<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended December 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-10576
SANTA BARBARA RESTAURANT GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 33-0403086
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
360 S. HOPE STREET, SUITE 300
SANTA BARBARA, CALIFORNIA 93105
(Address of Principal Executive Office) (Zip Code)
</TABLE>
REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (805) 563-3644
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<S> <C>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
Common Stock -- $.08 Par Value Boston Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained in this form, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
The aggregate market value of the common stock held by non-affiliates of
the registrant on April 26, 2000 was approximately $10.5 million based upon the
closing price of the common stock, as reported on the NASDAQ Small Cap Market.
The number of shares of the common stock of the registrant outstanding on
April 26, 2000 was 18,554,387.
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
The following sets forth certain information for each director of the
Company as of December 30, 1999.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE SINCE POSITION WITH THE COMPANY
---------------- --- ----- -------------------------
<S> <C> <C> <C>
William P. Foley, II 55 1997 Chairman and Director
Andrew F. Puzder 49 1997 Chief Executive Officer and Director
Frank P. Willey 46 1997 Director
C. Thomas Thompson 50 1998 Director
Dermot F. Rowland 62 1998 Director
Charles Rolles 65 1999 Director
Burt Sugarman 61 1999 Director
</TABLE>
William P. Foley, II became Chairman of the Board and a Director of the
Company in July 1997. Mr. Foley is also Chairman of the Board and Chief
Executive Officer of Fidelity National Financial, Inc., a company engaged in
title insurance and related services. Mr. Foley is also the Chairman of the
Board of CKE Restaurants, Inc., a company engaged in the quick service
restaurant business. He is also Chairman of the Board of Checkers Drive-In
Restaurants, Inc. and a member of the Boards of Directors of American National
Financial, Inc., Micro General Corporation, Fresh Foods, Inc., and Miravant
Medical Technologies, Inc.
Andrew F. Puzder became a Director of the Company in July 1997 and was
appointed Chief Executive Officer in August 1997. Mr. Puzder also serves as an
Executive Vice President, General Counsel, and Secretary for CKE Restaurants,
Inc. Mr. Puzder is also Executive Vice President, Legal for Fidelity National
Financial, Inc. Mr. Puzder has been with Fidelity National Financial, Inc. since
January 1995. From March 1994 to December 1994, he was a partner with the law
firm of Stradling, Yocca, Carlson & Rauth. Prior to that, he was a partner with
the law firm of Lewis, D'Amato, Brisbois & Bisgard, from September 1991 through
March 1994, and he was a partner of the Stolar Partnership from February 1984
through September 1991. Mr. Puzder is also a Director for Aspeon, Inc., Checkers
Drive-In Restaurants, Inc. and Fresh Foods, Inc.
Frank P. Willey became a Director of the Company in July 1997. He is also
the Vice Chairman of Fidelity National Financial, Inc. and has been a director
since February 1984. He was the President of Fidelity National Financial, Inc.
from January 1995 through March 2000, General Counsel of Fidelity National
Financial, Inc. from 1984 to January 1995. Mr. Willey also serves on the Boards
of Directors of CKE Restaurants, Inc., Southern Pacific Funding Corporation, and
Ugly Duckling Holdings, Inc.
C. Thomas Thompson became a Director of the Company in 1998. Mr. Thompson
is also the Chief Executive Officer, President and Chief Operating Officer of
CKE Restaurants, Inc. Mr. Thompson has been a Carl's Jr. franchisee since 1984,
and currently operates 17 Carl's Jr. restaurants in the San Francisco Bay Area.
Mr. Thompson also serves as a member of the Board of Directors of Checkers
Drive-In Restaurants, Inc. Mr. Thompson has more than 20 years of experience in
the restaurant industry.
Dermot F. Rowland became a Director of the Company in 1998. Mr. Rowland was
the founder of Timber Lodge Steakhouse, Inc. (acquired by the Company on
September 1, 1998) and has served as Chairman of the Board, Chief Executive
Officer, Secretary and as a Director of Timber Lodge since 1989. Prior to
establishing Timber Lodge, Mr. Rowland was involved in the formation and
management of Homestyle Buffet, Inc., which subsequently changed its name to
Staceys Buffet Inc. ("Staceys"). Staceys, based in Largo, Florida, develops and
operates buffet restaurants. He co-founded Staceys in 1986 and served as its
President and Chief Executive Officer from 1986 to 1987. In 1987, he became its
Chairman of the Board and continued as a consultant and Director until 1991.
Burt Sugarman became a Director of the Company in 1999. Mr. Sugarman has
been the Chairman of the Board, President and Chief Executive Officer of GIANT
GROUP, Ltd. for the past five years and served as the Chief Executive Officer of
Rally's Hamburgers, Inc. from 1990 and as the Chairman of the Board of Directors
of Rally's from 1991, resigning from these offices in February 1994. Mr.
Sugarman resumed the position of Chairman of the Board of Directors of Rally's
Hamburgers, Inc. in November 1994 and resigned such office in October 1997. Mr.
Sugarman is a Director of GIANT Group, Ltd. and Checkers Drive-In Restaurants,
Inc.
2
<PAGE> 3
Charles Rolles became a Director of the Company in 1999. Mr. Rolles has
been engaged in the business of real estate development for the past 30 years.
In addition, Mr. Rolles was the founder of the 50 unit Chuck's Steakhouse chain.
Mr. Rolles also served as a director of Liberty Bank from 1978 to 1990.
Executive Officers
Theodore Abajian, 36 was appointed Executive Vice President, Chief
Financial Officer in May 1998. In addition, since January 1, 2000 Mr. Abajian
holds the position of Senior Vice President and Chief Financial Officer for
Checkers Drive-In Restaurants, Inc. Prior to joining Santa Barbara Restaurant
Group, Inc. Mr. Abajian served as the Chief Financial Officer of Star Buffet,
Inc, since its formation in July 1997. Mr. Abajian also served as a director of
Stacey's Buffet, Inc. from October 31, 1997, to February 4, 1998. Mr. Abajian
has been the Vice President and Controller of Summit Family Restaurants Inc.
since 1994. From 1983 to 1994, he held several positions with Family
Restaurants, Inc., including Director of Financial Analysis, Planning and
Reporting for the family restaurant division, which included approximately 350
Carrows and Coco's restaurants.
Peter Bedzyk, 49 has served as Executive Vice President of Operations of
the Company's subsidiary Timber Lodge Steakhouse, Inc. since September 1, 1998,
the date Timber Lodge was acquired by Santa Barbara Restaurant Group. Prior to
the merger, Mr. Bedzyk was President and Chief Operating Officer of Timber Lodge
from February 1997 and a director since May 1996. From June 1995 to February
1997 he served as Executive Vice President of Operations and from 1991 to June
1995 Mr. Bedzyk was operations manager for Timber Lodge.
Nicholas J. Caddeo, 53 has been an Executive Vice President and Chief
Operating Officer of the Company's subsidiary Green Burrito, Inc. since August
1992. Prior to joining the Company, he was employed for more than 20 years by
Foodmaker, Inc., the corporate operator of Jack-in-the-Box restaurants, serving
as a Regional Manager for the Los Angeles area from January 1985 to July 1992.
Kevin Osborn, 44 was appointed President and Chief Executive Officer of both
the Company's La Salsa and Green Burrito subsidiaries in July 1999. From August
1982 to July 1999, Mr. Osborn was employed by Taco Bueno in Carollton, Texas,
spending 11 years as Regional Vice President of Operations.
Annette Della Flora, 38 was appointed Senior Vice President of Marketing of
the Company in September 1999. In addition, Ms. Della Flora holds the position
of Senior Vice President of Marketing of Checkers Drive-In Restaurants, Inc.
From December 1998 to September 1999, she was Vice President of Marketing for
Del Taco, Inc. in Laguna Hills, California. Ms. Della Flora worked for
HomeBase/Home Improvement Warehouse in Anaheim, California from June 1994 to
November 1998 in various marketing and advertising positions.
Andrew D. Simons, 39 was appointed Senior Vice President, General Counsel
and Secretary of the Company in July 1999. In addition, Mr. Simons holds the
position of Senior Vice President, General Counsel and Secretary of Checkers
Drive-In Restaurants, Inc. From April 1996 to June 1999 Mr. Simons served as
Vice President, General Counsel and Secretary of Circon Corporation. From July
1992 through April 1996 Mr. Simons worked for Tokos Medical Corporation in
various capacities including Vice President, General Counsel and Secretary.
Prior to 1992, Mr. Simons was an associate at the law firm of Gibson, Dunn &
Crutcher.
Lynn Whiteford, 48 has been Executive Vice President and Chief Operating
Officer of the Company's subsidiary JB's Family Restaurants, Inc. since April
1996. In addition, Mr. Whiteford assumed the role of Chief Operating Officer for
Timber Lodge Steakhouse upon the formation of Santa Barbara Restaurant Group in
September 1998. Additionally, Mr. Whiteford is Senior Vice President of Santa
Barbara Restaurant Group. Mr. Whiteford was Vice President of Operations and
Senior Vice President of Operations for Summit Family Restaurants (the
predecessor of JB's) since August 1994. Prior to joining Summit, he was Director
of Operations for the Ruby Restaurant Group from February 1992 until September
1994, and held various operations positions with Family Restaurants, Inc. and
its predecessors (Restaurant Enterprises Group, Grace Restaurant Company and Far
West Services) from July 1977 through February 1992. He was a Regional Vice
President from September 1987 through February 1992.
3
<PAGE> 4
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of such forms received by it or written representations
from certain reporting persons that no Forms 5 were required for those persons,
the Company believes that, during fiscal 1999, all filing requirements
applicable to its executive officers, directors and greater than 10%
stockholders were satisfied.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the annual and
long term compensation of the Company's Chief Executive Officer and the other
four most highly compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries during the fiscal year
indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
----------------------------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION(S) YEAR SALARY ($) BONUS (1)($) OTHER ($) OPTIONS (#) ($) (2)
- ------------------------------ ---- ---------- ------------ --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
ANDREW F. PUZDER (3) 1999 25,000 0 0 150,000 0
CHIEF EXECUTIVE OFFICER 1998 0 0 0 210,000 0
1997 0 0 0 100,000 0
THEODORE ABAJIAN (4) 1999 125,000 40,000 9,000 10,000 515
CHIEF FINANCIAL OFFICER 1998 83,333 34,000 6,000 50,000 410
LYNN WHITEFORD (5) 1999 117,500 40,000 7,800 25,000 510
1998 39,167 20,333 2,600 40,000 150
PETER K. BEDZYK (5) 1999 115,000 52,806 6,000 15,000 490
1998 38,333 6,500 2,000 40,000 150
KEVIN OSBORN (6) 1999 91,667 20,000 2,732 100,000 0
</TABLE>
(1) Bonus amounts were earned during fiscal 1999 and were paid shortly
thereafter.
(2) All other compensation includes amounts paid on behalf of the executive for
term life insurance.
(3) Mr. Puzder became a Director in July 1997 and Chief Executive Officer in
August 1997.
(4) Mr. Abajian began his employment with the Company on May 1, 1998.
(5) Mr. Whiteford & Mr. Bedzyk began their employment with the Company on
September 1, 1998.
(6) Mr. Osborn began his employment with the Company on July 12, 2000.
OPTIONS GRANTED IN FISCAL YEAR 1999
The following table sets forth information regarding options granted to the
named executive officers during the fiscal year ended December 30, 1999,
pursuant to the Company's Stock Option Plans.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM
OPTIONS IN FISCAL PRICE PER EXPIRATION -------------------------
GRANTED YEAR 1999 SHARE DATE 5% 10%
------- --------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Andrew F. Puzder 150,000 17.0 $2.94 5/13/2009 $277,153 $702,362
Theodore Abajian 10,000 1.1 $2.94 5/13/2009 $18,477 $46,824
Lynn Whiteford 25,000 2.8 $2.94 5/13/2009 $46,192 $117,060
Peter Bedzyk 15,000 1.2 $2.94 5/13/2009 $27,715 $70,236
Kevin Osborn 100,000 11.4 $2.44 7/12/2009 $153,325 $388,554
</TABLE>
4
<PAGE> 5
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1999 AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth the number of options, both exercisable and
unexercisable, held by each of the executive officers of the Company as of
December 30, 1999. There were no in-the-money options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE DECEMBER 30, 1999 DECEMBER 30, 1999
EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew F. Puzder 0 0 460,000 0 $0 $0
Theodore Abajian 0 0 60,000 0 0 0
Lynn Whiteford 0 0 65,000 0 0 0
Peter Bedzyk 0 0 112,259 0 0 0
Kevin Osborn 0 0 33,334 66,666 0 0
</TABLE>
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER MARKET ORIGINAL
OF PRICE EXERCISE OPTION TERM
SECURITIES OF STOCK PRICE NEW REMAINING
UNDERLYING AT TIME OF AT TIME OF EXERCISE AT DATE OF
OPTIONS REPRICING REPRICING PRICE REPRICING
NAME DATE REPRICED ($) ($) ($) ($)
---- --------- ----------- ---------- ------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Nicholas Caddeo 9/1/98 25,000 4.875 8.625 4.875 9 yrs
Chief Operating Officer 9/1/98 7,500 4.875 5.750 4.875 9 yrs
William P. Foley, II 9/1/98 80,000 4.875 8.625 4.875 9 yrs
Chairman of the Board 9/1/98 50,000 4.875 8.625 4.875 9 yrs
9/1/98 20,000 4.875 8.625 4.875 9 yrs
9/1/98 200,000 4.875 8.250 4.875 9 yrs 6 mos
Andrew F. Puzder 9/1/98 20,000 4.875 8.625 4.875 9 yrs
Chief Executive Officer 9/1/98 30,000 4.875 8.625 4.875 9 yrs
9/1/98 50,000 4.875 8.625 4.875 9 yrs
9/1/98 100,000 4.875 8.250 4.875 9 yrs 6 mos
Frank P. Willey 9/1/98 20,000 4.875 8.625 4.875 9 yrs
Director 9/1/98 50,000 4.875 8.625 4.875 9 yrs
9/1/98 10,000 4.875 8.250 4.875 9 yrs 6 mos
</TABLE>
COMPENSATION COMMITTEE REPORT ON OPTION REPRICING
On September 1, 1998, the Compensation Committee approved the repricing of
1,017,500 options granted pursuant to the Company's existing stock option plans
for non-employee directors and executive officers. Such options had exercise
prices ranging from $5.75 to $10.375. The repricing was effected by exchanging
new options with an exercise price of $4.875 per share, and the same vesting
period as the original option, for the options then held by such optionees.
The Compensation Committee approved the repricing because it believed that
equity interests are a significant factor in the Company's ability to retain
directors, executive officers and employees, by providing an incentive to all
such personnel to devote their utmost effort and skill to the advancement and
betterment of the Company by permitting them to participate in the success and
increased value of the Company. Following the grant of such options, however,
the price per share of the Company's Common Stock sharply declined as a result
of unforeseen market factors. The Compensation Committee believed, that as a
result of this relatively sudden decline, the options so granted would not have
the desired motivational effect on the optionees. Accordingly, the Compensation
Committee approved the repricing as a means of ensuring that such optionees have
a meaningful equity interest in the Company.
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COMPENSATION OF THE BOARD OF DIRECTORS
The members of the Board of Directors who are not employees receive $1,000
for their attendance in person at Board meetings and $500 if they are present at
a Board meeting telephonically. Members of the Board of Directors generally
receive an initial grant of 20,000 nonstatutory stock options upon their
election to the Board and thereafter periodically receive option grants in
recognition of their service as members of the Board of Directors. On June 23,
1999 Directors Sugarman and Rolles were each awarded options to purchase 20,000
shares in connection with their election to the Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the members of the Compensation Committee of the
Company's Board of Directors were Messrs. Willey (Chairman) and Thompson. None
of the Compensation Committee members were officers, former officers or
employees of the Company during fiscal 1998. Mr. Willey serves as President and
a Director of Fidelity National Financial, Inc. and a Director of CKE
Restaurants, Inc.
Corporate Deduction for Compensation. Section 162(m) of the Internal
Revenue Code generally limits to $1.0 million the corporate deduction for
compensation paid to certain executive officers, unless certain requirements are
met. At this time, the Company's deduction for officer compensation is not
limited by the provisions of Section 162(m). The Committee intends to monitor
regulations issued pursuant to Section 162(m) and to take such actions with
respect to the executive compensation program as are reasonably necessary to
preserve the corporate tax deduction for executive compensation paid.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has a standing Compensation Committee and Audit
Committee. The Board does not have a nominating or executive committee or other
committee performing similar functions. The Compensation Committee, whose
current members are Messrs. Willey (Chairman) and Thompson, considers the hiring
and election of corporate officers, salary and incentive compensation policies
for officers and directors, and the granting of stock options to employees.
Former Directors Bruce Haglund and Anthony Gregory served as members of the
Compensation Committee through August 1999, at which time they declined to stand
for reelection to the Company's Board. The Compensation Committee held two
meetings in 1999.
The Audit Committee, whose current members are Messrs. Willey (Chairman),
Sugarman and Rolles, reviews and directs the internal audit activities,
accounting procedures and controls of the Company. The Audit Committee also
meets with the Company's independent auditors, reviews the general scope of the
Company's annual audit and the fee charged by the independent auditors. The
Audit Committee held one meeting in 1999.
During fiscal 1999, The Board of Directors held four meetings and acted by
written consent on two occasions. Mr. Foley missed one meeting and Mr. Sugarman
missed two meetings during 1999. All committee meetings were fully attended.
PERFORMANCE GRAPH
Set forth below is a graph comparing cumulative total stockholder return on
the Company's common stock against the cumulative total return on the S & P 500
Index and against the cumulative total return of a peer group index, the
Restaurants 500 Index for the five-year period ending December 30, 1999. The
peer group comparison has been weighted based on the Company's stock market
capitalization. The graph assumes an initial investment of $100.00 on January 1,
1995, with dividends reinvested over the periods indicated.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Santa Barbara Restaurant Group 100.00 125.81 95.16 140.32 49.19 20.15
S&P 500 Index 100.00 137.58 169.17 225.60 290.08 351.12
Restaurants 500 100.00 149.98 148.18 159.11 249.35 253.66
</TABLE>
6
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 26, 2000,
relating to the beneficial ownership of the Company's common stock by (i) all
persons known by the Company to beneficially own more than 5% of the outstanding
shares of the Company's common stock, (ii) each director, director nominee and
officer of the Company and, (iii) all officers and directors of the Company as a
group. The Company had 18,554,387 shares outstanding as of April 26, 2000.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OF SHARES
BENEFICIAL OWNER(1)(2)(3) BENEFICIALLY OWNED(1) OUTSTANDING(4)
<S> <C> <C>
Fidelity National Financial, Inc.(5) 6,696,859 32.6%
17911 Von Karman Avenue, Suite 300
Irvine, CA 92614
William P. Foley, II (6) 2,184,400 11.2%
CKE Restaurants, Inc. 1,656,453 8.9%
KCC Delaware Company 1,005,877 5.4%
9440 Santa Monica Blvd.
Suite 407
Beverly Hills, CA 90210
Andrew F. Puzder (7) 614,000 3.2%
Dermot Rowland (8) 593,805 3.2%
Burt Sugarman (9) 55,000 *
Nicholas J. Caddeo (10) 68,200 *
Kevin Osborn (11) 33,334 *
Lynn Whiteford (12) 68,000 *
Peter Bedzyk (13) 115,599 *
Theodore Abajian (14) 60,000 *
C. Thomas Thompson (15) 66,000 *
Frank P. Willey (16) 125,000 *
Charles Rolles (17) 55,000 *
Andrew D. Simons (18) 10,000 *
All officers and directors as a
group (15 persons)(19) 5,054,215 24.1%
</TABLE>
* Represents less than 1% of the outstanding common stock of the Company.
(1) Unless otherwise noted, the Company believes that all shares are
beneficially owned and that all persons named in the table have sole
voting and investment power with respect to all shares of Company
common stock owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from April, 26, 2000 upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are
held by such person (but not those held by any other person) and which
are exercisable within 60 days from April 26, 2000 have been exercised.
(3) Unless otherwise indicated, the address of each stockholder listed is
360 S. Hope Street, Suite 300, Santa Barbara, California. 92803.
(4) Percentage calculation assumes owners derivative securities exercisable
within 60 days have been exercised.
(5) Includes 1,970,000 shares issuable upon the exercise of presently
exercisable warrants.
7
<PAGE> 8
(6) Excludes the 6,696,859 beneficial shares held by Fidelity National
Financial, Inc., of which Mr. Foley is Chairman of the Board and Chief
Executive Officer, and 1,656,453 beneficial shares held by CKE
Restaurants, Inc., of which Mr. Foley is the Chairman of the Board.
Includes 1,010,000 shares issuable upon the exercise of presently
exercisable nonstatutory stock options
(7) Includes 610,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(8) Includes 136,116 shares issuable upon the exercise of stock options
exercisable within 60 days.
(9) Excludes 1,005,877 shares held by KCC Delaware Company, a wholly-owned
subsidiary of Giant Group, LTD., of which Burt Sugarman is the Chief
Executive Officer. Includes 55,000 shares issuable upon the exercise of
presently exercisable nonstatutory stock options.
(10) Includes 47,500 shares issuable upon the exercise of stock options
exercisable within 60 days.
(11) Includes 33,334 shares issuable upon the exercise of stock options
exercisable within 60 days.
(12) Includes 65,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(13) Includes 112,259 shares issuable upon the exericise of stock options
exercisable within 60 days.
(14) Includes 60,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(15) Includes 65,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(16) Includes 125,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(17) Includes 55,000 shares issuable upon the exericise of stock options
exercisable within 60 days.
(18) Includes 10,000 shares issuable upon the exericise of stock options
exercisable within 60 days.
(19) Includes an aggregate of 2,397,543 shares issuable upon the exercise of
stock options exercisable within 60 days held by officers and directors
of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CKE Restaurants, Inc.
The Company and CKE share certain officers and directors. The Company is a
party to an agreement with CKE pursuant to which CKE provides the Company with
certain general and administrative support. In 1999, the Company incurred
$500,000 for such services.
As of December 30, 1999, there were 210 Carl's Jr./Green Burrito restaurants
in operation in California, Arizona, Oregon, Nevada, Oklahoma, Kansas and
Mexico. For the fiscal year ended December 30, 1999, the Company recognized
franchise revenues generated from CKE dual-concept franchise stores of
approximately $837,000 and had receivable balances of $123,000 related to
royalty and franchise fee payments due from CKE.
The Company leases approximately 650 square feet of office space from CKE on
a month-to-month basis at the rate of approximately $2,500 per month.
Fidelity National Financial, Inc.
The Company and Fidelity share certain officers and directors. In
conjunction with the La Salsa acquisition on July 15, 1999, 500,000 of SBRG
warrants held by Fidelity were cancelled and reissued by the Company to the
selling shareholders of La Salsa Holding, Inc. Fidelity owned approximately 4.7
million shares or 25% of the Company's common stock at December 30, 1999 and
holds warrants to acquire an additional 1,970,000 shares of the Company's common
stock.
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Granite Financial, Inc.
On October 1, 1999 the Company entered into an equipment lease
financing transaction with Granite Financial, Inc., a wholly owned subsidiary of
Fidelity National Financial, Inc. for certain point of sale equipment for JB's
Family Restaurants, Inc., costing $1.3 million. Under the agreement between the
parties, the Company makes monthly payments of $41,000.
Checkers Drive-In Restaurants, Inc.
The Company and Checkers share certain officers and directors. During 1999,
the Company received $104,408 from Checkers for salary payments made by the
Company to certain officers on behalf of Checkers. The Company presently owns
399,471 shares or 4.3% of Checkers common stock.
SUPPLEMENTAL INFORMATION
An annual report and an information statement shall be furnished to the
security holders of the Company subsequent to the filing of this Form 10-K. The
Company shall furnish copies of the annual report to security holders and the
proxy statement to the Securities and Exchange Commission when it is sent to the
security holders.
9
<PAGE> 10
Warrant transactions for 1999, 1998 and 1997 described above are as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------------------------- --------------------------- ---------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- ---------------- --------- ---------------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Warrants outstanding
January 1, ............ 3,000,000 $ 6.50 4,000,000 $ 6.12 4,000,000 $ 6.12
Issued .................. 500,000 7.25
Canceled ................ (500,000) 7.25 -- -- -- --
Exercised ............... -- -- (1,000,000) 5.00 -- --
--------- ---------- ---------
Warrants outstanding
December 31, .......... 3,000,000 $ 6.50 3,000,000 $ 6.50 4,000,000 $ 6.12
========= ========== =========
</TABLE>
In conjunction with its 1990 initial public offering, the Company entered
into an escrow agreement with three former executives pursuant to which the
former executives deposited certain shares of the Company's common stock,
originally acquired by them in 1988, into an escrow account to be released upon
the achievement of certain income levels by the Company. These shares were owned
by certain executives and shareholders prior to the initial public offering and
the underwriters requested that these shares be placed into escrow until certain
earnings goals were achieved. The respective shareholders have retained full
voting rights and full dividend rights to the shares. These restricted shares
continue to be included in shares outstanding but have been excluded when
calculating basic earnings per share. As of December 31, 1999 and 1998, 120,000
and 178,571 shares, respectively, were in the escrow account to be returned to
the Company for cancellation if the Company has not reported earnings of
$1,500,000 for any twelve-month period concluding with the twelve-month period
ending June 30, 1998. The Company is currently evaluating whether to extend or
terminate the escrow agreement.
14. STOCK-BASED COMPENSATION PLANS
The Company has certain stock option plans and from time-to-time grants
other nonstatutory options. Options are granted to eligible employees and
directors, officers and consultants who are actively involved in the operations
or development of the business of the Company. Generally, the exercise price of
options granted approximates the fair market value of the Company's common stock
on the date of grant. Currently, outstanding options become exercisable either
immediately or over a period of up to three years and expire five-to-ten years
after the grant date. The following provides additional information on these
plans and other options:
1998 Stock Option Plan
In 1998, the Board of Directors adopted the 1998 Stock Option Plan (the
"Plan"). Awards granted under the Plan are either incentive stock options or
non-qualified stock options, with vesting and pricing provisions determined by
the Board of Directors or a committee comprised of at least two outside
directors of the Company. Under the Plan, incentive options may be granted to
officers and other key employees of the Company (including directors if they are
also employees of the Company) and non-qualified options may be granted to
officers and other key employees of the Company, any member of the Board of
Directors or consultants. Options normally have a term of 10 years from the date
of grant and become exercisable over a three year period following the grant
date and are priced at the fair market value of the shares on the date of grant.
In August 1999, the Plan was amended to increase the number of shares available
for issuance under the Plan to 2,000,000. As of December 31, 1999, there were
1,452,500 stock options outstanding with exercise prices ranging from $1.88 to
$4.88 and 547,500 options remain available to be granted.
In connection with the acquisition of Timber Lodge on September 1, 1998,
the Company assumed all options outstanding under an existing Timber Lodge stock
option plan. Options under this plan become exercisable over a thirty-month
period and remain outstanding for a period of ten years following the date of
grant. As of December 31, 1999, there were 175,120 stock options outstanding
with exercise prices ranging from $2.75 to $6.78. No further shares may be
granted under this plan.
Incentive Stock Option Plan
In 1990, the Board of Directors of the Company adopted an Incentive Stock
Option Plan ("ISOP"). Under the ISOP, all key employees, including officers and
directors (who are also employees) of the Company are eligible to receive
options. To be eligible to receive options under the ISOP, an employee must have
been a full-time employee in good standing with the Company for one year. The
total number of options authorized under the plan is 100,000. As of December 31,
1999, the Company has 100,000 options available for future grant under the plan.
Non-Qualified Stock Option Plan
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SANTA BARBARA RESTAURANT GROUP, INC.
By: /s/ THEODORE ABAJIAN
------------------------------------
Theodore Abajian
Chief Financial Officer
Date: April 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ WILLIAM P. FOLEY, II Chairman of the Board, Director April 28, 2000
- ---------------------------
William P. Foley, II
/s/ ANDREW F. PUZDER Chief Executive Officer, Director April 28, 2000
- --------------------------- (Principal Executive Officer)
Andrew F. Puzder
/s/ THEODORE ABAJIAN Chief Financial Officer, April 28, 2000
- --------------------------- (Principal Financial and Accounting Officer)
Theodore Abajian
/s/ FRANK P. WILLEY Director April 28, 2000
- ---------------------------
Frank P. Willey
/s/ C. THOMAS THOMPSON Director April 28, 2000
- ---------------------------
C. Thomas Thompson
/s/ CHARLES ROLLES Director April 28, 2000
- ---------------------------
Charles Rolles
/s/ BURT SUGARMAN Director April 28, 2000
- ---------------------------
Burt Sugarman
/s/ DERMOT F. ROWLAND Director April 28, 2000
- ---------------------------
Dermot F. Rowland
</TABLE>
11
<PAGE> 12
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-30-1999
<CASH> 3,371
<SECURITIES> 1,065
<RECEIVABLES> 2,132
<ALLOWANCES> 338
<INVENTORY> 1,476
<CURRENT-ASSETS> 12,923
<PP&E> 43,270
<DEPRECIATION> 5,255
<TOTAL-ASSETS> 92,006
<CURRENT-LIABILITIES> 18,981
<BONDS> 0
0
0
<COMMON> 1,659
<OTHER-SE> 56,283
<TOTAL-LIABILITY-AND-EQUITY> 92,006
<SALES> 110,201
<TOTAL-REVENUES> 114,402
<CGS> 73,273
<TOTAL-COSTS> 98,119
<OTHER-EXPENSES> 20,103
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 704
<INCOME-PRETAX> (3,466)
<INCOME-TAX> (964)
<INCOME-CONTINUING> (2,502)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,502)
<EPS-BASIC> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
