (2); Atlanta, Georgia (2); Columbus, Ohio (3); Detroit, Michigan;
Johnson City, Tennessee; Nashville, Tennessee; and Boardman Township, Ohio. Same
store sales declined 1.2% for the year. This decline was caused by a combination
of new stores drawing sales away from older stores in the same store base, first
quarter sales being lower than normal due to harsh weather in the first quarter
and lower third quarter sales during the two weeks of the Olympics.
Restaurant operating income as a percent of sales increased from 15.8% in
1995 to 16.1% in 1996. The increase was primarily due to higher average store
sales as well as lower cost of goods sold and labor costs. Food and beverage
costs as a percentage of sales decreased from 28.6% in 1995 to 28.4% in 1996
primarily as a result of menu mix changes. Labor costs decreased from 34.9% in
1995 to 34.5% in 1996, because of the impact of changes in Restaurant management
staffing policies made in 1995.
9
<PAGE> 11
Restaurant operating expenses increased to 16.8% in fiscal 1996 from 16.4%
in 1995. Most of this increase was the result of higher repair and maintenance
spending (much of this was weather related in the first quarter) and increased
paper costs that resulted from changes made to the Registrant's electronic point
of sales system to improve kitchen efficiency.
Restaurant depreciation and amortization, including amortization of store
pre-opening expenses, decreased as a percent of sales from 4.3% in 1995 to 4.2%
in 1996.
General and administrative expenses declined from 6.3% of sales in 1995 to
5.6% in 1996 primarily due to the increased number of Restaurants over which
these expenses are spread.
Interest expense decreased from 2.0% of sales in 1995 to 1.2% of sales in
1996. The decrease is the result of paying off the revolving term loan agreement
in mid-May with the proceeds of a public offering of Common Shares.
The 1996 provision for income taxes before extraordinary items decreased to
36.0% of income before income taxes from 38.1% in 1995. The 1995 provision
included a $205,000 provision for the Company's estimate of additional tax
liability.
1995 COMPARED WITH 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 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. 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
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 fiscal 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 is a result of the
slowdown in the number of new Restaurants opening in 1994.
General and administrative expenses as a percent 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 and 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.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's primary sources of working capital and capital for the
development of new restaurants are cash flows from operations, borrowings under
a revolving term loan agreement, which provides a $33,000,000 line of credit,
and the sale of equity securities. At December 29, 1996, the Registrant had
outstanding borrowings of $709,000 under its revolving term loan agreement. See
Note 6 of the Notes to Financial Statements. On May 13, 1996, the Registrant
10
<PAGE> 12
completed a public offering of 2,875,000 Common Shares (the "Offering") and
received net proceeds of $37,442,000. The Registrant used $28.5 million of the
net proceeds from the Offering to reduce outstanding borrowings under the
revolving term loan agreement. The remainder was invested in short term federal
government securities and has and will be used to fund the development of new
Restaurants during the last half of 1996 and for general corporate purposes.
During 1996, the Registrant opened eleven new units and closed one. Capital
expenditures for these new units and the refurbishing and remodeling of existing
units totaled $34,997,000 and were funded by cash flows of $12,644,000 from
operations and proceeds from the sale of stock. The Registrant plans to open
eleven to thirteen units in 1997. Total cash expenditures for the 1997 expansion
are estimated to be approximately $30,000,000. The Registrant believes that cash
flow from operations together with borrowings from the revolving term loan
agreement will be sufficient to fund the planned expansion as well as the
ongoing maintenance and remodeling of existing Restaurants.
In 1992, the Registrant sold $23,000,000 of 6 3/4% Convertible Subordinated
Debentures Due 2002. These debentures are subject to limited annual redemption
by the bondholders and to limited redemption on the death of a beneficial owner.
The annual redemption is capped at 5% of the original gross proceeds and occurs
on each November 1. Redemptions on death are subject to a cap of $25,000 per
holder per year. Pursuant to these two redemption options, the Registrant
redeemed $1,357,000 in principal amount of these debentures during 1996 and
expects a similar principal redemption to occur in 1997. During January 1996,
the Registrant repurchased $400,000 in principal amount of the debentures in the
open market for a discounted purchase price of $360,000. As a result of these
transactions, which were funded through additional draws on the Registrant's
revolving term loan, the remaining outstanding balance of the debentures at
December 29, 1996 was $16,113,000. The Registrant believes that cash flow from
operations and additional borrowings from the revolving term loan will be
sufficient to fund the expected principal redemptions in 1997.
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 in the principal amount up
to $6,250,000 including capitalized 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. The loan is scheduled to mature in the
first quarter of 1998. The guaranty secures the loan until it is repaid or
refinanced without a guaranty. The Company expects that the Chairman will repay
or refinance the loan before its presently scheduled maturity. If the loan is
not so repaid or refinanced, the Company would fund any obligation it incurs
under the terms of its guaranty from additional borrowings under its line of
credit. The Company does not believe that it will be required to make any
material payment under the guaranty in 1997; however there can be no assurance
that the loan will be repaid or refinanced on terms that will not result in
continuing the guaranty or in a material payment. 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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Registrant, and the related notes, together
with the report of KPMG Peat Marwick LLP dated January 24, 1997, are set forth
at pages F-1 through F-18 attached hereto.
The supplementary data of the Registrant is contained in note 15 of the
notes to the report of KPMG Peat Marwick LLP set forth at page F-18 attached
hereto.
11
<PAGE> 13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The information required by this item was previously reported by the
Registrant in Item 5 of Part II of the Registrant's quarterly report on Form
10-Q for the fiscal quarter ended June 30, 1996 (Commission File No. 1-13044).
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Registrant's directors is set forth at "ELECTION
OF DIRECTORS; Nominees for Election as Directors, Directors Whose Terms Continue
Until the 1998 Annual Meeting and Directors Whose Terms Continue Until the 1999
Annual Meeting" in the Registrant's Proxy Statement for its 1997 Annual Meeting
of Shareholders dated March 19, 1997 (the "1997 Proxy Statement") which
information is incorporated herein by reference. Information regarding the
Registrant's executive officers is set forth in PART I of this report at
"Supplemental Item. Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is set forth at "COMPENSATION OF
MANAGEMENT" in the 1997 Proxy Statement which information is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is set forth at "SECURITY OWNERSHIP
OF PRINCIPAL SHAREHOLDERS, DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS" in the
1997 Proxy Statement which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is set forth at "COMPENSATION OF
MANAGEMENT" in the 1997 Proxy Statement which information is incorporated herein
by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THIS FORM 10-K.
(1) FINANCIAL STATEMENTS:
Independent Auditors' Report
Balance Sheet as of December 29, 1996 and December 31, 1995
Statement of Income for the Fiscal Years Ended December 29,
1996, December 31, 1995 and January 1, 1995
Statement of Changes in Shareholders' Equity for the Fiscal
Years Ended December 29, 1996, December 31, 1995 and January
1, 1995
Statement of Cash Flows for the Fiscal Years Ended December
29, 1996, December 31, 1995, and January 1, 1995
12
<PAGE> 14
Notes to Financial Statements for the Fiscal Years Ended
December 29, 1996, December 31, 1995, and January 1, 1995
(3) THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS FORM 10-K.
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
3.1. Amended and Restated Articles of Incorporation of
the Registrant (incorporated by reference to
Exhibit 28.2 of Registrant's quarterly report on
Form 10-Q for the quarterly period ended March
29, 1992; Commission File Number 0-16806).
3.2. Amended and Restated Code of Regulations of the
Registrant (incorporated by reference to Exhibit
4.5 of the Registrant's quarterly report on Form
10-Q for the fiscal quarter ended April 1, 1990;
Commission File No. 0-16806).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS.
4.1. See Articles FOURTH, FIFTH and SIXTH of the
Amended and Restated Articles of Incorporation of
the Registrant (see 3.1 above).
4.2. See Articles One, Four, Seven and Eight of the
Amended and Restated Code of Regulations of the
Registrant (see 3.2 above).
4.3. Rights Agreement dated as of February 1, 1990
between the Registrant and National City Bank
(incorporated by reference to Exhibit 1 of the
Registrant's Form 8-A filed with the Commission
on February 9, 1990; Commission File No.
0-16806).
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. (see [10.4] below).
4.8. Indenture dated as of October 28, 1992 between
Registrant and First Union National Bank of North
Carolina, as Trustee (incorporated by reference
to Exhibit 2.5 of Registrant's Form 8-A filed
with the Commission on November 10, 1992;
Commission File Number 0-16806).
(10) MATERIAL CONTRACTS (*Management contract or
compensatory plan or arrangement.)
10.1. Purchase and Sale Agreement dated October 20,
1995 between GMRI, Inc. and Registrant
(incorporated by reference to Exhibit 99.1 of the
Registrant's Current Report on Form 8-K dated
January 4, 1996 (the "1996 8-K"); Commission File
No. 1-13044).
13
<PAGE> 15
10.2. First Amendment to Purchase and Sale Agreement
dated October [ ], 1995 between GMRI, Inc. and
Registrant (incorporated by reference to Exhibit
99.2 of the 1996 8-K; Commission File No.
1-13044).
10.3. Joinder of Escrow Agreement dated October 25,
1995 among Lawyers Title Insurance Corporation,
GMRI, Inc. and Registrant (incorporated by
reference to Exhibit 99.3 of the 1996 8-K;
Commission File No. 1-13044).
10.4. 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 the Registrant's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 Form 10-K"),
Commission File No. 0-16806).
10.5. Underwriting Agreement dated May 7, 1996 with
Montgomery Securities and Equitable Securities
Corporation (incorporated by reference to Exhibit
10.1 to the Registrant's quarterly report on Form
10-Q for the quarter ended June 30, 1996 (the
"June 1996 Form 10-Q"), Commission File No.
0-16806).
10.6. Form of Contingent Employment Agreement and
schedule of executed Agreements (incorporated by
reference to Exhibit 10.5 of the 1995 Form
10-K).*
10.7. The Registrant's 1988 Employee Stock Option Plan
and 1992 Employee Stock Option Plan, Amended and
Restated April 22, 1996, (incorporated by
reference to Exhibit 10.2 to the June 1996 Form
10-Q, Commission File No. 0-16806).*
10.8. The Registrant's 1988 Directors Stock Option
Plan, as amended and restated.*
10.9. The Registrant's 1992 Directors Stock Option
Plan, as amended and restated.*
10.10. The Registrant's 1996 Officers' Stock Option Plan
(incorporated by reference to Exhibit 10.10 of
the 1995 Form 10-K).*
10.11. Reaffirmation and Amendment to Guaranty and
Suretyship Agreement between Registrant and
NationsBank of Tennessee, N.A. dated July 24,
1995 (incorporated by reference to Exhibit 10.5
of the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended July 2, 1995;
Commission File No. 1-13044).
10.12. Amended and Restated Guaranty between Registrant
and Chase Manhattan Bank dated January 31, 1997.
10.13. Letter dated February 3, 1997 from G. Arthur
Seelbinder to the Registrant.
(16) LETTER REGARDING CHANGE IN CERTIFYING ACCOUNTANT.
16.1. Letter dated August 14, 1996 from Price
Waterhouse LLP to the Securities and Exchange
Commission (incorporated by reference to Exhibit
16.1 to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended June 30,
1996; Commission File No. 1-13044.
(24) POWERS OF ATTORNEY.
14
<PAGE> 16
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 Registrant to sign
pursuant to a power of attorney.
(27) FINANCIAL DATA SCHEDULE.
27.1. Financial Data Schedule (submitted electronically
for SEC information only).
(B) REPORTS ON FORM 8-K.
No current report on Form 8-K was filed by the Registrant during the
fourth quarter of fiscal 1996.
15
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 28, 1997
COOKER RESTAURANT CORPORATION
(the "Registrant")
By: /s/ G. Arthur Seelbinder
------------------------------------
G. Arthur Seelbinder
Chairman of the Board,
Chief Executive Officer and Director
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 28, 1997.
<TABLE>
<CAPTION>
SIGNATURE Title
<S> <C>
/s/ G. Arthur Seelbinder Chairman of the Board, Chief Executive
- --------------------------------------- Officer and Director (principal executive officer)
G. Arthur Seelbinder
/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/ 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/ Joseph E. Madigan * Director
- ---------------------------------------
Joseph E. Madigan
/s/ Margaret T. Monaco * Director
- ---------------------------------------
Margaret T. Monaco
/s/ Harvey Palash * Director
- ---------------------------------------
Harvey Palash
* By: /s/ G. Arthur Seelbinder
- ---------------------------------------
G. Arthur Seelbinder
Attorney-in-Fact
</TABLE>
16
<PAGE> 18
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
COOKER RESTAURANT CORPORATION
-----------------------
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED:
DECEMBER 29, 1996
-----------------------
FINANCIAL STATEMENTS
-----------------------
================================================================================
<PAGE> 19
COOKER RESTAURANT CORPORATION
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report...............................................................................F-2
Balance Sheet as of December 29, 1996 and December 31, 1995................................................F-3
Statement of Income for the fiscal years ended December 29, 1996, December 31, 1995,
and January 1, 1995...............................................................................F-4
Statement of Changes in Shareholders' Equity for the fiscal years ended December 29, 1996,
December 31, 1995 and January 1, 1995............................................................F-5
Statement of Cash Flows for the fiscal years ended December 29, 1996, December
31, 1995 and January 1, 1995.....................................................................F-6
Notes to Financial Statements..............................................................................F-7
</TABLE>
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Cooker Restaurant Corporation
We have audited the accompanying balance sheet of Cooker Restaurant Corporation
(the "Company") as of December 29, 1996, and the related statements of income,
changes in shareholders' equity and cash flows for the year then ended. 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 audit. The accompanying financial statements of the Company as of December
31, 1995 and for the two-year period then ended were audited by other auditors
whose report thereon dated January 29, 1996, expressed an unqualified opinion on
those statements. The Company has been advised by its former auditors that they
are not in a position to reissue their auditors' report on the December 31,
1995 financial statements at this time.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Cooker Restaurant
Corporation as of December 29, 1996, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
January 24, 1997
Fort Lauderdale, Florida
F-2
<PAGE> 21
COOKER RESTAURANT CORPORATION
BALANCE SHEETS
(Dollar amounts in thousands)
December 29, 1996 and December 31, 1995
<TABLE>
<CAPTION>
Assets 1996 1995
------ ---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,009 1,299
Inventory 1,128 914
Land held for sale 1,560 882
Preoperational costs 749 302
Prepaid expenses and other current assets 585 511
---------- --------
Total current assets 6,031 3,908
Property and equipment, net 107,010 77,245
Other assets 1,592 2,028
---------- --------
$ 114,633 83,181
========== ========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Note payable $ 4,613 -
Accounts payable 3,845 2,421
Accrued liabilities 6,030 5,543
Income taxes payable 991 783
Deferred income taxes - 79
---------- --------
Total current liabilities 15,479 8,826
Long-term debt 16,822 35,976
Deferred income taxes 582 433
---------- --------
Total liabilities 32,883 45,235
---------- --------
Shareholders' equity:
Common share-without par value; authorized, 30,000,000
shares; issued 10,548,000 and 7,663,000 shares at December
29, 1996 and December 31, 1995, respectively 63,583 26,082
Retained earnings 24,316 18,013
Treasury stock, at cost, 513,000 shares at December 29, 1996
and December 31, 1995 (6,149) (6,149)
---------- --------
81,750 37,946
---------- --------
Commitments and contingencies
$ 114,633 83,181
========== ========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 22
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
(In thousands, except per share data)
Fiscal years ended December 29, 1996, December 31, 1995 and January 1, 1995
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Sales 110,273 91,678 84,169
------- ------ ------
Cost of sales:
Food and beverage 31,322 26,218 24,193
Labor 38,074 31,977 31,389
Restaurant operating expenses 18,470 15,065 13,549
Restaurant depreciation and amortization 4,624 3,957 5,030
------- ------ ------
92,490 77,217 74,161
Restaurant operating income 17,783 14,461 10,008
Other expenses (income):
General and administrative 6,149 5,785 4,532
Interest expense 1,278 1,848 1,787
Loss (gain) on sale of property 2 (305) -
Interest and other income (167) (30) (72)
------- ------ ------
7,262 7,298 6,247
------- ------ ------
Income before income taxes and extraordinary item 10,521 7,163 3,761
Provision for income taxes before extraordinary item 3,789 2,731 1,280
------- ------ ------
Income before extraordinary item 6,732 4,432 2,481
Extraordinary gain, net of income taxes - - 484
------- ------ ------
Net income 6,732 4,432 2,965
======= ====== ======
Earning per common share:
Before extraordinary item .72 .60 .34
Extraordinary item - - .07
------- ------ ------
Total .72 .60 .41
======= ====== ======
Weighed average number of common shares and common equivalent
shares outstanding 9,384 7,387 7,254
======= ====== ======
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 23
COOKER RESTAURANT CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollar and share amounts in thousands)
Fiscal years ended December 29, 1996, December 31, 1995 and January 1, 1995
<TABLE>
<CAPTION>
Common shares Treasury stock
----------------- Retained ----------------------------
Shares Amounts earnings Shares Amounts Total
------ ------- -------- ------ ------- -----
<S> <C> <C> <C> <C> <C> <C>
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
Issuance of common shares
under stock option plans 10 59 - - - 59
Proceeds from secondary
offering 2,875 37,442 - - - 37,442
Dividends paid $.06 per share - - (429) - - (429)
Net income - - 6,732 - - 6,732
-------- -------- -------- ------ -------- --------
Balance, December 29, 1996 10,548 $63,583 $24,316 513 $(6,149) $81,750
======== ======== ======== ====== ======== ========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 24
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
(Dollar amounts in thousands)
Fiscal years ended December 29, 1996, December 31, 1995 and January 1, 1995
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income 6,732 4,432 2,965
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 4,975 4,375 5,464
(Gain) loss on sale of property 2 (305) -
Gain on repurchase of debentures, net of income
taxes - (23) (484)
(Increase) decrease in:
Inventory (214) (84) (192)
Preoperational costs (1,402) (444) (1,348)
Prepaid expenses and other current assets (74) 237 (327)
Other assets 436 (276) (131)
Increase (decrease) in:
Accounts payable 1,424 460 683
Accrued liabilities 487 1,110 475
Income taxes payable 208 175 625
Deferred income taxes 70 (162) (159)
------- ------- -------
Net cash provided by operating activities 12,644 9,495 7,571
------- ------- -------
Cash flows from investing activities:
Purchases of property and equipment (34,997) (17,200) (11,318)
Proceeds from sales of property and equipment 532 459 206
Proceeds from sales of short-term investments - - 749
------- ------- -------
Net cash used in investing activities (34,465) (16,741) (10,363)
------- ------- -------
Cash flows from financing activities:
Proceeds from note payable 6,150 - -
Payment on note payable (1,537) - -
Net borrowings (repayments) under revolving line of
credit (17,397) 8,811 9,300
Repurchase of debentures (1,357) (1,180) (1,200)
Redemption of debentures (400) (893) (975)
Exercise of stock options 59 78 22
Proceeds from secondary offering 37,442 - -
Purchases of treasury stock - - (6,034)
Dividends paid (429) (358) (366)
------- ------- -------
Net cash provided by financing activities 22,531 6,458 747
------ ------- --------
Net (decrease) increase in cash and cash equivalents 710 (788) (2,045)
Cash and cash equivalents, at beginning of year 1,299 2,087 4,132
------- ------- -------
Cash and cash equivalents, at end of year 2,009 1,299 2,087
======= ======= =======
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 25
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 29, 1996, December 31, 1995 and January 1, 1995
(1) DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Cooker Restaurant Corporation (the "Company") operates 47 restaurants
in Tennessee, Ohio, Indiana, Kentucky, Michigan, Florida, Georgia,
North Carolina, Virginia and Maryland which have been developed under
the Cooker concept.
(A) FISCAL YEAR
The Company's fiscal year ends on the Sunday closest to December
31 of each year. Fiscal years 1996, 1995 and 1994 consisted of
52 weeks.
(B) CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, in banks and
credit card receivables. Credit card receivables are considered
cash equivalents because of their short collection period. The
carrying amount of cash equivalents approximates fair value.
(C) INVENTORIES
Inventories consist primarily of food and beverages and are
stated at the lower of cost or market. Cost is determined using
the first-in, first-out (FIFO) method.
(D) 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.
Amortization of preoperational costs was $949,027, $823,093, and
$2,254,268 for the years ended December 29, 1996, December 31,
1995 and January 1, 1995, respectively.
(E) PROPERTY AND EQUIPMENT
Property and equipment, including capital improvements, are
recorded at cost. Depreciation is calculated on 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 $618,000 and $291,000 were capitalized in fiscal 1996 and
1995, respectively.
F-7
<PAGE> 26
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(F) DEFERRED FINANCING COSTS
Deferred financing costs are being amortized by the interest
method using the effective interest rate implicit in the
borrowing transaction. Interest expense was $130,000, $130,368,
and $141,978 for the years ended December 29, 1996, December 30,
1995 and January 1, 1995, respectively.
(G) PREPAID LEASE
Prepaid lease represents prepayment of a long-term land lease
and is being amortized over the lease term.
(H) INCOME TAXES
The Company accounts for income taxes under the provisions of
Financial Accounting Standards ("SFAS") No. 109, Accounting for
Income Taxes, which generally requires recognition of deferred
tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and
liabilities, and are measured by applying enacted tax rates and
laws for the taxable years in which those differences are
expected to reverse. In addition, SFAS No. 109 requires
adjustment of previously deferred income taxes for changes in
tax rates under the liability method.
(I) EARNINGS PER SHARE
Earnings per share is computed by dividing net income by 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.
(J) 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(K) FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, accounts
payable and other current liabilities, and the revolving line of
credit approximates fair value because of the short maturity of
these instruments. The fair value of the convertible
subordinated debentures is estimated by discounting future cash
flows at rates currently offered to the Company for similar
types of borrowing arrangements. The carrying amount and fair
value of the convertible subordinated debentures are
$16,113,000 and $14,660,000, respectively, at December 29, 1996
and $17,870,000 and $15,569,000, respectively, at
December 31, 1995.
(L) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF
The Company adopted the provisions of SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, on January 1, 1996. This Statement
requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not
F-8
<PAGE> 27
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets. Assets
to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. Adoption of this
Statement did not have a material impact on the Company's
financial position, results of operations or liquidity.
(M) STOCK OPTION PLAN
Prior to January 1, 1996, the Company accounted for its stock
option plans in accordance with the provisions of Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. As such,
compensation expense would be recorded on the date of grant only
if the current market price of the underlying stock exceeded the
exercise price. On January 1, 1996, the Company adopted SFAS No.
123, Accounting for Stock-Based Compensation, which permits
entities to recognize as expense over the vesting period the
fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to
apply the provisions of APB Opinion No. 25 and provide pro forma
net income and pro forma earnings per share disclosures for
employee stock option grants made in 1995 and future years as if
the fair-value-based method defined in SFAS No. 123 had been
applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma
disclosure provisions of SFAS No. 123.
(N) RECLASSIFICATIONS
Certain amounts in the 1995 financial statements have been
reclassified to conform to the 1996 presentation.
(2) PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995 Useful life
---- ---- -----------
(in thousands)
<S> <C> <C> <C>
Land $ 26,997 19,595 -
Buildings and leasehold improvements 59,244 43,097 20-40 years, or shorter
of lease term
Furniture, fixtures and equipment 21,169 16,836 5-8 years
Construction in progress 16,916 11,013 -
-------- ------
124,326 90,541
Less accumulated depreciation and
amortization (17,316) (13,296)
-------- ------
Property and equipment, net $ 107,010 77,245
======== ======
</TABLE>
F-9
<PAGE> 28
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(3) OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Deferred financing costs, net of accumulated
amortization of $703,000 and $573,000 $ 603 764
Prepaid lease, net of accumulated amortization of
$60,000 and $46,000 629 643
Advances to employee stock ownership plan - 270
Liquor licenses, net of accumulated amortization of
$91,000 and $90,000 234 209
Other 126 142
------ ------
$ 1,592 2,028
====== ======
</TABLE>
(4) ACCRUED LIABILITIES
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Salaries, wages and benefits $ 3,073 2,707
Gift certificates payable 728 608
Sales tax payable 738 466
Property taxes 214 298
Insurance 743 759
Other 534 705
------ ------
$ 6,030 5,543
====== ======
</TABLE>
(5) NOTE PAYABLE
On September 20, 1996, the Company issued a promissory note to finance
the purchase of property in the amount of $6,150,000, payable in four
equal installments of $1,537,500 through May 1997, and secured by an
irrevocable standby letter of credit.
F-10
<PAGE> 29
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(6) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Convertible subordinated debentures $ 16,113 17,870
Revolving line of credit 709 18,106
-------- ------
$ 16,822 35,976
======== ======
</TABLE>
The convertible subordinated debentures (the "Debentures") mature
October 1, 2002, with interest payable quarterly at 6.75 percent. 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 agreement.
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 percent 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 1996 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 percent 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 1996 and 1995, the Company redeemed
debentures subject to this provision of $207,000 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. For the year ended
January 1, 1995, 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. The gain on 1995 and the 1996
redemptions was not material. 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 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.
The agreement matures December 31, 1998 and bears quarterly interest
payments at the Company's option of LIBOR plus 1.25 percent up to LIBOR
plus 2.00 percent or prime up to prime plus 0.50 percent, based on a
financial ratio as defined in the Agreement. Interest on borrowings at
December 29, 1996 ranged from 5.56 percent to 7.11 percent.
F-11
<PAGE> 30
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
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 percent of the prior year's net income.
(7) SHAREHOLDERS' EQUITY
The Company has authorized 300,000 shares of Class A Junior
participating preferred shares, without par value and 4,700,000 Class B
preferred shares, without par value, none of which have been issued.
Holders of Class A Junior participating preferred shares are entitled
to quarterly dividends equal to the greater of $.05 or 100 times the
aggregate per share amount of all cash and noncash dividends and
holders of Class B are entitled to dividends before distribution to
holders of common shares. Each Class A Junior participating preferred
share entitles the holder to 100 votes on all matters submitted to vote
by the shareholders. Holders of Class B preferred shares are entitled
to one vote for each share on matters requiring approval. The
liquidating value for Class A Junior participating preferred shares is
$.10 per share, plus all accrued and unpaid dividends.
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 percent 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 29, 1996, approximately
15,052,500 rights were outstanding.
(8) INCOME TAXES
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
December 29, December 31, January 1,
1996 1995 1995
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Current taxes:
Federal $ 2,975 2,412 1,037
State and local 744 481 402
------- ------ ------
3,719 2,893 1,439
Deferred taxes 70 (162) (159)
------- ------ ------
Provision before extraordinary item 3,789 2,731 1,280
Provision on extraordinary item - - 249
------- ------ ------
Provision for income taxes $ 3,789 2,731 1,529
======= ====== ======
</TABLE>
F-12
<PAGE> 31
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
The provision (benefit) for deferred income taxes consists of the
following:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Accelerated depreciation $ 14 (33)
Preoperational costs 121 (114)
Accrued health (14) (27)
Accrued vacation (18) 16
Provision for asset disposal (12) -
Other accrued expenses (27) -
Other 6 (4)
----- ----
Total $ 70 (162)
===== ====
</TABLE>
A reconciliation of the differences between income taxes calculated at
the federal statutory tax rate and the provision for income taxes
before extraordinary item is as follows:
<TABLE>
<CAPTION>
December 29, December 31, January 1,
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Income tax at statutory rates before
extraordinary item 34.0% 34.0% 34.0%
State and local income taxes, net of
federal tax benefit 4.7% 4.4% 7.0%
Reserve for tax examination - 2.9% -
FICA tip tax credit (4.6)% (5.2)% (6.6)%
Other nondeductible items 1.9% 2.0% (.4)%
---- ---- ----
36.0% 38.1% 34.0%
==== ==== ====
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities are as
follows:
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Accelerated depreciation $ 738 724
Preoperational costs 289 168
Accrued health (114) (100)
Accrued vacation (126) (108)
Provision for asset disposal (96) (84)
Other accrued expenses (104) (77)
Other (5) (11)
----- ----
$ 582 512
===== ====
</TABLE>
F-13
<PAGE> 32
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
The Internal Revenue Service (IRS) has completed its examination of the
Company's income tax returns for the years 1990 through 1993. The
Company has received statutory notices of deficiencies for the 1990 and
1991 years, and has filed a petition in the United States Tax Court
contesting these deficiencies. Statutory notices of deficiencies for
the 1992 and 1993 years are forthcoming. Once received, the Company
intends to file a petition in the United States Tax Court contesting
the deficiencies for these two years also. The deficiencies claimed by
the IRS for the 1990-1993 years approximate $900,000, exclusive of
interest and penalties. The Company believes that the accruals it has
provided in connection with this matter are adequate, and that the
resolution of the case in the United States Tax Court will not have a
material adverse effect on the Company's financial condition or results
of operations.
(9) EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the Company established an employee stock ownership plan (the
"ESOP" or the "Plan"). All employees who have reached the age of 21
years are participants in the Plan. Participants vest in the Plan based
upon a graduated schedule providing 20 percent after three years of
service and each year thereafter, with full vesting after seven years.
The amount and frequency of contributions to the Plan are at the
discretion of the Company. There were no contributions made to the ESOP
during fiscal 1996. 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 1996 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 1995.
As of December 29, 1996 and December 31, 1995, the ESOP owns 272,000
and 335,000, respectively, of the Company's common shares, all of which
are allocated to eligible participants. In 1996, the Company expressed
an intention to terminate the Plan, subject to Plan provisions.
(10) STOCK OPTION PLANS
The Company has stock option plans adopted in 1988 ("1988 Plan") and
1992 ("1992 Plan"), as amended. Under these plans, employees and
nonmanagement directors are granted stock options as determined by a
committee appointed by the Board of Directors at an exercise price no
less than fair market value at the date of grant. 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. Options
vest at a rate of 25 percent per year or, if there is substantial
change in control of the Company, the options become fully vested and
exercisable. The Company has reserved 682,000 and 718,000 common shares
for issuance to employees and 73,332 and 200,000 for issuance to
nonmanagement directors under the 1988 Plan and 1992 Plan,
respectively. No further options can be granted under the 1988 Plan for
employees and nonmanagement directors and under the 1992 Plan for
employees. The granting of options under the 1992 Plan for directors
expires April 13, 2002.
In April 1996, the Board of Directors and shareholders approved the
1996 officer option plan (the "1996 Plan") which provides for the grant
of nonqualified options to officers and employee-directors of the
Company. The number of shares is limited to fifteen percent of the
issued and outstanding shares of common stock, less shares subject to
options issued to officers and employee-directors. The recipients of
the options granted under the 1996 Plan, the number of shares to be
covered by each option, and the exercise price, vesting terms, if any,
duration and other terms of each option shall be determined by the
committee of the Company's Board of Directors. 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
exercise price shall be determined by the committee at the time of
grant, but in no event shall the exercise price be less than the fair
market value of a share on the date of grant. These options become
vested over
F-14
<PAGE> 33
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
various periods not to exceed four years from the date of grant or, if
there is substantial change in control of the Company, the options
become fully vested and exercised. The maximum number of shares granted
during any fiscal year by the Company shall be 500,000 to any one
officer. No options have been granted under the 1996 Plan through
December 29, 1996. The Plan expires April 22, 2006.
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 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
Granted 373,000 11.25 - 13.87
Canceled (23,000) 6.75 - 11.62
Exercised (10,000) 4.04 - 11.19
----------- ----------------------------
Balance at December 29, 1996 $ 1,271,000 4.04 - 21.75
========= ============================
</TABLE>
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.
The Company applies APB Opinion No. 25 in accounting for its Plan and,
accordingly, no compensation cost has been recognized for its stock
options in the financial statements. Had the Company determined
compensation cost based on the fair value at the grant date for its
stock options under SFAS No. 123, the Company's net income would have
been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Net income As reported $ 6,732 4,432
Pro forma $ 6,413 4,397
Earnings per share As reported $ .72 .60
Pro forma $ .68 .60
</TABLE>
Pro forma net income reflects only options granted in 1996 and 1995.
Therefore, the full impact of calculating compensation cost for stock
options under SFAS No. 123 is not reflected in the pro forma net income
amounts presented above because compensation cost is reflected over the
options' vesting period of four years and compensation cost for options
granted prior to January 1, 1995 is not considered.
The per share weighted-average fair value of stock options granted
during 1996 and 1995 was $5.56 and $3.89 on the date of grant using the
Black Scholes option-pricing model with the following weighted-average
assumptions: 1996-expected dividend yield .49 percent, risk-free
interest rate of 5.6 percent, an expected life of 7 years, and
volatility of 37 percent; 1995-expected dividend yield .65 percent,
risk-free interest rate of 6.69 percent, an expected life of 7 years
and volatility of 37 percent.
F-15
<PAGE> 34
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
Stock option activity during the periods indicated is as follows:
<TABLE>
<CAPTION>
Number of Weighted-average
Shares Exercise Price
------ --------------
<S> <C> <C>
Balance at January 1, 1995 894,000 $ 7.63
Granted 65,000 8.02
Cancelled (17,000) 8.96
Exercised (11,000) 4.64
--------- ------
Balance at December 31, 1995 931,000 7.68
Granted 373,000 11.77
Cancelled (23,000) 10.82
Exercised (10,000) 5.62
--------- ------
Balance at December 29, 1996 1,271,000 $ 8.77
========= ======
</TABLE>
At December 29, 1996, the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $4.04-$21.75 and
7.5 years, respectively.
At December 29, 1996 and December 31, 1995, the number of options
exercisable was 583,000 and 417,000, respectively, and the
weighted-average exercise price of those options was $7.91 and $7.86,
respectively.
(11) COMMITMENT AND CONTINGENCIES
(A) 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 $1,549,000, $1,378,000 and
$1,637,000, including percentage rent of $231,000, $262,000 and
$247,000 for the fiscal years ended December 29, 1996, December
31, 1995 and January 1, 1995, respectively.
Minimum rental commitments for noncancelable leases as of
December 29, 1996 are as follows:
<TABLE>
<CAPTION>
Fiscal year ending Amount
------------------ ------
(in thousands)
<S> <C> <C>
1997 $ 1,908
1998 1,938
1999 1,952
2000 1,949
2001 1,969
Thereafter 17,800
------
$ 27,516
======
</TABLE>
F-16
<PAGE> 35
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(B) LEGAL MATTERS
The Company is a party to various claims and legal actions
arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not
have a material adverse effect on the Company's financial
position, results of operations or liquidity.
(C) EMPLOYMENT AGREEMENTS
The Company and five of its officers have entered into
employment agreements which become effective upon a change in
control of the Company not approved by the Board of Directors,
as defined in the agreement and subject to certain criteria. The
agreement entitles the officers to a base salary, bonus and
benefits at not less than the rate the officer was receiving
prior to the change in control, limits discharge except for
cause, and provides for severance payment equal to the maximum
amount under IRS regulations.
(12) 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.
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 6, $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 1996 and 1995 was $2,004,000 and
$1,489,000, respectively. Cash paid for taxes for fiscal 1996 and 1995
was $3,511,000 and $2,581,000, respectively.
(13) RELATED PARTIES
Effective March 9, 1994, as amended January 31, 1997, the Board of
Directors (the "Board") authorized the Company to execute a guaranty
agreement whereby the Company guaranteed for one year the personal
indebtedness of the chairman together with accrued but unpaid interest.
This indebtedness is secured by a pledge of 570,000 common shares owned
by the chairman and a cross-collateralization of a mortgage on the
chairman's personal residence. Further, the chairman has 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
of principal plus any accrued but unpaid interest 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, the Chairman exercised options to purchase 100,000 common shares,
sold such 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 shares in a block transaction through
the same broker at the same time. The net proceeds from the exercise of
the stock options reduced the principal of the guaranteed loan. At
March 13, 1997, the amount of the guaranteed loan including interest
approximated $5.5 million. A fee of .25 percent per annum is charged on
the amount of the guaranty. 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 in executing the request. The
Company does not consider it necessary to provide for a potential loss
related to the guaranty in the financial statements at this time.
F-17
<PAGE> 36
COOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(14) SUBSEQUENT EVENT
Effective January 1, 1997 the Company established a 401(k) retirement
savings plan for the benefit of substantially all employees who have
attained the age 21 and worked 1,000 hours. Employees may contribute
between 1 to 15 percent of eligible compensation. The Company's
discretionary match is based on the Company's performance. The
Company's contribution will vest 20 percent per year beginning after
the third year.
(15) QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for fiscal year 1996 and 1995 are summarized
as follows:
<TABLE>
<CAPTION> First Second Third Fourth
quarter quarter quarter quarter
------- ------- ------ -------
1996 (in thousands, except per share data)
----
<S> <C> <C> <C> <C>
Sales $ 25,486 26,919 29,183 28,685
Restaurant operating income (a) 4,186 4,375 4,721 4,501
Income before income taxes 2,125 2,575 2,934 2,887
Net income 1,360 1,648 1,878 1,846
Earnings per share $ .18 .18 .18 .18
1995
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 share $ .14 .15 .15 .16
<FN>
(a) Sales less food and beverages, labor, restaurant operating
expenses and depreciation and amortization.
</TABLE>
F-18
<PAGE> 37
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
COOKER RESTAURANT CORPORATION
-----------------------
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED:
DECEMBER 29, 1996
-----------------------
EXHIBITS
-----------------------
================================================================================
<PAGE> 38
EXHIBIT INDEX
-------------
Page 1
<TABLE>
<CAPTION>
EXHIBIT NUMBER OF PAGES PAGE
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT + NUMBER
<S> <C> <C> <C>
3.1. Amended and Restated Articles of Incorporation of the *
Registrant. 13
------------------
3.2. Amended and Restated Code of Regulations of the *
Registrant. 12
------------------
4.1. See Articles FOURTH, FIFTH and SIXTH of the *
Amended and Restated Articles of Incorporation of the
Registrant (see 3.1 above). 13
------------------
4.2. See Articles One, Four, Seven and Eight of the Amended *
and Restated Code of Regulations of the Registrant (see
3.2 above). 12
------------------
4.3. Rights Agreement dated as of February 1, 1990 between *
the Registrant and National City Bank. 65
------------------
4.4. Amendment to Rights Agreement dated as of *
November 1, 1992 between the Registrant and
National City Bank. 1
------------------
4.5. Letter dated October 29, 1992 from the Registrant to First *
Union National Bank of North Carolina. 1
------------------
4.6. Letter dated October 29, 1992 from National City Bank *
to the Registrant. 1
------------------
4.7. See Section 7.4 of the Amended and Restated Loan *
Agreement dated December 22, 1995 between Registrant
and First Union National Bank of Tennessee (see 10.4
below). 31
------------------
4.8. Indenture dated as of October 28, 1992 between *
Registrant and First Union National Bank of North
Carolina, as Trustee. 61
------------------
10.1. Purchase and Sale Agreement dated October 20, 1995 *
between GMRI, Inc. and Registrant. 17
------------------
10.2. First Amendment to Purchase and Sale Agreement dated *
October __, 1995 between GMRI, Inc. and Registrant. 2
------------------
10.3. Joinder of Escrow Agreement dated October 25, 1995 *
among Lawyers Title Insurance Corporation, GMRI, Inc.
and Registrant. 2
------------------
10.4. Amended and Restated Loan Agreement dated *
December 22, 1995 between Registrant and First Union
National Bank of Tennessee. 31
------------------
10.5. Underwriting Agreement dated May 7, 1996 with *
Montgomery Securities and Equitable Securities
Corporation. 28
------------------
10.6. Form of Contingent Employment Agreement and *
schedule of executed Agreements. 10
------------------
10.7. The Registrant's 1988 Employee Stock Option Plan and *
1992 Employee Stock Option Plan, Amended and
Restated April 22, 1996. 11
------------------
</TABLE>
<PAGE> 39
<TABLE>
<S> <C> <C> <C>
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated. 6 43
------------------ -----------------
10.9. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated. 6 49
------------------ -----------------
10.10. The Registrant's 1996 Officer's Stock Option Plan. 10 *
------------------
10.11. Reaffirmation and Amendment to Guaranty and
Suretyship Agreement between Registrant and
NationsBank of Tennessee, N.A. dated July 24, 1995. 2 *
------------------
10.12. Amended and Restated Guaranty between Registrant and
Chase Manhattan Bank dated January 31, 1997. 7 55
------------------ -----------------
10.13. Letter dated February 3, 1997 from G. Arthur Seelbinder
to the Registrant. 1 62
------------------ -----------------
16.1. Letter dated August 14, 1996 from Price Waterhouse LLP
to the Securities and Exchange Commission. 1 *
------------------ -----------------
24.1. Powers of Attorney. 10 63
------------------ -----------------
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Registrant to sign pursuant to a power of attorney. 1 73
------------------ -----------------
27.1. Financial Data Schedules (submitted electronically for
SEC information only). 1
------------------
<FN>
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of
its securities or to any person from whom a proxy was solicited in connection
with the Registrant's most recent Annual Meeting of Shareholders upon the
payment of a fee of fifty cents ($.50) per page.
* Incorporated by Reference
</TABLE>
<PAGE> 1
COOKER RESTAURANT CORPORATION
1988 DIRECTORS STOCK OPTION PLAN
----------------------
AMENDED AND RESTATED
JANUARY 13, 1992
FURTHER AMENDED JANUARY 17, 1994
----------------------
AMENDED JANUARY 20, 1997
--------------------
P R E A M B L E :
1. Cooker Restaurant Corporation, an Ohio corporation (the "Company" or
"Cooker") adopted the 1988 Stock Option Plan for Nonmanagement Directors (the
"Original Plan") by action of its Board of Directors on November 22, 1988 which
was approved by its shareholders on June 5, 1989.
2. Substantial grants of options to purchase Common Shares, without par
value, of the Company have been made under the Original Plan.
3. The Company has gained substantial experience in the operation of the
Original Plan and there have been substantial changes in the laws and
regulations that govern stock option plans, such as the Original Plan. The
Company desires to amend and restate the Original Plan in order to reflect such
experience and comply with the changes in applicable laws and regulations.
4. The Company desires to attract and retain capable directors and to
provide them with long term incentives to continue their services to the
Company, to maximize the value of the Company to its shareholders and to acquire
a continuing ownership interest in the Company.
5. The Company has determined that the foregoing objectives will be
promoted by granting Options (as hereinafter defined) under this Plan to the
Directors of the Company who are not Employees, pursuant to this Plan.
T E R M S :
ARTICLE 1. DEFINITIONS.
Section 1.1. GENERAL. Certain words and phrases used in this Plan shall
have the meanings given to them below in this section:
"Board of Directors" means the board of directors of Cooker.
"Change in Control" means (a) the acquisition by any person (defined for
the purposes of this Section to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other than
Cooker or an employee benefit plan created by its Board of Directors for the
benefit of its Employees, either directly or indirectly, of the beneficial
ownership (determined under Rule 13d-3 of the Regulations promulgated by the
Securities and Exchange Commission ("SEC") under Section 13(d) of the Exchange
Act) of securities issued by Cooker having 20% or more of the voting power of
all the voting securities issued by Cooker in
<PAGE> 2
the election of directors at the next meeting of the holders of voting
securities to be held for such purpose, and such person acquired such beneficial
ownership without the prior consent of the Board of Directors; (b) the election
of a majority of the directors elected at any meeting of the holders of voting
securities of Cooker who are persons who were not nominated for such election by
the Board of Directors or a duly constituted committee of the Board of
Directors; or (c) the merger or consolidation with or transfer of substantially
all of the assets of Cooker to another person and the Board of Directors does
not adopt a resolution, before Cooker enters into any agreement for such merger,
consolidation or transfer, determining that it is not a Change in Control.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as now in effect or hereafter amended.
"Date of Grant" means the date of each annual meeting of the Shareholders
of Cooker at which Directors are elected.
"Director" means a member of the Board of Directors.
"Effective Date" means the date the Original Plan was adopted by the Board
of Directors.
"Eligibility Year" means with respect to a Date of Grant the most recently
ended fiscal year of the Company.
"Employee" means any employee of Cooker or any Subsidiary of Cooker.
"Exercise Price" means with respect to an Option, the amount of
consideration that must be delivered to the Company in order to purchase a
single Share thereunder.
"Fair Market Value of a Share" means (a) if the Shares are listed or
admitted to trading on a national securities exchange or the NASDAQ - National
Market System, the per Share closing price regular way on the principal national
securities exchange or the NASDAQ - National Market System on which the Shares
are listed or admitted to trading on the day prior to the date of determination
or, if no closing price can be determined for the date of determination, the
most recent date for which such price can reasonably be ascertained, or (b) if
the Shares are not listed or admitted to trading on a national securities
exchange or the NASDAQ - National Market System, the mean between the
representative bid and asked per Share prices in the over-the-counter market at
the closing of the day prior to the date of determination or the most recent
such bid and asked prices then available, as reported by NASDAQ or if the Shares
are not then quoted by NASDAQ as furnished by any market maker selected from
time to time by Cooker for that purpose.
"Grantee" means any Director to whom an Option has been granted and any
heir or legal representative to whom an Option has been transferred by will or
the laws of descent and distribution.
"Officer" means an officer of the Company as defined in 17 C.F.R.ss.
240.16a-1(f) as now in effect or hereafter amended.
"Option" or "Stock Option" means a right granted under the Plan to a
Participant to purchase a stated number of Shares.
"Option Certificate" means a certificate of the Company evidencing an
Option substantially in the form adopted by the Board of Directors.
"Parent" means a parent of a given corporation as such term is defined in
Section 424(e) of the Code.
"Participant" means a person who is eligible to receive and has received
an Option under the Plan.
"Plan" means the Original Plan as amended and restated herein and as it
may be further amended from time to time.
-2-
<PAGE> 3
"Shares" means Common Shares, without par value, of Cooker.
"Subsidiary" means a subsidiary of a given corporation as such term is
defined in Section 424(f) of the Code.
Section 1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles.
Section 1.3. EFFECT OF DEFINITIONS. The definitions set forth in Section
1.1 above shall apply equally to the singular, plural, adjectival, adverbial and
other forms of any of the words and phrases defined regardless of whether they
are capitalized.
ARTICLE 2. SHARES.
Section 2.1. NUMBER. The aggregate number of Shares in respect of which
Options may be granted under the Plan shall not exceed Seventy-Three Thousand
Three Hundred Thirty-Two (73,332)* , which number of Shares are hereby reserved
for issuance under the Plan out of the authorized but unissued Shares.
Section 2.2. CANCELLATIONS. If any Options granted under the Plan are
canceled, terminate or expire for any reason without having been exercised in
full, the Shares related to the unexercised portion of such Option shall be
available again for the purposes of the Plan.
Section 2.3. ANTI-DILUTION.
(a) If the Shares are split or if a dividend of Shares is paid on
the Shares, the number of Shares for which each then outstanding Option is
exercisable and the number of Shares as to which Options may be granted under
this Plan shall be automatically increased by the ratio between the number of
Shares that are outstanding immediately after such event and the number of
Shares that were outstanding immediately before such event and the Exercise
Price thereof shall be automatically decreased by the same ratio and if the
Shares are combined into a lesser number of Shares, the number of Shares for
which each then outstanding Option or SAR is exercisable and the number of
Shares as to which Options may be granted under the Plan shall be automatically
decreased by such ratio and the Exercise Price thereof shall be automatically
increased by such ratio.
(b) In the event of any other change in the Shares, through
recapitalization, merger, consolidation or exchanges of shares or otherwise,
there shall automatically be substituted for each Share subject to an
unexercised Option and each Share available for additional grants of Awards, the
number and kind of shares or other securities into which each outstanding Share
was changed; and the Exercise Price shall be increased or decreased
proportionally so that the aggregate Exercise Price for the securities subject
to each Option shall remain the same as immediately before such event; and the
Board of Directors may make such further equitable adjustments in the Plan and
the then outstanding Options as it deems necessary and appropriate including,
but not limited to, changing the number of Shares reserved under the Plan or
covered by outstanding Options, and the Exercise Price of outstanding Options.
Section 2.3. SOURCE. Except as otherwise determined by the Board of
Directors, the Shares issued under the Plan shall be authorized but unissued
Shares. However, Shares which are to be delivered under the Plan may be obtained
by the Company from its treasury, by purchases on the open market or from
private sources, or by issuing authorized but unissued Shares. The proceeds of
the exercise of any Award shall be general corporate funds of the Company. No
fractional Shares shall be issued or sold under the Plan nor will any cash
payment be made in lieu of fractional Shares.
- --------
* This amount was originally 110,000. Such amount was adjusted to reflect the
one-for-three reverse split effective April 29, 1991 and was subsequently
adjusted to reflect the two-for-one stock split effective March 20, 1992.
-3-
<PAGE> 4
Section 2.4. RIGHTS OF A SHAREHOLDER. No Grantee or other person claiming
under or through any Grantee shall have any right, title or interest in or to
any Shares allocated or reserved under the Plan or subject to any Option except
as to such Shares, if any, for which certificates representing such Shares have
been issued to such Grantee.
Section 2.5. SECURITIES LAWS. No Option shall be exercised nor shall any
Shares or other securities be issued or transferred pursuant to an Option unless
and until all applicable requirements imposed by federal and state securities
laws and by any stock exchanges upon which the Shares may be listed, have been
fully complied with. As a condition precedent to the exercise of an Option or
the issuance of Shares pursuant to the grant or exercise of an Option, the
Company may require the Grantee to take any reasonable action to meet such
requirements including providing undertakings as to the investment intent of the
Grantee, accepting transfer restrictions on the Shares issuable thereunder and
providing opinions of counsel, in form and substance acceptable to the Company,
as to the availability of exemptions from such requirements.
ARTICLE 3. ELIGIBILITY.
Section 3.1. DIRECTORS. Only Directors who are not Employees shall be
eligible to receive Options.
ARTICLE 4. STOCK OPTIONS.
Section 4.1. GRANT. On each Date of Grant, Options relating to
Twenty-Three Thousand Three Hundred Thirty-Two (23,332)* Shares or such lesser
number as remain available for granting under Article 2 above shall be
automatically granted, divided into Options for equal numbers of Shares for each
Director who is eligible to receive Options under Section 3.1 above and who
attended at least seventy five per cent (75%) of the total number of meetings of
the Board of Directors (and committees thereof of which he is a member) during
the Eligibility Year.
Section 4.2. EXERCISE PRICE. The Exercise Price of an Option shall be
equal to the Fair Market Value of a Share on the Date of Grant.
Section 4.3. TERM. (a) Each Option shall vest and first become exercisable
as to twenty five percent (25%) of the Shares originally subject to the Option
upon the convening of each annual meeting of the shareholders of the Company
which is held after the Date of Grant if the Grantee is a Director at the time
of such convening; and (b) each Option shall lapse and cease to be exercisable
upon the expiration of ten (10) years from the Date of Grant. Notwithstanding
the foregoing, all Options that have not previously been exercised nor lapsed
and ceased to be exercisable shall vest and become exercisable upon the
occurrence of any Change in Control; but under no circumstance shall any
portion of an Option that has not vested and become exercisable at the time the
Grantee ceases to be a Director, for any reason, vest or become exercisable at
any time after the Grantee ceases to be a Director.
Section 4.4. INCENTIVE STOCK OPTIONS. An Option under this Plan shall not
be treated as an "incentive stock option" as such term is defined in Section
422(b) of the Code.
Section 4.5. EXERCISE. An Option shall be exercised by the delivery of the
Option Certificate therefor with the notice of exercise set forth on the reverse
side thereof properly completed and duly executed by the Grantee named therein
to the Secretary or the Treasurer of the Company, together with the aggregate
Exercise Price for the number of Shares as to which the Option is being
exercised, after the Option has become exercisable and before it has ceased to
be exercisable. An Option may be exercised as to less than all of the Shares
purchasable thereunder but not for a fractional Share. No Option may be
exercised as to less than one hundred (100) Shares unless it is exercised as to
all of the Shares then available thereunder. If an Option is exercised as to
less than all of the Shares purchasable thereunder, new duly executed Option
Certificates reflecting the decreased number of Shares
- ----------
* This amount was 35,000. Such amount was adjusted to reflect the one-for-three
reverse split effective April 29, 1991 and was subsequently adjusted to reflect
the two-for-one stock split effective March 20, 1992.
-4-
<PAGE> 5
exercisable under such Option, but otherwise of the same tenor, shall be
returned to the Grantee. The Exercise Price shall be paid in cash by (a)
delivery of a certified or cashier's check payable to the order of the Company
in such amount, (b) wire transfer of immediately available funds to a bank
account designated by the Company, or (c) reduction of a debt of the Company to
the Grantee. Promptly after an Option is properly exercised, the Company shall
issue to the Grantee a certificate representing the Shares purchased thereunder.
Section 4.6. OPTION CERTIFICATES. Promptly after the Date of Grant, Cooker
shall duly execute and deliver to the Grantee an Option Certificate setting
forth the terms of the Option. No term that does not vary from those set forth
in this Plan need be set forth in an Option Certificate. Option Certificates are
not negotiable instruments or securities (as such term is defined in Chapter
1308 of the Ohio Revised Code) and may not be transferred except by will or the
laws of descent and distribution. Lost and destroyed Option Certificates may be
replaced without bond.
Section 4.7. DISABILITY. If a Grantee is absent from meetings of the Board
of Directors because of a physical or mental disability, for purposes of the
Plan, such Grantee will not be considered to have ended his service with the
Board of Directors while he has that disability, unless he resigns.
ARTICLE 5. GENERAL PROVISIONS.
Section 5.1. NO RIGHT TO CONTINUE. Nothing in the Plan or any Award or any
instrument executed pursuant to the Plan will confer upon any Participant any
right to continue to be a Director of the Company or affect the right of the
Shareholders to terminate the directorship of any Participant.
Section 5.2. LIMITED LIABILITY. The liability of the Company under this
Plan or in connection with any exercise of any Option is limited to the
obligations expressly set forth in the Plan and in the grant of any Option, and
no term or provision of this Plan nor of any Option shall be construed to impose
any duty, obligation or liability on the Company not expressly set forth in the
Plan or any grant of any Option.
Section 5.3. ASSUMPTION OF OPTIONS. Upon the dissolution or liquidation of
the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all the assets of the
Company to another corporation, any Options outstanding theretofore granted or
sold hereunder must be assumed by the surviving or purchasing corporation, with
appropriate adjustments as to the number and kind of shares and price.
Section 5.4. NO TRANSFER. No Option or other benefit under the Plan may be
sold, pledged or otherwise transferred other than by will or the laws of descent
and distribution; and no Option may be exercised during the life of the
Participant to whom it was granted except by such Participant.
Section 5.5. EXPENSES. All costs and expenses incurred in connection with
the administration of the Plan including any excise tax imposed upon the
transfer of Shares pursuant to the exercise of an Option shall be borne by the
Company.
Section 5.6. NOTICES. Notices and other communications required or
permitted to be made under the Plan shall be in writing and shall be deemed to
have been duly given if personally delivered or if sent by first class mail
addressed (a) if to a Grantee, at his residence address set forth in personnel
records of the Company or (b) if to the Company, to its Secretary or Treasurer
at its principal executive office.
Section 5.7. THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to give any person other than the Grantees any
rights or remedies under this Plan.
Section 5.8. SATURDAYS, SUNDAYS AND HOLIDAYS. Where this Plan authorizes
or requires a payment or performance on a Saturday, Sunday or public holiday,
such payment or performance shall be deemed to be timely if made on the next
succeeding business day; provided, however, that this Section 5.8 shall not be
construed to extend the ten (10) year period referred to in Section 4.3.
-5-
<PAGE> 6
Section 5.9. RULES OF CONSTRUCTION. The captions and section numbers
appearing in this Plan are inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the provisions of this Plan. In
this Plan words in the singular number include the plural, and in the plural
include the singular; and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates words of the neuter gender may refer
to any gender.
Section 5.10. GOVERNING LAW. The validity, terms, performance and
enforcement of this Plan shall be governed by laws of the State of Ohio that are
applicable to agreements negotiated, executed, delivered and performed solely in
the State of Ohio.
Section 5.11. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
upon its approval by the affirmative vote of the holders of a majority of the
outstanding Shares present, or represented, and entitled to vote at a meeting of
the shareholders of Cooker. Options shall be granted before such approval, but
all Options so granted shall be conditioned on such approval and shall be void
if such approval is not given within twelve (12) months after the Effective
Date.
Section 5.12. AMENDMENT AND TERMINATION. No Option shall be granted under
the Plan after August 31, 1997. The Board of Directors may at any time terminate
the Plan, or make such amendment of the Plan as it may deem advisable; provided,
however, that no amendment shall be effective without the approval of the
shareholders of the Company by the affirmative vote of the holders of a majority
of the outstanding Shares present, or represented, and entitled to vote at a
meeting of shareholders duly held, if it would:
(a) materially increase the benefits accruing to Participants under
the Plan;
(b) materially increase the number of Shares which may be issued
under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan; and, further, provided, however, that no amendment or
termination of the Plan shall be effective to alter or impair the rights of a
Grantee, under any Option granted before the adoption of such amendment or
termination by the Board of Directors, without the written consent of such
Grantee. No termination or amendment of this Plan or any Option nor waiver of
any right or requirement under this Plan or any Option shall be binding on the
Company unless it is in a writing duly entered into its records and executed by
a duly authorized Officer. The provisions of this Plan setting forth the
formulae that determine the Exercise Price of Options granted hereunder, the
number of Shares as to which they are exercisable, the times when they are
granted and the persons who are Participants may not be amended more than once
every six (6) months, other than to comport with changes in the Code, the
Employee Retirement Security Income Act of 1974, as amended, or the rules
thereunder.
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<PAGE> 1
Exhibit 10.9
COOKER RESTAURANT CORPORATION
1992 DIRECTORS STOCK OPTION PLAN
----------------------
JANUARY 13, 1992
FURTHER AMENDED JANUARY 17, 1994
----------------------
AMENDED JANUARY 20, 1997
--------------------
P R E A M B L E :
1. The Company desires to attract and retain capable directors and to
provide them with long term incentives to continue their services to the
Company, to maximize the value of the Company to its shareholders and to acquire
a continuing ownership interest in the Company.
2. The Company has determined that the foregoing objectives will be
promoted by granting Options (as hereinafter defined) under this Plan to the
Directors of the Company who are not Employees, pursuant to this Plan.
T E R M S :
ARTICLE 1. DEFINITIONS.
Section 1.1. GENERAL. Certain words and phrases used in this Plan shall
have the meanings given to them below in this section:
"Board of Directors" means the board of directors of Cooker.
"Change in Control" means (a) the acquisition by any person (defined for
the purposes of this Section to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other than
Cooker or an employee benefit plan created by its Board of Directors for the
benefit of its Employees, either directly or indirectly, of the beneficial
ownership (determined under Rule 13d-3 of the Regulations promulgated by the
Securities and Exchange Commission ("SEC") under Section 13(d) of the Exchange
Act) of securities issued by Cooker having 20% or more of the voting power of
all the voting securities issued by Cooker in the election of directors at the
next meeting of the holders of voting securities to be held for such purpose,
and such person acquired such beneficial ownership without the prior consent of
the Board of Directors; (b) the election of a majority of the directors elected
at any meeting of the holders of voting securities of Cooker who are persons who
were not nominated for such election by the Board of Directors or a duly
constituted committee of the Board of Directors; or (c) the merger or
consolidation with or transfer of substantially all of the assets of Cooker to
another person and the Board of Directors does not adopt a resolution, before
Cooker enters into any agreement for such merger, consolidation or transfer,
determining that it is not a Change in Control.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as now in effect or hereafter amended.
"Date of Grant" means the date of each annual meeting of the Shareholders
of Cooker at which Directors are elected.
<PAGE> 2
"Director" means a member of the Board of Directors.
"Effective Date" means the date this Plan was adopted by the Board of
Directors.
"Eligibility Year" means with respect to a Date of Grant the most recently
ended fiscal year of the Company.
"Employee" means any employee of Cooker or any Subsidiary of Cooker.
"Exercise Price" means with respect to an Option, the amount of
consideration that must be delivered to the Company in order to purchase a
single Share thereunder.
"Fair Market Value of a Share" means (a) if the Shares are listed or
admitted to trading on a national securities exchange or the NASDAQ -National
Market System, the per Share closing price regular way on the principal national
securities exchange or the NASDAQ - National Market System on which the Shares
are listed or admitted to trading on the day prior to the date of determination
or, if no closing price can be determined for the date of determination, the
most recent date for which such price can reasonably be ascertained, or (b) if
the Shares are not listed or admitted to trading on a national securities
exchange or the NASDAQ - National Market System, the mean between the
representative bid and asked per Share prices in the over-the-counter market at
the closing of the day prior to the date of determination or the most recent
such bid and asked prices then available, as reported by NASDAQ or if the Shares
are not then quoted by NASDAQ as furnished by any market maker selected from
time to time by Cooker for that purpose.
"Grantee" means any Director to whom an Option has been granted and any
heir or legal representative to whom an Option has been transferred by will or
the laws of descent and distribution.
"Officer" means an officer of the Company as defined in 17 C.F.R. Section
240.16a-1(f) as now in effect or hereafter amended.
"Option" or "Stock Option" means a right granted under the Plan to a
Participant to purchase a stated number of Shares.
"Option Certificate" means a certificate of the Company evidencing an
Option substantially in the form adopted by the Board of Directors.
"Parent" means a parent of a given corporation as such term is defined in
Section 424(e) of the Code.
"Participant" means a person who is eligible to receive and has received
an Option under the Plan.
"Plan" means the Original Plan as amended and restated herein and as it
may be further amended from time to time.
"Shares" means Common Shares, without par value, of Cooker.
"Subsidiary" means a subsidiary of a given corporation as such term is
defined in Section 424(f) of the Code.
Section 1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles.
Section 1.3. EFFECT OF DEFINITIONS. The definitions set forth in Section
1.1 above shall apply equally to the singular, plural, adjectival, adverbial and
other forms of any of the words and phrases defined regardless of whether they
are capitalized.
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<PAGE> 3
ARTICLE 2. SHARES.
Section 2.1. NUMBER. The aggregate number of Shares in respect of which
Options may be granted under the Plan shall not exceed Two Hundred Thousand
(200,000)*, which number of Shares are hereby reserved for issuance under the
Plan out of the authorized but unissued Shares.
Section 2.2. CANCELLATIONS. If any Options granted under the Plan are
canceled, terminate or expire for any reason without having been exercised in
full, the Shares related to the unexercised portion of such Option shall be
available again for the purposes of the Plan.
Section 2.3. ANTI-DILUTION.
(a) If the Shares are split or if a dividend of Shares is paid on
the Shares, the number of Shares for which each then outstanding Option is
exercisable and the number of Shares as to which Options may be granted under
this Plan shall be automatically increased by the ratio between the number of
Shares that are outstanding immediately after such event and the number of
Shares that were outstanding immediately before such event and the Exercise
Price thereof shall be automatically decreased by the same ratio and if the
Shares are combined into a lesser number of Shares, the number of Shares for
which each then outstanding Option or SAR is exercisable and the number of
Shares as to which Options may be granted under the Plan shall be automatically
decreased by such ratio and the Exercise Price thereof shall be automatically
increased by such ratio.
(b) In the event of any other change in the Shares, through
recapitalization, merger, consolidation or exchanges of shares or otherwise,
there shall automatically be substituted for each Share subject to an
unexercised Option and each Share available for additional grants of Awards, the
number and kind of shares or other securities into which each outstanding Share
was changed; and the Exercise Price shall be increased or decreased
proportionally so that the aggregate Exercise Price for the securities subject
to each Option shall remain the same as immediately before such event; and the
Board of Directors may make such further equitable adjustments in the Plan and
the then outstanding Options as it deems necessary and appropriate including,
but not limited to, changing the number of Shares reserved under the Plan or
covered by outstanding Options, and the Exercise Price of outstanding Options.
Section 2.3. SOURCE. Except as otherwise determined by the Board of
Directors, the Shares issued under the Plan shall be authorized but unissued
Shares. However, Shares which are to be delivered under the Plan may be obtained
by the Company from its treasury, by purchases on the open market or from
private sources, or by issuing authorized but unissued Shares. The proceeds of
the exercise of any Award shall be general corporate funds of the Company. No
fractional Shares shall be issued or sold under the Plan nor will any cash
payment be made in lieu of fractional Shares.
Section 2.4. RIGHTS OF A SHAREHOLDER. No Grantee or other person claiming
under or through any Grantee shall have any right, title or interest in or to
any Shares allocated or reserved under the Plan or subject to any Option except
as to such Shares, if any, for which certificates representing such Shares have
been issued to such Grantee.
Section 2.5. SECURITIES LAWS. No Option shall be exercised nor shall any
Shares or other securities be issued or transferred pursuant to an Option unless
and until all applicable requirements imposed by federal and state securities
laws and by any stock exchanges upon which the Shares may be listed, have been
fully complied with. As a condition precedent to the exercise of an Option or
the issuance of Shares pursuant to the grant or exercise of an Option, the
Company may require the Grantee to take any reasonable action to meet such
requirements including providing undertakings as to the investment intent of the
Grantee, accepting transfer restrictions on the Shares issuable thereunder and
providing opinions of counsel, in form and substance acceptable to the Company,
as to the availability of exemptions from such requirements.
ARTICLE 3. ELIGIBILITY.
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* This amount was 100,000 and was adjusted to reflect the two-for-one stock
split effective March 20, 1992.
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<PAGE> 4
Section 3.1. DIRECTORS. Only Directors who are not Employees shall be
eligible to receive Options.
ARTICLE 4. STOCK OPTIONS.
Section 4.1. GRANT. On each Date of Grant, Options relating to Twenty-Four
Thousand (24,000)* Shares or such lesser number as remain available for granting
under Article 2 above shall be automatically granted, divided into Options for
equal numbers of Shares for each Director who is eligible to receive Options
under Section 3.1 above and who attended at least seventy five per cent (75%) of
the total number of meetings of the Board of Directors (and committees thereof
of which he is a member) during the Eligibility Year.
Section 4.2. EXERCISE PRICE. The Exercise Price of an Option shall be
equal to the Fair Market Value of a Share on the Date of Grant.
Section 4.3. TERM. (a) Each Option shall vest and first become exercisable
as to twenty five percent (25%) of the Shares originally subject to the Option
upon the convening of each annual meeting of the shareholders of the Company
which is held after the Date of Grant if the Grantee is a Director at the time
of such convening; and (b) each Option shall lapse and cease to be exercisable
upon the expiration of ten (10) years from the Date of Grant. Notwithstanding
the foregoing, all Options that have not previously been exercised nor lapsed
and ceased to be exercisable shall vest and become exercisable upon the
occurrence of any Change in Control; but under no circumstance shall any
portion of an Option that has not vested and become exercisable at the time the
Grantee ceases to be a Director, for any reason, vest or become exercisable at
any time after the Grantee ceases to be a Director.
Section 4.4. INCENTIVE STOCK OPTIONS. An Option under this Plan shall not
be treated as an "incentive stock option" as such term is defined in Section
422(b) of the Code.
Section 4.5. EXERCISE. An Option shall be exercised by the delivery of the
Option Certificate therefor with the notice of exercise set forth on the reverse
side thereof properly completed and duly executed by the Grantee named therein
to the Secretary or the Treasurer of the Company, together with the aggregate
Exercise Price for the number of Shares as to which the Option is being
exercised, after the Option has become exercisable and before it has ceased to
be exercisable. An Option may be exercised as to less than all of the Shares
purchasable thereunder but not for a fractional Share. No Option may be
exercised as to less than one hundred (100) Shares unless it is exercised as to
all of the Shares then available thereunder. If an Option is exercised as to
less than all of the Shares purchasable thereunder, new duly executed Option
Certificates reflecting the decreased number of Shares exercisable under such
Option, but otherwise of the same tenor, shall be returned to the Grantee. The
Exercise Price shall be paid in cash by (a) delivery of a certified or cashier's
check payable to the order of the Company in such amount, (b) wire transfer of
immediately available funds to a bank account designated by the Company, or (c)
reduction of a debt of the Company to the Grantee. Promptly after an Option is
properly exercised, the Company shall issue to the Grantee a certificate
representing the Shares purchased thereunder.
Section 4.6. OPTION CERTIFICATES. Promptly after the Date of Grant, Cooker
shall duly execute and deliver to the Grantee an Option Certificate setting
forth the terms of the Option. No term that does not vary from those set forth
in this Plan need be set forth in an Option Certificate. Option Certificates are
not negotiable instruments or securities (as such term is defined in Chapter
1308 of the Ohio Revised Code) and may not be transferred except by will or the
laws of descent and distribution. Lost and destroyed Option Certificates may be
replaced without bond.
Section 4.7. DISABILITY. If a Grantee is absent from meetings of the Board
of Directors because of a physical or mental disability, for purposes of the
Plan, such Grantee will not be considered to have ended his service with the
Board of Directors while he has that disability, unless he resigns.
- ----------
* This amount was 12,000 and was adjusted to reflect the two-for-one stock split
effective March 20, 1992.
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<PAGE> 5
ARTICLE 5. GENERAL PROVISIONS.
Section 5.1. NO RIGHT TO CONTINUE. Nothing in the Plan or any Award or any
instrument executed pursuant to the Plan will confer upon any Participant any
right to continue to be a Director of the Company or affect the right of the
Shareholders to terminate the directorship of any Participant.
Section 5.2. LIMITED LIABILITY. The liability of the Company under this
Plan or in connection with any exercise of any Option is limited to the
obligations expressly set forth in the Plan and in the grant of any Option, and
no term or provision of this Plan nor of any Option shall be construed to impose
any duty, obligation or liability on the Company not expressly set forth in the
Plan or any grant of any Option.
Section 5.3. ASSUMPTION OF OPTIONS. Upon the dissolution or liquidation of
the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all the assets of the
Company to another corporation, any Options outstanding theretofore granted or
sold hereunder must be assumed by the surviving or purchasing corporation, with
appropriate adjustments as to the number and kind of shares and price.
Section 5.4. NO TRANSFER. No Option or other benefit under the Plan may be
sold, pledged or otherwise transferred other than by will or the laws of descent
and distribution; and no Option may be exercised during the life of the
Participant to whom it was granted except by such Participant.
Section 5.5. EXPENSES. All costs and expenses incurred in connection with
the administration of the Plan including any excise tax imposed upon the
transfer of Shares pursuant to the exercise of an Option shall be borne by the
Company.
Section 5.6. NOTICES. Notices and other communications required or
permitted to be made under the Plan shall be in writing and shall be deemed to
have been duly given if personally delivered or if sent by first class mail
addressed (a) if to a Grantee, at his residence address set forth in personnel
records of the Company or (b) if to the Company, to its Secretary or Treasurer
at its principal executive office.
Section 5.7. THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to give any person other than the Grantees any
rights or remedies under this Plan.
Section 5.8. SATURDAYS, SUNDAYS AND HOLIDAYS. Where this Plan authorizes
or requires a payment or performance on a Saturday, Sunday or public holiday,
such payment or performance shall be deemed to be timely if made on the next
succeeding business day; provided, however, that this Section 5.8 shall not be
construed to extend the ten (10) year period referred to in Section 4.3.
Section 5.9. RULES OF CONSTRUCTION. The captions and section numbers
appearing in this Plan are inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the provisions of this Plan. In
this Plan words in the singular number include the plural, and in the plural
include the singular; and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates words of the neuter gender may refer
to any gender.
Section 5.10. GOVERNING LAW. The validity, terms, performance and
enforcement of this Plan shall be governed by laws of the State of Ohio that are
applicable to agreements negotiated, executed, delivered and performed solely in
the State of Ohio.
Section 5.11. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
upon its approval by the affirmative vote of the holders of a majority of the
outstanding Shares present, or represented, and entitled to vote at a meeting of
the shareholders of Cooker. Options shall be granted before such approval, but
all Options so granted shall be conditioned on such approval and shall be void
if such approval is not given within twelve (12) months after the Effective
Date.
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<PAGE> 6
Section 5.12. AMENDMENT AND TERMINATION. No Option shall be granted under
the Plan more than ten (10) years after the Effective Date of the Plan. The
Board of Directors may at any time terminate the Plan, or make such amendment of
the Plan as it may deem advisable; provided, however, that no amendment shall be
effective without the approval of the shareholders of the Company by the
affirmative vote of the holders of a majority of the outstanding Shares present,
or represented, and entitled to vote at a meeting of shareholders duly held, if
it would:
(a) materially increase the benefits accruing to Participants under
the Plan;
(b) materially increase the number of Shares which may be issued
under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan; and, further, provided, however, that no amendment or
termination of the Plan shall be effective to alter or impair the rights of a
Grantee, under any Option granted before the adoption of such amendment or
termination by the Board of Directors, without the written consent of such
Grantee. No termination or amendment of this Plan or any Option nor waiver of
any right or requirement under this Plan or any Option shall be binding on the
Company unless it is in a writing duly entered into its records and executed by
a duly authorized Officer. The provisions of this Plan setting forth the
formulae that determine the Exercise Price of Options granted hereunder, the
number of Shares as to which they are exercisable, the times when they are
granted and the persons who are Participants may not be amended more than once
every six (6) months, other than to comport with changes in the Code, the
Employee Retirement Security Income Act of 1974, as amended, or the rules
thereunder.
-6-
<PAGE> 1
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY ("GUARANTY") dated as of January 31,
1997, made by the undersigned (the "GUARANTOR") in favor of The Chase Manhattan
Bank and/or any of its subsidiaries or affiliates (individually or collectively,
as the context may require, the "BANK").
PRELIMINARY STATEMENTS: The Bank has entered into an arrangement with
G. ARTHUR SEELBINDER AND KATHLEEN W. HAMMER (together, the "BORROWER") providing
for extensions of credit to the Borrower, which arrangement is evidenced by that
certain Grid Time Promissory Note (Eurodollar/Prime Rate) dated of even date
herewith in the maximum principal amount outstanding at any one time of
$6,250,000 made by Borrower payable to the order of Bank, which extension of
credit may include, but shall not limited to, the making of advances, entering
into Eurodollar contracts, or any other kind of contract or agreement under
which the Borrower may be indebted to the Bank in any manner in connection with
such credit facility (all of the foregoing agreements or arrangements and any
modifications, renewals, extensions or substitutions thereof or therefor being
the "FACILITIES" and any writing evidencing, supporting or securing a Facility,
including but not limited to this Guaranty, as the same may be modified,
amended, supplemented and restated from time to time being a "FACILITY
DOCUMENT"). Borrower owns a substantial amount of the stock or other ownership
interests of Guarantor which, if sold in bulk, would have severe negative
consequences on the market price for Guarantor's stock.
THEREFORE, in order to induce the Bank to extend credit or give
financial accommodation under the Facilities, the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT. The Guarantor unconditionally and
irrevocably guarantees to the Bank the punctual payment of all sums now owing or
which may in the future be owing by the Borrower under the Facilities, when the
same are due and payable, whether on demand, at stated maturity, by acceleration
or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise ("LIABILITIES"). The Liabilities include, without
limitation, interest accruing after the commencement of a proceeding under
bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates
provided in the Facility Documents as well as the reasonable fees and expenses
of counsel to the Bank incurred in connection with any litigation, mediation,
arbitration, bankruptcy or insolvency proceeding and any appeals therefrom and
any negotiations or settlements in connection therewith or in contemplation
thereof. Except as expressly hereinafter provided, this Guaranty is a guaranty
of payment and not of collection only and the Bank shall not be required to
exhaust any right or remedy or take any action against the Borrower or any other
person or entity or any collateral. Notwithstanding the foregoing, upon the
occurrence of a default under the Facility Documents, including, without
limitation, the failure of the Borrower to pay the Liabilities at the scheduled
maturity date (but excluding a default by the Guarantor under this Guaranty),
Bank agrees as follows:
(a) Bank shall provide notice any of such default to
Guarantor and shall permit Guarantor to cure
Borrower's default so long as such cure occurs
<PAGE> 2
prior to the expiration of any applicable grace
period under the Facility Documents.
(b) If the default is not cured by Borrower or Guarantor
within the applicable cure period, Bank shall permit
Guarantor a period of five business days in which to
purchase from Bank the shares of Guarantor's stock
pledged by Borrower pursuant to the Collateral
Agreement (Direct) of even date herewith
("SECURITIES") for a purchase price per share equal
to the market price at the close of trading on the
day the notice of default is sent or, if higher, the
then-current market price prior to Bank selling the
Securities to any other party.
(c) If after the expiration of the five-day period
Guarantor does not purchase the Securities, Bank
shall diligently pursue in good faith the sale of the
Securities in a commercially reasonable manner.
(d) If the Bank in good faith has been unable to
liquidate the Securities within ninety (90) days
following the occurrence of such default, then, in
such event, or if any such sale does not result in
sufficient proceeds to fully pay the Liabilities,
Bank may call upon the Guarantor to pay any
outstanding Liabilities in accordance with the terms
of this Guaranty, or to pursue such other remedies as
may be available to Bank, all in Bank's discretion.
(e) If the Securities are liquidated, Bank shall apply
the proceeds of the same first toward payment of any
indebtedness outstanding with respect to the
Facilities and the Facility Documents.
Notwithstanding the foregoing, if Guarantor defaults under any credit agreement
to which it is a party during the pendency of an uncured default under the
Facility Documents, Bank may proceed directly against Guarantor under this
Guaranty without first proceeding against the Securities. The Guarantor agrees
that, as between the Guarantor and the Bank, the Liabilities may be declared to
be due and payable for the purposes of this Guaranty notwithstanding any stay,
injunction or other prohibition which may prevent, delay or vitiate any
declaration as regards the Borrower and that in the event of a declaration or
attempted declaration, the Liabilities shall immediately become due and payable
by the Guarantor for the purposes of this Guaranty.
2. GUARANTY ABSOLUTE. The Guarantor guarantees that the Liabilities
shall be paid strictly in accordance with the terms of the Facilities. The
liability of the Guarantor under this Guaranty is absolute and unconditional
irrespective of: (a) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Facility Documents or Liabilities, or
any other amendment or waiver of or any consent to departure from any of the
terms of any Facility Document or Liability (provided that Bank shall not extend
the credit facility evidenced by the Facility Documents beyond the first
anniversary thereof without the prior written consent of the Guarantor); (b) any
release or amendment or waiver of, or consent to departure from, any other
guaranty or support document, or any exchange, release or non-perfection of any
collateral, for all or any of the Facility Documents or Liabilities; (c) any
present or future law,
-2-
<PAGE> 3
regulation or order of any jurisdiction (whether of right or in fact) or of any
agency thereof purporting to reduce, amend, restructure or otherwise affect any
term of any Facility Document or Liability; (d) without being limited by the
foregoing, any lack of validity or enforceability of any Facility Document or
Liability; and (e) any other defense, setoff or counterclaim whatsoever with
respect to the Facility Documents or the transactions contemplated thereby which
might constitute a defense available to, or discharge of, the Borrower or a
guarantor.
3. GUARANTY IRREVOCABLE. This Guaranty is a continuing guaranty of all
Liabilities now or hereafter existing under the Facilities and shall remain in
full force and effect until payment in full of all Liabilities and other amounts
payable under this Guaranty and until the Facilities are no longer in effect or,
if earlier, when the Guarantor has given the Bank written notice that this
Guaranty has been revoked; PROVIDED that any notice under this Section shall not
release the Guarantor from any Liability, absolute or contingent, existing prior
to the Bank's actual receipt of the notice at its branches or departments
responsible for the Facilities.
4. REINSTATEMENT. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Liabilities is rescinded or must otherwise be returned by the Bank on the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though the payment had not been made.
5. SUBROGATION. The Guarantor shall not exercise any rights which it
may acquire by way of subrogation, by any payment made under this Guaranty or
otherwise, until all the Liabilities have been paid in full and the Facilities
are no longer in effect. If any amount is paid to the Guarantor on account of
subrogation rights under this Guaranty at any time when all the Liabilities have
not been paid in full, the amount shall be held in trust for the benefit of the
Bank and shall be promptly paid to the Bank to be credited and applied to the
Liabilities, whether matured or unmatured or absolute or contingent, in
accordance with the terms of the Facilities. If the Guarantor makes payment to
the Bank of all or any part of the Liabilities and all the Liabilities are paid
in full and the Facilities are no longer in effect, the Bank shall, at the
Guarantor's request, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Liabilities
resulting from the payment.
6. SUBORDINATION. Without limiting the Bank's rights under any other
agreement, any liabilities owed by the Borrower to the Guarantor in connection
with any extension of credit or financial accommodation by the Guarantor to or
for the account of the Borrower, including but not limited to interest accruing
at the agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Liabilities, and such liabilities of
the Borrower to the Guarantor, if the Bank so requests, shall be collected,
enforced and received by the Guarantor as trustee for the Bank and shall be paid
over to the Bank on account of the Liabilities but without reducing or affecting
in any manner the liability of the Guarantor under the other provisions of this
Guaranty.
7. PAYMENTS GENERALLY. All payments by the Guarantor shall be made in
the manner, at the place and in the currency (the "PAYMENT CURRENCY") required
by the Facility Documents; PROVIDED, HOWEVER, that (if the Payment Currency is
other than U.S. dollars) the Guarantor may, at its option (or, if for any reason
whatsoever the Guarantor is unable to effect
-3-
<PAGE> 4
payments in the foregoing manner, the Guarantor shall be obligated to) pay to
the Bank at its principal office the equivalent amount in U.S. dollars computed
at the selling rate of the Bank or a selling rate chosen by the Bank, most
recently in effect on or prior to the date the Liability becomes due, for cable
transfers of the Payment Currency to the place where the Liability is payable.
In any case in which the Guarantor makes or is obligated to make payment in U.S.
dollars, the Guarantor shall hold the Bank harmless from any loss incurred by
the Bank arising from any change in the value of U.S. dollars in relation to the
Payment Currency between the date the Liability becomes due and the date the
Bank is actually able, following the conversion of the U.S. dollars paid by the
Guarantor into the Payment Currency and remittance of such Payment Currency to
the place where such Liability is payable, to apply such Payment Currency to
such Liability.
8. CERTAIN TAXES. The Guarantor further agrees that all payments to be
made hereunder shall be made without setoff or counterclaim and free and clear
of, and without deduction for, any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings or restrictions or conditions of any nature
whatsoever now or hereafter imposed, levied, collected, withheld or assessed by
any country or by any political subdivision or taxing authority thereof or
therein ("TAXES"). If any Taxes are required to be withheld from any amounts
payable to the Bank hereunder, the amounts so payable to the Bank shall be
increased to the extent necessary to yield to the Bank (after payment of all
Taxes) the amounts payable hereunder in the full amounts so to be paid. Whenever
any Tax is paid by the Guarantor, as promptly as possible thereafter, the
Guarantor shall send the Bank an official receipt showing payment thereof,
together with such additional documentary evidence as may be required from time
to time by the Bank.
9. REMEDIES GENERALLY. The remedies provided in this Guaranty are
cumulative and not exclusive of any remedies provided by law.
10. SETOFF. The Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker's lien or counterclaim the Bank may
otherwise have, the Bank shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held by it for the
account of the Guarantor at any of the Bank's offices, in U.S. dollars or in any
other currency, against any amount payable by the Guarantor under this Guaranty
which is not paid when due (regardless of whether such balances are then due to
the Guarantor), in which case it shall promptly notify the Guarantor thereof;
PROVIDED that the Bank's failure to give such notice shall not affect the
validity thereof.
11. FORMALITIES. The Guarantor waives presentment, notice of dishonor,
protest, notice of acceptance of this Guaranty or incurrence of any Liability
and any other formality with respect to any of the Liabilities or this Guaranty.
12. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty, nor consent to any departure by the Guarantor therefrom, shall be
effective unless it is in writing and signed by the Bank, and then the waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Bank to exercise, and no
delay in exercising, any right under this Guaranty shall operate as a waiver or
preclude any other or further exercise thereof or the exercise of any other
right.
-4-
<PAGE> 5
13. EXPENSES. The Guarantor shall reimburse the Bank on demand for all
costs, expenses and charges (including without limitation fees and charges of
external legal counsel for the Bank and costs allocated by its internal legal
department) incurred by the Bank in connection with the preparation, performance
or enforcement of this Guaranty. The obligations of the Guarantor under this
Section shall survive the termination of this Guaranty.
14. ASSIGNMENT. This Guaranty shall be binding on, and shall inure to
the benefit of the Guarantor, the Bank and their respective successors and
assigns; PROVIDED that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty. Without limiting the generality of the
foregoing: (a) the obligations of the Guarantor under this Guaranty shall
continue in full force and effect and shall be binding on the estate of the
Guarantor; and (b) the Bank may assign, sell participations in or otherwise
transfer its rights under the Facilities to any other person or entity, and the
other person or entity shall then become vested with all the rights granted to
the Bank in this Guaranty or otherwise.
15. CAPTIONS. The headings and captions in this Guaranty are for
convenience only and shall not affect the interpretation or construction of this
Guaranty.
16. GOVERNING LAW, ETC. THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. THE GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION
AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK.
SERVICE OF PROCESS BY THE BANK IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE
BINDING ON THE GUARANTOR IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE
ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO
TIME. THE GUARANTOR WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL IN ANY
ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY
OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR
OTHERWISE), THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
HIS/HER OBLIGATIONS UNDER THIS GUARANTY.
-5-
<PAGE> 6
17. WAIVER OF JURY TRIAL. NEITHER GUARANTOR NOR BANK, NOR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF GUARANTOR OR BANK SHALL SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEDURE BASED UPON OR ARISING OUT OF THIS NOTE, ANY RELATED AGREEMENT OR
INSTRUMENT, ANY SECURITY FOR THE INDEBTEDNESS EVIDENCED HEREBY OR THE DEALINGS
OR THE RELATIONSHIP BETWEEN OR AMONG GUARANTOR OR BANK. NEITHER GUARANTOR NOR
BANK WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN
WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY GUARANTOR
AND BANK, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER
GUARANTOR NOR BANK HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ONE ANOTHER THAT
THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered as of the date first above written.
COOKER RESTAURANT
CORPORATION, an Ohio corporation
By: ________________________________
Name: __________________________
Title: _________________________
Address:
5500 Village Boulevard
West Palm Beach, FL 33407
STATE OF NEW YORK
SS.:
COUNTY OF __________________________
On the ___ day of ____________, 1997 before me came _______________, to
me known, who, being duly sworn, did depose and say that he/she resides at
__________ _____________________________; that he/she is of COOKER RESTAURANT
CORPORATION, the entity described in the foregoing instrument; and that her/she
signed his/her name thereto in like order.
_________________________________
Notary Public
-6-
<PAGE> 7
ACCEPTED BY:
THE CHASE MANHATTAN BANK, a
New York banking corporation
By: ________________________________
Name: __________________________
Title: _________________________
STATE OF NEW YORK
SS.:
COUNTY OF _________________________
On the ___ day of _____________, 1997 before me came _______________,
to me known, who, being duly sworn, did depose and say that he/she resides at
__________ _______________________________________; that he/she is of THE CHASE
MANHATTAN BANK, a New York banking corporation, the entity described in the
foregoing instrument; and that her/she signed his/her name thereto in like
order.
_________________________________
Notary Public
-7-
<PAGE> 1
G. ARTHUR SEELBINDER
25 MIDDLE ROAD
PALM BEACH, FLORIDA 33480
February 3, 1997
Board of Directors
Cooker Restaurant Corporation
5500 Village Boulevard
West Palm Beach, Florida 33407
Re: Amended and Restated Guaranty dated as of January 31, 1997 to The
Chase Manhattan Bank
Dear Sirs:
You have at my request executed the above-referenced guaranty (the
"Guaranty") in order to secure the debt that I, jointly and severally with my
wife, owe to The Chase Manhattan Bank pursuant to the Amended and Restated Grid
Time Promissory Note (Eurodollar/Prime Rate) which is in the initial amount of
approximately $5.7 million and which with capitalized interest may become as
much as $6.25 million (the "Guaranteed Loan").
In return for the issuance of the Guaranty, I hereby agree as follows:
1. I will make a principal payment of at least $438,000 on the
Guaranteed Loan before the Proxy Statement for Cooker's 1997 Annual
Meeting of Shareholders is issued (currently scheduled to be March
14, 1997). I understand that I may sell up to 60,000 Common Shares
currently pledged to secure the Guaranteed Loan in order to make this
payment.
2. I will pay a guaranty fee of 1/4% of the principal amount of the
Guaranteed Loan, to Cooker upon the issuance of the Guaranty.
3. I will use my best efforts to obtain the release of the Guaranty, as
soon as possible, by executing the instruments referred to in the
letter from The Chase Manhattan Bank to you dated January 29, 1997 as
a "monetized equity collar," or if other lending facilities become
available, such as a margin loan or otherwise that would not require
a guaranty, by refinancing the loan through such a facility.
4. At the option of the Board of Directors of Cooker, I will apply, or
cause to be applied, my share of the net proceeds of the sale of my
residence at 25 Middle Road, Palm Beach, Florida, after payment of
the $3,000,000 mortgage on the premises, to reduce the principal and
interest outstanding under the Guaranteed Loan.
5. I will indemnify Cooker against, and hold it harmless from, any
losses, liabilities or obligations arising out of or related to, the
Guaranty, including, but not limited to, any payment of the principal
of or any interest on the Guaranteed Loan or any fees related
thereto.
The purpose of this letter agreement is to provide additional comfort to
the Board of Directors of Cooker Restaurant Corporation in connection with their
approval of the execution, delivery and performance of the Guaranty. My delivery
of this letter to Cooker shall not in any way diminish its rights as a
guarantor; including any rights of subrogation, reimbursement or exoneration.
Sincerely,
/s/ G. Arthur Seelbinder
G. Arthur Seelbinder
<PAGE> 1
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 20th day of
January, 1997.
/s/ Phillip L. Pritchard
------------------------
Phillip L. Pritchard
<PAGE> 2
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
January, 1997.
/s/ Glenn W. Cockburn
---------------------
Glenn W. Cockburn
<PAGE> 3
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of
January, 1997.
/s/ David C. Sevig
------------------
David C. Sevig
<PAGE> 4
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 30th day of
January, 1997.
/s/ Robin V. Holderman
----------------------
Robin V. Holderman
<PAGE> 5
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 25th day of
January,1997.
/s/ David T. Kollat
--------------------
David T. Kollat
<PAGE> 6
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 24th day of
February, 1997.
/s/ David L. Hobson
--------------------
David L. Hobson
<PAGE> 7
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 30th day of
January,1997.
/s/ Henry R. Hillenmeyer
---------------------------
Henry R. Hillenmeyer
<PAGE> 8
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this ____ day of
__________, 1997.
/s/ Joseph E. Madigan
---------------------
Joseph E. Madigan
<PAGE> 9
POWER OF ATTORNEY
The undersigned who is a director or officer of Cooker Restaurant Corporation,
an Ohio corporation (the "Company");
Does hereby constitute and appoint G. Arthur Seelbinder and Phillip L. Pritchard
to be his agents and attorneys-in-fact;
Each with the power to act fully hereunder without the other and with full power
of substitution to act in the name and on behalf of the undersigned;
To sign and file with the Securities and Exchange Commission the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 21st day of
January, 1997.
/s/ Margaret T. Monaco
-----------------------
Margaret T. Monaco
<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 the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 1996,
and any amendments or supplements to such Annual Report; and
To execute and deliver any instruments, certificates or other documents which
they shall deem necessary or proper in connection with the filing of such
Annual Report, and generally to act for and in the name of the undersigned
with respect to such filings as fully as could the undersigned if then
personally present and acting.
Each agent named above is hereby empowered to determine in his discretion the
times when, the purposes for, and the names in which, any power conferred
upon him herein shall be exercised and the terms and conditions of any
instrument, certificate or document which may be executed by him pursuant
to this instrument.
This Power of Attorney shall not be affected by the disability of the
undersigned nor by the lapse of time.
The validity, terms and enforcement of this Power of Attorney shall be governed
by those laws of the State of Ohio that apply to instruments negotiated,
executed, delivered and performed solely within the State of Ohio.
This Power of Attorney may be executed in any number of counterparts, each of
which shall have the same effect as if it were the original instrument and
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of
January, 1997.
/s/ Harvey Palash
-----------------
Harvey Palash
<PAGE> 1
Exhibit 24.2
SECRETARY'S CERTIFICATE
I, Margaret A. Epperson, certify that I am the duly elected, qualified
and acting Secretary of Cooker Restaurant Corporation, an Ohio Corporation (the
"Corporation"), that I am authorized and empowered to execute this Certificate
on behalf of the Corporation with respect to the Annual Report on Form 10-K and
further certify that the following is a true, complete and correct copy of a
resolution adopted by the Board of Directors of the Corporation on January 20,
1997, which resolution has not been amended, modified or rescinded:
RESOLVED, that each officer and director who may be required to execute
an annual report on Form 10-K or any amendment or supplement thereto
(whether on behalf of the Corporation or as an officer or director thereof
or otherwise) be, and each of them hereby is, authorized to execute a power
of attorney appointing G. Arthur Seelbinder and Phillip L. Pritchard and
each of them severally, his true and lawful attorneys and agents to execute
in his name, place and stead (in any such capacity) said Form 10-K and all
instruments or reports necessary or in connection therewith, and to file
the same with the Securities and Exchange Commission, each of said
attorneys and agents to have the power to act with or without the other, to
have full power and authority to do and to perform in the name and on
behalf of each of said officers and directors, or both, as the case may be,
every act which is necessary or advisable to be done as fully, and to all
intents and purposes, as any such officer or director might or could do in
person.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of March,
1997.
/s/ Margaret A. Epperson
-----------------------------------
Margaret A. Epperson, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COOKER
RESTAURANT CORPORATION 1996 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832412
<NAME> COOKER RESTAURANT CORPORATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-29-1996
<CASH> 2,009,000
<SECURITIES> 0
<RECEIVABLES> 173,000
<ALLOWANCES> 0
<INVENTORY> 1,128,000
<CURRENT-ASSETS> 6,031,000
<PP&E> 124,326,000
<DEPRECIATION> 17,316,000
<TOTAL-ASSETS> 114,633,000
<CURRENT-LIABILITIES> 15,479,000
<BONDS> 16,822,000
<COMMON> 63,583,000
0
0
<OTHER-SE> 18,167,000
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<SALES> 110,273,000
<TOTAL-REVENUES> 110,273,000
<CGS> 92,490,000
<TOTAL-COSTS> 92,490,000
<OTHER-EXPENSES> 7,262,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,278,000
<INCOME-PRETAX> 10,521,000
<INCOME-TAX> 3,789,000
<INCOME-CONTINUING> 6,732,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,732,000
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.72
</TABLE>
