<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
COOKER RESTAURANT CORPORATION
(NAME OF ISSUER)
COOKER RESTAURANT CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS OF SECURITIES)
216284208
(CUSIP NUMBER OF CLASS OF SECURITIES)
G. ARTHUR SEELBINDER
CHIEF EXECUTIVE OFFICER
COOKER RESTAURANT CORPORATION
5500 VILLAGE BOULEVARD
WEST PALM BEACH, FLORIDA 33407
(561) 615-6000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
Copies To:
PAUL S. BIRD, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000
AUGUST 12, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
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TRANSACTION AMOUNT OF
VALUATION* FILING FEE
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<S> <C>
$48,000,000.00 $9,600.00
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</TABLE>
* Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 4,000,000 shares of Common Stock at the maximum tender offer
price per share of $12.00.
N Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: [ ] Filing Party: [ ]
Form or Registration No.: [ ] Date Filed: [ ]
</TABLE>
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<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
Cooker Restaurant Corporation, an Ohio corporation (the "Company"), and the
address of its principal executive office is 5500 Village Boulevard, West Palm
Beach, Florida, 33407.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase up
to 4,000,000 shares (or such lesser number of shares as are validly tendered and
not withdrawn) of its Common Stock without par value (such shares, together with
the associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of February 1, 1990, between the Company and National City
Bank as Rights Agent, are hereinafter referred to as the "Shares"), at prices
not greater than $12.00 nor less than $10.50 net per Share in cash upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
August 12, 1998 (the "Offer to Purchase"), and in the related Letter of
Transmittal, which, as they may be amended from time to time, together
constitute the "Offer," copies of which are attached as Exhibit (a)(1) and
(a)(2), respectively, to this Schedule 13E-4. The Offer is conditioned upon,
among other things, the Company having obtained sufficient financing to fund the
purchase of Shares tendered in the Offer and pay all related taxes, fees and
expenses. As of August 7, 1998, the Company had issued and outstanding
10,159,354 Shares. The information set forth in "Introduction," "The Offer
-- Section 1. Number of Shares; Proration" and "The Offer -- Section 10.
Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning Shares" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and the "The
Offer -- Section 7. Price Range of Shares; Dividends" of the Offer to Purchase
is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "The Offer -- Section 8. Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "Introduction," "The Offer -- Section
2. Purpose of the Offer; Certain Effects of the Offer," "The Offer -- Section 8.
Source and Amount of Funds," "The Offer -- Section 10. Interests of Directors
and Officers; Transactions and Arrangements Concerning Shares" and "The Offer --
Section 11. Effects of the Offer on the Market for Shares; Registration under
the Exchange Act" of the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "The Offer -- Section 10. Interests of
Directors and Officers; Transactions and Arrangements Concerning Shares" of the
Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction," "The Offer -- Section 2.
Purpose of the Offer; Certain Effects of the Offer," "The Offer -- Section 8.
Source and Amount of Funds" and "The Offer -- Section 10. Interests of Directors
and Officers; Transactions and Arrangements Concerning Shares" of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and "The Offer -- Section 15.
Fees and Expenses" of the Offer to Purchase is incorporated herein by reference.
2
<PAGE> 3
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "The Offer -- Section 9. Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference and the information set forth on (i) pages F-1 through F-22
of the Company's Annual Report on Form 10-K for the fiscal year ended December
28, 1997, filed as Exhibit (g)(1) hereto, and (ii) pages 2 through 6 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28,
1998, filed as Exhibit (g)(2), in each case, is incorporated herein by
reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "The Offer -- Section 12. Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in "The Offer -- Section 11. Effects of the
Offer on the Market for Shares; Registration under the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
(d) Not Applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal, copies of which are attached hereto as Exhibit (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Form of Offer to Purchase dated August 12, 1998.
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Substitute Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(6) Form of Press Release issued by the Company dated August 11,
1998.
(7) Form of Summary Advertisement dated August 12, 1998.
(8) Form of Letter to Shareholders of the Company dated August
12, 1998, from G. Arthur Seelbinder, Chairman and Chief
Executive Officer.
(9) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(b)(1) Commitment Letter, dated August 7, 1998, from CNL Fund
Advisors, Inc. to the Company.
(2) Letter, dated August 11, 1998, from First Union to the
Company.
(c)(1) Amended and Restated Grid Time Promissory Note, dated as of
January 31, 1997, among G. Arthur Seelbinder, Kathleen W.
Hammer and The Chase Manhattan Bank.
(2) Amendment to Grid Time Promissory Note, dated March 26, 1998
between The Chase Manhattan Bank and G. Arthur Seelbinder.
(3) Amended and Restated Collateral Agreement, dated as of
January 31, 1997, among G. Arthur Seelbinder, Kathleen W.
Hammer and The Chase Manhattan Bank.
(4) Amended and Restated Guaranty, dated as of January 31, 1997,
made by the Company in favor of The Chase Manhattan Bank.
(5) Reaffirmation of Amended and Restated Guaranty, made as of
April 20, 1998, by the Company.
(6) Letter, dated February 3, 1997, from G. Arthur Seelbinder to
the Company.
(7) Letter, dated January 30, 1998, from G. Arthur Seelbinder to
the Company.
(8) Letter Agreement, dated March 26, 1998, among The Chase
Manhattan Bank, G. Arthur Seelbinder and the Company.
</TABLE>
3
<PAGE> 4
<TABLE>
<C> <S>
(9) Letter, dated August 11, 1998, from G. Arthur Seelbinder to
the Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Pages F-1 through F-22 of the Company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1997.
(g)(2) Pages 2 through 6 of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 28, 1998.
</TABLE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
COOKER RESTAURANT CORPORATION
By: /s/ G. ARTHUR SEELBINDER
------------------------------------
Name: G. Arthur Seelbinder
Title: Chairman and Chief Executive
Officer
Dated: August 12, 1998
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<C> <S>
(a)(1) Form of Offer to Purchase dated August 12, 1998.
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Substitute Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(6) Form of Press Release issued by the Company dated August 11,
1998.
(7) Form of Summary Advertisement dated August 12, 1998.
(8) Form of Letter to Shareholders of the Company dated August
12, 1998, from G. Arthur Seelbinder, Chairman and Chief
Executive Officer.
(9) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W--9.
(b)(1) Commitment Letter, dated August 7, 1998, from CNL Fund
Advisors, Inc. to the Company.
(2) Letter, dated August 11, 1998, from First Union to the
Company.
(c)(1) Amended and Restated Grid Time Promissory Note, dated as of
January 31, 1997, among G. Arthur Seelbinder, Kathleen W.
Hammer and The Chase Manhattan Bank.
(2) Amendment Grid Time Promissory Note, dated March 26, 1998
between the Chase Manhattan Bank and G. Arthur Seelbinder.
(3) Amended and Restated Collateral Agreement, dated as of
January 31, 1997, among G. Arthur Seelbinder, Kathleen W.
Hammer and The Chase Manhattan Bank.
(4) Amended and Restated Guaranty, dated as of January 31, 1997,
made by the Company in favor of The Chase Manhattan Bank.
(5) Reaffirmation of Amended and Restated Guaranty, made as of
April 20, 1998, by the Company.
(6) Letter, dated February 3, 1997, from G. Arthur Seelbinder to
the Company.
(7) Letter, dated January 30, 1998, from G. Arthur Seelbinder to
the Company.
(8) Letter Agreement, dated March 22, 1998, among The Chase
Manhattan Bank, G. Arthur Seelbinder and the Company.
(9) Letter, dated August 11, 1998, from G. Arthur Seelbinder to
the Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Pages F-1 through F-22 of the Company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1997.
(2) Pages 2 through 6 of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 28, 1998.
</TABLE>
5
<PAGE> 1
EXHIBIT (a)(1)
[COOKER LOGO]
COOKER RESTAURANT CORPORATION
OFFER TO PURCHASE FOR CASH UP TO
4,000,000 SHARES OF ITS COMMON STOCK WITHOUT PAR VALUE,
AT A PURCHASE PRICE NOT GREATER THAN $12.00
NOR LESS THAN $10.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER 10, 1998,
UNLESS THE OFFER IS EXTENDED.
------------------------
Cooker Restaurant Corporation, an Ohio corporation (the "Company"), hereby
invites its shareholders to tender up to 4,000,000 shares of its Common Stock,
without par value (such shares, together with associated preferred stock
purchase rights issued pursuant to the Rights Agreement, dated as of February 1,
1990, between the Company and National City Bank as Rights Agent, are
hereinafter referred to as the "Shares"), to the Company at prices not greater
than $12.00 nor less than $10.50 per Share in cash, as specified by tendering
shareholders, upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine the lowest single per Share price (not greater than $12.00 nor
less than $10.50 per Share), net to the seller in cash (the "Purchase Price"),
that will allow it to purchase 4,000,000 Shares (or such lesser number of Shares
as are validly tendered and not withdrawn) pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the financing condition referred to below,
the procedure pursuant to which Shares will be accepted for payment and the
proration provisions. Certificates representing Shares tendered at prices in
excess of the Purchase Price and not withdrawn and Shares not purchased because
of proration will be returned at the Company's expense. The Company reserves the
right, in its sole discretion, to purchase more than 4,000,000 Shares pursuant
to the Offer. See Section 14.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS CONDITIONED UPON THE COMPANY HAVING OBTAINED SUFFICIENT
FINANCING TO FUND THE PURCHASE OF SHARES TENDERED IN THE OFFER AND PAY ALL
RELATED TAXES, FEES AND EXPENSES. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
The Shares are listed and traded on the New York Stock Exchange (the
"NYSE") under the symbol "CGR." On August 11, 1998, the last full trading day on
the NYSE prior to the commencement of the Offer, the closing per Share sales
price as reported by the NYSE, Inc. was $8.5625 per Share. SHAREHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY (THROUGH A SPECIAL COMMITTEE, AS SET
FORTH IN SECTION 10) HAS APPROVED THE OFFER. HOWEVER, NEITHER THE COMPANY NOR
ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. FOUR OF THE COMPANY'S
DIRECTORS HAVE INFORMED THE COMPANY THAT THEY INTEND TO TENDER SHARES PURSUANT
TO THE OFFER. SEE SECTION 10. EXCEPT AS SET FORTH IN SECTION 10, THE COMPANY HAS
BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND TO TENDER
ANY SHARES PURSUANT TO THE OFFER. SEE SECTION 10.
------------------------
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
The Date of this Offer to Purchase is August 12, 1998
<PAGE> 2
IMPORTANT
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee or an Agent's
Message (as defined below) and any other required documents to ChaseMellon
Shareholder Services, L.L.C. (the "Depositary"), and either mail or deliver the
stock certificates for such tendered Shares to the Depositary (with all such
other documents) or tender such Shares pursuant to the procedure for book-entry
delivery set forth in Section 3, or (b) request a broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
shareholder. Shareholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact that
broker, dealer, commercial bank, trust company or other nominee if they desire
to tender their Shares. Any shareholder who desires to tender Shares and whose
certificates for such Shares cannot be delivered to the Depositary or who cannot
comply with the procedure for book-entry transfer or whose other required
documents cannot be delivered to the Depositary, in any case, by the expiration
of the Offer must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
TO EFFECT A VALID TENDER OF SHARES, SHAREHOLDERS MUST COMPLETE THE LETTER
OF TRANSMITTAL, INCLUDING THE BOX RELATING TO THE PRICE AT WHICH THEY ARE
TENDERING SHARES.
Additional copies of this Offer to Purchase, the Letter of Transmittal and
other tender offer materials may be obtained from the Information Agent and will
be furnished at the Company's expense. Questions and requests for assistance may
be directed to the Information Agent or the Dealer Manager at their addresses
and telephone numbers set forth on the back cover of this Offer to Purchase.
Shareholders may also contact their local broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
2
<PAGE> 3
SUMMARY
This general summary is solely for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text and
more specific details in this Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be
Purchased..................... 4,000,000 Shares (or such lesser number of
Shares as are validly tendered pursuant to the
Offer and not withdrawn).
Purchase Price................ The Company will, upon the terms and subject to
the conditions of the Offer, determine the
lowest single per Share price (not greater than
$12.00 nor less than $10.50 per Share) net to
the seller in cash (the "Purchase Price"), that
will allow it to purchase 4,000,000 Shares (or
such lesser number of Shares as are validly
tendered and not withdrawn) pursuant to the
Offer. The Company will pay the Purchase Price
for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn,
upon the terms and subject to the conditions of
the Offer. Each shareholder desiring to tender
Shares must specify in the Letter of
Transmittal the minimum price (not greater than
$12.00 nor less than $10.50 per Share) at which
such shareholder is willing to have his or her
Shares purchased by the Company.
Conditions to the Offer....... The Offer is conditioned upon the Company
having obtained sufficient financing to fund
the purchase of Shares tendered in the Offer
and pay all related taxes, fees and expenses
pursuant to the terms of the financing
commitment described in Section 2. The Offer is
also subject to certain other conditions. See
Section 6.
How to Tender Shares.......... See Section 3. Call the Information Agent or
consult your broker for assistance.
Brokerage Commissions......... None.
Stock Transfer Tax............ None, if payment is made to the registered
holder.
Expiration and Proration
Dates......................... Thursday, September 10, 1998, at 5:00 P.M., New
York City time, unless the Offer is extended by
the Company.
Proration..................... In the event that proration of tendered Shares
is required, proration for each shareholder
tendering Shares, other than Odd Lot Holders,
3
<PAGE> 4
shall be based on the ratio of the number of
Shares tendered by such shareholder at or below
the Purchase Price (and not withdrawn prior to
the Expiration Date) to the total number of
Shares tendered by all shareholders, other than
Odd Lot Holders, at or below the Purchase Price
(and not withdrawn prior to the Expiration
Date).
Odd Lots...................... There will be no proration of Shares tendered
by any shareholder owning beneficially fewer
than 100 Shares in the aggregate as of the
close of business on August 11, 1998 and as of
the Expiration Date, who tenders all such
Shares at or below the Purchase Price prior to
the Expiration Date and who checks the "Odd
Lots" box in the Letter of Transmittal. See
Section 1.
Payment Date.................. As soon as practicable after the expiration of
the Offer.
Position of the Company and
its Directors................. Neither the Company nor its Board of Directors
makes any recommendation to any shareholder as
to whether to tender or refrain from tendering
Shares. Four of the Company's directors have
informed the Company that they intend to tender
Shares pursuant to the Offer. See Section 10.
Except as set forth in Section 10, the Company
has been advised that none of its directors or
executive officers intend to tender any Shares
pursuant to the Offer.
Withdrawal Rights............. Tendered Shares may be withdrawn at any time
prior to the expiration of the Offer (5:00
P.M., New York City time, on Thursday,
September 10, 1998, or such later date to which
the Offer is extended by the Company) and,
unless previously purchased, may also be
withdrawn at any time after 5:00 P.M., New York
City time, on Thursday, October 8, 1998. See
Section 4.
For Further Developments
Regarding the Offer........... Call the Information Agent or consult your
broker.
4
<PAGE> 5
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH
RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS
HAVING BEEN AUTHORIZED BY THE COMPANY.
TABLE OF CONTENTS
<TABLE>
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PAGE
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SUMMARY............................................................. 3
INTRODUCTION........................................................ 6
THE OFFER........................................................... 8
1. NUMBER OF SHARES; PRORATION................................. 8
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.......... 9
3. PROCEDURES FOR TENDERING SHARES............................. 11
4. WITHDRAWAL RIGHTS........................................... 15
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE............ 15
6. CERTAIN CONDITIONS OF THE OFFER............................. 16
7. PRICE RANGE OF SHARES; DIVIDENDS............................ 18
8. SOURCE AND AMOUNT OF FUNDS.................................. 18
9. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 18
INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND
10. ARRANGEMENTS CONCERNING SHARES.............................. 24
EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION
11. UNDER THE EXCHANGE ACT...................................... 26
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS................. 26
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES....... 26
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.................. 28
15. FEES AND EXPENSES........................................... 29
16. MISCELLANEOUS............................................... 30
</TABLE>
5
<PAGE> 6
To the Holders of Common Stock of Cooker Restaurant Corporation:
INTRODUCTION
Cooker Restaurant Corporation, an Ohio corporation (the "Company"), hereby
invites its shareholders to tender up to 4,000,000 shares of its common stock
without par value (hereinafter referred to as the "Shares"), to the Company at
prices not greater than $12.00 nor less than $10.50 per Share, as specified by
tendering shareholders, upon the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal (which together constitute the
"Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine the lowest single per Share price (not greater than $12.00 nor
less than $10.50 per Share), net to the seller in cash (the "Purchase Price"),
that will allow it to purchase 4,000,000 Shares (or such lesser number of Shares
as are validly tendered and not withdrawn) pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the financing condition referred to below,
the procedure pursuant to which Shares will be accepted for payment and the
proration provisions. Certificates representing Shares tendered at prices in
excess of the Purchase Price and not withdrawn and Shares not purchased because
of proration will be returned at the Company's expense. The Company reserves the
right, in its sole discretion, to purchase more than 4,000,000 Shares pursuant
to the Offer. See Section 14.
The Company's obligation to purchase Shares pursuant to the Offer is
conditioned upon, among other things, sufficient financing being obtained by the
Company to fund the purchase of Shares tendered in the Offer and pay all related
taxes, fees and expenses pursuant to the terms of the financing commitment
described in Section 2 ("Purpose of the Offer; Certain Effects of the
Offer -- The Sale-Leaseback Transactions and Related Transactions) or such other
terms as the Company shall agree and as are not materially more onerous than as
set forth in such commitment (the "Financing Condition").
As described in Section 2, the Company has received a written waiver from
the lender under its revolving term loan facility consenting to the Company's
entering into sale-leaseback transactions involving up to 25 of the Company's
restaurant properties for up to $57,500,000 of proceeds. On August 7, 1998, the
Company obtained from a third party a commitment for up to $70 million of
financing which the Company expects to obtain through sale-leaseback
transactions involving up to 30 of the Company's restaurant properties (the
"Sale-Leaseback Transactions"). If Sale-Leaseback Transactions have not been
consummated on or prior to the initial Expiration Date in an amount sufficient
to finance the Company's purchase of Shares tendered pursuant to the Offer and
to pay related taxes, fees and expenses, the Company intends to extend the
Expiration Date from time to time for a period not to extend beyond December 15,
1998 until such Sale-Leaseback Transactions have been consummated and the other
conditions to the Offer have been satisfied or waived.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED IN THE OFFER. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE
SECTION 6.
THE BOARD OF DIRECTORS OF THE COMPANY (THROUGH A SPECIAL COMMITTEE, AS SET
FORTH IN SECTION 10) HAS APPROVED THE OFFER. HOWEVER, NEITHER THE COMPANY NOR
ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. FOUR OF THE COMPANY'S
DIRECTORS HAVE INFORMED THE COMPANY THAT THEY INTEND TO TENDER SHARES PURSUANT
TO THE OFFER. SEE SECTION 10. EXCEPT AS SET FORTH IN SECTION 10, THE COMPANY HAS
BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND TO TENDER
ANY SHARES PURSUANT TO THE OFFER. SEE SECTION 10.
The Special Committee of the Company's Board of Directors (described in
Section 10) believes that the Offer is in the best interests of the Company. The
Offer affords to those shareholders who desire liquidity an
6
<PAGE> 7
opportunity to sell all or a portion of their Shares without the usual
transaction costs associated with open market sales. The Company believes that
the Offer and the Sale-Leaseback Transactions will be accretive to earnings per
share (on both a basic and diluted basis) in the Company's current fiscal year
ending January 3, 1999 and in the fiscal year ending January 2, 2000, but there
can be no assurance to that effect. Following the completion of the
Sale-Leaseback Transactions and the Offer, the Company intends to refinance with
its current lender or other financing sources its existing revolving term loan
facility, which provides for maximum quarterly payments of $1,650,000 due
January 4, 1999 and April 1, 1999 and the repayment of the remaining outstanding
balance on June 30, 1999.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $12.00 nor less than $10.50 per Share) at which they are willing to
sell their Shares and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash to the Company. Shareholders who determine not to
accept the Offer will increase their proportionate interest in the Company's
equity, and thus in the Company's future earnings and assets, subject to the
Company's right to issue additional Shares and other equity securities in the
future.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 4,000,000 Shares (or such greater number of
Shares as the Company may elect to purchase) are validly tendered at prices at
or below the Purchase Price and not withdrawn, the Company will purchase validly
tendered and not withdrawn Shares first from all Odd Lot Holders (as defined in
Section 1) who validly tendered all their Shares at or below the Purchase Price
and who so certify in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery, and then, after the purchase
of all of the foregoing Shares, all Shares tendered at or below the Purchase
Price and not withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchase of fractional Shares). See Section 1.
All certificates representing Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater than the Purchase Price and not
withdrawn and Shares not purchased because of proration, will be returned at the
Company's expense to the shareholders who tendered such Shares.
The Purchase Price will be paid net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO
COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 THAT IS
INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED UNITED STATES
FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO
SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. The
Company will pay all fees and expenses incurred in connection with the Offer by
Donaldson, Lufkin & Jenrette Securities Corporation, who will act as dealer
manager for the Offer (the "Dealer Manager"), ChaseMellon Shareholder Services,
L.L.C., who will act as the depositary for the Offer (the "Depositary") and as
information agent for the Offer (the "Information Agent"). See Section 15.
As of August 7, 1998, the Company had issued and outstanding 10,159,354
Shares and had reserved 2,342,593 Shares for issuance upon exercise of
outstanding stock options and convertible debt securities. The 4,000,000 Shares
that the Company is offering to purchase pursuant to the Offer represent
approximately 39.4% of the outstanding Shares. The Shares are listed and traded
on the New York Stock Exchange (the "NYSE") under the symbol "CGR." On August
11, 1998, the last full trading day on the NYSE prior to the commencement of the
Offer, the closing per Share sales price as reported by the NYSE, Inc. was
$8.5625 per share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES. SEE SECTION 7.
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<PAGE> 8
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase 4,000,000 Shares or such lesser number of Shares as are validly
tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not greater than $12.00 nor less
than $10.50 per Share. The term "Expiration Date" means 5:00 P.M., New York City
time, on Thursday, September 10, 1998, unless and until the Company, in its sole
discretion, shall have extended the period of time during which the Offer will
remain open, in which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by the Company, shall expire.
See Section 14 for a description of the Company's right to extend, delay,
terminate or amend the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 4,000,000 Shares pursuant to the Offer. In
accordance with applicable regulations of the Securities and Exchange Commission
(the "Commission"), the Company may purchase pursuant to the Offer an additional
amount of Shares not to exceed 2% of the outstanding Shares without amending or
extending the Offer. See Section 14. In the event of an over-subscription of the
Offer as described below, Shares tendered at or below the Purchase Price prior
to the Expiration Date will be eligible for proration, except for Odd Lots as
explained below. The proration period also expires on the Expiration Date.
THE OFFER IS CONDITIONED UPON THE COMPANY HAVING OBTAINED SUFFICIENT
FINANCING TO FUND THE PURCHASE OF SHARES TENDERED IN THE OFFER AND PAY ALL
RELATED TAXES, FEES AND EXPENSES.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED IN THE OFFER. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE
SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender Shares must specify the price or prices (not greater than
$12.00 nor less than $10.50 per Share) at which they are willing to sell their
Shares to the Company. As promptly as practicable following the Expiration Date,
the Company will, in its sole discretion, determine the Purchase Price that will
allow it to purchase 4,000,000 Shares or such lesser number of Shares as are
validly tendered and not withdrawn) pursuant to the Offer. The Company will pay
the Purchase Price, even if such Shares were tendered below the Purchase Price,
for all Shares validly tendered prior to the Expiration Date at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the Financing Condition, the procedure pursuant to which
Shares will be accepted for payment and the proration provisions. All Shares
tendered and not purchased pursuant to the Offer, including Shares tendered at
prices in excess of the Purchase Price and not withdrawn and Shares not
purchased because of proration, will be returned to the tendering shareholders
at the Company's expense as promptly as practicable following the Expiration
Date. The Company reserves the right, in its sole discretion, to purchase more
than 4,000,000 Shares pursuant to the Offer. See Section 14.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than 4,000,000 Shares (or such greater number of Shares as the
Company may elect to purchase pursuant to the Offer) have been validly tendered
at prices at or below the Purchase Price and not withdrawn, the Company will
purchase validly tendered and not withdrawn Shares on the basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at
a price at or below the Purchase Price (tenders of fewer than all Shares
owned by such shareholder will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
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<PAGE> 9
(b) second, after purchase of all of the foregoing Shares, all Shares
tendered at prices at or below the Purchase Price and not withdrawn prior
to the Expiration Date, on a pro rata basis (with appropriate adjustments
to avoid purchases of fractional Shares) as described below.
Odd Lots. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares validly tendered prior to the Expiration Date at prices at or below the
Purchase Price and not withdrawn by any person who owned beneficially as of the
close of business on August 11, 1998, and continues to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares (and so certified in
the appropriate place on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery) (an "Odd Lot Holder"). As set forth above, Odd
Lots will be accepted for payment before proration, if any, of the purchase of
other tendered Shares. In order to qualify for this preference, an Odd Lot
Holder must tender all such Shares in accordance with the procedures described
in Section 3. This preference is not available to partial tenders or to
beneficial holders of an aggregate of 100 or more Shares, even if such holders
have separate accounts or certificates representing fewer than 100 Shares. By
accepting the Offer, an Odd Lot Holder would not only avoid the payment of
brokerage commissions but also would avoid any applicable odd lot discounts in a
sale of such holder's Shares. Any Odd Lot Holder wishing to tender all of such
shareholder's Shares should complete the box captioned "Odd Lots" on the Letter
of Transmittal and, if applicable, on the Notice of Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any shareholder who tendered all Shares owned
beneficially at or below the Purchase Price and who, as a result of proration,
would then own, beneficially an aggregate of fewer than 100 Shares. If the
Company exercises this right, it will increase the number of Shares that it is
offering to purchase by the number of Shares purchased through the exercise of
such right.
Proration. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each shareholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares tendered by
such shareholder at or below the Purchase Price (and not withdrawn) to the total
number of Shares tendered by all shareholders, other than Odd Lot Holders, at or
below the Purchase Price (and not withdrawn). Because of the difficulty in
determining the number of Shares properly tendered (including Shares tendered by
guaranteed delivery procedures, as described in Section 3) and not withdrawn,
and because of the odd lot procedure, the Company does not expect that it will
be able to announce the final proration factor or commence payment for any
Shares purchased pursuant to the Offer until approximately seven NYSE trading
days after the Expiration Date. The preliminary results of any proration will be
announced by press release as promptly as practicable after the Expiration Date.
Shareholders may obtain such preliminary information from the Information Agent
and may be able to obtain such information from their brokers.
As described in Section 13, the number of Shares that the Company will
purchase from a shareholder may affect the United States federal income tax
consequences to the shareholder of such purchase and therefore may be relevant
to a shareholder's decision whether to tender Shares. The Letter of Transmittal
affords each tendering shareholder the opportunity to designate the order of
priority in which Shares tendered are to be purchased in the event of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares as of August 11, 1998 and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the Company's shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THE MATTERS DISCUSSED
BELOW AS WELL AS THE FACTORS DESCRIBED IN THE COMPANY'S FILINGS WITH THE
COMMISSION.
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<PAGE> 10
THE OFFER
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not greater than $12.00 nor less than $10.50 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with market sales. In addition, shareholders owning fewer than 100
Shares whose Shares are purchased pursuant to the Offer not only will avoid the
payment of brokerage commissions but also will avoid any applicable odd lot
discounts payable on a sale of their Shares. The Offer also allows shareholders
to sell a portion of their Shares while retaining a continuing equity interest
in the Company.
The Special Committee of the Company's Board of Directors (described in
Section 10) believes that the Offer is in the best interests of the Company. The
Offer affords to those shareholders who desire liquidity an opportunity to sell
all or a portion of their Shares without the usual transaction costs associated
with open market sales. The Company believes that the Offer and the
Sale-Leaseback Transactions will be accretive to earnings per share (on both a
basic and a diluted basis) in the Company's current fiscal year ending January
3, 1999 and in the fiscal year ending January 2, 2000, but there can be no
assurance to that effect.
Shareholders who determine not to accept the Offer will increase their
proportionate interest in the Company's equity, and thus in the Company's future
earnings and assets, subject to the Company's right to issue additional Shares
and other equity securities in the future.
Shares that the Company acquires pursuant to the Offer will become
authorized Shares held in treasury and will be available for reissuance by the
Company without further shareholder action (except as may be required by
applicable law or the rules of any securities exchange on which the Shares are
listed). Subject to applicable state laws and NYSE rules, such Shares could be
issued without shareholder approval for, among other things, acquisitions, the
raising of additional capital for use in the Company's business, share dividends
or in connection with stock option plans and other plans, or a combination
thereof.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise. Any such
purchases may be on the same terms as, or on terms that are more or less
favorable to shareholders than, the terms of the Offer. However, Rule 13e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), generally prohibits the Company and its affiliates from purchasing any
Shares, other than pursuant to the Offer, until at least ten business days after
the expiration or termination of the Offer. Any possible future purchases by the
Company will depend on several factors including, without limitation, the
ability of the Company to make such purchases under its financing agreements in
effect at the time, the market price of the shares, the results of the Offer,
the Company's business and financial position and general economic and market
conditions.
THE SALE-LEASEBACK TRANSACTIONS AND RELATED TRANSACTIONS
The amount required to fund the purchase of Shares tendered in the Offer
(assuming a purchase price of $12.00 per Share) and pay related taxes, fees and
expenses of such transactions is estimated to be approximately $52 million.
The Sale-Leaseback Transactions. The Company intends to finance the Offer
and to pay related taxes, fees and expenses, by entering into the Sale-Leaseback
Transactions with respect to certain real estate properties where the Company's
restaurants are located (each a "Property" and collectively the "Properties"),
which are currently owned by the Company or by its affiliate, Southern Cooker,
Limited Partnership, an Ohio limited partnership. On August 7, 1998, the Company
received a written waiver (the "Waiver Letter") from First Union National Bank
of Tennessee ("First Union") under the Company's revolving term loan facility
consenting to the Company's entering into sale-leaseback transactions involving
up to 25 Properties for up to $57,500,000 of proceeds. On August 7, 1998, the
Company received a written commitment letter (the "Commitment Letter") from CNL
Fund Advisors, Inc. ("CNL") for the purchase by CNL of up to 30 Properties for
an aggregate purchase price of up to $70 million, and the subsequent lease back
to the Company of each such Property on the terms and conditions described in
the Commitment Letter. Under the Commitment Letter, in the event that the
Company acquires less than 4,000,000 Shares as a result of the Offer, the
Company would have the right to consummate Sale-Leaseback Transactions with
respect to such lesser number of Properties as would be required
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<PAGE> 11
to consummate the purchase of Shares pursuant to the Offer and to pay related
taxes, fees and expenses. The Offer is conditioned upon the closing of a
sufficient number of Sale-Leaseback Transactions to (i) finance the Offer, and
(ii) pay related taxes, fees and expenses. If Sale-Leaseback Transactions have
not been consummated on or prior to the initial Expiration Date in an amount
sufficient to finance the Company's purchase of Shares tendered pursuant to the
Offer and to pay related taxes, fees and expenses, the Company intends to extend
the Expiration Date from time to time for a period not to extend beyond December
15, 1998 until such Sale-Leaseback Transactions have been consummated and the
other conditions to the Offer have been satisfied or waived.
Pursuant to the terms of and subject to the conditions set forth in the
Commitment Letter, CNL has agreed (i) to purchase the Properties from the
Company and (ii) to enter into lease agreements (each a "Lease") with the
Company with respect to such Properties. The Commitment Letter provides that
each Lease will have an initial term of fifteen years, and that the Company will
have the option to renew each Lease for two successive five year terms. The
annual minimum rent for the initial term of each Lease will be 9.98% of the
Purchase Price for such Property; the annual minimum rents applicable during the
first and second optional renewal terms will be 11% and 12.1%, respectively, of
the Purchase Price for such Property.
The closing of each Sale-Leaseback Transaction is subject to certain
conditions, including (i) the satisfactory completion by CNL of its due
diligence investigation with respect to, among other things, title, survey,
environmental and other matters relating to the Properties, (ii) the absence of
any material adverse change in the financial condition of the Company and the
non-occurrence of any event which may, in the reasonable judgment of CNL, have a
material adverse effect upon the Company, and (iii) the execution and delivery
to CNL of definitive documentation for the purchase and sale of the relevant
Property and a Lease for such Property. It is anticipated that the definitive
documentation for the Sale-Leaseback Transactions will be customary for
transactions of that nature.
Copies of the Commitment Letter and the Waiver Letter have been filed as
exhibits to the Company's Issuer Tender Offer Statement on Schedule 13E-4.
Reference is made to such exhibits for a more complete description of the
Sale-Leaseback Transactions.
THE BOARD OF DIRECTORS (THROUGH A SPECIAL COMMITTEE, AS SET FORTH IN
SECTION 10) OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, NEITHER THE COMPANY
NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES. EACH SHAREHOLDER MUST
MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER
AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. FOUR OF THE
COMPANY'S DIRECTORS HAVE INFORMED THE COMPANY THAT THEY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER. SEE SECTION 10. EXCEPT AS SET FORTH IN SECTION 10, THE
COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND
TO TENDER ANY SHARES PURSUANT TO THE OFFER. SEE SECTION 10.
3. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
or an Agent's Message (as defined below) and any other documents required by the
Letter of Transmittal, must be received prior to 5:00 P.M., New York City time,
on the Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase or (b) the tendering shareholder must comply
with the guaranteed delivery procedure set forth below. IN ACCORDANCE WITH
INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, SHAREHOLDERS DESIRING TO TENDER
SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED
"PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" ON THE LETTER
OF TRANSMITTAL THE PRICE (IN INCREMENTS OF $.125) AT WHICH THEIR SHARES
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ARE BEING TENDERED. Shareholders who desire to tender Shares at more than one
price must complete a separate Letter of Transmittal for each price at which
Shares are tendered, provided that the same Shares cannot be tendered (unless
properly withdrawn previously in accordance with the terms of the Offer) at more
than one price. IN ORDER TO VALIDLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX
MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Holders who tender all such Shares must complete the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as set forth in Section 1.
Signature Guarantees and Method of Delivery. No signature guarantee is
required if (i) the Letter of Transmittal is signed by the registered holder(s)
of the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company or the Philadelphia Depositary Trust
Company (the "Book-Entry Transfer Facilities") whose name appears on a security
position listing as the owner of the Shares) tendered therewith and such
holder(s) have not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal; or (ii) Shares are tendered for the account of a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc. or a commercial bank or trust company (not a savings
bank or a savings and loan association) having an office, branch or agency in
the United States (each such entity being hereinafter referred to as an
"Eligible Institution"). See Instruction 1 of the Letter of Transmittal. In all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution. If a certificate for Shares is registered in the name
of a person other than the person executing a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to be issued, to
a person other than the registered holder, then the certificate must be endorsed
or accompanied by an appropriate stock power, in either case, signed exactly as
the name of the registered holder appears on the certificate, or stock power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at a Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at each of the Book-Entry Transfer
Facilities within two business days after the date of this Offer to Purchase,
and any financial institution that is a participant in a Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
Facility to transfer Shares into the Depositary's account in accordance with
such Book-Entry Transfer Facility's procedures for transfer. Although delivery
of Shares may be effected through a book-entry transfer into the Depositary's
account at one of the Book-Entry Transfer Facilities, either (i) a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with any required signature guarantees or an Agent's Message,
and any other required documents must, in any case, be transmitted to and
received by the Depositary at its address set forth on the back cover of this
Offer to Purchase prior to the Expiration Date, or (ii) the guaranteed delivery
procedure described below must be followed. The confirmation of a book-entry
transfer of Shares into the Depositary's account at either Book-Entry Transfer
Facility as described above is referred to herein as "confirmation of a
book-entry transfer." DELIVERY OF DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
confirmation of a book-entry transfer which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry
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Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
Guaranteed Delivery. Shareholders whose Share certificates are not
immediately available, who cannot deliver their Shares and all other required
documents to the Depositary or who cannot complete the procedure for delivery by
book-entry transfer prior to the Expiration Date must tender their Shares
pursuant to the guaranteed delivery procedure set forth in this Section 3.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (with any
required signature guarantees) must be received by the Depositary prior to the
Expiration Date, and (iii) the certificates for all physically delivered Shares
in proper form for transfer by delivery, or a confirmation of a book-entry
transfer into the Depositary's account at one of the Book-Entry Transfer
Facilities of all Shares delivered electronically, in each case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by this Letter of Transmittal, must be
received by the Depositary within three NYSE trading days after the date the
Depositary receives such Notice of Guaranteed Delivery.
United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the shareholder or other payee provides
its taxpayer identification number (employer identification number or social
security number) to the Depositary and certifies that such number is correct.
Therefore, each tendering shareholder must complete and sign the Substitute Form
W-9 included as part of the Letter of Transmittal so as to provide the
information and certification necessary to avoid backup withholding, unless such
shareholder otherwise establishes to the satisfaction of the Depositary that it
is not subject to backup withholding. Certain shareholders (including, among
others, all corporations and certain foreign shareholders) are not subject to
these backup withholding requirements. To prevent possible erroneous backup
withholding, an exempt holder must enter its correct taxpayer identification
number in Part 1 of Substitute Form W-9, write "Exempt" in Part 2 of such form,
and sign and date the form. See the Guidelines for Certification of Taxpayer
Identification Number of Substitute Form W-9 enclosed with Letter of Transmittal
for additional instructions. In order for a foreign shareholder to qualify as an
exempt recipient, a foreign shareholder must submit an Internal Revenue Service
("IRS") Form W-8 or a Substitute Form W-8, signed under penalties of perjury,
attesting to that shareholder's exempt status. Such statements may be obtained
from the Depositary. See Instruction 10 of the Letter of Transmittal.
Shareholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding.
TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE TO SHAREHOLDERS FOR SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of certain United States federal income tax consequences
to tendering shareholders, see Section 13.
Withholding For Foreign Shareholders. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign shareholder or its agent unless (A) the Depositary
determines that a reduced rate of withholding is available pursuant to a tax
treaty or that an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business
within the United States or (B) the foreign shareholder establishes to the
satisfaction of the Company and the Depositary that the sale of Shares by such
foreign shareholder pursuant to the Offer will qualify as a "sale or exchange,"
rather than as a distribution taxable as a dividend, for United States federal
income tax purposes (see Section 13 below). For this purpose, a foreign
shareholder is any shareholder that is not (i) a citizen or resident of the
United
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States, (ii) a corporation, partnership, or other entity created or organized in
or under the laws of the United States, any State or any political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of the source of such income, or (iv) a trust the
administration of which a court within the United States is able to exercise
primary supervision and all substantial decisions of which one or more United
States persons have the authority to control. In order to obtain a reduced rate
of withholding pursuant to a tax treaty, a foreign shareholder must deliver to
the Depositary before the payment a properly completed and executed IRS Form
1001. In order to obtain an exemption from withholding on the grounds that the
gross proceeds paid pursuant to the Offer are effectively connected with the
conduct of a trade or business within the United States, a foreign shareholder
must deliver to the Depositary a properly completed and executed IRS Form 4224.
The Depositary will determine a shareholder's status as a foreign shareholder
and eligibility for a reduced rate of, or exemption from, withholding by
reference to any outstanding certificates or statements concerning eligibility
for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or
IRS Form 4224) unless facts and circumstances indicate that such reliance is not
warranted. A foreign shareholder may be eligible to obtain a refund of all or a
portion of any tax withheld if such shareholder meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
test described in Section 13 or is otherwise able to establish that no tax or a
reduced amount of tax is due. Each foreign shareholder is urged to consult its
tax advisor regarding the application of United States federal income tax
withholding, including eligibility for a withholding tax reduction or exemption,
and the refund procedure. See Instruction 11 of the Letter of Transmittal.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance of any tender of
Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of any Shares that it determines
are not in appropriate form or the acceptance for payment of or payments for
which may be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer or any defect or irregularity in any tender with
respect to any particular Shares or any particular shareholder. No tender of
Shares will be deemed to have been properly made until all defects or
irregularities have been cured by the tendering shareholder or waived by the
Company. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person shall be obligated to give notice of any
defects or irregularities in tenders, nor shall any of them incur any liability
for failure to give any such notice.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person,
directly or indirectly, to tender Shares for such person's own account unless,
at the time of tender and at the end of the proration period or period during
which Shares are accepted by lot (including any extensions thereof), the person
so tendering (i) has a net long position equal to or greater than the amount of
(x) Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will deliver or cause to be delivered
such Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and conditions of the Offer.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY OR THE DEALER MANAGER. ANY
SUCH DOCUMENTS DELIVERED TO THE COMPANY OR THE DEALER MANAGER WILL NOT BE
14
<PAGE> 15
FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE VALIDLY
TENDERED.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 5:00 P.M. New York City time, on Thursday, October 8, 1998.
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received in a
timely manner by the Depositary at its address set forth on the back cover of
this Offer to Purchase. Any such notice of withdrawal must specify the name of
the tendering shareholder, the name of the registered holder (if different from
that of the person who tendered such Shares), the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering shareholder must also
submit the serial numbers shown on the particular certificates for Shares to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, the notice of withdrawal also must
specify the name and the number of the account at the applicable Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with the procedures of such facility. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Company, in its sole discretion, which determination shall be final and binding.
None of the Company, the Dealer Manager, the Depositary, the Information Agent
or any other person shall be obligated to give notice of any defects or
irregularities in any notice of withdrawal nor shall any of them incur liability
for failure to give any such notice.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter
be deemed not tendered for purposes of the Offer unless such withdrawn Shares
are validly retendered prior to the Expiration Date by again following one of
the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company (i) will determine the
lowest single Purchase Price that will allow it to purchase 4,000,000 Shares (or
such lesser number of Shares as are validly tendered and not withdrawn prior to
the Expiration Date), taking into account the number of Shares so tendered and
the prices specified by tendering shareholders, and (ii) will accept for payment
and pay for (and thereby purchase) Shares validly tendered at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date. For purposes
of the Offer, the Company will be deemed to have accepted for payment (and
therefore purchased) Shares that are tendered at or below the Purchase Price and
not withdrawn (subject to the proration provisions of the Offer) only when, as
and if it gives oral or written notice to the Depositary of its acceptance of
such Shares for payment pursuant to the Offer. In accordance with applicable
regulations of the Commission, the Company may purchase pursuant to the Offer an
additional amount of Shares not to exceed 2% of the outstanding Shares without
amending or extending the Offer. If (i) the Company increases or decreases the
price to be paid for the Shares, the Company increases the number of Shares
being sought and such increase in the number of Shares being sought exceeds 2%
of the outstanding Shares, or the Company decreases the number of Shares being
sought and (ii) the Offering is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and
15
<PAGE> 16
including, the date that notice of such increase or decrease is first published,
sent or given in the manner specified in Section 14, the Offer will be extended
until the expiration of such period of ten business days.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per Share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Date. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other required documents.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven NYSE trading days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
tendered at prices in excess of the Purchase Price and Shares not purchased due
to proration will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to the account maintained with the
applicable Book-Entry Transfer Facility by the participant therein who so
delivered such Shares) to the tendering shareholder as promptly as practicable
after the Expiration Date without expense to the tendering shareholders. Under
no circumstances will interest on the Purchase Price be paid by the Company by
reason of any delay in making payment. In addition, if certain events occur, the
Company may not be obligated to purchase Shares pursuant to the Offer. See
Section 6.
The Company will pay or cause to be paid all stock transfer taxes, if any,
payable on the transfer to it of Shares purchased pursuant to the Offer. If,
however, payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) if unpurchased Shares are to be registered
in the name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing the Letter of Transmittal, the amount of all stock transfer taxes, if
any (whether imposed on the registered holder(s) or such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the Purchase Price unless satisfactory evidence of the payment of the stock
transfer taxes, or exemption therefrom, is submitted. See Instruction 7 of the
Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED UNITED STATES FEDERAL INCOME TAX BACKUP
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER PAYEE
PURSUANT TO THE OFFER. SEE SECTION 3. SEE SECTION 13 REGARDING UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN SHAREHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER.
The Offer is conditioned upon the Company having obtained sufficient
financing to fund the purchase of Shares tendered in the Offer and pay all
related taxes, fees and expenses pursuant to the terms of the financing
commitment described in Section 2. In addition, notwithstanding any other
provision of the Offer, the Company shall not be required to accept for payment,
purchase or pay for any Shares tendered, and may terminate or amend the Offer or
may postpone the acceptance for payment of, or the purchase of and the payment
for Shares tendered, subject to Rule 13e-4(f) under the Exchange Act, if at any
time on or after August 12, 1998 and prior to the time of payment for any such
Shares (whether any Shares have theretofore been accepted for payment, purchased
or paid for pursuant to the Offer) any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) that,
in the Company's judgment (regardless of the circumstances
16
<PAGE> 17
giving rise thereto, including any action or omission to act by the Company),
makes it inadvisable to proceed with the Offer or with such acceptance for
payment or payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, before any court, authority, agency or tribunal that directly
or indirectly (i) challenges the making of the Offer, the acquisition of
some or all of the Shares pursuant to the Offer or otherwise relates in any
manner to the Offer, or (ii) in the Company's sole judgment, could
materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company or any of its subsidiaries or
materially impair the contemplated benefits of the Offer to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court or any authority, agency or tribunal
that, in the Company's sole judgment, would or might directly or
indirectly: (i) make the acceptance for payment of, or payment for, some or
all of the Shares illegal or otherwise restrict or prohibit consummation of
the Offer or otherwise relates in any manner to the Offer; (ii) delay or
restrict the ability of the Company, or render the Company unable, to
accept for payment or pay for some or all of the Shares; (iii) materially
impair the contemplated benefits of the Offer to the Company; or (iv)
materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of
its subsidiaries;
(c) there shall have occurred: (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market; (ii) the declaration of any
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory); (iii) the commencement of a war,
armed hostilities or other international or national crisis directly or
indirectly involving the United States; (iv) any limitation (whether or not
mandatory) by any governmental, regulatory or administrative agency or
authority on, or any event that, in the Company's sole judgment, might
affect, the extension of credit by banks or other lending institutions in
the United States; (v) any significant decrease in the market price of the
Shares or in the market prices of equity securities generally or any change
in the general political, market, economic or financial conditions in the
United States or abroad that could, in the sole judgment of the Company,
have a material adverse effect on the business, condition (financial or
otherwise), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or on the trading in the Shares or on the
proposed financing for the Offer; (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or (vii) any decline in either the Dow
Jones Industrial Average or the Standard and Poor's Index of 500 Industrial
Companies by an amount in excess of 10% measured from the close of business
on August 11, 1998;
(d) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or any person or group shall have filed
a Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 reflecting an intent to acquire the Company or any
of its Shares, or the Company shall have learned that any person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) shall have
acquired or proposed to acquire beneficial ownership of more than 5% of the
outstanding Shares, or any new group shall have been formed that
beneficially owns more than 5% of the outstanding Shares; or
(e) any change or changes shall have occurred, be pending or
threatened or be proposed, which have affected or could affect the
business, scope, condition (financial or otherwise), assets, income, level
of indebtedness, operations, prospects, stock ownership or capital
structure of the Company or its subsidiaries which, in the Company's sole
judgment, is or may be material to the Company or its subsidiaries.
17
<PAGE> 18
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion. The Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described above
will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and traded on the NYSE. The following table sets
forth, for the periods indicated, the high and low closing per Share sales
prices as reported by the NYSE, Inc. (rounded to the nearest $.01):
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
FISCAL 1996:
1st Quarter............................................... $14.00 $11.00 .06
2nd Quarter............................................... 15.25 12.13 --
3rd Quarter............................................... 13.38 10.38 --
4th Quarter............................................... 12.50 10.25 --
FISCAL 1997:
1st Quarter............................................... 12.13 10.13 .07
2nd Quarter............................................... 11.50 9.13 --
3rd Quarter............................................... 11.19 9.75 --
4th Quarter............................................... 10.88 9.50 --
FISCAL 1998:
1st Quarter............................................... 9.88 8.19 .07
2nd Quarter............................................... 12.13 9.38 --
3rd Quarter (through August 7, 1998)...................... 10.00 8.38 --
</TABLE>
On August 11, 1998, the last full trading day on the NYSE prior to the
commencement of the Offer, the closing per Share sales price was $8.5625.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
8. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 4,000,000 Shares pursuant to the Offer
at a purchase price of $12.00 per Share, the Company expects the maximum amount
required to finance the Offer and the payment of related taxes, fees and
expenses will be approximately $52 million. The Company expects to obtain
financing for such transactions pursuant to the Sale-Leaseback Transactions
described in Section 2 ("Purpose of the Offer; Certain Effects of the
Offer -- The Sale-Leaseback Transactions and Related Transactions"). The Offer
is conditioned upon, among other things, the Company having obtained sufficient
financing to fund the purchase of shares tendered in the Offer and pay all
related taxes, fees and expenses pursuant to the terms of the financing
commitment described in Section 2.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
At June 28, 1998, the Company owned and operated 64 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 a traditional and comfortable dining experience rather than
a theme atmosphere or menu. The Company provides an attractive value to
customers by offering a moderately-priced, full menu of high-quality food served
in generous portions. The menu includes appetizers, soups, salads, chicken,
fish, beef and pasta entrees, sandwiches, burgers and desserts, most of which
are created from original recipes and prepared from scratch
18
<PAGE> 19
using fresh ingredients. Entree selections generally range in price from $4.49
to $14.99 and, in 1997, the average check per person was approximately $10.97.
The Company is committed to providing prompt, friendly and efficient customer
service as reflected by its "100% Satisfaction Guarantee" policy and by its
having what the Company believes is a higher ratio of service personnel to
customers and a greater number of managers per Restaurant than many of its
competitors.
The Company is incorporated under the laws of Ohio. The Company's executive
offices are located at 5500 Village Boulevard, West Palm Beach, Florida, 33407,
and its telephone number is (561) 615-6000.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company and its subsidiaries. The historical financial
information (other than the ratio of earnings to fixed charges and book value
per common share) has been derived from the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
28, 1997 and from the unaudited consolidated financial statements included in
the Company's Quarterly Reports on Form 10-Q for the periods ended June 28, 1998
and June 29, 1997, respectively, which have been prepared on a basis
substantially consistent with the audited financial statements, and reflect, in
the opinion of management, all adjustments necessary to a fair presentation of
the financial position and results of operations for such periods. The results
for the six months ended June 28, 1998 are not necessarily indicative of the
results for the full year. The information presented below should be read in
conjunction with the Company's consolidated financial statements and notes
thereto incorporated herein by reference. More comprehensive financial
information is included in such financial statements, and the financial
information which follows is qualified in its entirety by reference to such
financial statements, related notes and the audit report (which refers to a
change in accounting for preoperational costs) contained therein, copies of
which may be obtained as set forth below under the caption "-- Additional
Information."
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
-------------------- ----------------------------
JUNE 28, JUNE 29, DECEMBER 28, DECEMBER 29,
1998 1997 1997 1996
-------- -------- ------------ ------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales..................................... $ 80,389 $ 65,728 $135,458 $110,273
Net income(a)............................. 4,178 3,634 5,956 6,732
Net income per common share(b)............ 0.41 0.36 0.59 0.75
Diluted net income per common share(b).... 0.41 0.35 0.58 0.72
Ratio of earnings to fixed charges........ 4.67 7.15 4.93 5.63
BALANCE SHEET AND OTHER DATA:
Long-term obligations..................... $ 40,928 $ 31,118 $ 42,917 $ 16,822
Total assets.............................. 148,126 124,917 142,921 114,633
Dividends per share....................... -- -- 0.07 0.06
Book value per common share............... 8.96 8.40 8.63 8.15
</TABLE>
NOTES TO SUMMARY FINANCIAL INFORMATION
(a) Effective December 30, 1996, the Company changed its method of
accounting for preoperational costs, costs for employee training and
relocation, and supplies incurred in the connection with the opening of
a restaurant to expense these costs as incurred.
(b) In December 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earning per Share"
which establishes new guidelines for the calculation of earnings per
share. Basic earnings per share have been computed by dividing net
income by the weighted average number of shares outstanding during the
year. Diluted earnings per share have been computed assuming the
exercise of stock options, as well as their related income tax effects.
Earnings per share for all periods have been restated to reflect the
provision of this Statement.
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<PAGE> 20
SUMMARY UNAUDITED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial
information gives effect to the purchase of Shares pursuant to the Offer, the
Sale-Leaseback Transactions and the payment of related taxes, fees and expenses,
based on the assumptions described in the Notes to Summary Unaudited
Consolidated Pro Forma Financial Information below, as if such transactions had
occurred on the first day of each of the periods presented, with respect to
operating statement data, and on June 28, 1998 and December 28, 1997, with
respect to balance sheet data. The summary unaudited consolidated pro forma
financial information should be read in conjunction with the summary historical
consolidated financial information incorporated herein by reference and does not
purport to be indicative of the results that would actually have been obtained,
or results that may be obtained in the future, or the financial condition that
would have resulted, if the purchase of the Shares pursuant to the Offer, the
Sale-Leaseback Transactions and the payment of related taxes, fees and expenses
had been completed at the dates indicated.
20
<PAGE> 21
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 28, 1998 DECEMBER 28, 1997
---------------------------------------- ----------------------------------------
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET AND OTHER
DATA:
ASSETS
Current Assets:
Cash and cash
equivalents.......... $ 4,504 $ 8,190f $ 12,694 $ 4,685 $ 8,190f $ 12,875
Inventory............... 1,496 1,496 1,509 1,509
Land held for sale...... 55 55 55 55
Prepaid and other
current assets....... 791 791 1,057 1,057
----------- ----------- ----------- ----------- ----------- -----------
Total current
assets........ 6,846 8,190 15,036 7,306 8,190 15,496
Property and equipment.... 139,812 (49,103)c 90,709 134,190 (49,103)c 85,087
Other assets.............. 1,558 850d 2,408 1,425 850d 2,275
----------- ----------- ----------- ----------- ----------- -----------
$ 148,216 $ (40,063) $ 108,153 $ 142,921 $ (40,063) $ 102,858
=========== =========== =========== =========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities
long-term debt....... $ 3,300 $ -- $ 3,300 $ -- $ $ 0
Notes payable........... 425 425 -- 0
Accounts payable........ 4,207 4,207 4,668 4,668
Accrued liabilities..... 6,810 6,810 6,857 6,857
Income taxes payable.... 848 (71)g 777 61 (72)g (11)
----------- ----------- ----------- ----------- ----------- -----------
Total current
liabilities... 15,590 (71) 15,519 11,586 (72) 11,514
Long-term debt............ 39,115 39,115 42,415 42,415
Deferred income taxes..... 1,813 1,813 1,813 1,813
Other liabilities......... 629 8,636g 9,265 635 8,636g 9,271
----------- ----------- ----------- ----------- ----------- -----------
Total
liabilities... 57,147 8,565 65,712 56,449 8,564 65,013
----------- ----------- ----------- ----------- ----------- -----------
Shareholders' equity:
Common share-without par
value; authorized,
30,000,000 shares.... 62,555 62,555 63,039 63,039
Retained earnings....... 33,047 (138)g 32,909 29,570 (137)g 29,433
Treasury stock at
cost................. (4,533) (48,490)a,b (53,023) (6,137) (48,490)a,b (54,627)
----------- ----------- ----------- ----------- ----------- -----------
Total
shareholders'
equity........ 91,069 (48,628) 42,441 86,472 (48,627) 37,845
----------- ----------- ----------- ----------- ----------- -----------
$ 148,216 $ (40,063) $ 108,153 $ 142,921 $ (40,063) $ 102,858
=========== =========== =========== =========== =========== ===========
Book value per common
share................... $ 8.96 $ $ 6.89 $ 8.63 $ $ 6.28
Common Shares Issued and
Outstanding............. 10,159,000 (4,000,000)a 6,159,000 10,022,000 (4,000,000)a 6,022,000
Common Shares Issued...... 10,548,000 10,548,000 10,548,000 10,548,000
Treasury Shares at cost... 389,000 4,000,000a 4,389,000 526,000 4,000,000a 4,526,000
</TABLE>
21
<PAGE> 22
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION (CONT.)
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 28, 1998 DECEMBER 28, 1997
------------------------------------- --------------------------------------
PRO FORMA PRO FORMA
STATEMENT OF INCOME DATA: HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
------------------------- ---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sales............................... $80,389 $ $80,389 $135,458 $ $135,458
------- ------- ------- -------- ------- --------
Cost of Sales:
Food and beverage................. 22,917 22,917 38,762 38,762
Labor............................. 27,784 27,784 46,711 46,711
Restaurant operating expenses..... 14,332 2,583c,g 16,915 23,662 5,166c,g 28,828
Restaurant depreciation........... 3,020 (486)e 2,534 4,966 (971)e 3,995
General and administrative........ 4,942 209g 5,151 9,854 209g 10,063
Interest expense, net............. 1,326 28d 1,354 1,689 57d 1,746
------- ------- ------- -------- ------- --------
74,321 2,335 76,656 125,644 4,460 130,104
------- ------- ------- -------- ------- --------
Income before income taxes and
cumulative effect of a change in
accounting principle.............. 6,068 (2,335) 3,733 9,814 (4,460) 5,354
Provision for income taxes before
cumulative effect of a change in
accounting principle.............. 1,890 (824)h 1,066 3,362 (1,504)h 1,858
------- ------- ------- -------- ------- --------
Income before cumulative effect
of a change in accounting
principle.................... 4,178 (1,511) 2,667 6,452 (2,956) 3,496
Cumulative effect of a change in
accounting for preoperational
costs (less tax of $253).......... -- 496 496
------- ------- ------- -------- ------- --------
Net income........................ $ 4,178 $(1,511) $ 2,667 $ 5,956 $(2,956) $ 3,000
======= ======= ======= ======== ======= ========
Basic earnings per share:
Income before cumulative effect of
change in accounting
principle...................... $ 0.41 $ 0.03 $ 0.44 $ 0.64 $ (0.06) $ 0.58
Cumulative effective of change in
accounting for preoperational
costs.......................... -- -- -- (0.05) (0.03) (0.08)
------- ------- ------- -------- ------- --------
Net Income........................ $ 0.41 $ 0.03 $ 0.44 $ 0.59 $ (0.09) $ 0.50
======= ======= ======= ======== ======= ========
Diluted earnings per share:
Income before cumulative effect of
change in accounting
principle...................... $ 0.41 $ 0.02 $ 0.43 $ 0.63 $ (0.07) $ 0.56
Cumulative effect of change in
accounting for preoperational
costs.......................... $ -- -- -- (0.05) (0.03) (0.08)
------- ------- ------- -------- ------- --------
Net Income........................ $ 0.41 $ 0.02 $ 0.43 $ 0.58 $ (0.10) $ 0.48
======= ======= ======= ======== ======= ========
Dividends per share................. $ 0.07 $ 0.03 $ 0.10 $ 0.07 $ 0.04 $ 0.11
Ratio of earnings to fixed
charges........................... 4.67 3.16 4.93 2.86
</TABLE>
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<PAGE> 23
NOTES TO SUMMARY UNAUDITED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION
(1) The following assumptions were made in presenting the summary unaudited
consolidated pro forma financial information:
(a) The information assumes that 4,000,000 Shares are repurchased and
recorded as Treasury Stock at $12 per share.
(b) Expenses directly related to the Offer are assumed to be $490
thousand and have been charged against Treasury Stock.
(c) The purchase price is assumed to be financed with Sale-Leaseback
Transactions involving the sale of 25 existing store locations'
land and building assets and the simultaneous leaseback of such
assets at an effective rate of 9.98%, with a lease term of 15
years, and resulting gross proceeds of approximately $57.5
million. The resulting additional lease expense has been charged
to Restaurant Operating Expense.
(d) Expenses directly related to the sale-leaseback are assumed to be
$850 thousand and were capitalized and amortized over the lease
term.
(e) Depreciation savings from the disposed assets were credited to
Restaurant Depreciation.
(f) Cash is increased by excess cash from the proceeds of the
Sale-Leaseback Transactions.
(g) Gross proceeds compared to net book value of the assets sold
resulted in a loss of $209 thousand for six of the locations and
was expensed immediately. The remaining nineteen stores had a
cumulative gain of $8.6 million which was deferred and amortized
over the lease term.
(h) The impact of these pro forma adjustments results in a net
reduction in the Company's effective tax rate. The resulting
rates are 26.7% and 31.4% for the periods ended June 28, 1998 and
December 28, 1997, respectively.
(2) Book value per share is calculated by dividing common stockholders' equity
by the number of common and pro forma shares outstanding at the end of the
period.
(3) For purposes of computing the ratio of earnings to fixed charges, "earnings"
has been calculated by adding to the caption "income before income taxes and
cumulative effect of a change in accounting principle," fixed charges,
excluding capitalized interest. "Fixed Charges" consists of interest expense
whether capitalized or expensed, amortization of debt costs, and the portion
of rents representing the interest factor which the Company generally
calculates as 8.00%.
23
<PAGE> 24
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; at its
regional offices located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and 7 World Trade Center, New York, New York 10048. Copies
of such material may also be obtained by mail, upon payment of the Commission's
customary charges, from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
also maintains a Web site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of August 7, 1998, the Company had issued and outstanding 10,159,354
Shares and had reserved for issuance upon exercise of outstanding stock options
and convertible debt securities 2,342,593 Shares. The 4,000,000 Shares that the
Company is offering to purchase represent approximately 39.4% of the Shares then
outstanding. As of August 5, 1998, the Company's directors and executive
officers as a group (11 persons) beneficially owned an aggregate of 2,015,262
Shares representing approximately 19.8% of the outstanding Shares, assuming the
exercise of options exercisable within 60 days.
If the Company purchases 4,000,000 Shares pursuant to the Offer, and
assuming the repurchase of all shares tendered by the four Directors of the
Company who have indicated that they intend to tender shares in the Offer, the
Company's executive officers and directors as a group would own beneficially
approximately 19.7% of the outstanding Shares immediately after the Offer,
assuming exercise of options exercisable within 60 days.
The Company has been advised that G. Arthur Seelbinder, Chairman of the
Board and Chief Executive Officer, intends to tender up to 570,000 Shares (or
approximately 77% of the Shares currently owned by Mr. Seelbinder, excluding
options) in the Offer. Mr. Seelbinder has informed the Company that he will use
the net after tax proceeds he may receive as a result of his participation in
the Offer to repay a portion of the Loan (described below).
In 1994, the Board of Directors approved a guaranty by the Company of a
loan of $5,000,000 to Mr. Seelbinder. In January, 1997, the Board approved a
refinancing of the loan with The Chase Manhattan Bank of New York (the "Bank").
The loan (the "Loan") from the Bank bears interest at the Bank's prime rate of
LIBOR plus 2%, is secured by 570,000 Common Shares and is guaranteed by the
Company in the principal amount up to $6,250,000 including capitalized interest.
Pursuant to the loan agreement between Mr. Seelbinder and the Bank, any
reduction of the principal amount outstanding under the Loan shall not entitle
Mr. Seelbinder to the advancement of additional funds under the Loan. 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.
The term of the Loan was scheduled to expire in the first quarter of 1998. The
term of the Loan has been extended until January 31, 1999. At July 31, 1998, the
amount of the Loan outstanding, including capitalized and accrued interest, was
approximately $5,449,063 and the undiscounted fair market value of the pledged
shares was approximately $4,845,000.
The guaranty secures the Loan until it is repaid or refinanced without a
guaranty. The Company would fund any obligation it incurs under the terms of its
guaranty from additional borrowings under its Credit Agreement. 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
agreed to pay to the Company a guaranty fee each year that the guaranty remains
outstanding beginning on March 9, 1994, the date the Company first issued its
guaranty of the loan. The amount of the guaranty fee is 1/4 percent of the
outstanding principal amount of the guaranteed loan
24
<PAGE> 25
on the date that the guaranty fee becomes due. Mr. Seelbinder has agreed to use
at least one-half of any incentive bonus paid to him by the Company to pay
principal and interest on the Loan beginning with any incentive bonus paid for
fiscal year 1998. Mr. Seelbinder has also agreed to make payments on the Loan in
amounts sufficient to ensure that the Loan balance on January 31, 1999 does not
exceed 90 percent of the Loan balance on January 31, 1998.
Because the value of the shares pledged to secure the Loan at July 31, 1998
and on the date of this filing was, and after the consummation of the Offer may
be, less than the amount required under the terms of the Loan, the Bank has the
right to require Mr. Seelbinder to provide more collateral or to pay down the
Loan. The Bank has not indicated to Mr. Seelbinder or the Company that it
intends to take this action, but there can be no assurance that the Bank will
not do so. Mr. Seelbinder has also informed the Company that following the
consummation of the Offer and the repayment of a portion of the Loan, he intends
to discuss with the Bank or other financing sources the refinancing of the
balance of the Loan. There can be no assurance that such refinancing will occur
or that, if the Loan is refinanced, the guaranty will not remain outstanding.
Although there can be no assurance that the Company will not be required to make
a payment under the guaranty, the Company believes that any such payment, if
required to be made, would not have a material adverse effect on the Company's
financial position or results of operations.
On March 4, 1997, Mr. Seelbinder exercised options to purchase 100,000
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 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 Loan.
The Company has also been advised that Glenn W. Cockburn, the Senior Vice
President -- Operations and a Director of the Company, intends to tender up to
100,000 Shares in the Offer, that Henry R. Hillenmeyer, a Director of the
Company, and certain members of his immediate family intend to tender up to
7,000 Shares in the Offer and that Harvey M. Palash, a Director of the Company,
intends to tender up to 125,000 Shares in the Offer. None of Messrs. Seelbinder,
Cockburn, Hillenmeyer or Palash voted in connection with the Board's
determination to approve the Offer (which was made by a special committee (the
"Special Committee") of the Board of Directors consisting of Messrs. Phillip L.
Pritchard, David T. Kollat, David L. Hobson and William Lehr Jackson and of
which Mr. Hobson was appointed Chairman) and the Board has delegated to the
Special Committee the authority to determine the final number of Shares to be
acquired by the Company pursuant to the Offer and any other changes to the terms
of the Offer.
The Company has been advised that none of its other directors or executive
officers intends to tender any Shares pursuant to the Offer.
Except as set forth below, neither the Company, nor any subsidiary of the
Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliates of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof:
On July 14, 1998, Mark W. Mikosz, the Vice President -- Chief
Financial Officer of the Company, received a grant of options to purchase
30,000 Shares at $9.44 per Share. 7,500 of such options vest and become
exercisable in July of each of 1999, 2000, 2001 and 2002, respectively.
On June 24, 1998, William Lehr Jackson, a Director of the Company
purchased 2,000 shares at $9.63 per share in an open market purchase.
Except for outstanding options to purchase Shares granted from time to time to
certain employees (including executive officers) of the Company pursuant to the
Company's stock option plans and except as otherwise described herein, neither
the Company nor, to the best of the Company's knowledge, any of its affiliates,
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any
25
<PAGE> 26
such securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. However, there will be a sufficient number of Shares
outstanding and publicly traded following consummation of the Offer to ensure a
continued trading market for the Shares and the continued listing of the
Company's securities on the NYSE.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
Shares the Company acquires pursuant to the Offer will be retained as
treasury stock by the Company (unless and until the Company determines to retire
such Shares) and will be available for the Company to issue without further
shareholder action (except as required by applicable law or, if retired, the
rules of any securities exchange on which Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in the Company's business and the satisfaction of
obligations under existing or future stock option and employee benefit plans.
The Company has no current plans for issuance of the Shares repurchased pursuant
to the Offer.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offering pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary is
based upon the Internal Revenue Code of 1986, as amended to the date hereof (the
"Code"), existing and proposed United States Treasury regulations promulgated
thereunder, administrative pronouncements and judicial decisions, changes to
which could materially affect the tax consequences described herein and could be
made on a retroactive basis.
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular shareholders in light of their
personal circumstances, or to certain types of shareholders (such as certain
financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a
26
<PAGE> 27
position in a "straddle" or as part of a "hedging" or "conversion" or
"constructive sale" transaction for United States federal income tax purposes).
In particular, the discussion of the consequences of an exchange of Shares for
cash pursuant to the Offer applies only to a United States shareholder (herein,
a "Holder"). For purposes of this summary, a "United States shareholder" is a
beneficial owner of the Shares who is (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States, any State or any political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of source, or (iv) a trust the administration of
which a court within the United States is able to exercise primary supervision
and all substantial decisions of which one or more United States persons have
the authority to control. This discussion does not address the tax consequences
to foreign shareholders who will be subject to United States federal income tax
on a net basis on the proceeds of their exchange of Shares pursuant to the Offer
because such income is effectively connected with the conduct of a trade or
business within the United States. Such shareholders are generally subject to
tax in a manner similar to United States shareholders; however, certain special
rules apply. Foreign shareholders who are not subject to United States federal
income tax on a net basis should see Section 3 for a discussion of the
applicable United States withholding tax rules and the potential for obtaining a
refund of all or a portion of the tax withheld. This summary does not apply to
foreign shareholders who hold, actually or constructively, more than 5% of the
stock of the Company. Any such shareholder is strongly advised to consult its
own tax advisor. This summary may not be applicable with respect to Shares
acquired as compensation (including Shares acquired upon the exercise of options
or which were or are subject to forfeiture restrictions). This summary also does
not address the state, local or foreign tax consequences of participating in the
Offer. Each Holder of Shares should consult such Holder's tax advisor as to the
particular consequences to it of participation in the Offer.
Consequences to Tendering Holders of Exchange of Shares for Cash Pursuant
to the Offer. An exchange of Shares for cash pursuant to the Offer by a Holder
will be a taxable transaction for United States federal income tax purposes. As
a consequence of the exchange, the Holder will, depending on such Holder's
particular circumstances, be treated either as recognizing gain or loss from the
disposition of the Shares or as receiving a dividend distribution from the
Company. In general, if a Holder does not exercise control over the affairs of
the Company and all Shares actually or constructively owned by such Holder under
the applicable attribution rules are tendered and exchanged for cash in the
Offer, the Holder should be treated as recognizing gain or loss from the
disposition of Shares.
Under Section 302 of the Code, a Holder will recognize gain or loss on an
exchange of Shares for cash if the exchange (i) results in a "complete
termination" of all such Holder's equity interest in the Company, (ii) results
in a "substantially disproportionate' redemption with respect to such Holder or
(iii) is "not essentially equivalent to a dividend" with respect to the Holder.
In applying each of the Section 302 tests, a Holder is in general deemed to own
constructively the Shares actually owned by certain related individuals and
entitles.
A Holder that exchanges all Shares actually or constructively owned by such
Holder for cash pursuant to the Offer will be regarded as having completely
terminated such Holder's equity interest in the Company. An exchange of Shares
for cash will be a "substantially disproportionate" redemption with respect to a
Holder if the percentage of the then outstanding Shares owned by such Holder
immediately after the exchange is less than 80% of the percentage of the Shares
owned by such Holder immediately before the exchange. If an exchange of Shares
for cash fails to satisfy the "substantially disproportionate" test, the Holder
may nonetheless satisfy the "not essentially equivalent to a dividend" test. A
Holder who wishes to satisfy (or avoid) the "not essentially equivalent to a
dividend" test is urged to consult such Holder's tax advisor because this test
will be met only if the reduction in such Holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such Holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the percentage interest of a shareholder whose relative stock
interest in a publicly held corporation is minimal (an interest of less than 1%
should satisfy this requirement) and who exercises no control over corporate
affairs should constitute such a "meaningful reduction." If a Holder sells
Shares to persons other than the Company at or about the time such Holder also
sells shares to the Company pursuant to the Offer, and the various sales
effected by the Holder are part of an overall plan to reduce or terminate such
Holder's proportionate interest in the Company, then the sales to persons other
than the Company may, for United States federal income tax purposes, be
integrated with the Holder's sale of Shares pursuant to the Offer and, if
integrated, may be taken into
27
<PAGE> 28
account in determining whether the Holder satisfies any of the three tests
described above. A Holder should consult his tax advisor regarding the treatment
of other exchanges of Shares for cash which may be integrated with such Holder's
sale of Shares to the Company pursuant to the Offer.
If a Holder is treated as recognizing gain or loss from the disposition of
Shares for cash, such gain or loss will be equal to the difference between the
amount of cash received and such Holder's tax basis in the Shares exchanged
therefor. Any such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the holding period of the Shares exceeds one
year as of the date of the exchange. Any long-term capital gain recognized by
Holders that are individuals, estates or trusts will be taxable at a maximum
rate of 20% if the holding period of the Shares exceeds 18 months and otherwise
will be taxable to such Holders at a maximum rate of 28%. However, any
short-term capital gain recognized by Holders that are individuals, estates or
trusts and any long-term or short-term capital gain recognized by Holders that
are corporations will be taxable at regular income tax rates.
If a Holder is not treated under the Section 302 tests as recognizing gain
or loss on an exchange of Shares for cash, the entire amount of cash received by
such Holder in such exchange will be treated as a dividend to the extent of the
Company's current and accumulated earnings and profits as determined for United
States federal income tax purposes. Such a dividend will be includible in the
Holder's gross income as ordinary income in its entirety, without reduction for
the tax basis of the Shares exchanged, and no loss will be recognized. The
Holder's tax basis in the Shares exchanged, however, will be added to such
Holder's tax basis in the remaining Shares that it owns. To the extent that cash
received in exchange for Shares is treated as a dividend to a corporate Holder,
(i) it will be eligible for a dividends-received deduction (subject to
applicable limitations) and (ii) it will be subject to the "extraordinary
dividend" provisions of the Code. A corporate Holder should consult its tax
advisor concerning the availability of the dividends-received deduction and the
application of the "extraordinary dividend" provisions of the Code.
The Company cannot predict whether or the extent to which the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Company to accept fewer shares than are tendered.
Therefore, a Holder can be given no assurance that a sufficient number of such
Holder's Shares will be purchased pursuant to the Offer to ensure that such
purchase will be treated as a sale or exchange, rather than as a dividend, for
United States federal income tax purposes pursuant to the rules discussed above.
Consequences to Shareholders who do not Tender Pursuant to the
Offer. Shareholders who do not accept the Company's Offer to tender their Shares
will not incur any tax liability as a result of the consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign shareholders and backup
withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO IT OF THE OFFER, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the
28
<PAGE> 29
Exchange Act, which requires that the Company must pay the consideration offered
or return the Shares tendered promptly after termination or withdrawal of a
tender offer. Subject to compliance with applicable law, the Company further
reserves the right, in its sole discretion, and regardless of whether any of the
events set forth in Section 6 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer). Amendments to the Offer may be made at any time and from
time to time effected by public announcement thereof, such announcement, in the
case of an extension, to be issued no later than 9:00 a.m., New York City time,
on the next business day after the last previously scheduled or announced
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to shareholders in a manner reasonably designated to
inform shareholders of such change. Without limiting the manner in which the
Company may choose to make a public announcement, except as required by
applicable law, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the Offer or information concerning the Offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Shares, the number of Shares being sought in the Offer or the Dealer Manager's
soliciting fees and, in the event of an increase in the number of Shares being
sought, such increase exceeds 2% of the outstanding Shares, and (ii) the Offer
ends on the tenth business day from, and including, the date that such notice of
an increase or decrease is first published, sent or given in the manner
specified in this Section 14, the Offer will then be extended until the
expiration of such period of ten business days.
15. FEES AND EXPENSES.
The Company has retained the Dealer Manager to act as its financial
advisors, as well as the dealer manager, in connection with the Offer. The
Dealer Manager will receive a fee for its services in connection with the Offer
equal to the sum of (i) $250,000 and (ii) $0.05 for each Share acquired pursuant
to the Offer. The Company also has agreed to reimburse the Dealer Manager for
certain reasonable out-of-pocket expenses incurred in connection with the Offer,
including the reasonable fees and expenses of counsel, and to indemnify the
Dealer Manager against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws.
The Company has retained ChaseMellon Shareholder Services, L.L.C. to act as
Depositary and Information Agent in connection with the Offer. The Information
Agent may contact shareholders by mail, telephone, telegraph and personal
interviews and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. ChaseMellon
Shareholder Services, L.L.C. will receive reasonable and customary compensation
for its services as Depositary and Information Agent, will be reimbursed by the
Company for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities in connection with the Offer, including certain
liabilities under the federal securities laws.
No fees or commissions will be payable to brokers, dealers or other persons
(other than to the Dealer Manager) for soliciting tenders of Shares pursuant to
the Offer. The Company, however, upon request, will reimburse brokers, dealers
and commercial banks for customary mailing and handling expenses incurred by
such persons in forwarding the Offer and related materials to the beneficial
owners of Shares held by any such person as a nominee or in a fiduciary
capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Company for purposes of the Offer (except
for the Dealer Manager).
The Company will pay or cause to be paid all stock transfer taxes, if any,
on its purchase of Shares except as otherwise provided in Instruction 7 in the
Letter of Transmittal.
29
<PAGE> 30
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer is being made on the Company's behalf by the Dealer
Manager or one or more registered brokers or dealers licenses under the laws of
such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 9 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE DEALER
MANAGER.
COOKER RESTAURANT CORPORATION
August 12, 1998
30
<PAGE> 31
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for Shares and
any other required documents should be sent or delivered by each shareholder or
his or her broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail:
P.O. Box 3301
South Hackensack, NJ
07606
Attn: Reorganization Department
By Overnight Delivery:
85 Challenger Road
Mail Drop -- Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
By Hand:
120 Broadway, 13th Floor
New York, NY 10271
Attn: Reorganization
Department
By Facsimile Transmissions:
(for Eligible Institutions only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
Additional copies of the Offer to Purchase, the Letter of Transmittal or
other tender offer materials may be obtained from the Information Agent and will
be furnished at the Company's expense. Questions and requests for assistance may
be directed to the Information Agent or the Dealer Manager as set forth below.
Shareholders may also contact their local broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
450 WEST 33RD STREET
14TH FLOOR
NEW YORK, NEW YORK 10001
BANKS AND BROKERS CALL COLLECT: (212) 273-8080
ALL OTHERS CALL TOLL-FREE: (800) 549-9249
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
277 PARK AVENUE
NEW YORK, NEW YORK 10172
CALL COLLECT: (212) 892-3644
August 12, 1998
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
COOKER RESTAURANT CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED AUGUST 12, 1998
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER 10, 1998, UNLESS THE OFFER IS
EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail:
P.O. Box 3301
South Hackensack, NJ 07606
Attn: Reorganization Department
By Overnight Delivery:
85 Challenger Road
Mail Drop -- Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
By Hand:
120 Broadway
13th Floor
New York, NY 10271
Attn: Reorganization Department
By Facsimile Transmission:
(for Eligible Institutions only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4680
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING
INSTRUCTIONS, CAREFULLY BEFORE CHECKING ANY BOX BELOW.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL-IN EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S)(1) BY CERTIFICATE(S) TENDERED(2)
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
TOTAL SHARES:
- ---------------------------------------------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which Shares are to be purchased in the event of
proration.(3) (Attach additional signed list if necessary.)
See Instruction 14.
1st: 2nd: 3rd: 4th: 5th:
(1) Need not be completed by shareholders tendering Shares by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate delivered
to the Depositary are being tendered hereby. See Instruction 4.
(3) If you do not designate an order, then in the event less than all Shares tendered are purchased due to
proration, Shares will be selected for purchase by the Depositary. See Instruction 14.
</TABLE>
- --------------------------------------------------------------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY OR THE
DEALER MANAGER WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT
CONSTITUTE VALID DELIVERY. DELIVERIES TO BOOK-ENTRY TRANSFER FACILITIES WILL NOT
CONSTITUTE VALID DELIVERY TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below).
Shareholders whose Share certificates are not immediately available, who
cannot deliver certificates and any other documents required to the Depositary
by the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedure for book-entry transfer prior to the Expiration Date must
tender their Shares using the guaranteed delivery procedure set forth in Section
3 of the Offer to Purchase. See Instruction 2.
<PAGE> 2
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
[ ] CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF
THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
Check Applicable Box: [ ] DTC [ ] PDTC
Account No.
Transaction Code No.
------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Date of Execution of Notice of Guaranteed Delivery
---------------------------------------------------------
Name of Institution that Guaranteed Delivery
If delivery is by book-entry transfer:
Name of Tendering Institution
Check Applicable Box: [ ] DTC [ ] PDTC
Account No.
Transaction Code No.
------------------------------------------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Cooker Restaurant Corporation, an Ohio
corporation (the "Company"), the above-described shares of its common stock
without par value (together with associated preferred stock purchase rights
issued pursuant to the Rights Agreement, dated as of February 1, 1990, between
the Company and National City Bank as Rights Agent, the "Shares"), at the price
per Share indicated in this Letter of Transmittal, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated August 12, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by any of the Book-Entry Transfer
Facilities, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Company upon receipt
by the Depositary, as the undersigned's agent, of the Purchase Price (as
defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer
on the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's acceptance of the terms and
conditions of the Offer, as well as the undersigned's representation and
warranty to the Company that (i) the undersigned has a net long position in the
Shares or equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and (ii) the tender of such Shares complies with Rule 14e-4 of the
Exchange Act. The Company's acceptance for payment of Shares tendered pursuant
to the Offer will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine the lowest single per Share
price (not greater than $12.00 nor less than $10.50 per Share), net to the
seller in cash (the "Purchase Price"), that will allow it to purchase 4,000,000
Shares (or such lesser number of Shares as are validly tendered and not
withdrawn) pursuant to the Offer. The undersigned understands that the Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the financing condition described in Section
2 of the Offer to Purchase, the procedure pursuant to which Shares will be
accepted for payment and the proration provisions. Certificates representing
Shares tendered at prices greater than the Purchase Price and not withdrawn and
Shares not purchased because of proration will be returned at the Company's
expense. See Section 1 of the Offer to Purchase.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price of any Shares purchased, and/or
return any Shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of Shares tendered by book-entry transfer, by
credit to the account at the applicable Book-Entry Transfer Facility).
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the Purchase Price of any Shares purchased and/or any
certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price of any Shares purchased and/or return any
Shares not tendered or not purchased in the name(s) of, and mail such check
and/or any certificates to, the person(s) so indicated. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares from the name of the registered holder(s)
thereof if the Company does not accept for payment any of the Shares so
tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ
THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE LETTER OF
TRANSMITTAL FOR EACH PRICE SPECIFIED MUST BE USED.
(SEE INSTRUCTION 5.)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO
VALID TENDER OF SHARES.
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] $10.500 [ ] $11.125 [ ] $11.750
[ ] $10.625 [ ] $11.250 [ ] $11.875
[ ] $10.750 [ ] $11.375 [ ] $12.000
[ ] $10.875 [ ] $11.500
[ ] $11.000 [ ] $11.625
</TABLE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owns beneficially as of the close of business on August
11, 1998, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially as of the close of business on August 11, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially as of the close of business on
August 11, 1998, and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares and is tendering all of
such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares are Being Tendered" in this Letter of
Transmittal). [ ]
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if the check for the aggregate Purchase Price of Shares
purchased and/or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue [ ] check
and/or [ ] certificate(s) to:
Name:
- -------------------------------------------------
---------------------------------------------------------
(PLEASE PRINT)
Address:
- ------------------------------------------------
---------------------------------------------------------
(INCLUDE ZIP CODE)
---------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
Book-Entry Facility Account
No.
- ------------------ [ ] DTC [ ] PDTC
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6 AND 8)
To be completed ONLY if the check for the Purchase Price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature(s).
Issue [ ] check
and/or [ ] certificate(s) to:
Name:
- -------------------------------------------------
---------------------------------------------------------
(PLEASE PRINT)
Address:
- ------------------------------------------------
---------------------------------------------------------
(INCLUDE ZIP CODE)
Book-Entry Facility Account
No.
- ------------------ [ ] DTC [ ] PDTC
<PAGE> 5
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL SHAREHOLDERS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated:
- -------------------------------, 1998
Name(s)
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.
- --------------------------------------------------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Firm Name:
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Authorized Signature:
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Dated:
- -------------------------------, 1998
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
recognized member of an Eligible Institution (as defined below), unless (i) this
Letter of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in a
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal, or (ii) such Shares are
tendered for the account of a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States (each such
entity, an "Eligible Institution"). See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be used either if Share
certificates are to be forwarded herewith or if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal prior to the
Expiration Date. If certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery.
Shareholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the Expiration
Date; and (iii) the certificates for all physically delivered Shares in proper
form for transfer by delivery, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, in each case together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange trading days after the date the
Depositary receives such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering shareholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares that are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the "Special Payment Instructions" or "Special Delivery
Instructions" boxes on this Letter of Transmittal, as promptly as practicable
following the expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
validly tendered, the shareholder must check the box indicating the price per
Share at which such shareholder is tendering Shares under "Price (In Dollars)
Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal,
except that Odd Lot Owners (as defined in Section 1 of the Offer to Purchase)
may check the box above in the section entitled "Odd Lots" indicating that such
shareholder is tendering all Shares at the Purchase Price determined by the
Company. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR (OTHER
THAN AS DESCRIBED ABOVE FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE IS NO
VALID TENDER OF SHARES. A shareholder wishing to tender portions of such
shareholder's Share holdings at different prices must complete a separate Letter
of Transmittal for each price at which such shareholder wishes to tender each
such portion of such shareholder's Shares. The same Shares cannot be tendered
(unless previously validly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificate(s) evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
<PAGE> 7
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the aggregate Purchase
Price is to be made to, or Shares not tendered or not purchased are to be
registered in the name of, any person other than the registered holder(s), or if
tendered Shares are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to
Purchase. Except as provided in this Instruction 7, it will not be necessary to
affix transfer tax stamps to the certificates representing Shares tendered
hereby.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal, or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such shareholder at the Book-Entry Transfer Facility from which such transfer
was made.
9. ODD LOTS. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date are to be purchased, the Shares purchased
first will consist of all Shares tendered by any shareholder who owned
beneficially as of the close of business on August 11, 1998, and continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares and who validly tendered all such Shares at or below the Purchase Price
(including by not designating a purchase price as described above). Partial
tenders of Shares will not qualify for this preference and this preference will
not be available unless the box captioned "Odd Lots" in this Letter of
Transmittal and the Notice of Guaranteed Delivery, if any, is completed.
10. SUBSTITUTE FORM W-9 AND FORM W-8. Under the United States federal income
tax backup withholding rules, unless an exemption applies under the applicable
law and regulations, 31% of the gross proceeds payable to a shareholder or other
payee pursuant to the Offer must be withheld and remitted to the United States
Treasury, unless the shareholder or other payee provides such person's taxpayer
identification number (employer identification number or social security number)
to the Depositary and certifies that such number is correct. Therefore, each
tendering shareholder must complete and sign the Substitute Form W-9 included as
part of this Letter of Transmittal so as to provide the information and
certification necessary to avoid backup withholding, unless such shareholder
otherwise establishes to the satisfaction of the Depositary that it is not
subject to backup withholding. Certain shareholders (including, among others,
all corporations and certain foreign shareholders) are not subject to these
backup withholding requirements. To prevent possible erroneous backup
withholding, an exempt holder must enter its correct taxpayer identification
number in Part 1 of Substitute Form W-9, write "Exempt" in Part 2 of such form,
and sign and date the form. See the enclosed Guidelines for Certification of
Taxpayer Identification Number or Substitute Form W-9 for additional
instructions. In order for a foreign shareholder to qualify as an exempt
recipient, a foreign shareholder must submit an Internal Revenue Service ("IRS")
Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting
to that shareholder's exempt status. Form W-8 may be obtained from the
Depositary.
11. WITHHOLDING ON FOREIGN SHAREHOLDERS. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign shareholder or its agent unless (A) the Depositary
determines that a reduced rate of withholding is available pursuant to a tax
treaty or that an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States or (B) the foreign shareholder establishes to the satisfaction
of the Company and the Depositary that the sale of Shares by such foreign
shareholder pursuant to the Offer will qualify as a "sale or exchange," rather
than as a distribution taxable as a dividend, for United States federal income
tax purposes (see Section 13 of the Offer to Purchase). For this purpose, a
foreign shareholder is any shareholder that is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, (iii) an estate, the income of which is subject to United
States federal income taxation regardless of the source of such income or (iv) a
trust the administration of which a court within the United States is able to
exercise primary supervision and all substantial decisions of which one or more
United States persons have the authority to control. In order to obtain a
reduced rate of withholding pursuant to a tax treaty, a foreign shareholder must
deliver to the Depositary a properly completed IRS Form 1001. In order to obtain
an exemption from withholding on the grounds that the gross proceeds paid
pursuant to the Offer are effectively connected with the conduct of a trade or
business within the United States, a foreign shareholder must deliver to the
Depositary a properly completed IRS Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
shareholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such shareholder meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 13 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax is due. Each foreign shareholder is urged to
consult its tax advisor regarding the application of United States federal
income tax withholding, including eligibility for a withholding tax reduction or
exemption and refund procedures.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or to the Dealer Manager
at their respective addresses and telephone numbers below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or other
tender offer materials may be directed to the Information Agent, and such copies
will be furnished promptly at the Company's expense. Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
documents relating to, or assistance concerning, the Offer.
<PAGE> 8
13. IRREGULARITIES. All questions as to the number of Shares to be accepted,
the price to be paid therefor and the validity, form, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, which determination shall be
final and binding on all parties. The Company reserves the absolute right to
reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Shares or any particular shareholder. No tender of Shares will be
deemed to be validly made until all defects or irregularities have been cured or
waived. None of the Company, the Dealer Manager, the Depositary, the Information
Agent or any other person is or will be obligated to give notice of any defects
or irregularities in tenders, and none of them will incur any liability for
failure to give any such notice.
14. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the United States federal income tax classification of any
gain or loss on the Shares purchased. See Sections 1 and 13 of the Offer to
Purchase.
15. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES. Any shareholder whose
certificates have been mutilated, lost, stolen or destroyed should contact the
Company's transfer agent, First Union National Bank of North Carolina,
Shareholders Services Group (the "Transfer Agent"), at 1525 West W.T. Harris
Blvd., 3-C3, Charlotte, North Carolina 28288-1151, (800) 829-8432 for further
instructions as soon as possible. In the event of a mutilated, lost, stolen or
destroyed certificate, certain procedures will be required to be completed
before this Letter of Transmittal can be processed. Because these procedures may
take a substantial amount of time to complete, notice of any mutilated, lost,
stolen or destroyed certificate should be provided to the Transfer Agent as soon
as possible.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) TOGETHER WITH
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH THEIR
LETTER OF TRANSMITTAL.
<PAGE> 9
TO BE COMPLETED BY ALL TENDERING REGISTERED HOLDERS OF SECURITIES
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1: PLEASE PROVIDE YOUR TIN IN THE APPROPRIATE BOX --------------------------
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
-------------------------------------------------------- OR Employer
DEPARTMENT OF THE NAME (if a joint account or you changed your name, see Identification Number
TREASURY INTERNAL Guidelines) ---------------------------
REVENUE SERVICE
-------------------------------------------------------- PART 2--For Payees exempt
CHECK APPROPRIATE BOX: from backup withholding,
[ ] Individual/Sole proprietor [ ] Corporation see the Important Tax
[ ] Partnership [ ] Other Information above and
-------------------------------------------------------- Guidelines for
BUSINESS NAME, if different from above (See Certification of Taxpayer
Guidelines): Identification Number on
-------------------------------------------------------- Substitute Form W-9
PAYOR'S REQUEST FOR ADDRESS enclosed herewith and
TAXPAYER IDENTIFICATION -------------------------------------------------------- complete as instructed
NUMBER ("TIN") CITY STATE ZIP CODE herein.
AND CERTIFICATION ------------------------------------------------------------------------------------
PART 3--CERTIFICATION--Under penalties of perjury, I certify that (i) the number
shown on this form is my correct Taxpayer Identification Number (or I am waiting for
a number to be issued to me) and
(ii) I am not subject to backup withholding because: (a) I am exempt from backup
withholding; or (b) I have not been notified by the IRS that I am subject to backup
withholding as a result of a failure to report all interest or dividends; or (c) the
IRS has notified me that I am no longer subject to backup withholding.
SIGNATURE DATE
------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out Item (ii) above if you have been
notified by the IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return. If you are exempt from
backup withholding, check the box in Part 5 below.
------------------------------------------------------------------------------------
PART 4--AWAITING TIN [ ] PART 5--EXEMPT TIN [ ]
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 4 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and that I mailed or delivered an application to receive
a taxpayer identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office (or I intend to mail or deliver
an application in the near future). I understand that if I do not provide a
taxpayer identification number to the payor within 60 days, the payor is
required to withhold 31% of all reportable payments made to me thereafter until
I provide a number.
Signature Date
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and that I mailed or delivered an application to receive
a taxpayer identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office (or I intend to mail or deliver
an application in the near future). I understand that if I do not provide a
taxpayer identification number to the payor within 60 days, the payor is
required to withhold 31% of all reportable payments made to me thereafter until
I provide a number.
Signature____ Date
<PAGE> 10
THE INFORMATION AGENT AND DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
450 WEST 33RD STREET
14TH FLOOR
NEW YORK, NEW YORK 10001
BANKS AND BROKERS CALL COLLECT: (212) 273-8080
ALL OTHERS CALL TOLL-FREE: (800) 549-9249
THE DEALER MANAGER FOR THE OFFER IS:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 PARK AVENUE
NEW YORK, NEW YORK 10172
CALL COLLECT:
(212) 892-3644
<PAGE> 1
EXHIBIT (a)(3)
COOKER RESTAURANT CORPORATION
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of common
stock of Cooker Restaurant Corporation are not immediately available, if the
procedure for book-entry transfer cannot be completed on a timely basis, or if
time will not permit all other documents required by the Letter of Transmittal
to be delivered to the Depositary (as defined below) prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase defined below). Such form
may be delivered by hand or transmitted by mail or overnight courier, or (for
Eligible Institutions only) by facsimile transmission, to the Depositary. See
Section 3 of the Offer to Purchase.
THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND
CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE
TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail:
P.O. Box 3301
South Hackensack, NJ 07606
Attn: Reorganization Department
By Overnight Delivery:
85 Challenger Road
Mail Drop-Reorg.
Ridgefield Park, NJ 07660
Attn: Reorganization Department:
By Hand:
120 Broadway
13th Floor
New York, NY 10271
Attn: Reorganization Department
By Facsimile Transmission:
(for Eligible Institutions only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Cooker Restaurant Corporation, an Ohio
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated August 12, 1998 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares of common stock
without par value (together with associated preferred stock purchase rights
issued pursuant to the Rights Agreement, dated as of February 1, 1990, between
the Company and National City Bank as Rights Agent, the "Shares"), of the
Company listed below, pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
- ------------------------------------------------------
Number of Shares
- ------------------------------------------------------
Certificate Nos.: (if available)
If shares will be tendered by book entry transfer:
- ------------------------------------------------------
Name of Tendering Institution
- ------------------------------------------------------
Account No. at (check one)
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
- ------------------------------------------------------
Name(s)
- ------------------------------------------------------
Address
- ------------------------------------------------------
Area Code/Telephone Number
- ------------------------------------------------------
Signature(s)
Dated:
- ----------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States hereby
guarantees: (i) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended; (ii) that such tender of Shares
complies with Rule 14e-4; and (iii) to deliver to the Depositary at one of its
addresses set forth above certificate(s) for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company or Philadelphia Depository Trust Company, in each case together with a
properly completed and duly executed Letter(s) of Transmittal (or facsimile(s)
thereof), with any required signature guarantee(s) and any other required
documents, all within three New York Stock Exchange, Inc. trading days after the
Depositary receives this Notice.
Number of Firm
- ------------------------------------
Address
- ---------------------------------------------
- ------------------------------------------------------
City, State, Zip Code
Area Code
and Telephone Number
-----------------------------
- ------------------------------------------------------
Authorized Signature
- ------------------------------------------------------
Name (Please Print)
Title
- -------------------------------------------------
Dated:
- ----------------------------------------------
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL.
<PAGE> 3
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH
PRICE SPECIFIED MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] $10.500 [ ] $11.125 [ ] $11.750
[ ] $10.625 [ ] $11.250 [ ] $11.875
[ ] $10.750 [ ] $11.375 [ ] $12.000
[ ] $10.875 [ ] $11.500
[ ] $11.000 [ ] $11.625
</TABLE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially as of the close of business on August
11, 1998, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially as of the close of business on August 11, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially as of the close of business on
August 11, 1998, and continues to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares and is
tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares are Being Tendered" above). [ ]
<PAGE> 1
EXHIBIT (a)(4)
COOKER RESTAURANT CORPORATION
OFFER TO PURCHASE FOR CASH
UP TO 4,000,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$12.00 NOR LESS THAN $10.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER 10, 1998,
UNLESS THE OFFER IS EXTENDED.
August 12, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
In our capacity as Dealer Manager, we are enclosing the material listed
below relating to the offer of Cooker Restaurant Corporation, an Ohio
corporation (the "Company"), to purchase up to 4,000,000 shares of its common
stock without par value (together with associated preferred stock purchase
rights issued pursuant to the Rights Agreement, dated as of February 1, 1990,
between the Company and National City Bank as Rights Agent, the "Shares"), at
prices not greater than $12.00 nor less than $10.50 per Share, net to the seller
in cash, specified by tendering shareholders, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 12, 1998 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine the lowest single per Share price (not greater than $12.00 nor
less than $10.50 per Share), net to the seller in cash (the "Purchase Price"),
that will allow it to purchase 4,000,000 Shares (or such lesser number of Shares
as are validly tendered and not withdrawn) pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the financing condition referred to below,
the procedure pursuant to which Shares will be accepted for payment and the
proration provisions. Certificates representing Shares tendered at prices in
excess of the Purchase Price and not withdrawn and Shares not purchased because
of proration will be returned at the Company's expense. The Company reserves the
right, in its sole discretion, to purchase more than 4,000,000 Shares pursuant
to the Offer.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS CONDITIONED UPON THE COMPANY HAVING OBTAINED SUFFICIENT
FINANCING TO FUND THE PURCHASE OF SHARES TENDERED IN THE OFFER AND PAY ALL
RELATED TAXES, FEES AND EXPENSES. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6 OF THE OFFER TO PURCHASE.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
<PAGE> 2
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of
your clients.
3. A letter to shareholders of the Company from G. Arthur Seelbinder,
Chairman and Chief Executive Officer.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (each as defined in the Offer to
Purchase).
5. A letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space for obtaining such clients' instructions with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to United States federal
income tax backup withholding.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON THURSDAY, SEPTEMBER 10, 1998, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
fees paid to the Dealer Manager). The Company will, upon request, reimburse you
for reasonable and customary handling and mailing expenses incurred by you in
forwarding materials relating to the Offer to your customers. The Company will
pay all stock transfer taxes applicable to its purchase of Shares pursuant to
the Offer, subject to Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in the Offer to Purchase, if more than 4,000,000 Shares (or
such greater number of Shares as the Company may elect to purchase pursuant to
the Offer) have been validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) the Company will accept Shares for purchase in the following order of
priority: (i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any shareholder who owned beneficially
as of the close of business on August 11, 1998, and who continues to own
beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares
and who validly tenders all of such Shares (partial tenders will not qualify for
this preference) and completes the box captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and (ii)
after purchase of all of the foregoing Shares, all other Shares validly tendered
at or below the Purchase Price and not withdrawn prior to the Expiration Date on
a pro rata basis.
THE BOARD OF DIRECTORS OF THE COMPANY (THROUGH A SPECIAL COMMITTEE, AS SET
FORTH IN SECTION 10 OF THE OFFER TO PURCHASE) HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. FOUR OF THE COMPANY'S DIRECTORS HAVE INFORMED THE COMPANY THAT THEY
INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10 OF THE OFFER TO
PURCHASE. EXCEPT AS SET FORTH IN SECTION 10 OF THE OFFER TO PURCHASE, THE
COMPANY HAS BEEN ADVISED THAT NONE
<PAGE> 3
OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND TO TENDER ANY SHARES PURSUANT TO
THE OFFER.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT OR THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS
SET FORTH ON THE BACK COVER OF THE ENCLOSED OFFER TO PURCHASE. ADDITIONAL COPIES
OF THE ENCLOSED MATERIALS MAY BE REQUESTED FROM THE INFORMATION AGENT.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
<PAGE> 1
EXHIBIT (a)(5)
COOKER RESTAURANT CORPORATION
OFFER TO PURCHASE FOR CASH
UP TO 4,000,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$12.00 NOR LESS THAN $10.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER 10, 1998,
UNLESS THE OFFER IS EXTENDED
August 12, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated August 12,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by Cooker Restaurant
Corporation, an Ohio corporation (the "Company"), to purchase up to 4,000,000
shares of its common stock without par value (together with associated preferred
stock purchase rights issued pursuant to the Rights Agreement, dated as of
February 1, 1990, between the Company and National City Bank as Rights Agent,
the "Shares"), at prices not greater than $12.00 nor less than $10.50 per Share,
net to the seller in cash, specified by tendering shareholders, upon the terms
and subject to the conditions of the Offer. Also enclosed herewith is certain
other material related to the Offer.
The Company will, upon the terms and subject to the conditions of the
Offer, determine the lowest single per Share price (not greater than $12.00 nor
less than $10.50 per Share), net to the seller in cash (the "Purchase Price"),
that will allow it to purchase 4,000,000 Shares (or such lesser number of Shares
as are validly tendered and not withdrawn) pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the financing condition referred to below,
the procedure pursuant to which Shares will be accepted for payment and the
proration provisions. Certificates representing Shares tendered at prices in
excess of the Purchase Price and not withdrawn and Shares not purchased because
of proration will be returned at the Company's expense. The Company reserves the
right, in its sole discretion, to purchase more than 4,000,000 Shares pursuant
to the Offer. See Section 1 of the Offer to Purchase.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS CONDITIONED UPON THE COMPANY HAVING OBTAINED SUFFICIENT
FINANCING TO FUND THE PURCHASE OF SHARES TENDERED IN THE OFFER AND PAY ALL
RELATED TAXES, FEES AND EXPENSES. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6 OF THE OFFER TO PURCHASE.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
<PAGE> 2
Your attention is invited to the following:
1. You may tender Shares at prices (in increments of $.125), which
cannot be greater than $12.00 nor less than $10.50 per Share, as indicated
in the attached Instruction Form, net to you in cash.
2. The Offer is for a maximum of 4,000,000 Shares, constituting
approximately 39.4% of the total Shares outstanding as of August 7, 1998.
The Offer is conditioned upon the Company having obtained sufficient
financing to fund the Offer and pay all related taxes, fees and expenses.
The Offer is subject to certain other conditions set forth in Section 6 of
the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at
5:00 P.M., New York City time, on Thursday, September 10, 1998, unless the
Offer is extended. Your instructions to us should be forwarded to us in
ample time to permit us to submit a tender on your behalf.
4. As described in the Offer to Purchase, if at the expiration of the
Offer, more than 4,000,000 Shares (or such greater number of Shares as the
Company may elect to purchase pursuant to the Offer) have been validly
tendered at prices at or below the Purchase Price and not withdrawn, the
Company will purchase Shares in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date by any shareholder who owned
beneficially as of the close of business on August 11, 1998, and who
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares and who validly tenders all of such Shares
(partial tenders will not qualify for this preference) and completes the
box captioned "Odd Lots" in the Letter of Transmittal and, if
applicable, the Notice of Guaranteed Delivery; and
(ii) after purchase of all the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date, on a pro rata basis (with appropriate
adjustments to avoid purchase of fractional shares). See Section 1 of
the Offer to Purchase for a discussion of proration.
5. Tendering shareholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer if payment is made to the registered holder. Any stock transfer taxes
applicable to the purchase of Shares by the Company pursuant to the Offer
will be paid by the Company, except as otherwise provided in Instruction 7
of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each portion of your Shares. We must submit separate Letters
of Transmittal on your behalf for each price you will accept.
7. If you owned beneficially as of the close of business on August 11,
1998, and continue to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and you instruct us to tender at or
below the Purchase Price on your behalf all such Shares prior to the
Expiration Date and check the box captioned "Odd Lots" in the Instruction
Form, all such Shares will be accepted for purchase before proration, if
any, of the other tendered Shares.
THE BOARD OF DIRECTORS OF THE COMPANY (THROUGH A SPECIAL COMMITTEE, AS SET
FORTH IN SECTION 10 OF THE OFFER TO PURCHASE) HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. FOUR OF THE COMPANY'S DIRECTORS HAVE INFORMED THE COMPANY THAT THEY
INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10 OF THE OFFER TO
PURCHASE. EXCEPT AS SET FORTH IN SECTION 10 OF THE OFFER TO PURCHASE, THE
COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND
TO TENDER ANY SHARES PURSUANT TO THE OFFER.
<PAGE> 3
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF BY THE EXPIRATION DATE OF THE OFFER.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction the securities or blue
sky laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on the Company's behalf by Donaldson, Lufkin & Jenrette
Securities Corporation, the Dealer Manager, or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
<PAGE> 4
INSTRUCTION FORM
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 4,000,000 SHARES OF COMMON STOCK
OF COOKER RESTAURANT CORPORATION
AT A PURCHASE PRICE NOT GREATER THAN
$12.00 NOR LESS THAN $10.50 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated August 12, 1998, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the Offer by Cooker
Restaurant Corporation (the "Company") to purchase up to 4,000,000 shares of its
common stock without par value (together with associated preferred stock
purchase rights issued pursuant to the Rights Agreement, dated as of February 1,
1990, between the Company and National City Bank as Rights Agent, the "Shares"),
at prices not greater than $12.00 nor less than $10.50 per Share, net to the
undersigned in cash, specified by the undersigned, upon the terms and subject to
the terms and conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
[ ] By checking this box, all Shares held by us for your account will be
tendered.
If fewer than all Shares held by us for your account are to be tendered,
please check the following box and indicate below the aggregate number of Shares
to be tendered by us. [ ]*
------------ SHARES
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE INSTRUCTION FORM FOR EACH
PRICE SPECIFIED MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] $10.500 [ ] $11.125 [ ] $11.750
[ ] $10.625 [ ] $11.250 [ ] $11.875
[ ] $10.750 [ ] $11.375 [ ] $12.000
[ ] $10.875 [ ] $11.500
[ ] $11.000 [ ] $11.625
</TABLE>
ODD LOTS
[ ] By checking this box, the undersigned represents that the undersigned
owned beneficially, as of the close of business on August 11, 1998 and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" above). [ ]
<PAGE> 5
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE:
Date:
- ------------------------------------------ 1998
- ------------------------------------------------------
- ------------------------------------------------------
Signature(s)
- ------------------------------------------------------
- ------------------------------------------------------
Name(s)
Address
- ---------------------------------------------
- ------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
- ------------------------------------------------------
Taxpayer Identification or Social Security No.
- ------------------------------------------------------
<PAGE> 1
EXHIBIT (a)(6)
NEWS RELEASE
COOKER RESTAURANT CORPORATION TO COMMENCE TENDER OFFER
FOR UP TO 4,000,000 SHARES OF ITS COMMON STOCK
WEST PALM BEACH, Fla., Aug. 11/PR Newswire/ -- Cooker Restaurant
Corporation (NYSE: CGR) announced today that it will commence a Dutch Auction
issuer tender offer to purchase for cash up to 4,000,000 shares of its issued
and outstanding common stock without par value. The tender offer will begin
tomorrow, August 12, 1998, and will expire, unless extended, at 5:00 p.m., New
York City time, on Thursday, September 10, 1998.
Terms of the tender offer, which are described more fully in the Offer to
Purchase and Letter of Transmittal, invite the Company's shareholders to tender
up to 4,000,000 shares of the Company's common stock to the Company at prices
not greater than $12.00 nor less than $10.50 per share, as specified by the
tendering shareholders. The offer is conditioned upon the Company having
obtained sufficient financing to fund the purchase of shares tendered in the
offer and pay all related taxes, fees and expenses. The offer is subject to
certain other conditions. The Company will, subject to the terms and conditions
of the offer, determine the lowest single per share price (not greater than
$12.00 nor less than $10.50 per share) net to the seller in cash that will allow
it to purchase 4,000,000 shares (or such lesser number of shares as are validly
tendered and not withdrawn) pursuant to the offer. Such lowest single per share
price will be the purchase price the Company will pay for all shares validly
tendered at prices at or below such purchase price and not withdrawn, subject to
the terms and conditions of the offer. Shares tendered at prices in excess of
the purchase price and shares not purchased because of proration will be
returned at the Company's expense. The Company reserves the right, in its sole
discretion, to purchase more than 4,000,000 shares pursuant to the offer.
The Offer to Purchase, Letter of Transmittal and related documents will be
mailed to shareholders of record of the Company's common stock and will also be
made available for distribution to beneficial owners of such common stock.
On August 11, 1998, the closing price of the Company's common stock was
$8.5625 per share.
The dealer manager for the tender offer is Donaldson, Lufkin & Jenrette
Securities Corporation (call collect: (212) 892-3644) and the depositary and
information agent is ChaseMellon Shareholder Services, L.L.C (call toll free:
(800) 549-9249).
To obtain a copy of the news release, call Dan DeWeever, (212) 273-8293.
CONTACT: Dan DeWeever, ChaseMellon Shareholder Services, L.L.C., (212)
273-8293.
<PAGE> 1
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to Purchase and
the related Letter of Transmittal. Capitalized terms not defined in this
announcement have the respective meanings ascribed to such terms in the Offer to
Purchase. The Offer is not being made to, nor will the Company accept tenders
from, holders of Shares in any jurisdiction in which the Offer or its acceptance
would violate that jurisdiction's laws. The Company is not aware of any
jurisdiction in which the making of the Offer or the tender of Shares would not
be in compliance with the laws of such jurisdiction. In jurisdictions whose laws
require that the Offer be made by a licensed broker or dealer, the Offer shall
be deemed to be made on the Company's behalf by Donaldson, Lufkin & Jenrette
Securities Corporation or by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
by
[CGR LOGO]
Cooker Restaurant Corporation
Up to 4,000,000 Shares Of Its Common Stock
At A Purchase Price Not Greater Than
$12.00 Nor Less Than $10.50 Per Share
Cooker Restaurant Corporation, an Ohio corporation (the "Company"),
invites its shareholders to tender up to 4,000,000 shares of its common stock
without par value (together with the associated preferred stock purchase rights
issued pursuant to the Rights Agreement, dated as of February 1, 1990, between
the Company and National City Bank as Rights Agent, the "Shares"), to the
Company at prices not greater than $12.00 nor less than $10.50 per Share in
cash, as specified by tendering shareholders, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 12, 1998 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY,
SEPTEMBER 10, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is conditioned upon the Company having obtained sufficient
<PAGE> 2
financing to fund the purchase of Shares tendered in the Offer and pay
all related taxes, fees and expenses. The Offer is also subject to certain other
conditions.
THE BOARD OF DIRECTORS OF THE COMPANY (THROUGH A SPECIAL COMMITTEE, AS
SET FORTH IN SECTION 10 OF THE OFFER TO PURCHASE) HAS APPROVED THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. FOUR OF THE COMPANY'S DIRECTORS HAVE INFORMED THE COMPANY THAT THEY
INTEND TO TENDER SHARES PURSUANT TO THE OFFER. EXCEPT AS SET FORTH IN SECTION 10
OF THE OFFER TO PURCHASE, THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS
DIRECTORS OR EXECUTIVE OFFICERS INTEND TO TENDER ANY SHARES PURSUANT TO THE
OFFER.
THE COMPANY WILL, UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE
OFFER, DETERMINE THE LOWEST SINGLE PER SHARE PRICE (NOT GREATER THAN $12.00 NOR
LESS THAN $10.50 PER SHARE), NET TO THE SELLER IN CASH (THE "PURCHASE PRICE"),
THAT WILL ALLOW IT TO PURCHASE 4,000,000 SHARES (OR SUCH LESSER NUMBER OF SHARES
AS ARE VALIDLY TENDERED AND NOT WITHDRAWN) PURSUANT TO THE OFFER. ALL SHARES
VALIDLY TENDERED AT PRICES AT OR BELOW THE PURCHASE PRICE AND NOT WITHDRAWN WILL
BE PURCHASED AT THE PURCHASE PRICE, UPON THE TERMS AND SUBJECT TO THE CONDITIONS
OF THE OFFER, INCLUDING THE FINANCING CONDITION DESCRIBED IN SECTION 2 OF THE
OFFER TO PURCHASE, THE PROCEDURE PURSUANT TO WHICH SHARES WILL BE ACCEPTED FOR
PAYMENT AND THE PRORATION PROVISIONS. CERTIFICATES REPRESENTING SHARES TENDERED
AT PRICES IN EXCESS OF THE PURCHASE PRICE AND NOT WITHDRAWN AND SHARES NOT
PURCHASED BECAUSE OF PRORATION WILL BE RETURNED AT THE COMPANY'S EXPENSE.
The term "Expiration Date" means 5:00 p.m., New York City time, on
Thursday, September 10, 1998, unless and until the Company in its sole
discretion shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall refer to the latest time
and date at which the Offer, as so extended by the Company, shall expire. The
Company reserves the right, in its sole discretion, to purchase more than
4,000,000 Shares pursuant to the Offer. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased), subject
to proration, Shares that are validly tendered at or below the Purchase
<PAGE> 3
Price and not withdrawn only when, as and if it gives oral or written notice to
ChaseMellon Shareholder Services, L.L.C. (in such capacity, the "Depositary") of
its acceptance of such Shares for payment pursuant to the Offer. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made promptly (subject to possible delay in the event of proration) but only
after timely receipt by the Depositary of certificates for such Shares (or a
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities), a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) and any other required documents.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer, more than 4,000,000 Shares (or such greater number of
Shares as the Company may elect to purchase pursuant to the Offer) have been
validly tendered at prices at or below the Purchase Price and not withdrawn, the
Company will purchase validly tendered and not withdrawn Shares first from all
Odd Lot Holders who validly tendered all their Shares at or below the Purchase
Price and who so certify in the appropriate place on the Letter of Transmittal
and, if applicable, on the Notice of Guaranteed Delivery, and then, after the
purchase of all of the foregoing Shares, all other Shares tendered at or below
the Purchase Price and not withdrawn prior to the Expiration Date, on a pro rata
basis (with appropriate adjustments to avoid purchase of fractional Shares).
The Company expressly reserves the right at any time or from time to
time, in its sole discretion, to extend the period of time during which the
Offer is open by giving notice of such extension to the Depositary and making a
public announcement thereof. Subject to certain conditions set forth in the
Offer to Purchase, the Company also expressly reserves the right to terminate
the Offer and not accept for payment any Shares not theretofore accepted for
payment.
Shares tendered pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date and, unless accepted for payment by the Company as
provided in the Offer to Purchase, may also be withdrawn after 5:00 p.m., New
York City time, on Thursday, October 8, 1998. For a withdrawal to be effective,
the Depositary must receive a notice of withdrawal in written, telegraphic or
facsimile transmission form in a timely manner at one of its addresses set forth
on the back cover of the Offer to Purchase. Such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the name
of the registered holder (if different from that of the person who tendered the
Shares), the number of Shares tendered and the number of Shares to be withdrawn.
If the certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (except in the case of
Shares tendered by an Eligible Institution). If Shares have been tendered
pursuant to the procedure for book-entry transfer, the notice of withdrawal must
specify the name
<PAGE> 4
and the number of the account at the applicable Book-Entry Transfer Facility to
be credited with the withdrawn Shares and otherwise comply with the procedures
of such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE SHAREHOLDERS DECIDE WHETHER TO
ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHICH PRICE OR PRICES TO TENDER
THEIR SHARES.
These materials are being mailed to record holders of Shares as of
August 11, 1998 and are being furnished to brokers, banks and similar persons
whose names, or the names of whose nominees, appear on the Company's shareholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing for transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated by reference herein.
Additional copies of the Offer to Purchase, the Letter of Transmittal
and other tender offer materials may be obtained from the Information Agent and
will be furnished at the Company's expense. Questions and requests for
assistance may be directed to the Information Agent or the Dealer Manager as set
forth below. Shareholders may also contact their local broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
The Information Agent and Depository Agent for the Offer is:
ChaseMellon Shareholder Services, L.L.C
450 West 33rd Street
14th Floor
New York, New York 10001
Banks and Brokers call collect: (212) 273-8080
All others call toll-free: (800) 549-9249
The Dealer Manager for the Offer is:
<PAGE> 5
DONALDSON, LUFKIN & JENRETTE
277 Park Avenue
New York, New York 10172
Call collect:
(212) 892-3644
August 12, 1998
<PAGE> 1
EXHIBIT (a)(8)
COOKER LOGO
August 12, 1998
5500 Village Boulevard
West Palm Beach, Florida, 33407
(561) 615-6000
Dear Shareholder:
Cooker Restaurant Corporation is offering to purchase up to 4,000,000
shares of its common stock at a price not greater than $12.00 nor less than
$10.50 per share. The Company is conducting the Offer through a procedure
commonly referred to as a "Dutch Auction." This procedure allows you to select
the price within the specified price range at which you are willing to sell all
or a portion of your shares to the Company.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your shares, instructions on how to
tender shares are provided in the enclosed materials. I encourage you to read
these materials carefully before making any decision with respect to the Offer.
Neither the Company nor its Board of Directors makes any recommendation to any
shareholder whether to tender any or all shares.
Please note that the Offer is scheduled to expire at 5:00 P.M., New York
City time, on Thursday, September 10, 1998, unless extended by the Company.
Questions regarding the Offer should be directed to ChaseMellon Shareholder
Services, L.L.C., the Information Agent for the Offer at (800) 549-9249, or
Donaldson, Lufkin & Jenrette Securities Corporation, the Dealer Manager for the
Offer, at the telephone numbers set forth in the enclosed materials.
Sincerely,
/s/ G. Arthur Seelbinder
G. Arthur Seelbinder
Chairman and Chief Executive Officer
<PAGE> 1
EXHIBIT (a)(9)
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- -----------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -----------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
or minor(2)
4. Custodian account of a
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3)
for a designated ward,
minor, or incompetent
person
7. a. The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
8. Sole proprietorship The owner(4)
account
- -----------------------------------------------------
- -----------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- -----------------------------------------------------
9. The valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number of
the personal
representatives or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. The broker or The broker or nominee
registered nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
- -----------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on the account has a social security number, that person's
number must be listed.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments that are not subject to information reporting are also not
subject to backup withholding. For details, see the regulations under sections
6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE. -- SECTION 6109 REQUIRES MOST RECIPIENTS OF DIVIDEND,
INTEREST, OR OTHER PAYMENTS TO GIVE TAXPAYER IDENTIFICATION NUMBERS TO PAYERS
WHO MUST REPORT THE PAYMENTS TO THE IRS. THE IRS USES THE NUMBERS FOR
IDENTIFICATION PURPOSES. PAYORS MUST BE GIVEN THE NUMBERS WHETHER OR NOT
RECIPIENTS ARE REQUIRED TO FILE TAX RETURNS. PAYORS MUST GENERALLY WITHHOLD 31%
OF TAXABLE INTEREST, DIVIDEND, AND CERTAIN OTHER PAYMENTS TO A PAYEE WHO DOES
NOT FURNISH A TAXPAYER IDENTIFICATION NUMBER TO A PAYOR. CERTAIN PENALTIES MAY
ALSO APPLY.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- IF YOU
FAIL TO FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER TO A PAYOR, YOU ARE
SUBJECT TO A PENALTY OF $50 FOR EACH SUCH FAILURE UNLESS YOUR FAILURE IS DUE
TO REASONABLE CAUSE AND NOT TO WILLFUL NEGLECT.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- IF YOU
MAKE A FALSE STATEMENT WITH NO REASONABLE BASIS WHICH RESULTS IN NO
IMPOSITION OF BACKUP WITHHOLDING, YOU ARE SUBJECT TO A PENALTY OF $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- FALSIFYING CERTIFICATIONS
OR AFFIRMATIONS MAY SUBJECT YOU TO CRIMINAL PENALTIES INCLUDING FINES AND/OR
IMPRISONMENT.
(4) MISUSE OF TINS. -- IF THE REQUESTER DISCLOSES OR USES TINS IN VIOLATION OF
FEDERAL LAW, THE REQUESTER MAY BE SUBJECT TO CIVIL AND CRIMINAL PENALTIES.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- -- A corporation.
- -- A financial institution.
- -- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- -- The United States or any agency or instrumentality thereof.
- -- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- -- A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- -- An international organization or any agency, or instrumentality thereof.
- -- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- -- A futures commission merchant registered with the Commodity Futures Trading
Commission.
- -- A real estate investment trust.
- -- A common trust fund operated by a bank under section 584(a).
- -- A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
- -- A trust exempt from tax under section 664 or described in section 4947.
- -- An entity registered at all times under the Investment Company Act of 1940.
- -- A foreign central bank of issue.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- -- Payments to nonresident aliens subject to withholding under section 1441.
- -- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- -- Payments of patronage dividends where the amount received is not paid in
money.
- -- Payments made by certain foreign organizations.
- -- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- -- Payments of interest on obligations issued by individuals. However, if you
pay $600 or more in interest in the course of your trade or business to a
payee, you must report the payment. Backup withholding applies to the
reportable payment if the payee has not provided a TIN or has provided an
incorrect TIN.
- -- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- -- Payments described in section 6049(b)(5) to non-resident aliens.
- -- Payments on tax-free covenant bonds under section 1451.
- -- Payments made by certain foreign organizations.
- -- Mortgage interest paid to you.
Other types of payments that generally are exempt from backup withholding
include:
- -- Wages.
- -- Distributions from a pension, annuity, profit-sharing or stock bonus plan, or
an IRA.
- -- Certain surrenders of life insurance contracts.
- -- Gambling winnings, if withholding is required under section 3402(q). However,
if withholding is not required under section 3402(q), backup withholding
applies if the payee fails to furnish a TIN.
- -- Real estate transactions reportable under section 6045.
<PAGE> 1
EXHIBIT (b)(1)
[LETTERHEAD OF CNL FUND ADVISORS, INC.]
August 7, 1998
VIA TELECOPY AND
FEDERAL EXPRESS
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
5500 Village Boulevard
West Palm Beach, Florida 33407
Re: $70,000,000.00 of Sale/Leaseback Financing to Acquire Thirty (30)
Existing and Operating Cooker Restaurants and Related Real Property
(the "Properties")
Dear Mr. Seelbinder:
CNL Fund Advisors, Inc. (the "Company") hereby issues this commitment
letter ("Commitment") by which it agrees to enter, or cause an affiliate to
enter, into sale-leaseback transactions with Cooker Restaurant Corporation (as
"Seller/Lessee") for up to thirty (30) properties with an aggregate purchase
price totaling approximately Seventy Million Dollars ($70,000,000.00) with
presently operating Cooker Restaurants located thereon, together with any and
all improvements now or hereafter constructed thereon (the land and such
improvements individually referred to as a "Property" and collectively referred
to as the "Properties"). The terms Property and Properties do not include
furniture, fixtures and equipment now or hereafter located thereon or therein
("FF&E"). Seller/Lessee agrees to make the Properties available for acquisition
and leaseback within the time periods and subject to the terms and conditions
set forth herein.
This Commitment provides funding for the acquisition of the Properties
beginning as of the date hereof and ending not later than December 15, 1998;
provided, however, this outside closing date shall be extended if necessary to
permit delivery of the documents required under Paragraph 7 hereof. The
Company's obligations hereunder are contingent upon (i) the appraisal to be
ordered by the Company (and described in Paragraph 7.B of this Commitment)
showing that the fair market value of each Property (including any improvements
constructed thereon) is not less than one hundred ten percent (110%) of the
Purchase Price (as hereinafter defined) applicable to such Property; (ii) the
Company's receipt of credit and trade references of Seller/Lessee; (iii)
approval of each Property by the Company based on a physical inspection of the
Property, (iv) submission to and approval by the Company of profit and loss
statements and sales information for a period of three (3) years or, in the
event Seller/Lessee has not operated the
<PAGE> 2
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 2
Property for three (3) years, from the date of opening of the Cooker Restaurant
on the Property by Seller/Lessee, which information shall be forwarded to the
Company with Exhibit "A"; and (v) approval by the Company of Exhibit "A" within
five (5) business days from receipt of Exhibit "A," all of which must be
acceptable to the Company in its sole and absolute discretion. In the event the
Company rejects any Property identified on Exhibit "A," Seller/Lessee shall have
a period of five (5) days from the date such Property was rejected to offer a
substitute Property acceptable to the Company in its sole discretion. If the
Company and the Seller/Lessee cannot agree, in good faith, on Exhibit "A," this
Commitment shall be of no further force and effect and the fee set forth in
Paragraph 13 shall be refunded by the Company to the Seller/Lessee. Attached to
this Commitment as Exhibit "A" is a list of a minimum of thirty (30) Properties
showing, for each Property, the store number, street address and city. For each
Property designated on the list, Seller/Lessee shall submit in writing to the
Company, to the extent Seller/Lessee has such information within its possession
or control, complete site information and trade area analyses, and demographic
and feasibility studies prepared by Seller/Lessee, which includes a demographic
profile of the trade area, aerial photographs and maps indicating the Property
location and competition within the trade area, traffic generation information,
and photographs of each Property. The Company shall have twenty (20) days after
receipt of the foregoing information (to the extent that it exists) in which to
reject any Property on the basis of the foregoing information, by written
notification to Seller/Lessee. Additionally, the Seller/Lessee may elect in
writing to Company to withdraw any Property on the basis of an unsatisfactory
appraisal of such Property, which, in Seller/Lessee's opinion, will cause the
operation of the restaurant on such Property at a negative cash flow, but upon
such election, Seller/Lessee shall reimburse Company for its actual out of
pocket costs incurred in connection with such Property, limited as set forth in
Paragraph 1 hereof.
In the event that Company determines in good faith that any Property does
not satisfy the requirements of this Commitment Letter, Seller/Lessee may
propose additional substitute properties for acquisition by Company and Company
agrees to review such substitute properties promptly in order to meet the
parties' expected closing timeframe.
This Commitment is made subject to the following terms and conditions:
1. PURCHASE PRICE. The purchase price for each Property (the "Purchase
Price") will be subject to the acceptance of the Property by the Company and
shall conform to the appraisal requirements set forth in subparagraph 7.B
hereof. The average Purchase Price for all of the Properties set forth on
Exhibit "A" shall be Two Million Three Hundred Thirty-three Thousand Dollars
($2,333,000.00) per Property (the "Average Purchase Price"). Company shall pay
for the following Company acquisition costs at closing for each Property: (i) an
appraisal fee; (ii) the Company's legal fees; and (iii) travel and lodging
expenses
<PAGE> 3
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 3
related to the physical inspection of each Property by a Company representative.
Seller/Lessee shall pay, at the closing for each Property, for an ASTM Phase I
Environmental Audit of the Property, provided that the average cost per Property
does not exceed $2,750.00. Seller/Lessee's closing costs include title insurance
premiums, transfer taxes or stamps, environmental audits, survey costs,
recording fees and other title insurance fees and costs. The Company will
consider using existing appraisals, surveys and Phase I Environmental Reports
obtained by Seller/Lessee, provided that such appraisals, surveys and
environmental reports are acceptable to Company in all respects and are
currently certified to Company.
2. Contract for Purchase and Sale. Prior to each closing, the Company and
Seller/Lessee shall enter into a contract for purchase and sale consistent with
this Commitment and containing such commercially reasonable representations and
warranties as may be required by the Company.
3. Lease. The lease agreements to be entered into between the Company and
Seller/Lessee (each, a "Lease") shall be in form reasonably acceptable to the
Company and Seller/Lessee. There shall be one lease for each Property acquired
by Company and leased to Seller/Lessee pursuant to the terms of this Commitment.
The form of the Lease and all related documents shall be finalized within thirty
(30) days following the date of the full execution of this Commitment, and
shall, upon acceptance of the Seller/Lessee and the Company, be attached to this
Commitment as Composite Exhibit "B." The Lease shall include the following
provisions:
A. Term. The primary term of the Lease will be fifteen (15) years
with two (2) successive five (5) year renewal options.
B. Rent. The initial annual minimum rent ("Minimum Rent") under
the Lease shall be equal to nine and 98/100 percent (9.98%)
multiplied by the Purchase Price. In the event Seller/Lessee
exercises its first renewal option, as defined in paragraph
3.A above, then at the time of exercise of the first renewal
option Minimum Rent shall be increased to eleven percent (11%)
multiplied by the Purchase Price. In the event Seller/Lessee
exercises its second renewal option, as defined in paragraph
3.A above, then at the time of exercise of the second renewal
option Minimum Rent shall be increased to twelve and 10/100
percent (12.1%) multiplied by the Purchase Price. Minimum Rent
will be payable in equal advance monthly installments on the
first day of each month.
<PAGE> 4
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 4
C. Late Charges. A late charge in the amount of five percent (5%)
of the amount due shall be payable with respect to any payment
due under the Lease which is received more than ten (10) days
after the due date. In addition to any late charge, in the
event Company does not receive rent within ten (10) days after
the due date, interest at the rate of fifteen percent (15%)
per annum shall be due and payable with respect to such
payment from the expiration of the ten (10) day grace period
until Company receives such payment. The late charges and
interest charges described herein shall not be due unless and
until the Company delivers written notice of the delinquent
payment to Seller/Lessee in accordance with the terms of this
paragraph 4.C. Any notices of any late payments, late charges
or interest charges required to be delivered by the Company
under the Lease shall be delivered by telecopy facsimile or by
a nationally recognized overnight courier. Any other notices
required to be delivered by the Company or Seller/Lessee under
the Lease must be delivered by telecopy facsimile, by a
nationally recognized overnight courier or by registered or
certified mail, postage prepaid, return receipt requested. All
notices to Seller/Lessee shall be addressed to the Controller
of Cooker Restaurant Corporation.
D. Insurance, Taxes, Utilities, Maintenance and Repairs. The
Lease shall be absolutely triple net. Accordingly,
Seller/Lessee shall pay all taxes and assessments, utilities,
maintenance costs, repair costs, the costs of replacing
obsolete components, and insurance costs applicable to both
the Property and any equipment thereon. Seller/Lessee will be
required to maintain the Property and all components thereof
to a standard which complies with the Lease. At or prior to
the closing, Seller/Lessee shall deliver to the Company
satisfactory evidence of:
(i) standard fire and hazard insurance, with all-risk
extended coverage endorsement including vandalism and
malicious mischief, without coinsurance, in an amount
not less than the insurable replacement cost (100%) of
the Property, without coinsurance. The standard
deductible clauses, if any, shall not exceed the sum of
Ten Thousand Dollars ($10,000.00). The standard
deductible clause for extraordinary windstorm (including
hail) in Florida (only) shall not exceed the sum of two
percent (2%) of the replacement cost (100%) of the
Property per occurrence;;
<PAGE> 5
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 5
(ii) if any Property is located in an area identified by the
U.S. Department of Housing and Urban Development
(H.U.D.) as an area having "special flood hazards"
(zones beginning with "A" or "V") flood insurance must
be purchased and obtained for the full (100%)
replacement cost of the Property. The standard
deductible clauses, if any, shall not exceed the sum of
Two Hundred Fifty Thousand Dollars ($250,000.00);
(iii) if any Property is located in a high earthquake risk
area and earthquake insurance is available, earthquake
insurance must be purchased in an amount not less than
the insurable replacement cost (100%) of the Property.
The standard deductible clauses, if any, shall not
exceed the sum of Twenty Five Thousand Dollars
($25,000.00), except for Properties located in Memphis,
Tennessee, for which the standard deductible clause may
be One Hundred Thousand Dollars ($100,000.00);
(iv) single limit comprehensive commercial general liability
insurance in an amount not less than One Million Dollars
($1,000,000.00) per occurrence, including product and
liquor liability, with a general aggregate of Three
Million Dollars ($3,000,000.00), with umbrella liability
coverage of not less than Ten Million Dollars
($10,000,000.00), and with all deductibles in excess of
One Thousand Dollars ($1,000.00) to be approved by
Company; and
(v) business interruption insurance for not less than six
(6) months coverage for each occurrence.
Upon mutual agreement of the Company and Seller/Lessee, in
writing, all stated deductibles may be increased and/or
business interruption insurance may be discontinued; provided,
however, Seller/Lessee's audited net worth thresholds are
mutually acceptable to the Company and to Seller/Lessee. In
each case, all commercial general liability and umbrella
insurance policies shall name the Company and/or its
affiliates as an additional insured, all property insurance
policies shall name the Company as a loss payee, and coverage
may not be materially amended or canceled without thirty (30)
days prior written notice to the Company. All insurance
companies shall be selected by Seller/Lessee, rated A minus
(A-) or
<PAGE> 6
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 6
better by Best's Insurance Rating Service, issued by insurance
companies and agencies licensed or authorized by the Insurance
Commissioner of the State in which the Property is located to
conduct business in the State, and shall be acceptable to the
Company in Company's reasonable discretion.
E. Assignability of Lease Interest. Seller/Lessee shall have the
full and free right to sublet, assign, or otherwise transfer
its interest in the Lease and the premises described therein
to a subsidiary of Seller/Lessee or to a franchisee or any
parent or operating subsidiary of Seller/Lessee, or a
corporation or other entity with which Seller/Lessee may merge
or consolidate or to which Seller/Lessee may sell all or a
substantial portion of its assets or stock, without the
Company's approval, written or otherwise; provided, however,
that the Property shall be used only as it was used prior to
such transfer event, and provided further that the party
merging, consolidating or purchasing the assets or stock of
Seller/Lessee shall execute and deliver to the Company a full
unconditional guaranty of the obligations of Seller/Lessee. No
assignment or subletting shall operate to release
Seller/Lessee from its obligations under the Lease. In
connection with and prior to any permitted assignment or
subletting, Seller/Lessee shall give the Company written
notice of such an assignment or subletting together with (i) a
copy of the assignment or subletting documents, and the name,
address and telephone and facsimile numbers of the assignee or
sublet tenant and (ii) a new insurance policy and binder
naming the assignee or sublet tenant operator and occupant of
the Property. The Company may assign its rights under the
Lease without Seller/Lessee's consent in connection with a
transfer of the Property to any affiliate of the Company, and
in such event, Seller/Lessee's right of first refusal (defined
elsewhere in this Commitment) shall not apply to such
assignment and transfer.
F. Conduct of Business. The use of the Property shall be limited
to the operation of a Cooker Restaurant, and Seller/Lessee
shall continuously operate such restaurant on the Property
except for temporary closure for periods not to exceed six (6)
months. At any time, a maximum of three (3) sites (which
maximum limit shall not apply to closures based on casualty or
condemnation) can be temporarily closed for a period of time
in excess of six (6) months; provided, however, (i)
Seller/Lessee is diligently pursuing reopening of the
restaurant or other solution; (ii) no restaurant is
temporarily closed for a period in excess of six (6) months on
more than one (1)
<PAGE> 7
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 7
occasion; and (iii) the total period of temporary closure for
any such restaurant does not exceed a total of twelve (12)
months. The Seller/Lessee shall at all times maintain the
Property and operate its business in compliance with all
applicable regulations and requirements of all county,
municipal, state, federal and other governmental authorities,
and instruments of record affecting the Property which are now
in force or which are enacted during the term of the Lease.
G. Form of Entity. Seller/Lessee must be duly formed and in good
standing under the laws of the state of its formation and, if
it is a foreign entity, it shall be qualified to do business
in the state where the Property is located.
H. Seller/Lessee's First Right of Refusal. The Lease shall
provide the Seller/Lessee with a first right of refusal to
purchase the Property on the same terms and conditions as
those contained in an offer received by the Company from a
third party if the Company intends to accept such third party
offer. Seller/Lessee's right of first refusal shall not apply
to assignments and transfers made by the Company to an
affiliate of the Company.
I. Option to Purchase. Except as provided in this paragraph, at
any time after the tenth (10th) Lease Year, the Seller/Lessee
shall have the option to purchase the Property upon the terms
and conditions set forth in the Lease provided that
Seller/Lessee is not in default at the time of the exercise of
such option. In the event the Seller/Lessee's right of first
refusal becomes operative during the sixth, seventh, eighth,
ninth or tenth Lease Year, Seller/Lessee elects not to
exercise such right, and the offer triggering Seller/Lessee's
right of first refusal closes, then the option to purchase
shall not be exercised by Seller/Lessee sooner than five (5)
years after the date of closing of such offer. In the event
the Seller/Lessee's right of first refusal becomes operative
at any time after the tenth (10th) Lease year or during any
renewal period, Seller/Lessee elects not to exercise such
right, and the offer triggering Seller/Lessee's right of first
refusal closes, then the option to purchase shall not be
exercised by Seller/Lessee sooner than five (5) years after
the date of closing of such offer. In the event the
Seller/Lessee exercises its option to purchase, the option
purchase price shall be the greater of:
<PAGE> 8
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 8
(i) The fair market value of the Property as of the option
exercise date determined by an M.A.I. appraiser with
experience in performing appraisals on national
franchise restaurant sites selected by the Company and
Seller/Lessee; or
(ii) The Purchase Price paid by the Company for the Property
(as determined under Paragraph 1 hereof).
The Company may reject or accept Seller/Lessee's exercise of
the option to purchase in the Company's sole discretion. For
purposes of determining the fair market value of the Property,
the Company shall select an appraiser with experience in
performing appraisals on national franchise restaurant sites
(at its expense) to determine the fair market value of the
Property and Seller/Lessee shall also select an appraiser with
experience in performing appraisals on national franchise
restaurant sites (at its expense) to determine the fair market
value of the Property. If such appraisers cannot agree on the
fair market value of the Property as of the option exercise
date and the lower of the two appraisals is not less than
ninety-five percent (95%) of the higher appraisal, then the
average of the two (2) appraisals shall be conclusively
considered to be the fair market value of the Property. If
such appraisers cannot agree on the fair market value of the
Property as of the option exercise date and the lower of the
two appraisals is less than ninety-five percent (95%) of the
higher appraisal, then the two (2) appraisers shall select a
third appraiser with experience in performing appraisals on
national franchise restaurant sites (the expense of which
shall be shared equally by Seller/Lessee and the Company) to
determine such fair market value and the average of the three
(3) appraisals shall be conclusively considered to be the fair
market value of the Property. If one party fails to select an
appraiser within thirty (30) days after the option exercise
date, and the other party (the "Second Party") does select an
appraiser, then the Second Party may notify the First Party
that unless First Party has selected an appraiser within ten
(10) days following delivery of the said notice to the First
Party, the Second Party's appraisal shall be deemed to
represent the fair market value of the Property.
In the event Seller/Lessee exercises it option to purchase, it
may elect to revoke the exercise of such option to purchase;
provided, however, Seller/Lessee reimburses
<PAGE> 9
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 9
to the Company any and all costs and expenses associated with
the exercise of the option to purchase.
J. Non-Compete. During the term of the Lease and any extensions
thereof, Seller/Lessee shall not own an interest in, or
operate, another Cooker Restaurant within a two (2) mile
radius of the Property without obtaining the prior written
approval of Company, which approval shall not be unreasonably
withheld, delayed or conditioned; provided, however,
Seller/Lessee has submitted to the Company supporting
information acceptable to the Company in its sole discretion
to justify the operation of an additional Cooker Restaurant
within such two (2) mile radius. This provision shall not
apply to any Property within this two (2) mile restricted
radius on the date of closing.
K. Economic Infeasibility and Substitution. In the event the
Seller/Lessee and the Company mutually agree, in their
reasonable business discretion, exercised in good faith, that
the Property is inadequate or unprofitable for the purposes
for which the same are then used pursuant to the Lease, then
Seller/Lessee may, at Seller/Lessee's option, during the term
of the Lease or any extensions thereof, give written notice to
the Company of its intention to substitute another improved
property having a Cooker Restaurant located thereon. Such
substitute property shall have a value no less than the then
current value of the Property as established by a qualified
independent appraiser (who is a member of the American
Institute of Real Estate Appraisers). Such other restaurant
shall be subject to Company's approval and, in the event the
Property has been sold to a non-affiliate of the Company,
shall be subject to the approval of the then mortgagee having
an interest in the Property. Mortgagee shall use it's
reasonable business discretion, exercised in good faith, in
determining whether or not to approve the substitution. The
terms of the related lease for such substitute property shall
be identical to the Lease, except that the term shall be for
the then remainder of the term of the Lease (considering
renewal options). Seller/Lessee shall pay all reasonable costs
associated with the closing to effect the substitution. Upon
Company's and any mortgagee's approval of the substitution of
the Property, a closing of title shall take place as soon as
reasonably practical thereafter, but in no event later than
sixty (60) days after Seller/Lessee is notified that the
Company has approved the substitution. If the Company and the
non-affiliate mortgagee (if applicable) do not approve such
substitute property,
<PAGE> 10
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 10
Seller/Lessee may submit other properties to the Company for
the Company's (and the non-affiliate's mortgagee, if
applicable) approval. If no properties are accepted by the
Company (and the non-affiliates's mortgagee, if applicable),
then Seller/Lessee shall have the option to purchase the
Property for a purchase price which shall be the greater of
the following:
i. The fair market value of the Property as of the
substitution date determined by an M.A.I. appraiser
selected by the Company and Seller/Lessee;
ii. The Purchase Price paid by the Company for the Property
(as determined under Paragraph 1 hereof).
The Company may reject or accept Seller/Lessee's exercise of
the option to purchase in the Company's sole discretion. For
purposes of determining the fair market value of the Property,
the Company and Seller/Lessee will obtain an appraisal(s) in
accordance with the provisions of paragraph 3.I of this
Commitment.
L. Cross-Default. Any (i) default in the payment of rent in any
of Seller/Lessee's Leases with the Company after the
expiration of ten (10) days notice to Seller/Lessee by the
Company, with the payment amount in default exceeding
$175,000.00, or (ii) any aggregate of payment defaults in any
of Seller/Lessees Leases with the Company where the total
payment amounts in default exceed $175,000.00 shall, at
Company's option, constitute a default in all Leases
contemplated by this Commitment. In the event any other
default in any of Seller/Lessee's Leases with the Company
results in an expenditure of funds by the Company, any such
expenditure shall be added to the default amounts identified
in subparagraphs (i) and (ii) above for purposes of
determining the value of the payment default. In the event of
any such default, Company shall be entitled to the default
interest rate specified in the applicable leases during the
term of any such default, and any of Seller/Lessee's monies
deposited with Company shall be immediately and irrevocably
assigned to Company to apply to the obligations of
Seller/Lessee in any manner Company deems necessary.
4. Site Inspections. The Company reserves the right to physically inspect
and approve each Property proposed by Seller/Lessee for closing in accordance
with the transactions contemplated herein.
<PAGE> 11
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 11
5. Adverse Conditions. This Commitment shall be contingent upon no
material adverse change in the financial condition of Seller/Lessee or the
occurrence of any event which may, in the Company's reasonable judgment, have a
material adverse effect upon the Seller/Lessee. In addition, the Company's
obligation hereunder is subject to the ongoing review of Seller/Lessee's
financial statements. To that end, the Company shall have the right to review
quarterly unaudited statements of Seller/Lessee, along with any other financial
information the Company may reasonably require.
6. Legal Documents. Company's counsel will prepare all leases, purchase
agreements, and related documents. Seller/Lessee agrees that approval of such
documents shall not be unreasonably withheld.
7. Required Documents. Not later than twenty (20) days prior to any land
closing, the Seller/Lessee must submit or cause to be submitted to the Company
or the Company shall have otherwise received the following documents or
information in form and substance satisfactory to the Company, and the Company
will use its best efforts to review such documents and information and to
prepare closing documentation in a timely manner. Failure to furnish any of this
information in a timely manner will delay the closing. The Company shall have
received and approved:
A. Seller/Lessee shall order an ALTA Owner's Form of Title
Insurance Commitment in the amount of the Purchase Price
issued by a National Division Office of First American Title
Insurance Company or another title insurance company
acceptable to the Company. A fifty (50) year chain of title
shall also be provided to the Company. The title insurance
commitment shall provide for extended coverage and any
necessary title endorsements reasonably required by Company's
counsel (excluding zoning endorsement), and title shall be
subject to no material exceptions, unless approved in writing
by the Company prior to closing.
B. The Company shall order an M.A.I. appraisal completed by an
appraiser selected by the Company showing that the fair market
value of the Property (including improvements to be funded by
the Company) is not less than one hundred ten percent (110%)
of the Purchase Price. Upon written request of the
Seller/Lessee, a copy of the appraisal will be provided to
Seller/Lessee.
<PAGE> 12
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 12
C. The Company shall order a current (dated not more than 180
days prior to closing) Phase I environmental assessment report
or audit (prepared according to ASTM standards and including
the review and delivery to the Company of a 50 year chain of
title report) approved by and certified to the Company and its
affiliates and the Seller/Lessee in accordance with the
Company's certification instructions prepared by an
appropriately licensed professional selected and approved by
the Company, stating, among other things, that:
iii. There is a low likelihood of the existence on the
Property of the presence beyond minimum action levels of
petroleum, petrochemical, toxic or other hazardous
substances.
iv. Neither the Property nor any property within a one-half
(1/2) mile radius thereof (that by reason of its
elevation or relative groundwater gradient could result
in any contaminants migrating to the Property) is
identified on any local, state or federal register as a
site containing or potentially containing any hazardous
waste or toxic material beyond minimum action levels;
v. Nothing in the public records discloses a condition or
circumstance with respect to the Property which may
require or may hereafter require a cleanup, removal or
other remedial action or response which could subject an
owner of the Property to any damages, penalties, claims,
costs, or expenses;
vi. Based on an actual inspection of the Property and a
review of available public records it does not appear
that tanks or other facilities (including, but not
limited to, petroleum, petrochemical or hazardous waste
storage tanks or other facilities) are presently (or
have ever been unless removed in accordance with law and
with no further action recommended by the applicable
governmental authority) located on, under or at the
Property.
The firm providing the Phase I report or audit shall deliver
to the Company (a) a copy of their errors and omissions
liability coverage policy, which shall be in an amount which
is not less than Two Million Dollars ($2,000,000.00); (b) a
statement describing any pending or threatened litigation
against such firm; and (c) a resume of the engineers preparing
such report or audit.
<PAGE> 13
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 13
D. A copy of the most recent Property real estate tax bill and a
copy of the paid receipt therefor.
E. Five (5) copies of a current (within the year of closing;
provided, however, the title company can eliminate any
exceptions for survey matters based upon the date of such
survey) survey of the Property certified to the Company and/or
its affiliates (as directed by the Company) and the title
company, which survey was prepared by a registered surveyor
acceptable to the title company issuing the title commitment.
The survey must show all existing improvements on the
Property, all setback lines, all easements and utility lines,
shall reveal no material encroachments, unless waived by the
Company, and must contain a certification which substantially
complies with the attached "Certification of Surveyor."
F. Certificates of insurance evidencing liability casualty
insurance coverage in the form and amounts required above.
G. If Seller/Lessee is other than an individual, such
documentation as is necessary to evidence the fact that it is
validly organized and in good standing under the laws of the
state of its formation and that it is authorized to do
business in the state where the Property is located, together
with such resolutions or approvals as are required for it to
enter into this Commitment and to consummate the transactions
contemplated hereby.
H. [DELETED]
I. Copies of all necessary governmental permits, licenses and
approvals required to construct or operate the Property as a
Cooker Restaurant (including without limitation, the liquor
license and the certificate of occupancy or equivalent, issued
by the applicable governmental authority).
J. If Seller/Lessee is a franchisee of the restaurant operated on
the Property then Seller/Lessee shall furnish a copy of
Seller/Lessee's original franchise agreement as to the
Property and, prior to the closing, the Company shall receive
from the franchisor a certificate (this form shall be prepared
by the Company and provided directly by the Company to the
franchisor) verifying, among other things, the
<PAGE> 14
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 14
existence and validity of the franchise as to both
Seller/Lessee and the Property, and that no default exists
under the franchise agreement.
K. Such other information or documentation as the Company might
reasonably request as a prudent purchaser in order to finalize
the transactions contemplated hereby and to comply with the
requirements of all local, state and federal agencies, and all
regulations and laws to which the Company and its affiliates
are subject.
8. Opinion of Counsel. As a condition to closing, Company's counsel shall
require the opinion of Seller/Lessee's counsel as to such matters as Company's
counsel may deem appropriate, including but not limited to:
A. Seller/Lessee is duly organized and validly existing under the
laws of the state of their formation; has the power and its
representatives have been duly authorized to enter into the
transactions contemplated by this Commitment; and all
necessary approvals required to consummate the transactions
contemplated hereby have been obtained.
B. There is no threatened or pending litigation relating to
Seller/Lessee or any affiliate of Seller/Lessee which might
affect either the sale or lease of the Property, or the
operation of the contemplated business therein, or which might
have a material adverse affect upon the financial condition of
Seller/Lessee.
C. Seller/Lessee is not in violation of any agreement, law,
ordinance, regulation, ruling, court order or other
governmental enactment regarding the Property and that
consummation of the transactions contemplated hereby will not
place Seller/Lessee in violation of any such matter.
D. All documents executed by Seller/Lessee in connection with the
closing have been duly executed and delivered, constitute
valid and binding obligations of Seller/Lessee, and are
enforceable according to their terms.
E. Seller/Lessee's franchise agreement remains in full force and
effect and Seller/Lessee is not in default with respect to any
of Seller/Lessee's obligations thereunder.
<PAGE> 15
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 15
F. The contemplated transactions are not security arrangements or
financing secured by real property but are, for all purposes,
true leases.
9. CLOSING. At each closing, Seller/Lessee shall execute and/or deliver to
the Company all documents, monies, instruments and other items required by this
Commitment. The Company's obligation to close is conditioned upon its receipt
and approval of all such documents, monies, instruments and items.
10. APPLICABLE LAW. This Commitment shall be construed in accordance with
the laws of the State of Florida. It is agreed that time shall be of the essence
all terms and provisions of this Commitment.
11. SURVIVAL. The terms and conditions of this Commitment shall survive
closing with respect to the transaction contemplated herein.
12. Not a Security Arrangement. The parties hereto acknowledge and agree
that the contemplated transactions are not intended as a security arrangement or
financing by real property, but rather shall be construed for all purposes as
true leases.
13. Commitment Period. This Commitment shall expire unless, on or before
Friday, August 14, 1998, this Commitment is accepted and returned to the Company
together with Exhibit "A" and a commitment fee of Twenty Five Thousand Dollars
($25,000.00). The commitment fee will be retained by the Company in connection
with the execution of this Commitment and such fee will be returned at the final
closing on the last Property. If the transactions contemplated herein do not
close within the time periods specified in this Commitment due to
Seller/Lessee's failure to comply with the terms of this Commitment, then the
Company shall have the option to terminate its obligation hereunder and retain
the commitment fee to cover expenses, in which event this Commitment shall be of
no further force or effect.
14. Brokerage. The Company has not engaged any broker with respect to this
Commitment, or the sale of Properties by Seller/Lessee to the Company or the
leaseback thereof. In the event any brokerage fee or commission is payable to
any person in connection with the transactions contemplated herein,
Seller/Lessee shall be responsible for paying such fee(s).
15. Assignment of Commitment. This Commitment is not assignable by
Seller/Lessee. The Company may assign this Commitment in whole or part to an
affiliate of the Company without Seller/Lessee's consent.
<PAGE> 16
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 16
[Continued on next page]
<PAGE> 17
Mr. G. Arthur Seelbinder
Chairman and Chief Executive Officer
Cooker Restaurant Corporation
August 7, 1998
Page 17
If this Commitment is acceptable to you, please sign in the space provided
below and return one executed original letter to my office. Following receipt of
the executed Commitment, I shall instruct our legal counsel to prepare
definitive documents consistent with the foregoing terms and conditions. If you
have any questions, please do not hesitate to call me.
Very truly yours,
CNL FUND ADVISORS, INC.
By: /s/ John T. Walker
-------------------------------
John T. Walker, Chief Operating
Officer
ACCEPTED AND AGREED:
AS TO SELLER/LESSEE
COOKER RESTAURANT CORPORATION
By: /s/ G.A. Seelbinder
---------------------------------
Name: G.A. Seelbinder
As its: Chairman
Date: 8/11/98
<PAGE> 18
EXHIBIT "A"
City/Township
Store No./Location County/State
- --------------------------------------------------------------------------------
Store No. 107 -- Hermitage Metropolitan Nashville
4770 Lebanon Road Davidson County, TN
Hermitage, Tennessee 37076
Store No. 110 -- Parkway Metropolitan Nashville
1211 Murfreesboro Road Davidson County, TN
Nashville, Tennessee 37217
Store No. 112 -- Westerville City of Columbus
6193 Cleveland Avenue Franklin County, OH
Columbus, Ohio 43229
Store No. 114 -- Rivergate City of Goodlettsville
317 Bluebird Lane Davidson County, TN
Goodlettaville, Tennessee 37072
Store No. 117 -- East Main City of Columbus
5225 East Main Street Franklin County, OH
Columbus, Ohio 43213
Store No. 120 -- Dayton Washington Township
1383 Miamisburg-Centerville Road Montgomery County, OH
Dayton, Ohio 45459
Store No. 122 -- Auburn Hills City of Auburn Hills
3773 East Walton Boulevard Oakland County, MI
Auburn Hills, Michigan 48326
Store No. 124 -- Westlake City of Westlake
857 Columbia Road Cuyahoga County, OH
Westlake, Ohio 44145
Store No. 128 -- North High City of Columbus
8360 North High Street Franklin County, OH
Columbus, Ohio 43235
Store No. 127 -- Willow Lake Pike Township
2801 Lake Circle Drive Marion County, IN
Indianapolis, Indiana 46268
Store No. 129 -- Springdale City of Springdale
11333 Princeton Pike Hamilton County, OH
Springdale, Ohio 45246
Page 1 of 3
<PAGE> 19
City/Township
Store No./Location County/State
- --------------------------------------------------------------------------------
Store No. 130 -- Novi City of Novi
39581 12 Mile Road Oakland County, MI
Novi, Michigan 48377
Store No. 132 -- Toledo Springfield Township
6658 Airport Highway Lucas County, OH
Holland, Ohio 43528
Store No. 133 -- East Memphis City of Memphis
6980 Winchester Road Shelby County, TN
Memphis, Tennessee 38115
Store No. 134 -- Raleigh City of Raleigh
4516 Falls of Neuse Road Wake County, NC
Raleigh, North Carolina 27609
Store No. 144 -- Solon City of Solon
6150 S.O.M. Center Road Cuyahoga County, OH
Solon, Ohio 44139
Store No. 146 -- Murfreesboro City of Murfreesboro
730 N.W. Broad Street Rutherford County, TN
Murfreesboro, Tennessee 37129
Store No. 148 -- Vandalia City of Vandalia
7580 Poe Avenue Montgomery County, OH
Dayton, Ohio 45414
Store No. 149 -- Town Center Cobb County, GA
790 Cobb Place Boulevard
Kennesaw, Georgia 30144
Store No. 150 -- Beavercreek City of Beavercreek
2819 Centre Drive Greene County, OH
Beavercreek, Ohio 45431
Store No. 151 -- Sterling Heights City of Sterling Heights,
14425 Lakeside Circle Macomb County, MI
Sterling Heights, Michigan 48313
Store No. 157 -- Grand Rapids City of Walker
3050 Alpine Road Kent County, MI
Walker, Michigan 49504
Store No. 158-- Chesapeake City/County of Chesapeake, VA
628 Jarman Road
Chesapeake, Virginia 23320
Page 2 of 2
<PAGE> 20
City/Township
Store No./Location County/State
- --------------------------------------------------------------------------------
Store No. 159 -- Beechmont Anderson Township
8600 Beechmont Avenue Hamilton County, OH
Cincinnati, Ohio 45255
Store No. 161 -- Chattanooga City of Cattanooga
2225 Gunbarrell Road Hamilton County, TN
Chattanooga, Tennessee 37421
Store No. 162 -- Mentor City of Mentor
7787 Reynolds Road Lake County, OH
Mentor, Ohio 44060
Store No. 164 -- Canton Canton Township
41980 Ford Road Oakland County, MI
Canton Township, Michigan 48187
Store No. 165 -- Cuyahoga Falls City of Cuyahoga Falls
283 Howe Avenue Summit County, OH
Cuyahoga Falls, Ohio 44221
Store No. 171 -- Troy City of Troy
5460 Corporate Drive Oakland County, MI
Troy, Michigan 48098
Store No. 172 -- Augusta City of Augusta
275 Robert C. Daniel, Jr. Parkway Richmond County, GA
Augusta, Georgia 30909
Page 3 of 3
<PAGE> 1
[FIRST UNION LOGO & LETTERHEAD]
Exhibit (b)(2)
August 11, 1998
Cooker Restaurant Corporation
5500 Village Boulevard
West Palm Beach, Florida 33407
ATTENTION: Mr. Mark W. Mikosz CFO
SUBJECT: REQUEST FOR WAIVER AND ACKNOWLEDGMENT OF THE SALE AND LEASE BACK OF
CERTAIN ASSETS PURSUANT TO THE AMENDED AND RESTATED LOAN AGREEMENT BETWEEN
COOKER RESTAURANT CORPORATION AND FIRST UNION NATIONAL BANK
Dear Mr. Mikosz:
Pursuant to our conversation it is our understanding that Cooker
Restaurant Corporation ("Borrower") wishes to sell and contemporaneously lease
back certain stores owned by Borrower and that such sale and lease back may
constitute events of default under the Amended and Restated Loan Agreement
("Loan") between First Union National Bank ("Bank") and Borrower. Further, some
of the stores to be sold are pledged as collateral under the Loan and are
encumbered by the Bank. In conjunction with the sale and lease back the Company
will receive $57,500,000 (Fifty Seven Million Five Hundred thousand Dollars)
from the sale of approximately 25 (Twenty Five) stores and such proceeds will
be used to repurchase up to 4,000,000 shares (Four Million) of the outstanding
stock of the Company (approximately $48,000,000), pay related fees, taxes, and
expenses and to finance store expansion.
The Bank herewith acknowledges and consents to the sale and lease back of
the stores and repurchase of common shares described above. Further, the Bank
agrees to waive such events of defaults and covenant breaches that may be
created by this sale and repurchase and also agrees to release its security
interest in stores being sold. As a condition and in consideration of this
waiver and release of collateral, the Company will grant the bank a first
priority collateral position in other stores which have an equal or greater
value to those being released. Such new collateral interests will be granted to
the Bank on or before October 31, 1998. This acknowledgment and waiver is
granted pursuant to the sales and lease back and repurchase transaction alone
and does not modify, amend, or change in any other manner the Loan or covenants
therein all of which are in full force and effect and binding on all parties
thereto.
I look forward to working with you as we strive to meet the needs of
Cooker Restaurant Corporation. Please let me know if I can clarify or be of any
other help to you regarding this request.
Sincerely,
/s/ Frank Vrabel
Frank Vrabel
Vice President
<PAGE> 1
EXHIBIT(c)(1)
AMENDED AND RESTATED
GRID TIME PROMISSORY NOTE
(EURODOLLAR/PRIME RATE)
$6,250,000.00 January 31,1997
For value received, G. ARTHUR SEELBINDER and KATHLEEN W.
HAMMER (together, the "Borrower") hereby jointly and severally promise to pay to
the order of The Chase Manhattan Bank (the" Bank"), at its office at 1211 Avenue
of the Americas, New York, New York 10036 for the account of the lending office
of the Bank set forth on the signature page hereof (the "Lending Office"), the
principal amount of SIX MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($6,250,000.00) or, if less, the principal amount of each loan made by the Bank
to the Borrower ("Loans"), on the maturity date of such Loan (which shall be (i)
one, two or three calendar months after the date of such Loan, in the case of a
Eurodollar Loan, or (ii) the date recorded by the Bank on its books, in the case
of a Prime Loan) ("Maturity Date"). The credit facility evidenced by this Note
shall expire on the first anniversary of the date of execution hereof unless
extended in writing by the Bank.
The Borrower promises to pay interest on the unpaid balance of
the principal amount of each such Loan from and including the date of such Loan
to the date of repayment at either (i) a floating rate per annum equal to the
Prime Rate (such Loan a " Prime Loan"); or (ii) a fixed rate per annum equal to
the Adjusted Eurodollar Rate applicable to such Loan PLUS 2.00% (such Loan a
"Eurodollar Loan"). The principal amount shall be due and payable in full on the
Maturity Date or, in the event of an acceleration of the Loans following a
default, at such earlier date as such acceleration may occur. Any principal not
paid when due shall bear interest from and including the date due until paid in
full at a rate per annum equal to the Default Rate. Interest shall be payable on
the relevant Interest Payment Date. Interest shall be calculated on the basis of
a year of 365 or 366 days (in the case of Prime Loans) and 360 days (in the case
of Eurodollar Loans) for the actual number of days elapsed.
THIS NOTE AMENDS AND RESTATES THE PROVISIONS OF THAT CERTAIN TERM PROMISSORY
NOTE DATED MARCH 9, 1994, IN THE PRINCIPAL AMOUNT OF $5,000,000.00 MADE BY
BORROWER PAYABLE TO THE ORDER OF NATIONSBANK OF TENNESSEE, N.A. ("NATIONSBANK"),
AS AMENDED AND RENEWED PURSUANT TO THAT CERTAIN AMENDED AND RENEWED TERM
PROMISSORY NOTE DATED JULY 24,1995, IN THE PRINCIPAL AMOUNT OF $5,000,000.00
MADE BY BORROWER PAYABLE TO THE ORDER OF NATIONSBANK, AS ASSIGNED BY NATIONSBANK
TO
<PAGE> 2
BANK PURSUANT TO THAT CERTAIN ASSIGNMENT OF NOTES, MORTGAGE AND
COLLATERAL DOCUMENTS DATED AS OF JANUARY 31, 1997, AND DOES NOT
CONSTITUTE NEW INDEBTEDNESS.
All payments hereunder shall be made in lawful money of the
United States and in immediately available funds. Any extension of time for the
payment of the principal of this Note resulting from the due date falling on a
non-Banking Day shall be included in the computation of interest. The date,
amount, type and Maturity Date of, and the interest rate with respect to, each
Loan evidenced hereby and all payments of principal thereof shall be recorded by
the Bank on its books and, prior to any transfer of this Note (or, at the
discretion of the Bank, at any other time), endorsed by the Bank on a schedule
attached to this Note. The Bank may (but shall not be obligated to) debit the
amount of any payment under this Note that is not made when due to any deposit
account of the Borrower with the Bank. Any reduction of the principal amount
outstanding hereunder shall not entitle Borrower to advancement of additional
funds under the credit facility evidenced by this Note.
The proceeds of the Loans may be used (a) to retire Borrower's
loan facility with NationsBank in the original principal amount of
$5,000,000.00, together with accrued and unpaid interest thereon and all
expenses born by Borrower in connection therewith (including, without
limitation, the fees and expenses of counsel for the Bank), and (b) during the
term of the Loans, to pay interest on the existing principal balance of the
Loans, and for no other purpose.
The Borrower waives presentment, notice of dishonor, protest
and any other notice or formality with respect to this Note.
1. DEFINITIONS. The terms listed below shall be defined as
follows:
"Adjusted Eurodollar Rate", shall mean the Eurodollar Rate for
such Loan divided by one minus the Reserve Requirement.
"Banking Day" shall mean any day on which commercial banks are
not authorized or required to close in New York City and whenever such day
relates to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a
day on which dealings in U.S. dollar deposits are also carried out in the London
interbank market.
"Collateral Agreement" shall mean the Collateral Agreement
(Direct) dated the date hereof executed by the Borrower in favor of the Bank.
<PAGE> 3
"Default Rate" means, in respect of any amount not paid when
due, a rate per annum during the period commencing on the due date until such
amount is paid in full equal to: (a) if a Prime Loan, a floating rate of 2%
above the rate of interest thereon (including any margin); (b) if such Loan is a
Eurodollar Loan, a fixed rate of 2% above the rate of interest in effect thereon
(including any margin) at the time of default until the Maturity Date thereof
and, thereafter, a floating rate of 2% above the rate of interest for a Prime
Loan (including any margin).
"Eurodollar Rate" shall mean the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted by the Bank at
approximately 11:00 a.m. London time (or as soon thereafter as practicable) two
Banking Days prior to the first day of such Loan for the offering by the Bank to
leading banks in the London interbank market of U.S. dollar deposits having a
term comparable to such Loan and in an amount comparable to the principal amount
of such Loan.
"Facility Documents" shall mean this Note, the Collateral
Agreement, the line of credit offer letter dated December 9, 1996, and any
updates or renewals thereof, and any other documents, instruments, or agreements
delivered in connection with this Note or the Collateral Agreement whether by
the Borrower or a Third Party.
"Guarantor" shall mean Cooker Restaurant Corporation, an Ohio
corporation.
"Head Office" shall mean the head office of the Bank,
currently located at One Chase Manhattan Plaza, New York, New York 10081.
"Interest Payment Date" shall mean (i) for any Prime Loan
hereunder, the last Banking Day of each calendar month; and (ii) for any
Eurodollar Loan, the Maturity Date of such Loan and, in the case of a Loan with
a Maturity Date that extends more than three months after the date of such Loan,
at three-month intervals after the date of such Loan; and (iii) for any Prime
Loan or Eurodollar Loan, on any payment of principal.
"Loan Value" shall mean the advance rate, as determined by the
Bank from time to time, assigned to each type of collateral that the Bank
accepts as collateral.
"Prime Rate" shall mean that rate of interest from time to
time announced by the Bank at the Head Office as its prime commercial lending
rate, which is not necessarily the lowest or best rate offered by the Bank.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System.
3
<PAGE> 4
"Regulatory Change" shall mean any change after the date of
this Note in United States federal, state or municipal laws or any foreign laws
or regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of
banks, including the Bank, of or under any United States federal, state, or
municipal laws or any foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.
"Reserve Requirement" shall mean, for any Eurodollar Loan, the
average maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during the term of such Loan
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding one billion U.S. dollars against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (x) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined or (y) any category
of extensions of credit or other assets which include Eurodollar Loans.
"Third Party" shall mean any party liable with respect to, or
otherwise granting support for, this Note, whether by guaranty, subordination,
grant of security or otherwise, including, without limitation, Guarantor.
2. BORROWINGS; AND PREPAYMENTS. The Borrower shall give the
Bank notice of each borrowing by 12:00 noon New York City time three (3) days
prior to each requested borrowing of a Eurodollar Loan and by 12:00 noon New
York City time on the date of such borrowing of a Prime Loan; provided that no
Eurodollar Loan shall be in a minimum amount equal to less than $100,000.00. The
Borrower shall have the right to make prepayments of principal at any time or
from time to time; provided that: (a) the Borrower shall give the Bank notice of
each prepayment by 12:00 noon New York City time two (2) days prior to
prepayment of a Eurodollar Loan and by 12:00 noon New York City time on the date
of prepayment of a Prime Loan; (b) Eurodollar Loans may be prepaid prior to
their Maturity Date only if accompanied by payment of the additional
compensation calculated in accordance with paragraph 5 below; (a) prepayments
shall be applied to the installments of principal in the inverse order of their
maturities; and (d) prepayments for Eurodollar Loans shall be in a minimum
amount equal to the lesser of $100,000 or the unpaid principal amount of such
Loan. In the event that a Eurodollar Loan shall mature and the Bank has not
received either payment for such Eurodollar Loan or a request for borrowing from
Borrower with respect thereto, the Bank shall convert such Eurodollar Loan to a
new Eurodollar Loan with a one-month maturity.
4
<PAGE> 5
3. ADDITIONAL COSTS. (a) If as a result of any Regulatory
Change which (i) changes the basis of taxation of any amounts payable to the
Bank under the Note (other than taxes imposed on the over-all net income of the
Bank or the Lending Office by the jurisdictions in which the Head Office of the
Bank or the Lending Office are located) or (ii) imposes or modifies any reserve,
special deposit, deposit insurance or assessments, minimum capital, capital
ratios or similar requirements relating to any extension of credit or other
assets of, or any deposits with or other liabilities of the Bank, or (iii)
imposes any other condition affecting this Note, the Bank determines (which
determination shall be conclusive) that the cost to it of making or maintaining
a Eurodollar Loan is increased or any amount received or receivable by the Bank
under this Note is reduced, then the Borrower will pay to the Bank on demand an
additional amount that the Bank determines will compensate it for the increased
cost or reduction in amount.
(b) Without limiting the effect of the foregoing provisions of
this Section 3 (but without duplication), The Borrower shall pay to the Bank
from time to time on request such amounts as the Bank may determine to be
necessary to compensate the Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Note or thereafter) of any court or governmental or monetary
authority of capital in respect of the Loans hereunder (such compensation to
include, without limitation, an amount equal to any reduction in return on
assets or equity of the Bank to a level below that which it could have achieved
but for such law, regulation, interpretation, directive or request).
4. UNAVAILABILITY, INADEQUACY OR ILLEGALITY OF EURODOLLAR
RATE. Anything herein to the contrary notwithstanding, if the Bank determines
(which determination shall be conclusive) that:
(a) quotations of interest rates for the relevant deposits
referred to in the definition of Eurodollar Rate are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for the Loan; or
(b) the definition of Eurodollar Rate does not adequately
cover the cost to the Bank of making or maintaining the Eurodollar Loan; or
(c) as a result of any Regulatory Change (or any change in the
interpretation thereof) adopted after the date hereof, the Head Office of the
Bank or the Lending Office is subject to any taxes, reserves, limitations, or
other charges, requirements or restrictions on any claims of such office on
non-United States residents (including, without limitation, claims on non-United
States offices or affiliates of the Bank) or in respect of the excess above a
specified level of such claims; or
5
<PAGE> 6
(d) it is unlawful for the Bank or the Lending Office to
maintain the Eurodollar Loan at the Eurodollar Rate;
THEN, the Bank shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the existing Eurodollar Loan shall bear
interest as a Prime Loan until the Maturity Date of such Loan and the Bank shall
make no Eurodollar Loans.
5. CERTAIN COMPENSATION. If for any reason there is a
principal payment of a Eurodollar Loan on a date other than its Maturity Date
(whether by prepayment. acceleration or otherwise), the Borrower will pay to the
Bank such amount or amounts as shall be sufficient (in the reasonable opinion of
the Bank) to compensate the Bank for any loss, cost or expense which the Bank
determines is attributable to such payment.
Without limiting the generality of the preceding paragraph,
such compensation shall include an amount equal to the excess, if any of (i) the
amount of interest which otherwise would have accrued on the principal amount so
paid for the period from the date of such payment to the Maturity Date at a rate
per annum equal to the sum of the then applicable Eurodollar Rate (plus any
margin) over (ii) the interest component of the amount the Bank would have bid
in the Eurodollar interbank market for deposits in U.S. dollars of leading banks
in amounts comparable to such principal amount and with maturities comparable to
such period (as reasonably determined by the Bank).
6. REPRESENTATIONS. The Borrower represents and warrants that:
(a) none of the proceeds of the Loans shall be used to
"purchase" or "carry" "margin stock" as defined by Regulation U of the Federal
Reserve Board;
(b) the Facility Documents constitute the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their terms, except as the enforcement hereof and thereof may be
limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally and subject to the applicability of
general principles of equity;
(c) the execution, delivery and performance by the Borrower of
the Facility Documents and all other documents contemplated hereby or thereby,
do not and will not (i) conflict with or constitute a breach of, or default
under, or require any consent under, or result in the creation of any lien,
charge or encumbrance upon the property or assets of the Borrower pursuant to
any other agreement or instrument (other than the pledge of, and security
interest granted in, the collateral pursuant to the Collateral Agreement and a
judgment in the amount of $1,999,331.64 which has been entered against Borrower
in favor of the First Third Bank of Columbus in Franklin
6
<PAGE> 7
County, Ohio, a copy of which judgment has been recorded in the Public Records
of Palm Beach County, Florida (hereinafter, the "Fifth, Third Bank Judgment"))
to which the Borrower is a party or is bound or by which its properties may be
bound or affected; or (ii) violate any provision of any law, rule, regulation
(including, without limitation, Regulation U of the Federal Reserve Board),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrower;
(d) no consent, approval or authorization of, or registration,
declaration or filing with, any governmental authority or other person or entity
is required as a condition to or in connection with the due and valid execution,
delivery and performance by the Borrower of any Facility Document; and
(e) there are no actions, suits, investigations or proceedings
pending or threatened at law, in equity, in arbitration or by or before any
other authority involving or affecting: (i) the Borrower that, if adversely
determined, are likely to have a material adverse effect on the prospects or
condition of Borrower; (ii) any part of the collateral or any material part of
the other assets or properties of Borrower; or (iii) any of the transactions
contemplated in the Facility Documents. Borrower is not in default with respect
to any judgment, writ, injunction, order, decree or consent of any court or
other judicial authority, which default is likely to have or has had a material
adverse effect on the prospects or condition of Borrower other than the Fifth
Third Bank Judgment.
Each borrowing request by the Borrower under this Note shall
constitute a representation and warranty that the statements above are true and
correct both on the date of such request and on the date of the borrowing. Each
borrowing request shall also constitute a representation that no event of
default under this Note has occurred and is continuing or would result from such
borrowing.
7. EVENTS OF DEFAULT. If any of the following events of
default shall occur and be continuing:
(a) the Borrower shall fail to pay the principal of, or
interest on, this Note, or any other amount payable under this Note, on or
before the expiration of seven (7) days after the due date therefor;
(b) any representation or warranty made or deemed made by the
Borrower in this Note or by the Borrower or any Third Party in any Facility
Document to which it is a party, or in any certificate, document, opinion or
financial or other statement furnished under or in connection with a Facility
Document, shall prove to have been incorrect in any material respect on or after
the date hereof;
7
<PAGE> 8
(c) the Borrower or any Third Party shall fail to perform or
observe any term, covenant or agreement contained in any Facility Document on
its part to be performed or observed and shall fail to cure such default on or
before the expiration of, in the case of nonfinancial defaults, thirty (30)
days, and in the case of financial defaults, seven (7) days, following receipt
of notice of such default;
(d) the Borrower or any Third Party shall fail to pay when due
any of its indebtedness (including, but not limited to, indebtedness for
borrowed money and specifically including Borrower's indebtedness to Bank in
connection with a $3,000,000 loan from Bank to Borrower secured by a lien on
real property of Borrower located at 25 Middle Road, Palm Beach, Florida) or any
interest or premium thereon when due (whether by scheduled maturity,
acceleration, demand or otherwise) or shall otherwise be in default under any of
their respective credit agreements and shall fail to cure such default within
the time provided for cure in the documents evidencing such indebtedness;
(e) the Borrower or any Third Party: (i) shall generally not,
or be unable to, or shall admit in writing its inability to, pay its debts as
its debts become due; (ii) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for its or a substantial part of its assets;
(iii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation; (iv) shall have
had any such petition filed, or any such proceeding shall have been commenced
against it, in which an adjudication is made or order for relief is entered or
which remains undismissed for a period of 30 days; (v) shall have had a
receiver, custodian or trustee appointed for all or a substantial part of its
property; or (vi) takes any action effectuating, approving or consenting to any
of the events described in clauses (i) through (v),
(f) either Borrower shall die and the estate of such Borrower
shall fail to pay Borrower's obligations hereunder within a seven month period
or prior to winding up of the estate; or any Third Party shall die, dissolve or
for any reason cease to be in existence or shall merge or consolidate unless,
following such merger or consolidation, the Bank's rights under the Facility
Documents are not impaired and the Bank receives marketable securities of the
same value as the securities pledged to the Bank pursuant to the Collateral
Agreement; or if the Borrower or any Third Party is a partnership, limited
liability partnership or limited liability company, any general partner, partner
or member, respectively, shall die, dissolve or for any reason cease to be in
existence or cease to be a partner or member, as the case may be, or shall merge
or consolidate;
(g) the Borrower or any Third Party is involved in a
proceeding relating to, or which may result in, a forfeiture of a material part
or all of the Borrower's or any Third Party's assets;
8
<PAGE> 9
(h) there is, in the opinion of the Bank, a material adverse
change in the business, prospects or financial condition of the Borrower or
Guarantor;
(i) the value of the Collateral for the Loans shall decline
such that (or if for any other reason) the sum of the Loans outstanding
hereunder is at any time greater than the aggregate Loan Value of the collateral
pledged to secure the Loans unless, prior to the expiration of seven (7) days
from the occurrence of such default Borrower, or anyone on behalf of Borrower,
reduces the principal amount outstanding under this Note or pledges additional
Collateral sufficient in value to cause the Loan Value to equal or exceed the
aggregate Loans outstanding hereunder;
(j) the share price of the stock of Guarantor shall decline to
$8.00 per share or less;
(k) the Borrower creates, incurs, assumes or suffers to exist
any material lien or other encumbrance (a "Lien" ) upon or with respect to the
real property owned by the Borrower located at 25 Middle Road, Palm Beach,
Florida, other than liens for ad valorem real property taxes which are not yet
due and payable, any Lien in favor of the Bank, or any Lien approved by the Bank
in writing;
(l) while this Note is in effect, the Borrower fails to
furnish personal financial statements of the Borrower or any Third Party,
including a balance sheet and statement of sources and uses, together with
footnotes and schedules thereto, to the Bank within ninety (90) days after the
end of the each calendar year, with respect to Borrower and each fiscal year of
any Third Party or fails to furnish personal tax returns of Borrower, with
schedules thereto, on an annual basis as required herein, or any other financial
information reasonably requested by Bank;
(m) any Facility Document granting a security interest at any
time and for any reason shall cease to create a valid and perfected first
priority security interest in and to the property purported to be subject to the
Facility Document or ceases to be in full force and effect or is declared null
and void, or the validity or enforceability of any Facility Document is
contested by any party to the Facility Document, or such signatory to the
Facility Document denies it has any further liability or obligation under the
Facility Document;
THEN, the Bank may. by notice to the Borrower, declare the unpaid principal
amount of this Note, accrued interest thereon and all other amounts payable
under this Note due and payable whereupon the same shall become and be forthwith
due and payable without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower, provided that in
the case of an event of default described in clause (e) above, the unpaid
principal amount of this Note, accrued interest and other amounts payable under
this Note shall be immediately due and payable.
9
<PAGE> 10
8. EXPENSES. The Borrower agrees to reimburse the Bank on
demand for all costs, expenses and charges (including, without limitation,
reasonable fees and charges of counsel) in connection with the preparation or
modification of the Facility Documents, and the Borrower further agrees to
reimburse the Bank on demand for all costs, expenses and charges (including,
without limitation, reasonable fees and charges of counsel and costs allocated
by internal legal counsel) in connection with performance or enforcement of the
Facility Documents, or the defense or prosecution of any rights of the Bank
pursuant to any Facility Documents.
9. JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN
NEW YORK CITY OVER ANY ACTION OR PROCEEDING ARISING OUT OF THIS NOTE, AND THE
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAYBE HELD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT.
THE BORROWER HEREBY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUCH ACTION OR PROCEEDING IN EITHER OF SAID COURTS BY MAILING THEREOF BY THE
BANK BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SPECIFIED ON THE SIGNATURE PAGE HEREOF, OR AT THE BORROWER'S MOST RECENT
MAILING ADDRESS AS SET FORTH IN THE RECORDS OF THE BANK.
THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
BY SUIT OR PROCEEDING IN SUCH STATE ON THE BASIS OF AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE BANK TO BRING ANY
ACTION OR PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION.
10. ASSIGNMENTS; PARTICIPATION. The Bank may at any time and
from time to time sell, assign, transfer or otherwise dispose of all of any
portion of this Note or of the Bank's interest herein. The Bank may furnish any
information concerning the Borrower in the possession of the Bank from time to
time to assignees (including prospective assignees). The Borrower may not assign
or transfer its rights or obligations hereunder without the prior written
consent of the Bank. Notwithstanding any other language in this Note, the Bank
may at any time assign all or any portion of its rights under this Note to a
Federal Reserve Bank as collateral in accordance with Regulation A of the Board
of Governors of the Federal Reserve System and the applicable operating circular
of such Federal Reserve Bank.
11. MISCELLANEOUS. (a) The provisions of this Note are
intended to be severable. If for any reason any provisions of this Note shall be
held invalid or unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
thereof in any jurisdiction,
10
<PAGE> 11
(b) No amendment, modification, supplement or waiver of any
provision of this Note nor consent to departure by the Borrower therefrom shall
be effective unless the same shall be in writing and signed by the Borrower and
the Bank, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(c) No failure on the part of the Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof or
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
(d) As used herein, the term Borrower shall include all
signatories hereto, if more than one. In such event, the obligations,
representations and warranties of the Borrower hereunder shall be joint and
several. This Note shall be binding on the Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns, except that the Borrower may not delegate any of its obligations
hereunder without the prior written consent of the Bank.
(e) Anything herein to the contrary notwithstanding, the
obligations of the Borrower under this Note shall be subject to the limitation
that payments of interest shall not be required to the extent that receipt
thereof would be contrary to provisions of law applicable to the Bank limiting
rates of interest which may be charged or collected by the Bank.
(f) Unless otherwise agreed in writing, notices shall be given
to the Bank and the Borrower at their respective addresses set forth in the
signature page of this Note, or such other address communicated in writing by
either such party to the other. Notices to the Bank shall be effective upon
receipt.
(g) The obligations of the Borrower under Sections 3, 5, 8, 9
and 13 hereof shall survive the repayment of the Loans.
12. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, PROVIDED THAT
SUCH CHOICE OF LAW IS NOT INTENDED TO LIMIT THE MAXIMUM RATE OF INTEREST WHICH
MAY BE CHARGED OR COLLECTED BY THE BANK HEREUNDER IF THE BANK MAY, UNDER THE
LAWS APPLICABLE TO IT, CHARGE OR COLLECT INTEREST AT A HIGHER RATE THAN IS
PERMISSIBLE UNDER THE LAWS OF SAID STATE.
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<PAGE> 12
13. WAIVER OF JURY TRIAL.
NEITHER BORROWER NOR BANK, NOR ANY ASSIGNEE, SUCCESSOR, HEIR
OR PERSONAL REPRESENTATIVE OF BORROWER 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 BY OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG BORROWER OR BANK. NEITHER BORROWER 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 BORROWER AND BANK, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER BORROWER 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 Borrower has executed this Note as of
the date first set forth above.
LENDING OFFICE FOR THE LOANS: ADDRESS FOR NOTICES TO THE BANK:
The Chase Manhattan Bank The Chase Manhattan Bank
One Chase Manhattan Plaza 1211 Avenue of the Americas
New York, New York 10081 New York, New York 10036
Attn:
ADDRESS FOR NOTICES:
/s/ G. Arthur Seelbinder 25 Middle Road
- -------------------------- Palm Beach, Florida 33480
G. ARTHUR SEELBINDER
/s/ Kathleen Hammer ADDRESS FOR NOTICES:
- ------------------------- 25 Middle Road
KATHLEEN HAMMER Palm Beach, Florida 33480
12
<PAGE> 13
SCHEDULE A
13
<PAGE> 1
EXHIBIT (c)(2)
AMENDMENT TO
GRID TIME PROMISSORY NOTE
THIS, AMENDMENT, dated as of March 26, 1998 (the "Amendment"), is by and between
THE CHASE MANHATTAN BANK (the "Bank") and G. Arthur Seelbinder and Kathleen W.
Hammer (together, the "Borrower").
The Bank and the Borrower have entered into a Grid Time Promissory Note dated
January 31, 1997 in the amount of $6,250,000 (the "Note"). The Bank and the
Borrower desire to amend the Note to modify its maturity.
Except as otherwise provided herein, the capitalized terms used in this
Amendment shall have the respective meanings assigned to such terms in this
Note.
AGREEMENT
---------
In consideration of the foregoing, and the mutual covenants and agreements
hereinafter set forth, the parties hereto hereby agree as follows:
1. AMENDMENT. This Note is hereby amended as follows:
For value received, G. Arthur Seelbinder and Kathleen Hammer, (together, the
"Borrower") hereby promise to pay to the order of The Chase Manhattan Bank (the
"Bank") with an office at 1211 Avenue of the Americas, New York, New York 10036
for the account of the lending office of the Bank set forth on the signature
page hereof (the "Lending Office"), the principal amount of SIX MILLION TWO
HUNDRED FIFTY THOUSAND DOLLARS ($6,250,000.00) or, if less, the principal amount
of each loan (the "Loans") endorsed on the schedule attached hereto and made a
part hereof (including any continuation thereof, the "Schedule") on the maturity
date of such Loan (which shall be (i) one, two, three, or six calendar months
after the date of such Loan, in the case of a Eurodollar Loan, in each case as
the borrower may select, or (ii) one calendar month after the date of a Prime
Loan; each a "Maturity Date"). Excepting receipt by the Bank of notice from the
Borrower indicating an alternate selection, the one month Eurodollar rate shall
be utilized. The credit facility evidenced by this Note shall expire on January
31, 1999, unless extended in writing by the Bank.
2. CONDITIONS PRECEDENT. This Amendment shall not become effected until the Bank
has received executed counterparts of this Amendment signed by each of the
parties hereto.
3. CONTINUED EFFECTIVENESS. Except to the extent expressly amended hereby, all
of the terms of the Note remain in full force and effect.
4. APPLICABLE LAW. This Amendment shall be governed by, and construed in
accordance with the laws of the State of New York.
<PAGE> 2
5. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute but one agreement.
IN WITNESS WHEREOF, the Bank and the Borrower have duly executed this Amendment,
all as of the day and year first above written.
/s/ G. Arthur Seelbinder /s/ Kathleen Hammer
- ----------------------------- -----------------------------
G. ARTHUR SEELBINDER KATHLEEN W. HAMMER
AGREED TO:
THE CHASE MANHATTAN BANK
By: /s/ John W. Blackman
- -----------------------------
Name: John W. Blackman
-------------------
Title: Managing Director
------------------
<PAGE> 1
EXHIBIT (c)(3)
AMENDED AND RESTATED
COLLATERAL AGREEMENT
[Direct]
In consideration of one or more loans, letters of credit or other
financial accommodations extended by THE CHASE MANHATTAN BANK or any of its
subsidiaries or affiliates (the "Bank"), the undersigned and the Bank agree as
follows:
1. Definitions.
"COLLATERAL" means each of the following as identified in EXHIBIT A,
and includes all additions, proceeds, renewals, investments and reinvestments,
substitutions and any sums of money standing to the credit of any account opened
or maintained by any clearing system for the undersigned and under the direction
or control of the Bank, whether or not listed on EXHIBIT A: (a) the deposits of
the undersigned with the Bank (whether or not held in trust, or in any custody,
subcustody, safekeeping, investment management accounts or other accounts of the
undersigned with the Bank) (the "DEPOSITS"); (b) the stocks, bonds and other
instruments and securities (whether or not held in trust or in any custody,
subcustody, safekeeping, investment management accounts or other accounts of the
undersigned with the Bank or any other custodian or trustee or clearing system)
(the "SECURITIES"); (c) all Deposits, Securities and any other assets held in
trust, or in any custody, subcustody, safekeeping, investment management
accounts or other accounts of the undersigned with the Bank or any other
custodian or trustee or clearing system (the "ACCOUNT ASSETS"); and as to all of
the foregoing, all certificates, receipts and other instruments evidencing the
Deposits, Securities and Account Assets. "Clearing system" includes Cedel Bank,
Societe Anonyme, the Euroclear System, the Depository Trust Company ("DTC") and
such other clearing or safekeeping system that may from time to time be used in
connection with transactions relating to or the custody of any Securities, and
any depository for any of the foregoing.
THIS COLLATERAL AGREEMENT AMENDS AND RESTATES THE TERMS AND PROVISIONS OF THAT
CERTAIN STOCK PLEDGE AGREEMENT DATED JULY 8, 1992, BETWEEN G. ARTHUR SEELBINDER
AND FIRST UNION NATIONAL BANK OF TENNESSEE, N.A. ("FIRST UNION"), AS AMENDED BY
A FIRST AMENDMENT TO STOCK PLEDGE AGREEMENT DATED DECEMBER 27, 1993, AND AS
ASSIGNED BY FIRST UNION TO NATIONSBANK OF TENNESSEE, N.A. ("NATIONSBANK") AND
THEREAFTER AMENDED BY A SECOND AMENDMENT TO STOCK PLEDGE AGREEMENT BETWEEN G.
ARTHUR SEELBINDER, KATHLEEN W. HAMMER AND NATIONSBANK DATED AS OF MARCH 9, 1994,
A THIRD AMENDMENT TO STOCK PLEDGE AGREEMENT DATED JANUARY 27, 1995 AND A FOURTH
AMENDMENT TO STOCK PLEDGE AGREEMENT DATED JULY 24, 1995, AND AS ASSIGNED BY
<PAGE> 2
NATIONSBANK TO BANK PURSUANT TO THAT CERTAIN ASSIGNMENT OF NOTES, MORTGAGE AND
COLLATERAL DOCUMENTS DATED AS OF JANUARY 31, 1997.
"Liabilities" means indebtedness, obligations and liabilities of any
kind of the undersigned to the Bank, now or in the future, absolute or
contingent, direct or indirect, joint or several, due or not due, arising by
operation of law or otherwise, including, without limitation, indebtedness of
Borrower to Bank in the amount of $3,000,000 secured by a lien on Borrower's
real property located at 25 Middle Road, Palm Beach, Florida, and costs and
expenses incurred by the Bank in connection with the Collateral, this Agreement
or any Liability Document.
"Liability Document" means any instrument, agreement or document
evidencing or delivered in connection with the Liabilities.
2. Grant of Security Interest.
As security for the payment of all the Liabilities, the undersigned
pledges, transfers and assigns to the Bank and grants to the Bank a security
interest in and right of setoff against, the Collateral.
3. Agreements of the Undersigned and Rights of the Bank.
The undersigned agrees as follows and irrevocably authorizes the Bank
to exercise the rights listed below, at its option, for its own benefit, either
in its own name or in the name of the undersigned, and appoints the Bank as its
attorney-in-fact to take all action permitted under this Agreement.
a. Deposits: The Bank may: (i) renew the Deposits on terms and for
periods the Bank deems appropriate; (ii) demand, collect, and receive payment of
any monies or proceeds due or to become due under the Deposits; (iii) execute
any instruments required for the withdrawal or repayment of the Deposits; (iv)
in all respects deal with the Deposits as the owner; provided that, as to (ii)
through (iv), until the occurrence of a Default, the Bank will only take that
action if, in its judgment, failure to take that action would impair its rights
under this Agreement.
b. Securities: The Bank may: (i) transfer to the account of the Bank
any Securities whether in the possession of, or registered in the name of, the
DTC or other clearing system or held otherwise; (ii) transfer to the account of
the Bank with any Federal Reserve Bank any Securities held in book entry form
with any such Federal Reserve Bank; and (iii) transfer to the name of the Bank
or its nominee any Securities registered in the name of the undersigned and held
by the Bank and complete and deliver any necessary stock powers or other
transfer instruments; provided that until
2
<PAGE> 3
the occurrence of a Default, the Bank will only take that action if, in its
judgment, failure to take that action would impair its rights under this
Agreement.
The undersigned grants to the Bank an irrevocable proxy to vote any and
all Securities and give consents, waivers and ratifications in connection with
those Securities, provided that until the occurrence of a Default, the Bank
will only take that action if, in its judgment, failure to take that action
would impair its rights under this Agreement.
All payments, distributions and dividends in securities, property or
cash shall be paid directly to and, at the discretion of the Bank, retained by
the Bank and held by it, until applied as provided in this Agreement, as
additional Collateral; provided that until the occurrence of a Default,
interest on Deposits and cash dividends on Securities paid in the ordinary
course will be paid to the undersigned.
c. General: The Bank may, in its name, or in the name of the
undersigned: (i) execute and file financing statements under the Uniform
Commercial Code (the "UCC"), or any other filings necessary or desirable to
create, perfect or preserve its security interest, all without notice (except as
required by applicable law and not waivable) and without liability except to
account for property actually received by it; (ii) demand, sue for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed desirable with
respect to, any item of the Collateral (but shall be under no obligation to do
so); (iii) in its sole discretion, modify the terms of any Liability or release
any item of the Collateral, without incurring responsibility to, or affecting
any liability of, the undersigned; and (iv) make any notification (to the issuer
of any certificate or Security, or otherwise) or take any other action in
connection with the perfection or preservation of its security interest or any
enforcement of remedies, and retain any documents evidencing the title of the
undersigned to any item of the Collateral.
The undersigned agrees that it will not sell, assign, or otherwise
dispose of, grant any option with respect to, or pledge, or otherwise encumber
the Collateral, or file or permit to be filed any financing or like statement
with respect to the Collateral in which the Bank is not named as the sole
secured party. At the request of the Bank, the undersigned agrees to do all
other things which the Bank may deem necessary or advisable in order to perfect
and preserve the security interest and to give effect to the rights granted to
the Bank under this Agreement or enable the Bank to Comply with any applicable
laws or regulations. Notwithstanding the foregoing, the Bank does not assume any
duty with respect to the Collateral and is not required to take any action to
collect, preserve or protect its or the undersigned's rights in any item of the
Collateral. The undersigned releases the Bank and agrees to hold the Bank
harmless from any claims, causes of action and demands at any time arising with
respect to this Agreement, the use or disposition of any item of the Collateral
or any action taken or omitted to be taken by the Bank with respect thereto.
3
<PAGE> 4
The rights granted to the Bank pursuant to this Agreement are in
addition to the rights granted to the Bank in any custody, investment
management, trust or similar agreement. In case of conflict between the
provisions of this Agreement and of any other such agreement, the provisions of
this Agreement will prevail.
Unless the context otherwise requires, all terms used in this Agreement
which are defined in the UCC will have the meanings stated in the UCC.
4. Loan Value of the Collateral.
The undersigned agrees that at all times the amount of the Liabilities
may not exceed the aggregate Loan Value of the Collateral. The undersigned will,
at the Bank's option, either supplement the Collateral or make any payment under
the Liabielities to the extent necessary to ensure compliance with this
provision or the Bank may liquidate Collateral to the extent necessary to ensure
compliance with this provision. "Loan Value" means the value assigned by the
Bank from time to time, in its sole reasonable discretion, to each item of the
Collateral.
5. Currency Conversion.
For calculation purposes, any currency in which the Collateral is
denominated (the "Collateral Currency") will be converted into the currency of
the Liabilities (the "Liability Currency") at the spot rate of exchange for the
purchase of the Liability Currency with the Collateral Currency quoted by the
Bank at such place as the Bank deems appropriate (or, if no such rate is quoted
on any relevant date, estimated by the Bank on the basis of the Bank's last
quoted spot rate) or another prevailing rate that the Bank deems more
appropriate.
6. Representations and Warranties.
The undersigned represents and warrants: (a) the undersigned is the
sole owner of the Collateral; (b) the Collateral is free of all encumbrances
except for the security interest in favor of the Bank created by this Agreement;
(c) no authorizations, consents or approvals and no notice to or filing with any
governmental authority or regulatory body is required for the execution and
delivery of this Agreement or the exercise by the Bank of its rights and
remedies; (d) the execution, delivery and performance of this Agreement will not
violate any provisions of applicable law, regulation or order and will not
result in the breach of, or constitute a default, or require any consent, under
any agreement, instrument or document to which the undersigned is a party or by
which it or any of its property may be bound or affected; (e) as to Deposits and
Account Assets, the undersigned has not withdrawn, canceled, been repaid or
redeemed all or any part of any Deposits or Account Assets and there is no such
pending application; (f) as to Securities, the Securities have been duly
authorized and are fully paid and non-assessable and may be sold by the Bank
under the
4
<PAGE> 5
provisions of Rule 144(k) of the Securities Act of 1933 as amended; and the
undersigned understands that Securities held in or by any clearing system may be
held on a fungible basis and acknowledges the fungibility regimes pertaining to
the Cedel system and the Euroclear system.
7. Default.
Each of the following is a default ("Default"):
(i) the undersigned or other person liable on or for any of the
Liabilities ("Liability Party") fails to perform or observe any term, covenant,
or condition under this Agreement or under any Liability Document; (ii) any sum
payable on any of the Liabilities is not paid when due; (iii) any indebtedness
of the undersigned or of any Liability Party becomes due and payable by
acceleration of its maturity; (iv) any representation and warranty of the
undersigned or any Liability Party in this Agreement or in any Liability
Document is false or misleading at any time; (v) the undersigned or any
Liability Party (if a natural person) dies; (vi) the undersigned or any
Liability Party: (a) is generally not, or is unable to, or admits in writing its
inability to, pay its debts as its debts become due; (b) makes an assignment for
the benefit or creditors, or petitions or applies to any tribunal for the
appointment of a custodian, receiver or trustee for its or a substantial part of
its assets: (c) commences any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation; (d) has any such
petition filed, or any such proceeding has been commenced against it, in which
an adjudication is made or order for relief is entered or which remains
undismissed for a period of 30 days; (e) has a receiver, custodian or trustee
appointed for all or a substantial part of its property; or (f) takes any action
effectuating, approving or consenting to any of the events described in this
section (vi); and (vii) the undersigned or any Liability Party is involved in a
proceeding relating to, or which may result in, a forfeiture of part or all of
the undersigned's or any Liability Party's assets; then, unless and to the
extent that the Bank otherwise elects, the Bank will be entitled to exercise any
of the rights and remedies under this Agreement.
8. Remedies.
On a Default, the Bank will have the rights and remedies under the UCC
and the other rights granted to the Bank under this Agreement and may exercise
its rights without regard to any premium or penalty from liquidation of any
Collateral and without regard to the undersigned's basis or holding period for
any Collateral.
The Bank may sell in the Borough of Manhattan, New York City, or
elsewhere, in one or more sales or parcels, at the price as the Bank deems best,
for cash or on credit or for other property, for immediate or future delivery,
any item of the Collateral, at any broker's board or at public or private sale,
in any reasonable manner permissible under the UCC (except that, to the extent
permissible under the UCC, the undersigned waives any requirements of the UCC)
and the Bank
5
<PAGE> 6
or anyone else may be the purchaser of the Collateral and hold it free from any
claim or right including, without limitation, any equity of redemption of the
undersigned, which right the undersigned expressly waives.
The Bank may also, in its sole discretion: (i) convert any part of the
Collateral Currency into the Liability Currency; (ii) hold any monies or
proceeds representing the Collateral in a cash collateral account in the
Liability Currency or other currency that the Bank reasonably selects; (iii)
invest such monies or proceeds on behalf of the undersigned; and (iv) apply any
portion of the Collateral, first, to all costs and expenses of the Bank, second,
to the payment of interest on the Liabilities and any fees or commissions to
which the Bank may be entitled, third, to the payment of principal of the
Liabilities, whether or not then due, and fourth, to the undersigned.
The undersigned will pay to the Bank all expenses (including reasonable
attorneys' fees and legal expenses incurred by the Bank and the allocated costs
of its in-house counsel) in connection with the exercise of any of the Bank's
rights or obligations under this Agreement or the Liability Documents. The
undersigned will take any action requested by the Bank to allow it to sell or
dispose of the Collateral. Notwithstanding that the Bank may continue to hold
Collateral and regardless of the value of the Collateral, the undersigned will
remain liable for the payment in full of any unpaid balance of the Liabilities.
9. Jurisdiction.
The undersigned consents to the non-exclusive jurisdiction of the State
and Federal courts sitting in the City of New York and agrees that suit may be
brought against the undersigned in those courts or in any other jurisdiction
where the undersigned or any of its assets may be found, and the undersigned
irrevocably submits to the jurisdiction of those courts. The undersigned
consents to the service of process by mailing copies of process to the
undersigned at its most recent mailing address in the records of the Bank. The
undersigned further agrees that any action or proceeding brought against the
Bank may be brought only in a New York State or United States Federal court
sitting in New York County.
10. Notices.
Unless otherwise agreed in writing, notices may be given to the Bank
and the undersigned by ordinary mail addressed to the Bank or the undersigned at
their addresses on the signature page of this Agreement, or any other address
communicated in writing by either party to the other. Notices to the Bank are
effective on receipt.
6
<PAGE> 7
11. Miscellaneous.
(a.) The Bank may assign any of the Liabilities or Collateral and will
be fully discharged from all responsibility as to the assigned Collateral. That
assignee will have all the powers and rights of the Bank hereunder, but only as
to the assigned Collateral.
(b.) No amendment or waiver of any provision of this Agreement nor
consent to any departure by the undersigned will be effective unless it is in
writing and signed by the undersigned and the Bank and will be effective only in
that specific instance and for that specific purpose. No failure on the part of
the Bank to exercise, and no delay in exercising, any right will operate as a
waiver or preclude any other or further exercise or the exercise of any other
right.
(c.) The rights and remedies in this Agreement are cumulative and not
exclusive of any rights and remedies which the Bank may have under law or under
other agreements or arrangements with the undersigned or any Liability Party.
(d.) The provisions of this Agreement are intended to be severable. If
for any reason any provision of this Agreement is not valid or enforceable in
whole or in part in any jurisdiction, that provision will, as to that
jurisdiction, be ineffective to the extent of that invalidity or
unenforceability without in any manner affecting the validity or enforceability
in any other jurisdiction or the remaining provisions of this Agreement.
(e.) The term "undersigned" will include all signatories, if more than
one, and the terms, covenants and conditions and the representations and
warranties will be joint and several. The term "undersigned" will also include
the heirs, executors, administrators, assigns and successors of the undersigned.
(f.) The undersigned hereby waives presentment, notice of dishonor and
protest of all instruments included in or evidencing the Liabilities or the
Collateral and any other notices and demands, whether or not relating to those
instruments.
(g.) Unless otherwise agreed, Liabilities will be repayable at the
principal office of the Bank at One Chase Manhattan Plaza, New York, New York
10081, on demand and will bear interest at the rate announced by the Bank from
time to time at its principal office as its prime commercial lending rate.
(h.) This Agreement is governed by and construed according to the laws
of the State of New York.
7
<PAGE> 8
12. WAIVER OF JURY TRIAL.
NEITHER THE UNDERSIGNED NOR BANK, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR
PERSONAL REPRESENTATIVE OF THE UNDERSIGNED OR BANK, SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED
UPON OR ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR INSTRUMENT, ANY
OTHER SECURITY FOR THE INDEBTEDNESS SECURED HEREBY OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN OR AMONG THE UNDERSIGNED AND BANK. NEITHER THE UNDERSIGNED
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 THE
UNDERSIGNED AND BANK, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NEITHER THE UNDERSIGNED 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.
8
<PAGE> 9
IN WITNESS WHEREOF, the undersigned has signed this Agreement effective as of
the 31st day of January, 1997.
/s/ G. Arthur Seelbinder /s/ Kathleen W. Hammer POA
- ------------------------------- ------------------------------
G. ARTHUR SEELBINDER KATHLEEN W. HAMMER
ACCEPTED:
Address for notices to the Bank
The Chase Manhattan Bank The Chase Manhattan Bank, N.A.
1211 Avenue of the Americas
New York, New York 10036
By: /s/ Daniel A. Dougherty
---------------------------------
Name: Daniel A. Dougherty
---------------------------
Title: SVP
---------------------------
9
<PAGE> 10
EXHIBIT A
DESCRIPTION OF THE COLLATERAL
1. Deposits
<TABLE>
<CAPTION>
Type of Location
Deposit (NY, IBF-NY, Contract or Issue or Maturity Principal
(CD, TD, etc.) etc.) Certificate No. Opening Date Date Amount
-------------- ----------- -------------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C>
</TABLE>
2. Stocks, Bonds and Other Instruments and Securities
<TABLE>
<CAPTION>
Nature of Security Number of Face Amount Certificate
or Obligation Name of Issuer Units (if Applicable) Number
--------------------- --------------------- --------- --------------- -----------
<S> <C> <C> <C> <C>
Stock Cooker Restaurant 570,000 40527
Corporation, an Ohio Shares
corporation
</TABLE>
3. All Assets Held or to be Held in the Following Custody or Subcustody
Accounts, Safekeeping Accounts and/or Investment Management Accounts:
Type of Account Account Number Location
--------------- -------------- -----------
<PAGE> 1
EXHIBIT (c)(4)
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
EXHIBIT (c)(5)
REAFFIRMATION OF AMENDED AND RESTATED GUARANTY
----------------------------------------------
THIS REAFFIRMATION OF AMENDED AND RESTATED GUARANTY ("Reaffirmation")
is made as of the 20th Day of April, 1998, by COOKER RESTAURANT CORPORATION, an
Ohio corporation ("Guarantor").
RECITALS:
---------
A. Chase Manhattan Bank ("Lender") entered into an arrangement with G.
Arthur Seelbinder and Kathleen W. Hammer (collectively, "Borrower") providing
for the extensions of credit to Borrower, which arrangement is evidenced by that
certain Amended and Restated Grid Time Promissory Note dated January 31, 1997
("Note").
B. Pursuant to the terms of the Note, Lender made loans and extensions
of credit to Borrower.
C. In connection with the Note, Guarantor executed that certain Amended
and Restate Guaranty ("Guaranty") dated as even date therewith in favor of and
for the benefit of Lender.
D. Borrower has requested that Lender extend, and Lender has agreed to
extend, the term of the Note by execution of that certain Amendment to Grid time
Promissory Note dated of even date herewith ("Amendment") to extend the maturity
date of the Note until January 31, 1999, in accordance with the terms of the
Amendment.
E. As a condition to Lender's willingness to extend the term of the
Note, Lender has required the execution of this Reaffirmation.
NOW THEREFORE, in order to induce Lender to extend the term of the
Note, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned Guarantor hereby:
(1) confirms, ratifies and reaffirms in all respects the Guaranty, and
acknowledges that such Guaranty is in full force and effect;
(2) represents and warrants to Lender that (a) all representations and
warranties to Lender in the Guaranty are true and correct on this date, as if
made on this date, except to the extent any of them expressly relate to an
earlier date; (b) Guarantor is not in default under the Guaranty, and no event
has occurred that, with notice or lapse of time or both, would constitute such
an event of default; and (c) since the date of the most recent financial
statements delivered to Lender, there has not been any material adverse change
in Guarantor's financial condition;
(3) acknowledges that Guarantor's liability under the Guaranty is not
affected or diminished in any manner by the terms of the Note, as amended
pursuant to the Amendment, or by any other documents executed in connection
therewith, and that Guarantor's liability includes, without limitation,
Borrower's obligations under and pursuant to the Note, as amended pursuant to
the Amendment;
(4) agrees that, by requesting this Reaffirmation, Lender will not be
deemed to have waived any of its rights to enforce the Guaranty upon any
subsequent modification of the terms of the extensions of credit or the
documents evidencing and securing them, whether or not a similar ratification is
executed at the time of such subsequent modification; and
<PAGE> 2
(5) KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE OR MIGHT ACQUIRE TO TRIAL BY JURY IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM, OR OTHER LITIGATION ("ACTION") BASED UPON OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THE GUARANTY OR ANY RELATED DOCUMENTS, INSTRUMENTS
OR AGREEMENTS (WHETHER ORAL OR WRITTEN AND WHETHER EXPRESS OR IMPLIED AS A
RESULT OF A COURSE IN DEALING, A COURSE OF CONDUCT, A STATEMENT, OR OTHER ACTION
OF EITHER PARTY); AND THE UNDERSIGNED GUARANTOR SHALL N OT SEEK TO CONSOLIDATE
ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN WAIVED) WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE UNDERSIGNED GUARANTOR
ACKNOWLEDGES THAT IT HAS NOT IN ANY WAY AGREED WITH OR REPRESENTED TO LENDER
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
THE PROVISIONS IN THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER'S EXTENDING
THE TERM OF THE NOTE. THE PROVISIONS IN THIS SECTION WILL BE BINDING UPON THE
HEIRS, SUCCESSORS, ASSIGNS, AND PERSONAL REPRESENTATIVES OF THE UNDERSIGNED
GUARANTOR.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 3
IN WITNESS WHEREOF, Guarantor has executed this Reaffirmation as of the
date first above written.
WITNESSES: "GUARANTOR"
COOKER RESTAURANT
/s/ Glenn W. Cockburn CORPORATION, an Ohio Corporation
- ----------------------------
(Signature)
By: /s/ Phillip L. Pritchard (SEAL)
--------------------------------
Name: Phillip L. Pritchard
--------------------------------
Glenn W. Cockburn Title: President, C.O.O.
- ----------------------------- --------------------------------
(Printed Name)
/s/ M. A. Epperson
- ----------------------------
(Signature)
M. A. Epperson
- ----------------------------
(Printed Name)
<PAGE> 1
EXHIBIT (c)(6)
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
EXHIBIT (c)(7)
G. ARTHUR SEELBINDER
148 SEAGATE
PALM BEACH, FLORIDA 33480
January 30, 1998
Board of Directors
Cooker Restaurant Corporation
5500 Village Boulevard
West Palm Beach, Florida 33407
Re: Reaffirmation of Amended and Restated Guaranty 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 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. On or before January 31, 1999, I will pay down the principal
amount of the Guaranteed Loan so that it does not exceed 90%
of the January 31, 1998 balance on January 31, 1999. I will
take such steps as may be reasonably required to pay off the
Guaranteed Loan on a ten year schedule in approximately equal
installments. I understand that I may sell up to ten percent
of the Common Shares currently pledged to secure the
Guaranteed Loan in order to make this payment and I will do so
if requested by the Board. I will use at least one-half of any
incentive bonus paid to me to pay principal and interest on
the Guaranteed Loan.
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. 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
EXHIBIT (c)(8)
Chase Manhattan Private Bank, N.A.
205 Royal Palm Way
Palm Beach, FL 33480
March 26, 1998
Mr. G. Arthur Seelbinder
Ms. Kathleen Hammer
5500 Village Boulevard
West Palm Beach, Florida 33407
Dear Arthur and Kathleen:
On behalf of our affiliate, The Chase Manhattan Bank ("the Bank"), I am pleased
to inform you that the Bank is prepared to extend the maturity of your loan to
January 31, 1999 subject to the following terms and conditions:
Loan Amount: up to $6,250,000.00
- ------------
Loan Type: Advised Line of Credit
- ----------
Pricing: LIBOR + 2.00% or Prime Rate (Borrower's option)
- -------
Term: January 31, 1999 (annually renewable from this date
- ---- forward at the Bank's option)
Guarantor: Cooker Restaurant Corporation
- ----------
Facility Fee: None
- -------------
Collateral:
- -----------
A perfected first priority security interest in 570,000 shares of Cooker
Restaurant Corporation ("CGR"). The Maximum Advance Rate shall be 95% times
the market value of the CGR stock collateral. The Bank shall have the right
to modify the Maximum Advance Rate and the acceptability of the collateral
("Eligible Collateral") at any time.
In the event that the value of the Eligible Collateral shall decline with
the effect that the Loan Value defined below shall be less than the amount
of the loan balance outstanding, the Bank, at its option: will require the
Borrower to either 1) provide additional collateral acceptable to the Bank
its sole discretion; or 2) to make a principal payment to the extent
necessary to ensure that the aggregate outstanding loan balances are in
compliance with the Maximum Advance Rate(s); or, if the Borrower shall fail
to provide additional acceptable collateral or make a principal payment on
the loan, the Bank may sell that portion of the collateral and apply the
proceeds to the outstanding loans in an amount sufficient to ensure
compliance with the Maximum Advance Rate(s).
"Loan Value" shall mean the advance rate, as determined by the Bank from
time to time, assigned to each type of Eligible Collateral. Collateral may
be sold by the Bank without regard to the Borrower's basis or holding
period.
Principal Amortization: None, this loan shall be interest only.
- -----------------------
<PAGE> 2
Conditions: This loan will have no prepayment penalty
- ----------- (excepting LIBOR provisions, if any)
This facility shall be cross-collateralized and
cross-defaulted with any other loan facility extended
to the Borrowers by The Chase Manhattan Bank or its
affiliates.
Events of Default:
- ------------------
o Non-payment of Chase principal and/or interest when due.
o Material adverse change in Borrowers' financial condition.
o Failure to deliver personal financial statement with footnotes and
schedules or personal tax returns with schedules on an annual basis.
o Bankruptcy or insolvency of Borrowers
o Failure to deliver any other financial information that the Bank may
reasonably request.
o Death of Borrower with a 7 month cure period granted to the estate
If you are in agreement with the foregoing, please sign and return the enclosed
duplicate original of this letter. This letter may be executed in counterparts
which, taken together, shall constitute an original. This letter will be
governed by and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of laws.
Very truly yours,
/s/ Richard M. Ditizio
------------------------------
Richard M. Ditizio
Vice President
ACCEPTED AND AGREED:
- --------------------
/s/ G. Arthur Seelbinder /s/ Kathleen W. Hammer
- ------------------------------ ------------------------------
G. Arthur Seelbinder Kathleen W. Hammer
GUARANTOR
/s/ Phillip L. Prichard
- ------------------------------
Cooker Restaurant Corporation
By: Phillip L. Pritchard
--------------------------
Its: President
-------------------------
<PAGE> 1
Exhibit (c)(9)
G. Arthur Seelbinder
148 Seagate
Palm Beach, Florida 33480
August 11, 1998
Board of Directors
Cooker Restaurant Corporation (the "Company")
5500 Village Boulevard
West Palm Beach, Florida 33407
Re: Issuer Tender Offer on Schedule 13E-4
Dear Sirs:
Reference is hereby made to (i) that Amended and Restated Grid Time
Promissory Note (Eurodollar/Prime Rate), dated January 31, 1997, which is in the
initial amount of approximately $5 million and which with capitalized interest
may become much as $6.25 million (as amended, the "Guaranteed Loan"), (ii) that
Amended and Restated Guaranty, dated as of January 31, 1997 (as amended, the
"Guaranty"), issued by the Company in favor of The Chase Manhattan Bank (the
"Bank") and (iii) the proposed Dutch Auction issuer tender offer (the "Offer")
to be made by the Company for up to 4 million shares of the Company's common
stock, without par value (the "Common Stock").
In consideration of the Guaranty, the undersigned hereby informs the
Board of Directors and commits to the Company as follows:
1. The undersigned intends to tender up to 570,000 shares of Common
Stock in the Offer and to use all of the after tax proceeds that I may receive
as a result of my participation in the Offer to repay a portion of the
Guaranteed Loan.
2. Following the consummation of the Offer and the repayment of a
portion of the Guaranteed Loan using such proceeds, I intend to discuss with the
Bank or other financing sources the refinancing of the balance of the Guaranteed
Loan.
Sincerely,
/s/ G. Arthur Seelbinder
G. Arthur Seelbinder
<PAGE> 1
EXHIBIT (g)(1)
COOKER RESTAURANT CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report...............................................................................F-2
Consolidated Balance Sheets as of December 28, 1997 and December 29, 1996..................................F-3
Consolidated Statements of Income for the fiscal years ended December 28, 1997,
December 29, 1996 and December 31, 1995...............................................................F-4
Consolidated Statements of Changes in Shareholders' Equity for the fiscal years ended
December 28, 1997, December 29, 1996 and December 31, 1995............................................F-5
Consolidated Statements of Cash Flows for the fiscal years ended December 28, 1997,
December 29, 1996 and December 31, 1995...............................................................F-6
Notes to Consolidated Financial Statements.................................................................F-7
</TABLE>
F-1
<PAGE> 2
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Cooker Restaurant Corporation:
We have audited the accompanying consolidated balance sheets of Cooker
Restaurant Corporation and subsidiaries (the "Company") as of December 28, 1997
and December 29, 1996, and the related consolidated statements of income,
changes in shareholders' equity and cash flows for each of the years in the
three-year period ended December 28, 1997. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cooker Restaurant
Corporation and subsidiaries as of December 28, 1997 and December 29, 1996, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 28, 1997 in conformity with generally
accepted accounting principles.
As discussed in note 2 to the consolidated financial statements, the Company
changed its method of accounting for preoperational costs in 1997.
KPMG PEAT MARWICK LLP
January 30, 1998
Fort Lauderdale, Florida
F-2
<PAGE> 3
COOKER RESTAURANT CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
December 28, 1997 and December 29, 1996
<TABLE>
<CAPTION>
Assets 1997 1996
------ ---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,685 2,009
Inventory 1,509 1,128
Land held for sale 55 1,560
Preoperational costs -- 749
Prepaid expenses and other current assets 1,057 527
--------- --------
Total current assets 7,306 5,973
Property and equipment, net 134,190 107,010
Other assets 1,425 1,650
--------- --------
$ 142,921 114,633
========= ========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Note payable $ -- 4,613
Accounts payable 4,668 3,845
Accrued liabilities 6,684 6,030
Current maturities of long-term debt 27,500 --
Capital lease obligation, current 173 --
Income taxes payable 61 991
--------- --------
Total current liabilities 39,086 15,479
Long-term debt, excluding current maturities 14,915 16,822
Capital lease obligation, long-term 502 --
Deferred income taxes 1,813 582
Other liabilities 133 --
--------- --------
Total liabilities 56,449 32,883
--------- --------
Shareholders' equity:
Common share-without par value; authorized, 30,000,000
shares; issued 10,548,000 and 10,548,000 shares at
December 28, 1997 and December 29, 1996, respectively 63,039 63,583
Retained earnings 29,570 24,316
Treasury stock, at cost, 526,000 and 513,000 shares at
December 28, 1997 and December 29, 1996, respectively (6,137) (6,149)
--------- --------
86,472 81,750
--------- --------
Commitments and contingencies
$ 142,921 114,633
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 4
COOKER RESTAURANT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Fiscal years ended December 28, 1997, December 29, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Sales $ 135,458 110,273 91,678
--------- -------- -------
Cost of sales:
Food and beverage 38,762 31,322 26,218
Labor 46,711 38,074 31,977
Restaurant operating expenses 23,662 18,470 15,065
Restaurant depreciation and amortization 4,966 3,675 3,134
General and administrative 7,368 6,019 5,655
Preoperational costs 2,184 949 823
Impairment of long-lived assets 472 -- --
Interest expense 1,788 1,408 1, 978
Loss (gain) on sale of property (170) 2 (305)
Interest and other income (99) (167) (30)
--------- -------- -------
125,644 99,752 84,515
--------- -------- -------
Income before income taxes and cumulative effect of a
change in accounting principle 9,814 10,521 7,163
Provision for income taxes before cumulative effect
of a change in accounting principle 3,362 3,789 2,731
--------- -------- -------
Income before cumulative effect of a change in
accounting principle 6,452 6,732 4,432
Cumulative effect of change in accounting for
preoperational costs (less tax of $253) 496 -- --
--------- -------- -------
Net income $ 5,956 6,732 4,432
========= ======== =======
Basic earnings per common share:
Income before cumulative effect of change in
accounting principle $ 0.64 0.75 0.62
Cumulative effect of change in accounting
for preoperational costs (0.05) -- --
--------- -------- -------
Net income $ 0.59 0.75 0.62
========= ======== =======
Diluted earnings per common share:
Income before cumulative effect of change
in accounting principle $ 0.63 0.72 0.61
Cumulative effect of change in accounting
for preoperational costs (0.05) -- --
--------- -------- -------
Net income $ 0.58 0.72 0.61
========= ======== =======
Pro forma amounts assuming change in accounting
principle is applied retroactively:
Net income $ 6,452 6,442 4,667
========= ======== =======
Earnings per share - primary $ 0.64 0.72 0.65
========= ======== =======
Earnings per share - diluted $ 0.63 0.69 0.63
========= ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 5
COOKER RESTAURANT CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollar and share amounts in thousands)
Fiscal years ended December 28, 1997, December 29, 1996 and December 31, 1995
<TABLE>
<CAPTION>
Common shares Treasury stock
----------------------- Retained -----------------------
Shares Amounts earnings Shares Amounts Total
------ ------- -------- ------ ------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995 7,651 $ 26,003 $ 13,939 500 $ (6,034) $ 33,908
Shares repurchased -- -- -- 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
------ -------- -------- ------ -------- --------
10,548 63,583 24,316 513 (6,149) 81,750
Balance, December 29, 1996
Shares repurchased -- -- -- 122 (1,361) (1,361)
Issuance of shares under stock
option plans -- (751) -- (109) 1,373 622
Tax benefits of stock options
exercised -- 207 -- -- -- 207
Dividends paid $.07 per share
-- -- (702) -- -- (702)
Net income -- -- 5,956 -- -- 5,956
------ -------- -------- ------ -------- --------
Balance, December 28, 1997 10,548 $ 63,039 29,570 526 (6,137) 86,472
====== ======== ======== ====== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 6
COOKER RESTAURANT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
Fiscal years ended December 28, 1997, December 29, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 5,956 6,732 4,432
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle 749 -- --
Depreciation and amortization 5,470 4,026 3,552
Amortization of preoperational costs -- 949 823
Impairment of asset 472 -- --
Deferred income taxes 1,231 70 (162)
(Gain) loss on sale of property (170) 2 (305)
Gain on repurchase of debentures, net of income taxes -- -- (23)
(Increase) decrease in:
Inventory (381) (214) (84)
Preoperational costs -- (1,402) (444)
Prepaid expenses and other current assets (530) (74) 237
Other assets 225 436 (276)
Increase (decrease) in:
Accounts payable 823 1,424 460
Accrued liabilities 654 487 1,110
Income taxes payable (930) 208 175
Deferred rent 133 -- --
-------- ------- -------
Net cash provided by operating activities 13,702 12,644 9,495
-------- ------- -------
Cash flows from investing activities:
Purchases of property and equipment (33,109) (34,997) (17,200)
Proceeds from sale of property and equipment 2,375 532 459
-------- ------- -------
Net cash used in investing activities (30,734) (34,465) (16,741)
-------- ------- -------
Cash flows from financing activities:
Proceeds from note payable -- 6,150 --
Payment on note payable (4,613) (1,537) --
Borrowings under revolving line of credit 49,199 21,469 23,124
Repayments under revolving line of credit (22,408) (38,866) (14,313)
Redemption of debentures (1,198) (1,357) (1,180)
Repurchase of debentures -- (400) (893)
Exercise of stock options 829 59 78
Proceeds from secondary offering -- 37,442 --
Purchases of treasury stock (1,361) -- --
Capital lease obligations (38) -- --
Dividends paid (702) (429) (358)
-------- ------- -------
Net cash provided by financing activities 19,708 22,531 6,458
-------- ------- -------
Net increase (decrease) in cash and cash equivalents 2,676 710 (788)
Cash and cash equivalents, at beginning of year 2,009 1,299 2,087
-------- ------- -------
Cash and cash equivalents, at end of year $ 4,685 2,009 1,299
======== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 7
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 28, 1997, December 29, 1996 and December 31, 1995
(1) DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Cooker Restaurant Corporation and subsidiaries (the "Company") owns and
operates 60 restaurants in Tennessee, Ohio, Indiana, Kentucky,
Michigan, Florida, Georgia, North Carolina, Virginia and Maryland which
have been developed under the Cooker concept.
(a) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial
statements of Cooker Restaurant Corporation and its
majority-owned subsidiaries, CGR Management Corporation and
Southern Cooker Partnership. All significant intercompany
balances and transactions have been eliminated in the
consolidation.
(b) FISCAL YEAR
The Company's fiscal year ends on the Sunday closest to December
31 of each year. Fiscal years 1997, 1996 and 1995 consisted of
52 weeks.
(c) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents. Cash equivalents of $3,695,732 and $657,590 at
December 28, 1997 and December 29, 1996, respectively, consist
of overnight repurchase agreements and credit card receivables
and short-term investment with a maturity of three months or
less. Credit card receivables are considered cash equivalents
because of their short collection period. The carrying amount of
cash equivalents approximates fair value.
(d) 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.
(e) PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Equipment under
capital leases are stated at the lower of the present value of
the minimum lease payments or the fair value of the leased
property. Depreciation is calculated on the straight-line method
over the estimated useful lives of the assets. Equipment held
under capital leases and leasehold improvements are amortized
using the straight-line method over the shorter of the estimated
useful life of the asset or the remaining lease term.
F-7
<PAGE> 8
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 estimated useful life of the asset. Interest
costs of $445,800 and 618,000 were capitalized in fiscal 1997
and 1996, respectively.
(f) DEFERRED FINANCING COSTS
Deferred financing costs are being amortized by the interest
method using the effective interest rate implicit in the
borrowing transaction. Amortization expense was $130,000,
$130,000, and $130,368 for the years ended December 28, 1997,
December 29, 1996 and December 31, 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
consolidated 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
In December 1997, the Company adopted the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 128,
Earnings per Share, which establishes new guidelines for the
calculation of earnings per share. Basic earnings per share have
been computed by dividing net income by the weighted average
number of shares outstanding during the year. Diluted earnings
per share have been computed assuming the excercise of stock
options, as well as their related income tax effects. Earnings
per share for all prior periods have been restated to reflect
the provision of this Statement.
F-8
<PAGE> 9
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basic and diluted share data are as follows (in thousands):
1997 1996 1995
---- ---- ----
Weighted average shares outstanding - basic 10,024 8,980 7,151
Effect of dilutive securities:
Options 263 404 172
------ ----- -----
Diluted shares 10,287 9,384 7,323
====== ===== =====
Convertible subordinated debentures outstanding as of December
28, 1997 are convertible into 691,710 shares of common stock at
$21.5625 per share and due October 2002, were not included in
the computation of diluted EPS for each of the years in the
three-year period ended December 28, 1997 as the inclusion of
the convertible subordinated debentures would be antidilutive.
Options to purchase 840,215 shares of common stock, at prices
ranging from $10.875 to $21.75 per share, were outstanding for
the year ended December 28, 1997, but were not included in the
computation of diluted EPS because the options' excercise prices
were greater than the average market price of the common shares
for the year ended December 28, 1997. The options expire between
October 2001 and March 2007.
Options to purchase 95,340 shares of common stock, at prices
ranging from $12.875 to $21.75 per share, were outstanding for
the year ended December 27, 1996, but were not included in the
computation of diluted EPS because the options' excercise prices
were greater than the average market price of the common shares
for the year ended December 27, 1996. The options expire between
April 2002 and April 2006.
(j) USE OF ESTIMATES
The preparation of consolidated 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 consolidated 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 is $13,573,000
at December 28, 1997 and $16,113,000 at December 29, 1996,
respectively.
F-9
<PAGE> 10
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(l) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF
Annually, or more frequently if events or circumstances change,
a determination is made by management to ascertain whether
property and equipment and other intangibles have been impaired
based on the sum of expected future undiscounted cash flows from
operating activities. If the estimated net cash flows are less
than the carrying amount of such assets, the Company will
recognize an impairment loss in an amount necessary to write
down the assets to a fair value as determined from expected
future discounted cash flows. Based upon its most recent
analysis, the Company determined that an impairment write down
was necessary for certain locations due to a decline in sales
and corresponding trend of increasing operating expenses at
certain locations. As a result of this analysis, the Company
recognized an impairment write down of $472,000 for two
restaurant locations during the fourth quarter ended December
28, 1997.
(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) RECENT ACCOUNTING PRONOUNCEMENT
In June 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 130 - "Reporting Comprehensive Income." SFAS No.
130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general
purpose financial statements. SFAS No. 130 is effective for
fiscal years beginning after December 31, 1997. Management does
not anticipate a significant impact of the adoption of SFAS No.
130 on the Company's consolidated financial position, results of
operations or cash flows.
In June 1997, the FASB issued SFAS No. 131 - "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131
establishes standards for the way that public business
enterprises report information about operating segments in
annual financial statements and requires that these enterprises
report selected information about operating segments in interim
financial reports to shareholders. SFAS No. 131 is effective for
financial statements for periods beginning after December 15,
1997. Management does not anticipate a significant impact of the
adoption of SFAS No. 131 on the Company's consolidated financial
position, results of operations or cash flows.
F-10
<PAGE> 11
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(O) RECLASSIFICATIONS
Certain amounts in the 1996 and 1995 financial statements have
been reclassified to conform to the 1997 presentation.
(2) PREOPERATIONAL COSTS
Effective December 30, 1996, the Company changed its method of
accounting for preoperational costs, costs for employee training and
relocation, and supplies incurred in connection with the opening of a
restaurant to expense these costs as incurred. The Company capitalized
these costs and amortized them over one year, commencing from the date
the restaurant is opened. The expensing method is the preferable method
based on recent accounting trends.
The Company restated 1997 first quarter results to record a pre-tax
charge of $749,000 [$496,000 after taxes or $.05 per share (diluted)]
as the cumulative effect of the change in accounting for preoperational
costs. Quarterly earnings were restated to reflect the cumulative
effect charge and the additional current-year expense (see note 16).
(3) PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following:
<TABLE>
<CAPTION>
December 28, December 29,
1997 1996 Useful life
---- ---- -----------
(in thousands)
<S> <C> <C> <C>
Land $ 36,470 26,997 --
Buildings and leasehold 20-40 years, or
improvements 84,622 59,244 shorter of lease term
Furniture, fixtures and equipment 28,495 21,169 5-8 years
Construction in progress 6,145 16,916 --
Capital lease 713 -- 4 years
-------- --------
156,445 124,326
Less accumulated depreciation and amortization
(22,255) (17,316)
-------- --------
Property and equipment, net $ 134,190 107,010
======= =======
</TABLE>
Depreciation and amortization expense of property and equipment
approximated $5,470,000, $4,026,000 and $3,552,000 for the years ended
December 27, 1997, December 29, 1996, and December 31, 1995,
respectively.
F-11
<PAGE> 12
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
December 28, December 29,
1997 1996
---- ----
(in thousands)
<S> <C> <C>
Deferred financing costs, net of accumulated
amortization of $833,000 and $703,000 $ 480 $ 603
Prepaid lease, net of accumulated amortization
of $74,000 and $60,000 615 629
Liquor licenses 185 234
Deposits 89 58
Other 56 126
------ ------
$1,425 $1,650
====== ======
</TABLE>
(5) ACCRUED LIABILITIES
Accrued liabilities consist of the following:
December 28, December 29,
1997 1996
---- ----
(in thousands)
Salaries, wages and benefits $3,394 $3,073
Gift certificates payable 1,064 728
Sales tax payable 651 738
Property taxes 194 214
Insurance 604 743
Other 777 534
------ ------
$6,684 $6,030
====== ======
(6) 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. The note was repaid during fiscal
1997.
F-12
<PAGE> 13
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) LONG-TERM DEBT
Long-term debt consists of the following:
December 28, December 29,
1997 1996
---- ----
(in thousands)
Convertible subordinated debentures $ 14,915 $ 16,113
Revolving line of credit 27,500 709
------ -------
42,415 16,822
Less current maturities of long-term debt (27,500) --
------ -------
Long-term debt, excluding current maturities $ 14,915 $ 16,822
====== ======
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 debenture 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 1997 and 1996, 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 1997 and 1996, the Company redeemed
debentures subject to this provision of $48,000 and $207,000,
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.
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 28, 1997 ranged from 6.25 percent to 6.48 percent.
F-13
<PAGE> 14
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED 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.
(8) DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. They are used
to manage well-defined interest rate risk.
Interest rate swap agreements are used to reduce the potential impact
of increases in interest rates on floating-rate long-term debt. At
December 28, 1997, the Company was a party to an interest rate swap
agreement with a termination date of September 28, 2001. The agreement
entitles the Company to receive from the counterparty (a major bank),
the amounts, if any, by which the Company's interest payments on its
$27,500,000 line of credit (included in the $33,000,000 line of credit)
exceed 6.25 percent through the termination date. No amounts were
received by the Company during the year ended December 28, 1997.
The fair value of the interest swap agreement approximated $486,000 at
December 28, 1997. The fair value is estimated using option pricing
models that value the potential for the swaps to become in-the-money
through changes in interest rates during the remaining term of the
agreement.
The Company is exposed to credit losses in the event of nonperformance
by the counterparties to its interest rate swap agreements. The Company
anticipates, however, that counterparties will be able to fully satisfy
their obligations under the contracts. The Company does not obtain
collateral to support financial instruments but monitors the credit
standing of the counterparties.
(9) 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 o ne 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 28, 1997,
approximately 15,183,000 rights were outstanding.
F-14
<PAGE> 15
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In March 1997, the board of directors approved a plan to repurchase
122,000 common shares. Repurchase under this program was completed in
March at a cost of approximately $1,361,000. When treasury shares are
reissued, any excess of the average acquisition cost of the shares over
the proceeds from reissuance is charged to retained earnings.
(10) INCOME TAXES
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
December 28, December 29, December 31,
1997 1996 1995
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Current taxes:
Federal $ 1,545 2,975 2,412
State and local 333 744 481
------- ----- ------
1,878 3,719 2,893
Deferred taxes 1,484 70 (162)
------- ----- ------
Provision before cumulative effect 3,362 3,789 2,731
Benefit from cumulative effect (253) -- --
------- ----- ------
Provision for income taxes $ 3,109 3,789 2,731
======= ===== ======
</TABLE>
The provision (benefit) for deferred income taxes consists of the
following:
December 28, December 29,
1997 1996
---- ----
(in thousands)
Accelerated depreciation $ 1,466 14
Impairment of assets (179) --
Preoperational costs (253) 121
Accrued health (3) (14)
Accrued vacation (13) (18)
Provision for asset disposal 95 (12)
Other accrued expenses 173 (27)
Other (55) 6
------- ----
Total $ 1,231 70
======= ====
F-15
<PAGE> 16
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 28, December 29, December 31,
1997 1996 1995
---- ---- ----
(in thousands)
<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 4.0% 4.7% 4.4%
Reserve for tax examination -- -- 2.9%
FICA tip tax credit (4.1)% (4.6)% (5.2)%
Other nondeductible items 0.4% 1.9% 2.0%
---- ---- ----
34.3% 36.0% 38.1%
==== ==== ====
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities are as
follows:
December 28, December 29,
1997 1996
---- ----
(in thousands)
Accelerated depreciation $ 2,193 738
Impairment of assets (179) --
Preoperational costs -- 289
Accrued health (115) (114)
Accrued vacation (138) (126)
Provision for asset disposal -- (96)
Other accrued expenses 71 (104)
Other (19) (5)
------- ----
$ 1,813 582
======= ====
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.
(11) 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.
F-16
<PAGE> 17
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 and 1997. Dividends on shares held by the ESOP are
used to reduce the Company's receivable from the ES OP prior to
allocation to ESOP participant accounts. Shares forfeited, due to
participant withdrawals from the ESOP during fiscal 1997, 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 1996 and 1995.
As of December 28, 1997 and December 29, 1996, the ESOP owns 239,000
and 272,000, respectively, of the Company's common shares, all of which
are allocated to eligible participants. In 1997, the Company expressed
an intention to terminate the Plan, subject to Plan provisions.
(12) 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 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. The Company has issued 12,500 options under the 1996 Plan
through December 28, 1997. The Plan expires April 22, 2006.
F-17
<PAGE> 18
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Changes in the number of shares under the stock option plans are
summarized as follows:
<TABLE>
<CAPTION>
Options Price
------- -----------------------------
<S> <C> <C> <C>
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
Granted 373,000 10.37 -- 11.50
Canceled (19,000) 6.75 -- 11.62
Exercised (109,000) 4.03 -- 7.63
--------- -----------------------------
Balance at December 28,1997 1,516,000 $ 4.03 -- 21.75
========= =============================
</TABLE>
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 consolidated 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>
1997 1996 1997
---- ---- ----
(in thousands, except
per share data)
<S> <C> <C> <C>
Net income: As reported $ 5,956 $ 6,732 $ 4,432
Pro forma $ 5,395 $ 6,413 $ 4,397
Basic earnings per share: As reported $ .59 $ .75 $ .62
Pro forma $ .54 $ .71
Diluted earnings per share: As reported $ .58 $ .72 $ .61
Pro forma
</TABLE>
Pro forma net income reflects only options granted since January 1,
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 2, 1995 is not considered.
F-18
<PAGE> 19
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The per share weighted-average fair value of stock options granted
during 1997, 1996 and 1995 was $5.04, $5.56 and $3.89, respectively, on
the date of grant using the Black Scholes option-pricing model with the
following weighted-average assumptions: dividend yield .61 percent, .49
percent and .65 percent, risk-free interest rates of 6.5 percent, 5.6
percent and 6.69 percent, expected lives of 7 years for all years, and
expected volatility of 33 percent, 37 percent and 37 percent.
Stock option activity during the periods indicated is as follows:
Number of Weighted-average
shares exercise price
------ --------------
Balance at January 1, 1995 894,000 7.63
Granted 65,000 8.02
Canceled (17,000) 8.96
Exercised (11,000) 4.64
---------- ------
Balance at December 31, 1995 931,000 7.68
Granted 373,000 11.77
Canceled (23,000) 10.82
Exercised (10,000) 5.62
---------- ------
Balance at December 29, 1996 1,271,000 8.77
Granted 373,000 10.97
Canceled (19,000) 10.95
Exercised (109,000) 5.78
---------- ------
Balance at December 28, 1997 1,516,000 $ 9.48
========== ======
At December 28, 1997, the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $6.71-$11.85 and
7.4 years, respectively.
At December 28, 1997, December 29, 1996 and December 31, 1995, the
number of options exercisable was 717,000, 583,000 and 417,000,
respectively, and the weighted-average exercise price of those options
was $8.50, $7.91 and $7.86, respectively.
(13) 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 $2,022,000, $1,549,000 and
$1,378,000, including percentage rent of $231,000, $231,000 and
$262,000 for the fiscal years ended December 28, 1997, December
29, 1996 and December 31, 1995, respectively.
F-19
<PAGE> 20
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Minimum rental commitments for noncancelable leases as of December 28,
1997 are as follows:
Fiscal year ending Amount
- ------------------ ------
(in thousands)
1998 $ 2,258,744
1999 2,290,499
2000 2,282,782
2001 2,305,400
2002 2,384,056
Thereafter 22,955,897
------------
$ 34,477,378
============
(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.
(d) RETIREMENT SAVINGS PLAN
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.
(e) SALE-LEASEBACK
During August 1997, the Company refinanced and entered into an
agreement for the sale and leaseback of the point of sale
terminal system and software under a sale/leaseback arrangement.
The system was sold for $713,000. The transaction was accounted
for as a financing wherein the property with a net book value of
$713,000 remained on the books and continues to be depreciated.
A finance obligation representing the proceeds was recorded and
is reduced based on payments under the lease. The lease has a
term of four years and requires annual rental payments of
$210,000 in 1998, 1999 and 2000 and $175,000 in 2001.
F-20
<PAGE> 21
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(f) LEASE GUARANTEE
The Company subleased its previous headquarters location and has
guaranteed the minimum rent due. At December 28, 1997, the
outstanding balance on this guarantee was $172,500.
(14) 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 1995, the Company repurchased $643,000 of debentures,
which was included in accounts payable at January 1, 1995, and was paid
during fiscal 1995.
Cash paid for interest for fiscal 1997 and 1996 was $2,094,000 and
$2,004,000, respectively. Cash paid for taxes for fiscal 1997 and 1996
was $2,808,000 and $3,511,000, respectively.
(15) RELATED PARTIES
In 1994, the Board of Directors approved a guaranty by the Company of a
loan of $5,000,000 to the Chairman of the Board. In January, 1997, the
Board approved a refinancing of the loan with The Chase Manhattan Bank
of New York (the "Bank"). The loan (the "Loan") from the Bank bears
interest at the Bank's prime rate or LIBOR plus 2%, is secured by
570,000 Common Shares and is guaranteed by the Company in the principal
amount up to $6,250,000 including capitalized interest. Pursuant to the
loan agreement between the chairman and the Bank, any reduction of the
principal amount outstanding under the Loan shall not entitle the
chairman to the advancement of additional funds under the Loan. 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. The term of the Loan was scheduled to expire in the first
quarter of 1998. The term of the loan has been extended until August
28, 1998. At March 24, 1998, the amount of the Loan outstanding,
including capitalized and accrued interest, was approximately
$5,330,000 and the undiscounted fair market value of the pledged shares
was approximately $5,344,000. The guaranty secures the Loan until it is
repaid or refinanced without a guaranty. The Company would fund any
obligation it incurs under the terms of its guaranty from additional
borrowings under its revolving credit/term loan agreement. There can be
no assurance that the Loan will be repaid or refinanced at August 28,
1998 on terms that will not result in continuing the guaranty or in
material payment. The chairman has agreed to pay to the Company a
guaranty fee each year that the guaranty remains outstanding beginning
on March 9, 1994, the date the Company first issued its guaranty of the
loan. The amount of the guaranty fee is 1/4 percent of the outstanding
principal amount of the guaranteed loan on the date that the guaranty
fee becomes due. The chairman has agreed to use at least one-half of
any incentive bonus paid to him by the Company to pay principal and
interest on the Loan beginning with any incentive bonus paid for fiscal
year 1998. The chairman has also agreed to make payments on the Loan in
amounts sufficient to ensure that the Loan balance on January 31, 1999
does not exceed 90 percent of the Loan balance on January 31, 1998.
F-21
<PAGE> 22
COOKER RESTAURANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(16) QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data (unaudited) for fiscal year 1997 and 1996 are
summarized as follows:
<TABLE>
<CAPTION>
First Second Third Fourth
quarter quarter quarter quarter
------- ------- ------- -------
1997 (in thousands, except per share data)
----
<S> <C> <C> <C> <C>
Sales $32,507 33,221 34,167 35,563
Income before income taxes and cumulative effect (a)
2,907 3,376 2,356 1,175
Cumulative effect of a change in accounting principle
(net of tax) (a) 496 -- -- --
Net income (a) 1,415 2,219 1,549 773(b)
Earnings per share (a):
Primary $ 0.14 0.22 0.15 0.08
======= ====== ====== ======
Diluted $ 0.14 0.22 0.15 0.08
======= ====== ====== ======
1996
----
Sales $25,486 26,919 29,183 28,685
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:
Primary $ 0.19 0.19 0.19 0.18
======= ====== ====== ======
Diluted $ 0.19 0.18 0.18 0.18
======= ====== ====== ======
Pro forma amounts assuming change in accounting for preoperational
costs applied retroactively:
Net income $ 1,380 1,382 1,914 1,766
Earnings per share:
Primary $ .19 .16 .19 .18
Diluted $ .19 .15 .19 .17
</TABLE>
(a) Quarterly amounts have been restated to reflect the change in
accounting for preoperational costs. The additional
benefit/charge in each quarter is as follows: first quarter,
charge of $1,042,000 ($649,000 after taxes) or $0.06 per share;
second quarter, benefit of $134,000 ($94,000 after taxes) or
$.01 per share; and third quarter, charge of $447,000 ($287,000
after taxes) or $.03 per share.
(b) Includes an impairment of long-lived assets charge of $472,000
($310,000 after taxes).
F-22
<PAGE> 1
EXHIBIT (g)(2)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
COOKER RESTAURANT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<CAPTION>
June 28, December 28,
1998 1997
-------- ------------
(In Thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,504 $ 4,685
Inventory 1,496 1,509
Land held for sale 55 55
Prepaid and other current assets 791 1,057
-------- --------
Total current assets 6,846 7,306
Property and equipment 139,812 134,190
Other assets 1,558 1,425
-------- --------
$148,216 $142,921
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities long-term debt $ 3,300 $ --
Notes payable 425 --
Accounts payable 4,207 4,668
Accrued liabilities 6,810 6,857
Income taxes payable 848 61
-------- --------
Total current liabilities 15,590 11,586
Long-term debt 39,115 42,415
Deferred income taxes 1,813 1,813
Other liabilities 629 635
-------- --------
Total liabilities 57,147 56,449
-------- --------
Shareholders' equity:
Common shares-without par value: authorized 30,000,000
shares; issued 10,548,000 and 10,548,000 at June 28,
1998 and December 28, 1997, respectively 62,555 63,039
Retained earnings 33,047 29,570
Treasury stock at cost, 389,000 and 526,000 shares at
June 28, 1998 and December 28, 1997, respectively (4,533) (6,137)
-------- --------
Total shareholder's equity 91,069 86,472
-------- --------
$148,216 $142,921
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 2
<TABLE>
COOKER RESTAURANT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
1998 1997 1998 1997
-------- -------- -------- --------
(In Thousands Except Per (In Thousands Except Per
Share Data) Share Data)
<S> <C> <C> <C> <C>
Sales $39,955 $33,221 $80,389 $65,728
------- ------- ------- -------
Cost of sales:
Food and beverage 11,495 9,574 22,917 18,833
Labor 13,930 11,408 27,784 22,577
Restaurant operating expenses 7,349 5,657 14,332 11,113
Restaurant depreciation 1,556 1,060 3,020 2,124
General and administrative 2,387 1,730 4,942 4,123
Interest expense, net 739 416 1,326 675
------- ------- ------- -------
37,456 29,845 74,321 59,445
------- ------- ------- -------
Income before income taxes and cumulative effect of a
change in accounting principle 2,499 3,376 6,068 6,283
Provision for income taxes before cumulative effect of
a change in accounting principle 659 1,157 1,890 2,153
------- ------- ------- -------
Income before cumulative effect of a change
in accounting principle 1,840 2,219 4,178 4,130
Cumulative effect of a change in accounting for preoperational
costs (less tax of $253) -- -- -- 496
------- ------- ------- -------
Net income $ 1,840 $ 2,219 $ 4,178 $ 3,634
======= ======= ======= =======
Basic earnings per share:
Income before cumulative effect of change in
accounting principle $ 0.18 $ 0.22 $ 0.41 $ 0.41
Cumulative effect of change in accounting for
preoperational costs -- -- -- (0.05)
------- ------- ------- -------
Net income $ 0.18 $ 0.22 $ 0.41 $ 0.36
======= ======= ======= =======
Diluted earnings per share:
Income before cumulative effect of change in
accounting principle $ 0.18 $ 0.22 $ 0.41 $ 0.40
Cumulative effect of change in accounting for
preoperational costs -- -- -- (0.05)
------- ------- ------- -------
Net income $ 0.18 $ 0.22 $ 0.41 $ 0.35
======= ======= ======= =======
Weighted average number of common shares outstanding - basic 10,130 10,019 10,076 10,027
Weighted average number of common shares outstanding - diluted 10,326 10,208 10,253 10,257
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 3
<TABLE>
COOKER RESTAURANT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
<CAPTION>
Six Months Ended
June 28, June 29,
1998 1997
-------- --------
(In Thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,178 $ 3,634
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of change in accounting principle -- 496
Depreciation and amortization 3,249 2,446
Deferred income taxes -- 253
Loss (gain) on sale of property 1 (53)
Decrease (increase) in current assets 279 (511)
(Increase) decrease in other assets (132) 76
Increase (decrease) in current liabilities 357 (872)
------- --------
Net cash provided by operating activities 7,932 5,469
------- --------
Cash flows from investing activities:
Purchases of property and equipment (8,879) (14,733)
Proceeds from sale of property and equipment 7 1,486
------- --------
Net cash used in investing activities (8,872) (13,247)
Cash flows from financing activities:
Proceeds from note payable 425 --
Payment on note payable -- (4,613)
Proceeds from borrowings -- 14,344
Redemption of debentures -- (48)
Exercise of stock options 1,121 --
Purchases of treasury stock -- (585)
Capital lease obligations (85) --
Dividends paid (702) (702)
------- --------
Net cash provided by financing activities 759 8,396
------- --------
Net (decrease) increase in cash and cash equivalents (181) 618
Cash and cash equivalents, at beginning of period 4,685 2,009
Cash and cash equivalents, at end of period $ 4,504 $ 2,627
======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 4
COOKER RESTAURANT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 28, 1998 and June 29, 1997
(Unaudited)
Note 1: Basis of Presentation.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the accompanying condensed consolidated financial statements contain
all adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position of the Cooker Restaurant Corporation and
subsidiaries (the "Company"), after elimination of intercompany accounts and
transactions, at June 28, 1998 and the statements of income and cash flows for
the three months ended June 28, 1998. The results of operations for the three
months ended June 28, 1998 are not necessarily indicative of the operating
results expected for the fiscal year ended January 3, 1999. These financial
statements should be read in conjunction with the financial statements and notes
thereto contained in the Company's annual report on Form 10-K for the fiscal
year ended December 28, 1997.
Certain amounts in the 1997 financial statements have been reclassified to
conform to the 1998 presentation.
Note 2: Earnings Per Share.
In December 1997, the Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share," which establishes
new guidelines for the calculation of earnings per share. Basic earnings per
share have been computed by dividing net income by the weighted average number
of shares outstanding during the year. Diluted earnings per share have been
computed assuming the exercise of stock options, as well as their related income
tax effects. Earnings per share for all prior periods have been restated to
reflect the provisions of this statement.
Convertible subordinated debentures outstanding as of June 28, 1998 are
convertible into 691,710 shares of common stock at $21.5625 per share and are
due October 2002, were not included in the computation of diluted EPS for each
quarters ended June 29, 1997 and June 28, 1998 as the inclusion of the
convertible subordinated debentures would be antidilutive.
Options to purchase 886,115 and 832,715 shares at prices ranging from $10.375 to
$21.75 per share and $10.875 to $21.75 per share, were outstanding for the six
months ended June 28, 1998 and June 29, 1997, respectively, but were not
included in the computation of diluted EPS because the options' exercise prices
were greater than the average market price of the common shares for the six
months ended June 28, 1998 and June 29, 1997 respectively. The options expire
between October 1999 and May 2008 for the six months ended June 28, 1998 and
between October 1999 and January 2007 for the six months ended June 29, 1997.
Note 3: Recent Accounting Pronouncements.
Effective December 29, 1997, the Company adopted the Financial Accounting
Standard Board ("FASB") No. 130 "Reporting Comprehensive Income" and No. 131 -
"Disclosure about Segments of an Enterprise and Related Information." The
adoption of these pronouncements did not have a significant impact on the
Company's consolidated financial position, results of operations or cash flows.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). This Statement establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as (a) a hedge of the exposure
to changes in the fair value of a recognized asset or, (b) a hedge of the
exposure to variable cash flows of a forecasted transaction, or (c) a hedge
of the foreign currency exposure of a net investment in a foreign operation,
an unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction. The accounting for changes
in the fair value of a derivative (that is, gains and losses) depends on the
intended use of the derivative and the resulting designation. This Statement
shall be effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999. The Company has not determined the effect of the adoption of
SFAS No. 133 on the Company's results of operations or statement of financial
position.
Note 4: ESOP Plan Termination.
During the second quarter the Board of Directors approved the termination of the
Cooker Restaurant Corporation Employee Stock Ownership Plan (the "Plan"). The
effective date of the termination was June 30, 1998. The Plan termination did
not have a significant impact on the Company's consolidated financial position,
results of operations or cash flows.
Note 5: Derivative Financial Instruments.
The fair value of the interest swap agreement approximated ($447,000) at June
28, 1998. The fair value is estimated using option pricing models that value
the potential for the swaps to become in the money (liability) through changes
interest rates during the remaining term of the agreement.
5
