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 than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, forFor Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)Rule 14a-11(c) or Section 240.14a-12Rule 14a-12
FOODMAKER, INC.
(Name of Registrant as Specified in itsIts Charter)
FOODMAKER, INC.
(Name of Person(s) Filing Proxy Statement)
PaymentPaying of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was 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, or the Formform or Scheduleschedule and the date of its filing.
(1) Amount Previously Paid:previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FOODMAKER
January 9, 19971998
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 14,
1997,13, 1998, at
the San Diego Mission Valley Hilton, 901 Camino del Rio South,Princess Resort, 1404 West Vacation Road, 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.provided or, if indicated on
your proxy card, to optionally vote your proxy by telephone. 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 of the Board
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
_______________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 14, 199713, 1998
The Annual Meeting of Stockholders of Foodmaker, Inc. will be held at
2:00 p.m. on Friday, February 14, 1997,13, 1998, at the San Diego Mission Valley
Hilton, 901 Camino del Rio South,Princess Resort,
1404 West Vacation Road, San Diego, California.
The meeting will be held to vote upon the following proposals:
1. To elect eight directors to serve until the next Annual
Meeting of Stockholders and until their successors are
elected and qualified;
2. To approve the proposed amendments to the 1992 Employee Stock
Incentive Plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as
independent accountants; and
4.3. To act upon such other matters as may properly come
before the meeting or any postponementpostponements or adjournmentadjournments
thereof.
Only stockholders of record at the close of business on December 27,
1996,26,
1997, will be entitled to vote at the meeting.
By Order of the Board of Directors
LAWRENCE E. SCHAUF
Lawrence E. Schauf, Secretary
San Diego, California
January 9, 19971998
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
_______________________________________________
PROXY STATEMENT
________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
February 14, 199713, 1998
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 14, 1997,13, 1998, at the
San Diego Princess Resort, 1404 West Vacation Road, San Diego, California,
and all adjournments and postponements thereof. This Proxy Statement and
form of proxy were mailed to stockholders on or about January 9, 1997.1998.
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. The Company has engaged
D.F. King & Co., Inc. ("D.F. King") to assist in the solicitation of proxies,
for which D.F. King will be paid a fee not to exceed $4,500 plus out-of-
pocket expenses. In addition to solicitation by mail, proxies may be
solicited personally or by telephone or other means by D.F. King, as well as
by directors, officers or employees of the Company, who will receive no
additional compensation for such services.
VOTING
The close of business on December 27, 199626, 1997 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 38,846,94539,151,145 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.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. Abstentions and
broker non-votes (i.e., shares held by brokers or nominees that the broker or
nominee does not have discretionary power to vote on a particular matter and
as to which instructions have not been received from the beneficial owners or
persons entitled to vote) are counted for the purpose of determining the
presence or absence of a quorum for the transaction of business. In the
event that there are insufficient votes for a quorum at the time of the
Annual Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
A director will be elected by a plurality of the votes of the shares of
Common Stock present in person or represented by proxy. The affirmative vote
of a majority of the shares of Common Stock present in person or represented
by proxy will be required to ratify the amendments to the Company's 1992
Employee Stock Incentive Plan and to ratify the appointment of KPMG Peat Marwick LLP
as independent accountants of the Company for the 19971998 fiscal year.
With regard to the election of directors, votes may be cast in favor or
withheld. Votes that are withheld will be excluded entirely from the vote
and will have no effect. Abstentions may be specified on all proposals other
than the election of directors and will be counted as present for purposes of
the 1
item on which the abstention is voted.
Therefore such abstentions will have the effect of a negative vote. Broker
non-votes are not counted for purposes of determining whether a proposal has
been approved and, therefore, have the effect of reducing the number of
affirmative votes required to achieve a majority of the votes cast for such
proposal.
Proxies will be voted as directed.directed in writing or by telephone. If no
direction is given, proxies will be voted FOR management's nominees for
election as directors and FOR ProposalsProposal 2, and 3, unless the stockholder otherwise
directs in the proxy. The enclosed proxy gives discretionary authority as to
any matters not specifically referred to therein. See "Other Business". The
telephone voting procedures, available only to stockholders of record, are
designed to authenticate stockholders' identities, to allow record
stockholders to vote their shares and to confirm that their instructions have
been properly recorded. Specific instructions to be followed by any record
stockholder interested in voting via telephone are set forth on the enclosed
proxy card. A 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 written proxy bearing a later date.date or,
for record stockholders, by a later proxy delivered using the telephone
voting procedures. A proxy will not be voted if the stockholder who executed
it or voted it by telephone is present at the Meeting and elects to vote the
shares represented thereby in person.
PROPOSAL ONE
ELECTION OF 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 eight
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. Stockholders' nominations for
election as a director may be made only pursuant to the provisions of the
Company's bylaws, described below under "Other Business".
The following table provides certain information about each of the
Company's nominees for director as of January 1, 1997:1998:
Director
Name Age Positions with the Company Since
- ------------------------- --- -------------------------------- -------------------------------------------------------------------------------------
Michael E. Alpert 54Alpert(6) 55 Director 1992
Jay W. Brown 51 Nominee forBrown(2)(3) 52 Director --1997
Paul T. Carter(2) 74(3)(5) 75 Director 1991
Charles W. Duddles 56Duddles(1) 57 Executive Vice President, 1988
Chief Financial Officer, Chief
Administrative Officer and Director
Edward Gibbons(1)(2)(3)Gibbons(3)(4)(5) 60(6) 61 Director 1985
Jack W. Goodall(1)(3) 58(4)(5)(6) 59 Chairman of the Board 1985
Robert J. Nugent (1) 55Nugent(1)(4) 56 President, Chief Executive
Officer and Director 1988
L. Robert Payne(2)(5) 6364 Director 1986
__________________________
(1) Member of the ExecutiveAdministrative Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Member of the Stock OptionExecutive Committee.
(5) Member of the InvestmentFinance Committee.
(6) Member of the Nominating Committee.
2
The business experience, principal occupations and the employment of the
nominees has been as follows:
Mr. Alpert was a partner in the San Diego officeOffice of the law firm of
Gibson, Dunn & Crutcher LLP for more than five5 years prior to his retirement on
August 1, 1992. He is currently Advisory Counsel to Gibson, Dunn & Crutcher
LLP. Gibson, Dunn & Crutcher LLP provides legal services to the Company from
time to time to the Company.time.
Since 1995, Mr. Brown is a Vice President of Ralston Purina Company and has been Chief Executive OfficerPresident and PresidentCEO of several of its subsidiaries
including Protein Technologies
International, Inc. since October 1994,, the world's leading supplier of soy-based proteins to
the food and paper processing industries. He was Chairman and CEO of
Continental Baking Company from October 1984 to July 1995 and President of
Van Camp Seafood
2
Company from August 1983 to October 1984. He was previouslyFrom July 1981
through July 1983, he served as Vice President of Marketing for
Jack in the JACK IN THE BOX Division of the Company from
July 1981 to July 1983.Box.
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. Carter is a director of Borrego Springs National Bank.
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 ControllerMr. Duddles has 18 years of experience with the Company from August 1979 to July 1981 and Senior Vice
President, Finance and Administration from August 1981 to October 1985.in
various finance positions.
Mr. Gibbons has been a general partner of 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.
Mr. Goodall has been Chairman of the Board since October 1985. For more
than five years prior to his retirement as an officer in April 1996, he was President and
Chief Executive Officer of the Company. Mr. Goodall is also a director of Van Camp Seafood Company, Inc., Thrifty Payless, Inc. and Ralcorp
Holdings, Inc.
Mr. Nugent has been President and Chief Executive Officer of the Company
since April 1996. He was Executive Vice President of the Company from
February 1985 to April 1996 and President and Chief Operating Officer of the
JACK IN THE BOXJack in the Box Division of the Company from May 1988 to April 1996. Mr.
Nugent has 18 years of experience with the Company in various executive and
operations positions.
Mr. Payne has been President and Chief Executive Officer of
Multi-
Ventures,Multi-Ventures, Inc. since February 1976 and was Chairman of the Board of
Grossmont Bank, a wholly-owned subsidiary of Bancomer, S.A., from February
1974 until October 1995. Multi-Ventures, Inc. is a real estate development
and investment company that is also the managing partner of the San Diego
Mission Valley Hilton and the Hanalei Hotel. He was a principal in the
Company prior to its acquisition by its former parent, Ralston Purina
Company, in 1968.
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES OF THE BOARD
During the fiscal year ended September 29, 1996,The following information is provided about the Board of Directors had an Executive Committee, anand
certain of its committees.
The Audit Committee, a Compensation Committee, a
Stock Option Committee and an Investment Committee. Foodmaker does not have
a Nominating Committee. Mr. Leonard I. Green, a current member of the Board
of Directors who served on various committees, is not standing for re-
election.
The Executive Committee,currently consisting of Messrs. Gibbons, Goodall and
Nugent, may exercise all the authority of the Board in the management of the
Company in the intervals between meetings of the Board of Directors. The
Executive Committee held no meetings in 1996.
The Audit Committee, consisting of Messrs.Brown, Carter Gibbons, Green and
Payne, directs the internal and external audit activities of Foodmaker as
deemed appropriate. The Audit Committee held two meetings in 1996.1997.
The Compensation Committee, currently consisting of Messrs. Brown, Carter
and Gibbons, Goodallreviews compensation policies and Green,recommends changes when
appropriate. The Compensation Committee held one meetingtwo meetings in 1996 and took action by unanimous written consent
on one occasion.
The Stock Option Committee, consisting of Messrs. Gibbons and Green,
held one meeting in 19961997 and granted
stock options on three occasions by unanimous written consents.
3
The InvestmentNominating Committee, consisting of Messrs. Alpert, Gibbons Green and
Payne,Goodall, recommends to the Board nominees for election as Directors and will
consider nominees properly submitted by stockholders (see "Other Business") .
The Nominating Committee held no meetings in 1996 but took action by unanimous written consent
on one occasion.
3
1997.
In 1996,1997, the Board of Directors held six meetings and on two occasionsone occasion
acted by unanimous written consent. Each current director attended more than
75% of the aggregate of the general meetings and the meetings of committees
on which such director served, except Mr. Green who attended 70% of such meetings.served.
Directors who are also officers of Foodmaker or its subsidiaries receive
no additional compensation for their services as directors. Mr. Goodall, who
continues to provide ongoing consultation on various matters, receives
compensation of $10,000 per month as Chairman of the Board of Directors. The
other independent directors of the Company receive compensation consisting of
an $18,000 annual retainer, $1,500$2,000 ($1,500 through February 14, 1997) for
each Board of Directors' meeting attended in person and are also reimbursed
for out-of-pocket and travel expenses. 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 except Mr. Goodall, have
elected to defer their compensation pursuant to this plan since its adoption on February 17,
1995.plan.
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 1996 and
intends to pay him $7,500 in fiscal 1997 for
consultation services relating to insurance matters. The Company has not
renewed this arrangement for 1998. No additional compensation is paid to
other members of the Board of Directors.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of December 15, 1996,1997, 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 and nominee for director of the Company, (iii) each executive
officer listed in the Summary Compensation Table herein and (iv) all
directors and executive officers of the Company as a group. Each of the
following stockholders has sole voting and investment power with respect to
shares beneficially owned by such stockholder, except to the extent that
authority is shared with spouses under applicable law or as otherwise noted.
Number of Shares
Percent of Common Stock
Name Beneficially Owned(1) Percent of Class(1)
- --------------------------------------------------------------------------- --------------------- ----------
The Capital Group Companies, Inc.(2). . . 4,215,700 10.9%
George D. Bjurman-------------------
Morgan Stanley, Dean Witter,
Discover & Associates(3) Co. (2). . . . 2,589,410 6.7%. . . . 4,415,094 11.3%
Jack W. Goodall . . . . . . . . . . . . . 1,071,8731,078,873 2.7%
Robert J. Nugent. . . . . . . . . . . . . 704,771717,271 1.8%
Charles W. Duddles. . . . . . . . . . . . 488,793490,693 1.3%
Kenneth R. Williams . . . . . . . . . . . 430,656437,156 1.1%
Edward Gibbons(4)Gibbons(3) . . . . . . . . . . . . 384,736 *
William E. Rulon. . . . . . . . . . . . . 256,020 *
Leonard I. Green(5) . . . . . . . . . . . 176,695 *394,736 1.0%
Paul L. Schultz . . . . . . . . . . . . . 175,236183,070 *
L. Robert Payne . . . . . . . . . . . . . 81,00091,000 *
Paul T. Carter. . . . . . . . . . . . . . 38,750 *
Christopher V. Walker . . . . . . . . . . 32,00048,750 *
Michael E. Alpert . . . . . . . . . 31,500 *
Lawrence E. Schauf. . . . 20,000. . . . . 27,500 *
Jay W. Brown. . . . . . . . . . . . . . . 10,00020,000 *
All directors and executive officers
as a group (22(20 persons). . . . . . . . . . 4,234,874 10.5%3,913,517 9.7%
_________________________
* 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, Gibbons, Rulon, Green,
Schultz, Payne,
Carter, WalkerAlpert, Schauf and AlpertBrown have the right to acquire through the
exercise of stock options within 60 days of the above date, 385,000, 200,000, 135,000, 150,000, 20,000,
60,000, 20,000, 79,166, 56,000, 26,750, 20,000395,000,
212,500, 140,000, 156,500, 30,000, 87,000, 66,000, 36,750, 30,000,
25,000 and 20,000,10,000, respectively, of the shares reflected above as
beneficially owned.
(2) According to its Schedule 13F13G filing, Capital Guardian Trust Company and
Capital Research and Management Company, operating subsidiaries of The
Capital Group Companies, Inc.Morgan Stanley, Dean Witter,
Discover & Co., exercised as of September 30, 1996,November 6, 1997, investment discretion
with respect to 2,285,700 and 1,930,0004,415,094 shares,
respectively, and sole voting power with respect to 1,963,200 of such
shares, all of which, 2,446,550 are ownedheld on a
discretionary basis on behalf of clients by various clients.Morgan Stanley & Co., its
wholly-owned subsidiary. All shares held are with shared voting power.
The address of The
Capital Group Companies, Inc.Morgan Stanley, Dean Witter, Discover & Company and
Morgan Stanley & Co. is 333 South Hope Street, Los Angeles, CA
90071.1585 Broadway, New York, New York 10036.
(3) According to its Schedule 13F filing, George D. Bjurman & Associates
exercised as of September 30, 1996, investment discretion with respect
to 2,589,410 shares and sole voting power with respect to 2,423,260 of
such shares, all of which are owned by various clients. The address of
George D. Bjurman & Associates is 10100 Santa Monica Blvd., Suite 1200,
Los Angeles, CA 90067.
(4) Includes 50,000 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-------Annual Compensation-------- Underlying
Compensa-
Name and Principal Position Year Salary($) Bonus($) Other($)
Options(#) -tion($tion ($)(F1)
- ------------------------------------------------------------------------------ ---- --------- -------- -------------------- ---------- ----------- ------------
Jack W. Goodall 1996 470,067 300,000 50,763 -- 17,323
Chairman of the Board 1995 648,867 120,000 7,970 -- 20,810
1994 631,951 -- 43,179 35,000 20,303
Robert J. Nugent 1997 467,500 500,000 32,497 50,000
13,823
President, Chief Executive Officer 1996 408,685 435,000 6,000
25,000 10,628
President, Chief Executive Officerand Director 1995 382,370 70,000 789 --
5,168
and Director 1994 371,165 -- 15,947 25,000 5,058
Kenneth R. Williams 1997 330,000 280,000 12,000 25,000
18,638
Executive Vice President, 1996 296,185 248,000 6,000 13,000
19,214
Executive Vice President,Marketing and Operations 1995 282,370 40,625 1,616 25,000
9,815
Marketing and Operations 1994 271,165 -- 21,940 15,000 9,479
Charles W. Duddles 1997 305,000 248,000 16,270 25,000
17,682
Executive Vice President, Chief
Financial Officer, Chief 1996 291,185 240,000 6,000 10,000
19,105
Executive Vice President, ChiefAdministrative Officer 1995 282,370 50,000 515 --
9,815
Financial Officer, Chief Administrative 1994 271,165and Director
Lawrence E. Schauf (F2) 1997 250,000 200,000 19,034
25,000 8,796
Executive Vice President, Secretary 1996 28,846 -- 13,302 20,000 9,479
Officer and Director1,385 50,000
577
Paul L. Schultz 1997 242,500 169,000 12,000 20,000
12,952
Vice President, Operations 1996 216,586 146,250 6,000 9,000
13,246
Vice President, Operations 1995 208,171 29,250 1,747 22,500
7,277
1994 198,420 -- 13,510 10,000 6,740
William E. Rulon 1996 208,685 136,500 6,000 -- 12,792
Senior Vice President 1995 207,370 28,438 -- -- 7,565
1994 196,165 -- 22,094 10,000 7,229
- -----------------------------------------------------------------------------------------
Other annual compensation for Mr. Goodall in 1996 includes reimbursement
for executive health benefits of $23,105 and retirement-related
compensation valued at $27,658; and for Mr. Rulon in 1994 includes an
automobile allowance of $11,205 and reimbursement for executive health
benefits of $10,889. 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 $50,000.
All other compensation represents the Company's matching contributions
to the deferred compensation plan, except for approximately $1,300
annually for each person (except Mr. Schauf in 1996) for premiums on
term life insurance paid by the Company for the benefit of the named
executive officer. The Company has no interest in such insurance
policies.
Mr. Goodall retired as Chief Executive Officer and President ofSchauf began his employment with the Company in Aprilon August 19, 1996.
His compensation in 1996 includes $60,000
received as Chairman of the Board subsequent to his retirement. From
January 1994 through April 1995, approximately 50% of Mr. Goodall's
listed annual compensation was charged to Family Restaurants, Inc. where
he also served as Chairman of the Board and Chief Executive Officer.
6
Stock Option Grants in Fiscal 19961997
Set forth below is information with respect to options granted to the
named executive officers in the Summary Compensation Table during the 19961997
fiscal year. No options were granted during the year to Mr. Goodall or Mr.
Rulon.
Potential Realizable Value
at Assumed Annual Rates
Number of % of Total of Stock Price
Securities Options/SARs Appreciation For
Underlying Granted to Exercise or Option Term
Options/SARs Employees Base Price Expiration
--------------------------- ----------------------------
Name Granted (#) in Fiscal Year ($/Share) Date 5%
10%
- ------------------- ------------------------- -------------- --------------------- ---------- ------- --------
Robert J. Nugent. . . . . 25,000 5.2% 7.125 8/16/2006 $113,227 $287,640Nugent 50,000 6.7% 12.125 6/9/2007 $385,368
$978,987
Kenneth R. Williams . . . 13,000 2.7% 7.125 8/16/2006 58,878 149,57325,000 3.3% 12.125 6/9/2007 192,684
489,493
Charles W. Duddles. . . . 10,000 2.1% 7.125 8/16/2006 45,291 115,056Duddles 25,000 3.3% 12.125 6/9/2007 192,684
489,493
Lawrence E. Schauf 25,000 3.3% 12.125 6/9/2007 192,684
489,493
Paul L. Schultz . . . . . 9,000 1.9% 7.125 8/16/2006 40,762 103,55120,000 2.7% 12.125 6/9/2007 154,147
391,595
6
Option Exercises in Fiscal 19961997 and Fiscal Year-End Values
Set forth below is information with respect to options exercised by the
named executive officers in the Summary Compensation Table during the 19961997
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
Options/SARs Held at In-the-Money
Options/SARs
Shares Fiscal Year-End at Fiscal
Year-EndYear-End(F1)
Acquired on Value ---------------------------- ----------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable
Unexercisable
- ------------------- ----------- -------- ----------- ------------- ----------- -------------
Jack W. Goodall . . . . . 0 $ 0 385,000 0 $2,190,887 $ 0
Robert J. Nugent. . . . .Nugent 0 0 200,000 25,000 926,772 75,000$0 212,500 62,500 $2,916,616
$511,719
Kenneth R. Williams . . . 0 0 150,000 13,000 630,700 39,000156,500 31,500 2,088,044
258,906
Charles W. Duddles. . . .Duddles 0 0 135,000 10,000 736,489140,000 30,000 2,037,739
240,625
Lawrence E. Schauf 0 0 25,000 50,000 254,688
434,375
Paul L. Schultz . . . . . 0 0 75,833 15,667 271,698 51,168
William E. Rulon. . . . . 0 0 60,000 0 296,248 083,666 27,834 1,065,961
241,311
- --------------------------
Based on the difference between the exercise price of the options and
the closing price of the Company's common stock on the last trading day
prior to the Company's fiscal year ended September 28, 1997.
Report of the Board of Directors and Stock OptionCompensation Committee on Executive
Compensation
The Board of Directors has the primary responsibility for determining
executive compensation. There areIn addition, there is also a Compensation and Stock Option
Committees eachCommittee
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. 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. It is the
objective of the Company to maintain base salaries that are slightly above
the mid-range of compensation 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. The purpose of the Performance Bonus Plan is to reward key
employees, executives and officers for achievement of corporate goals
relating to earnings. The performance bonuses for the named executives for
fiscal 19961997 were paid in accordance with the established plan and are
reflected in the Summary Compensation Table.
7
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 1996,1997, stock options were granted to
Messrs. Nugent, Williams, Duddles, Schauf and Schultz for the purchase of
50,000, 25,000, 13,000, 10,00025,000, 25,000 and 9,00020,000 shares, respectively, of Common
Stock at $7.125$12.125 per share, exercisable 50% on July 16, 1997each of May 9, 1998 and July 16, 1998.May 9,
1999. All options were granted at 100% of the market price of the Company's
common stock on the dates of grant. Options serve to directly align the
interests of executives, including the Chief Executive Officer, with the
interests of other shareholders, since such executives will not realize a
benefit unless and until the market price of the Company's common stock
increases.
7
Mr. Nugent became the Chief Executive Officer of the Company on April 1,
1996. Mr. Nugent's initialHis base salary as Chief Executive Officerof March 31, 1997, was targetedincreased 15% over his
previous base salary in order to achieve, over a three year period, a level slightly abovemaintain his salary at approximately the
mid-range of competitive industry practice. His base salary established in
1996 represented a 17.5% increase over his previous salary due to his
promotion to Chief Executive Officer. In establishing Mr. Nugent's base
salary level, his extensive experience in the quick-serve restaurant industry
and the Company's performance under his leadership as President and Chief
Operating Officer were considered. An annual cash incentive award
is payable to Mr. Nugent if the Company achieves or exceeds specified
earnings goals. Mr. Nugent's bonus for 19961997 reflects the highest performance
rating under the Foodmaker Performance Bonus Plan. In 1996,1997, approximately
one-half of Mr. Nugent's compensation was incentive pay.
This report is submitted by the Board of Directors and the Stock OptionCompensation
Committee.
Board of Directors Stock OptionCompensation Committee
----------------------------------------------------------------------------------------- ----------------------
Michael E. Alpert Leonard I. Green Edward Gibbons Jay W. Brown
Jay W. Brown Jack W. Goodall Paul T. Carter
Paul T. Carter Robert J. Nugent Leonard I. GreenEdward Gibbons
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 1996, theThe members of the BoardCompensation Committee are currently Jay W. Brown,
Paul T. Carter and Edward Gibbons. Jay W. Brown, who was Vice President of
Directors were primarily
responsible for determining executive compensation.the Company from July 1981 to July 1983, participated in the deliberations of
the committee. In addition, Mr. Goodall, whoformerly Chief Executive Officer of
the Company, was an
executive officer and also a member of the BoardCompensation Committee during a portion of
Directors,fiscal year 1997 and participated in discussions to the extentdeliberations of making recommendations concerning the compensation of executive officers other than himself.committee
during such time.
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 an administrative,
clerical, or restaurant hourly capacity who have completed 1,000 Hours of
Service 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 multiplied by Benefit Service plus .4% of
Final Average Pay in excess of Covered Compensation 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. 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. (The preceding
capitalized terms are defined in the Retirement Plan.Plan, a copy of which is
filed as an exhibit to the Company's Annual Report on Form 10-K.)
8
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 are reduced for early 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 3020 full years of
service is 60% of Final Average Compensation. For those executives whose
service lengths are less than 3020 years, the target percentage of 60% is
reduced by applying a factor determined by dividing the number of full years
of actual service by 30.20. The plan is unfunded and represents an unsecured
claim against the Company.
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
8
qualify for the E$P. Participants in the E$P may defer up 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$P. Effective April 2, 1990, all such
persons were offered an opportunity to participate in a non-qualified
deferred compensation plan established by the Company. Participants of the
plan, known as the Capital Accumulation Plan for Executives, may defer up to
15% of base and/or bonus pay. The Company contributes on a participant's
behalf 100% of the first 3% of compensation that is deferred by the
participant. Benefits paid under such plan also include an interest
component based on Moody's Average Corporate Bond Yield Index. The plan is
unfunded and participants' accounts represent unsecured claims against the
Company.
Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company contributions to the E$P, Company
contributions to the Deferred Compensation Plan, Supplemental Retirement Plan
and Social Security (50% of primary insurance amount).
Estimated Annual Benefits Based on Years of Service
---------------------------------------------------
Average Annual ---------------------------------------------------
Earnings 10 15 20
25 30
- ------------- -------- ---------------------- -------- -------- --------
$ 100,000.100,000 . . . . . . . $ 20,000 $ 30,000 $ 40,000 $ 50,00045,000 $ 60,000
200,000.200,000 . . . 40,000 60,000 80,000 100,000 120,000
300,000.. . . . 60,000 90,000 120,000
150,000 180,000
400,000.300,000 . . . 80,000 120,000 160,000 200,000 240,000
500,000. . . . 100,000 150,000 200,000 250,000 300,000
600,000.. 90,000 135,000 180,000
400,000 . . . . . . . 120,000 180,000 240,000
300,000 360,000
800,000.500,000 . . . 160,000 240,000 320,000 400,000 480,000
1,000,000. . . . 200,000. 150,000 225,000 300,000
400,000 500,000 600,000 1,200,000.. . . . . . . 180,000 270,000 360,000
800,000 . . . . . . . 240,000 360,000 480,000
1,000,000 . . . . . . . 300,000 450,000 600,000
1,200,000 . . . . . . . 360,000 540,000 720,000
At September 29, 1996,28, 1997, the number of years of service under the
retirement plans for Messrs. Nugent, Williams, Duddles, Schauf and Schultz
was 18, 27, 24, 1 and Rulon
was 17, 26, 23, 21 and 30,22, respectively; and the amount of eligible
compensation for each of these individuals approximates the amounts reflected
as salary and bonus in the Summary Compensation Table.
Mr. Goodall retired
in April 1996.
Severance Arrangements
The Company has entered into compensation and benefits assurance
agreements with certain of its senior executives, including Messrs. Nugent,
Williams, Duddles, Schauf and Schultz, for the payment of certain
compensation and the provision for certain benefits in the event of
termination of employment
9
following a change in control of the Company. The
agreements continue in effect through September 29, 1998 and are
automatically extended for additional, successive, two-year terms thereafter
unless at least six-months written notice is given to the contrary. If there
is a change of control (as defined in the agreements) during the term of any
such agreement, the executive will be entitled to receive the payments and
benefits specified in the event that his employment is terminated within 24
months thereafter: (i) involuntarily, without cause or (ii) voluntarily for
"good reason" (as defined in the agreements). Amounts payable under each
agreement include all amounts earned by the employee prior to the date of
termination and a multiple of the employee's annual base salary, bonus and
the Company's matching contributions to the deferred compensation plan. In
the case of Messrs. Nugent, Williams, Duddles, Schauf and Schultz, the
applicable multiples are 2.5, 2.5, 2.5, 2.5 and 1.5, respectively. In
addition, the agreements provide for the continuation of health insurance
benefits for a period of up to 18 months following termination and certain
incidental benefits.
9
CERTAIN TRANSACTIONS
At the beginning of the fiscal 1995, Sharon Payne, daughter of
L. Robert Payne,In 1990, a directorwholly-owned subsidiary of the Company heldentered into a 20.6% equity interestmaster
license agreement with Foodmex, Inc., a Nevada corporation, for the
development and operation of Jack in Foodmex, Inc. ("Foodmex"), which franchises and operates ten JACK IN THE BOXthe Box restaurants in Mexico. The majorityIn
connection with the master license agreement in 1990, the stockholders of
the funds invested by Ms. Payne in
Foodmex were loaned to her by Mr. Payne; the loan was secured by Ms. Payne's
equity position in Foodmex. During that year, Mr. Payne acquired the
interestprovided personal guarantees 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, except as guarantor on a $75,000 bank loan.
As a franchisee of the Company, Foodmex has various financialFoodmex's obligations to the
Company for franchise feesCompany's subsidiary. In 1993, Foodmex and other trade accounts
payable, which had been approximately $280,000 per month but have declined to
approximately $110,000 per month. As athe Company's subsidiary modified
and amended their agreement. Subsequently, as the result of the devaluation of the
Mexican Peso, Foodmex encountered severe financial
difficulties andencountered by Foodmex, it became unable to meet its obligations
on a current basis. Therefore, Foodmex has
beenwas required to pay in advance for
its food and supplies purchased from the Company and entered into an
agreement for the payment, over an extended period without interest, of the
accumulated arrearage which has been reduced
to approximately $805,000 and a portion of the royalties accruing during 1996
which amounted to approximately $122,000 at fiscal year end. 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 agreements were no more
favorable to the franchisee than could have been obtained by an entirely
unrelated third party.arrearage.
In December 1996, the Company's subsidiary terminated its franchise
agreement with Foodmex; and Foodmex filed a lawsuit in Federal Court,
Foodmex, Inc. v. Foodmaker International Franchising Inc., et al., against
the Company, terminatedits subsidiary, Jack W. Goodall, Robert J. Nugent and another
employee of the licensesCompany. As amended, the complaint alleges claims for breach
of contract, breach of the implied covenant of good faith and fair dealing,
fraud, tortious interference with contract relations, violation of the
California Franchise Relations Act, Racketeer Influenced and Corrupt
Organization Act and civil conspiracy. The amended complaint seeks monetary
damages in excess of $10 million and punitive damages. A counterclaim was
filed by the Company and its subsidiary alleging claims based on breach of
contract, trademark infringement, unfair competition and false designation of
origin. The counterclaim seeks injunctive relief and monetary damages,
including payment of over $1 million owing to the Company's subsidiary.
In March 1997, the Court granted the Company's subsidiary's motion for
preliminary injunction. In granting the motion, the Court found that the
Company's subsidiary has a likelihood of success on the merits of its breach
of contract and trademark infringement claims and required Foodmex to comply
with the termination provisions of its agreement, including the removal of
all Jack in the Box signs and discontinuance of all further use of Jack in the
Box trademarks. In June 1997, Foodmex and its president were found in contempt
of court for failing to comply with the preliminary injunction.
In April 1997, the Company's subsidiary filed an action in the Superior
Court for San Diego, Foodmaker International Franchising, Inc. v. Weber et.
al., against certain of the stockholders of Foodmex, seeking to enforce
guarantee of Foodmex's obligations to the Company.
Sharon Payne, who is the daughter of L. Robert Payne, a director of the
Company, acquired 25% of the outstanding common stock of Foodmex in 1990,
loaned certain funds to Foodmex and signed a guarantee of Foodmex's
obligations to the Company's subsidiary, similar in substance to that
provided by the other Foodmex stockholders. The Company has been advised
that it is the position of Ms. Payne that her personal guarantee is no longer
of any legal effect as the result of changes made to the agreements between
Foodmex and the Company's subsidiary subsequent to the making of her
guarantee. Ms. Payne is not a defendant in the Weber lawsuit.
The Company has been advised by Mr. Payne that the majority of the funds
invested by his daughter in Foodmex (including her loans to Foodmex) were
loaned to her by him. In addition, Mr. Payne has advised that in the past
he, his wife and a family trust provided guarantees of, and certain
collateral for, amongFoodmex's bank indebtedness, the maximum amount of which was
approximately $760,000, and which is currently $69,200. Mr. Payne has never
guaranteed any of Foodmex's obligations to the Company's subsidiary. Mr.
Payne has also advised the Company that in December 1995 all of the ownership
interest formerly held by his daughter in Foodmex was transferred to other
reasons, chronic insolvencystockholders of Foodmex; and failure to meet
operational standards.that neither he nor his daughter presently holds
any ownership interest in Foodmex.
10
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock at the endSeptember 30th of each fiscal year since the initial
public offering on March 4, 1992 with a Restaurant Peer
Group Index and the Standard & Poor's ("S&P") 500 Index
and a Restaurant Peer Group Index for the same period.
The comparison assumes $100 was invested on March 4,September 30, 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]
Mar. 4, Sept. 27, Oct. 3, Oct. 2, Oct. 1, Sept. 29,
1992 1992 1993 1994 1995 1996 ------- --------- ------- ------- ------- ---------1997
---- ---- ---- ---- ---- ----
Foodmaker, Inc. 100 70 65 38 38 6896 55 55 96 181
Restaurant PeerGroup(1) 100 116 102 102 107 134
S&P 500 Index 100 103 118 122 158 190
Restaurant Peer Group(1) 100 84 98 94 94 106113 117 152 183 257
- --------------
(1) The Restaurant Peer Group Index is comprised of the following
companies: Bob Evans Farms, Inc.; CKE Restaurants, Inc.; International
Dairy Queen; Luby's Cafeterias, Inc.; Perkins Family Restaurants, L.P.;
Ryan's Family Steak Houses, Inc.; Sbarro, Inc.; Shoney's, Inc.; and
Vicorp Restaurants, Inc.
PROPOSED AMENDMENTS TO 1992 EMPLOYEE STOCK INCENTIVE PLAN
The Company has a long history of utilizing stock options to provide
additional incentives to its employees. As of December 15, 1996, only 3,160
shares of the Company's Common Stock remained available under the 1992 Stock
Incentive Plan (the "1992 Plan"). The Company does not have any other
stock-based incentive compensation plan in which its executive officers, or
other senior management employees, are eligible to participate. All of the
awards outstanding under the 1992 Plan are nontransferable stock options.
All options granted since the Company's public offering in 1992 have exercise
prices equal to the market price of the underlying stock on the date the
options were granted.
On October 11 and December 18, 1996, the Board amended and restated the
Company's 1992 Plan, subject to the approval by the stockholders, to: (i)
increase the number of shares available for Awards (as defined in the 1992
Plan) under the 1992 Plan by 1,900,000 to 3,775,000, and (ii) include
technical changes, primarily to conform the 1992 Plan to the deductibility
requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). These proposed
11
amendments, which are discussed more fully below, are being submitted to the
stockholders for their approval at the Annual Meeting.
The proposed technical amendments will conform the 1992 Plan to the
deductibility requirements of Section 162(m) of the Internal Revenue Code of
1986, as amended (the Code"). In 1993, the Code was amended to add Section
162(m). Section 162(m) places a limit of $1,000,000 on the amount of
compensation that may be deductible by the Company in any tax year with
respect to each of the Company's highest paid executives, including
compensation relating to stock option exercises. However, such compensation
is not subject to the deduction limit if certain limitations approved by
stockholders are applied to stock options and other awards granted to these
executives. In order to maximize the deductibility of compensation relating
to Awards made to executive officers under the 1992 Plan, the Company is
requesting stockholders to approve the amendments to the 1992 Plan.
In addition, the Board adopted an amendment to the 1992 Plan to change
the existing requirement that members of the committee administering the 1992
Plan be "disinterested directors" to a requirement that the members of that
committee be "Non-Employee Directors" (as those terms have been defined in
the previous and present versions of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")).
The following description of the 1992 Plan is qualified in its entirety
by reference to the full text of the 1992 Plan, as it is proposed to be
amended and restated, a copy of which is attached as Exhibit "A" to this
proxy statement.
General
The purpose of the 1992 Plan is to enable the Company and its
subsidiaries to attract, retain and motivate their employees by providing for
or increasing their proprietary interests in the Company. As indicated in
the report of the Board of Directors and Stock Option Committee (the
"Committee") to the stockholders, elsewhere in this proxy, the Board of
Directors and the Committee believe that the Company's compensation plans for
executives should include long-term incentives linked to increases in
stockholder value. The 1992 Plan was designed to forge such links between
executive rewards and stockholder wealth creation. The proposed amendments
were approved by the Board of Directors, subject to stockholder approval, to
enable the Company to continue this practice with its management team and to
maximize the deductibility of compensation relating to Awards made to
executive officers under the 1992 Plan.
Any Employee (as defined in the 1992 Plan) is eligible for selection as
a participant in the 1992 Plan. As of September 30, 1996, the Company had
approximately 25,000 employees and approximately 34 employees were
participating in the 1992 Plan.
Administration
The 1992 Plan is administered by a committee of the Board (the
"Committee") of Directors. On December 6, 1996, the 1992 Plan was amended to
require that the committee administering the Plan consist of two or more
"non-employee directors" (as such term is now defined in Section 16b-3 of the
Exchange Act) in place of the requirement that each of such directors be a
"disinterested person" (as such term had been defined in Rule 16b-3
promulgated under the Exchange Act).
To satisfy the requirements of Section 162(m) of the Code, the 1992 Plan
would be amended to provide that if Awards under the Plan are to be made to
persons subject to Section 162(m) of the Code and such Awards are intended to
constitute performance-based compensation, then each of the Committee's
members shall also be an "outside director," as such term is defined in the
regulations under Section 162(m) of the Code.
The current members of the Committee are both "non-employee directors"
and "outside directors."
Subject to the provisions of the 1992 Plan, the Committee has full and
final authority to select the employees to whom Awards will be granted
thereunder, to grant such Awards and to determine the terms and provisions of
such Awards and the number of shares to be sold or issued pursuant thereto,
12
and to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the 1992 Plan.
Limitation on Number of Shares
The maximum number of shares of Common Stock which currently may be sold
or issued under the 1992 Plan may not exceed 1,875,000 shares of Common
Stock, in the aggregate, subject to certain adjustments occasioned by
reorganizations, recapitalizations, restructurings, reclassifications, stock
splits, reverse stock splits, stock dividends, or the like. Under the
proposed amendment to the 1992 Plan, the number of shares available under the
1992 Plan would be increased by 1,900,000 to 3,775,000.
No employee may be granted awards under the 1992 Plan, as it is proposed
to be amended, in excess of 400,000 shares of Common Stock during any
calendar year. This limitation is intended to satisfy the requirements of
Section 162(m) of the Internal Revenue Code (the "Code") so that compensation
attributable to Awards under the 1992 Plan qualifies as performance-based
compensation under Section 162(m) of the Code and the regulations thereunder.
The 400,000 annual limitation is subject to certain adjustments occasioned by
reorganizations, recapitalizations, restructurings, reclassifications, stock
splits, reverse stock splits, stock dividends, or the like, but only to the
extent such adjustment would not affect the status of compensation
attributable to Awards as performance-based compensation.
Under the 1992 Plan, shares for which Awards are granted that
subsequently are reacquired by the Company pursuant to the terms of the Award
under which they were issued or sold, including shares that were withheld by
the Company as payment of the purchase price of the shares issued pursuant to
such Award, or as payment of the recipient's tax withholding obligation with
respect to such Award and shares related to stock options that have
subsequently expired, terminated or been canceled without such shares having
been sold or issued thereunder are shares for which Awards may be granted
under the 1992 Plan.
Plan Awards
In general, Awards to employees under the 1992 Plan ("Awards") are not
restricted to any specified form or structure and may include, without
limitation, sales or bonuses of stock, restricted stock, stock options,
reload stock options, stock purchase warrants, other rights to acquire stock,
securities convertible into or redeemable for stock, stock appreciation
rights, limited stock appreciation rights, phantom stock, dividend
equivalents, performance units or performance shares, and an Award may
consist of one such security or benefit, or two or more of them in tandem or
in the alternative.
Some of the permissible features of Awards to employees under the 1992
Plan are:
1. An Award may provide for the satisfaction of a recipient's tax
withholding obligation by the retention of shares to which the recipient would
otherwise be entitled or by the recipient's delivery of previously owned shares
or other property.
2. An Award under the 1992 Plan which is a stock option or other right
to purchase shares may include provisions allowing the recipient to pay some or
all of the purchase price by delivery of a promissory note only, delivery of
previously owned shares or other property or by the withholding of some of the
shares issuable pursuant to the Award. If an option under the 1992 Plan permits
the recipient to pay for the shares of Common Stock issuable pursuant thereto
with previously owned shares, the recipient will be able to exercise the option
in successive transactions (known as "pyramiding") starting with a relatively
small number of shares and, by a series of exercises using the shares acquired
from each transaction, to pay the purchase price of the shares acquired in the
following transaction, exercise an option for a large number of shares with
no additional cash and no more investment than the original share or shares
delivered.
3. An Award may provide for the issuance of shares of Common Stock as a
Stock Bonus for no consideration other than services rendered or to be rendered.
13
4. Under a proposed amendment to the 1992 Plan, the terms and conditions
of an Award may contain provisions required in order for such Award to qualify
as performance-based compensation as described in Section 162(m) of the Code
and the regulations thereunder. Under this proposed amendment, if the amount of
compensation an Employee will receive under any Award is not based solely on an
increase in the value of Common Stock after the date of grant or award, the
Committee, in order to qualify an Award as performance-based compensation, can
condition the grant, award, vesting, or exercisability of such an award on the
attainment of a pre-established, objective performance goal. For this purpose,
a pre-established, objective performance goal may include one or more of the
following performance criteria: (i) cash flow, (ii) earnings per share
(including earnings before interest, taxes, and amortization). (iii) return
on equity, (iv) total stockholder return, (v) return on capital, (vi) return
on assets or net assets, (vii) income or net income, (viii) operating income
or net operating income, (ix) operating margin, (x) return on operating
revenue, and (xi) any other similar performance criteria contemplated by the
regulations under Section 162(m) of the Code.
The following table discloses the number of shares subject to Awards,
all of which have been stock options, that have been granted under the 1992
Plan as of December 15, 1996:
Number of Shares
Name Position Underlying Options
---- -------- ------------------
Jack W. Goodall. . . . . . Chairman of the Board 385,000
Robert J. Nugent . . . . . President, Chief Executive Officer
and Director 225,000
Kenneth R. Williams. . . . Executive Vice President, Marketing
and Operations 163,000
Charles W. Duddles . . . . Executive Vice President, Chief
Financial Officer, Chief
Administrative Officer and Director 145,000
Paul L. Schultz. . . . . . Vice President, Operations 91,500
William E. Rulon . . . . . Senior Vice President 60,000
Total for all current executive officers as a group. . . . . . . . 1,352,250
Total for all employees, other than executive officers,
as a group . . . . . . . . . . . . . . . . . . . . . . . . . . . 245,850
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,598,100
Plan Duration
The 1992 Plan became effective upon its adoption by the Company's Board
of Directors in January 1992, but the proposed Amendments will not become
effective until after they have been approved by the Company's stockholders.
Awards may not be granted under the 1992 Plan after January 3, 2002.
Although Common Shares may be issued after that date pursuant to Awards
granted prior to such date, no Common Shares may be issued under the 1992
Plan after January 3, 2012.
Amendments
The Board of Directors may amend or terminate the 1992 Plan at any time
and in any manner, provided that no such action of the Board may deprive the
recipient of any Award previously granted of his or her rights with respect
thereto without his or her consent.
Changes in Control
An Award may include a provision accelerating the receipt of benefits
pursuant to such Award upon the occurrence of specified events, including,
without limitation, a change of control of the Company, an acquisition of a
specified percentage of the voting power of the Company, the dissolution or
liquidation of the Company, a sale of substantially all of the property and
assets of the Company or an event of the type requiring an adjustment in the
number or type of shares or other securities or property that may be acquired
pursuant to an Award.
14
Tax Treatment
The following is a brief description of the federal income tax treatment
which will generally apply to Awards made under the 1992 Plan, based on
federal income tax laws in effect on the date hereof. The exact federal
income tax treatment of Awards will depend on the specific nature of the
Award, as discussed more fully below.
Incentive Options. Pursuant to the 1992 Plan, Employees may be granted
options which are intended to qualify as incentive stock options ("Incentive
Options") under the provisions of Section 422 of the Internal Revenue Code.
(the "Code"). Generally, the optionee is not taxed and the Company is not
entitled to a deduction on the grant or the exercise of an Incentive Option.
However, if the optionee sells the shares acquired upon the exercise of an
Incentive Option ("ISO Shares") at any time within (a) one year after the
date of transfer of ISO Shares to the optionee pursuant to the exercise of
such Incentive Option or (b) two years after the date of grant of such
Incentive Option, then (1) the optionee will recognize capital gain equal to
the excess, if any, of the sales price over the fair market value of the ISO
Shares on the date of exercise, (2) the optionee will recognize ordinary
income equal to the excess, if any, of the lesser of the sales price or the
fair market value of the ISO Shares on the date of exercise, over the
exercise price of such Incentive Option, (3) the optionee will recognize
capital loss equal to the excess, if any of the exercise price of such
Incentive Option over the sales price of the ISO Shares, and (4) the Company
will generally be entitled to a deduction equal to the amount of the ordinary
income recognized by the optionee. If the optionee sells the ISO Shares at
any time after the optionee has held the ISO Shares for at least (i) one year
after the date of transfer of the ISO Shares to the optionee pursuant to the
exercise of the Incentive Option and (ii) two years after the date of grant
of the Incentive Option, then the optionee will recognize capital gain or
loss equal to the difference between the sales price and the exercise price
of such Incentive Option, and the Company will not be entitled to any
deduction.
Nonqualified Options. The grant of an option or other similar right to
acquire stock which does not qualify for treatment as an Incentive Option (a
"Nonqualified Option") is generally not a taxable event for the optionee.
Upon exercise of the Nonqualified Option, the optionee will generally
recognize ordinary income in an amount equal to the excess of the fair market
value of the stock acquired upon exercise (determined as of the date of the
exercise) over the exercise price of such option, and the Company will be
entitled to a tax deduction equal to such amount. See "Special Rules for
Awards Granted to Insiders," below.
Special Rules for Awards Granted to Insiders. If a recipient of an
option is a director, officer or stockholder subject to Section 16 of the
Exchange Act (an "Insider") and exercises an option within six months of the
date of grant, the timing of the recognition of any ordinary income should be
deferred until (and the amount of ordinary income should be determined based
on the fair market value (or sales price in the case of a disposition) of the
shares of Common Stock upon) the earlier of the following two dates (the
"16(b) Date"): (i) six months after the date of grant or (ii) a disposition
of the shares of Common Stock, unless the insider makes an election under
Section 83(b) of the Code (an "83(b) Election") within 30 days after exercise
to recognize ordinary income based on the value of the Common Stock on the
date of exercise. In addition, special rules apply to an Insider who
exercises an option having an exercise price greater than the fair market
value of the underlying shares on the date of exercise. Insiders should
consult their tax advisors to determine the tax consequences to them of
receiving and exercising Awards pursuant to the 1992 Plan.
Stock Bonuses. The recipient of a Stock Bonus consisting of Common
Stock that is transferable or not subject to a substantial risk of
forfeiture, in each case within the meaning of Section 83 of the Code,
generally will be required to recognize ordinary income (and the Company will
be entitled to a deduction) equal to the fair market value of the underlying
Common Stock on the date of grant. Insiders, however, may be required to
recognize ordinary income with respect to such Stock Bonuses on the 16(b)
Date, determined with reference to the value of the Common Shares on that
date, unless they make a valid 83(b) Election within 30 days after the date
of grant. See "Special Rules for Awards Granted to Insiders," above.
Restricted Stock Bonuses or Forfeitable Stock: Awards under the 1992
Plan may also include sales or bonuses consisting of shares of Common Stock
that are subject to a substantial risk of forfeiture and are not
transferable, in each case within the meaning of Section 83 of the Code
("Restricted Stock").
15
Unless the recipient of such an Award makes an 83(b) Election as discussed
above within 30 days after the receipt of the Restricted Stock, the recipient
generally will not be taxed on the receipt of Restricted Stock until the shares
are no longer subject to a substantial risk of forfeiture or become transferable
(i.e., one or both of the restrictions "lapse"). When one or both of the
restrictions lapse, the recipient will recognize ordinary income (and the
Company will be entitled to a deduction) in an amount equal to the excess of
the fair market value of the Common Stock at the time of lapse over the
purchase price, if any, paid for the shares. However, if the recipient makes
an 83(b) Election within 30 days of the receipt of Restricted Stock, he or she
will recognize ordinary income (and the Company will be entitled to a deduction)
equal to the excess of the fair market value of the shares on the date of
receipt (determined without regard to the vesting or transferability
restrictions) over such purchase price. In the case of an Insider, the timing
of income recognition (including the date used to compute the fair market value
of the Common Stock) with respect to Restricted Stock may be deferred until the
16(b) Date, as described in "Special Rules for Awards Granted to Insiders"
above, unless the Insider makes a valid 83(b) Election.
Miscellaneous Tax Issues. With certain exceptions, an individual may
not deduct investment-related interest to the extent such interest exceeds
the individual's net investment income for the year. Investment interest
generally includes interest paid on indebtedness incurred to purchase shares
of Common Stock. Interest disallowed under this rule may be carried forward
to and deducted in later years, subject to the same limitations.
A holder's tax basis in Common Stock acquired pursuant to the 1992 Plan
generally will equal the amount paid for the Common Stock plus any amount
recognized as ordinary income with respect to such stock. Other than
ordinary income recognized with respect to the Common Stock and included in
basis, any subsequent gain or loss upon the disposition of such stock
generally will be capital gain or loss (long-term or short-term, depending on
the holder's holding period).
Special rules will apply in cases where a recipient of an Award pays the
exercise or purchase price of the Award or applicable withholding tax
obligations under the 1992 Plan by delivering previously owned shares of
Common Stock or by reducing the amount of shares otherwise issuable pursuant
to the Award. The surrender or withholding of such shares will in certain
circumstances result in the recognition of income with respect to such shares
or a carryover basis in the shares acquired.
The terms of the agreements pursuant to which specific Awards are made
to employees under the 1992 Plan may provide for accelerated vesting or
payment of an Award in connection with a change in control of the Company as
discussed above. In that event and depending upon the individual
circumstances of the recipient, certain amounts with respect to such Awards
may constitute "excess parachute payments" under the "golden parachute"
provisions of the Code. Pursuant to these provisions, a recipient will be
subject to a 20% excise tax on any "excess parachute payments" and the
Company will be denied any deduction with respect to such payment.
Recipients of Awards should consult their tax advisors as to whether
accelerated vesting of an Award in connection with a change in control of the
Company would give rise to an excess parachute payment.
The Company generally obtains a deduction equal to the ordinary income
recognized by the recipient of an Award. However, the Company's deduction
for such amounts (including amounts attributable to the ordinary income
recognized with respect to options, stock bonuses or forfeitable stock) may
be limited to $1,000,000 (per person) annually under Section 162(m) of the
Code. Certain proposed amendments to the 1992 Plan are intended to prevent
the potential application of the deduction limits of Section 162(m) to Awards
made under the Plan to executive officers of the Company.
Board Recommendation
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to adopt the proposed Amendments to the 1992
Plan in order to help attract, retain and motivate employees and to maximize
the deductibility of compensation attributable to Awards granted under
16
the 1992 Plan. A majority of the votes cast at the Annual Meeting is necessary
for the approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF
THE AMENDMENTS TO THE 1992 STOCK INCENTIVE PLAN.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 19961997 were filed on a timely basis.basis, except for a late Form 4 for
Mr. Goodall reporting the gift of stock.
11
PROPOSAL TWO
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 September 28, 1997,27, 1998, 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.
Pursuant to the Company's Bylaws, in order for a stockholder to present
business at the Annual Meeting or to make nominations for election of a
director, such matters must be filed in writing with the Secretary of the
Company in a timely manner. To be timely, a stockholder's notice must be
delivered to the principal executive offices of the Company not less than
ninety (90) nor more than one hundred and twenty (120) days prior to the
meeting as originally scheduled; provided, however, that in the event that
less than 100 days' notice or prior public disclosure of the date of the
meeting is made to stockholders, notice by the stockholder must be received
not later than the close of business on the 10th day following the day on
which notice of the date of the Annual Meeting was mailed or public
disclosure was made. Such notice shall set forth, as to the stockholder
giving notice, the stockholder's name and address as they appear on the
Company's books, and the class and number of shares of the Company which are
beneficially owned by such stockholder. Additionally, (i) with respect to a
stockholder's notice regarding a nominee for director, such notice shall set
forth, as to each person whom the stockholder proposes to nominate for
election or re-election as a director, all information relating to such
person that is required to be disclosed in solicitations of proxies for
election of directors pursuant to the Securities Exchange Act of 1934, as
amended (including such person's written consent to being named in the Proxy
Statement as a nominee and to serving as a director if elected); and (ii)
with respect to a notice relating to a matter the stockholder proposes to
bring before the Annual Meeting, a brief description of the business desired
to be brought before the meeting and any material interest of the stockholder
in such business.
STOCKHOLDER PROPOSALS FOR 19981999 ANNUAL MEETING
Any eligible stockholder of the Company wishing to have a proposal
considered for inclusion in the Company's 19981999 proxy solicitation materials
must set forth such proposal in writing and file it with the Secretary of the
Company on or before September 12, 1997.11, 1998. Any such proposals must comply in
all respects with the rules and regulations of the Securities and Exchange
Commission.
1712
19961997 ANNUAL REPORT AND FORM 10-K
A copy of the 19961997 Annual Report to Stockholders accompanies this Proxy
Statement. Foodmaker's Annual Report on Form 10-K for the year ended
September 29, 1996,28, 1997, as filed with the Securities and Exchange Commission,
contains detailed information concerning Foodmaker and its operations which
is not included in the 19961997 Annual Report. A COPY OF THE 19961997 FORM 10-K WILL
BE FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN
WRITING TO:
Foodmaker Treasury Department, 9330 Balboa Avenue, San Diego, California
92123-1516.
By Order of the Board of Directors,
LAWRENCE E. SCHAUF
LawrenceLAWRENCE E. SchaufSCHAUF
Secretary
18
Exhibit A
FOODMAKER INC.
AMENDED AND RESTATED
1992 EMPLOYEE STOCK INCENTIVE PLAN
Section 1. Purpose of Plan. The purpose of this 1992 Employee Stock
Incentive Plan ("Plan") of Foodmaker, Inc. (the "Company"), is to enable the
Company and its subsidiaries to attract, retain and motivate their employees
by providing for or increasing the proprietary interests of such employees in
the Company.
Section 2. Persons Eligible under Plan. Any person, including any
director of the Company, who is an employee of the Company or any of its
subsidiaries (an "Employee") shall be eligible to be considered for the grant
of Awards (as hereinafter defined) hereunder.
Section 3. Awards.
(a) The Committee (as hereinafter defined), on behalf of the Company,
is authorized under this Plan to enter into any type of arrangement with an
Employee that is not inconsistent with the provisions of this Plan and that
by its terms, involves or might involve the issuance of (i) shares of common
stock of the Company ("Common Shares"), (ii) an option, warrant, convertible
security, stock appreciation right or similar right with an exercise or
conversion privilege at a price related to the Common Shares, or (iii) any
other security or benefit with a value derived from the value of the Common
Shares. The entering into of any such arrangement is referred to herein as
the "grant" of an "Award."
(b) Awards are not restricted to any specified form or structure and
may include, without limitation, sales or bonuses of stock, restricted stock,
stock options, reload stock options, stock purchase warrants, other rights to
acquire stock, securities convertible into or redeemable for stock, stock
appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, and an Award
may consist of one such security or benefit, or two or more of them in tandem
or in the alternative.
(c) Common Shares may be issued pursuant to an Award for any lawful
consideration as determined by the Committee, including, without limitation,
services rendered by the recipient of such Award.
(d) Subject to the provisions of this Plan, the Committee, in its sole
and absolute discretion, shall determine all of the terms and conditions of
each Award granted under this Plan, which terms and conditions may include,
among other things:
(i) a provision permitting the recipient of such Award, including
any recipient who is a director or officer of the Company, to pay the
purchase price of the Common Shares or other property issuable pursuant
to such Award, or such recipient's tax withholding obligation with
respect to such issuance, in whole or in part, by any one or more of the
following:
(A) the delivery of previously owned shares of capital stock of
the Company (including "pyramiding") or other property; or
(B) the delivery of a promissory note, the terms and conditions
of which shall be determined by the Committee;
(ii) a provision accelerating the receipt of benefits pursuant
to such Award upon the occurrence of specified events, including,
without limitation, a change of control of the Company, an
acquisition of a specified percentage of the voting power of the
Company, the dissolution or liquidation of the Company, a sale of
substantially all of the property and assets of the Company or an
event of the type described in Section 7 hereof; or
(iii) any provision required in order for such Award to qualify
as an incentive stock option under Section 422 of the Internal Revenue
Code (an "Incentive Stock Option").
(iv) any provision required in order for such Award to qualify
as "Performance-Based Compensation" as described in Section 162(m) of
the Internal Revenue Code (the "Code") and
A-1
the regulations thereunder. If the amount of compensation an Employee
will receive under any Award is not based solely on an increase in the
value of Common Stock after the date of grant or award, the Committee,
in order to qualify an Award as Performance-Based Compensation, can
condition the grant, award, vesting, or exercisability of such an award
on the attainment of a pre-established, objective performance goal.
For this purpose, a pre-established, objective performance goal may
include one or more of the following performance criteria; (i) cash
flow, (ii) earnings per share (including earnings before interest,
taxes, and amortization), (iii) return on equity, (iv) total
stockholder return, (v) return on capital, (vi) return on assets or net
assets, (vii) income or net income, (viii) operating income or net
operating income, (ix) operating margin, (x) return on operating
revenue, and (xi) any other similar performance criteria contemplated
by the regulations under Section 162(m) of the Code.
Section 4. Stock Subject to Plan.
(a) The maximum number of Common Shares that may be issued pursuant to
Incentive Stock Options granted under this Plan is 3,775,000, subject to
adjustment as provided in Section 7 hereof.
(b) The maximum number of Common Shares that may be issued pursuant to
all Awards (including Incentive Stock Options) granted under this Plan, other
than Common Shares that are issued pursuant to Awards and subsequently
reacquired by the Company pursuant to the terms and conditions of such
Awards, is 3,775,000, subject to adjustment as provided in Section 7 hereof
(such maximum number, as so adjusted, shall be referred to herein as the
"Share Limitation").
(c) All outstanding options to purchase shares of common stock, $.01 par
value per share, of PDV Holdings, Inc. ("PDV") shall be converted into
options to purchase common Shares (with the same rights, privileges and
exercise prices as applied to such options pursuant to the terms of any Stock
Option Agreements between PDV and the holders of such options) at such time
as the proposed merger of PDV with and into the Company (the "Merger") is
consummated. All such options, to the extent that they remain unexercised at
the effective time of said Merger, shall be deemed Awards that have been
granted under this Plan and the maximum number of Common Shares that may be
issued pursuant to all Awards granted under this Plan shall include Common
Shares issued pursuant to said options, other than Common Shares that are
issued pursuant to said options and subsequently reacquired by the Company
pursuant to the terms and conditions of said options.
(d) No Award may be granted under this Plan unless, on the date of
grant, the sum of (i) the maximum number of Common Shares issuable at any
time pursuant to such award, plus (ii) the number of Common Shares that have
previously been issued pursuant to Awards granted under this Plan (including
Common Shares issued pursuant to Awards described in (c), above), other than
Common Shares that have been issued pursuant to Awards and subsequently
reacquired by the Company pursuant to the terms and conditions of such
Awards, plus (iii) the maximum number of Common Shares that may be issued at
any time thereafter pursuant to Awards granted under this Plan (including
common Shares that may be issued at any time thereafter pursuant to Awards
described in (c), above) that are outstanding on such date, does not exceed
the Share Limitation.
(e) Notwithstanding any other provision of this Plan, no Employee shall
be granted Awards with respect to more than 400,000 shares of Common Stock in
any one calendar year; provided, however, that this limitation shall not
apply if it is not required in order for the compensation attributable to
Awards hereunder to qualify as Performance-Based Compensation. The
limitation set forth in this Section 4(e) shall be subject to adjustment as
provided in Section 7, but only to the extent such adjustments would not
affect the status of compensation attributable to Awards hereunder as
Performance-Based Compensation.
Section 5. Duration of Plan. No awards shall be granted under this
Plan after January 3, 2002. Although Common Shares may be issued after
January 3, 2002, pursuant to Awards granted prior to such date, no Common
Shares shall be issued under this Plan after January 3, 2012.
Section 6. Administration of Plan.
(a) This Plan shall be administered by a committee (the "Committee") of
the Board of Directors of the Company (the "Board") consisting of two or more
directors, each of whom is a "Non-Employee Director" (as such term is defined
in Rule 16b-3 promulgated under the Securities
A-2
Exchange Act of 1934, as amended (the "Exchange Act"), as such rule may be
amended from time to time). In addition, if Awards are to be made to persons
subject to Section 162(m) of the Code and such awards are intended to
constitute Performance-Based Compensation, then each of the Committee's members
shall also be an "outside director," as such term is defined in the regulations
under Section 162(m) of the Code.
(b) Subject to the provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation, the following:
(i) adopt, amend and rescind rules and regulations relating to this
Plan;
(ii) determine which persons meet the requirements of Section 2
hereof for eligibility under this Plan and to which of such eligible
persons, if any, Awards shall be granted hereunder;
(iii) grant Awards to eligible persons and determine the terms
and conditions thereof, including the number of Common Shares issuable
pursuant thereto;
(iv) determine whether, and the extent to which, adjustments are
required pursuant to Section 7 hereof; and
(v) interpret and construe this Plan and the terms and conditions
of any Award granted hereunder.
Section 7. Adjustments. If the outstanding securities of the class
then subject to this Plan are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
if cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification, dividend
(other than a regular, quarterly cash dividend) or other distribution, stock
split, reverse stock split or the like, or if substantially all of the
property and assets of the Company are sold, then, unless such event shall
cause a termination of the Incentive Stock Options or other Awards, or the
terms of such transaction shall provide otherwise, the Committee shall make
appropriate and proportionate adjustments in (a) the number and type of
shares or other securities or cash or other property that may be acquired
pursuant to Incentive Stock Options and other Awards theretofore granted
under this Plan and (b) the maximum number and type of shares or other
securities that may be issued pursuant to Incentive Stock Options and other
Awards thereafter granted under this Plan.
Section 8. Amendment and Termination of Plan. The Board may amend or
terminate this Plan at any time and in any manner; provided, however, that no
such amendment or termination shall deprive the recipient of any Award
theretofore granted under this Plan, without the consent of such recipient,
of any of his or her rights thereunder or with respect thereto.
Section 9. Effective Date of Plan. This Plan shall be effective as of
January 3, 1992, the date upon which it was approved by the Board; provided,
however, that no Common Shares may be issued under the Plan until it has been
approved by the affirmative vote of the holders of a majority of the
outstanding Common Shares in accordance with applicable state laws.
A-313
Proxy with telephone voting instructions - side one -----------------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOODMAKER, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 14, 199713, 1998 AT 2:00 P.M.
SAN DIEGO MISSION VALLEY HILTON, 901 CAMINO DEL RIO SOUTH,PRINCESS RESORT, 1404 WEST VACATION ROAD, SAN DIEGO, CA
The undersigned hereby appoints Jack W. Goodall, Charles W. Duddles and
Lawrence E. Schauf 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 14, 1997,13, 1998, and any postponements or adjournments
thereof. The above named proxies are instructed to vote all the
undersigned's shares of stock on the proposals set forth in the Notice of
Annual Meeting and Proxy Statement as specified on 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 postponements or adjournments
thereof. 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 and
3.Proposal 2. The
Board of Directors recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
- ---------------------------------------------------------------------------------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
FOODMAKER, INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 14, 199713, 1998 AT 2:00 P.M.
SAN DIEGO MISSION VALLEY HILTON
901 CAMINO DEL RIO SOUTH,PRINCESS RESORT
1404 WEST VACATION ROAD, SAN DIEGO, CA
Proxy with telephone voting instructions - side two ------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposals 1 and 2
Please mark
your votes as
indicated in /X//x/
this example.example
FOR WITHHOLD FOR ALL
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees AUTHORITYALL ALL EXCEPT
(noted below)
Nominees: Michael E. Alpert, Jay W. Brown, listed (except to vote for all
Paul T. Carter, Charles W. Duddles, as withheld) nominees listed
Edward Gibbons, Jack W. Goodall, / / / / / /
01 Michael E. Alpert 05 Edward Gibbons
02 Jay W. Brown 06 Jack W. Goodall
03 Paul T. Carter 07 Robert J. Nugent
and04 Charles W. Duddles 08 L. Robert Payne
(Instruction: To withhold authority to vote for any individual nominee mark
the "FOR ALL EXCEPT" box above and write that nominee's name below.)
- --------------------------------------------------------------------------------------------------------
2. To approve the proposed amendments to the 1992 FOR AGAINST ABSTAIN
Employee Stock Incentive Plan; / / / / / /
3. Ratification of appointment of KPMG Peat FOR AGAINST ABSTAIN
Marwick LLP as independent accountants. / / / / / /
4.3. In their discretion, the Proxies are authorized FOR AGAINST ABSTAIN
to vote upon such other business as may
properly / / / / / / come before the meeting.
I plan to attend the meeting. YES NO
/ / / /
NAME,- -----------------------------------------------
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS
BELOW ***
[NAME, ADDRESS & SHARE INFORMATIONINFORMATION]
Signature(s)_______________________________________ Dated:______________, 1997_________________________Dated:___________________, 1998
Stockholder(s), please sign above 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.
PLEASE SIGN, DATE-------------------------------------------------------------------------
^ FOLD AND RETURNDETACH HERE ^
VOTE BY TELEPHONE
QUICK * * * EASY * * * IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card.
You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
Your vote will be confirmed and cast as you directed. END OF CALL
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9; To WITHHOLD FOR AN INDIVIDUAL nominee,
press 0 and listen to the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
Your vote will be confirmed and cast as you directed. END OF CALL.
If you vote by telephone, there is no need for you to mail back your proxy.
THANK YOU FOR VOTING
Call * * Toll Free * * On a Touch Tone Telephone
1-800-840-1208 - ANYTIME
There is NO CHARGE to you for this call CONTROL NUMBER
Proxy without telephone voting instructions - side one -----------------------
PROXY
CARD PROMPTLY USINGTHIS PROXY IS SOLICITED ON BEHALF OF THE ENCLOSED ENVELOPE.BOARD OF DIRECTORS
FOODMAKER, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 13, 1998 AT 2:00
P.M.
SAN DIEGO PRINCESS RESORT, 1404 WEST VACATION ROAD, SAN DIEGO, CA
The undersigned hereby appoints Jack W. Goodall, Charles W. Duddles and
Lawrence E. Schauf 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 13, 1998, and any postponements or adjournments
thereof. The above named proxies are instructed to vote all the
undersigned's shares of stock on the proposals set forth in the Notice of
Annual Meeting and Proxy Statement as specified on 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 postponements or adjournments
thereof. 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" Proposal 2. The
Board of Directors recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
-----------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
FOODMAKER, INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 13, 1998 AT 2:00 P.M.
SAN DIEGO PRINCESS RESORT
1404 WEST VACATION ROAD, SAN DIEGO, CA
Proxy without telephone voting instructions - ------------------------------------------------------------------------------side two -----------------------
The Board of Directors recommends a vote FOR Proposals 1 and 2
Please mark
your votes as
indicated in /x/
this example
FOR WITHHOLD FOR ALL
1. ELECTION OF DIRECTORS ALL ALL EXCEPT
(noted below)
Nominees: / / / / / /
01 Michael E. Alpert 05 Edward Gibbons
02 Jay W. Brown 06 Jack W. Goodall
03 Paul T. Carter 07 Robert J. Nugent
04 Charles W. Duddles 08 L. Robert Payne
(Instruction: To withhold authority to vote for any individual nominee mark
the "FOR ALL EXCEPT" box above and write that nominee's 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
/ / / /
- -----------------------------------------------
[NAME, ADDRESS & SHARE INFORMATION]
Signature(s)______________________________Dated:________________, 1998
Stockholder(s), please sign above 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.
------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
Proxy Easy$aver Plus Plan - side one --------------------------------------------------------------------------------------------------------
FOODMAKER, INC. EASY$AVER PLUS PLAN BALLOT
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 14, 199713, 1998 AT 2:00
P.M.
SAN DIEGO MISSION VALLEY HILTON, 901 CAMINO DEL RIO SOUTH,PRINCESS RESORT, 1404 WEST VACATION ROAD, SAN DIEGO, CA
This is a ballot for voting instructions for the shares of Foodmaker, Inc.
stock allocated to your Foodmaker, Inc Easy$aver Plus Plan account. Mellon
Bank, N.A., as Trustee of the Plan, will vote all shares held in your account
as directed on your ballot at the Foodmaker, Inc. Annual Meeting of
Stockholders to be held on February 14, 1997.13, 1998.
Indicate your voting instructions for the proposals on the ballot, sign and
date it, and return it in the envelope provided. Your ballot must be
received on or before February 12, 199711, 1998 in order to be counted. Your voting
instructions will be kept confidential.
If you properly sign and return your ballot, the Trustee will vote your
shares according to your instructions. If you do not properly sign and
return the ballot to be received on or before February 12, 1997,11, 1998, to Ellen
Philip Associates Inc., no action will be taken with respect to those shares
which have been allocated to your account.
(Continued, and to be marked, dated and signed, on the other side)
- -----------------------------------------------------------------------------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
FOODMAKER, INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 14, 199713, 1998 AT 2:00 P.M.
SAN DIEGO MISSION VALLEY HILTON
901 CAMINO DEL RIO SOUTH,PRINCESS RESORT
1404 WEST VACATION ROAD, SAN DIEGO, CA
Proxy Easy$aver Plus Plan - side two ---------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposals 1 and 2
Please mark
your votes as
indicated in /X//x/
this example.example
FOR WITHHOLD FOR ALL
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees AUTHORITYALL ALL EXCEPT
(noted below)
Nominees: Michael E. Alpert, Jay W. Brown, listed (except to vote for all
Paul T. Carter, Charles W. Duddles, as withheld) nominees listed
Edward Gibbons, Jack W. Goodall, / / / / / /
01 Michael E. Alpert 05 Edward Gibbons
02 Jay W. Brown 06 Jack W. Goodall
03 Paul T. Carter 07 Robert J. Nugent
and04 Charles W. Duddles 08 L. Robert Payne
(Instruction: To withhold authority to vote for any individual nominee mark
the "FOR ALL EXCEPT" box above and write that nominee's name below.)
- --------------------------------------------------------------------------------------------------------
2. To approve the proposed amendments to the 1992 FOR AGAINST ABSTAIN
Employee Stock Incentive Plan; / / / / / /
3. Ratification of the appointment of KPMG Peat FOR AGAINST ABSTAIN
Marwick LLP as independent accountants. / / / / / /
NAME,3. In their discretion, the Proxies are authorized
to vote upon such other business as may
properly come before the meeting.
- -----------------------------------------------
[NAME, ADDRESS & SHARE INFORMATIONINFORMATION]
Signature(s)_______________________________________ Dated:______________, 1997____________________________________Dated:________________, 1998
Please sign above exactly as name appears hereon.
- --------------------------------------------------------------------------------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
BALLOT FOODMAKER, INC. BALLOT
Annual Meeting of Stockholders, February 13, 1998
The undersigned votes_________________________________(_______________________)
shares of stock, with respect to the following:
1. Election of Directors: Michael E. Alpert, Jay W. Brown, Paul T. Carter,
Charles W. Duddles, Edward Gibbons, Jack W. Goodall, Robert J. Nugent
and L. Robert Payne.
/ / FOR all nominees listed.
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
/ / FOR all nominees listed except__________________________________
2. Ratification of appointment of KPMG Peat Marwick LLP as independent
accountants. / / FOR / / AGAINST / / ABSTAIN
____________________________________________
Stockholder's signature (/ / check box if you are voting shares held in
Easy$aver Plus Plan)
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)