<PAGE> 1
As filed with the Securities and Exchange Commission on July 23, 1999
Registration No. 333-____________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CKE RESTAURANTS, INC.
(Exact name of registrant as specified in charter)
Delaware 33-0602639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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401 W. Carl Karcher Way, Anaheim, California 92801
(714) 774-5796
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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Andrew F. Puzder, Esq.
Executive Vice President and General Counsel
CKE Restaurants, Inc.
401 W. Carl Karcher Way, Anaheim, California 92801
(714) 774-5796
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
C. Craig Carlson, Esq.
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
(949) 725-4000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective. If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
Proposed Proposed
maximum maximum
Title of each class Amount to be offering price aggregate offering Amount of
of securities to be registered registered per share (1) price registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value) 54,501 shares $14.0938 $768,126 $213.54
===============================================================================================================================
</TABLE>
(1) The offering price is estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c), and is based upon the
average of the high and low prices reported on the New York Stock Exchange
on July 21, 1999, which average was $14.0938 per share.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PRELIMINARY PROSPECTUS
54,501 Shares
CKE Restaurants, Inc.
Common Stock
--------------------------
This prospectus relates to the offer and sale of up to 54,501 shares of
our common stock which are held by some of our current stockholders.
The prices at which such stockholders may sell the shares in this
offering will be determined by the prevailing market price for the shares or in
negotiated transactions. We will not receive any of the proceeds from the sale
of the shares.
Our common stock is listed on the New York Stock Exchange under the
symbol "CKR." On July 21, 1999, the last reported sale price of our common stock
was $14.3125 per share.
--------------------------
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 2.
--------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the Registration
Statement filed with the Securities and Exchange Commission is effective. The
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
--------------------------
This prospectus is dated July 23, 1999
<PAGE> 3
TABLE OF CONTENTS
Page
----
The Company.............................................................. 1
Risk Factors............................................................. 2
Use of Proceeds.......................................................... 8
Selling Stockholders..................................................... 8
Plan of Distribution..................................................... 9
Experts.................................................................. 9
Legal Matters............................................................ 9
Where You Can Find More Information...................................... 10
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
The information contained in or incorporated by reference in this
prospectus discusses our plans and strategies for our business or state other
forward-looking statements that involve a number of risks and uncertainties.
Forward-looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "seeks,"
"pro forma" or "anticipates," or other variations thereof (including their use
in the negative), or by discussions of strategies, plans or intentions. These
forward-looking statements reflect the current views of our management; however,
various risks, uncertainties and contingencies could cause our actual results,
performance or achievements to differ materially from those expressed in, or
implied by, these statements, including the following:
o our ability to grow and implement cost-saving strategies;
o increases in our food, labor and occupancy and other operating
costs;
o our ability to compete in the quick-service restaurant industry;
o our ability to pay principal and interest on our substantial debt;
o our ability to borrow in the future;
o our ability and the ability of our franchisees, suppliers and
vendors to implement an effective Y2K readiness program;
o adverse legislation or regulation;
o adverse weather conditions;
o our ability to sustain or increase historical revenues and profit
margins; and
o continuation of certain trends and general economic conditions in
our industry.
In addition, such forward-looking statements are necessarily dependent
upon assumptions and estimates that may prove to be incorrect. Accordingly,
while we believe that the plans, intentions and expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that such
plans, intentions or expectations will be achieved. The information contained in
this prospectus, including the information set forth under the caption "Risk
Factors," identifies important factors that could cause such differences.
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THE COMPANY
CKE Restaurants, Inc. owns, operates and franchises 3,799 quick-service
restaurants primarily under the Carl's Jr., Hardee's and Taco Bueno brand names.
Our Hardee's and Carl's Jr. chains are the fourth and seventh largest
quick-service hamburger restaurant chains in the United States, respectively,
based on domestic systemwide sales. Based on publicly available data, our
company-operated Carl's Jr. and Taco Bueno restaurants generate restaurant-level
operating margins that are among the highest of the major quick-service
restaurant chains.
o Carl's Jr.(R)--Carl's Jr. was founded in 1956 and is located
primarily in the Western United States, with a leading market
presence in California. The Carl's Jr. menu features several
charbroiled hamburgers, chicken sandwiches, steak sandwiches and
other signature items, including the Famous Star, Western Bacon
Cheeseburger(R), Super Star(R), Charbroiler Chicken Sandwiches(R),
Crispy Chicken Sandwiches(R) and the Charbroiled Sirloin Steak
Sandwich. Carl's Jr. differentiates itself from its competitors by
offering menu items that are generally made-to-order, meet
exacting quality standards and have a strong reputation for
quality and taste. As of May 17, 1999, our Carl's Jr. system
included 878 restaurants, of which we operated 547 restaurants and
our franchisees and licensees operated 331 restaurants.
o Hardee's(R)--We acquired Hardee's in July 1997. This acquisition
enabled us to expand the scope of our operations and become one of
the leading nationwide operators of quick-service hamburger
restaurants. Hardee's was founded in 1961 and has significant
market presence in the Southeastern and Midwestern United States.
We believe there is significant value in Hardee's and Carl's Jr.'s
complementary geographic markets and relative menu strengths.
Hardee's strength is in its breakfast menu, which generates
approximately 30% of its overall revenues. This represents one of
the highest percentages in the quick-service hamburger restaurant
industry. Since we acquired Hardee's, we have acquired an
additional 697 Hardee's restaurants from franchisees in key
markets, including 557 restaurants operated by Flagstar
Enterprises, Inc. ("FEI"), then the largest Hardee's franchisee.
These additional acquisitions have enabled us to exercise further
control over and strengthen the Hardee's brand. As of May 17,
1999, our Hardee's system included 2,784 restaurants, of which we
operated 1,410 restaurants and our franchisees and licensees
operated 1,374 restaurants.
o Taco Bueno(R)--As of May 17, 1999, we owned and operated 113 Taco
Bueno quick-service Mexican restaurants located in Texas and
Oklahoma. Taco Bueno differentiates itself from its competitors by
offering a diverse menu featuring generous portions of freshly
prepared, high-quality food items. In addition to typical
quick-service Mexican offerings, such as burritos, tacos, tostadas
and combination meals, Taco Bueno features a number of signature
menu items, such as its Mexidips & Chips, Muchaco and Bueno
Chilada Platter.
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RISK FACTORS
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in our common stock.
Some information in this prospectus may contain "forward looking" statements
that discuss future expectations of our financial condition or results of
operations. The risk factors noted in this section and other factors described
in this offering memorandum could cause actual results to differ materially from
those contained in any forward-looking statements.
LEVERAGE AND ABILITY TO SERVICE DEBT--TO SERVICE OUR INDEBTEDNESS, WE WILL
REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON
MANY FACTORS BEYOND OUR CONTROL.
We have a significant amount of indebtedness. As of May 17, 1999, we
had a total of $655.2 million of long-term debt and capital lease obligations,
including current portion, and our debt to capitalization ratio was .52x. We may
be unable to incur substantial additional indebtedness in the future. While we
have been able to generate sufficient earnings to satisfy our debt service
obligations and other fixed charges, our substantial indebtedness could have
important consequences to holders of our common stock and other securities. For
example, it could:
o make it more difficult for us to satisfy our obligations under our
debt securities and other indebtedness;
o increase our vulnerability to general adverse economic and
industry conditions;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, and other general corporate purposes;
o limit our flexibility in planning for, or reacting to, changes in
our business and the industry in which we operate;
o place us at a competitive disadvantage compared to our competitors
that have less debt; and/or
o limit, along with the financial and other restrictive covenants in
our indebtedness, among other things, our ability to borrow
additional funds. Failure to comply with those covenants could
result in an event of default which, if not cured or waived, could
have a material adverse effect on us.
Our ability to make payments on and to refinance our indebtedness and
to fund planned capital expenditures will depend on our ability to generate cash
in the future. Our ability to generate cash from our operations is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond our control.
Based on our current level of operations, we believe our cash flow from
operations, available cash and available borrowings under our senior credit
facility will be adequate to meet our future liquidity needs for at least the
next few years. We cannot assure you, however, that our business will generate
sufficient cash flow from operations, that currently anticipated cost savings
and operating improvements will be realized on schedule or that future
borrowings will be available to us under our senior credit facility in an amount
sufficient to enable us to pay our indebtedness or to fund our other liquidity
needs. We may need to refinance all or a portion of our indebtedness on or
before its maturity. We cannot assure you that we will be able to refinance any
of our indebtedness on commercially reasonable terms or at all.
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UNCERTAINTIES RELATED TO THE REVITALIZATION OF HARDEE'S--WE WILL CONTINUE TO
FACE CHALLENGES IN OUR ATTEMPT TO IMPROVE OUR HARDEE'S OPERATIONS.
Revitalizing Hardee's will continue to challenge our management team.
Hardee's is a well-established but underperforming brand. When we acquired
Hardee's, it was experiencing declining system-wide same-store sales and a
declining market share in the quick-service hamburger restaurant industry. Our
initial turnaround strategy for Hardee's focused on managing costs and realizing
purchasing strategies. While we have been able to improve our Hardee's
restaurant-level operating margins, we are continuing our focus on increasing
sales by revitalizing the Hardee's brand. Specifically, we are investing large
amounts of capital into reconfiguring our Hardee's restaurants' kitchens,
replacing equipment, and remodeling restaurants to the Star Hardee's format. We
cannot assure you that these strategies will be successful. If we are unable to
achieve anticipated sales improvements and further improvements in
restaurant-level operating margins in our Hardee's restaurants on a timely
basis, cash flows generated from Hardee's operations may not be adequate to
support our turnaround strategies for Hardee's. Our success will also depend, in
part, on our Hardee's franchisees. Hardee's franchisees are not required to
participate in implementing our strategies and we cannot assure you that all
Hardee's franchisees will participate. If Hardee's franchisees do not implement
our strategies we may not achieve our goals in the desired timeframe or at all.
Failure to accomplish our goals could have a material adverse effect on our
financial condition and results of operations.
GROWTH STRATEGY--OUR ABILITY TO EXPAND OUR RESTAURANT CHAINS DEPENDS ON FACTORS
BEYOND OUR CONTROL.
Our growth strategy includes, among other things, opening additional
company-operated and franchised restaurants, remodeling our restaurants and
dual-branding our restaurant concepts. The success of our growth strategy will
depend on numerous factors, many of which are beyond our control and the control
of our franchisees, including:
o the hiring, training and retention of qualified management and
other restaurant personnel;
o the ability to obtain necessary governmental permits and
approvals;
o competition for desirable site locations;
o the availability of appropriate financing; and
o general economic conditions.
To manage our planned expansion, we must ensure the continuing adequacy
of our existing systems and procedures, including our supply and distribution
arrangements, restaurant management, financial controls and information systems.
Given the improvements we have realized in recent years in the
same-store sales growth in our company-operated Carl's Jr. restaurants, we
cannot assure you that we will be able to maintain the current level of
same-store sales growth. We experienced same-store sales declines of 1.3% and
4.8% at our company-operated Carl's Jr. restaurants for the quarters ended
January 25, 1999 and May 17, 1999, respectively.
ACQUISITION STRATEGY--ACQUIRING AND INVESTING IN UNDERPERFORMING RESTAURANT
BUSINESSES INVOLVES SPECIAL RISKS.
We have a record of acquiring underperforming restaurant companies and
improving their operations. We are not currently contemplating any significant
acquisitions of other restaurant companies. However, we will continue to
evaluate investment opportunities in other restaurant companies. Acquisitions
involve the following risks that could adversely affect our operating results:
o the diversion of management's attention;
o the assimilation of the operations and personnel of the acquired
companies; and
o the potential loss of key employees.
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We cannot assure you that any of our acquisitions or investments will
not materially or adversely affect us or that any such acquisition or investment
will enhance our business.
COMPETITION--OUR SUCCESS DEPENDS ON OUR ABILITY TO COMPETE WITH OUR MAJOR
COMPETITORS.
The foodservice industry is intensely competitive with respect to the
quality and value of food products offered, concept, service, price, dining
experience and location. We compete with major restaurant chains, some of which
dominate the quick-service restaurant industry. Our competitors also include a
variety of mid-price, full-service casual-dining restaurants, health and
nutrition-oriented restaurants, delicatessens and prepared food stores, as well
as supermarkets and convenience stores. Many of our competitors have
substantially greater financial, marketing and other resources than we have,
which may give them competitive advantages. Our competitors could also make
changes to pricing or other marketing strategies. As our competitors expand
operations, we expect competition to intensify. Such increased competition could
have a material adverse effect on our financial condition and results of
operations.
THE FOOD SERVICE INDUSTRY--CONSUMER PREFERENCES AND PERCEPTIONS, SEASONALITY AND
GENERAL ECONOMIC CONDITIONS MAY HAVE SIGNIFICANT EFFECTS ON OUR BUSINESS.
Foodservice businesses are often affected by changes in consumer
tastes, national, regional and local economic conditions and demographic trends.
The performance of individual restaurants may be adversely affected by traffic
patterns, demographics and the type, number and locations of competing
restaurants. Restaurant performance may also be affected by adverse weather
conditions, particularly in our Hardee's restaurants, because a significant
number of them are located in areas which experience severe winter conditions.
Multiunit foodservice businesses such as ours can also be materially and
adversely affected by publicity resulting from poor food quality, illness,
injury or other health concerns or operating issues stemming from one or a
limited number of restaurants. We can be similarly affected by consumer concerns
with respect to the nutritional value of quick-service food. In addition, our
dependence on frequent deliveries of food and paper products subjects our
restaurants to the risk that shortages or interruptions in supply, caused by
adverse weather or other conditions, could adversely affect the availability,
quality and cost of ingredients. Unfavorable trends or developments concerning
factors such as inflation, increased food, labor and employee benefit costs
(including increases in hourly wage and unemployment tax rates), increases in
the number and locations of competing quick-service restaurants, regional
weather conditions and the availability of experienced management and hourly
employees may also adversely affect our financial condition and results of
operations. Changes in economic conditions affecting our customers could reduce
traffic in some or all of our restaurants or impose practical limits on pricing,
either of which could have a material adverse effect on our financial condition
and results of operations. Our continued success will depend in part on our
management's ability to anticipate, identify and respond to changing conditions.
GOVERNMENT REGULATIONS--WE MUST DEVOTE SIGNIFICANT RESOURCES TO COMPLY WITH
EXTENSIVE LEGAL REQUIREMENTS APPLICABLE TO OUR FRANCHISE AND OTHER BUSINESS
OPERATIONS.
We are subject to federal regulation and certain state laws which
govern the offer and sale of franchises. Many state franchise laws impose
substantive requirements on franchise agreements, including limitations on
noncompetition provisions and on provisions concerning the termination or
nonrenewal of a franchise. Some states require that certain materials be
registered before franchises can be offered or sold in that state. The failure
to obtain or retain licenses or approvals to sell franchises could adversely
affect us or our franchisees. The restaurant industry is also subject to
extensive federal, state and local governmental regulations, including those
relating to the preparation and sale of food and those relating to building and
zoning requirements. We and our franchisees are also subject to laws governing
relationships with employees, including minimum wage requirements, overtime,
working and safety conditions and citizenship requirements. Many of our
employees are paid hourly rates based upon the federal and state minimum wage
laws. Recent legislation increasing the minimum wage has resulted in
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higher labor costs to us and our franchisees. We anticipate that increases in
the minimum wage may be offset through pricing and other cost-control efforts;
however, we cannot assure you that we or our franchisees will be able to pass
such additional costs on to customers in whole or in part.
KEY DISTRIBUTORS--DISRUPTION IN DELIVERIES MAY ADVERSELY AFFECT OUR RESTAURANTS.
Our profitability is dependent on, among other things, our continuing
ability to offer fresh, high quality food at moderate prices. While we continue
to operate our own distribution business for our Carl's Jr. system, we rely upon
independent distributors for our Hardee's and Taco Bueno restaurants. In
particular, our Hardee's restaurants depend on the distribution services of two
distributors, MBM Corporation ("MBM"), an independent supplier and distributor
of food and other products, and Fast Food Merchandisers, Inc. ("FFM"), which was
recently acquired by MBM. MBM and FFM are responsible for delivering food, paper
and other products from our vendors to our Hardee's restaurants on a regular
basis. MBM and FFM also provide distribution services to a large number of our
Hardee's franchisees. Any disruption in these distribution services could have a
material adverse effect on our business.
YEAR 2000 ISSUES--THE EFFICIENT OPERATION OF OUR RESTAURANTS RELIES ON OUR
INFORMATION SYSTEMS, WHICH MAY BE DISRUPTED UNDER CERTAIN CIRCUMSTANCES.
We rely on various information systems to manage our restaurant
operations, and regularly make investments to upgrade, enhance or replace such
systems. We are aware that some significant portion of existing electronic
equipment, including computers, software and embedded technology, was not
designed to correctly process dates after December 31, 1999. These systems store
dates as having two-digit, rather than four-digit, years, which could
potentially cause erroneous data results or program failures in the year 2000.
We continue to review the impact of such Year 2000 ("Y2K") issues on our
internal computer and non-computer systems as well as on our vendors and service
providers.
Internally, we have nearly completed the process of making the
information systems used by our company-operated Carl's Jr. and Taco Bueno
restaurants Y2K compatible, and will complete the process before the turn of the
century. With respect to our company-operated Hardee's restaurants, our review
found a number of potential Y2K compatibility problems, and we are in the
process of replacing suspect systems with Y2K compatible systems. We expect to
complete the replacement of our company-operated Hardee's restaurants' financial
information systems in November 1999, complete equipment purchasing information
systems in August 1999 and purchase back-office management information systems
in November 1999. We have not identified any other significant areas of
non-compliance in our internal computer or non-computer systems.
We believe our greatest risk with respect to Y2K issues relates to
third-party failure to appropriately address their Y2K non-compliance. Y2K
failures in key suppliers' systems, or in their respective suppliers' systems,
could affect their ability to supply us with material or services, and therefore
affect our ability to operate our restaurants. External Y2K failures could
therefore have a material adverse effect on our revenues and financial
condition. We are in the process of confirming the Y2K compliance of our
important suppliers and have been assured that MBM's, as well as our less
important vendors and service providers', Y2K compliance efforts are on
schedule. We plan to secure alternative suppliers for those who cannot assure us
of their Y2K readiness. In addition, the inability of our multiunit franchisees
to become Y2K compliant may materially adversely affect our ability to receive
royalties from them. External Y2K risks will be addressed as our survey of
suppliers is completed. Although we expect cooperation from the suppliers we are
surveying, we also rely on services such as telephones and utilities, whose Y2K
compliance is outside of our control. Therefore, we may be unable to accurately
assess the Y2K readiness of some third parties, and the impact of such
third-party non-compliance on our operations.
We plan to continue to identify, assess and to resolve all material Y2K
issues by the end of calendar 1999. We have developed or are in the process of
developing contingency plans to address significant internal and external Y2K
issues as they are identified. These contingency plans are expected to be
completed by [July] 1999. However, the Y2K problem involves pervasive complex
interrelationships, both internally and externally. As a
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result, we cannot assure you that we will identify and successfully resolve all
Y2K issues, and the possibility exists that Y2K-related disruptions could have a
material adverse effect on us.
ENVIRONMENTAL MATTERS--COMPLIANCE WITH ENVIRONMENTAL LAWS MAY ADVERSELY AFFECT
OUR FINANCIAL HEALTH.
We are subject to various federal, state and local environmental laws.
These laws govern discharges to air and water, as well as handling and disposal
practices for solid and hazardous wastes. These laws may also impose liability
for damages from and the costs of cleaning up sites of spills, disposals or
other releases of hazardous materials. We may be responsible for environmental
conditions relating to our restaurants and the land on which our restaurants are
located, regardless of whether we lease or own the restaurants or land in
question and regardless of whether such environmental conditions were created by
us or by a prior owner or tenant. Although we cannot assure you that all such
environmental conditions have been identified, these conditions include the
presence of asbestos containing materials, leaks from chemical storage tanks and
on-site spills.
We are not aware of any environmental conditions that would have a
material adverse effect on our businesses, assets or results of operations taken
as a whole. Although environmental site assessments prepared for certain
properties recommend limited further investigations or minor repairs, based on
the information currently available to us, we do not believe any of these other
issues would have a material adverse effect on these properties. Nevertheless,
we cannot assure you that environmental conditions relating to prior, existing
or future restaurants or restaurant sites will not have a material adverse
effect on us. Moreover, there is no assurance that: (1) future laws, ordinances
or regulations will not impose any material environmental liability; or (2) the
current environmental condition of the properties will not be adversely affected
by tenants or other third parties or by the condition of land or operations in
the vicinity of the properties (such as underground storage tanks).
ANTI-TAKEOVER PROVISIONS--PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND
BYLAWS COULD LIMIT THE ABILITY OF STOCKHOLDERS TO EFFECT A CHANGE IN CONTROL OF
CKE.
Our Certificate of Incorporation and Bylaws include several provisions
and features intended to render more difficult certain unsolicited or hostile
attempts to acquire our business. In addition, our Board of Directors has the
authority, without further action by our stockholders, to issue up to 5,000,000
shares of preferred stock in one or more series, and to fix the rights,
preferences and restrictions of such preferred stock. These provisions may
discourage a third party from attempting to acquire control of us and could
limit the price that investors might be willing to pay in the future for shares
of our common stock.
UNSTABLE STOCK PRICE--MANY FACTORS MAY CAUSE THE PRICE OF OUR COMMON STOCK TO
DECLINE.
Any or all of the following factors could cause the market price of our
common stock to fall:
o quarterly variations in the actual or anticipated results of our
operations, our competitors and other companies in the restaurant
industry;
o changes in general economic conditions, the financial markets or
the quick-service restaurant industry;
o our failure to meet securities analysts' expectations or changes
in their recommendations about our common stock;
o the occurrence of natural disasters; and/or
o other developments affecting us, our franchisees, our suppliers,
or our competitors.
In recent years the stock market has experienced significant price and
volume fluctuations. This volatility has had a significant effect on the market
prices of securities issued by many companies for reasons unrelated to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of our common stock.
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USE OF PROCEEDS
All of the shares of common stock covered by this Prospectus are being
offered by the selling stockholders. We will not receive any of the proceeds
from the sale of these shares.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
shares of common stock held by the selling stockholders as of July 21, 1999.
Except as otherwise noted elsewhere in this Prospectus, none of the selling
stockholders has held any position, office or other material relationship with
us or any of our predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
Shares Owned
After Offering
Shares Owned -------------------
Name Prior to Offering Shares Offered Number Percent
- ------------------- ----------------- -------------- -------- -------
<S> <C> <C> <C> <C>
Michael J. Adams 4,360 4,360 0 0
Ballard Investments 1,962 1,962 0 0
Gregory G. Brightman 7,303 7,303 0 0
Richard M. Calahan 545 545 0 0
Edgemon Properties 2,943 2,943 0 0
Hollis Geiger 4,524 4,524 0 0
Dennis Hodson 545 545 0 0
David Lamm 4,360 4,360 0 0
Donald William Manuel 7,303 7,303 0 0
Alan Palmieri 8,557 8,557 0 0
S. Kent Stewart 12,099 12,099 0 0
</TABLE>
Each of the selling stockholders is a member of Boston West, L.L.C.
("Boston West"). We also own a minority interest in Boston West, which operates
Boston Market restaurants as a franchisee of Boston Chicken, Inc. The shares
being offered by the selling stockholders were acquired from us in connection
with their release of certain claims they have asserted against us relating to
the operations of Boston West.
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PLAN OF DISTRIBUTION
The shares in this offering may be sold from time to time directly by
the selling stockholder or, alternatively, their broker-dealers or agents, may
sell these shares from time to time. Each selling stockholder will be
responsible for underwriting discounts or commissions or agent's commissions.
The shares in this offering may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated prices. The selling
stockholders may effect such sales in one or more of the following transactions
(which may involve crosses or block transactions):
o on any national securities exchange or quotation service on which
the shares offered by the selling stockholders may be listed or
quoted at the time of sale;
o in the over-the-counter market;
o in transactions otherwise than on such exchanges or services or in
the over-the-counter market; or
o through the writing of options.
Sales of the shares in this offering may also be made pursuant to Rule
144 under the Securities Act, where applicable.
The selling stockholders and any broker executing selling orders on
behalf of the selling stockholders may be deemed to be an "underwriter" within
the meaning of Section 2(11) the Securities Act of 1933, as amended (the
"Securities Act"), in which event commissions received by such broker may be
deemed to be underwriting commissions under the Securities Act. The selling
stockholders have agreed to pay all underwriting discounts, commissions and fees
applicable to the sale of shares.
LEGAL MATTERS
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, will issue an opinion about the legality of the common stock
being offered by this prospectus.
EXPERTS
The consolidated financial statements of CKE Restaurants, Inc. and its
subsidiaries as of January 31, 1999 and 1998 and for each of the years in the
three-year period ended January 31, 1999, incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended January
31, 1999, have been so incorporated in reliance upon the report of KPMG LLP,
independent certified public accountants, and upon the authority of such firm as
experts in accounting and auditing.
-8-
<PAGE> 12
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, at 7 World Trade Center, Suite 1300,
New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. You can also obtain copies of the documents
at prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facilities. Our SEC filings are also available at the office of the New York
Stock Exchange. For further information on obtaining copies of our public
filings at the New York Stock Exchange, you should call (212) 656-5060.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and later information that we file with the
SEC will automatically update and supercede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") prior to the termination of this offering:
(1) our Annual Report on Form 10-K for the fiscal year ended January
31, 1999;
(2) our Quarterly Report on Form 10-Q for the quarterly period ended
May 17, 1999; and
(3) our Current Reports on Form 8-K dated February 19, 1999, February
25, 1999 and March 18, 1999.
You may request a copy of these filings (other than an exhibit to a
filing unless that exhibit is specifically incorporated by reference into that
filing) at no cost, by writing to or telephoning us at the following address:
General Counsel
CKE Restaurants, Inc.
401 W. Carl Karcher Way
Anaheim, California 92801
Telephone requests may be directed to
(714) 774-5796
-9-
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the estimated costs and expenses in connection
with the offering of the shares of common stock pursuant to this Registration
Statement:
Registration fee to the Securities
and Exchange Commission.................................... $ 214
Accounting Fees and Expenses............................... $10,000
Legal Fees and Expenses.................................... $10,000
Miscellaneous Expenses..................................... $ 5,000
-------
Total............................................. $25,214
=======
All expenses of the offering, other than selling discounts, commissions
and legal fees and expenses incurred separately by the selling stockholders,
will be paid by the Registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation limits, to the maximum
extent permitted by Delaware law, the personal liability of directors for
monetary damages for breach of their fiduciary duties as a director. The
Registrant's Bylaws provide that the Registrant shall indemnify its officers and
directors and may indemnify its employees and other agents to the fullest extent
permitted by Delaware law.
Section 145 of the Delaware General Corporation Law ("DGCL") provides
that a corporation may indemnify any person made a party to an action (other
than an action by or in the right of the corporation) by reason of the fact that
he or she was a director, officer, employee or agent of the corporation or was
serving at the request of the corporation against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
(other than an action by or in the right of the corporation), has no reasonable
cause to believe his or her conduct was unlawful.
ITEM 16. EXHIBITS.
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation.
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of KPMG LLP.
24.1 Power of Attorney (included on signature page).
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
II-1
<PAGE> 14
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) above
do not apply if the registration statement is on Form
S-3 or Form S-8 and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934, (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Barbara, State of California, on the 23rd day
of July, 1999.
CKE RESTAURANTS, INC.
By: /s/ WILLIAM P. FOLEY II
------------------------------------
William P. Foley II
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of CKE Restaurants, Inc., do
hereby constitute and appoint William P. Foley II, Carl A. Strunk and Andrew F.
Puzder, and each of them, our true and lawful attorneys and agents, to do any
and all acts and things in our name and behalf in our capacities as directors
and officers and to execute any and all instruments for us and in our names in
the capacities indicated below, which said attorneys and agents, or either of
them, may deem necessary or advisable to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names and in the capacities
indicated below, any and all amendments (including post-effective amendments) to
this Registration Statement, or any related registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
as amended; and we do hereby ratify and confirm all that the said attorneys and
agents, or either of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM P. FOLEY II Chairman of the Board of Directors and July 23, 1999
- ------------------------------------ Chief Executive Officer
William P. Foley II (Principal Executive Officer)
/s/ CARL A. STRUNK Executive Vice President and July 23, 1999
- ------------------------------------ Chief Financial Officer
Carl A. Strunk (Principal Financial Officer and
Accounting Officer)
/s/ BYRON ALLUMBAUGH Director July 23, 1999
- ------------------------------------
Byron Allumbaugh
/s/ PETER CHURM Director July 23, 1999
- ------------------------------------
Peter Churm
/s/ CARL L. KARCHER Director July 23, 1999
- ------------------------------------
Carl L. Karcher
</TABLE>
S-1
<PAGE> 16
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ CARL N. KARCHER Director July 23, 1999
- ------------------------------------
Carl N. Karcher
/s/ DANIEL D. LANE Vice Chairman of the Board July 23, 1999
- ------------------------------------
Daniel D. Lane
Director July __, 1999
- ------------------------------------
W. Howard Lester
/s/ FRANK P. WILLEY Director July 23, 1999
- ------------------------------------
Frank P. Willey
</TABLE>
S-2
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
------- ----------- -----------
<S> <C> <C>
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation. --
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional Corporation --
(included in Exhibit 5.1).
23.2 Consent of KPMG LLP. --
24.1 Power of Attorney (included on signature page). --
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[STRADLING YOCCA CARLSON & RAUTH LETTERHEAD]
July 23, 1999
CKE Restaurants, Inc.
401 W. Carl Karcher Way
Anaheim, California 92801
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
At your request, we have examined the form of Registration Statement on
Form S-3 (the "Registration Statement"), being filed by CKE Restaurants, Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933
for resale of an aggregate of up to 54,501 shares (the "Shares") of Common
Stock, par value $.01 per share, of the Company (the "Common Stock"). The Shares
may be sold from time to time for the account of the Selling Stockholders
named in the Registration Statement.
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization, issuance and sale of the securities referred to above.
On the basis of the foregoing, and assuming that the full consideration
for each of the Shares has been received by the Company, it is our opinion that
the Shares covered by the Registration Statement have duly authorized and
validly issued and are fully paid and nonassessable shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legal Matters" in the
Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ STRADLING YOCCA CARLSON & RAUTH
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Stockholders
of CKE Restaurants, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-3 and related prospectus of CKE Restaurants, Inc. of our report dated March
18, 1999 relating to the consolidated balance sheets of CKE Restaurants, Inc.
and Subsidiaries as of January 31, 1999 and 1998, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the years
in the three-year period ended January 31, 1999, which report appears in the
January 31, 1999 annual report on Form 10-K of CKE Restaurants, Inc. and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Orange County, California
July 23, 1999
