SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other thanthat the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FOODMAKER, INC.
(Name of Registrant as Specified in its Charter)
FOODMAKER, INC.
(Name of Person(s) Filing Proxy Statement)
Paying of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-7(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
2)(2) Aggregate number of securities to which transaction applies:
3)(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11*
4) Proposed maximum aggregate value of transaction:
* Set0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined.determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FOODMAKER
January 17, 199512, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Foodmaker, Inc. to be held at 2:00 p.m. on Friday, February 17, 1995,16, 1996, at the
San Diego Mission Valley Hilton, 901Radisson Hotel, Royal Ballroom, 1433 Camino del Rio South, San Diego,
California.
We hope you will attend in person. If you plan to do so, please indicate
in the space provided on the enclosed proxy. Whether you plan to attend the
meeting or not, we urge you to sign, date and return the enclosed proxy as
soon as possible in the postage-paid envelope provided. This will ensure
representation of your shares in the event that you are unable to attend the
meeting.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Meeting and Proxy Statement.
The Directors and Officers of the Company look forward to meeting with
you.
Sincerely,
JACK W. GOODALL
Jack W. Goodall
Chairman, Chief Executive
Officer and President
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 17, 199516, 1996
The Annual Meeting of Stockholders of Foodmaker, Inc. will be held at
2:00 p.m. on Friday, February 17, 1995,16, 1996, at the San Diego Mission Valley
Hilton, 901Radisson Hotel, Royal
Ballroom, 1433 Camino del Rio South, San Diego, California. The meeting will
be held to vote upon the following proposals:
1. To elect nine directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants; and
3. To approve the Foodmaker, Inc. Deferred Compensation Plan for
Non-Management Directors;
4. To approve the Foodmaker, Inc. Non-Employee Director Stock Option
Plan;
and to act upon such other matters as may properly come before the meeting.meeting
or any postponement or adjournment thereof.
Only stockholders of record at the close of business on January 2,December 29,
1995, will be entitled to vote at the meeting.
By Order of the Board of Directors
WILLIAM E. RULON
William E. Rulon, Secretary
San Diego, California
January 17, 1995
12, 1996
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
____________________
PROXY STATEMENT
____________________
ANNUAL MEETING OF STOCKHOLDERS
February 17, 1995
January 17, 199516, 1996
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Foodmaker, Inc., a Delaware corporation
("Foodmaker" or the "Company"), for use at the Annual Meeting of Stockholders
(the "Meeting") to be held at 2:00 p.m. on Friday, February 17,
1995,16, 1996, and all
adjournments and postponements thereof. This Proxy Statement and form of
proxy were mailed to stockholders on or about January 17, 1995.12, 1996.
The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Stockholders, Proxy Statement and form of proxy and the
solicitation of proxies will be paid by Foodmaker.
VOTING
The close of business on January 2,December 29, 1995 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote
at the Meeting. On that date, there were 38,688,60038,802,195 shares of Foodmaker
common stock, $.01 par value (the "Common Stock"), outstanding. Each share is
entitled to one vote on any matter that may be presented for consideration
and action by the stockholders.
Proxies will be voted FOR management's nominees for election as directors
and FOR ProposalsProposal 2, 3 and 4, unless the stockholder otherwise directs in the proxy.
Where the stockholder has appropriately directed how the proxy is to be
voted, it will be voted accordingly. The proxy may be revoked at any time
before it is voted at the Meeting by submitting written notice of revocation
to the Secretary of Foodmaker, or by filing a duly executed proxy bearing a
later date. A proxy will not be voted if the stockholder who executed it is
present at the Meeting and elects to vote the shares represented thereby in
person.
-1-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 15, 1994, information with
respect to beneficial ownership of voting securities of the Company by (i)
each person who is known to the Company to be the beneficial owner of more
than 5% of any class of the Company's voting securities, (ii) each director
of the Company, (iii) each executive officer listed in the executive
compensation table herein and (iv) all directors and executive officers of
the Company as a group.
Number of Shares Percent
Beneficially of
Name Owned(1) Class(1)
- --------------------------------------------- ----------- -------
The Fulcrum III Limited Partnership(2)(3) . . . . 10,430,688 27.0%
The Second Fulcrum III Limited Partnership(2)(3). 7,090,418 18.3%
Edward Gibbons(4) . . . . . . . . . . . . . . . . 17,753,606 45.9%
The Capital Group, Inc.(5). . . . . . . . . . . . 4,206,100 10.9%
Jack W. Goodall . . . . . . . . . . . . . . . . . 1,021,473 2.6%
Robert J. Nugent. . . . . . . . . . . . . . . . . 692,271 1.8%
Charles W. Duddles. . . . . . . . . . . . . . . . 489,293 1.3%
Kenneth R. Williams . . . . . . . . . . . . . . . 400,266 1.0%
James J. Bischoff . . . . . . . . . . . . . . . . 37,500 *
Leonard I. Green(6) . . . . . . . . . . . . . . . 50,000 *
L. Robert Payne . . . . . . . . . . . . . . . . . 41,000 *
Paul T. Carter. . . . . . . . . . . . . . . . . . 16,750 *
Christopher V. Walker . . . . . . . . . . . . . . 12,000 *
Michael E. Alpert . . . . . . . . . . . . . . . . -- *
All directors and executive officers
as a group (20 persons) . . . . . . . . . . . 21,338,853 53.6%
- -------------------------
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date which such
person has the right to acquire within 60 days after such date. For
purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, any security
which such person or persons has the right to acquire within 60 days
after such date is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percentage ownership of
any other person. Messrs. Goodall, Nugent, Duddles, Williams,
Bischoff, Payne and Carter have the right to acquire within 60 days of
the above date, 367,500, 187,500, 125,000, 117,500, 37,500, 36,000 and
6,750, respectively, of the shares reflected above as beneficially
owned.
(2) The Fulcrum III Limited Partnership and The Second Fulcrum III Limited
Partnership (collectively "Fulcrum III") are Delaware limited
partnerships. Gibbons, Goodwin, van Amerongen ("GGvA"), successor to
Gibbons, Green, van Amerongen ("Gibbons Green"), is the general partner
of each such partnership, and may be deemed to be a beneficial owner of
the shares held by each such partnership.
(3) The address of The Fulcrum III Limited Partnership and The Second
Fulcrum III Limited Partnership is 600 Madison Avenue, New York, New
York 10022.
(4) Of these shares, 232,500 are owned by Mr. Gibbons and his wife.
Mr. Gibbons and the other general partners of GGvA, Todd Goodwin, Lewis
van Amerongen and Elizabeth V. Camp, exercise shared voting and
investment power with respect to shares held by Fulcrum III and may be
deemed beneficial owners of the shares held by such partnerships.
(5) According to the most recent filing on Schedule 13G, Capital Guardian
Trust Company and Capital Research and Management Company, operating
subsidiaries of The Capital Group, Inc., exercised investment
discretion with respect to 2,426,100 and 1,780,000 shares,
respectively, and sole voting power with respect to 1,729,700 of such
shares, all of which are owned by various institutional investors. The
address of The Capital Group, Inc. is 333 South Hope Street, Los
Angeles, CA 90071.
(6) In addition to the shares owned directly and reflected above, pursuant
to an arrangement with GGvA, Mr. Green is entitled to the economic
benefit of 102,946 shares of Common Stock held by Fulcrum III, which
would include the right to receive such shares upon a distribution of
shares by Fulcrum III to its partners. In addition, Mr. Green would be
entitled to his 29.38% share of any carried interest payable by Fulcrum
III to GGvA as general partner of Fulcrum III, which would result in
Mr. Green having the economic benefit of a greater number of shares.
-2-
NOMINEES FOR ELECTION AS DIRECTORS
The directors of Foodmaker are elected annually. The term of office of
all present directors expires on the date of the Meeting, at which time all
nine directors are to be elected to serve for the ensuing year and until
their successors are elected and qualified. The nominees of management for
election as directors are set forth below along with certain information
regarding these nominees. Should any nominee become unavailable to serve as a
director, the proxies will be voted for such other person as the Board of
Directors shall designate. To the best of Foodmaker's knowledge, all nominees
are and will be available to serve.
The following table provides certain information about each of the
Company's directors as of January 1, 1995:1996:
Director
Name Age Positions with the Company Since
- ----------------------------------------------------- --- -------------------------- -------------
Michael E. Alpert(4) 52Alpert(5) 53 Director 1992
Paul T. Carter(2)(4) 72(5) 73 Director 1991
Charles W. Duddles 5455 Executive Vice President, 1988
Chief Administrative Officer,
Chief Financial Officer and
Director
Edward Gibbons(1)(2)(3)(4) 58(5) 59 Director 1985
Jack W. Goodall(1) 5657 Chairman of the Board, 1985
Chief 1985 Executive Officer
and President
Leonard I. Green(1)(2)(3) 61(4) 62 Director 1985
Robert J. Nugent 5354 Executive Vice President, 1988
President 1988 and Chief Operating
Officer of Jack In The Box
Division and Director
L. Robert Payne(1)(2)(4) 61(5) 62 Director 1986
Christopher V. Walker 4849 Director 1988
- --------------------------__________________________
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option and Compensation Committees.
(4) Member of the Investment Committee.
(5) Member of the Corporate Oversight Committee.
During the past five years, the business experience, principal
occupations, and the employment of the nominees has been as follows:
Mr. Alpert was a partner in the San Diego Office of the law firm of
Gibson, Dunn & Crutcher for more than five years prior to his retirement on
August 1, 1992. He is currently Advisory Counsel to Gibson, Dunn & Crutcher.
Gibson, Dunn & Crutcher provides legal services from time to time to the
Company.
Mr. Carter has been an insurance consultant for the Government Division
of Corroon & Black Corporation since February 1987. From February 1987 until
December 1990, he was also a consultant to the San Diego Unified School
District on insurance matters. He retired in February 1987 as Chairman and
Chief Executive Officer of Corroon & Black Corporation, Southwestern Region
and as Director and Senior Vice President of Corroon & Black Corporation, New
York.
Mr. Duddles has been Executive Vice President and Chief Administrative
Officer of the Company since May 1988. He has been Chief Financial Officer of
the Company since October 1985 and was Senior Vice President from October
1985 to May 1988. He was previously Vice President and Controller of the
Company from August 1979 to July 1981 and Senior Vice President, Finance and
Administration from August 1981 to October 1985.
He is also a director of
Family Restaurants, Inc.-2-
Mr. Gibbons has been a general partner of GGvA,Gibbons, Goodwin, van
Amerongen ("GGvA"), successor to Gibbons, Green, van Amerongen ("Gibbons
Green"), an investment banking firm specializing in management buyouts, for
more than five years preceding the date hereof. Mr. Gibbons is also a
director of Robert Half International, Inc., Bath Iron Works Corporation, Horace Mann Companies and
Family Restaurants, Inc.
-3-
Mr. Goodall has been President of the Company since April 1970, Chief
Executive Officer of the Company since February 1979 and Chairman since
October 1985. He has beenwas also Chairman and Chief Executive Officer of Family
Restaurants, Inc. sincefrom January 1994.1994 until his resignation in 1995. He has beenwas a
director of Grossmont Bank, a wholly-owned subsidiary of Bancomer, S.A., sincefrom
1980 until October 1995, and has been a director of Van Camp Seafood Company,
Inc. since April 1992 and a director of THC Corp.Thrifty Payless, Inc. since October
1992. He has been a director of Ralcorp Holdings, Inc. since March 1994 and was a Vice President of Ralston Purina Company from July 1981
to October 1985.1994.
Mr. Green has been a general partner of Leonard Green & Partners, an
investment firm, since June 1989. Until June 28, 1989 and for more than five
years preceding that date, he was a partner of Gibbons Green. Mr. Green is
also a director of Horace Mann Companies, Kash n' Karry Food Stores, Inc.,
Australian Resources N.L., Carr-Gottstein Foods Co., Thrifty Payless, Inc.,
and United Merchandising Corp. and Family Restaurants, Inc.
Mr. Nugent has been Executive Vice President of the Company since
February 1985 and President and Chief Operating Officer of the Jack In The
Box Division of the Company since May 1988. He was Executive Vice President-OperationsPresident-
Operations and Marketing from February 1985 to May 1988. He was previously
Division Vice President of the Company from August 1979 to April 1982 and
Corporate Vice President-Restaurant Operations from April 1982 through
January 1985.
Mr. Payne has beenwas Chairman of the Board of Grossmont Bank, a wholly-owned
subsidiary of Bancomer, S.A., sincefrom February 1974 until October 1995, and
President and Chief Executive Officer of Multi-Ventures, Inc. since February
1976. Multi-Ventures, Inc. is a real estate development and investment
company that is also the managing partner of the San Diego Mission Valley
Hilton. He was a principal in the Company prior to its acquisition by its
former parent Ralston Purina Company in 1968.
Mr. Walker has been a Managing Director of Trust Company of the West
since April 1995. He was a general partner of Leonard Green & Partners, an
investment firm, sincefrom September 1989.1989 until March 1995. He was associated with
Gibbons Green from November 1985 and was a partner thereof from January 1989
until September 1989.
Prior to joining Gibbons Green, Mr. Walker worked from
March 1984 to October 1985 for Zimmerman Holdings, Inc., a California based
private holding company engaged in the acquisition and operation of
manufacturing companies. He is also a director of Kash n' Karry Food
Stores, Inc. and Australian Resources N.L., an Australian gold mining
company.-3-
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
During 1994 (fiscal year),fiscal 1995, the Board of Directors had an Executive Committee,
an Audit Committee, a Stock Option Committee, an Investment Committee, a
Corporate Oversight Committee and a Compensation Committee. Foodmaker does
not have a Nominating Committee.
The Executive Committee, consisting of Messrs. Gibbons, Goodall, Green
and Payne, may exercise all the authority of the Board in the management of
the Company in the intervals between meetings of the Board of Directors. In
1994,1995, the Executive Committee held threetwo meetings.
The Audit Committee, consisting of Messrs. Carter, Gibbons, Green, and
Payne, directs the internal and external audit activities of Foodmaker as
deemed appropriate. The Audit Committee held one meeting in 1994.1995.
The Stock Option Committee and the Compensation Committee, both
consisting of Messrs. Gibbons and Green, held no formal meetings in 1994.1995.
However, stock options were granted on several occasions by unanimous written
consents.
The Investment Committee, consisting of Messrs. Gibbons, Green and
Payne, held no meetings in 1995 but took action by unanimous written consent
on one occasion.
The Corporate Oversight Committee, consisting of Messrs. Alpert, Carter,
Gibbons and Payne, which was established to report to the Board of Directors
regarding any conflicts of interest which may arise in the relationship
between the Company and Family Restaurants, Inc., held twono meetings in 1994.1995.
In 1994,1995, the Board of Directors held sixfour general meetings and on one
occasion acted by unanimous written consent. Each director, other than Mr.
Green,Gibbons, attended more than 75% of the aggregate of the general meetings and
the meetings of committees on which such director serves.
Directors who are also officers of Foodmaker or its subsidiaries receive
no additional compensation for -4-
their services as directors. The independent
directors of the Company receive compensation consisting of an $18,000 annual
retainer of $18,000 and $1,500 for each Board of Directors' meeting attended in person.
No additional compensation is paid for actions taken by the Board of
Directors by written consent or participating in telephonic meetings. Under
the Company's Deferred Compensation Plan for Non-Management Directors, each
independent director may defer any portion or all of such compensation.
Amounts deferred under the plan's equity option are immediately converted to
stock equivalents at the then current market price of the Company's common
stock and matched at a 25% rate by the Company. A director's stock equivalent
account is distributed in cash, based upon the ending number of stock
equivalents and the market value of the Company's common stock, at the
conclusion of the director's service as a member of the Board of Directors.
All of the independent directors have elected to defer their compensation
pursuant to this plan since its adoption on February 17, 1995.
Pursuant to the Company's Non-Employee Director Stock Option Plan,
commencing February 17, 1995 and annually thereafter upon election to the
Board, each independent director also receives a stock option to purchase
10,000 shares of the Company's common stock at the market value, as defined,
on the date of grant.
Additionally, the Company paid Mr. Carter $15,000 in fiscal 19941995 and
intends to pay him the same amount in fiscal 19951996 for consultation services
relating to insurance matters. Except as described below under "Compensation
Committee Interlocks and Insider Participation", no additional compensation
is paid to other members of the Board of Directors.
For a description-4-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of two new
compensation plans for non-employee directors recently approved by the
Executive CommitteeDecember 15, 1995, information
with respect to beneficial ownership of voting securities of the BoardCompany by
(i) each person who is known to the Company to be the beneficial owner of
Directors, subjectmore than 5% of any class of the Company's voting securities, (ii) each
director of the Company, (iii) each executive officer listed in the executive
compensation table herein and (iv) all directors and executive officers of
the Company as a group.
Number of Shares Percent
Beneficially of
Name Owned(1) Class(1)
- --------------------------------------------- ---------------- ---------
The Capital Group Companies, Inc.(2). . . . . . . . 4,262,100 11.0%
The Prudential Insurance Company of America(3). . . 4,132,617 10.7%
Jack W. Goodall . . . . . . . . . . . . . . . . . . 1,088,973 2.8%
Robert J. Nugent. . . . . . . . . . . . . . . . . . 704,771 1.8%
Charles W. Duddles. . . . . . . . . . . . . . . . . 494,793 1.3%
Kenneth R. Williams . . . . . . . . . . . . . . . . 431,206 1.1%
Edward Gibbons(4) . . . . . . . . . . . . . . . . . 349,736 *
Paul L. Schultz . . . . . . . . . . . . . . . . . . 171,903 *
Leonard I. Green(5) . . . . . . . . . . . . . . . . 166,695 *
L. Robert Payne . . . . . . . . . . . . . . . . . . 71,000 *
Paul T. Carter. . . . . . . . . . . . . . . . . . . 28,750 *
Christopher V. Walker . . . . . . . . . . . . . . . 22,000 *
Michael E. Alpert . . . . . . . . . . . . . . . . . 10,000 *
All directors and executive officers
as a group (20 persons) . . . . . . . . . . . . . 4,166,909 10.4%
_________________________
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to stockholders'
approval, see "Proposed Deferred Compensation Planhave
"beneficial ownership" of any shares as of a given date which such person
has the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or
group of persons named above on a given date, any security which such
person or persons has the right to acquire within 60 days after such date
is deemed to be outstanding, but is not deemed to be outstanding for Non-Management Directors"the
purpose of computing the percentage ownership of any other person. Messrs.
Goodall, Nugent, Duddles, Williams, Gibbons, Schultz, Green, Payne,
Carter, Walker and "Proposed Non-Employee Director Stock Option Plan."Alpert have the right to acquire within 60 days of the
above date, 385,000, 200,000, 135,000, 150,000, 10,000, 75,833, 10,000,
46,000, 16,750, 10,000 and 10,000, respectively, of the shares reflected
above as beneficially owned.
(2) According to the most recent filing on Schedule 13G, Capital Guardian
Trust Company and Capital Research and Management Company, operating
subsidiaries of The Capital Group Companies, Inc., exercised as of
December 31, 1994, investment discretion with respect to 2,432,100 and
1,830,000 shares, respectively, and sole voting power with respect to
1,735,700 of such shares, all of which are owned by various institutional
investors. The address of The Capital Group Companies, Inc. is 333
South Hope Street, Los Angeles, CA 90071.
(3) According to the most recent filing on Schedule 13G, The Prudential
Insurance Company of America ("Prudential"), as of November 30, 1995, held
4,114,617 shares in its general account and another 18,000 shares in
various accounts for the benefit of its clients but over which Prudential
may have direct or indirect voting and/or investment discretion.
Prudential's address is Prudential Plaza, Newark, NJ 07102-3777.
(4) Includes 25,000 shares owned by Mr. Gibbons' wife.
(5) Includes 107,235 shares owned by TG Limited, a general partnership in
which Mr. Green is the managing partner.
-5-
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning 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 years
indicated. Bonus amounts were accrued during the year and paid shortly
thereafter.
Securities All Other
----------Annual Compensation---------- StockCompensation-------- Underlying Compensa-
Name and Position Year Salary($) Bonus($) Other($) Options tion($Options(#) -tion($)
- ------------------------------------------------------------------ ---- --------- -------- ------------------- ----------- ------- ----------------------
Jack W. Goodall 1995 648,867 120,000 27,436 - 1,344
Chairman of the Board, Chief Executive 1994 631,951 - 62,138 35,000 1,344
Chairman of the Board,Officer and President 1993 563,077 - 87,943 - 1,344
Chief Executive 1992 500,000 375,000 88,659 224,570 1,344
Officer and President
Robert J. Nugent 1995 382,370 70,000 4,613 - 1,344
Executive Vice President, President and 1994 371,165 - 19,659 25,000 1,344
Executive Vice President,Chief Operating Officer of 1993 328,461 - 42,380 - 1,344
President and Chief 1992 300,000 180,000 47,112 135,205 1,344
Operating Officer of
Jack In The Box Division and Director
Charles W. Duddles 1995 282,370 50,000 8,986 - 1,344
Executive Vice President, Chief 1994 271,165 - 21,438 20,000 1,344
Executive Vice President,Administrative Officer, Chief Financial 1993 234,615 - 44,666 - 1,344
Chief Administrative 1992 225,000 135,000 42,634 88,660 1,344
Officer, Chief Financial
Officer and Director
Kenneth R. Williams 1995 282,370 40,625 10,087 25,000 1,344
Senior Vice President, Executive Vice 1994 271,165 - 30,075 15,000 1,344
Senior Vice President of Jack In The Box Division 1993 234,615 - 47,588 - 1,344
ExecutivePaul L. Schultz 1995 208,171 29,250 7,992 22,500 1,032
Vice President, 1992 200,000 150,000 46,186 95,000 1,344Vice President of 1994 198,420 - 19,462 10,000 787
Operations of Jack In The Box Division James J. Bischoff 1994 159,627 60,000 8,314 75,000 448
Vice President, Executive 1993 168,923 - 39,094 - 787
- - -
Vice President of 1992 - - - - -
Jack In The Box Division----------------------------------------
Other annual compensation in 1994 includes approximate automobile
allowances, which were discontinued February 7, 1994, of $17,000 for Mr.
Goodall and $11,000 for Mssrs.Messrs. Nugent, Duddles, Williams and Schultz,
and in 1993, $48,000 for Mr. Goodall, $32,000 for Messrs. Nugent,
Duddles and Williams, and in
1993 and 1992, $48,000$28,000 for Mr. Goodall and $32,000 for each of the
aforementioned executive officers.Schultz. Also included are the
Company's matching contributions to the deferred compensation plan,
which for Mr. Goodall were $19,466 in 1995, $18,959 in 1994 and $28,142
in 1993, and $22,500 in 1992, for Mr. Williams $8,135 in 1994 and for Mr. Duddles $11,088 in
1993. In
1994,1993; and reimbursement for executive health benefits were $25,543 for Mr. Goodall of
$7,494 in 1995 and $10,735$25,543 in 1994 and for Mr. Williams.Williams $10,735 in 1994.
Other included amounts do not exceed 25% of the total other annual
compensation in years when such compensation exceeds the limits of the
lesser of 10% of salary and bonus or $25,000.
-5-
All other compensation represents the premiums on term life insurance
for the benefit of the named executive officer. The Company has no
interest in such insurance policies.
SinceFrom January 1994 through April 1995, approximately 50% of Mr. Goodall's
listed annual compensation has beenwas charged to Family Restaurants, Inc. where
he also servesserved as Chairman of the Board and Chief Executive Officer. See
"Compensation Committee Interlocks and Insider Participation - Family
Restaurants, Inc. Transaction"Transactions".
-6-
Stock Option Grants in Fiscal 19941995
Set forth below is information with respect to options granted to Mr.
Williams and Mr. Schultz during the 1995 fiscal year. No options were granted
during the year to the other named executive officers duringin the 1994 fiscal year.Summary
Compensation Table.
Potential Realizable Value
at Assumed Annual Rates
Number of % of Total Value at Assumed
Number of Options Annual Rates of Stock Price
Securities Granted to Market PriceOptions/SARs Appreciation For
Underlying EmployeesGranted to Exercise or Price on Option Term
OptionsOptions/SARs Employees Base Price Expiration --------------------------
Name Granted (#) in Fiscal Base Price Date of Expiration ------------------
Name Granted(#) Year ($/Share) Grant Date 5% 10%
- ---------------- ---------------------------- ------------- -------------- ---------- ---------- ------- --------- ------- -------- -------- --------
Jack W. Goodall 35,000 10.8% $ 5.875 $ 5.875 07/21/04 $129,316 $327,713
Robert J. Nugent 25,000 7.7% 5.875 5.875 07/21/04 92,369 234,081
Charles W. Duddles 20,000 6.2% 5.875 5.875 07/21/04 73,895 187,265
Kenneth R. Williams 15,000 4.6% 5.875 5.875 07/21/. . . 25,000 3.1% $5.125 12/11/04 55,421 140,449
James J. Bischoff 50,000 15.5% 10.125 10.125 03/15/04 318,378 806,832
25,000 7.7% 5.875 5.875 07/21/04 92,369 234,081$80,577 $204,198
Paul L. Schultz . . . . . 12,500 1.5% 5.000 01/02/05 39,306 99,609
10,000 1.2% 6.500 08/28/05 40,878 103,593
Option Exercises in Fiscal 19941995 and Fiscal Year-End Values
Set forth below is information with respect to options exercised by the
named executive officers during the 19941995 fiscal year, and the number and
value of unexercised stock options held by the named executive officers at
the end of the fiscal year.
Number of
Securities Underlying
Unexercised Value of Unexercised
OptionsOptions/SARs Held at In-the-Money OptionsOptions/SARs
Shares Fiscal Year-End at Fiscal Year-End
Acquired on Value ------------------------- ----------------------------------------------------- ----------------------------
Name on ExerciseExercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------ ----------- -------- ----------- ------------- ----------- -------------
Jack W. Goodall . . . . . 0 $ 0 367,500 17,500385,000 0 $1,050,935 $ 0
Robert J. NugentNugent. . . . . 0 0 187,500 12,500200,000 0 419,143 0
Charles W. DuddlesDuddles. . . . 0 0 125,000 10,000135,000 0 333,919 0
Kenneth R. Williams . . . 0 0 117,500 7,500 224,200 0
James J. Bischoff137,500 12,500 232,013 7,813
Paul L. Schultz . . . . . 0 0 37,500 37,500 0 066,250 16,250 81,557 4,688
Report of the Board of Directors and Stock Option Committee on Executive
Compensation
The Board of Directors has the primary responsibility for determining
executive compensation. There isare also a Compensation Committeeand Stock Option
Committees each composed of not less than two non-employee independent
directors. Executive compensation is designed to (a) provide compensation
opportunities that will attract, motivate and retain highly qualified
managers and executives, and (b) provide salary and other rewards that are
closely linked to Company, team, and individual performance, focused on
achievement of annual business plans and longer term incentives linked to
increases in stockholder value.
There is also a committee of disinterested directors (Messrs. Gibbons and
Green) with responsibility for administering the 1992 Employee Stock
Incentive Plan. The Chief Executive Officer recommends the
compensation to be paid to executive officers of the Company other than
himself; final determination of the amount of compensation rests with the
non-employee members of the Board of Directors. Board members who are also
executive officers do not participate in discussions about, nor do they vote
on, recommendations concerning their respective compensation.
The Company's executive officer compensation program is comprised of base
salary, bonus opportunity, long-term incentive compensation in the form of
stock options, and other benefits such as health insurance.
-6-
It is the objective of the Company to maintain base salaries that are
within the upper mid-range of amounts paid to senior executives with
comparable qualifications, experience and responsibilities at other companies
engaged in the same or similar business as the Company. The Performance Bonus
Plan provides for a bonus as a percent of base salary which is dependent upon
the Company's performance level achieved and the job classification of the
individual.
-7-
The purpose of the Performance Bonus Plan is to reward key employees,
executives and officers for achievement of corporate and/or division goals
relating to earnings before depreciation,
interest and taxes, as well as achieving individual department budget
targets. Noearnings. The performance bonuses were paid tofor the named executives for
fiscal 1994.1995 were considered appropriate based on the Company's recovery to
profitable operations in the last half of the year and are reflected in the
Summary Compensation Table.
The 1992 Employee Stock Incentive Plan forms the basis for the Company's
long-term incentive plan for officers and key managers. The purpose of the
Plan is to enable the Company and its subsidiaries to attract, retain and
motivate employees by providing for or increasing the proprietary interests
of such employees in the Company. During 1994,1995, a stock option was granted to
Mr. Williams for the purchase of 25,000 shares of Common Stock at $5.125 per
share, exercisable 50% on May 11, 1995 and November 11, 1995. Mr. Schultz
also received stock options for the purchase of 12,500 shares of Common Stock
at $5.00 per share, exercisable 50% on June 2, 1995 and December 2, 1995, and
10,000 shares at $6.50 per share, exercisable one-third on October 2, 1995,
1996 and 1997. All options were granted for 35,000, 25,000, 20,000, 15,000 and 25,000 shares to Mr. Goodall, Mr.
Nugent, Mr. Duddles, Mr. Williams and Mr. Bischoff, respectively at $5.875, the market price aton the datedates of
grant, exercisable 50% on September 30, 1994
and 1995. Mr. Bischoff also received a stock option for 50,000 shares at
$10.125, the market price at the date of grant, exercisable 50% on August
15, 1994 and February 15, 1995, in conjuction with his employment with the
Company on January 24, 1994.grant.
This report is submitted by the Board of Directors and the Stock Option
Committee.
Board of Directors Stock Option Committee
------------------------------------------ ---------------------------------------------------------------------- ----------------------
Michael E. Alpert Leonard I. Green Edward Gibbons
Paul T. Carter Robert J. Nugent Leonard I. Green
Charles W. Duddles L. Robert Payne
Edward Gibbons Christopher V. Walker
Jack W. Goodall
This report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
Compensation Committee Interlocks and Insider Participation
During fiscal 1994,1995, the members of the Board of Directors were primarily
responsible for determining executive compensation. The followingMr. Goodall, who is an
executive officers, whoofficer and also are membersa member of the Board of Directors, participated
in deliberationsdiscussions to the extent of making recommendations concerning the
compensation of executive officer compensation: Jack W. Goodall,
Robert J. Nugent and Charles W. Duddles.officers other than himself. In addition, the
Company is a party to the transactions described below in which Edward
Gibbons, Leonard I. Green and/or Christopher V. Walker, who are members of
the Board of Directors, have a material interest.
Transactions with GGvA - Pursuant to an agreement which expired on
December 31, 1994, the Company paid GGvA a monthly fee of $75,000 plus
expenses. Under this agreement, subject to certain conditions, GGvA provided
management consulting and financial planning services to the Company,
including assistance in strategic planning, negotiating and structuring bank
loans and exploring potential acquisitions, mergers and restructurings for
the Company. The contacts and expertise provided in these areas enhanceenhanced the
Company's opportunities and management's expertise in these matters.
Mr. Gibbons, who is a director of Foodmaker, is a general partner of GGvA and
GGvA is the general partner of The Fulcrum III.III Limited Partnership and The
Second Fulcrum III Limited Partnership (collectively "Fulcrum III"), Delaware
limited partnerships. Fulcrum III owned 17,521,106 shares, or approximately
45%, of the Company's common stock until such stock was distributed to the
Fulcrum III partners in November 1995. The specialized consulting services
provided by GGvA dodid overlap somewhat with Mr. Gibbon's role as director, for
which he did not receive any additional compensation. Since the expiration of
this agreement, the Company compensateshas compensated Mr. Gibbons on the same basis as
other independent directors. The amount of the fee paid to GGvA was
determined by negotiations between the management of the Company and GGvA,
and approved by the Board of Directors of the Company. The Company believes
that the terms of its agreement with GGvA were comparable to what could have
been obtained from an unrelated, but equally qualified, third party. Through June 1994, a portion
of such fee paid to GGvA was in turn paid to Leonard I. Green, Christopher
V. Walker and Leonard Green & Partners, L.P., in which Leonard I. Green and
Christopher V. Walker, directors of the Company and former partners in GGvA,
are general partners, during which period they did not receive any
additional compensation as directors of the Company.
-7-
Family
Restaurants, Inc. TransactionTransactions - On January 27, 1994, Foodmaker, Apollo Advisors,FRI
Partners, L.P. ("Apollo") and Green Equity Investors, L.P. ("GEI"), whose
general partner is Leonard Green & Partners, (collectively, the
"Investors"), acquired Restaurant Enterprises
Group, Inc. ("REGI"), a company that owns, operates and franchises various
restaurant chains
-8-
including El Torito, Carrows and Coco's. Contemporaneously, REGI changed its
name to Family Restaurants, Inc. ("FRI"). Concurrently, Foodmaker contributed
its entire Chi-Chi's Mexican restaurant chain to FRI in exchange for a 39%
equity interest in FRI, valued at $62 million, a five-year warrant to acquire
111,111 additional shares at $240 per share, which would increase its equity
interest to 45%, and approximately $173 million in cash ($208 million less the
face amount of Chi-Chi's debt assumed, aggregating approximately $35 million).
Apollo and GEI, respectively, contributed $62 million and $29 million in cash
and holdheld approximate 39% and 18% equity positions in FRI. Management of FRI
invested $2.5 millionhold the remaining equity positions in cash and notes
and holds an approximate 4% equity position.FRI. The net cash received was used by
Foodmaker to repay all of the debt outstanding under its then existing bank
credit facility, which has beenwas terminated, and to reduce other debt, to the
extent permitted by the Company's financing agreements, and to provide funds
for capital expenditures and general corporate purposes.
As a result of negative publicity regarding the nutritional value of
Mexican food, and resulting sales declines, FRI wrote off the goodwill
attributable to Chi-Chi's in their fourth quarter ended December 25, 1994.
The Company does not anticipate receiving dividendsrecorded in its first quarter of 1995 the complete write-down of
its 39% investment in FRI as a result of the goodwill write-off.
During 1995 Mr. Goodall resigned as Chief Executive Officer of FRI and
disposed of his equity interest in FRI for a nominal amount. As part of Mr.
Goodall's separation agreement, FRI forgave the unpaid balance of
approximately $700,000 under the note originally issued by Mr. Goodall as
partial payment for his shares.
Because of FRI's continuing substantial losses and resulting increased
borrowing requirements, the major FRI stockholders were required to purchase
a participation with respect to any additional advances by the banks to FRI.
Rather than become liable for these advances, the Company, by an agreement
dated November 20, 1995, transferred all of its stock and warrants to Apollo.
Since the Company's investment in FRI was previously written off in fiscal
1995, the consummation of this agreement subsequent to the date of the
financial statements will have no effect on its FRI common stock in
the foreseeable future. The paymentfinancial condition or
results of dividends is restricted by FRI's
public debt instruments.operations of the Company.
Pension Table
Retirement Plan. The Company maintains a retirement plan (the "Retirement
Plan"), which was adopted effective October 21, 1985 and restated effective
as of January 1, 1989. The Retirement Plan is a defined benefit plan covering
eligible regular employees employed in a sales,an administrative, clerical, or
restaurant hourly capacity who have completed 1,000 Hours of Service (as defined in the Retirement Plan) and
reached age 21. The Retirement Plan provides that a participant retiring at
age 65 will receive an annual retirement benefit equal in amount to one
percent of Final Average Pay (as defined in the Retirement Plan) multiplied by Benefit Service (as defined in the Retirement Plan) plus .4% of Final
Average Pay in excess of Covered Compensation (as defined in the Retirement Plan) multiplied by Benefit Service,
subject to grandfathered minimum benefit accruals under the previous plan as
of December 31, 1988. The .4% portion of the calculation is limited to a
maximum of 35 years of service. Although normal retirement is age 65, benefits may begin as early as
age 55 if service requirements defined in the Retirement Plan are met.
Benefits payable may be reduced for early commencement.
At October 2, 1994, the number of years of Benefit Service under the
Retirement Plan for Messrs. Goodall, Nugent, Duddles, Williams and Bischoff
was 26, 15, 21, 24 and none, respectively; and the amount of covered
compensation for each of these individuals approximates the amounts
reflected as salary and bonus in the Summary Compensation Table.
Supplemental Retirement Plans. The Employee Retirement Income Security Act
of 1974 ("ERISA") and various tax laws may cause a reduction in the annual
retirement benefit payable under the Retirement Plan. If this
occurs, the Company intends to provide a compensating annuity supplement for
Mr. Goodall, pursuant to authority granted under ERISA. Under an unfunded
excess benefits plan, this supplement provides the difference between the
maximum annual payment permissible under ERISA from qualified plans and the
amount determined under(The preceding
capitalized terms are defined in the Retirement Plan's formula. The supplement plus
the tax-qualified annuity will not exceed the maximum amount the Company
could have been required to provide underPlan.)
Although normal retirement is age 65, benefits may begin as early as age
55 if service requirements defined in the Retirement Plan butare met. Benefits
payable are reduced for the
legislative limitations.
In addition, theearly commencement.
Supplemental Retirement Plan. The Company established a non-qualified
supplemental retirement plan for selected executives effective April 2, 1990,
known as the Supplemental Executive Retirement Plan. The plan provides for a
percentage of replacement income based on Service and Final Average
Compensation (each as defined in the plan). The target replacement income
from all Company funded sources based upon a maximum of 30 full years of
service is 60% of Final Average Compensation. For those executives whose
service lengths are less than 30 years, the target percentage of 60% is
reduced by applying a factor determined by dividing the number of full years
of actual service by 30. The plan is unfunded and represents an unsecured
claim against the Company.
-8-
Easy$aver Plus Plan. Effective October 21, 1985, the Company adopted the
Foodmaker Savings Investment Plan, currently named the Foodmaker Easy$aver
Plus Plan (the "E$P"), which includes a cash-or-deferred arrangement under
Section 401(k) of the Internal Revenue Code. Eligible regular full-time
employees who have completed at least one year of service and reached age 21
qualify for the E$P. Participants in the E$P may defer up
-9-
to 12% of their pay on a pre-tax basis. In addition, the Company contributes on
a participant's behalf an amount equal to 50% of the first 4% of compensation
that is deferred by the participant.
Deferred Compensation Plan. Since January 1, 1989, all executive officers
and certain other members of management of the Company have been excluded
from participation in the E$P. Effective April 2, 1990, all such persons were
offered an opportunity to participate in a non-qualified deferred
compensation plan established by the Company. Participants of the plan, known
as the Capital Accumulation Plan for Executives, may defer up to 15% of base
and/or bonus pay. The Company matches 100% of the first 3% of participant
deferrals. Benefits paid under such plan also include an interest component.
The plan is unfunded and participant accounts represent unsecured claims
against the Company.
Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company match dollars in the E$P, Company
match dollars in the Deferred Compensation Plan, Supplemental Retirement Plan
and Social Security (50% of primary insurance amount).
AverageEstimated Annual Benefits Based on Years of Service
Average Annual ---------------------------------------------------------------------------------------------------
Earnings 10 15 20 25 30
------------- ------------- -------- -------- -------- -------- --------
$ 100,000. . . .$. $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000
200,000. . . . 40,000 60,000 80,000 100,000 120,000
300,000. . . . 60,000 90,000 120,000 150,000 180,000
400,000. . . . 80,000 120,000 160,000 200,000 240,000
500,000. . . . 100,000 150,000 200,000 250,000 300,000
600,000. . . . 120,000 180,000 240,000 300,000 360,000
800,000. . . . 160,000 240,000 320,000 400,000 480,000
1,000,000. . . . 200,000 300,000 400,000 500,000 600,000
1,200,000. . . . 240,000 360,000 480,000 600,000 720,000
PROPOSED DEFERRED COMPENSATION PLAN FOR NON-MANAGEMENT DIRECTORS
General Information
The Deferred Compensation Plan for Non-Management Directors (the
"Deferral Plan") was approved byAt October 1, 1995, the Executive Committeenumber of the Boardyears of Directors of the Company (the "Board") on January 11, 1995, and is being
submitted to the stockholders of the Company for their approval at the
Meeting. The affirmative vote of a majority of shares of Common Stock
voting at the Meeting, provided a quorum is present, is required for
approval of this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR THIS PROPOSAL.
The description of the Deferral Plan which follows is qualified in its
entirety by reference to the full text of the Deferral Plan which is set
forth in Exhibit A to this Proxy Statement.
Purpose and Eligibility
The purpose of the Deferral Plan is to enhance the profitability and
value of the Company for the benefit of its stockholders by providing a
deferred compensation program to attract and retain qualified non-management
directors who have made or will make important contributions to the success
of the Company. Directors who are not officers or employees of the Company
or a subsidiary of the Company and are eligible to receive compensation in
the form of directors' fees or retainers ("Compensation") are eligible to
participate in the plan.
-9-
Terms and Conditions of the Deferral Plan
The option for deferral of Compensation offeredservice under the Deferral Plan
consists of the Equity Optionretirement
plans for Messrs. Goodall, Nugent, Duddles, Williams and such other options as the Board may from
time to time determine. Prior to commencement of directorships, or with
respect to existing directors, prior to commencement of a new term as a
director, an eligible director may enter into an agreement with the Company
to defer receipt of compensation under the Deferral Plan. In the event that
directors shall be elected to serve for terms of more than one year, an
eligible director may request, prior to each anniversary date of his
election, that the Company agree to defer his compensation for the next
succeeding year.
Under the Equity Option, a Deferred Stock Equivalent Account is
established which provides for the crediting of stock equivalentsSchultz was 27, 16,
22, 25 and fractions thereof (the "Stock Equivalents") in an amount determined by
dividing20, respectively; and the amount of eligible compensation for each
of these individuals approximates the amounts reflected as salary and bonus
in the Summary Compensation to be deferred under this option byTable.
CERTAIN TRANSACTIONS
At the market valuebeginning of the Common Stock on the date of crediting. Upon a deferral
into the Deferred Stock Equivalent Account, the Company will credit the
account with additional Stock Equivalents equal to 25% of the Compensation
deferred. Such additionally credited Stock Equivalents, and all dividend
equivalents associated therewith, are hereinafter referred to as "Company
Matching Deferrals".
Distributions Under the Plan
Distributions under the Equity Option, including distributions of
Company Matching Deferrals, must be in cash. The amount of cash to be
distributed will be the number of whole and/or fractional Stock Equivalents
in each Deferred Stock Equivalent Account multiplied by the Market Value on
the date of the Participant's termination or the effective date of the
determination of total and permanent disability, with interest accruing, at
the rate described in the Deferral Plan, from such date of termination or
determination of total and permanent disability until the time of
distribution.
Change in Control
Upon a change in control, as defined in the Deferral Plan, deferrals
will no longer be permitted and each Deferred Stock Equivalent Account will
be immediately converted into an interest bearing account.
Nontransferability
The right to receive payment of benefits under the Deferral Plan cannot
be transferred, assigned or pledged except by beneficiary designation, will
or pursuant to the laws of descent and distribution.
Administration
The Board will administer the Deferral Plan and, in connection
therewith, has full power and sole discretion to impose on any deferral any
terms and conditions in addition to those set forth in the Deferral Plan; to
construe and interpret the Deferral Plan; to establish rules and
regulations; to delegate responsibilities to others to assist it in
administering the Deferral Plan or performing any responsibilities
hereunder; and to perform all other acts it believes reasonable and proper
in connection with the administration of the Deferral Plan. A majority of
the Board, consisting of all Board members except the individual member who
is being considered, shall have full power and sole discretion to determine
whether a director is eligible to participate in the Deferral Plan.
Amendment and Termination
The power to amend, modify or terminate the Deferral Plan at any time
is reserved to the Board except that no amendment, modification or
termination which would reasonably be considered to be adverse to a
participant or beneficiary may apply to or affect the terms of any deferral
of Compensation deferred prior to the effective date of such amendment,
modification or termination, without the consent of the participant or
beneficiary affected thereby.
Federal Income Tax Consequences
The following statement is based on present federal tax laws and
regulations and does not purport to be a complete description of the federal
income tax aspects of the Deferral Plan.
-10-
The Compensation deferred under the Deferral Plan, the Company Matching
Deferrals credited to the participant's account and any appreciation, if
any, in the value of such deferrals based on an increase in the market value
of the Company's Common Stock are generally not taxable to the participant
until such time as a cash distribution is made. At that time, the
participant will recognize taxable ordinary income for the amount of the
distribution. The Company will also be entitled to a tax deduction at the
time of and in the amount of the distribution.
PROPOSED NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
General Information
The Non-Employee Director Stock Option Plan (the "Director Plan") was
approved by the Executive Committee of the Board of Directors of the Company
on January 11, 1995, and is being submitted to the stockholders of the
Company for their approval at the Meeting. The affirmative vote of a
majority of shares of Common Stock voting at the Meeting, provided a quorum
is present, is required for approval of this proposal. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Director Plan provides for options which do not qualify as
incentive stock options under Section 422A of the Internal Revenue Code.
The description of the Director Plan which follows is qualified in its
entirety by reference to the full text of the Director Plan which is set
forth in Exhibit B to this Proxy Statement.
Purpose and Eligibility
The purpose of the Director Plan is to promote the long-term growth and
financial success of the Company by enabling the Company to attract, retain
and motivate non-employee directors of the Company by providing for or
increasing their proprietary interest in the Company. The persons eligible
to be considered for the grant of options hereunder are any directors of the
Board who are not employees of the Company or a subsidiary of the Company.
Stock Subject to Director Plan
The Director Plan provides for the maximum of 250,000 shares of Common
Stock that may be subject to options granted thereunder during the tenfiscal year,
duration of the plan. The Director Plan provides that if the outstanding
shares of stock of the class then subject to this plan are increased or
decreased or are changed into or exchanged for a different number or kind of
shares or securities, as a result of one or more reorganizations,
recapitalizations, stock splits, reverse stock splits, stock dividends and
the like, appropriate adjustments shall be made in the number and/or type of
shares or securities for which options may thereafter be granted under this
plan and for which options then outstanding under this plan may thereafter
be exercised. Any such adjustments in outstanding options shall be made
without changing the aggregate exercise price applicable to the unexercised
portions of such options. Shares of Common Stock subject to the
unexercised portions of any options granted under this plan which expire,
terminate or are canceled may again be subject to options under this plan.
Terms of Options
Commencing February 17, 1995 and on the date of each annual shareholder
meeting thereafter at which such non-employee director has been re-elected
to the Board, such non-employee director will be automatically granted a
non-qualified stock option to purchase 10,000 shares of Common Stock. The
per share exercise price of each option will be equal to the current market
price per share of Common Stock on the date of grant.
The current market price per share of Common Stock on the date of grant
shall be not less than the higher of (a) the Quoted Price per share for such
stock on the business day immediately preceding the date of grant or (b) the
average of the Quoted Prices of the Common Stock for 30 consecutive trading
days commencing 45 trading days before the date of grant. The "Quoted
Price" of the Common Stock shall be the last reported sales price of the
Common Stock as reported
-11-
by NASDAQ, National Market System, or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on
such exchange which shall be for consolidated trading if applicable to such
exchange, or if neither so reported or listed, the last reported bid price of
the Common Stock. In the absence of one or more such quotations, the Board
shall determine the current market price on the basis of such information as it
in good faith considers appropriate.
Each option will have a term of ten years and shall become exercisable
in full six months after the date of grant. If on any date upon which
options are to be granted under this Director Plan the number of shares of
Common Stock remaining available under the Director Plan are less than the
number of shares required for all grants to be made on such date, then
options to purchase a proportionate amount of such available number of
shares of Common Stock shall be granted to each eligible non-employee
director.
Payment for Securities
All or a portion of an exercisable option shall be deemed exercised
upon delivery to the Secretary of the Company at the Company's principal
office all of the following: (i) a written notice of exercise specifying
the number of shares to be purchased signed by the non-employee director or
other person then entitled to exercise the option, (ii) full payment of the
exercise price for such shares by any of the following or combination
thereof (a) cash, (b) certified or cashier's check payable to the order of
the Company, or (c) the delivery of whole shares of the Company's Common
Stock owned by the option holder and valued at the closing market price on
the business day prior to the date of exercise, (iii) such representations
and documents as the Board, in its sole discretion, deems necessary or
advisable to effect compliance with all applicable provisions of the
Securities Act of 1933, as amended, and any other federal or state
securities laws or regulations, (iv) in the event that the option shall be
exercised by any person or persons other than the non-employee director,
appropriate proof of the right of such person or persons to exercise the
option, and (v) such representations and documents as the Board, in its sole
discretion, deems necessary or advisable.
Nontransferability
Any option granted under this plan shall by its terms be
nontransferable by the optionee otherwise than by will or the laws of
descent and distribution, and shall be exercisable during the optionee's
lifetime only by the optionee.
Administration
The Director Plan is intended to meet the requirements of Rule 16b-
3(c)(2)(ii) adopted under the Securities Exchange Act of 1934 (or its
successor) and accordingly is intended to be self-governing. To this end,
the Director Plan requires no discretionary action by any administrative
body with regard to any transaction under the Director Plan. To the extent,
if any, that any questions of interpretation arise, these shall be resolved
by the Board.
Amendment and Termination
The Board may alter, amend, suspend, or terminate the Director Plan,
provided that no such action shall deprive any optionee, without his or her
consent, of any option granted to the optionee pursuant to this plan or of
any of his or her rights under such option and provided further that the
provisions of this plan designating persons eligible to participate in the
Director Plan and specifying the amount, exercise price and timing of grants
under the Director Plan shall not be amended more than once every six months
other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder.
Unless sooner terminated, the Director Plan terminates ten years after
the date of stockholders' approval thereof. Subsequent to such termination
date, no options may be granted under this plan, but such termination will
not prevent a participant holding an option with an exercise date subsequent
to the termination date from exercising that option.
-12-
Federal Income Tax Consequences
The following statement is based on present federal tax laws and
regulations and does not purport to be a complete description of the federal
income tax aspects of the Director Plan.
Although the grant of a non-qualified option is not generally taxable
to the recipient, upon exercise the recipient will be taxed at ordinary
income rates on the excess of the fair market value on the exercise date of
the stock received over the option exercise price, and the Company will be
entitled to a tax deduction of the same amount. The amount included in the
optionee's taxable income on the exercise of a non-qualified option will be
subject to federal and state income tax withholding. The optionee's basis
in the acquired shares will be equal to the option exercise price plus the
amount included in income upon exercise. Gain or loss on the subsequent
sale or disposition of the shares will be treated as long-term or short-term
capital gain or loss, depending on the holding period for the stock as of
the date of disposition. The stockholder will recognize long-term capital
gain or loss if the holding period exceeds one year.
PARTICIPANT BENEFITS OF PROPOSED NEW PLANS
Each of the six non-executive (non-employee) directors of the Company
receives compensation consisting of an annual retainer of $18,000 and $1,500
for each general meeting of the Board (usually six annually) attended. Any
portion or all of such compenstation would be allowed to be deferred under
the Deferral Plan. Assuming that all such directors deferred all such
compensation, aggregating $162,000 annually, the Company Matching Deferrals
would be $40,500. The potential future value of such deferrals, including
the amounts actually deferred, is subject to fluctuations in the market
price of the Company's Common Stock subsequent to the date of deferral.
In addition, under the Director Plan, each of the six non-executive
(non-employee) directors of the Company would receive annually, until the
proposed plan's 250,000 shares are depleted, stock options for the purchase
of 10,000 shares (60,000 shares annually for all such directors) of Common
Stock at the fair market value on the date of grant. Any potential
realizable value of the options is subject to the increase, if any, in the
market price of the Company's Common Stock.
None of the executive officers reflected in the summary compensation
table or other categories of employees of the Company are covered by either
of the above plans.
CERTAIN TRANSACTIONS
Transactions with Prudential
On September 30, 1994, the Company repaid outstanding borrowings from
The Prudential Insurance Company of America ("Prudential") of $23.3 million,
of which 50% was not due until September 30, 1995. Pursuant to such
borrowings, the Company paid during 1994 interest of approximately
$3.2 million and a prepayment premium of $.8 million. Prudential is a
limited partner in Fulcrum III.
Transactions with Others Sharon Payne, daughter of
L. Robert Payne, a director of the Company, holdsheld a 25%20.6% equity interest in
Foodmex, Inc. ("Foodmex"), which franchises and operates ten Jack In The Box
franchisesrestaurants in Mexico. The majority of the funds invested by Ms. Payne in
Foodmex were loaned to her by Mr. Payne; thisthe loan iswas secured by Ms. Payne's
equity position in Foodmex. During the year, Mr. Payne acquired the interest
of his daughter in Foodmex and, in December 1995, entirely disposed of all
interest to other Foodmex shareholders. He retains no equity or other
interest in Foodmex.
As a franchisee of the Company, Foodmex has various financial
obligations to the Company for franchise fees and other trade accounts
payable, totallingwhich had been approximately $280,000 per month but have declined to
approximately $120,000 per month. As a result of the devaluation of the
Mexican Peso, Foodmex encountered severe financial difficulties and became
unable to meet its obligations on a current basis. Therefore, Foodmex has
been required to pay in advance for its food and supplies purchased from the
Company and has entered into an agreement for the payment, over an extended
period without interest, of the accumulated arrearage of approximately
$830,000 and a portion of the royalties accruing during 1996. In addition,
the Company has agreed to waive late charges accrued through December 1995,
upon timely and satisfactory completion of the established payment schedule.
The Company believes the terms of the credit and franchise agreementagreements are no
more favorable to the franchisee than could have been obtained by an entirely
unrelated third party and treatment of Foodmex with respect to
credit terms is no more favorable than terms extended to franchisees
generally.
-13-
party.
-10-
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock at the end of each fiscal year since the initial
public offering on March 4, 1992 with the Standard & Poor's ("S&P") 500 Index
and Nations Restaurant News ("NRN") Stock Index for the same period. The
comparison assumes $100 was invested on March 4, 1992 in the Company's Common
Stock and in each of the comparison groups, and assumes reinvestment of
dividends. The Company paid no dividends during the periods.
[A LINE GRAPH CHART WAS INCLUDED HEREIN WHICH GRAPHICALLY
REFLECTED THE FOLLOWING DATA]
March 4, September 27, October 3, October 2, October 1,
1992 1992 1993 1994 1995
-------- ------------- ---------- ---------- ----------
Foodmaker, Inc. 100 70 65 38 38
S&P 500 Index 100 101 113 113 143
NRN Stock Index 100 102 122 124 -14-
177
-11-
COMPLIANCE WITH REPORTING OBLIGATIONS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each
executive officer, director and beneficial owner of more than 10% of the
Company's Common Stock is required to file certain forms with the Securities
and Exchange Commission. A report of beneficial ownership of the Company's
Common Stock on Form 3 is due at the time such person becomes subject to the
reporting requirements and a report on Form 4 or Form 5 must be filed to
reflect changes thereafter. Based on written statements and copies of forms
provided to the Company by persons subject to the reporting requirements, the
Company believes that all such reports required to be filed by such persons
during fiscal 19941995 were filed on a timely basis, except that late Forms 34
were filed by James J. Bischoff upon his becoming an executive
officerWilliam F. Motts reflecting the transfer of the Company,stock pursuant to a
marital termination agreement; and L. Robert Payne and the Payne Family Trust
upon purchasing stock;
late Forms 4 were filed by Jack W. Goodall reflecting his gift of stock to
charity, Charles W. Duddles reflecting his gift of stock to his adult
children, L. Robert Payne reflecting his indirect beneficial ownership of
stock directly held by the Payne Family Trust and William E. Rulon
reflecting the acquisition of stock in his 401(k) plan from the exchange of
stock of the Company's former parent; and Forms 5 were not timely filed by
William Burt, Mohammad Iqbal and Joseph Micatrotto relating to the
accelerated expiration of stock options upon their termination of service.stock.
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as
independent accountants to examine the consolidated accounts of the Company
for the fiscal year ending October 1, 1995,September 29, 1996, subject to ratification by
stockholders. KPMG Peat Marwick LLP has acted as accountants for Foodmaker
since 1986. The firm will be represented at the Meeting and will have the
opportunity to make a statement and respond to appropriate questions from
stockholders.
OTHER BUSINESS
Foodmaker's management is not aware of any other matters to come before
the Meeting. If any matter not mentioned herein is properly brought before the
Meeting, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
best judgment.
STOCKHOLDER PROPOSALS FOR
19961997 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 19961997 Annual
Meeting of Stockholders and to be included in the Company's proxy statement
and form of proxy for that meeting must be received by the Company, directed
to the attention of the Secretary, on or before September 17, 1995.16, 1996. Any such
proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
19941995 ANNUAL REPORT AND FORM 10-K
A copy of the 19941995 Annual Report to Stockholders accompanies this Proxy
Statement. Foodmaker's Annual Report on Form 10-K for the year ended
October 2, 1994,1, 1995, as filed with the Securities and Exchange Commission,
contains detailed information concerning Foodmaker and its operations which
is not included in the 19941995 Annual Report. A COPY OF THE 19941995 FORM 10-K WILL
BE FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN WRITING TO:
Foodmaker Corporate Communications,Treasury Department, 9330 Balboa Avenue, San Diego, California
92123-1516.
By Order of the Board of Directors,
WILLIAM E. RULON
WILLIAM E. RULON
Secretary
-15--12-
Exhibit A
FOODMAKER, INC.
DEFERRED COMPENSATION PLAN FOR
NON-MANAGEMENT DIRECTORS
(Effective: February 17, 1995)
1. General Provisions
1.1 Purpose of Plan
The purpose of the Plan is to enhance the profitability and value
of the Company for the benefit of its stockholders by providing a
deferred compensation program to attract and retain qualified non-
management directors who have made or will make important
contributions to the success of the Company.
1.2 Definitions
(a) "Acquiring Person" means any person or groups of Affiliates
or Associates who is or becomes the beneficial owner,
directly or indirectly, of shares representing 20% or more of
the outstanding Stock.
(b) "Affiliate" or Associate" shall have the meanings set forth
as of March 1, 1990, in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as
amended.
(c) "Beneficiary" means the person or persons (including legal
entitles) who have been designated in accordance with Section
3.2 hereof to receive benefits under this Plan following a
Participant's death.
(d) "Board" means the Board of Directors of Foodmaker, Inc.
(e) "Change in Control" means the time when (i) any person,
either individually or together with such person's Affiliates
or Associates, shall have become the beneficial owner,
directly or indirectly, of shares representing at least 50%
of the outstanding Stock and there shall have been a public
announcement of such occurrence by the Company or such person
or (ii) individuals who shall qualify as Continuing Directors
shall have ceased for any reason to constitute at least a
majority of the Board of Directors of Foodmaker, Inc.;
provided however, that in the case of either clause (i) or
clause (ii), a Change in Control shall not be deemed to have
occurred if the event shall have been approved prior to the
occurrence thereof by a majority of the Continuing Directors
who shall then be members of such Board of Directors.
(f) "Company" means Foodmaker, Inc. and its subsidiaries.
(g) "Compensation" means all or any part of any cash, or other
consideration to be paid to a Director by the Company as
directors' fees or retainers.
(h) "Continuing Director" means any member of the Board while
such person is a member of the Board, who is not an Affiliate
or Associate of an Acquiring Person or of any such Acquiring
Person's Affiliate or Associate and was a member of the Board
prior to the time when such Acquiring Person became an
Acquiring Person, and any successor of a Continuing Director,
while such successor is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative or nominee of an Acquiring Person
or of any Affiliate or Associate of such Acquiring Person and
is recommenced or elected to succeed the Continuing Director
by a majority of the Continuing Directors.
(i) "Date of Crediting" means, with respect to any Compensation
deferred pursuant to the Plan, the date when such
Compensation would be payable to a Participant.
(j) "Director" means any member of the Board.
A-1
(k) "Market Value" means, in the case of Stock, the average of
the closing prices of the Stock as reported by the New York
Stock Exchange - Composite Transactions during the ten (10)
trading days immediately preceding the date in question, or,
if the Stock is not quoted on such composite tape or if such
Stock is not listed on such exchange, on the principal United
States securities exchange registered under the Securities
Exchange Act of 1934, as amended, on which the Stock is
listed, or if the Stock is not listed on any such exchange,
the average of the closing bid quotations with respect to a
share of the Stock during the ten (10) days immediately
preceding the date in question on the NASDAQ Stock Market
National Market System or any system then in use, or if no
such quotations are available, the fair market value on the
date in question of share of the Stock as determined by a
majority of the Continuing Directors in good faith.
(l) "Non-Management Director" means any Director who is not an
officer or employee of the Company.
(m) "Participant" means any Director who participates in the
Plan.
(n) "Plan" means the Deferred Compensation Plan for Non-
Management Directors.
(o) "Stock" means the Company's $.01 par value common stock or
any such other security outstanding upon the reclassification
of the Company's common stock, including, without limitation,
any Stock split-up, Stock dividend, or other distributions of
stock in respect of Stock, or any reverse Stock split-up, or
recapitalization of the Company or any merger or
consolidation of the Company with any subsidiary or
affiliate, or any other transaction, whether or not with or
into or otherwise involving an Acquiring Person.
(p) "Year" means calendar year unless otherwise specified.
1.3 Eligibility and Participation
To be eligible to participate in the Plan, an individual must:
(a) meet the definition of a Non-Management Director, and
(b) be entitled to Compensation.
An eligible Director becomes a Participant in this Plan upon the
effective date of an agreement executed by the parties pursuant to
Section 2.1(c).
1.4 Administration of the Plan
The Board shall administer the Plan and, in connection therewith
shall have full power and sole discretion to impose on any
deferral any terms and conditions in addition to those set forth
in the Plan; to construe and interpret the Plan; to establish
rules and regulations; to delegate responsibilities to others to
assist it in administering the Plan or performing any
responsibilities hereunder; and to perform all other acts it
believes reasonable and proper in connection with the
administration of the Plan. A majority of the Board, consisting
of all Board members except the individual member who is being
considered shall have full power and sole discretion to determine
whether a Director is eligible to participate in the Plan.
1.5 Power to Amend
The power to amend, modify or terminate this Plan at any time is
reserved to the Board except that no amendment, modification or
termination which would reasonably be considered to be adverse to
a Participant or Beneficiary may apply to or affect the terms of
any deferral of Compensation deferred prior to the effective date
of such amendment, modification or termination, without the
consent of the Participant or Beneficiary affected thereby.
A-2
2. Deferral Option
2.1 Terms and Conditions
(a) Deferral option available - The option for deferral of
Compensation offered under this Plan shall consist of the
Equity Option and such other options as the Board may from
time to time determine. Prior to commencement of
directorships, or with respect to existing Directors, prior
to commencement of a new term as a Director, an eligible
Director may request in writing that the Board approve a
deferral either into or under any single deferral option
provided under this Plan, or any combination thereof. In the
event that Directors shall be elected to serve for terms of
more thanProxy side one year, an eligible Director may request, prior
to each anniversary date of his election, that the Company
agree to defer his compensation for the next succeeding year.
(b) Source of terms and conditions - Any deferral under the Plan
shall be subject to the provisions of the Plan, any other
conditions imposed by law, and the terms of any award of
Compensation. Approval of a deferral of Compensation shall
in no event constitute a waiver by the Company of any
conditions to the receipt of such Compensation.
(c) Written agreement - Every deferral made under this Plan shall
be made pursuant to a written agreement signed by the
Participant and the Company. Any modifications or amendments
to such agreement shall also be in writing signed by the
parties. In the event of any conflict or inconsistency
between the terms of such written agreement and the terms of
the Plan, such written agreement shall control.
2.2 Equity Option
(a) Stock equivalents - Upon execution of a written agreement
pursuant to Section 2.1 (c) above, a "Deferred Stock
Equivalent Account" shall be established in the Participant's
name. Stock equivalents and fractions thereof shall be
credited to such Deferred Stock Equivalent Account in an
amount determined by dividing the amount of Compensation to
be deferred under this option by the Market Value of the
Stock on the Date of Crediting. Upon the occurrence of any
of the events described in Section 7.(a) of the Foodmaker,
Inc. 1992 Employee Stock Incentive Plan, the number of Stock
equivalents in each Deferred Stock Equivalent Account shall,
to the extent appropriate, be adjusted accordingly.
(b) Company Matching Deferral - Upon a deferral into the Equity
Option and the associated crediting of Stock equivalents to
a Participant's Deferred Stock Equivalent Account, the
Company shall credit such Deferred Stock Equivalent Account,
on the same Date of Crediting, with additional Stock
equivalents equal to 25% of the Compensation deferred into
such Deferred Stock Equivalent Account divided by the Market
Value of the Stock on the Date of Crediting. Such
additionally credited Stock equivalents, and all dividend
equivalents associated therewith, are hereinafter referred to
as "Company Matching Deferrals".
(c) Time of crediting - Deferrals in Stock equivalents shall be
credited to a Participant's Deferred Stock Equivalent Account
on the Date of Crediting.
(d) Dividend Equivalents - To the extent dividends on the Stock
are paid, dividend equivalents and fractions thereof on the
Stock equivalents and fractions thereof in a Participant's
Deferred Stock Equivalent Account shall be awarded, converted
to additional Stock equivalents and credited to the Deferred
Stock Equivalent Account as of the dividend payment dates.
The number of Stock equivalents to be credited as of each
such date shall be determined by dividing the amount of the
dividend equivalent by the Market Value of the Stock on the
dividend payment date. The Participant's Deferred Stock
Equivalent Account shall continue to earn such dividend
equivalents until the time of a Participant's termination or
the effective date of the commencement of total and permanent
disability.
(e) Form of distribution - Distributions under this Option,
including distributions of Company Matching Deferrals, shall
be in cash. The amount of cash to be distributed shall be
the number of whole and/or fractional Stock equivalents in
each Deferred Stock Equivalent Account multiplied by the
Market Value on the date of the Participant's termination or
the effective date of the determination of total and
permanent disability, with interest accruing,
A-3
at the rate described in Section 2.3(a) hereof, from such date
of termination or determination of total and permanent
disability until the time of distribution.
(f) Change in Control - Upon a Change in Control, deferrals into
the Equity Option will no longer be permitted and each
Deferred Stock Equivalent Account shall be immediately
converted into a Deferred Cash Account established pursuant
to Section 2.3(a) hereof. The amount of cash to be credited
to each such Deferred Cash Account shall be equal to the
number of whole and/or fractional Stock equivalents in each
Deferred Stock Equivalent Account multiplied by the Market
Value as of the Change in Control. Each Participant whose
Deferred Stock Equivalent Account is hereby converted to a
Deferred Cash Account shall have the right, at his sole
discretion, to convert such Deferred Cash Account into any
other deferral option which may thereafter be established
pursuant to the Plan or any other deferred compensation plan
established by the Company or any successor.
2.3 Deferred Cash Account
(a) Upon a Change in Control, a "Deferred Cash Account" shall be
established in the Participant's name. The amount of
Compensation being deferred will be credited to this account
on the Date of Crediting. Interest equivalents on amounts
deferred shall be calculated annually as of December 31 of
each year for the period from the Date of Crediting until
December 31, or if such period is greater than one year, for
the one-year period commencing with the previous January 1.
Such equivalents shall be based on the average of the daily
close of business prime rates for the 365 days of such year,
with respect to amounts credited prior to such year, or, with
respect to amounts credited during such year, for the number
of days from the Date of Crediting. The daily close of
business prime rates shall be as established by Credit
Lyonnais, New York Branch or such other bank as may be
designated by the Board. At distribution, interest
equivalents shall be similarly calculated on amounts in the
Deferred Cash Account based on average daily prime rates from
the preceding January 1, or, if later, the Date of Crediting,
through the date of distribution, and added to the total to
be distributed. The crediting of interest equivalents to the
Participant's Deferred Cash Account shall continue until the
balance in such account is fully distributed.
(b) Time of crediting - The interest equivalents calculated each
December 31 shall be credited to a Participant's Deferred
Cash Account on January 1 of the next Year. Prior to
distribution to a Participant pursuant to Section 3.1 hereof,
interest equivalents calculated as described above shall be
credited to such Participant's Deferred Cash Account.
(c) Form of distribution - Distributions shall be in cash.
3. Other Governing Provisions
3.1 Time of distribution to Participant - All amounts due to the
Participant shall be payable on the 60th day following the
Participant's termination. Distributions to Participants found to
be totally and permanently disabled shall be on the 60th day
following the determination of such disability. No amounts shall
be payable to a Participant prior to such Participant's
termination or total and permanent disability.
3.2 Distribution upon death - In the event of the Participant's death,
all amounts due under this Option shall be paid to the
Beneficiary; but if none is designated then benefits shall be paid
to Participant's estate or as provided by law. Distribution in
full shall be made in a lump sum on the 60th day following the
Participant's death.
3.3 Company's Obligations Unfunded - All benefits due a Participant or
a Beneficiary under this Plan are unfunded and unsecured and are
payable out of the general funds of the Company. The Company, in
its sole and absolute discretion, may establish a "grantor trust"
for the payment of benefits and obligations hereunder, the assets
of which shall be at all times subject to the claims of creditors
of the Company as provided for in such trust, provided that such
trust does not alter the characterization of the Plan as an
"unfunded plan" for purposes of the Employee Retirement Income
Security Act, as amended. Such trust shall make distributions in
accordance with the terms of the Plan.
A-4
3.4 Beneficiary Designation - A Participant may file with the
Secretary of the Company a written designation of a beneficiary or
beneficiaries (subject to such limitations as to the classes and
number of beneficiaries and contingent beneficiaries as the Board
may from time to time prescribe) to receive, following the death
of the Participant, benefits payable under any option of the Plan.
The Board reserves the right to review and approve beneficiary
designations. A Participant may from time to time revoke or
change any such designation of beneficiary and any designation of
beneficiary under the Plan shall be controlling over any other
disposition, testamentary or otherwise; provided, however, that if
the Board shall be in doubt as to the right of such beneficiary to
receive any benefits under the Plan, the Board may determine to
recognize only the rights of the legal representative of the
Participant, in which case the Company, the Board and the members
thereof shall not be under any further liability to anyone.
3.5 Hardship Withdrawals - The Board in its sole and absolute
discretion may permit withdrawal by a Participant of any amount
from his accounts, if the Board determines, in its discretion that
such funds are needed due to serious and immediate financial
hardship from an unforeseeable emergency. Serious and immediate
financial hardship to the Participant must result from a sudden
and unexpected illness or accident of the Participant or a
dependent, loss of property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising from events
beyond the control of the Participant. A distribution based upon
such financial hardship cannot exceed the amount necessary to meet
such immediate financial need. In addition, the Board may impose
suspensions or other penalties as a condition to such withdrawals.
3.6 Transferability of Benefits - The right to receive payment of
benefits under this Plan shall not be transferred, assigned or
pledged except by beneficiary designation, will or pursuant to the
laws of descent and distribution.
3.7 Address of Participant or Beneficiary - A Participant shall keep
the Company apprixed of his current address and that of any
Beneficiary at all times during his participation in the Plan. At
the death of a Participant, a Beneficiary whi is entitled to
receive payment of benefits under the Plan shall keep the Company
apprised of his current address until the entire amount to be
distributed to him has been paid.
3.8 Taxes - Any taxes required to be withheld under applicable
federal, state or local tax laws or regulations may be withheld
from any payment due hereunder.
3.9 Gender - The use of masculine pronouns herein shall be deemed to
include both males and females.
A-5
Exhibit B
FOODMAKER, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose of the Plan. Under this Non-Employee Director Stock
Option Plan (the "Director Plan") of Foodmaker, Inc., a Delaware corporation
(the "Company"), options may be granted to eligible persons, as set forth in
Section 4, to purchase shares of the Company's common stock ("Common
Stock"). This Director Plan is designed to promote the long-term growth and
financial success of the Company by enabling the Company to attract, retain
and motivate such persons by providing for or increasing their proprietary
interest in the Company.
2. Effective Date. This Director Plan shall be in effect commencing
on February 17, 1995, subject to approval by the Company's stockholders.
Options may not be granted more than ten years after the date of stockholder
approval of this Director Plan or termination of this Director Plan by the
Board of Directors of the Company (the "Board"), whichever is earlier.
3. Plan Operation. This Director Plan is intended to meet the
requirements of Rule 16b-3(c)(2)(ii) adopted under the Securities Exchange
Act of 1934 (or its successor) and accordingly is intended to be self-
governing. To this end, this Director Plan requires no discretionary action
by any administrative body with regard to any transaction under this
Director Plan. To the extent, if any, that any questions of interpretation
arise, these shall be resolved by the Board.
4. Eligible Persons. The persons eligible to receive a grant of non-
qualified stock options hereunder are any Director of the Board who on the
date of said grant is not an employee of the Company or a subsidiary of the
Company. For purposes of this Section 4, a person shall not be considered
an employee solely by reason of serving as Chairman of the Board.
5. Stock Subject to Director Plan. The maximum number of shares that
may be subject to options granted hereunder shall be 250,000 shares of
Common Stock, subject to adjustments under Section 6. Shares of Common Stock
subject to the unexercised portions of any options granted under this
Director Plan which expire, terminate or are canceled may again be subject
to options under this Director Plan.
6. Adjustments. If the outstanding shares of stock of the class then
subject to this Director Plan are increased or decreased, or are changed
into or exchanged for a different number or kind of shares or securities, as
a result of one or more reorganizations, recapitalizations, stock splits,
reverse stock splits, stock dividends, spin-offs and the like, appropriate
adjustments shall be made in the number and/or type of shares or securities
for which options may thereafter be granted under this Director Plan and for
which options then outstanding under this Director Plan may thereafter be
exercised. Any such adjustments in outstanding options shall be made
without changing the aggregate exercise price applicable to the unexercised
portions of such options.
7. Stock Options. Commencing February 17, 1995 and on the date of
each annual stockholder meeting thereafter at which such non-employee
director has been re-elected to the Board, such non-employee director will
be automatically granted a non-qualified stock option to purchase 10,000
shares of Common Stock. The per share exercise price of each option will be
equal to the current market price per share of Common Stock on the date of
grant.
The current market price per share of Common Stock on the date of grant
shall be not less than the higher of (a) the Quoted Price per share for such
stock on the business day immediately preceding the date of grant or (b) the
average of the Quoted Prices of the Common Stock for 30 consecutive trading
days commencing 45 trading days before the date of grant. The "Quoted
Price" of the Common Stock shall be the last reported sales price of the
Common Stock as reported by NASDAQ, National Market System, or if the Common
Stock is listed on a securities exchange, the last reported sales price of
the Common Stock on such exchange which shall be for consolidated trading if
applicable to such exchange, or if neither so reported or listed, the last
reported bid price of the Common Stock. In the absence of one or more such
quotations, the Board shall determine the current market price on the basis
of such information as it in good faith considers appropriate.
B-1
Each option will have a term of ten years and shall become exercisable
in full six months after the date of grant. If on any date upon which
options are to be granted under this Director Plan the number of shares of
Common Stock remaining available under the Director Plan are less than the
number of shares required for all grants to be made on such date, then options
to purchase a proportionate amount of such available number of shares of Common
Stock shall be granted to each eligible non-employee director.
8. Documentation of Grants. Awards made under this Director Plan
shall be evidenced by written agreements or such other appropriate
documentation as the Board shall prescribe. The Board need not require the
execution of any instrument or acknowledgment of notice of an award under
this Director Plan, in which case acceptance of such award by the respective
optionee will constitute agreement to the terms of the award.
9. Nontransferability. Any option granted under this Director Plan
shall by its terms be nontransferable by the optionee otherwise than by will
or the laws of descent and distribution, and shall be exercisable, during
the optionee's lifetime, only by the optionee.
10. Amendment and Termination. The Board may alter, amend, suspend,
or terminate this Director Plan, provided that no such action shall deprive
any optionee, without his or her consent, of any option granted to the
optionee pursuant to this Director Plan or of any of his or her rights under
such option and provided further that the provisions of this Director Plan
designating persons eligible to participate in the Director Plan and
specifying the amount, exercise price and timing of grants under the
Director Plan shall not be amended more than once every six months other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.
11. Termination of Directorship. Notwithstanding Section 7 above, all
options granted hereunder and held by non-employee directors as of the date
of cessation of service as a director may be exercised by the non-employee
director or his or her heirs or legal representatives until the earlier of
the tenth anniversary of the date of grant or the expiration of ninety days
after the date of cessation of such service.
12. Manner of Exercise. All or a portion of an exercisable option
shall be deemed exercised upon delivery to the Secretary of the Company at
the Company's principal office all of the following: (i) a written notice
of exercise specifying the number of shares to be purchased signed by the
non-employee director or other person then entitled to exercise the option,
(ii) full payment of the exercise price for such shares by any of the
following or combination thereof (a) cash, (b) certified or cashier's check
payable to the order of the Company, or (c) the delivery of whole shares of
the Company's Common Stock owned by the option holder and valued at the
closing market price on the business day prior to the date of exercise,
(iii) such representations and documents as the Board, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any
other federal or state securities laws or regulations, (iv) in the event
that the option shall be exercised by any person or persons other than the
non-employee director, appropriate proof of the right of such person or
persons to exercise the option, and (v) such representations and documents
as the Board, in its sole discretion, deems necessary or advisable.
13. Compliance with Law. Common Stock shall not be issued upon
exercise of an option granted under this Director Plan unless and until
counsel for the Company shall be satisfied that any conditions necessary for
such issuance to comply with applicable federal, state or local tax,
securities or other laws or rules or applicable securities exchange
requirements have been fulfilled.
IN TESTIMONY WHEREOF, Foodmaker, Inc. has executed this Director Plan
by its officers thereunto duly authorized.
FOODMAKER, INC.
B-2
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PROXY
FOODMAKER, INC.THIS PROXY PROXYIS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOODMAKER, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 17, 199516, 1996 AT 2:00 P.M.
SAN DIEGO MISSION VALLEY HILTON, 901RADISSON HOTEL, ROYAL BALLROOM, 1433 CAMINO DEL RIO SOUTH, SAN DIEGO, CA
The undersigned hereby appoints Jack W. Goodall, Charles W. Duddles and
William E. Rulon and each of them, acting by a majority or by one of them if
only one is acting, as lawful proxies, with full power of substitution, for
and in the name of the undersigned, to vote on behalf of the undersigned,
with all the powers the undersigned would possess if personally present at
the Annual Meeting of Stockholders of Foodmaker, Inc., a Delaware corporation
("Foodmaker"), on February 17, 1995,16, 1996, and any postponements or adjournments
thereof. The above named proxies are instructed to vote all the under-
signed'sundersigned's
shares of stock on the proposals set forth in the Notice of Annual Meeting
and Proxy Statement as specified belowon the other side hereof and are authorized
in their discretion to vote upon such other business as may properly come
before the meeting or any postponement or adjournment thereof.
1. Election of Directors: Michael E. Alpert, Paul T. Carter,
Charles W. Duddles, Edward Gibbons, Jack W. Goodall,
Leonard I. Green, Robert J. Nugent, L. Robert Payne and
Christopher V. Walker.
/ / FOR all nominees listed.
/ / FOR all nominees listed except
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. Ratification of appointment of KPMG Peat Marwick as
independent accountants. / / FOR / / AGAINST / / ABSTAIN
3. To approve the Foodmaker, Inc. Deferred Compensation Plan
for Non-Management Directors. / / FOR / / AGAINST / / ABSTAIN
4. To approve the Foodmaker, Inc. Non-Employee Director Stock
Option Plan. / / FOR / / AGAINST / / ABSTAIN
The Board of Directors recommends a vote FOR the above proposals. This proxy
when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted
"FOR" all nominees listed and "FOR" Proposals 2, 3Proposal 2. The Board of Directors
recommends a vote FOR the above proposals.
(Continued, and 4.to be marked, dated and signed, on the other side)
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^ FOLD AND DETACH HERE ^
FOODMAKER, INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 16, 1996 AT 2:00 P.M.
RADISSON HOTEL, ROYAL BALLROOM
1433 CAMINO DEL RIO SOUTH, SAN DIEGO, CA
Proxy side two --------------------------------------------------------------
Please mark
your votes as
indicated in /X/
this example.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees AUTHORITY
Nominees: Michael E. Alpert, Paul T. listed (except to vote for all
Carter, Charles W. Duddles, as withheld) nominees listed
Edward Gibbons, Jack W. / / / /
Goodall, Leonard I. Green,
Robert J. Nugent, L. Robert
Payne and Christopher V.
Walker.
(Instruction: To withhold authority to
vote for any individual
nominee, write that nominees
name below.)
- ------------------------------------------
2. Ratification of appointment of KPMG Peat FOR AGAINST ABSTAIN
Marwick LLP as independent accountants. / / / / / /
3. In their discretion, the Proxies are authorized
to vote upon such other business as may
properly come before the meeting.
I plan to attend the meeting. YES NO
/ / / /
STOCKHOLDER
ADDRESS &
SHARE OWNERSHIP
Signature(s)________________________________________ Dated: _____________,1996
Stockholder(s), please sign belowabove exactly as name appears hereon; in the case
of joint holders, all should sign. Fiduciaries should add their full title to
their signature. Corporations should sign in full corporate name by an
authorized officer. Partnerships should sign in partnership name by an
authorized person.
Dated:_________________, 1995
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IMPORTANT - PLEASE SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE; NO
POSTAGE NECESSARY.
I do___________I do not___________expect to attend the Annual Meeting.ENVELOPE.
________________________________________________________________________________
^ FOLD AND DETACH HERE ^
BALLOT FOODMAKER, INC. BALLOT
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 17, 1995Annual Meeting of Stockholders, February 16, 1996
The undersigned votes____________________(______________________________)votes________________________________(________________________)
shares of stock, with respect to the following:
1. Election of Directors: Michael E. Alpert, Paul T. Carter, Charles W.
Duddles, Edward Gibbons, Jack W. Goodall, Leonard I. Green, Robert J.
Nugent, L. Robert Payne and Christopher V. Walker.
/ / FOR all nominees listed.
/ / FOR all nominees listed except________________________.except____________________________________
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. Ratification of appointment of KPMG Peat Marwick LLP as independent
accountants. / / FOR / / AGAINST / / ABSTAIN
3. To approve the Foodmaker, Inc. Deferred Compensation Plan
for Non-Management Directors. / / FOR / / AGAINST / / ABSTAIN
4. To approve the Foodmaker, Inc. Non-Employee Director Stock
Option Plan. / / FOR / / AGAINST / / ABSTAIN
______________________________________________________________________________________
Stockholder's signature
INSTRUCTION: If ballot is cast by proxy, print stockholder name above or, if
multiple stockholders, print "Proxies Filed" above.
______________________________________________________________________________________
Proxy signature (if ballot is cast by proxy)