Delaware
|
5812
|
84-1573084
|
||
(State or other jurisdiction of
incorporation or organization) |
(Primary standard industrial
classification code number) |
(I.R.S. employer
identification number) |
Thomas J. Leary
Brandi R.
Steege
OMelveny & Myers LLP
610 Newport Center
Drive, Suite 1700
Newport Beach, California 92660
(949)
760-9600
|
Valerie Ford Jacob
Stuart H.
Gelfond
Fried, Frank, Harris, Shriver & Jacobson
One New
York Plaza
New York, New York 10004
(212)
859-8000
|
Per Share
|
Total
|
|||||
|
|
|
|
|
||
Offering Price
|
$
|
|
$
|
|
||
Discounts and Commissions to Underwriters
|
$
|
|
$
|
|
||
Offering Proceeds to Red Robin
|
$
|
|
$
|
|
||
Offering Proceeds to the Selling Stockholders
|
$
|
|
$
|
|
Banc of America Securities LLC
|
U.S. Bancorp Piper Jaffray
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Page
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i
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17
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18
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19
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20
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21
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23
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38
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51
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65
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69
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72
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74
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76
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80
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83
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83
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83
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F-1
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the underwriters will not exercise their over-allotment option to purchase up to 755,700 additional shares of our common stock from some of the selling
stockholders at the price set forth on the cover of this prospectus;
|
|
|
an initial offering price of $15.00 per share, the midpoint of the range set forth on the cover of this prospectus;
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|
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no exercise of options to purchase an aggregate of 504,466 shares of common stock which were outstanding as of May 19, 2002 under our stock option plans; and
|
|
|
that we have completed a one-for-2.9 reverse stock split that we intend to complete prior to the consummation of this offering.
|
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Focus on our key guiding principals, or cornerstones, that drive our success
. Values, people, burgers and time.
|
|
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Offer high quality, imaginative menu items
. Our restaurants feature imaginative menu items that showcase recipes and capture
tastes and flavors that our guests do not typically associate with burgers, salads and sandwiches.
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|
Create a fun, festive and memorable dining experience
. We promote an exciting, high-energy and family-friendly atmosphere by
decorating our restaurant interiors with an eclectic selection of celebrity posters, three-dimensional artwork, carousel horses and statues of our mascot Red.
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|
|
Provide an exceptional dining value with broad consumer appeal
. We offer generous portions of high quality, imaginative food and
beverages for a per person average check of approximately $10.00, which we believe differentiates us from many of our competitors who have significantly higher average guest checks.
|
|
|
Deliver strong unit economics
. Our comparable company-owned restaurants generated average sales of approximately $3.0 million and
restaurant-level operating profit of approximately $618,000, or 20.5% of comparable company-owned restaurant sales in 2001. The average cash investment cost for
|
|
|
Pursue disciplined restaurant and franchise growth
. Our disciplined expansion strategy includes both company-owned and franchised
development. In 2002, we have opened five new company-owned restaurants, relocated one restaurant and expect to open five additional new company-owned restaurants. Our franchisees have opened four new restaurants and we expect them to open three
additional restaurants this year.
|
|
|
Build awareness of the Red Robin® Americas Gourmet Burgers & Spirits® brand
. We believe we have become well
known within our markets for our signature menu items and we intend to strengthen this brand loyalty by continuing to offer new menu items and deliver a consistently memorable guest experience.
|
|
|
Continue to capitalize on favorable lifestyle and demographic trends
. We believe we have benefited from several key trends that
have helped drive our business. These trends include the expected increase in consumption of food away from home and the large and growing teen population.
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|
|
our ability to open new restaurants, secure sufficient new space and manage our planned expansion;
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|
|
the continued service of key management personnel;
|
|
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changes in consumer preferences or consumer discretionary spending;
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|
|
health concerns regarding beef or other food products;
|
|
|
the effect of competition in the restaurant industry;
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|
|
the ability of our franchisees to take actions that could harm our business;
|
|
|
adverse economic and other developments in the Western United States where 83.3% of our company-owned restaurants are located; and
|
|
|
Quad-C, Skylark Co., Ltd., Mike Snyder and our other officers, directors and principal stockholders will hold approximately 58.0% of our common stock after this
offering and, acting individually or together, will be able to exert significant influence over all matters requiring stockholder approval, including the election of directors and significant business transactions.
|
Common stock offered by:
|
||
Red Robin Gourmet Burgers, Inc.
|
4,000,000 shares
|
|
Selling stockholders
|
1,038,000 shares
|
|
Common stock to be outstanding after this offering
|
15,025,654 shares
|
|
Use of proceeds
|
We intend to use the proceeds of this offering:
|
|
to repay approximately $47.9 million of indebtedness under our term loan,
including related fees;
|
||
to repay approximately $3.5 million of indebtedness under our revolving
credit facility; and
|
||
to repay approximately $2.1 million of indebtedness under one real estate
and three equipment loans, including related fees.
|
||
The remaining net proceeds will be used for general corporate purposes, which may include the opening of new restaurants or the acquisition of existing
restaurants from franchisees if we receive sufficient proceeds. We will not receive any of the proceeds from the sale of shares by the selling stockholders. See Use of Proceeds.
|
||
Proposed Nasdaq National Market symbol
|
RRGB
|
|
|
1,475,690 shares of common stock reserved for issuance under our stock option plans, of which 504,466 shares are subject to options outstanding at a weighted
average exercise price of $5.83 per share; and
|
|
|
300,000 shares of common stock reserved for issuance under our employee stock purchase plan.
|
Fiscal Year Ended
|
First Quarter Ended
|
|||||||||||||||||||
1999
|
2000(1)
|
2001
|
2001
|
2002
|
||||||||||||||||
(in thousands, except per share data, restaurant-related data and footnotes)
|
||||||||||||||||||||
Statement of Income Data:
|
(unaudited)
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Restaurant
|
$
|
121,430
|
|
$
|
180,413
|
|
$
|
214,963
|
|
$
|
64,572
|
|
$
|
76,317
|
|
|||||
Franchise royalties and fees
|
|
8,249
|
|
|
8,247
|
|
|
9,002
|
|
|
2,822
|
|
|
2,757
|
|
|||||
Rent revenue
|
|
333
|
|
|
510
|
|
|
520
|
|
|
120
|
|
|
127
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
|
130,012
|
|
|
189,170
|
|
|
224,485
|
|
|
67,514
|
|
|
79,201
|
|
|||||
Income from operations
|
|
7,145
|
|
|
8,805
|
|
|
18,740
|
|
|
5,127
|
|
|
5,993
|
|
|||||
Interest expense
|
|
4,156
|
|
|
6,482
|
|
|
7,850
|
|
|
2,500
|
|
|
2,217
|
|
|||||
Interest income
|
|
(186
|
)
|
|
(742
|
)
|
|
(746
|
)
|
|
(208
|
)
|
|
(100
|
)
|
|||||
Other expense
|
|
391
|
|
|
191
|
|
|
190
|
|
|
63
|
|
|
25
|
|
|||||
(Provision) benefit for income taxes(2)
|
|
1,596
|
|
|
12,557
|
|
|
(3,722
|
)
|
|
(901
|
)
|
|
(1,374
|
)
|
|||||
Net income(2)
|
|
4,380
|
|
|
15,431
|
|
|
7,724
|
|
|
1,871
|
|
|
2,476
|
|
|||||
Net income per common share(2)
|
||||||||||||||||||||
Basic
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.77
|
|
$
|
0.19
|
|
$
|
0.25
|
|
|||||
Diluted
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.75
|
|
$
|
0.18
|
|
$
|
0.23
|
|
|||||
Shares used in computing net income per common share
|
||||||||||||||||||||
Basic
|
|
2,971
|
|
|
7,444
|
|
|
10,085
|
|
|
10,076
|
|
|
10,090
|
|
|||||
Diluted
|
|
2,971
|
|
|
7,444
|
|
|
10,236
|
|
|
10,170
|
|
|
10,650
|
|
|||||
Selected Operating Data:
|
||||||||||||||||||||
System-wide restaurants open at end of period
|
|
144
|
|
|
164
|
|
|
182
|
|
|
165
|
|
|
186
|
|
|||||
Company-owned restaurants open at end of period
|
|
46
|
|
|
73
|
|
|
77
|
|
|
72
|
|
|
88
|
|
|||||
Average annual comparable company-owned restaurant sales(3)
|
$
|
2,664
|
|
$
|
2,890
|
|
$
|
3,020
|
|
|||||||||||
Comparable company-owned restaurant sales increase(3)
|
|
5.8
|
%
|
|
6.9
|
%
|
|
2.0
|
%
|
|
2.6
|
%
|
|
0.4
|
%
|
|||||
Restaurant-level operating profit(4)
|
$
|
20,340
|
|
$
|
32,423
|
|
$
|
41,215
|
|
$
|
11,497
|
|
$
|
14,298
|
|
|||||
EBITDA(5)
|
|
12,539
|
|
|
16,870
|
|
|
29,231
|
|
|
8,279
|
|
|
9,592
|
|
|||||
EBITDA margin(5)
|
|
9.6
|
%
|
|
8.9
|
%
|
|
13.0
|
%
|
|
12.3
|
%
|
|
12.1
|
%
|
April 21, 2002
|
||||||
Actual
|
As Adjusted(6)
|
|||||
(unaudited)
|
||||||
Balance Sheet Data:
|
||||||
Cash and cash equivalents
|
$
|
6,547
|
$
|
10,695
|
||
Total assets
|
|
154,188
|
|
156,168
|
||
Long-term debt, including current portion
|
|
78,743
|
|
30,122
|
||
Total stockholders equity
|
|
49,475
|
|
100,076
|
(1)
|
|
In May 2000, we purchased all of the outstanding capital stock of one of our franchisees, The Snyder Group Company, for approximately $23.7 million plus
liabilities assumed of $20.0 million, thereby acquiring 14 restaurants and significantly changing our capital structure. See the financial statements of The Snyder Group Company and the related notes included elsewhere in this prospectus.
|
|
|
In addition, in May 2000, we sold 4,310,344 shares of our common stock to affiliates of Quad-C, a private equity firm, for $25.0 million. The proceeds were used
to pay off debentures and promissory notes, as well as pay down bank debt and fund new restaurant construction.
|
(2)
|
|
Net income in 1999 included a benefit for income taxes of $1.6 million and net income in 2000 included a benefit for income taxes of $12.6 million, in each case
as a result of the reversal of previously recorded deferred tax asset valuation allowance. Due to our improved profitability, the deferred tax asset valuation allowance was reversed because it became more likely than not that the deferred tax asset
would be realized in the future.
|
(3)
|
|
Company-owned restaurants become comparable in the first period following the first full fiscal year of operations. For example, the restaurants we acquired in
May 2000 from The Snyder Group Company are included in comparable company-owned restaurants in 2002.
|
(4)
|
|
We define restaurant-level operating profit to be restaurant sales minus restaurant operating costs, excluding restaurant closures and impairment costs. It does
not include general and administrative costs, depreciation and amortization, franchise development costs and pre-opening costs. Although restaurant-level operating profit is a measure commonly used in the restaurant industry to evaluate operating
performance, it is not a measurement determined in accordance with generally accepted accounting principles and should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing
activities or other financial statement data presented as indicators of financial performance or liquidity. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The following
table sets forth our calculation of restaurant-level operating profit:
|
(5)
|
|
EBITDA represents earnings before interest, taxes, depreciation and amortization. EBITDA is another measure commonly used to evaluate operating performance.
EBITDA is not a measurement determined in accordance with generally accepted accounting principles and should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities or
other financial statement data presented as indicators of financial performance or liquidity. EBITDA as presented may not be comparable to other similarly titled measures of other companies. EBITDA margin is calculated as EBITDA divided by total
revenues. The following table sets forth our calculation of EBITDA:
|
(6)
|
|
As adjusted information gives effect to the application of the net proceeds from the sale of 4,000,000 shares of our common stock offered by us in this offering
at an initial offering price of $15.00 per share, less the underwriting discount and estimated offering expenses payable by us, and the use of the proceeds from this offering to repay approximately $47.9 million of indebtedness under our term loan,
including related fees, approximately $3.5 million of indebtedness under our revolving credit facility and approximately $2.1 million of indebtedness under one real estate and three equipment loans, including related fees. This information also
reflects the non-cash charge to earnings of approximately $2.2 million from the write-off of deferred loan fees and the cash charge of approximately $1.9 million from pre-payment penalty fees related to the repayment of the indebtedness noted above.
|
|
|
the hiring, training and retention of qualified operating personnel, especially managers;
|
|
|
reliance on the knowledge of our executives and franchisees to identify available and suitable restaurant sites;
|
|
|
competition for restaurant sites;
|
|
|
negotiation of favorable lease terms;
|
|
|
timely development of new restaurants, including the availability of construction materials and labor;
|
|
|
management of construction and development costs of new restaurants;
|
|
|
securing required governmental approvals and permits in a timely manner, or at all;
|
|
|
competition in our markets; and
|
|
|
general economic conditions.
|
|
|
material adverse effects on our operating results, particularly in the fiscal quarters immediately following the acquisition as it is integrated into our
operations;
|
|
|
risks associated with entering into markets or conducting operations where we have no or limited prior experience; and
|
|
|
the diversion of managements attention from other business concerns.
|
|
|
the timing of new restaurant openings and related expenses;
|
|
|
restaurant operating costs and pre-opening costs for our newly-opened restaurants, which are often materially greater during the first several months of
operation than thereafter;
|
|
|
labor availability and costs for hourly and management personnel;
|
|
|
profitability of our restaurants, especially in new markets;
|
|
|
franchise development costs;
|
|
|
increases and decreases in comparable restaurant sales;
|
|
|
impairment of long-lived assets, including goodwill, and any loss on restaurant closures;
|
|
|
general economic conditions;
|
|
|
changes in consumer preferences and competitive conditions; and
|
|
|
fluctuations in commodity prices.
|
|
|
authorize our board of directors to establish one or more series of preferred stock, the terms of which can be determined by the board of directors at the time
of issuance;
|
|
|
divide our board of directors into three classes of directors, with each class serving a staggered three-year term. As the classification of the board of
directors generally increases the difficulty of replacing a majority of the directors, it may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us and may maintain the composition of the board
of directors;
|
|
|
not provide for cumulative voting in the election of directors unless required by applicable law. Under cumulative voting, a minority stockholder holding a
sufficient percentage of a class of shares may be able to ensure the election of one or more directors;
|
|
|
provide that a director may be removed from our board of directors only for cause, and then only by a supermajority vote of the outstanding shares;
|
|
|
require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and
may not be effected by any consent in writing;
|
|
|
state that special meetings of our stockholders may be called only by the chairman of the board of directors, our chief executive officer, by the board of
directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10.0% of our outstanding voting stock;
|
|
|
provide that the chairman or other person presiding over any stockholder meeting may adjourn the meeting whether or not a quorum is present at the meeting;
|
|
|
establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by
stockholders at a meeting;
|
|
|
provide that certain provisions of our certificate of incorporation can be amended only by supermajority vote of the outstanding shares, and that our bylaws can
be amended only by supermajority vote of the outstanding shares or our board of directors;
|
|
|
allow our directors, not our stockholders, to fill vacancies on our board of directors; and
|
|
|
provide that the authorized number of directors may be changed only by resolution of the board of directors.
|
|
|
our ability to achieve and manage our planned expansion;
|
|
|
our ability to raise capital in the future;
|
|
|
the ability of our franchisees to open and manage new restaurants;
|
|
|
our franchisees adherence to our practices, policies and procedures;
|
|
|
changes in the availability and costs of food;
|
|
|
potential fluctuation in our quarterly operating results due to seasonality and other factors;
|
|
|
the continued service of key management personnel;
|
|
|
the concentration of our restaurants in the Western United States;
|
|
|
our ability to protect our name and logo and other proprietary information;
|
|
|
changes in consumer preferences or consumer discretionary spending;
|
|
|
health concerns about our food products;
|
|
|
our ability to attract, motivate and retain qualified team members;
|
|
|
the impact of federal, state or local government regulations relating to our team members or the sale of food and alcoholic beverages;
|
|
|
the impact of litigation; and
|
|
|
the effect of competition in the restaurant industry.
|
|
|
approximately $47.9 million to repay the outstanding amounts under our term loan with Finova Capital Corporation, including a prepayment penalty of 4.0%, which
bears interest at 9.9% and has a maturity date of September 1, 2012.
|
|
|
approximately $3.5 million to repay the outstanding amounts under our revolving credit facility with U.S. Bank National Association, which bears interest at the
London Interbank Offered Rate, or LIBOR, plus 3.0% and has a maturity date of March 31, 2003. We entered into this revolving credit facility for working capital and capital expenditure needs.
|
|
|
approximately $1.6 million to repay the outstanding amounts under one real estate loan with Captec Financial Group, including a prepayment penalty of 1.0%,
which bears interest at 10.1% and has a maturity date of January 1, 2012.
|
|
|
approximately $0.5 million to repay the outstanding amounts under two equipment loans with Captec and one equipment loan with General Electric Capital
Corporation, which bear interest at rates ranging from 9.6% to 11.6% and have maturity dates between April 1, 2003 and December 1, 2003.
|
|
|
on an actual basis; and
|
|
|
on an as adjusted basis to give effect to the application of the net proceeds from the sale of 4,000,000 shares of our common stock offered by us in this
offering at an offering price of $15.00 per share, less the underwriting discount and estimated offering expenses payable by us, and the use of proceeds from this offering to repay approximately $47.9 million of indebtedness under our term loan,
including related fees, approximately $3.5 million of indebtedness under our revolving credit facility and approximately $2.1 million of indebtedness under one real estate and three equipment loans, including related fees. This information also
reflects the non-cash charge to earnings of approximately $2.2 million from the write-off of deferred loan fees and the cash charge of approximately $1.9 million from pre-payment penalty fees related to the repayment of the indebtedness noted
above.
|
(1)
|
|
We have entered into a commitment letter with Wachovia Bank, N.A. to enter into a new revolving credit facility of up to $35.0 million contingent upon the
consummation of this offering. Wachovia Bank, N.A. has committed $15.0 million to the new revolving credit facility and intends to use its reasonable best efforts to syndicate the remainder of the credit facility to other lenders.
|
(2)
|
|
Long-term debt includes capital leases.
|
(3)
|
|
Excludes 1,443,086 shares of common stock issuable on the exercise of stock options outstanding as of April 21, 2002.
|
Fiscal Year Ended
|
First Quarter Ended
|
|||||||||||||||||||||||||||
1997
|
1998
|
1999
|
2000(1)
|
2001
|
2001
|
2002
|
||||||||||||||||||||||
(in thousands, except per share data,
restaurant-related data and footnotes) |
(unaudited)
|
|||||||||||||||||||||||||||
Statement of Income Data:
|
||||||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||
Restaurant
|
$
|
108,604
|
|
$
|
110,953
|
|
$
|
121,430
|
|
$
|
180,413
|
|
$
|
214,963
|
|
$
|
64,572
|
|
$
|
76,317
|
|
|||||||
Franchise royalties and fees
|
|
7,078
|
|
|
7,193
|
|
|
8,249
|
|
|
8,247
|
|
|
9,002
|
|
|
2,822
|
|
|
2,757
|
|
|||||||
Rent revenue
|
|
36
|
|
|
69
|
|
|
333
|
|
|
510
|
|
|
520
|
|
|
120
|
|
|
127
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
115,718
|
|
|
118,215
|
|
|
130,012
|
|
|
189,170
|
|
|
224,485
|
|
|
67,514
|
|
|
79,201
|
|
|||||||
Costs and expenses:
|
||||||||||||||||||||||||||||
Restaurant operating costs:
|
||||||||||||||||||||||||||||
Cost of sales
|
|
28,471
|
|
|
27,679
|
|
|
30,159
|
|
|
43,945
|
|
|
50,914
|
|
|
15,952
|
|
|
17,897
|
|
|||||||
Labor
|
|
40,261
|
|
|
39,089
|
|
|
43,504
|
|
|
64,566
|
|
|
74,854
|
|
|
22,639
|
|
|
27,428
|
|
|||||||
Operating
|
|
16,550
|
|
|
17,382
|
|
|
19,429
|
|
|
27,960
|
|
|
33,195
|
|
|
10,317
|
|
|
11,412
|
|
|||||||
Occupancy
|
|
6,433
|
|
|
6,379
|
|
|
7,998
|
|
|
11,519
|
|
|
14,785
|
|
|
4,167
|
|
|
5,282
|
|
|||||||
Restaurant closures and impairment
|
|
6,342
|
|
|
140
|
|
|
(330
|
)
|
|
1,302
|
|
|
36
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
|
7,135
|
|
|
5,008
|
|
|
5,394
|
|
|
8,065
|
|
|
10,491
|
|
|
3,152
|
|
|
3,599
|
|
|||||||
General and administrative
|
|
10,974
|
|
|
13,578
|
|
|
13,434
|
|
|
17,116
|
|
|
16,845
|
|
|
4,545
|
|
|
5,712
|
|
|||||||
Franchise development
|
|
870
|
|
|
1,982
|
|
|
2,508
|
|
|
3,386
|
|
|
3,704
|
|
|
1,610
|
|
|
1,362
|
|
|||||||
Pre-opening costs
|
|
159
|
|
|
|
|
|
771
|
|
|
2,506
|
|
|
921
|
|
|
5
|
|
|
517
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total costs and expenses
|
|
117,195
|
|
|
111,237
|
|
|
122,867
|
|
|
180,365
|
|
|
205,745
|
|
|
62,387
|
|
|
73,208
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
|
(1,477
|
)
|
|
6,978
|
|
|
7,145
|
|
|
8,805
|
|
|
18,740
|
|
|
5,127
|
|
|
5,993
|
|
|||||||
Other (income) expense:
|
||||||||||||||||||||||||||||
Interest expense
|
|
4,785
|
|
|
4,460
|
|
|
4,156
|
|
|
6,482
|
|
|
7,850
|
|
|
2,500
|
|
|
2,217
|
|
|||||||
Interest income
|
|
(127
|
)
|
|
(282
|
)
|
|
(186
|
)
|
|
(742
|
)
|
|
(746
|
)
|
|
(208
|
)
|
|
(100
|
)
|
|||||||
Other expense
|
|
559
|
|
|
595
|
|
|
391
|
|
|
191
|
|
|
190
|
|
|
63
|
|
|
25
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total other expense
|
|
5,217
|
|
|
4,773
|
|
|
4,361
|
|
|
5,931
|
|
|
7,294
|
|
|
2,355
|
|
|
2,143
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
|
(6,694
|
)
|
|
2,205
|
|
|
2,784
|
|
|
2,874
|
|
|
11,446
|
|
|
2,772
|
|
|
3,850
|
|
|||||||
(Provision) benefit for income taxes(2)
|
|
(1,899
|
)
|
|
33
|
|
|
1,596
|
|
|
12,557
|
|
|
(3,722
|
)
|
|
(901
|
)
|
|
(1,374
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)(2)
|
$
|
(8,593
|
)
|
$
|
2,238
|
|
$
|
4,380
|
|
$
|
15,431
|
|
$
|
7,724
|
|
$
|
1,871
|
|
$
|
2,476
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share(2)
|
||||||||||||||||||||||||||||
Basic
|
$
|
(3.02
|
)
|
$
|
0.78
|
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.77
|
|
$
|
0.19
|
|
$
|
0.25
|
|
|||||||
Diluted
|
$
|
(3.02
|
)
|
$
|
0.78
|
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.75
|
|
$
|
0.18
|
|
$
|
0.23
|
|
|||||||
Shares used in computing net income per common share
|
||||||||||||||||||||||||||||
Basic
|
|
2,847
|
|
|
2,903
|
|
|
2,971
|
|
|
7,444
|
|
|
10,085
|
|
|
10,076
|
|
|
10,090
|
|
|||||||
Diluted
|
|
2,847
|
|
|
2,903
|
|
|
2,971
|
|
|
7,444
|
|
|
10,236
|
|
|
10,170
|
|
|
10,650
|
|
|||||||
Selected Operating Data:
|
||||||||||||||||||||||||||||
System-wide restaurants open at end of period
|
|
128
|
|
|
131
|
|
|
144
|
|
|
164
|
|
|
182
|
|
|
165
|
|
|
186
|
|
|||||||
Company-owned restaurants open at end of period
|
|
46
|
|
|
44
|
|
|
46
|
|
|
73
|
|
|
77
|
|
|
72
|
|
|
88
|
|
|||||||
Average annual comparable company-owned restaurant sales(3)
|
$
|
2,309
|
|
$
|
2,496
|
|
$
|
2,664
|
|
$
|
2,890
|
|
$
|
3,020
|
|
|||||||||||||
Comparable company-owned restaurant sales increase(3)
|
|
9.2
|
%
|
|
4.9
|
%
|
|
5.8
|
%
|
|
6.9
|
%
|
|
2.0
|
%
|
|
2.6
|
%
|
|
0.4
|
%
|
|||||||
Restaurant-level operating profit(4)
|
$
|
16,889
|
|
$
|
20,424
|
|
$
|
20,340
|
|
$
|
32,423
|
|
$
|
41,215
|
|
$
|
11,497
|
|
$
|
14,298
|
|
|||||||
EBITDA(5)
|
|
5,658
|
|
|
11,986
|
|
|
12,539
|
|
|
16,870
|
|
|
29,231
|
|
|
8,279
|
|
|
9,592
|
|
|||||||
EBITDA margin(5)
|
|
4.9
|
%
|
|
10.1
|
%
|
|
9.6
|
%
|
|
8.9
|
%
|
|
13.0
|
%
|
|
12.3
|
%
|
|
12.1
|
%
|
|||||||
Fiscal Year
|
First Quarter
|
|||||||||||||||||||||||||||
1997
|
1998
|
1999
|
2000
|
2001
|
2001
|
2002
|
||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
3,414
|
|
$
|
5,645
|
|
$
|
5,176
|
|
$
|
8,317
|
|
$
|
18,992
|
|
$
|
14,083
|
|
$
|
6,547
|
|
|||||||
Total assets(1)
|
|
52,555
|
|
|
55,338
|
|
|
70,706
|
|
|
141,184
|
|
|
154,441
|
|
|
148,759
|
|
|
154,188
|
|
|||||||
Long-term debt, including current portion
|
|
58,418
|
|
|
57,509
|
|
|
66,120
|
|
|
78,413
|
|
|
80,087
|
|
|
82,330
|
|
|
78,743
|
|
|||||||
Total stockholders equity (deficit)(1)
|
|
(22,248
|
)
|
|
(19,291
|
)
|
|
(14,861
|
)
|
|
39,773
|
|
|
46,978
|
|
|
41,401
|
|
|
49,475
|
|
(1)
|
|
In May 2000, we purchased all of the outstanding capital stock of one of our franchisees, The Snyder Group Company, for approximately
$
23.7 million plus
liabilities assumed of $20.0 million, thereby acquiring 14 restaurants and significantly changing our capital structure. See the financial statements of The Snyder Group Company and the related notes included elsewhere in this prospectus.
|
|
|
In addition, in May 2000, we sold 4,310,344 shares of our common stock to affiliates of Quad-C, a private equity firm, for $25.0 million. The proceeds were used
to pay off debentures and promissory notes, as well as pay down bank debt and fund new restaurant construction.
|
(2)
|
|
Net income in 1999 included a benefit for income taxes of $1.6 million and net income in 2000 included a benefit for income taxes of $12.6 million, in each case
as a result of the reversal of previously recorded deferred tax asset valuation allowance. Due to our improved profitability, the deferred tax asset valuation allowance was reversed because it became more likely than not that the deferred tax asset
would be realized in the future.
|
(3)
|
|
Company-owned restaurants become comparable in the first period following the first full fiscal year of operations. For example, the restaurants we acquired in
May 2000 from The Snyder Group Company are included in comparable company-owned restaurants in 2002.
|
(4)
|
|
We define restaurant-level operating profit to be restaurant sales minus restaurant operating costs, excluding restaurant closures and impairment costs. It does
not include general and administrative costs, depreciation and amortization, franchise development costs and pre-opening costs. Although restaurant-level operating profit is a measure commonly used in the restaurant industry to evaluate operating
performance, it is not a measurement determined in accordance with generally accepted accounting principles and should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing
activities or other financial statement data presented as indicators of financial performance or liquidity. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The following
table sets forth our calculation of restaurant-level operating profit:
|
(5)
|
|
EBITDA represents earnings before interest, taxes, depreciation and amortization. EBITDA is another measure commonly used to evaluate operating performance.
EBITDA is not a measurement determined in accordance with generally accepted accounting principles and should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities or
other financial statement data presented as indicators of financial performance or liquidity. EBITDA as presented may not be comparable to other similarly titled measures of other companies. EBITDA margin is calculated as EBITDA divided by total
revenues. The following table sets forth our calculation of EBITDA:
|
Fiscal Year Ended
|
First Quarter Ended
|
||||||||||||||
1999
|
2000
|
2001
|
2001
|
2002
|
|||||||||||
(unaudited)
|
|||||||||||||||
Revenue:
|
|||||||||||||||
Restaurant
|
93.4
|
%
|
95.4
|
%
|
95.8
|
%
|
95.6
|
%
|
96.3
|
%
|
|||||
Franchise royalties and fees
|
6.3
|
|
4.3
|
|
4.0
|
|
4.2
|
|
3.5
|
|
|||||
Rent revenue
|
0.3
|
|
0.3
|
|
0.2
|
|
0.2
|
|
0.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
100.0
|
|
100.0
|
|
100.0
|
|
100.0
|
|
100.0
|
|
|||||
Costs and expenses:
|
|||||||||||||||
Restaurant operating costs:
|
|||||||||||||||
Cost of sales
|
24.8
|
|
24.4
|
|
23.7
|
|
24.7
|
|
23.5
|
|
|||||
Labor
|
35.8
|
|
35.8
|
|
34.8
|
|
35.0
|
|
35.9
|
|
|||||
Operating
|
16.0
|
|
15.5
|
|
15.4
|
|
16.0
|
|
15.0
|
|
|||||
Occupancy
|
6.6
|
|
6.4
|
|
6.9
|
|
6.5
|
|
6.9
|
|
|||||
Restaurant closures and impairment
|
(0.3
|
)
|
0.7
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Total restaurant operating costs
|
82.9
|
|
82.8
|
|
80.8
|
|
82.2
|
|
81.3
|
|
|||||
Depreciation and amortization
|
4.1
|
|
4.3
|
|
4.7
|
|
4.7
|
|
4.5
|
|
|||||
General and administrative
|
10.3
|
|
9.0
|
|
7.5
|
|
6.7
|
|
7.2
|
|
|||||
Franchise development
|
1.9
|
|
1.8
|
|
1.6
|
|
2.4
|
|
1.7
|
|
|||||
Pre-opening costs
|
0.6
|
|
1.3
|
|
0.4
|
|
|
|
0.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations
|
5.5
|
|
4.7
|
|
8.3
|
|
7.6
|
|
7.6
|
|
|||||
Other (income) expense:
|
|||||||||||||||
Interest expense
|
3.2
|
|
3.4
|
|
3.5
|
|
3.7
|
|
2.8
|
|
|||||
Interest income
|
(0.1
|
)
|
(0.4
|
)
|
(0.3
|
)
|
(0.3
|
)
|
(0.1
|
)
|
|||||
Other expense
|
0.3
|
|
0.1
|
|
0.1
|
|
0.1
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Total other expense
|
3.4
|
|
3.1
|
|
3.2
|
|
3.5
|
|
2.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Income before income taxes
|
2.1
|
|
1.5
|
|
5.1
|
|
4.1
|
|
4.9
|
|
|||||
(Provision) benefit for income taxes
|
1.2
|
|
6.6
|
|
(1.7
|
)
|
(1.3
|
)
|
(1.7
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
3.4
|
%
|
8.2
|
%
|
3.4
|
%
|
2.8
|
%
|
3.1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
the timing of new restaurant openings and related expenses;
|
|
|
restaurant operating costs and pre-opening costs for our newly-opened restaurants, which are often materially greater during the first several months of
operation than thereafter;
|
|
|
labor availability and costs for hourly and management personnel;
|
|
|
profitability of our restaurants, especially in new markets;
|
|
|
franchise development costs;
|
|
|
increases and decreases in comparable restaurant sales;
|
|
|
impairment of long-lived assets, including goodwill, and any loss on restaurant closures;
|
|
|
general economic conditions;
|
|
|
changes in consumer preferences and competitive conditions; and
|
|
|
fluctuations in commodity prices.
|
Payments Due As of December 30, 2001
|
|||||||||||||||
Contractual Obligations
|
Total
|
Less Than 1 year
|
1-3 years
|
3-5 years
|
After 5 years
|
||||||||||
(in thousands)
|
|||||||||||||||
Term loan and notes payable(1)
|
$
|
66,835
|
$
|
4,635
|
$
|
9,499
|
$
|
12,366
|
$
|
40,336
|
|||||
Capital lease obligations
|
|
13,252
|
|
443
|
|
795
|
|
1,098
|
|
10,917
|
|||||
Operating lease obligations
|
|
107,315
|
|
9,676
|
|
18,654
|
|
16,300
|
|
62,686
|
(1)
|
|
We intend to repay $48.1 million of this amount with the net proceeds of this offering.
|
|
|
Focus on key guiding principals, or cornerstones, that drive our success.
In managing our operations, we focus on four
cornerstones that we believe are essential to our business. Our four cornerstones are:
|
|
|
Offer high quality, imaginative menu items.
Our restaurants feature menu items that use imaginative toppings and showcase recipes
that capture tastes and flavors that our guests do not typically associate with burgers, salads and sandwiches. We believe the success of our concept is due to our ability to interpret the latest food trends and incorporate them into our gourmet
burgers, pastas, rice bowls, appetizers, salads, sandwiches and beverages. Our menu items are cooked to order, using high-quality, fresh ingredients and premium meats and based on unique recipes. One of our signature menu items is our Royal Red
Robin Burger, which features a gourmet burger topped with a fried egg, along with bacon, cheese, lettuce, tomato and mayonnaise. We offer a wide selection of toppings for our gourmet burgers, including fresh guacamole, roasted green chilies, honey
mustard dressing, grilled pineapple, crispy onion straws, sautéed mushrooms and a choice of six different cheeses. We serve all of our gourmet burgers and sandwiches with bottomless french fries.
|
|
|
Create a fun, festive and memorable dining experience.
We promote an exciting, high-energy and family-friendly atmosphere by
decorating our restaurant interiors with an eclectic selection of celebrity posters, three-dimensional artwork, carousel horses and statues of our mascot Red. We enhance the excitement and energy levels in our restaurants by placing
televisions in our main dining areas, in our floors and in our bathrooms and by playing upbeat, popular music throughout the day.
|
|
|
Provide an exceptional dining value with broad consumer appeal.
We offer generous portions of high quality, imaginative food and
beverages for a per person average check of approximately $10.00, which includes alcoholic beverages. We believe this price-to-value relationship differentiates us from our competitors, many of whom have significantly higher average guest checks,
and allows us to appeal to a broad base of consumers with a wide range of income levels. In addition to attracting families and groups, our restaurant features seating in the bar area, which is often used by our single diners. Our restaurants are
popular during both the day and evening hours as evidenced by our almost equal split between lunch and dinner sales. We believe that our diverse menu further enhances our broad appeal by accommodating groups with different tastes.
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Deliver strong unit economics
. We believe our company-owned restaurants provide strong unit-level economics. In 2001, our
comparable company-owned restaurants generated average sales of approximately $3.0 million and restaurant-level operating profit of approximately $618,000, or 20.5% of total comparable company-owned restaurant sales. The average cash investment cost
for our free-standing restaurants opened in 2001 was approximately $1.7 million, excluding pre-opening costs, which averaged approximately $146,000 per restaurant, and land.
In 2000, our comparable company-owned restaurants generated average
sales of approximately $2.9 million and restaurant-level operating profit of approximately $533,000, or 18.4% of total comparable company-owned restaurant sales. The average cash investment cost for our free-standing restaurants opened in 2000 was
approximately $1.8 million, excluding pre-opening costs, which averaged approximately $144,000 per restaurant, and land.
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Pursue disciplined restaurant and franchise growth
. We are pursuing a disciplined growth strategy, including both company-owned
and franchised development. In 2001, we opened six company-owned restaurants and our franchisees opened 16 restaurants and expanded into two new states. In 2002, we have opened five new company-owned restaurants and relocated one restaurant and
expect to open an additional five new company-owned restaurants. In addition, our franchisees have opened four new restaurants and we expect our franchisees to open three additional new restaurants. We intend to continue to expand by opening new
company-owned and franchised restaurants at a comparable pace in future years. Our site selection criteria focuses on identifying markets, trade areas and other specific sites that are likely to yield the greatest density of desirable demographics,
heavy retail traffic and a highly visible site.
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Build awareness of the Red Robin
®
Americas Gourmet Burgers & Spirits
®
brand.
We believe that the Red Robin name has achieved substantial brand equity among our guests and has become well known within our markets for our signature menu items. We intend to strengthen this brand loyalty by
continuing to offer new menu items and deliver a consistently memorable guest experience. Additionally, we believe that Red Robin is recognized for the family-friendly, high-energy and exciting
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atmosphere our restaurants offer. Key brand attributes that we continue to build upon are our high-quality imaginative food items, commitment to guest service and a strong price-to-value
relationship.
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Continue to capitalize on favorable lifestyle and demographic trends.
We believe that we have benefited from several key lifestyle
and demographic trends that have helped drive our business. These trends include:
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employee discounts or other discounts;
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any federal, state, municipal or other sales, value added or retailers excise taxes; or
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adjustments for net returns on salable goods and discounts allowed to customers on sales.
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Selection process
. We generally select franchisees that are experienced, well-capitalized, multi-unit restaurant operators or who
have demonstrated the ability to raise capital and rapidly grow a multi-unit retail or service organization. During the selection process, we conduct comprehensive background, financial, and reference checks on all candidates. Key department heads
will typically meet with each franchisee candidate and often visit their current business operations to assess his or her level of relevant expertise. References are obtained from the candidates as well as through industry sources, such as former
suppliers, executives, managers, or other business associates. We will generally not grant development rights for the development of a single restaurant.
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Development and operations
. After a franchise agreement is signed, we actively work with and monitor our franchisees to ensure
successful franchise operations as well as compliance with Red Robin systems and procedures. During the development phase, we assist in the selection of restaurant sites and the development of prototype and building plans, including all required
changes by local municipalities and developers. After construction is completed, we review the building for compliance with our standards and provide eight trainers to assist in the opening of the restaurant. We advise the franchisee on menu,
management training, and equipment and food purchases. At least once a year, we review all menu items and descriptions to ensure compliance with our requirements and standards. We require all suppliers of ground beef, if different than ours, to pay
for and pass an annual inspection performed by third party auditors. Finally, on an ongoing basis, we conduct brand equity reviews on all franchise restaurants to determine their level of effectiveness in executing our concept at a variety of
operational levels. Reviews are conducted by seasoned operations teams, last approximately two to three days, and focus on seven key areas including health, safety, brand foundation, and execution proficiency.
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Class I directors, whose term will expire at the annual meeting of stockholders to be held in 2003;
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Class II directors, whose term will expire at the annual meeting of stockholders to be held in 2004; and
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Class III directors, whose term will expire at the annual meeting of stockholders to be held in 2005.
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Long-Term Compensation
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|||||||||||||||
Annual Compensation(1)
|
Securities Underlying Options/SARs (#)
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All Other Compensation ($)(2)
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|||||||||||||
Name and Principal Position
|
Year
|
Salary($)
|
Bonus($)
|
||||||||||||
Michael J. Snyder, Chief Executive Officer
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2001
|
$
|
340,609
|
|
$
|
347,288
|
|
|
$
|
4,620
|
|||||
James P. McCloskey, Chief Financial Officer
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2001
|
|
226,861
|
|
|
162,068
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(3)
|
|
|
2,793
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|||||
Michael E. Woods, Senior Vice President of Franchise Development
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2001
|
|
196,568
|
|
|
140,498
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(3)
|
|
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2,562
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|||||
Robert J. Merullo, Senior Vice President of Restaurant Operations
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2001
|
|
207,563
|
|
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147,630
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(3)
|
|
|
5,600
|
|||||
Todd A. Brighton, Vice President of Development
|
2001
|
|
95,192
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(4)
|
|
30,000
|
|
51,724
|
|
1,400
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|||||
Eric C. Houseman, Vice President of Restaurant Operations
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2001
|
|
128,942
|
|
|
48,300
|
|
8,621
|
|
1,391
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(1)
|
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In accordance with the rules of the SEC, the compensation described in this table does not include a) medical, group life insurance or other benefits
received by the named executive officers that are available generally to all of our salaried employees, or b) perquisites and other personal benefits received by the named executive officers that do not exceed the lesser of $50,000 or 10.0% of the
officers salary and bonus disclosed in this table.
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(2)
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Represents premiums paid for supplemental life insurance.
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(3)
|
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Includes $20,000 of bonus compensation earned during 2001 that has been deferred at the election of the named executive officer.
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(4)
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Mr. Brighton joined Red Robin in April 2001. His annualized salary for 2001 was $150,000.
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(1)
|
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The potential realizable values are based on an assumption that the stock price of our common stock will appreciate at the annual rate shown, compounded
annually, from the date of grant until the end of the option term. These values do not take into account amounts required to be paid as income taxes under the Internal Revenue Code and any applicable state laws or option provisions providing for
termination of an option following termination of employment, non-transferability or vesting. These amounts are calculated based on the requirements promulgated by the SEC and do not reflect our estimate of future stock price growth of the shares of
our common stock.
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(2)
|
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Represents options we granted under our 2000 management performance common stock option plan. These options vest over a three-year period, with 50.0% vesting on
the second anniversary of the grant date and the remaining 50.0% vesting on the third anniversary of the grant date.
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(3)
|
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Based on an aggregate of 136,361 shares of our common stock that are subject to options granted to employees during 2001.
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(4)
|
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We granted options at an exercise price equal to the fair market value of our common stock as determined by our board of directors at the date of grant. In
determining the fair market value of our common stock, the board considered various factors, including our financial condition and business prospects, operating results, the absence of a market for our common stock and the risks normally associated
with investments in companies engaged in similar businesses.
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(5)
|
|
The term of each option we grant is generally ten years from the date of grant. Our options may terminate before their expiration date if the option
holders status as an employee is terminated or upon the option holders death or disability.
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Number of
Securities
Underlying
Unexercised Options at
December 30,
2001(1)
|
Value of Unexercised
In-the-Money Options at
December 30, 2001
|
|||||||
Name
|
Exercisable
|
Unexercisable
|
Exercisable($)
|
Unexercisable($)
|
||||
Michael J. Snyder
|
|
517,241
|
|
4,758,617
|
||||
James P. McCloskey(2)
|
103,448
|
34,483
|
951,722
|
317,244
|
||||
Michael E. Woods
|
43,103
|
103,448
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396,548
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951,722
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||||
Robert J. Merullo
|
|
86,207
|
|
793,104
|
||||
Todd A. Brighton
|
|
51,724
|
|
438,102
|
||||
Eric C. Houseman
|
3,448
|
22,414
|
31,722
|
199,915
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(1)
|
|
This table does not give effect to the exercise of stock options by certain of our executive officers in April 2002. See Related Party
TransactionsOption Exercises.
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(2)
|
|
Excludes options to purchase 34,483 shares of our common stock that we granted to Mr. McCloskey in January 2002.
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designate recipients of awards;
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determine or modify, subject to any required consent, the terms and provisions of awards, including the price, vesting provisions, terms of exercise and
expiration dates;
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approve the form of award agreements;
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determine specific objectives and performance criteria with respect to performance awards;
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construe and interpret the 2002 stock incentive plan; and
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re-price, accelerate and extend the exercisability or term, and establish the events of termination or reversion of outstanding awards.
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stockholder approval of our dissolution or liquidation;
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certain changes in a majority of the membership of our board of directors over a period of two years or less;
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the acquisition of more than 30.0% of our outstanding voting securities by any person other than a person who held more than 20.0% of our outstanding voting
securities as of the date that the 2002 stock incentive plan was approved, a company benefit plan, or one of their affiliates, successors, heirs, relatives or certain donees or certain other affiliates;
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certain transfers of all or substantially all of our assets; and
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a merger, consolidation or reorganization (other than with an affiliate) whereby our stockholders do not own more than 50.0% of the outstanding voting
securities of the resulting entity after such event.
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for any breach of the directors duty of loyalty to us or our stockholders;
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for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
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under Section 174 of the Delaware General Corporation Law; or
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for any transaction from which the director derives an improper personal benefit.
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Mike Snyder, our chief executive officer, received $4,100 in cash, $5.1 million in debentures repaid by us in August 2001, $18,870 in debentures repaid by us in
May 2001 and 793,647 shares of our common stock.
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Mike Woods, our senior vice president of franchise development, received $2,241 in cash, $399,934 pursuant to a promissory note repaid by us in August 2001 and
69,340 shares of our common stock.
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Bob Merullo, our senior vice president of operations, received $2,241 in cash, $399,934 pursuant to a promissory note repaid by us in August 2001 and 69,340
shares of our common stock.
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Steve Snyder, Mike Snyders brother and the president of OTL, Ltd., one of our principal stockholders, and his wife each received $2,050 in cash, $2.1
million in debentures repaid by us in August 2001, $9,435 in debentures repaid by us in May 2001 and 396,824 shares of our common stock.
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Mike Snyder elected to exercise options to purchase an aggregate of 517,241 shares of common stock. Mr. Snyder paid the exercise price by delivering a full
recourse promissory note in the principal amount of $3,000,000. This promissory note bears interest at 4.65% per annum, with principal and accrued and unpaid interest due and payable on December 31, 2009.
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Jim McCloskey elected to exercise options to purchase an aggregate of 172,415 shares of common stock. Mr. McCloskey paid the exercise price by delivering three
full recourse promissory notes in the aggregate principal amount of $1,050,000. These promissory notes bear interest at 4.65% per annum, with principal and accrued and unpaid interest due and payable as follows: June 26, 2006 with respect to
$600,000 principal amount, December 31, 2009 with respect to $200,000 principal amount and January 29, 2012 with respect to $250,000 principal amount.
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Bob Merullo elected to exercise options to purchase 86,207 shares of common stock. Mr. Merullo paid the exercise price by delivering a full recourse
promissory note in the principal amount of $500,000. This promissory note bears interest at 4.65% per annum, with principal and accrued and unpaid interest due and payable on December 31, 2009.
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Mike Woods elected to exercise options to purchase an aggregate of 146,551 shares of common stock. Mr. Woods paid the exercise price by delivering two full
recourse promissory notes in the aggregate principal amount of $850,000. These promissory notes bear interest at 4.65% per annum, with principal and accrued and unpaid interest due and payable as follows: January 6, 2007 with respect to $250,000
principal amount and December 31, 2009 with respect to $600,000 principal amount.
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379,310 shares acquired by Mr. Snyder, 103,448 shares acquired by Mr. Woods, 34,483 shares acquired by Mr. McCloskey and 86,207 shares acquired by Mr.
Merullo vest and become exercisable based on internal rate of return calculations to be applied upon the sale of 100% of our common stock, our initial public offering or on December 31, 2003 based upon the satisfaction of specified EBITDA targets
applied annually on each of the preceding three years. Any shares that remain unvested under the EBITDA targets or the internal rate of return calculations will vest and become exercisable on April 15, 2007.
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68,966 shares acquired by Mr. Snyder vested and became exercisable in May 2002 and the remaining 68,965 shares will vest and become exercisable in May 2003.
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11,494 shares acquired by Mr. McCloskey will vest and become exercisable in January 2004, an additional 11,494 shares will vest and become exercisable in
January 2005 and the remaining 11,495 shares will vest and become exercisable in January 2006.
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(1)
|
|
This table reflects the early exercise of stock options by certain of our executive officers in April 2002. See Related Party TransactionsOption
Exercises.
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(2)
|
|
Quad-C Partners V, L.P. is the sole member of RR Investors, LLC, and as such, controls the disposition of the shares held by RR Investors, LLC and the exercise
of the registration rights.
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(3)
|
|
Stephen S. Snyder, as president and the sole shareholder of OTL, Ltd. controls the disposition of shares held by OTL, Ltd. and the exercise of the registration
rights.
|
(4)
|
|
Edward T. Harvey, Terrence D. Daniels and certain other principals and employees of Quad-C collectively control the disposition of the shares held by RR
Investors II, LLC and the exercise of the registration rights.
|
(5)
|
|
Gerald R. Kingen controls the disposition of these shares held by his daughter and the exercise of the registration rights.
|
(6)
|
|
Robert J. Merullo controls the disposition of these shares held by his minor children and the exercise of the registration rights.
|
(7)
|
|
Michael E. Woods controls the disposition of these shares held by his minor children and the exercise of the registration rights.
|
|
|
each person who beneficially owns more than 5.0% of our capital stock;
|
|
|
each of our directors;
|
|
|
each named executive officer;
|
|
|
all directors and executive officers as a group; and
|
|
|
each selling stockholder.
|
*
|
|
Represents beneficial ownership of less than one percent (1.0%) of the outstanding shares of our common stock.
|
(1)
|
|
This table gives effect to the exercise of stock options by certain of our executive officers. See Related Party TransactionsOption Exercises.
|
(2)
|
|
If a stockholder holds options or other securities that are exercisable or otherwise convertible into our common stock within 60 days of May 19, 2002, we treat
the common stock underlying those securities as owned by that stockholder, and as outstanding shares when we calculate the stockholders percentage ownership of our common stock. However, we do not consider that common stock to be outstanding
when we calculate the percentage ownership of any other stockholder.
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(3)
|
|
4,144,562 shares of our common stock are owned of record by RR Investors, LLC. As the sole member of RR Investors, Quad-C Partners V, L.P. has the sole power to
vote and dispose of the shares held by RR Investors. Quad-C Advisors V, L.L.C. is the general partner of Quad-C Partners V. Edward T. Harvey, one of our directors, is the president and a director of RR Investors. In addition, Mr. Harvey has an
indirect management interest in RR Investors as a holder of a 15.0% membership interest in Quad-C Advisors V. Terrence D. Daniels, one of our other directors, is the vice president and secretary of RR Investors. In addition, Mr. Daniels has an
indirect membership interest in RR Investors as a holder of a 40.0% membership interest in Quad-C Advisors V. This amount excludes 165,782 shares of common stock held by RR Investors II, LLC. See footnotes 13 and 14, below, for more information
regarding RR Investors II. The address of this stockholder is c/o Quad-C Management, Inc., 230 East High Street, Charlottesville, Virginia 22902.
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(4)
|
|
Includes 775,862 shares of common stock held by Hibari Guam Corporation, an indirect wholly owned subsidiary of Skylark Co., Ltd. In this offering, Hibari Guam
Corporation will sell 21,172 shares of common stock. Skylark Co., Ltd.s address is Shacho-Shitsu Branch, 16
th Floor, Shinjuku Green Tower, 6-14-1 Nishi Shinjuku, Shinjuku, Tokyo 160-0023 Japan.
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(5)
|
|
Consists of 793,648 shares of common stock borrowed from Stephen S. Snyder, as trustee of the Stephen S. Snyder Intervious Trust. Pursuant to the borrowing
arrangement, OTL, Ltd. has sole voting and dispositive power with respect to these shares. If the over-allotment option is exercised in full, OTL, Ltd. will hold 620,638 shares of common stock after the offering. OTL, Ltd.s address is 2300
River Road, #17, Yakima, Washington 98902.
|
(6)
|
|
Gaishoku System Kenkyujos address is 1-25-8 Nishikubo, Musashino-shi, Tokyo, 180 Japan.
|
(7)
|
|
If the over-allotment option is exercised in full, Hibari Guam Corporation will not own any shares after the offering. Hibari Guam Corporations address is
9999 South Marine Drive, Temuning, Guam 96911.
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(8)
|
|
Includes 3,034 shares held by the Claire C. McCloskey Trust, 3,034 shares held by the Megan L. McCloskey Trust and 3,034 shares held by the James P. McCloskey,
Jr. Trust, the sole beneficiaries of which are Mr. McCloskeys children. This amount also includes 11,586 shares held by the James P. McCloskey Retained Annuity Trust.
|
(9)
|
|
Includes an aggregate of 3,448 shares held by Mr. Woods minor children.
|
(10)
|
|
Includes an aggregate of 5,172 shares held by Mr. Merullos minor children.
|
(11)
|
|
Consists of 3,448 shares of common stock subject to options exercisable within 60 days of May 19, 2002 and 13,793 shares of common stock subject to
performance-vested options which we expect to become exercisable upon consummation of the offering.
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(12)
|
|
Excludes 775,862 shares of common stock held by Gaishoku System Kenkyujo Company, Ltd. Mr. Chino owns approximately 25.0% of the outstanding capital stock
of Gaishoku System Kenkyujo and his three brothers own the remaining 75.0% of the outstanding capital stock of Gaishoku System Kenkyujo. Mr. Chino and his three brothers are each members on the board of directors of Gaishoku System Kenkyujo.
One of Mr. Chinos brothers is also the president of Gaishoku System Kenkyujo. Mr. Chino disclaims beneficial ownership of these shares.
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(13)
|
|
Consists of 4,144,562 shares of common stock held by RR Investors, LLC and 165,782 shares of common stock held by RR Investors II, LLC. Mr. Daniels is the vice
president and secretary of each of RR Investors and RR Investors II and, as such, shares voting and dispositive power as to the shares held by RR Investors and RR Investors II. In addition, Mr. Daniels has an indirect membership interest in RR
Investors as a holder of a 40.0% membership interest in Quad-C Advisors V, L.L.C., the general partner of the sole member of RR Investors, Quad-C Partners V, L.P. Mr. Daniels also has a membership interest in RR Investors II equal to 22.5% and his
four children collectively own an additional 20.8% of the outstanding membership interests of RR Investors II. Mr. Daniels disclaims beneficial ownership of these shares except to the extent of Mr. Daniels pecuniary interest therein.
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(14)
|
|
Consists of 4,144,562 shares of common stock held by RR Investors, LLC and 165,782 shares of common stock held by RR Investors II, LLC. Mr. Harvey is the
president and a director of each of RR Investors and RR Investors II and, as such, shares voting and dispositive power as to the shares held by RR Investors and RR Investors II. In addition, Mr. Harvey has an indirect membership interest in RR
Investors as a holder of a 15.0% membership interest in Quad-C Advisors V, L.L.C., the general partner of the sole member of RR Investors, Quad-C Partners V, L.P. Mr. Harvey also has an indirect membership interest in RR Investors II
through High Street Holdings, L.C., in which he is the manager and has an 80.0% ownership interest. Mr. Harvey disclaims beneficial ownership of these shares except to the extent of Mr. Harveys pecuniary interest therein.
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(15)
|
|
Includes 2,759 shares of common stock subject to options exercisable within 60 days of May 19, 2002.
|
(16)
|
|
Includes 6,207 shares of common stock subject to options exercisable within 60 days of May 19, 2002 and 13,793 shares of common stock subject to
performance-vested options which we expect to become exercisable upon consummation of the offering.
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(17)
|
|
Consists of 68,966 shares of common stock subject to options exercisable within 60 days of May 19, 2002. Mr. Yokokawa has notified us that he intends to
exercise these options prior to the offering. Mr. Yokokawas address is 3-2-11 Aobadai, Meguro-ku, Tokyo 153-0042.
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authorize our board of directors to establish one or more series of preferred stock, the terms of which can be determined by the board of directors at the time
of issuance;
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divide our board of directors into three classes of directors, with each class serving a staggered three-year term. As the classification of the board of
directors generally increases the difficulty of replacing a majority of the directors, it may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us and may maintain the composition of the board
of directors;
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do not provide for cumulative voting in the election of directors unless required by applicable law. Under cumulative voting, a minority stockholder holding a
sufficient percentage of a class of shares may be able to ensure the election of one or more directors;
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provide that a director may be removed from our board of directors only for cause, and then only by a supermajority vote of the outstanding shares;
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require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and
may not be effected by any consent in writing;
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state that special meetings of our stockholders may be called only by the chairman of the board of directors, our chief executive officer, by the board of
directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10.0% of our outstanding voting stock;
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provide that the chairman or other person presiding over any stockholder meeting may adjourn the meeting whether or not a quorum is present at the meeting;
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establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by
stockholders at a meeting;
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|
provide that certain provisions of our certificate of incorporation can be amended only by supermajority vote of the outstanding shares, and that our bylaws can
be amended only by supermajority vote of the outstanding shares or our board of directors;
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|
allow our directors, not our stockholders, to fill vacancies on our board of directors; and
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|
|
provide that the authorized number of directors may be changed only by resolution of the board of directors.
|
|
|
up to 504,466 shares of common stock reserved for issuance upon exercise of options outstanding as of May 19, 2002;
|
|
|
up to 1,475,690 shares of common stock that may be issued with respect to awards that may be granted in the future under our stock option plans; and
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|
|
up to 300,000 shares of common stock that may be issued to our employees pursuant to our employee stock purchase plan.
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|
|
an individual who is a citizen or resident of the United States;
|
|
|
a corporation (including any entity treated as a corporation for U.S. tax purposes) or partnership (including any entity treated as a partnership for U.S. tax
purposes) created or organized in the United States or under the laws of the United States or of any political subdivision of the United States, other than a partnership treated as foreign under U.S. Treasury regulations;
|
|
|
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
|
|
|
a trust, in general, if its administration is subject to the primary supervision of a U.S. court and one or more U.S. persons have the authority to control all
of its substantial decisions, or if it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
|
|
|
U.S. state and local or non-U.S. tax consequences;
|
|
|
specific facts and circumstances that may be relevant to a particular non-U.S. holders tax position, including, if the non-U.S. holder is an entity that
is treated as a partnership for U.S. tax purposes, the U.S. tax consequences of holding and disposing our common stock may be affected by determinations made at the partner level;
|
|
|
the tax consequences for the shareholders, partners or beneficiaries of a non-U.S. holder;
|
|
|
special tax rules that may apply to some non-U.S. holders, including without limitation, banks, insurance companies, financial institutions, broker-dealers,
tax-exempt entities, or U.S. expatriates; or
|
|
|
special tax rules that may apply to a non-U.S. holder that holds our common stock as part of a straddle, hedge or conversion transaction.
|
|
|
in the case of common stock held by a foreign partnership, the certification requirement will generally be applied to the partners of the partnership and the
partnership will be required to provide certain information;
|
|
|
in the case of common stock held by a foreign trust, the certification requirement will generally be applied to the trust or the beneficial owners of the trust
depending on whether the trust is a foreign complex trust, foreign simple trust, or foreign grantor trust as defined in the U.S. Treasury regulations; and
|
|
|
look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.
|
1.
|
|
The non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the sale, exchange or
other disposition and certain other requirements are met;
|
2.
|
|
The gain is effectively connected with the non-U.S. holders conduct of a trade or business in the United States, directly or through an entity treated as
a partnership for U.S. tax purposes and, if an applicable tax treaty requires, attributable to a U.S. permanent establishment of such non-U.S. holder; or
|
3.
|
|
Our common stock constitutes a U.S. real property interest by reason of our status as a U.S. real property holding corporation for U.S. federal
income tax purposes at any time during the shorter of (i) the period during which the non-U.S. holder holds our common stock or (ii) the 5-year period ending
|
on the date the non-U.S. holder disposes of our common stock. As long as our common stock is regularly traded on an established securities market for tax purposes, our common stock will not be
treated as a U.S. real property interest with respect to a non-U.S. holder that has not beneficially owned more than 5.0% of such regularly traded common stock at any time within the five-year period preceding such disposition. We believe that we
are a U.S. real property holding corporation and will remain a U.S. real property holding corporation for the foreseeable future. See discussion below.
|
Underwriter
|
Number of Shares
|
|
Banc of America Securities LLC
|
||
U.S. Bancorp Piper Jaffray Inc.
|
||
Wachovia Securities, Inc.
|
||
|
||
Total
|
5,038,000
|
|
|
|
|
receipt and acceptance of our common stock by the underwriters, and
|
|
|
the right to reject orders in whole or in part.
|
Paid by Red Robin
|
||||
No Exercise
|
Full Exercise
|
|||
Per Share
|
||||
Total
|
Paid by the
Selling Stockholders |
||||
No Exercise
|
Full Exercise
|
|||
Per Share
|
||||
Total
|
|
|
the history of, and prospects for, our company and the industry in which we compete,
|
|
|
the past and present financial performance of our company,
|
|
|
an assessment of our management,
|
|
|
the present state of our development,
|
|
|
the prospects for our future earnings,
|
|
|
the prevailing market conditions of the applicable United States securities market at the time of this offering,
|
|
|
market valuations of publicly traded companies that we and the representatives of the underwriters believe to be comparable to our company, and
|
|
|
other factors deemed relevant.
|
Page
|
||
RED ROBIN GOURMET BURGERS, INC.
|
||
Independent Auditors Report
|
F-2
|
|
Consolidated Balance SheetsDecember 31, 2000, December 30, 2001 and April 21, 2002 (unaudited)
|
F-3
|
|
Consolidated Statements of IncomeYears Ended December 26, 1999, December 31, 2000 and December 30, 2001, and
Quarters Ended April 22, 2001 (unaudited) and April 21, 2002 (unaudited)
|
F-5
|
|
Consolidated Statements of Stockholders Equity (Deficit)Years Ended December 26, 1999, December 31, 2000 and
December 30, 2001, and Quarter Ended April 21, 2002 (unaudited)
|
F-6
|
|
Consolidated Statements of Cash FlowsYears Ended December 26, 1999, December 31, 2000 and December 30, 2001, and
Quarters Ended April 22, 2001 (unaudited) and April 21, 2002 (unaudited)
|
F-7
|
|
Notes to Consolidated Financial Statements
|
F-9
|
|
THE SNYDER GROUP COMPANY
|
||
Report of Independent Public Accountants
|
F-26
|
|
Statement of Operationsfor the Year Ended December 26, 1999
|
F-27
|
|
Statement of Stockholders Deficitfor the Year Ended December 26, 1999
|
F-28
|
|
Statement of Cash Flowsfor the Year Ended December 26, 1999
|
F-29
|
|
Notes to Financial Statements
|
F-30
|
|
Report of Independent Public Accountants
|
F-35
|
|
Balance SheetMay 10, 2000
|
F-36
|
|
Statement of Operationsfor the Period December 27, 1999 through May 10, 2000
|
F-37
|
|
Statement of Stockholders Deficitfor the Period December 27, 1999 through May 10, 2000
|
F-38
|
|
Statement of Cash Flowsfor the Period December 27, 1999 through May 10, 2000
|
F-39
|
|
Notes to Financial Statements
|
F-40
|
December 31, 2000
|
December 30, 2001
|
Apri 21,
2002
|
|||||||
(unaudited)
|
|||||||||
Assets
|
|||||||||
Current Assets:
|
|||||||||
Cash and cash equivalents
|
$
|
8,316,826
|
$
|
18,992,153
|
$
|
6,546,609
|
|||
Accounts receivable, net
|
|
3,398,531
|
|
2,697,197
|
|
1,759,508
|
|||
Inventories
|
|
2,607,272
|
|
2,745,898
|
|
3,070,691
|
|||
Prepaid expenses and other current assets
|
|
1,866,486
|
|
2,072,715
|
|
1,969,917
|
|||
Income tax refund receivable
|
|
1,045,494
|
|
25,379
|
|
|
|||
Deferred tax asset
|
|
3,371,444
|
|
1,667,165
|
|
1,666,888
|
|||
Restricted current assetsmarketing funds
|
|
834,121
|
|
680,607
|
|
149,509
|
|||
|
|
|
|
|
|
||||
Total current assets
|
|
21,440,174
|
|
28,881,114
|
|
15,163,122
|
|||
Real estate held for sale
|
|
3,696,574
|
|
842,496
|
|
1,892,496
|
|||
Property and equipment, net
|
|
72,159,703
|
|
82,451,120
|
|
91,426,758
|
|||
Deferred tax asset
|
|
8,172,572
|
|
8,652,382
|
|
8,188,128
|
|||
Goodwill, net
|
|
23,114,528
|
|
22,554,777
|
|
25,666,132
|
|||
Other assets, net
|
|
12,300,847
|
|
11,059,097
|
|
11,851,810
|
|||
|
|
|
|
|
|
||||
Total assets
|
$
|
140,884,398
|
$
|
154,440,986
|
$
|
154,188,446
|
|||
|
|
|
|
|
|
December 31, 2000
|
December 30, 2001
|
April 21,
2002
|
||||||||||
(unaudited)
|
||||||||||||
Liabilities and Stockholders Equity
|
||||||||||||
Current Liabilities:
|
||||||||||||
Trade accounts payable
|
$
|
5,004,767
|
|
$
|
5,669,512
|
|
$
|
6,400,657
|
|
|||
Accrued payroll and payroll-related liabilities
|
|
4,951,330
|
|
|
7,254,058
|
|
|
6,968,507
|
|
|||
Unredeemed gift certificates
|
|
2,237,199
|
|
|
2,341,504
|
|
|
1,940,474
|
|
|||
Accrued liabilities
|
|
6,209,630
|
|
|
7,200,640
|
|
|
6,091,692
|
|
|||
Accrued liabilitiesmarketing funds
|
|
834,121
|
|
|
680,607
|
|
|
149,509
|
|
|||
Current portion of long-term debt
|
|
4,387,221
|
|
|
5,077,515
|
|
|
4,659,936
|
|
|||
|
|
|
|
|
|
|
|
|
||||
Total current liabilities
|
|
23,624,268
|
|
|
28,223,836
|
|
|
26,210,775
|
|
|||
Deferred rent payable
|
|
3,761,506
|
|
|
4,229,199
|
|
|
4,419,729
|
|
|||
Long-term debt
|
|
74,025,280
|
|
|
75,009,577
|
|
|
74,083,144
|
|
|||
Commitments and contingencies (note 10)
|
|
|
|
|
|
|
|
|
|
|||
Stockholders Equity:
|
||||||||||||
Common stock, $.001 par value: 50,000,000 shares authorized; 10,076,343, 10,090,312 and 10,090,485 (unaudited) shares
issued and outstanding, respectively
|
|
10,076
|
|
|
10,090
|
|
|
10,090
|
|
|||
Preferred stock, $.001 par value: 1,000,000 shares authorized; no shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
|||
Additional paid-in capital
|
|
53,373,858
|
|
|
53,454,868
|
|
|
53,744,568
|
|
|||
Deferred compensation
|
|
|
|
|
|
|
|
(268,808
|
)
|
|||
Note receivable from stockholder/officer
|
|
(300,000
|
)
|
|
(600,000
|
)
|
|
(600,000
|
)
|
|||
Accumulated deficit
|
|
(13,610,590
|
)
|
|
(5,886,584
|
)
|
|
(3,411,052
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||
Total stockholders equity
|
|
39,473,344
|
|
|
46,978,374
|
|
|
49,474,798
|
|
|||
|
|
|
|
|
|
|
|
|
||||
Total liabilities and stockholders equity
|
$
|
140,884,398
|
|
$
|
154,440,986
|
|
$
|
154,188,446
|
|
|||
|
|
|
|
|
|
|
|
|
Year Ended
|
Quarter Ended
|
|||||||||||||||||||
December 26, 1999
|
December 31, 2000
|
December 30, 2001
|
April 22,
2001
|
April 21,
2002
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Restaurant
|
$
|
121,430,239
|
|
$
|
180,413,546
|
|
$
|
214,963,264
|
|
$
|
64,571,686
|
|
$
|
76,316,992
|
|
|||||
Franchise royalties and fees
|
|
8,248,810
|
|
|
8,247,439
|
|
|
9,002,090
|
|
|
2,821,838
|
|
|
2,757,151
|
|
|||||
Rent revenue
|
|
333,101
|
|
|
509,514
|
|
|
519,408
|
|
|
120,025
|
|
|
126,918
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
|
130,012,150
|
|
|
189,170,499
|
|
|
224,484,762
|
|
|
67,513,549
|
|
|
79,201,061
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Costs and Expenses:
|
||||||||||||||||||||
Restaurant operating costs:
|
||||||||||||||||||||
Cost of sales
|
|
30,158,666
|
|
|
43,945,312
|
|
|
50,913,947
|
|
|
15,952,422
|
|
|
17,896,612
|
|
|||||
Labor
|
|
43,503,825
|
|
|
64,565,631
|
|
|
74,853,721
|
|
|
22,638,733
|
|
|
27,427,930
|
|
|||||
Operating
|
|
19,429,491
|
|
|
27,959,620
|
|
|
33,194,842
|
|
|
10,316,432
|
|
|
11,412,408
|
|
|||||
Occupancy
|
|
7,997,915
|
|
|
11,519,135
|
|
|
14,785,060
|
|
|
4,166,616
|
|
|
5,282,328
|
|
|||||
Restaurant closures and impairment
|
|
(330,000
|
)
|
|
1,302,186
|
|
|
36,359
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
5,394,203
|
|
|
8,065,141
|
|
|
10,491,058
|
|
|
3,152,425
|
|
|
3,599,192
|
|
|||||
General and administrative
|
|
13,434,319
|
|
|
17,116,344
|
|
|
16,844,988
|
|
|
4,544,588
|
|
|
5,711,748
|
|
|||||
Franchise development
|
|
2,508,426
|
|
|
3,386,169
|
|
|
3,703,485
|
|
|
1,610,027
|
|
|
1,361,654
|
|
|||||
Pre-opening costs
|
|
770,597
|
|
|
2,506,387
|
|
|
920,845
|
|
|
5,354
|
|
|
516,540
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total costs and expenses
|
|
122,867,442
|
|
|
180,365,925
|
|
|
205,744,305
|
|
|
62,386,597
|
|
|
73,208,412
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations
|
|
7,144,708
|
|
|
8,804,574
|
|
|
18,740,457
|
|
|
5,126,952
|
|
|
5,992,649
|
|
|||||
Other (Income) Expense:
|
||||||||||||||||||||
Interest expense
|
|
4,155,967
|
|
|
6,482,028
|
|
|
7,850,101
|
|
|
2,499,370
|
|
|
2,217,050
|
|
|||||
Interest income
|
|
(185,912
|
)
|
|
(741,521
|
)
|
|
(746,344
|
)
|
|
(208,015
|
)
|
|
(99,858
|
)
|
|||||
Other
|
|
390,971
|
|
|
190,715
|
|
|
190,437
|
|
|
63,227
|
|
|
25,461
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total other expense
|
|
4,361,026
|
|
|
5,931,222
|
|
|
7,294,194
|
|
|
2,354,582
|
|
|
2,142,653
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
2,783,682
|
|
|
2,873,352
|
|
|
11,446,263
|
|
|
2,772,370
|
|
|
3,849,996
|
|
|||||
(Provision) benefit for income taxes
|
|
1,595,989
|
|
|
12,557,195
|
|
|
(3,722,257
|
)
|
|
(901,020
|
)
|
|
(1,374,464
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
4,379,671
|
|
$
|
15,430,547
|
|
$
|
7,724,006
|
|
$
|
1,871,350
|
|
$
|
2,475,532
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Income Per Share:
|
||||||||||||||||||||
Basic
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.77
|
|
$
|
0.19
|
|
$
|
0.25
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted
|
$
|
1.47
|
|
$
|
2.07
|
|
$
|
0.75
|
|
$
|
0.18
|
|
$
|
0.23
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding:
|
||||||||||||||||||||
Basic
|
|
2,971,407
|
|
|
7,443,893
|
|
|
10,085,468
|
|
|
10,076,416
|
|
|
10,090,419
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted
|
|
2,971,407
|
|
|
7,443,893
|
|
|
10,235,917
|
|
|
10,169,596
|
|
|
10,649,738
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-In
Capital
|
Deferred
Compensation
|
Note Receivable
from Stockholder/
Officer
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance, December 27,
1998
|
2,970,578
|
$
|
2,970
|
$
|
14,127,325
|
|
|
|
|
|
|
$
|
(33,420,808
|
)
|
$
|
(19,290,513
|
)
|
|||||||
Options exercised for common stock
|
8,620
|
|
9
|
|
49,991
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
4,379,671
|
|
|
4,379,671
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, December 26, 1999
|
2,979,198
|
|
2,979
|
|
14,177,316
|
|
|
|
|
|
|
|
(29,041,137
|
)
|
|
(14,860,842
|
)
|
|||||||
Common stock issued:
|
||||||||||||||||||||||||
For the acquisition of The Snyder Group Company, net of offering costs of $1,959,799
|
1,889,708
|
|
1,890
|
|
8,998,617
|
|
|
|
|
|
|
|
|
|
|
9,000,507
|
|
|||||||
For the conversion of debt owed to a related party
|
775,862
|
|
776
|
|
4,499,224
|
|
|
|
|
|
|
|
|
|
|
4,500,000
|
|
|||||||
To affiliates of Quad-C, a related party
|
4,310,344
|
|
4,310
|
|
24,995,690
|
|
|
|
|
|
|
|
|
|
|
25,000,000
|
|
|||||||
Other
|
114,507
|
|
114
|
|
664,018
|
|
|
|
|
|
|
|
|
|
|
664,132
|
|
|||||||
Options exercised for common stock
|
6,724
|
|
7
|
|
38,993
|
|
|
|
|
|
|
|
|
|
|
39,000
|
|
|||||||
Issuance of note receivable-stockholder/officer
|
|
|
|
|
|
|
|
|
|
(300,000
|
)
|
|
|
|
|
(300,000
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
15,430,547
|
|
|
15,430,547
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2000
|
10,076,343
|
|
10,076
|
|
53,373,858
|
|
|
|
|
(300,000
|
)
|
|
(13,610,590
|
)
|
|
39,473,344
|
|
|||||||
Common stock issued
|
9,659
|
|
10
|
|
56,014
|
|
|
|
|
|
|
|
|
|
|
56,024
|
|
|||||||
Options exercised for common stock
|
4,310
|
|
4
|
|
24,996
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|||||||
Issuance of note receivable-stockholder/officer
|
|
|
|
|
|
|
|
|
|
(300,000
|
)
|
|
|
|
|
(300,000
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
7,724,006
|
|
|
7,724,006
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, December 30, 2001
|
10,090,312
|
|
10,090
|
|
53,454,868
|
|
|
|
|
(600,000
|
)
|
|
(5,886,584
|
)
|
|
46,978,374
|
|
|||||||
Deferred compensation (unaudited)
|
|
|
|
|
288,700
|
|
(288,700
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Amortization of deferred compensation
(unaudited) |
|
|
|
|
|
|
19,892
|
|
|
|
|
|
|
|
|
19,892
|
|
|||||||
Options exercised for common stock
(unaudited) |
173
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|||||||
Net income (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2,475,532
|
|
|
2,475,532
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, April 21, 2002 (unaudited)
|
10,090,485
|
$
|
10,090
|
$
|
53,744,568
|
$
|
(268,808
|
)
|
$
|
(600,000
|
)
|
$
|
(3,411,052
|
)
|
$
|
49,474,798
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
Quarter Ended
|
|||||||||||||||||||
December 26, 1999
|
December 31, 2000
|
December 30, 2001
|
April 22,
2001
|
April 21,
2002
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||||||||||
Net income
|
$
|
4,379,671
|
|
$
|
15,430,547
|
|
$
|
7,724,006
|
|
$
|
1,871,350
|
|
$
|
2,475,532
|
|
|||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,892
|
|
|||||
Depreciation and amortization
|
|
5,394,203
|
|
|
8,065,141
|
|
|
10,491,058
|
|
|
3,152,425
|
|
|
3,599,192
|
|
|||||
Loss (gain) on sale of property and equipment
|
|
52,252
|
|
|
(61,832
|
)
|
|
191,552
|
|
|
45,982
|
|
|
1,949
|
|
|||||
Noncash restaurant closure and impairment costs
|
|
(330,000
|
)
|
|
1,302,186
|
|
|
36,359
|
|
|
|
|
|
|
|
|||||
Provision for doubtful accounts, net of charge-offs
|
|
104,732
|
|
|
1,272,256
|
|
|
698,316
|
|
|
333,152
|
|
|
16,193
|
|
|||||
Provision (benefit) for deferred income taxes
|
|
(2,186,121
|
)
|
|
(13,235,077
|
)
|
|
1,224,469
|
|
|
(298,394
|
)
|
|
937,795
|
|
|||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||
Accounts receivable
|
|
(1,405,280
|
)
|
|
(1,981,133
|
)
|
|
531,837
|
|
|
287,102
|
|
|
921,871
|
|
|||||
Inventories
|
|
(347,042
|
)
|
|
(1,051,706
|
)
|
|
(138,626
|
)
|
|
187,353
|
|
|
(206,003
|
)
|
|||||
Prepaid expenses and other current assets
|
|
(187,668
|
)
|
|
(906,078
|
)
|
|
(206,229
|
)
|
|
285,003
|
|
|
308,854
|
|
|||||
Income tax refund receivable
|
|
(133,879
|
)
|
|
(254,491
|
)
|
|
1,020,116
|
|
|
1,045,494
|
|
|
25,378
|
|
|||||
Other assets
|
|
(815,424
|
)
|
|
345,880
|
|
|
72,192
|
|
|
(321,828
|
)
|
|
(411,448
|
)
|
|||||
Trade accounts payable and accrued liabilities
|
|
2,509,359
|
|
|
(1,486,592
|
)
|
|
3,426,428
|
|
|
(1,714,004
|
)
|
|
(2,079,270
|
)
|
|||||
Deferred rent payable
|
|
272,365
|
|
|
660,741
|
|
|
467,693
|
|
|
126,428
|
|
|
190,530
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
|
7,307,168
|
|
|
8,099,842
|
|
|
25,539,171
|
|
|
5,000,063
|
|
|
5,800,465
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash Flows From Investing Activities:
|
||||||||||||||||||||
Proceeds from sales of real estate, property and equipment
|
|
44,144
|
|
|
1,209,449
|
|
|
2,648,232
|
|
|
513,853
|
|
|
50,603
|
|
|||||
Purchases of property and equipment
|
|
(16,301,773
|
)
|
|
(20,196,996
|
)
|
|
(18,675,387
|
)
|
|
(3,430,293
|
)
|
|
(10,708,626
|
)
|
|||||
Purchase of Western Franchise Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,320,265
|
)
|
|||||
Purchase of The Snyder Group Company
|
|
|
|
|
(1,572,900
|
)
|
|
(56,024
|
)
|
|
(56,024
|
)
|
|
|
|
|||||
Issuance of notes receivablestockholder/officer
|
|
|
|
|
(300,000
|
)
|
|
(300,000
|
)
|
|
(300,000
|
)
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net cash used in investing activities
|
|
(16,257,629
|
)
|
|
(20,860,447
|
)
|
|
(16,383,179
|
)
|
|
(3,272,464
|
)
|
|
(16,978,288
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash Flows From Financing Activities:
|
||||||||||||||||||||
Proceeds from issuance of long-term debt
|
|
9,500,000
|
|
|
53,133,034
|
|
|
6,376,775
|
|
|
5,356,752
|
|
|
329,988
|
|
|||||
Debt issuance costs
|
|
|
|
|
(2,052,642
|
)
|
|
(459,419
|
)
|
|
|
|
|
|
|
|||||
Amortization of debt issuance costs
|
|
32,084
|
|
|
83,882
|
|
|
223,139
|
|
|
64,671
|
|
|
75,291
|
|
|||||
Payments of long-term debt and capital leases
|
|
(1,100,697
|
)
|
|
(48,007,002
|
)
|
|
(4,702,184
|
)
|
|
(1,439,301
|
)
|
|
(1,674,000
|
)
|
Year Ended
|
Quarter Ended
|
|||||||||||||||||
December 26, 1999
|
December 31, 2000
|
December 30, 2001
|
April 22,
2001
|
April 21,
2002
|
||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||
Repayment of debentures
|
|
|
|
|
(9,160,363
|
)
|
|
|
|
|
|
|
|
|||||
Repayment of promissory note
|
|
|
|
|
(1,799,938
|
)
|
|
|
|
|
|
|
|
|||||
Sale of common stock to Quad C, a related party
|
|
|
|
|
23,040,201
|
|
|
|
|
|
|
|
|
|||||
Sale of common stock
|
|
50,000
|
|
|
664,132
|
|
|
81,024
|
|
56,124
|
|
1,000
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net cash provided by (used in) financing activities
|
|
8,481,387
|
|
|
15,901,304
|
|
|
1,519,335
|
|
4,038,246
|
|
(1,267,721
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
(469,074
|
)
|
$
|
3,140,699
|
|
$
|
10,675,327
|
$
|
5,765,845
|
$
|
(12,445,544
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
5,645,201
|
|
|
5,176,127
|
|
|
8,316,826
|
|
8,316,826
|
|
18,992,153
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
5,176,127
|
|
$
|
8,316,826
|
|
$
|
18,992,153
|
$
|
14,082,671
|
$
|
6,546,609
|
|
|||||
Supplemental Disclosures, Including Non-Cash Transactions:
|
||||||||||||||||||
Interest paid
|
$
|
4,320,276
|
|
$
|
6,536,349
|
|
$
|
7,805,576
|
$
|
2,561,472
|
$
|
2,434,007
|
|
|||||
Income taxes paid, net
|
$
|
590,132
|
|
$
|
817,102
|
|
$
|
1,600,000
|
$
|
|
|
359,000
|
|
|||||
Note receivable from sale of property
|
$
|
|
|
$
|
1,195,121
|
|
$
|
|
$
|
|
$
|
|
|
|||||
Common stock issued for The Snyder Group Company acquisition
|
$
|
|
|
$
|
10,960,306
|
|
$
|
56,024
|
$
|
|
$
|
|
|
|||||
Common stock issued to a related party for debt retirement
|
$
|
|
|
$
|
4,500,000
|
|
$
|
|
$
|
|
$
|
|
|
|||||
Debentures and promissory note issued for The Snyder Group Company acquisition
|
$
|
|
|
$
|
10,960,301
|
|
$
|
|
$
|
|
$
|
|
|
|||||
Capital lease obligations incurred for equipment purchase
|
$
|
211,513
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
Year Ended
|
Quarter Ended
|
||||||||||||||
December 26,
1999 |
December 31,
2000 |
December 30,
2001 |
April 22,
2001
|
April 21,
2002
|
|||||||||||
(unaudited)
|
(unaudited)
|
||||||||||||||
Net earnings
|
$
|
4,379,671
|
$
|
15,430,547
|
$
|
7,724,006
|
$
|
1,871,350
|
$
|
2,475,532
|
|||||
Basic
|
|
2,971,407
|
|
7,443,893
|
|
10,085,468
|
|
10,076,416
|
|
10,090,419
|
|||||
Dilutive effect of stock options
|
|
|
|
|
|
150,449
|
|
93,180
|
|
559,319
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted weighted average shares outstanding
|
|
2,971,407
|
|
7,443,893
|
|
10,235,917
|
|
10,169,596
|
|
10,649,738
|
|||||
Earnings Per Share:
|
|||||||||||||||
Basic
|
$
|
1.47
|
$
|
2.07
|
$
|
0.77
|
$
|
0.19
|
$
|
0.25
|
|||||
Diluted
|
$
|
1.47
|
$
|
2.07
|
$
|
0.75
|
$
|
0.18
|
$
|
0.23
|
Year Ended December 31, 2000
|
|||
Total revenues
|
$
|
204,837,502
|
|
Net income
|
|
14,184,054
|
|
Earnings Per Share:
|
|||
Basic
|
$
|
1.91
|
|
Diluted
|
$
|
1.91
|
2000
|
2001
|
April 21,
2002
|
||||||||||
(unaudited)
|
||||||||||||
Trade receivable due from franchisees
|
$
|
1,794,023
|
|
$
|
2,498,572
|
|
$
|
950,065
|
|
|||
Receivable from landlords
|
|
3,024,675
|
|
|
1,530,817
|
|
|
662,597
|
|
|||
Other
|
|
187,416
|
|
|
232,856
|
|
|
410,357
|
|
|||
|
|
|
|
|
|
|
|
|
||||
|
5,006,114
|
|
|
4,262,245
|
|
|
2,023,019
|
|
||||
Allowance for doubtful accounts
|
|
(1,607,583
|
)
|
|
(1,565,048
|
)
|
|
(263,511
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||
Accounts receivable, net
|
$
|
3,398,531
|
|
$
|
2,697,197
|
|
$
|
1,759,508
|
|
|||
|
|
|
|
|
|
|
|
|
1999
|
2000
|
2001
|
||||||||||
Allowance for doubtful accounts, beginning of period
|
$
|
230,595
|
|
$
|
335,327
|
|
$
|
1,607,583
|
|
|||
Additions
|
|
219,404
|
|
|
1,335,776
|
|
|
724,782
|
|
|||
Decreases
|
|
(114,672
|
)
|
|
(63,520
|
)
|
|
(767,317
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||
Allowance for doubtful accounts, end of period
|
$
|
335,327
|
|
$
|
1,607,583
|
|
$
|
1,565,048
|
|
|||
|
|
|
|
|
|
|
|
|
2000
|
2001
|
April 21,
2002
|
|||||||
(unaudited)
|
|||||||||
Cash
|
$
|
300,935
|
$
|
161,516
|
$
|
2,891
|
|||
Prepaids
|
|
345,971
|
|
281,593
|
|
|
|||
Inventory
|
|
|
|
6,036
|
|
6,538
|
|||
Accounts receivable from franchisees
|
|
187,215
|
|
231,462
|
|
140,080
|
|||
|
|
|
|
|
|
||||
Restricted current assets-marketing funds
|
$
|
834,121
|
$
|
680,607
|
$
|
149,509
|
|||
|
|
|
|
|
|
Estimated Lives
|
2000
|
2001
|
April 21,
2002
|
|||||||||||
(unaudited)
|
||||||||||||||
Land
|
$
|
6,880,518
|
|
$
|
6,880,518
|
|
$
|
6,880,518
|
|
|||||
Buildings
|
15 to 30 years
|
|
6,280,339
|
|
|
6,373,239
|
|
|
6,378,396
|
|
||||
Furniture, fixtures and equipment
|
3 to 7 years
|
|
39,440,719
|
|
|
46,104,220
|
|
|
49,126,181
|
|
||||
Leasehold improvements
|
Shorter of lease term or life
|
|
52,961,926
|
|
|
64,844,180
|
|
|
70,239,591
|
|
||||
Restaurant property leased to others
|
3 to 30 years
|
|
8,784,584
|
|
|
8,784,584
|
|
|
8,792,552
|
|
||||
Construction in progress
|
|
4,938,974
|
|
|
4,450,897
|
|
|
7,847,367
|
|
|||||
|
|
|
|
|
|
|
|
|
||||||
|
119,287,060
|
|
|
137,437,638
|
|
|
149,264,605
|
|
||||||
Accumulated depreciation and amortization
|
|
(47,127,357
|
)
|
|
(54,986,518
|
)
|
|
(57,837,847
|
)
|
|||||
|
|
|
|
|
|
|
|
|
||||||
Property and equipment, net
|
$
|
72,159,703
|
|
$
|
82,451,120
|
|
$
|
91,426,758
|
|
|||||
|
|
|
|
|
|
|
|
|
2000
|
2001
|
April 21,
2002
|
||||||||||
(unaudited)
|
||||||||||||
Franchise rights
|
$
|
5,800,000
|
|
$
|
5,800,000
|
|
$
|
8,600,000
|
|
|||
Workforce
|
|
2,530,000
|
|
|
2,530,000
|
|
|
|
|
|||
Loan fees
|
|
2,454,855
|
|
|
2,630,956
|
|
|
2,809,560
|
|
|||
Note receivable
|
|
1,195,121
|
|
|
1,050,000
|
|
|
152,387
|
|
|||
Deposits
|
|
322,129
|
|
|
252,009
|
|
|
289,493
|
|
|||
Liquor licenses
|
|
771,723
|
|
|
919,925
|
|
|
1,066,251
|
|
|||
Other
|
|
59,540
|
|
|
91,732
|
|
|
38,688
|
|
|||
|
|
|
|
|
|
|
|
|
||||
|
13,133,368
|
|
|
13,274,622
|
|
|
12,956,379
|
|
||||
Accumulated amortization
|
|
(832,521
|
)
|
|
(2,215,525
|
)
|
|
(1,104,569
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||
Other assets, net
|
$
|
12,300,847
|
|
$
|
11,059,097
|
|
$
|
11,851,810
|
|
|||
|
|
|
|
|
|
|
|
|
2000
|
2001
|
|||||||
Term loan
|
$
|
49,633,418
|
|
$
|
47,303,212
|
|
||
Collateralized notes payable and capital leases
|
|
28,779,083
|
|
|
32,783,880
|
|
||
|
|
|
|
|
|
|||
|
78,412,501
|
|
|
80,087,092
|
|
|||
Current portion
|
|
(4,387,221
|
)
|
|
(5,077,515
|
)
|
||
|
|
|
|
|
|
|||
Long-term debt
|
$
|
74,025,280
|
|
$
|
75,009,577
|
|
||
|
|
|
|
|
|
2002
|
$
|
5,077,515
|
|
2003
|
|
5,060,889
|
|
2004
|
|
5,233,094
|
|
2005
|
|
7,331,474
|
|
2006
|
|
6,131,984
|
|
Thereafter
|
|
51,252,136
|
|
|
|
||
$
|
80,087,092
|
||
|
|
1999
|
2000
|
2001
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
(586,121
|
)
|
$
|
(670,484
|
)
|
$
|
(1,964,493
|
)
|
|||
State
|
|
(4,011
|
)
|
|
(7,398
|
)
|
|
(533,295
|
)
|
|||
Deferred:
|
||||||||||||
Federal
|
|
170,758
|
|
|
284,494
|
|
|
(1,104,231
|
)
|
|||
State
|
|
(260,478
|
)
|
|
(183,937
|
)
|
|
(120,238
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||
|
(679,852
|
)
|
|
(577,325
|
)
|
|
(3,722,257
|
)
|
||||
Change in valuation allowance
|
|
2,275,841
|
|
|
13,134,520
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||
$
|
1,595,989
|
|
$
|
12,557,195
|
|
$
|
(3,722,257
|
)
|
||||
|
|
|
|
|
|
|
|
|
1999
|
2000
|
2001
|
|||||||
Minimum rent
|
$
|
4,757,404
|
$
|
7,220,168
|
$
|
9,593,137
|
|||
Percentage rent
|
|
661,298
|
|
1,090,149
|
|
944,977
|
|||
|
|
|
|
|
|
||||
$
|
5,418,702
|
$
|
8,310,317
|
$
|
10,538,114
|
||||
|
|
|
|
|
|
1999
|
2000
|
2001
|
|||||||
Franchise Royalties and Fees:
|
|||||||||
Royalty income
|
$
|
7,902,810
|
$
|
7,934,226
|
$
|
8,520,990
|
|||
Franchise fees
|
|
346,000
|
|
313,213
|
|
481,100
|
|||
|
|
|
|
|
|
||||
Total franchise royalties and fees
|
|
8,248,810
|
|
8,247,439
|
|
9,002,090
|
|||
|
|
|
|
|
|
||||
Franchise Development Costs:
|
|||||||||
Payroll and employee benefit costs
|
|
727,653
|
|
1,313,785
|
|
1,344,745
|
|||
General and administrative
|
|
1,780,773
|
|
2,072,384
|
|
2,358,740
|
|||
|
|
|
|
|
|
||||
Total franchise development costs
|
|
2,508,426
|
|
3,386,169
|
|
3,703,485
|
|||
|
|
|
|
|
|
||||
Operating income from franchise operations
|
$
|
5,740,384
|
$
|
4,861,270
|
$
|
5,298,605
|
|||
|
|
|
|
|
|
1999
|
2000
|
2001
|
||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Outstanding at beginning of year
|
533,828
|
|
$
|
5.80
|
539,689
|
|
$
|
5.80
|
1,413,138
|
|
$
|
5.80
|
||||||
Granted
|
118,448
|
|
|
5.80
|
959,914
|
|
|
5.80
|
136,361
|
|
|
6.53
|
||||||
Canceled
|
(103,966
|
)
|
|
5.80
|
(79,741
|
)
|
|
5.80
|
(132,223
|
)
|
|
5.80
|
||||||
Exercised
|
(8,621
|
)
|
|
5.80
|
(6,724
|
)
|
|
5.80
|
(4,310
|
)
|
|
5.80
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Outstanding at end of year
|
539,689
|
|
$
|
5.80
|
1,413,138
|
|
$
|
5.80
|
1,412,966
|
|
$
|
5.86
|
1999
|
2000
|
2001
|
|||||||||
Net Income:
|
As reported
|
$
|
4,379,671
|
$
|
15,430,547
|
$
|
7,724,006
|
||||
Proforma
|
|
4,192,923
|
|
12,963,474
|
|
7,379,407
|
|||||
Basic Earnings Per Share:
|
As reported
|
$
|
1.47
|
$
|
2.07
|
$
|
0.77
|
||||
Proforma
|
$
|
1.41
|
$
|
1.74
|
$
|
0.73
|
|||||
Diluted Earnings Per Share:
|
As reported
|
$
|
1.47
|
$
|
2.07
|
$
|
0.75
|
||||
Proforma
|
$
|
1.41
|
$
|
1.74
|
$
|
0.72
|
Aggregate Amortization Expense:
|
||
For the quarter ended 4/21/02 (unaudited)
|
176,066
|
|
Estimated Amortization Expense:
|
||
For year ended 12/29/02
|
$584,327
|
|
For year ended 12/28/03
|
576,053
|
|
For year ended 12/26/04
|
551,164
|
|
For year ended 12/25/05
|
532,490
|
|
For year ended 12/31/06
|
486,758
|
For the Year Ended
|
Quarter Ended
|
Quarter Ended
|
|||||||||||||
December 26, 1999
|
December 31, 2000
|
December 30, 2001
|
April 22,
2001
|
April 21,
2002
|
|||||||||||
(unaudited)
|
(unaudited)
|
||||||||||||||
Reported net income
|
$
|
4,379,671
|
$
|
15,430,547
|
$
|
7,724,006
|
$
|
1,871,350
|
$
|
2,475,532
|
|||||
Add back: goodwill amortization
|
|
0
|
|
485,479
|
|
535,745
|
|
165,699
|
|
0
|
|||||
Add back: workforce amortization
|
|
0
|
|
518,976
|
|
569,252
|
|
175,154
|
|
0
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted net income
|
$
|
4,379,671
|
$
|
16,435,002
|
$
|
8,829,003
|
$
|
2,212,203
|
$
|
2,475,532
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share:
|
|||||||||||||||
Reported net income
|
$
|
1.47
|
$
|
2.07
|
$
|
0.77
|
$
|
0.19
|
$
|
0.25
|
|||||
Goodwill amortization
|
|
|
|
0.07
|
|
0.05
|
|
0.02
|
|
|
|||||
Workforce amortization
|
|
|
|
0.07
|
|
0.06
|
|
0.02
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted net income
|
$
|
1.47
|
$
|
2.20
|
$
|
0.88
|
$
|
0.22
|
$
|
0.25
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share:
|
|||||||||||||||
Reported net income
|
$
|
1.47
|
$
|
2.07
|
$
|
0.75
|
$
|
0.18
|
$
|
0.23
|
|||||
Goodwill amortization
|
|
|
|
0.07
|
|
0.05
|
|
0.02
|
|
|
|||||
Workforce amortization
|
|
|
|
0.07
|
|
0.06
|
|
0.02
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted net income
|
$
|
1.47
|
$
|
2.20
|
$
|
0.86
|
$
|
0.21
|
$
|
0.23
|
|||||
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
41,675,004
|
|
|
Costs and expenses:
|
||||
Store-
|
||||
Salaries and benefits
|
|
12,876,697
|
|
|
Cost of products sold
|
|
10,482,092
|
|
|
Other controllable costs
|
|
5,748,659
|
|
|
Rent, occupancy and related costs
|
|
4,782,055
|
|
|
Advertising and promotion
|
|
827,580
|
|
|
Depreciation and amortization
|
|
1,316,618
|
|
|
|
|
|
||
Total store costs and expenses
|
|
36,033,701
|
|
|
Non-Store-
|
||||
General And administrative
|
|
4,904,661
|
|
|
Reorganization costs
|
|
130,072
|
|
|
Depreciation and amortization
|
|
113,307
|
|
|
|
|
|
||
Total non-store costs and expenses
|
|
5,148,040
|
|
|
|
|
|
||
Total costs and expenses
|
|
41,181,741
|
|
|
|
|
|
||
Income from Operations
|
|
493,263
|
|
|
Other Income (Expense):
|
||||
Other income (expense)
|
|
263,529
|
|
|
Loss on sale of assets
|
|
(444,510
|
)
|
|
Interest income from related party
|
|
94,878
|
|
|
Interest expense
|
|
(1,879,110
|
)
|
|
|
|
|
||
Total other expense, net
|
|
(1,965,213
|
)
|
|
|
|
|
||
Loss Before Income Taxes and Change
in Accounting Principle |
|
(1,471,950
|
)
|
|
Income Tax Expense
|
|
129,555
|
|
|
|
|
|
||
Net Loss Before Change in Accounting Principle
|
|
(1,601,505
|
)
|
|
|
|
|
||
Change in Accounting Principle
|
|
(223,753
|
)
|
|
|
|
|
||
Net Loss
|
$
|
(1,825,258
|
)
|
|
|
|
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings (Deficit)
|
Total
|
||||||||||||||||
Shares
|
Amount
|
||||||||||||||||||
Balances,
December 27, 1998
|
106,487
|
|
|
1,065
|
|
|
138,075
|
|
|
(637,629
|
)
|
|
(498,489
|
)
|
|||||
Repurchase of common stock
|
(4,782
|
)
|
|
(48
|
)
|
|
(151,952
|
)
|
|
|
|
|
(152,000
|
)
|
|||||
Capital contribution
|
|
|
|
|
|
|
42,400
|
|
|
|
|
|
42,400
|
|
|||||
Net loss
|
|
|
|
|
|
|
|
|
|
(1,825,258
|
)
|
|
(1,825,258
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balances,
December 26, 1999
|
101,705
|
|
$
|
1,017
|
|
$
|
28,523
|
|
$
|
(2,462,887
|
)
|
$
|
(2,433,347
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$
|
(1,825,258
|
)
|
|
Adjustments to reconcile net loss to net cash provided by
operating activities- |
||||
Depreciation and amortization
|
|
1,789,160
|
|
|
Loss on sale of assets
|
|
445,899
|
|
|
Changes in assets and liabilities-
|
||||
Increase in current assets
|
|
(832,220
|
)
|
|
Increase in accounts payable and accrued expenses
|
|
2,164,132
|
|
|
Increase in deposits and other non-current assets
|
|
(51,265
|
)
|
|
|
|
|
||
Net cash provided by operating activities
|
|
1,690,448
|
|
|
|
|
|
||
Cash Flows from Investing Activities:
|
||||
Purchases of property and equipment
|
|
(1,904,017
|
)
|
|
Proceeds from sale of assets
|
|
1,350,000
|
|
|
|
|
|
||
Net cash used in investing activities
|
|
(554,017
|
)
|
|
|
|
|
||
Cash Flows from Financing Activities:
|
||||
Repayment of notes payable
|
|
(2,185,755
|
)
|
|
Draws on debt
|
|
1,833,036
|
|
|
Repayments of capital lease obligations
|
|
(463,207
|
)
|
|
Capital contribution
|
|
42,400
|
|
|
Repurchase of common stock
|
|
(152,000
|
)
|
|
|
|
|
||
Net cash used in financing activities
|
|
(925,527
|
)
|
|
|
|
|
||
Increase in Cash
|
|
210,904
|
|
|
Cash
, beginning of period
|
|
136,103
|
|
|
|
|
|
||
Cash
, end of period
|
$
|
347,007
|
|
|
|
|
|
||
Supplemental Disclosure of Cash Flow Information:
|
||||
Cash paid for interest
|
$
|
1,850,848
|
|
|
|
|
|
Buildings and leasehold improvements
|
5-20 years
|
|
Furniture and equipment
|
5-10 years
|
|
Smallwares
|
2 years
|
License agreements
|
15-20 years
|
|
Goodwill
|
18 years
|
2000
|
||||
Assets
|
||||
Current Assets:
|
||||
Cash
|
$
|
112,066
|
|
|
Accounts receivable
|
|
246,646
|
|
|
Inventory
|
|
255,506
|
|
|
Prepaid expenses and other current assets
|
|
71,161
|
|
|
Income tax receivable
|
|
132,102
|
|
|
|
|
|
||
Total current assets
|
|
817,481
|
|
|
|
|
|
||
Property and Equipment, net
|
|
10,904,798
|
|
|
Receivable From Affiliate
|
|
5,074
|
|
|
Advances to Stockholders
|
|
1,920,605
|
|
|
Deposits
|
|
128,678
|
|
|
Other Assets, net
|
|
463,075
|
|
|
|
|
|
||
Total assets
|
$
|
14,239,711
|
|
|
Liabilities and Stockholders Deficit
|
||||
Current Liabilities:
|
||||
Accounts payable
|
$
|
2,203,472
|
|
|
Accrued expenses
|
|
5,017,312
|
|
|
Current portion of notes payable
|
|
1,454,678
|
|
|
Current portion of capital lease obligations
|
|
248,622
|
|
|
|
|
|
||
Total current liabilities
|
|
8,924,084
|
|
|
|
|
|
||
Notes Payable, net of current portion
|
|
2,602,681
|
|
|
Capital Lease Obligations, net of current portion
|
|
6,048,517
|
|
|
|
|
|
||
Total liabilities
|
|
17,575,282
|
|
|
|
|
|
||
Commitments And Contingencies (Note 8)
|
||||
Stockholders Deficit:
|
||||
Preferred stock, no par value; 100,000 shares authorized, none issued and outstanding
|
|
|
|
|
Common stock, $.01 par value; 200,000 shares authorized, 84,214 shares issued and outstanding
|
|
842
|
|
|
Additional paid-in capital
|
|
(527,302
|
)
|
|
Retained (deficit)
|
|
(2,809,111
|
)
|
|
|
|
|
||
Total stockholders deficit
|
|
(3,335,571
|
)
|
|
|
|
|
||
Total liabilities and stockholders deficit
|
$
|
14,239,711
|
|
|
|
|
|
Revenue
|
$
|
16,296,336
|
|
|
Costs and Expenses:
|
||||
Store-
|
||||
Salaries and benefits
|
|
4,898,376
|
|
|
Cost of products sold
|
|
4,131,860
|
|
|
Other controllable costs
|
|
2,185,047
|
|
|
Rent, occupancy and related costs
|
|
1,833,921
|
|
|
Advertising and promotion
|
|
336,693
|
|
|
Depreciation and amortization
|
|
496,809
|
|
|
|
|
|
||
Total store costs and expenses
|
|
13,882,706
|
|
|
Non-store-
|
||||
General and administrative
|
|
1,531,807
|
|
|
Reorganization costs
|
|
420,485
|
|
|
Depreciation and amortization
|
|
51,204
|
|
|
|
|
|
||
Total non-store costs and expenses
|
|
2,003,496
|
|
|
|
|
|
||
Total costs and expenses
|
|
15,886,202
|
|
|
|
|
|
||
Income From Operations
|
|
410,134
|
|
|
Other Income (Expense):
|
||||
Other expense, net
|
|
(149,076
|
)
|
|
Interest income from related party
|
|
31,025
|
|
|
Interest expense
|
|
(748,907
|
)
|
|
|
|
|
||
Total other expense, net
|
|
(866,958
|
)
|
|
|
|
|
||
Loss Before Income Taxes
|
|
(456,824
|
)
|
|
Income Tax Benefit
|
|
110,600
|
|
|
|
|
|
||
Net Loss
|
$
|
(346,224
|
)
|
|
|
|
|
Additional Paid-In Capital
|
Retained Earnings (Deficit)
|
Total
|
|||||||||||||||||
Common Stock
|
|||||||||||||||||||
Shares
|
Amount
|
||||||||||||||||||
Balances
, December 26, 1999
|
101,705
|
|
$
|
1,017
|
|
$
|
28,523
|
|
$
|
(2,462,887
|
)
|
$
|
(2,433,347
|
)
|
|||||
Repurchase of common stock
|
(17,491
|
)
|
|
(175
|
)
|
|
(555,825
|
)
|
|
|
|
|
(556,000
|
)
|
|||||
Net loss
|
|
|
|
|
|
|
|
|
|
(346,224
|
)
|
|
(346,224
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balances
, May 10, 2000
|
84,214
|
|
$
|
842
|
|
$
|
(527,302
|
)
|
$
|
(2,809,111
|
)
|
$
|
(3,335,571
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$
|
(346,224
|
)
|
|
Adjustments to reconcile net loss to net cash provided by
operating activities- |
||||
Depreciation and amortization
|
|
548,014
|
|
|
Gain on disposition of assets
|
|
(1,249
|
)
|
|
Changes in assets and liabilities-
|
||||
Decrease in current assets
|
|
533,649
|
|
|
Increase in accounts payable and accrued expenses
|
|
131,478
|
|
|
Increase in deposits and other non-current assets
|
|
(198,045
|
)
|
|
|
|
|
||
Net cash provided by operating activities
|
|
667,623
|
|
|
|
|
|
||
Cash Flows From Investing Activities:
|
||||
Purchases of property and equipment
|
|
(66,762
|
)
|
|
|
|
|
||
Net cash used in investing activities
|
|
(66,762
|
)
|
|
|
|
|
||
Cash Flows from Financing Activities:
|
||||
Repayment of notes payable
|
|
(167,066
|
)
|
|
Repayments of capital lease obligations
|
|
(112,736
|
)
|
|
Repurchase of common stock
|
|
(556,000
|
)
|
|
|
|
|
||
Net cash used in financing activities
|
|
(835,802
|
)
|
|
|
|
|
||
Decrease in Cash
|
|
(234,941
|
)
|
|
Cash, beginning of period
|
|
347,007
|
|
|
|
|
|
||
Cash, end of period
|
$
|
112,066
|
|
|
|
|
|
||
Supplemental Disclosure of Cash Flow Information:
|
||||
Cash paid for interest
|
$
|
672,855
|
|
|
|
|
|
Buildings and leasehold improvements
|
5-20 years
|
|
Furniture and equipment
|
5-10 years
|
|
Smallwares
|
2 years
|
License agreements
|
15-20 years
|
|
Goodwill
|
18 years
|
Land
|
$
|
1,189,883
|
|
|
Buildings and leasehold improvements
|
|
9,051,336
|
|
|
Furniture and equipment
|
|
8,593,752
|
|
|
Smallwares
|
|
279,231
|
|
|
Less-Accumulated depreciation and amortization
|
|
(8,209,404
|
)
|
|
|
|
|
||
Total property and equipment, net
|
$
|
10,904,798
|
|
|
|
|
|
||
Other assets at May 10, 2000 consisted of the following:
|
||||
License agreements
|
$
|
345,000
|
|
|
Goodwill
|
|
134,777
|
|
|
Cash surrender of insurance policies
|
|
247,002
|
|
|
Less-Accumulated amortization
|
|
(263,704
|
)
|
|
|
|
|
||
Total other assets, net
|
$
|
463,075
|
|
|
|
|
|
2001
|
$
|
1,454,678
|
|
2002
|
|
432,271
|
|
2003
|
|
442,539
|
|
2004
|
|
327,471
|
|
2005
|
|
242,407
|
|
Thereafter
|
$
|
1,157,993
|
|
|
|
||
Total
|
$
|
4,057,359
|
|
|
|
Operating Lease
|
Capital
Lease |
|||||
May 11, 2000May 10, 2001
|
$
|
2,159,606
|
$
|
1,154,586
|
||
May 11, 2001May 10, 2002
|
|
1,993,352
|
|
978,124
|
||
May 11, 2002May 10, 2003
|
|
1,961,475
|
|
981,097
|
||
May 11, 2003May 10, 2004
|
|
1,899,477
|
|
906,677
|
||
May 11, 2004May 10, 2005
|
|
1,644,095
|
|
933,031
|
||
Thereafter
|
|
13,009,584
|
|
11,214,072
|
||
|
|
|
|
|||
Total future minimum leases
|
$
|
22,667,589
|
$
|
16,167,587
|
||
|
|
|
|
|||
Lessamount representing interest
|
$
|
9,870,448
|
||||
Present value of net future minimum lease payments
|
|
6,297,139
|
||||
Lessamounts due within one year
|
|
248,622
|
||||
|
|
|||||
$
|
6,048,517
|
|||||
|
|
2000
|
|||
Deferred tax assets:
|
|||
Net operating loss carryforwards
|
130,550
|
|
|
Accrued liabilities
|
165,771
|
|
|
|
|
||
Total deferred tax assets
|
296,321
|
|
|
|
|
||
Valuation Allowance
|
(246,446
|
)
|
|
Deferred tax liabilities:
|
|||
Property and equipment
|
(49,875
|
)
|
|
Total deferred tax liabilities
|
(49,875
|
)
|
|
|
|
Exhibit Number
|
Description of Document
|
|
10.35
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between Michael E. Woods and Red Robin Gourmet Burgers, Inc.
|
|
10.36
|
Secured Promissory Note, dated April 25, 2002, executed by Michael E. Woods in favor of Red Robin Gourmet Burgers, Inc.
|
|
10.37
|
Letter Agreement, dated June 6, 2002, by and among Wachovia Bank, National Association, First Union Securities, Inc. and Red Robin International,
Inc.
|
|
21.1
|
List of Subsidiaries.
|
|
23.1
|
Consent of Deloitte & Touche LLP, Independent Auditors.
|
|
23.2
|
Consent of OMelveny & Myers LLP. Reference is made to Exhibit 5.1.
|
|
24.1
|
Power of Attorney.
|
*
|
|
To be filed by amendment.
|
**
|
|
Confidential treatment has been requested for a portion of this Exhibit.
|
|
|
Previously filed.
|
By:
|
/s/ M
ICHAEL
J.
S
NYDER
|
|
Michael J. Snyder
|
||
Chairman of the Board, President and
Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/
S
/ M
ICHAEL
J.
S
NYDER
Michael J. Snyder
|
Chairman of the Board, President, Chief
Executive Officer and Director (Principal Executive Officer) |
July 12, 2002
|
||
/s/ J
AMES
P.
M
C
C
LOSKEY
James P. McCloskey
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
July 12, 2002
|
||
*
Edward T. Harvey
|
Director
|
July 12, 2002
|
||
*
Terrence D. Daniels
|
Director
|
July 12, 2002
|
||
*
Gary J. Singer
|
Director
|
July 12, 2002
|
||
*
Tasuku Chino
|
Director
|
July 12, 2002
|
*By:
|
/s/ M
ICHAEL
J.
S
NYDER
|
|
Michael J. Snyder
Attorney-in-fact
|
Exhibit Number
|
Description of Document
|
|
1.1*
|
Form of Underwriting Agreement.
|
|
2.1
|
Agreement and Plan of Merger, dated February 18, 2000, by and among Red Robin International, Inc., Red Robin Holding Co., Inc., The Snyder Group Company and
the stockholders of The Snyder Group Company.
|
|
2.2
|
Closing Agreement and Amendment to Merger Agreement, entered into as May 11, 2000, by and among Red Robin International Inc., Red Robin Holding Co., Inc.,
The Snyder Group Company and the stockholders of The Snyder Group Company.
|
|
2.3
|
Memorandum Agreement, dated May 10, 2001, by and among The Snyder Group Company, Red Robin International, Inc., Red Robin West, Inc., Rodney Bench, as
trustee of that certain Trust Indenture Agreement, dated May 11, 2000, by and among Red Robin International, Inc., Rodney Bench and Bunch Grass Leasing, LLC. Filed as Exhibit 10.16.
|
|
2.4
|
Agreement and Plan of Merger, dated January 23, 2001, by and among Red Robin International, Inc., Red Robin Gourmet Burgers, Inc. and Red Robin Merger Sub,
Inc.
|
|
2.5
|
Stock Purchase Agreement, dated as of September 19, 2001, by and among Western Franchise Development, Inc., Dennis E. Garcelon and E. Marlena Garcelon,
trustees of the Garcelon Trust dated January 6, 1992, Samuel Winston Garcelon and Red Robin International, Inc.
|
|
3.1*
|
Amended and Restated Certificate of Incorporation.
|
|
3.2*
|
Amended and Restated Bylaws.
|
|
4.1
|
Specimen Stock Certificate.
|
|
5.1
|
Opinion of OMelveny & Myers LLP.
|
|
10.1
|
Red Robin Gourmet Burgers, Inc. Incentive Stock Option and Nonqualified Stock Option Plan 1990.
|
|
10.2
|
Red Robin Gourmet Burgers, Inc. 1996 Stock Option Plan.
|
|
10.3
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan.
|
|
10.4*
|
Red Robin Gourmet Burgers, Inc. 2002 Stock Incentive Plan.
|
|
10.5*
|
Red Robin Gourmet Burgers, Inc. Employee Stock Purchase Plan.
|
|
10.6
|
Stock Subscription Agreement, dated as of February 18, 2000, between Red Robin International, Inc., a Nevada corporation, RR Investors, LLC, a Virginia
limited liability company, and RR Investors II, LLC, a Virginia limited liability company.
|
|
10.7
|
Amended and Restated Shareholders Agreement, dated August 9, 2001, by and among Red Robin Gourmet Burgers, Inc., Skylark Co., Ltd., RR Investors LLC, RR
Investors II, LLC, Michael J. Snyder and certain other stockholders named therein.
|
|
10.8
|
Registration Rights Agreement, dated May 11, 2000, by and among Red Robin International, Inc., Skylark Co., Ltd., RR Investors LLC, RR Investors II, LLC,
Michael J. Snyder and certain stockholders named therein.
|
|
10.9
|
First Amendment to Registration Rights Agreement, dated August 9, 2001, by and among Red Robin Gourmet Burgers, Inc., Red Robin International, Inc., Skylark
Co., Ltd., RR Investors LLC, RR Investors II, LLC, Michael J. Snyder and certain other stockholders named therein.
|
|
10.10
|
Employment Agreement, dated May 11, 2000, by and between Red Robin International, Inc. and Michael J. Snyder.
|
Exhibit Number
|
Description of Document
|
|
10.11
|
Employment Agreement, dated January 7, 1997, by and between Mike Woods and Red Robin International, Inc.
|
|
10.12
|
Non-Interference, Non-Disclosure and Non-Competition Agreement, dated May 11, 2000, by and among RR Investors, LLC, RR Investors II, LLC, Red Robin
International, Inc. and Michael J. Snyder.
|
|
10.13
|
Consulting Services Agreement, dated May 11, 2000, by and between Red Robin International, Inc. and Quad-C Management, Inc.
|
|
10.14
|
Escrow Agreement, dated May 11, 2000, by and among Red Robin International, Inc., Red Robin Holding Co., Inc., the former stockholders of The Snyder Group
Company and The Bank of New York, as escrow agent.
|
|
10.15
|
First Amendment to Escrow Agreement, dated August 9, 2001, by and among Red Robin Gourmet Burgers, Inc., Red Robin International, Inc., Red Robin West, Inc.,
the former stockholders of The Snyder Group Company and The Bank of New York, as escrow agent.
|
|
10.16
|
Memorandum Agreement, dated May 10, 2001, by and among The Snyder Group Company, each stockholder of The Snyder Group Company, Red Robin International, Inc.,
Red Robin West, Inc., Rodney Bench, as trustee of that certain Trust Indenture Agreement, dated May 11, 2000, by and among Red Robin International, Inc., Rodney Bench and Bunch Grass Leasing, LLC.
|
|
10.17
|
Loan Agreement, dated as of September 6, 2000, among Red Robin International, Inc., Red Robin Distributing Company, Inc., Red Robin Holding Co., Inc., Red
Robin of Baltimore County, Inc., Red Robin of Anne Arundel County, Inc., Finova Capital Corporation and certain other financial institutions from time to time party thereto.
|
|
10.18
|
First Amendment to Loan Instruments, dated as of August 9, 2001, by and among Red Robin Gourmet Burgers, Inc., Red Robin International, Inc., Red Robin
Distributing Company, Inc., Red Robin West, Inc., Red Robin of Baltimore County, Inc., Red Robin of Montgomery County, Inc., Red Robin of Anne Arundel County, Inc., Finova Capital Corporation and certain other financial institutions from time
to time party thereto.
|
|
10.19
|
Second Amendment to Loan Instruments, dated as of January 31, 2002, by and among Red Robin Gourmet Burgers, Inc., Red Robin International, Inc. Red Robin
Distributing Company, Inc., Red Robin West, Inc., Red Robin of Baltimore County, Inc., Red Robin of Montgomery County, Inc., Red Robin of Anne Arundel County, Inc., Western Franchise Development, Inc., Finova Capital Corporation and certain
other financial institutions from time to time party thereto.
|
|
10.20
|
Form of Indemnification Agreement entered into by and between Red Robin Gourmet Burgers, Inc. and each of our directors and executive officers.
|
|
10.21
|
Master Loan Agreement, dated November 3, 2000, by and between Red Robin and General Electric Capital Business Asset Funding Corporation.
|
|
10.22
|
Promissory Note, dated June 30, 2000, by Michael J. Snyder in favor of Red Robin International, Inc.
|
|
10.23
|
Promissory Note, dated February 27, 2001, by Michael J. Snyder in favor of Red Robin International, Inc.
|
|
10.24
|
Pledge Agreement, dated June 30, 2000, by and between Michael J. Snyder and Red Robin International, Inc.
|
|
10.25
|
Pledge Agreement, dated February 27, 2001, by and between Michael J. Snyder and Red Robin International, Inc.
|
|
10.26
|
Agreement, dated July 15, 1998, by and between Red Robin International, Inc. and McClain Finlon Advertising, Inc., as amended.
|
Exhibit Number
|
Description of Document
|
|
10.27**
|
Fountain Beverage Agreement, dated April 1, 2000, by and between Pepsi-Cola Company, a division of PepsiCo, a North Carolina corporation, and Red Robin
International, Inc.
|
|
10.28**
|
Master Distribution Agreement, dated May 16, 2001, by and between Sysco Corporation and Red Robin International, Inc.
|
|
10.29
|
Credit Agreement, dated as of April 12, 2002, between Red Robin International, Inc. and U.S. Bank National Association.
|
|
10.30
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between Robert J. Merullo and Red Robin Gourmet Burgers, Inc.
|
|
10.31
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between James P. McCloskey and Red Robin Gourmet Burgers, Inc.
|
|
10.32
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between James P. McCloskey and Red Robin Gourmet Burgers, Inc.
|
|
10.33
|
Secured Promissory Note, dated April 25, 2002 executed by James P. McCloskey in favor of Red Robin Gourmet Burgers, Inc.
|
|
10.34
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between Michael J. Snyder and Red Robin Gourmet Burgers, Inc.
|
|
10.35
|
Red Robin Gourmet Burgers, Inc. 2000 Management Performance Common Stock Option Plan Option Exercise AgreementEarly Exercise, dated April 25, 2002, by
and between Michael E. Woods and Red Robin Gourmet Burgers, Inc.
|
|
10.36
|
Secured Promissory Note, dated April 25, 2002, executed by Michael E. Woods in favor of Red Robin Gourmet Burgers, Inc.
|
|
10.37
|
Letter Agreement, dated June 6, 2002, by and among Wachovia Bank, National Association, First Union Securities, Inc. and Red Robin International,
Inc.
|
|
21.1
|
List of Subsidiaries.
|
|
23.1
|
Consent of Deloitte & Touche LLP, Independent Auditors.
|
|
23.2
|
Consent of OMelveny & Myers LLP. Reference is made to Exhibit 5.1.
|
|
24.1
|
Power of Attorney.
|
*
|
|
To be filed by amendment.
|
**
|
|
Confidential treatment has been requested for a portion of this Exhibit.
|
|
|
Previously filed.
|
EXHIBIT 5.1
[LETTERHEAD OF O'MELVENY & MYERS LLP]
July 12, 2002
Red Robin Gourmet Burgers, Inc.
5575 DTC Parkway, Suite 110
Greenwood Village, Colorado 80111
Re: Registration of Securities of Red Robin Gourmet Burgers, Inc.
Ladies and Gentlemen:
At your request, we have examined the Registration Statement (the "Registration Statement") on Form S-1 (File No. 333-87044) of Red Robin Gourmet Burgers, Inc., a Delaware corporation (the "Company"), in connection with the registration under the Securities Act of 1933 of (a) 4,000,000 shares (the "Company Shares") of Common Stock, $0.001 par value per share, of the Company ("Common Stock"), and (b) an aggregate of 1,793,700 shares (the "Selling Stockholder Shares") of Common Stock owned of record by four of the Company's existing stockholders.
We are of the opinion that:
(i) The Company Shares have been duly authorized by all necessary corporate action on the part of the Company and, upon payment for and delivery of the Company Shares as contemplated by the Registration Statement and the countersigning of the certificate or certificates representing the Company Shares by a duly authorized signatory of the registrar for the Common Stock or the book-entry of the Company Shares by the transfer agent for the Company's Common Stock in the name of The Depository Trust Company or its nominee, the Company Shares will be validly issued, fully paid and non-assessable.
(ii) The Selling Stockholder Shares have been duly authorized by all necessary corporation action on the part of the Company and are validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading "Legal Matters" in the Prospectus constituting part of the Registration Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP |
Exhibit 10.20
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this "Agreement") is made and entered into effective as of _________ __, 2002, by and between Red Robin Gourmet Burgers, Inc., a Delaware corporation (the "Company"), and ____________ (the "Indemnitee"), a director and/or officer of the Company.
BACKGROUND
A. The Indemnitee has been selected to serve or is currently serving as a director and/or officer of the Company and in such capacity is expected to render or has rendered valuable services to the Company.
B. The Company has investigated the availability and sufficiency of liability insurance and Delaware statutory indemnification provisions to provide its directors and officers with adequate protection against various legal risks and potential liabilities to which directors and officers are subject due to their position with the Company and has concluded that insurance and statutory provisions may provide inadequate and unacceptable protection to certain individuals requested to serve as its directors and officers.
C. In recognition of past services and in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve as directors and officers of the Company, the Board of Directors has determined, after due consideration and investigation of the terms and provisions of this Agreement and the various other options available to the Company and the Indemnitee in lieu of this Agreement, that this Agreement is not only reasonable and prudent, but necessary to promote and ensure the best interests of the Company and its stockholders.
AGREEMENT
In consideration of the services and continued services of the Indemnitee and in order to induce the Indemnitee to serve or to continue to serve as a director and/or officer of the Company, the Company and the Indemnitee agree as follows:
1. Indemnity of the Indemnitee. The Company hereby agrees to hold harmless and indemnify the Indemnitee to the full extent authorized or permitted by the provisions of Section 145 of the Delaware General Corporation Law, as such may be amended from time to time, and Article XV of the Bylaws of the Company, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Other Than Proceedings by or in the Right of the Company. The
Indemnitee shall be entitled to the rights of indemnification provided in this
Section l(a) if, by reason of his Corporate Status (as hereinafter defined), he
is, or is threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the Company.
Pursuant to this Section 1(a), the Indemnitee shall be indemnified against all
Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid
in settlement
actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.
(b) Proceedings by or in the Right of the Company. The Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that a court of competent jurisdiction shall finally determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1, the Company shall and hereby does indemnify and hold harmless the Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of the Indemnitee. The only limitation that shall exist upon the Company's obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to the Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 7, 8 and 9 hereof) to be unlawful under Delaware law.
3. Partial Indemnity. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of, but not the total amount of, the Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him in the investigation, defense, appeal or settlement of any Proceeding, the Company shall nevertheless indemnify the Indemnitee for the portion of the Expenses, judgments, penalties, fines and amounts paid in settlement to which the Indemnitee is entitled.
4. Contribution in the Event of Joint Liability.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring the Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against the Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, the Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, in connection with the events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution that may be brought by officers, directors or employees of the Company other than the Indemnitee who may be jointly liable with the Indemnitee.
5. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which the Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
6. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred or reasonably anticipated to be incurred by or on behalf of the Indemnitee in connection with any Proceeding by reason of the
Indemnitee's Corporate Status within ten (10) days after the receipt by the
Company of a statement or statements from the Indemnitee requesting such advance
or advances from time to time, whether prior to or after final disposition of
such Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred or reasonably anticipated to be incurred by the Indemnitee and
shall include or be preceded or accompanied by an undertaking by or on behalf of
the Indemnitee to repay any Expenses advanced if it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 6
shall be unsecured and interest free. Notwithstanding the foregoing, the
obligation of the Company to advance Expenses pursuant to this Section 6 shall
be subject to the condition that, if, when and to the extent that the Company
determines that the Indemnitee would not be permitted to be indemnified under
applicable law, the Company shall be entitled to be reimbursed, within thirty
(30) days of such determination, by the Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid; provided, however,
that if the Indemnitee has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that the
Indemnitee should be indemnified under applicable law, any determination made by
the Company that the Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and the Indemnitee shall not be required to
reimburse the Company for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed).
7. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for the Indemnitee rights of indemnity that are as favorable as may be permitted under the law and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether the Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, the Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that the Indemnitee has requested indemnification.
(b) Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 7(a) hereof, a determination, if required by applicable law, with respect to the Indemnitee's entitlement thereto shall be made in the specific case by one of the following four methods: (i) by a majority vote of the Disinterested Directors, even though less than a quorum, or (ii) by a committee of such Disinterested Directors designated by majority vote of such Disinterested Directors, even though less than a quorum, or (iii) if there are no such Disinterested Directors, or if such Disinterested Directors so direct, by Independent Counsel in a written opinion, or (iv) in the absence of Disinterested Directors and at the election of the Indemnitee, by the stockholders.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 7(b) hereof, the Independent Counsel shall be selected
as provided in this Section 7(c). Within 20 days of receiving a written request for Indemnification, the Company shall submit a list of three candidates from which the Indemnitee shall have 10 days to select one or to request a second list of three names, which the Company shall provide within 20 days of notification. If, within 60 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall have been selected, either the Company or the Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, the person so appointed shall act as Independent Counsel under Section 7(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 7(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 7(c), regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with Section 7(a) of this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.
(e) The Indemnitee shall be deemed to have acted in good faith if the Indemnitee's action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to the Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 7(e) are satisfied, it shall in any event be presumed that the Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under this
Section 7 to determine whether the Indemnitee is entitled to indemnification
shall not have made a determination within thirty (30) days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and the Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by the Indemnitee of
a material fact, or an omission of a material fact necessary to make the
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 30 day period may be extended for a
reasonable time, not to exceed an additional fifteen (15) days, if the person,
persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 7(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 7(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) The Indemnitee shall cooperate with the person, persons or entity making such determination with respect to the Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board of Directors, or stockholder of the Company shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee's entitlement to indemnification. Any costs or expenses (including attorneys' fees and disbursements) incurred by the Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which the Indemnitee is a party is resolved in any manner other than by adverse judgment against the Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that the Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.
8. Change in Control. If there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Continuing Directors) then with respect to all matters thereafter arising concerning the rights of the Indemnitee to indemnity payments and Expense advances or contribution amounts under this Agreement or any other agreement, the Company's Certificate of Incorporation, the Company's Bylaws or other applicable law in effect relating to claims for indemnifiable events, the provisions of clauses (i), (ii) and (iv) of Section 7(b) shall no longer be applicable and following such Change in Control, the Company shall seek legal advice only from Independent Counsel. The Independent Counsel, among other things, shall render its written opinion to the Company and the Indemnitee as to whether and to what extent the Indemnitee would be entitled to be indemnified under this Agreement or applicable law. The Company shall pay the reasonable fees of the Independent Counsel referred to above and may fully indemnify the Independent Counsel against any and all
expenses (including attorneys' fees and disbursements), claims, liabilities and damages arising out of or relating to this Agreement.
9. Remedies of the Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section
7 of this Agreement that the Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 6 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 7(b) of this Agreement
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to this Agreement within
thirty (30) days after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within thirty (30) days after a
determination has been made that the Indemnitee is entitled to indemnification
or such determination is deemed to have been made pursuant to Section 7 of this
Agreement, the Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent jurisdiction,
of his entitlement to such indemnification. The Indemnitee shall commence such
proceeding seeking an adjudication within one year following the date on which
the Indemnitee first has the right to commence such proceeding pursuant to this
Section 9(a). The Company shall not oppose the Indemnitee's right to seek any
such adjudication.
(b) In the event that a determination shall have been made pursuant
to Section 7(b) of this Agreement that the Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, on the merits and the
Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 7(b).
(c) If a determination shall have been made pursuant to Section 7(b) of this Agreement that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 9, absent a prohibition of such indemnification under applicable law.
(d) In the event that the Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors' and officers' liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 16 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.
10. Insurance.
(a) The Company covenants and agrees that, as long as the Indemnitee shall continue to serve as a director or officer of the Company and thereafter so long as the Indemnitee shall be subject to any possible Proceeding, the Company, subject to Section 10(c) of this Agreement, shall promptly obtain and maintain in full force and effect directors' and officers' liability insurance ("D&O Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O Insurance policies, the Indemnitee shall be named as an insured in a manner that provides the Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's directors and officers.
(c) Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that insurance is not reasonably available, the premium costs for insurance are disproportionate to the amount of coverage provided, the coverage provided by insurance is so limited by exclusions that it provides an insufficient benefit, or the Indemnitee is covered by similar insurance maintained by a subsidiary of the Company.
11. Non-Exclusivity; Survival of Rights; Subrogation.
(a) The rights of indemnification and advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company, the Bylaws of the Company, any agreement, a vote of stockholders or Disinterested Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by such the Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Section 145 of the Delaware General Corporation Law, as amended, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Bylaws of the Company or this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
12. Exception to Right of Indemnification. Notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled to indemnification under this Agreement with respect to any Proceeding brought by the Indemnitee, or any claim therein, unless (a) the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors of the Company or (b) such Proceeding is being brought by the Indemnitee to assert, interpret or enforce his rights under this Agreement, the Delaware General Corporation Law, as amended, or the Bylaws of the Company.
13. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period the Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee and/or agent of another Enterprise) and shall continue thereafter so long as the Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 9 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether the Indemnitee continues to serve as an officer or director of the Company or any other Enterprise at the Company's request.
14. Security. To the extent requested by the Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time provide security to the Indemnitee for the Company's obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
15. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce the Indemnitee to serve as an officer and/or director of the Company, and the Company acknowledges that the Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
16. Definitions. For purposes of this Agreement:
(a) A "Change of Control" shall be deemed to have occurred if (i) any "person" (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of shares of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding voting securities, or (ii) during any period of two consecutive years, individuals ("Continuing Directors") who at the beginning of the two year period constitute the Board of Directors of the Company or whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such a merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after the merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all the Company's assets.
(b) "Corporate Status" describes the status of a person who is or was a director, officer, employee and/or agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the Company.
(c) "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
(d) "Enterprise" shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which the Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.
(e) "Expenses" shall include all reasonable attorneys' fees, paralegal fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding.
(f) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or its affiliates or the Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or the Indemnitee in an action to determine the
Indemnitee's rights under this Agreement. The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(g) "Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which the Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that the Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.
17. Severability. If any provision or provisions of this Agreement shall
be held by a court of competent jurisdiction to be invalid, void, illegal or
otherwise unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law; and
(b) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
18. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
19. Notice by Indemnitee. The Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
20. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a) If to the Indemnitee, to the address set forth below the Indemnitee's signature hereto.
(b) If to the Company, to:
Red Robin Gourmet Burgers, Inc. 5575 DTC Parkway, Suite 110 Greenwood Village, Colorado 80111 Attention: Michael J. Snyder, Chief Executive Officer With a copy to: John W. Grant, General Counsel
or to such other address as may have been furnished to the Indemnitee by the Company or to the Company by the Indemnitee, as the case may be.
21. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
22. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
23. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without application of the conflict of laws principles thereof.
24. Gender. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.
COMPANY:
Red Robin Gourmet Burgers, Inc.,
a Delaware corporation
By: ________________________________
Name:
Title:
INDEMNITEE:
EXHIBIT 10.28
***Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by an asterisk and has been filed separately with the Securities and Exchange Commission pursuant to Rule 406 under the Securities Act of 1933, as amended, and the Commission's rules and regulations promulgated under the Freedom of Information Act, pursuant to a request for confidential treatment.***
A
Sysco Corporation
Master Distribution Agreement
For
Red Robin International, Inc.
May 16, 2001
Table of Contents
1. Appointment of Distributor
2. Customer Service Provided by SYSCO
2.1 Account Executive
2.2 Item List
2.3 Policies and Procedures
3. Delivery Service Provided by SYSCO
4. Information Services Provided by SYSCO
4.1 Usage Reports
4.2 Direct Order Entry
4.3 Supporting Software
4.4 Third Party Providers
5. Pricing
5.1 Definition of Cost
5.2 Merchandising Services
5.3 Sell Price
5.4 Customer Contract Pricing
5.5 Substitutions
5.6 Adjustment in Margins for Unanticipated Problems
6. Supplier Agreements - Administration and Handling
6.1 Supplier Detail Form
6.2 Equivalent SYSCO Branded Product
6.3 Effectiveness of Additional Supplier Agreements
6.4 Administrative Maintenance of Supplier Agreements
6.5 Specifically Inventoried Proprietary Product - Effectiveness of
Pricing Changes
7. Price Verification
8. Proprietary and Special Order Products
8.1 Definition of Special Order Products
8.2 Definition of Proprietary Products
8.3 Stocking of Proprietary Products
8.4 Proprietary Product and Special Order Products Requirements
8.5 Customer Responsibility for Proprietary Products and Special
Order Products
9. Credit
9.1 Net Terms
9.2 Set Off
9.3 Service Charge; Collection Fees
9.4 Applications
9.5 Financial Information
9.6 Delivery Stoppage
10. Term
11. Termination
12. Arbitration and Waiver of Jury Trial Right
12.1 Arbitration
12.2 Waiver of Jury Trial Right
13. Perishable Agricultural Commodities
14. Miscellaneous
14.1 Assignment
14.2 Entire Agreement
14.3 Amendments
14.4 Notices
14.5 Donations
MASTER DISTRIBUTION AGREEMENT
Master Distribution Agreement (this "Agreement"), dated May 16, 2001, between SYSCO CORPORATION for itself and on behalf of those of its operating subsidiaries and/or divisions listed in Schedule 1 (collectively, "SYSCO") and Red Robin International, Inc. and each entity that owns or operates any of the establishments listed as Customer Locations on Schedule 1.
A. SYSCO performs regional and national marketing, freight management, consolidated warehousing, quality assurance and performance-based product marketing for suppliers of products to the foodservice distribution industry;
B. SYSCO performs purchasing, marketing, warehousing, quality assurance, product research and development, transportation and distribution services for foodservice customers directly and through its operating subsidiaries and divisions (collectively, "Operating Companies" and individually, "Operating Company"); and
C. Customer owns, operates, is a franchiser of, and/or acts as a group purchasing organization for the establishments listed in Schedule 1 (the "Customer Locations").
D. Customer desires to contract with SYSCO as its primary distributor for foodservice products (i.e., supplying 80% or more of such products) to all of its participating Customer Locations and SYSCO desires to perform these services.
In consideration of the mutual obligations set forth below, the parties agree as follows:
Customer appoints SYSCO to serve as its primary distributor to the Customer Locations of foodservice products within the product categories described in Schedule 2 ("Products"). By appointing SYSCO its "primary distributor" Customer agrees that each participating Customer Location will purchase not less than 80% of the dollar volume of such Customer Location's purchase requirements of Products in each Product category.
Products will include SYSCO(R) brand, national brand and other products stocked by SYSCO. SYSCO(R) brand products include all products under trademarks or tradenames owned by SYSCO as well as products under trademarks available exclusively to SYSCO(R) in foodservice distribution channels.
Each Operating Company will establish a delivery schedule for each Customer Location within its market area taking into consideration Customer needs and preferences and will use reasonable, good faith efforts to make on-time deliveries.
Applicable freight, in those cases where the invoice cost to the delivering Operating Company is not a delivered cost, means a reasonable freight charge to transport a Product from the Supplier (as defined below) to the Operating Company. Freight charges may include common or contract carrier charges imposed by the Product Supplier or a carrier, or charges billed by Alfmark, SYSCO's freight management service. Applicable freight for any Product will not exceed the rate charged by nationally recognized carriers operating between the same points, for the same quantity of product, and the same type of freight service.
these services and may also be compensated for these services and considers this compensation to be earned income. Receipt of such cost recovery or earned income does not reduce Cost and does not diminish SYSCO's commitment to provide competitive prices to its customers.
For Example, a Product with a Cost of $25.00 per case, a margin on sell of 10% and a promotional allowance on the face of the invoice of $.50 per case will
have a Sell Price calculated as follows:
Calculate base price from margin $25.00 = $25.00 = $27.78 ---------- ----------- (100%-10%) 90% Less promotional allowance shown the invoice (.50) ------ Sell Price $27.28 ====== |
(b) Duration of Sell Price - Costs for all Products are recalculated with the following frequencies:
1) Time of sale pricing - price sensitive products with volatile fluctuations in pricing (i.e. produce and fresh seafood);
2) Weekly pricing - commodity products which reflect declines and advances in Cost on a regular basis, as determined by SYSCO (i.e. most protein products) - will be in effect for seven consecutive days;
3) Monthly pricing - fairly stable pricing for extended periods (i.e. most canned products) - will be in effect to coincide with Red Robin's fiscal monthly calendar.
Variances can occur to the Customer's invoiced price due to starting and ending dates of Supplier Agreements, as detailed in Section 6 hereof (and the timing of when "Cost" is determined).
1) Time of Sale Pricing - day of invoicing;
2) Weekly Pricing - Thursday of the prior week;
3) Monthly Pricing - Seven days prior to the start of Red Robin's fiscal monthly calendar.
6.1 Customer will provide SYSCO with written evidence of the existence of any contractual agreements it has with any Supplier for the purchase of Products ("Supplier Agreements"), utilizing the SYSCO Supplier Detail Form (Schedule 3). Supplier Agreements include agreements for which the Supplier and Customer have agreed on off-invoice allowances for Customer ("Supplier Off-Invoice Allowances") or the guaranteed cost Supplier will charge distributor for Product to be resold to Customer ("Supplier Guaranteed Distributor Cost"). SYSCO will use the Supplier Guaranteed Distributor Cost (of which it has been notified appropriately) as the Cost of such Product when calculating its Sell Price, notwithstanding that the Cost of such Product to SYSCO otherwise varies. SYSCO will provide for a Supplier Off-Invoice Allowance for a Product by deducting such allowance value after the Sell Price of such Product is calculated in accordance with Section 5.3.
Customer will be allowed one (1) annual price verification at each delivering Operating Company for purchases made under this Agreement. The price verification will consist of reviewing computer reports documenting SYSCO's calculation of the Customer's invoice price and verification of the participating SYSCO Operating Company's delivered Cost. If requested, applicable Supplier invoices and accompanying freight invoices will also be made available. Price verification adjustments, if applicable, will be made utilizing the net of undercharges and overcharges to the Customer. The price verification process is subject to the following:
a. Customer must request a price verification in writing at least twenty
(20) business days prior to the suggested date of the price
verification. This request must identify the thirty (30) items to be
price verified and the period covered;
b. The date and time of price verification must be to the mutual agreement of both parties;
c. The price verification will be made at the delivering Operating Company's location;
d. Support for the price verification may not be removed from the delivering Operating Company location;
e. The period for which pricing is to be verified will not begin more than twelve (12) months prior to the date of the price verification, and will cover only one pricing period.
Due to the extensive time and complexity associated with price verification, SYSCO will not permit computer generated price matching or electronic audits by or on behalf of Customers or any Third Party Provider to be used in lieu of the above price verification procedure.
Due to the highly perishable nature of fresh produce, SYSCO will not honor proprietary status on any fresh produce item.
SYSCO Operating companies will stock 21 days of inventory on all proprietary items.
a) Suppliers of Proprietary Products and Special Order Products must provide SYSCO with SYSCO's required indemnity agreement and insurance coverage;
b) Proprietary Products and Special Order Products must have a valid UPC number assigned and a scanable UPC bar code on each sellable unit;
c) SYSCO utilizes several third party warehouses throughout the nation for the purpose of efficiently redistributing products ("Redistribution Warehouses"). Any Products placed into the Redistribution Warehouses must be inventoried on a consigned basis by either the Supplier or the Customer.
SYSCO reserves the right to modify payment terms for Customer or any company or entity which purchases Products under this Agreement as a franchisee or member of a group purchasing organization, in SYSCO's sole judgement, if any such entity's financial condition materially deteriorates or SYSCO becomes aware of circumstances that may materially and adversely impact such entity's ability to meet its financial obligations when due.
SYSCO will give Customer a (30) day written notice of a material default with thirty (30) days to cure within such thirty (30) day period.
Franchisee Customers which are franchisees or members of group purchasing organizations will normally be offered the standard credit terms offered hereunder. However, at the sole discretion of the servicing SYSCO Operating Company and based on the credit worthiness of the individual Customer Location (or the entity which owns or operates such Customer Location), terms other than that stated in this Agreement may be applied.
The term of this Agreement will begin on May 21, 2001, and will end at 5:00
p.m. Houston time on June 30, 2004.
This Agreement may be terminated prior to its ending date for the following:
(a) By either party for failure of the other party to comply with any material provision of this Agreement within sixty (60) days of such party's receipt of written notice describing said failure;
(b) By SYSCO immediately upon written notice to Customer if Customer's financial position deteriorates materially, determined by SYSCO in its sole judgment; or SYSCO becomes aware of any circumstances that, in SYSCO's sole judgement, materially impacts Customer's ability to meet its financial obligation when due;
(c) By SYSCO with respect to any Customer franchisee or a member of Customer's group purchasing organization, immediately upon written notice to such entity if its financial position deteriorates materially, determined by SYSCO in its sole judgment; or SYSCO becomes aware of any circumstances that, in SYSCO's sole judgment, materially impacts such entity's ability to meet its financial obligations when due;
(d) By SYSCO, if Customer (or any Customer franchisee or member of Customer's group purchasing organization) fails to meet its stated operational representations set out in Schedule 5. The margin schedule submitted is based on the Customer's operational representations concerning its service needs as stated in Schedule 2 including, but not limited to its anticipated purchase volumes, drop sizes, Product mix, location of Customer Locations, number of deliveries, information services/technology requirements, and number of Proprietary Products and Special Order Products as well as Customer's compliance with the payment and other obligations specified in this Agreement. If SYSCO determines at any time or times after ninety (90) days from the date of this Agreement that Customer (or any Customer franchisee or member of Customer's group purchasing organization) requires service which varies materially from the levels contemplated in Customer's representations made to SYSCO in negotiating this Agreement, SYSCO reserves the right to request an increase on the margin specified. SYSCO shall give written notice to Customer (or any Customer franchisee or member of Customer's group purchasing organization) of the proposed increase in the margin. If the parties are unable to agree on such an increase within 30 days after the date of the notice of such increase and Customer's (or any Customer franchisee or member of Customer's group purchasing organization) service requirements and/or contract compliance continues to vary from that contemplated or required by this Agreement, SYSCO may terminate this Agreement on thirty (30) days written notice to Customer (or any Customer franchisee or member of Customer's group purchasing organization).
Upon termination, Customer (or any Customer franchisee or member of Customer's group purchasing organization) agrees to fully comply with all of its obligations under this Agreement, including, without limitation to pay all invoices at the earlier of 1) the time they are due or 2) two weeks from the date of the last shipment to a Customer Location.
This Agreement may cover sales of "perishable agricultural commodities" as
those terms are defined by federal law. Generally, all fresh and frozen fruits
and vegetables which have not been processed beyond cutting, combining, and/or
steam blanching are considered perishable agricultural commodities as are oil
blanched french fried potato products. All perishable agricultural commodities
sold under this Agreement are sold subject to the statutory trust authorized by
Section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C.
499e(c)). The seller of these commodities retains a trust claim over these
commodities and all inventories of food or other products derived from these
commodities until full payment is received.
Executed as of the date set forth at the beginning of this Agreement.
SYSCO CORPORATION
20701 East Currier Road By: /s/ DEBBIE MARTIN Walnut, CA 91789 --------------------------------- Attention: Debbie Martin, Debbie Martin Regional V.P., Multi-Unit Sales Regional Vice President, Telephone: (909) 598-7883 Multi Unit Sales Facsimile: (909) 594-0565 Date:_______________________________ Copy to: ------- |
SYSCO Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
Attention: Operations Review Telephone: (281) 584-1390 Facsimile: (281) 584-1744 RED ROBIN INTERNATIONAL, INC. 5575 DTC Parkway, #110 By: /s/ RAY MASTERS Englewood, CO 80111 --------------------------------- Attention: Ray Masters Ray Masters Telephone: (303) 846-6029 Vice President, Purchasing Facsimile: (303) 846-6044 Date: 5-22-01 ------------------------------- |
MASTER DISTRIBUTION AGREEMENT
Schedule Index
Schedule 1 Operating Companies and Participating Customer Locations as of Contract Date Schedule 2 Customer Margins Schedule 3 SYSCO Supplier Detail Form Schedule 4 Proprietary Products List Schedule 5 Customer Representations Schedule 6 Customer Incentive Programs |
SCHEDULE 1 TO MASTER DISTRIBUTION AGREEMENT |
Operating Companies and Participating Customer Locations
as of Contract Date
RED ROBIN LOCATIONS HISTORY
Highlighted are Franchise restaurants ---------------------------------------------------------------------------------------------------------- SYSCO Albuquerque Rest Name Address City ST ZIP Phone FAX OWNER 601 Comanche NE ---------------------------------------------------------------------------------------------------------- Albuquerque NM 97107 222 Cottonwood M 10009 Coors Blvd Albuquerque NM 87114 Mach Robin (806)000-00-0000 ---------------------------------------------------------------------------------------------------------- President: Keith Miller ---------------------------------------------------------------------------------------------------------- SYSCO Arizona Rest Name Address City ST ZIP Phone FAX OWNER 611 South 80th Avenue ---------------------------------------------------------------------------------------------------------- Phoenix AZ 85043 115 Pima/Shea 8970 East Shea Blvd Scottsdale AZ 85260 602-661-7114 602-602-7466 Company (802)936-9920 ---------------------------------------------------------------------------------------------------------- President: Michael 148 Sahara 2575 S Decatur Blvd Las Vegas NV 89102 702-364-1858 702-367-1941 Company Dickson ----------------------------------------------------------------------------------------------------------- 152 Sunset Galleria 1300 W Sunset Rd # 2545 Henderson NV 89014 702-547-1777 702-547-2253 Company ----------------------------------------------------------------------------------------------------------- 301 Tucson 4500 N Oracle Road Tucson AZ 85705 520-292-0888 520-888-8502 Tucson Robinson, Inc. ----------------------------------------------------------------------------------------------------------- 302 Glendale 3850 W Bell Road Glendale AZ 85300 602-978-3826 602-978-3857 BBIG, Inc. ----------------------------------------------------------------------------------------------------------- 303 Tempe 1375 W Elliot Tempe AZ 85284 602-940-9900 602-940-9275 Tucson Robinson, Inc. ----------------------------------------------------------------------------------------------------------- 304 Mesa 1355 W Southern Mesa AZ 85210 602-890-0652 602-890-9118 BBIG, Inc. ----------------------------------------------------------------------------------------------------------- 305 Lake 70 Swanson Blvd Lake AZ 86403 520-855-5555 520-555-5455 Arizona City Food Line, Inc. ----------------------------------------------------------------------------------------------------------- 400 Las Vegas 151 N. Blvd Las Vegas NV 89110 702-453-8611 702-453-7811 Company ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- SYSCO Central Rest Name Address City ST ZIP Phone FAX OWNER Pennsylvania ---------------------------------------------------------------------------------------------------------- Corey Road 103 Fairlakes 13056 Fair Lakes Shop Ctr Fairfax VA 22033 703-502-0334 703-502-8934 Company Union Square Industrial ---------------------------------------------------------------------------------------------------------- Park 105 Oxford Valley 610 Middletown Blvd Langhome PA 19047 215-752-1000 215-752-1047 Company Harrisburg, PA 17109 ----------------------------------------------------------------------------------------------------------- (717) 11 Potomac Mills 14090 Worth Avenue Woodridge VA 22192 703-492-6900 703-492-6116 Company President: Thomas ----------------------------------------------------------------------------------------------------------- Russell 144 Owings Mills 4 Restaurant Park Drive Owings Mills MD 21117 443-394-0999 443-394-5710 Company ----------------------------------------------------------------------------------------------------------- 153 Glen Allen 10057 Brook Rd Glen Allen VA 23059 804-261-2222 804-261-2491 Company ----------------------------------------------------------------------------------------------------------- 157 Charlottesville 1533 Rio Rd East Charlottes- NC 22901 804-965-9523 804-965-1574 Company ville ----------------------------------------------------------------------------------------------------------- 325 Allentown 4255 A Broadway Allentown PA 18104 610-366-1776 610-633-9667 Lehigh Valley Restaurant Group ------------------------------------------------------------------------------------------------------------ 326 North Hampton 3715 Easton-Nazareth Hwy Easton PA 18045 610-515-1111 610-515-1812 Lehigh Valley Restaurant Group ------------------------------------------------------------------------------------------------------------ 327 Hershey 621 Park Ave Hershey PA 17033 717-520-1776 717-520-1777 Lehigh Valley Restaurant Group ------------------------------------------------------------------------------------------------------------ 328 Exton 600 W Uwchian Ave Exton PA 19341 610-363-5995 610-363-1073 Lehigh Valley Restaurant Group ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ SYSCO Chicago Rest Name Address City ST ZIP Phone FAX OWNER 260 Wieboldt Drive ------------------------------------------------------------------------------------------------------------ Des Plaines, IL 120 Schaumburg 120 K Woodfield Mall Schaumburg IL 60173 847-517-4476 Mach 60016-3192 Robin LLC (847)899-5400 ------------------------------------------------------------------------------------------------------------ President: Chuck Staes ------------------------------------------------------------------------------------------------------------ SYSCO Cincinnati Rest Name Address City ST ZIP Phone FAX OWNER 10610 Evandale Drive ------------------------------------------------------------------------------------------------------------ Cincinnati, OH 45241 430 Crosswoods 7520 Highcross Blvd Columbus OH 43235 614-430-0100 614-430-0277 Midwest (613)683-6300 Robin, LLC President: Joseph ------------------------------------------------------------------------------------------------------------ Calabrese 431 Easton Market 3977 Morse Crossing Easton OH 43219 614-475-5200 614-475-6159 Midwest Robin, LLC ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ SYSCO Cleveland Rest Name Address City ST ZIP Phone FAX OWNER 22801 Aurora Road ------------------------------------------------------------------------------------------------------------ Bedford Heights, 104 Lecamessler 4949 Great Northern Blvd North OH 44070 216-734-6070 206-734-6579 Lecamess- OH, 44146 Olmstead ler, LLC (216)587-0200 ------------------------------------------------------------------------------------------------------------ President: Richard Rose 601 Lecamessler 6522 Strip Avenue Canton OH 44720 330-305-1080 330-305-1781 Lecamess- ler, LLC ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ SYSCO Dallas Rest Name Address City ST ZIP Phone FAX NOTES 14330 Gillis Road ------------------------------------------------------------------------------------------------------------ Dallas, TX 75244 114 Grapevine 1701 William D. Tate Ave Grapevine TX 76051 817-481-6335 817-251-1524 2RT5/3/99 (972)233-0700 ------------------------------------------------------------------------------------------------------------ President: Ivan Moore |
----------------------------------------------------------------------------------------------------------- SYSCO Houston Rest Name Address City ST Zip Phone FAX OWNER 635 Portwall Street ----------------------------------------------------------------------------------------------------------- Houston, TX 77220 Mary E 7620 Katy Freeway Houston TX 77024 2RT,LC (713) 672-8080 ----------------------------------------------------------------------------------------------------------- President: Larry Pulliam ----------------------------------------------------------------------------------------------------------- SYSCO Idaho Rest Name Address City ST Zip Phone FAX OWNER 6710 Pan Am Avenue ----------------------------------------------------------------------------------------------------------- Bolso, ID 83705 202 Park Center 211 W Parkcenter Blvd Boise ID 83705 208-344-7472 208-344-9687 Mach Robin (208) ----------------------------------------------------------------------------------------------------------- President: Tom 220 Westpark 267 N Milwaukee Boise ID 83704 208-323-0023 208-323-1367 Mach Robin Morgan ----------------------------------------------------------------------------------------------------------- 221 Nampa 2222 Cassla Rd Nampa ID 83686 208-463-0289 208-463-0289 Mach Robin ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- SYSCO Indianapolis Rest Name Address City ST Zip Phone FAX OWNER 4000 W 62nd St ----------------------------------------------------------------------------------------------------------- Indianapolis IN 46268 352 Glenbrook 4201 Cold Water Creek Ft. Wayne IN 46805 219-484-9888 219-373-2886 Company (801) 972-5484 Square President: Walter ----------------------------------------------------------------------------------------------------------- Mills 353 Glenbrook 6020 E 82nd St Indianapolis IN 46250 317-579-1800 317-579-0664 Company Square ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- SYSCO Intermountain Rest Name Address City ST Zip Phone FAX OWNER 1669 South Industrial ----------------------------------------------------------------------------------------------------------- Road 410 Murray 316 E Winchester Blvd Murray UT 84107 801-266-9410 801-265-5843 Rockin' Robin Salt Lake City, UT 84104 ----------------------------------------------------------------------------------------------------------- (801) 972-5484 412 Layton 1562 N Woodland Park Layton UT 84011 801-644-7989 801-265-8843 Rockin' Robin President: Thomas Hills Dr Kesteloot ----------------------------------------------------------------------------------------------------------- 414 West Valley 3601 S 2700 West #B152 West Valley UT 84119 801-964-2354 801-964-2392 Rockin' Robin ----------------------------------------------------------------------------------------------------------- 416 Provo 1200 Town Ctr Blvd, Provo UT 84801 801-652-8093 801-852-8096 Rockin' Robin #1100 ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- SYSCO/Konings Rest Name Address City ST Zip Phone FAX OWNER 1346 Kingsway Avenue ----------------------------------------------------------------------------------------------------------- Port Coquitlam, BC 270 Red Robin 9628 Cameron Street Burnby, BC CAN V3J 1M2 604-421-7266 604-421-7255 Burnsby (604) 944-4410 Restaurants President: Hans of Canada Konings ----------------------------------------------------------------------------------------------------------- 272 Red Robin 801 Marine Drive N. Vancouver, CAN V7R 3K6 604-984-4464 604-985-4947 Capilano Restaurants BC of Canada ----------------------------------------------------------------------------------------------------------- 273 Red Robin 752 Thurlow Street Vancouver, BC CAN V6E 1A3 604-662-8288 604-662-6279 Carlyle Restaurants #200 of Canada ----------------------------------------------------------------------------------------------------------- 274 Red Robin 4211 106th Street Edmonton, AB CAN T8J 0L7 780-438-2473 780-438-8804 Whitemud Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 275 Red Robin 4640 Kingsway #112 Burnby, BC CAN V5H 2B9 604-439-7696 604-439-7674 Metrotown Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 276 Red Robin 800 Tomie Street Victoria, BC CAN V8X 3W4 260-366-4440 250-388-5987 Victoria Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 277 Red Robin 9727 Macleod Trail SW Calgary, AB CAN T2J 0P6 403-259-3916 403-259-3988 Mac Leod Restaurants Trail of Canada ----------------------------------------------------------------------------------------------------------- 278 Red Robin 10010 171st Street W. Edmonton, CAN T5S 1B5 780-484-6735 780-483-0904 West Restaurants AB Edmonton of Canada ----------------------------------------------------------------------------------------------------------- 279 Red Robin 3000 Lougheed Highway Coquitlam, BC CAN V3B 1C5 604-491-6650 604-941-6662 Coquitlam Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 280 Red Robin 11215 104th Avenue Edmonton, AB CAN T5K 2S1 780-424-9363 780-424-9450 Longstreet Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 281 Red Robin 1110 Memoral Drive NW Calgary, AB CAN T2N 3E3 403-283-9600 403-283-9678 Kensington Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 283 Red Robin 1001 W Broadway Vancouver, BC CAN V8H 4B1 604-733-6494 604-733-6499 Broadway Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 284 Red Robin 6141 200th Street Langley, BC CAN V2Y 1A2 604-530-4484 604-530-4499 Langley Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 285 Red Robin 1920 Cooper Road Kelowna, BC CAN V1Y 8K5 250-762-9700 250-762-9715 Kelowna Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 286 Red Robin 22701 Lougheed Maple Ridge, CAN V2X 8K2 604-467-6266 604-467-6680 Maple Ridge Restaurants Highway BC of Canada ----------------------------------------------------------------------------------------------------------- 287 Red Robin 33011 South Free Way Abbortsford, CAN V2S 2A6 604-853-8185 604-853-2029 Abbortsford Restaurants BC of Canada ----------------------------------------------------------------------------------------------------------- 288 Red Robin 10237 152nd Street Surrey, BC CAN V3R 4G8 604-930-2416 604-930-2402 Guildford Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 289 Red Robin 8007 488 King George Surrey, BC CAN V3W 0H9 604-594-6637 604-594-6854 Newton Restaurants Hwy of Canada ----------------------------------------------------------------------------------------------------------- 290 Red Robin 4970 137th Ave Edmonton, AB CAN T5Y 2V4 780-614-0800 780-472-8008 Clareview Restaurants of Canada ----------------------------------------------------------------------------------------------------------- 291 Red Robin 101 1600 15th Ave Prince George,CAN V2L 3X3 250-614-0800 250-614-0084 Parkwood Restaurants BC of Canada ----------------------------------------------------------------------------------------------------------- 292 Red Robin 3575 20th Ave NE Calgary, AB CAN T1Y 6R3 403-293-4047 403-293-7030 Sunridge Restaurants of Canada ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- SYSCO Los Angeles Rest Name Address City ST Zip Phone FAX OWNER 20701 E. Currier Road ----------------------------------------------------------------------------------------------------------- Walnut, CA 91789 21 Santa Ana 1307 W. Sunflower Santa Ana CA 92704 714-432-1111 714-732-0141 Company (909) 695-?595 ----------------------------------------------------------------------------------------------------------- President: Bruce 24 Galleria 1615 Hawthorne Blvd Redondo Beach CA 90278 310-642-2488 310-214-2987 Company Schwartz ----------------------------------------------------------------------------------------------------------- 33 Carritos 360 Carritos Los Cerritos CA 90701 310-402-7333 310-402-7977 Company ----------------------------------------------------------------------------------------------------------- 46 Orange 2199 North Orange Mall Orange CA 92665 714-974-9888 714-974-3719 Company ----------------------------------------------------------------------------------------------------------- 46 San Dimas 565 W. Arrow Highway San Dimas CA 91773 909-592-7009 909-592-1668 Company ----------------------------------------------------------------------------------------------------------- 47 Brea 1080 Brea Mall Brea CA 92621 714-529-6766 714-529-6574 Company ----------------------------------------------------------------------------------------------------------- 63 Tustin 3015 E Camino Rea Tustin CA 92680 714-544-2060 714-544-3125 Company ----------------------------------------------------------------------------------------------------------- 68 La Habra 1631 W, Imperial Hwy La Habra CA 90633 310-694-1685 310-697-6029 Company ----------------------------------------------------------------------------------------------------------- 68 Stanton 12697 Beach Blvd Stanton CA 90680 714-373-1767 714-890-1767 Company ----------------------------------------------------------------------------------------------------------- |
---------------------------------------------------------------------------------------------------------- L.A. Cont. 71 Victorville 12409 Mariposa Victorville CA 92393 619-955-6555 619-955-6560 Company ---------------------------------------------------------------------------------------------------------- 89 Corona 419 McKinley Street Corona CA 91719 909-737-1130 909-737-7715 Company ---------------------------------------------------------------------------------------------------------- 146 Garden Grove 12007 Harbor Blv Corona CA 91719 909-737-1130 909-737-7715 Company ---------------------------------------------------------------------------------------------------------- 160 West Covina 428 Plaza Dr West Covina CA 91790 626-814-3318 626-814-3369 Company ---------------------------------------------------------------------------------------------------------- 235 Calabasas 24005 Calabasas Rd Calabasas CA 91302 818-223-8112 818-223-6511 Top Robin Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 236 Santa 3825 State Street Santa CA 93105 805-687-4000 805-682-4586 Top Robin Barbara Barbara Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 238 Topanga 6600 Topanga Cyn Canoga Park CA 91303 818-883-1060 818-883-0054 Top Robin #49H Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 241 Palmdale 1233 West Ave, P, Palmdale CA 93551 805-274-1773 805-274-2073 Top Robin #301 Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 242 Glendale 1187 Glendale Glendale CA 91210 818-551-0191 818-551-0195 Top Robin Galleria Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 246 Valencia 24204 Valencia Blvd, Valencia CA 91355 805-260-2411 805-260-2414 Top Robin #1351 Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 420 La Mirada 14299 Firestone Blvd La Mirada CA 90638 714-739-8500 714-523-9886 La Mirada Restaurant Group ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- Miesel-SYSCO Rest Name Address City ST ZIP Phone FAX OWNER 41600 Van Born Road ---------------------------------------------------------------------------------------------------------- Canton, MI 48188 376 Novi Town 43250 Crescent Blvd Novi MI 48375 810-349-3220 810-349-2912 Red Robin (313) 397-7990 Center of Michigan President: Michael Green ---------------------------------------------------------------------------------------------------------- 377 Westland 36350 West Warme Westland MI 48185 313-421-4081 313-421-4274 Red Robin Avenue of Michigan ---------------------------------------------------------------------------------------------------------- 378 Southgate 15777 Eureka Road Southgate MI 4895 734-285-0009 734-285-3777 Red Robin of Michigan ---------------------------------------------------------------------------------------------------------- 379 Madison 31805 John R Madison MI 48071 248-577-5870 248-577-5873 Red Robin Heights Heights of Michigan ---------------------------------------------------------------------------------------------------------- 380 Roseville 32051 Gratlot Roseville MI 48066 810-285-9993 810-285-9996 Red Robin of Michigan ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- SYSCO Minnesota Rest Name Address City ST ZIP Phone FAX OWNER 2400 County Rd J ---------------------------------------------------------------------------------------------------------- St. Paul, MN 55112 620 Eagan 1230 Town Centre Dr Eagan MN 55122 Le Carnassier (612)785-9000 ---------------------------------------------------------------------------------------------------------- President: Phil Selpp 631 Apple Valley 15560 Cedar Ave Apple Valley MN 55124 952-997-6250 952-431-3479 Le Carnassier ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- SYSCO Modesto Rest Name Address City ST ZIP Phone FAX OWNER 136 South Mariposa Road ---------------------------------------------------------------------------------------------------------- Modesto, CA 95354 70 Redding 1045 Dana Drive Redding CA 96003 916-222-5999 916-222-8161 Company (203) 627-7700 ---------------------------------------------------------------------------------------------------------- President: John Torza 78 Yuba City 1200 Colusa Ave Yuba City CA 95991 916-751-1012 916-751-1121 Company ---------------------------------------------------------------------------------------------------------- 82 Folsum 1011 Riley Street Folsum CA 95630 916-983-1773 916-983-1373 Company ---------------------------------------------------------------------------------------------------------- 90 Citrus 7990 Greenback Lane, Citrus CA 95610 916-726-7792 916-726-7770 Company Heights Unit J Heights ---------------------------------------------------------------------------------------------------------- 354 Solano Mall 1350 Travis Blvd., Fairfield CA 94533 707-429-4525 Company Suite 1532-A ---------------------------------------------------------------------------------------------------------- 191 New Park 1031 New Park Mall Newark CA 94580 510-791-2644 510-791-3388 Western Mall Franchise Development ---------------------------------------------------------------------------------------------------------- 192 Sun Valley 404-A Sun Vally Concord CA 94520 510-571-9315 510-571-0789 Western Mall Mall Franchise Development ---------------------------------------------------------------------------------------------------------- 193 San Bruno 1274 El Camino Real San Bruno CA 94066 415-588-4500 415-588-4984 Western Franchise Development ---------------------------------------------------------------------------------------------------------- 194 Eastridge 398 Eastridge Mall San Jose CA 95122 408-223-1000 408-223-1013 Western A-10 Franchise Development ---------------------------------------------------------------------------------------------------------- 195 Pleasanton 4503 Rosewood Drive Pleasanton CA 94588 925-225-1755 925-224-8033 Western Franchise Development ---------------------------------------------------------------------------------------------------------- 196 San Mateo 2204 Bridgepointe San Mateo CA 94402 650-571-5500 650-570-2854 Western Pkwy Franchise Development ---------------------------------------------------------------------------------------------------------- 237 Coalinga Interstate 5 & 198 Coalinga CA 93210 209-935-2096 209-935-5156 Top Robin Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 239 Clovis 950 Shaw Ave Clovis CA 93612 559-299-4500 559-299-3487 Top Robin Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 240 Manchester 1901 E. Shields #110 Fresno CA 92736 209-222-4500 209-222-4833 Top Robin Central Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 244 Bakersfield 2701 Ming Ave #Q15 Bakersfield CA 93304 805-398-9794 805-398-3136 Top Robin Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 245 Visalia 2015 S. Mooney Blvd Visalia CA 93277 209-740-4060 209-740-4067 Top Robin #505 Ventures, Inc. ---------------------------------------------------------------------------------------------------------- 401 Reno 4000 Kletzke Lane Reno NV 89502 702-825-7246 702-825-8827 Mach Robin ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- SYSCO Montana Rest Name Address City ST ZIP Phone FAX OWNER 1509 Monad Road ---------------------------------------------------------------------------------------------------------- Billings, MT 59101 232 Billings 1603 Grand Ave #1 Billings MT 59102 405-248-7778 405-245-6625 JMJ Management (406) 247-1100 Corp. President: Patrick Burton ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- Nobel/SYSCO Denver Rest Name Address City ST ZIP Phone FAX OWNER 1101 West 48th Avenue ---------------------------------------------------------------------------------------------------------- Denver, CO 80217 015 Broadmoor 2230 Southgate Rd Colorado CO 80906 719-447-8810 719-447-8611 Company (303) 458-4000 Springs President: Chris DeWitt ---------------------------------------------------------------------------------------------------------- 020 Flatirons 1 West Flatirons Broomfield CO 80021 303-464-0451 303-464-1347 Company Circle ---------------------------------------------------------------------------------------------------------- 203 Lakewood 3333 S Wadsworth #8 Lakewood CO 80227 303-989-8448 303-980-8094 Company ---------------------------------------------------------------------------------------------------------- 204 Arvada 7460 W. 52nd Ave Arvada CO 80002 303-431-6330 303-431-6544 Company ---------------------------------------------------------------------------------------------------------- 205 Citadel 3680 Citadel Drive N. Colorado CO 80919 303-597-2473 303-597-2773 Company Springs ---------------------------------------------------------------------------------------------------------- 206 Arapahoe 8585 E. Arapahoe Road Englewood CO 80111 303-771-3350 303-771-2117 Company ---------------------------------------------------------------------------------------------------------- 207 Chapel Hills 1410 Jamboree Drive Colorado CO 80919 303-598-2473 303-598-2156 Company Springs ---------------------------------------------------------------------------------------------------------- 208 Havana 1491 South Havana Aurora CO 80012 303-671-7055 303-671-8331 Company ---------------------------------------------------------------------------------------------------------- |
--------------------------------------------------------------------------------------------------- SYSCO W. Coast Florida Rest Name Address City ST ZIP PHONE --------------------------------------------------------------------------------------------------- PO Box 1911 647 Bonita Springs 25101 Temimi Trail Bonita Springs FL 34135 941-390-9230 --------------------------------------------------------------------------------------------------- Palmetto FL. 34220-1911 President: Carl Cannova --------------------------------------------------------------------------------------------------- SYSCO W. Coast Florida FAX NOTES --------------------------------------------------------------------------------------------------- PO Box 1911 941-390-9233 Le Camassier --------------------------------------------------------------------------------------------------- Palmetto FL. 34220-1911 President: Carl Cannova |
SCHEDULE 2
TO
MASTER DISTRIBUTION AGREEMENT
CUSTOMER MARGINS
Product Category Margin 1. Healthcare *** 2. Dairy Products *** Exception: Cheddar Cheese *** All other Cheeses *** 3. Meats *** Exception: Hamburger *** 4. Seafood (fresh & frozen) *** 5. Poultry (CVP & frozen) *** 6. Frozen/Refrigerated Foods *** Exception: Fries 30# Case *** 36# Case *** 7. Canned & Dry *** Exception: Coke Products National Contract Dr. Pepper/7-UP National Contract 8. Paper & Disposables *** 9. Chemical/Janitorial (supplies & cleaning) *** Exception: Ecolab National Contract 10. Supplies & Equipment *** 11. Dispenser Beverage *** 12. Produce *** |
The SYSCO Corporation owns several specialty meat operations and manages a line of premium meat products that does not fall within the scope of this agreement. Premium meat products will be sold at prevailing market prices.
The SYSCO Corporation owns several specialty produce operations. Purchase of products from said produce operations is not provided for in this agreement.
SCHEDULE 3
TO
MASTER DISTRIBUTION AGREEMENT
Customer Negotiated Supplier Agreements
Details and Parameters
The supplier's verification and authorization of details noted on the attached form, signed by both customer and supplier, will allow SYSCO to qualify and promptly implement negotiated programs between the customer and supplier. SYSCO will gladly accept a supplier written contract as authorization, asking only that the pertinent information detailed on the attached form is included. Please utilize the form as needed to clarify details not specifically addressed in a written contract.
Please return the form along with a copy of the contract by the 10/th/ of the month prior to the effective date of monthly pricing (or 21 days before the customer's non-standard calendar effective date). After review for completeness, agreement information will be made available to the operating companies. Contracts received by SYSCO after the cut-off date that lack pertinent information as requested on the Customer Negotiated Supplier Agreement Form, and/or that are without complete SUPC information will not be implemented by SYSCO until one month later. The supplier will have sole responsibility to the customer for any discounts due during the implementation period. SYSCO operating companies will not perform retro processing procedures for agreements received after the cut off.
This form can be e-mailed as a Word.doc for convenience in setting up and
maintaining negotiated programs between the customer and supplier.
SYSCO CORPORATION
Customer Negotiated Supplier Agreement Form
-------------------------------------------------------------------------------- Customer Name Customer Contact -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Supplier Name Supplier Contact -------------------------------------------------------------------------------- Supplier Contact Phone Supplier Contact Fax -------------------------------------------------------------------------------- Supplier Contact Email Address -------------------------------------------------------------------------------- |
Customer Eligibility Definition (Customer and Affiliates)
Pricing will be extended only to the customer denoted above unless denoted
below.
Other affiliated customers to include ... ____________________________________
Effective Dates (MUST use full calendar months, i.e. l-31, or customer defined fiscal calendar)
Agreement Definition for Customer/Supplier Negotiated Program (please check
one)
Guaranteed: FOB cost____ or Delivered cost ____ to SYSCO, or Allowance amount
per case/lb____ .
SYSCO Operating Company Inclusion
ALL servicing this customer (YES is required for National Pricing eligibility)
(YES or NO)________
Brand Eligibility Definition
-------------------------------------------------------------------------------- Manufacturer Brand (YES or NO)_____ -------------------------------------------------------------------------------- SYSCO Brand (YES or NO)_____ Must be verified by SYSCO with customer prior to implementation. -------------------------------------------------------------------------------- |
Item Inclusion and Data Definition
For guaranteed cost programs, please define only the net customer cost to the
SYSCO operating companies. This will be the base cost on which the SYSCO
contracted customer margin will be applied. (If your contract is FOB, this
cost plus freight will be the base cost.)
. Please refrain from quoting a billback amount.
. Please refrain from quoting the SYSCO list or bracket price. (Customer
contract pricing should not be contingent on SYSCO operating company
purchase patterns.)
. Please refrain from calculating end-user invoice price. Margin, fee, and
rounding errors may occur.
Cost Differential Bill Back Definition Submit Bill Back to local broker. (YES or NO)_____ (If NO, please complete the following)
Item Inclusion List
Agreement Definition for Customer/Supplier Negotiated Program (please check one)
Guaranteed: FOB cost____ or Delivered cost ____ to SYSCO, or Allowance amount per case/lb ____.
------------------------------------------------------------------------------------ SUPC Maufacturer's Brand/Label Pack/size Product Description Customer/Supplier Product Code Negotiated Cost or Allowance Value to SYSCO before Mark-up/Margin/Fee ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ |
SCHEDULE 4
TO
MASTER DISTRIBUTION AGREEMENT
Customer Listing of Proprietary Products
SUPC Pack/Size Description
SCHEDULE 5
TO
MASTER DISTRIBUTION AGREEMENT
Customer Representations
This document was prepared and based on the following Customer representations. SYSCO reserves the right to modify the agreement in the event these parameters are not achieved.
Average Order Size $3,800
Average Sell Price per Piece $24.24
2. Customer will purchase not less than eighty percent (80%) of Customer's purchase requirements for each category of Products.
3. Customer will pay all amounts due SYSCO within the payment terms set forth in Section 9.
SCHEDULE 6
TO
MASTER DISTRIBUTION AGREEMENT
Corporate Customer Allowance
Annual Meeting Allowance
An annual meeting allowance of $150.00 per Red Robin Restaurant per year will be paid to Red Robin's Corporate Office on an annual basis in February based on all Red Robin Restaurants that SYSCO is selling at 80% and
that has been operational for more than 90 days.
Operating Company Customer Incentive
Prompt Payment Incentive
Each Operating Company will offer an incentive allowance based on early payment of each individual customer invoice as listed below:
Invoices paid within 21 days .15% Invoices paid within 14 days .30% Invoices paid within 9 days .45% |
This incentive will be calculated from the monthly CPAS Report and the Early Pay Incentive checks will be sent to the Red Robin Corporate office for company units and to the franchise office for the franchise units.
SYSCO Employee
SYSCO will provide a full time employee at the Red Robin Corporate office in Denver to manage the Red Robin/SYSCO account.
EXHIBIT 10.37
June 6, 2002
Mr. Jim McCloskey
Chief Financial Officer
Red Robin Gourmet Burgers, Inc.
5575 DTC Parkway, Suite 110
Greenwood Village, CO 80111
Gentlemen:
Red Robin International, Inc. (the "Borrower") has informed Wachovia
Bank, National Association ("Wachovia") that it intends to consummate an initial
public offering of its capital stock (the "IPO"). In connection with the IPO,
the Borrower intends to enter into a senior secured bank facility having
substantially the terms set forth on the summary of terms and conditions
attached hereto (the "Term Sheet") with certain financial institutions (the
"Lenders") for an aggregate principal amount of up to $35,000,000 (the
"Facility"). Wachovia understands that the proceeds of the Facility will be used
(i) to finance new restaurant construction costs, (ii) to pay certain costs,
fees and expenses in connection with such construction projects, (iii) to
refinance certain existing debt of the Borrower, (iv) to pay any fees and
expenses in connection with the Facility, (v) to provide for the working capital
and general corporate requirements of the Borrower and its subsidiaries and (vi)
for acquisitions relating to the purchase or repurchase of Red Robin franchises.
The IPO, the Facility and the other transactions described above are hereinafter referred to collectively as the "Transactions".
Based upon and subject to the foregoing and to the terms and conditions
set forth below and in the Term Sheet, Wachovia is pleased to confirm its
commitment (the "Commitment") to provide up to a $15,000,000 portion of the
Facility to the Borrower and to use its reasonable best efforts to secure
commitments from additional lenders for the remaining portion of the Facility.
Wachovia, through its affiliate, First Union Securities, Inc., acting under the
tradename Wachovia Securities ("FUSI" or the "Lead Arranger"), is also pleased
to advise you of its willingness to serve as sole manager and arranger for the
Facility. Wachovia's obligation to provide its portion of the Facility pursuant
to the Commitment is subject to the following: (i) the Borrower's written
acceptance of a letter from Wachovia to the Borrower of even date herewith (the
"Fee Letter") pursuant to which the Borrower agrees to pay, or cause to be paid,
to Wachovia certain fees in connection with the Facility as more particularly
set forth therein, (ii) completion by Wachovia of its confirmatory due diligence
on the Borrower and its subsidiaries in all respects satisfactory to Wachovia,
(iii) completion of a definitive credit agreement and related
Red Robin Gourmet Burgers, Inc.
June 6, 2002
documentation for the Facility in form and substance reasonably satisfactory to
Wachovia, (iv) review of all documentation relating to the IPO in form and
substance reasonably satisfactory to Wachovia, (v) compliance with all
applicable laws and regulations (including compliance of this letter agreement
(this "Commitment Letter") and the Transactions described herein with all
applicable federal banking laws, rules and regulations), (vi) there having been
no competing issuance of senior debt facilities of the Borrower or any of its
subsidiaries being offered, placed or arranged for the purposes of effectuating
the IPO, without the prior written consent of Wachovia and FUSI, (vii) receipt
of commitments by Wachovia (including Wachovia's) for the Facility equaling or
exceeding $25,000,000 in aggregate principal amount, and (viii) the satisfaction
of all other conditions described herein, in the Term Sheet and in such
definitive credit documentation. Further, Wachovia's Commitment is subject to
(a) there not having occurred any event that has, or could be reasonably
expected to have, a material adverse effect on the business, properties,
prospects, operations or condition (financial or otherwise) of the Borrower and
its subsidiaries taken as a whole and (b) the absence of any material adverse
change in the financial, banking or capital markets (including the loan
syndication market) that has materially impaired or would materially impair the
syndication of the Facility, as determined by Wachovia and FUSI in their
reasonable discretion.
It is agreed that Wachovia will act as the Administrative Agent (the "Administrative Agent") for the Lenders under the Facility. Wachovia, through its affiliate FUSI, will also serve as sole manager of the syndication effort. In connection with such syndication effort, Wachovia, with the advice and consent of the Borrower, will manage all aspects of the syndication, including, without limitation, making decisions as to the selection and number of institutions to be approached and when such institutions will be approached, when commitments will be accepted, which institutions will participate, the allocations of commitments among syndicate Lenders and the amount and distribution of fees payable to syndicate Lenders. As a part of this process, Wachovia will consult with the Borrower regarding the selection and number of institutions to be approached.
Wachovia reserves the right, prior to or after the execution of definitive documentation with respect to the Facility, and as part of any syndication thereof or otherwise, to arrange for the assignment of a portion of the Commitment to one or more financial institutions that will become Lenders and be party to such definitive documentation. In addition, in connection with any such syndication, the Borrower acknowledges that Wachovia may allocate a portion of the fees payable under the Fee Letter to such other Lenders. It is agreed, however, that no Lender will receive compensation from or on behalf of the Borrower outside the terms contained herein and in the Fee Letter in order to obtain its commitment to participate in the Facility.
The Borrower understands that Wachovia intends to commence the syndication efforts immediately and intends to complete the syndication prior to the closing date of the Facility (the "Closing Date"). The Borrower agrees to assist Wachovia in promptly completing a mutually satisfactory syndication. The syndication will be accomplished by a variety of means including direct contact during the syndication between senior management of the Borrower and Wachovia and their respective affiliates and advisors. Wachovia reserves the right to engage the services of
Red Robin Gourmet Burgers, Inc.
June 6, 2002
FUSI and other of its affiliates in furnishing the services to be performed by Wachovia as contemplated herein and to allocate (in whole or in part) to any such affiliates any fees payable to it in such manner as it and its affiliates may agree in their sole discretion. The Borrower agrees that Wachovia may share with any of its affiliates and advisors any information related to the Transactions or any other matter contemplated hereby (other than in violation of Regulation FD), on a confidential basis; provided that such disclosure of information is for the purpose of effecting the Transactions.
The Borrower hereby represents and warrants that (i) all information, other than the Projections (as defined below), which has been or is hereafter made available to Wachovia or the Lenders by the Borrower or any of its representatives in connection with the transactions contemplated hereby ("Information") is and will be complete and correct in all material respects and, to the Borrower's knowledge, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading and (ii) all financial projections concerning the Borrower and its subsidiaries that have been or are hereafter made available to Wachovia or the Lenders by the Borrower or any of its representatives (the "Projections") have been or will be prepared in good faith based upon assumptions that the Borrower believes to be reasonable at the time of such preparation. The Borrower agrees to furnish us with such Information and Projections as we may reasonably request and to supplement the Information and the Projections from time to time until the Closing Date so that the representation and warranty in the preceding sentence is correct on such date (including, without limitation, updating the Projections to the extent the Borrower becomes aware that such Projections have become materially inaccurate or have been prepared based upon assumptions that the Borrower believes are no longer reasonable). In arranging and syndicating the Facility, Wachovia will be using and relying on the Information and the Projections without independent verification thereof.
The Borrower agrees to reimburse Wachovia, FUSI and their affiliates from time to time on demand for all of their reasonable fees and out-of-pocket expenses (including reasonable attorneys' fees and expenses) incurred in connection with the transactions described herein whether or not the Facility is closed or any credit is extended thereunder. The Borrower also agrees to indemnify and hold harmless Wachovia, FUSI and their affiliates and their respective affiliates, directors, officers, employees and agents (collectively, the "Indemnified Parties") from and against any and all actions, suits, losses, claims, damages and liabilities of any kind or nature, joint or several, to which such Indemnified Parties may become subject, related to or arising out of any of the transactions contemplated herein, including without limitation the execution of definitive credit documentation, the syndication and closing of the Facility (a "Third Party Claim"), and will reimburse the Indemnified Parties for all reasonable out-of-pocket expenses (including reasonable attorneys' fees and expenses) on demand as they are incurred in connection with the investigation of, preparation for, or defense of any pending or threatened Third Party Claim or any action or proceeding arising therefrom; provided, however, that no Indemnified Party shall have any right to indemnification for any of the foregoing to the extent determined by a final and nonappealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct; provided, further, that (i) each
Red Robin Gourmet Burgers, Inc.
June 6, 2002
Indemnified Party shall promptly notify the Borrower in writing upon becoming aware of the initiation of any Third Party Claim against it, (ii) the Borrower shall be entitled to participate in the defense of any such Third Party Claim and, if the Borrower so chooses, to assume the defense, at the Borrower's expense, of any such Third Party Claim with counsel selected by the Borrower (it being understood that any Indemnified Party shall have the right to participate in such defense and employ counsel separate from the counsel employed by the Borrower, and that such counsel shall be at the expense of such Indemnified Party unless such Indemnified Party shall have been advised by counsel that there may be legal defenses available to it that are inconsistent with or in addition to those available to the Borrower, in which case such counsel shall be at the Borrower's expense) and (iii) no Indemnified Party shall settle any Third Party Claim without the Borrower's prior written consent. This Commitment Letter is addressed solely to the Borrower, and neither Wachovia and FUSI, on the one hand, nor the Borrower, on the other hand, shall be liable to the other or any other person for any consequential damages that may be alleged as a result of this Commitment Letter or any of the transactions referred to herein. This Commitment Letter is not intended to confer any obligations to or benefits upon any third party. The provisions of this paragraph shall survive completion of the Transactions and any termination of this Commitment Letter.
The Borrower is not authorized to show or circulate this Commitment Letter, the Fee Letter or the Term Sheet, or disclose the contents thereof, to any other person or entity (other than to its affiliates, directors, officers, advisors, legal and financial counsel and underwriters and underwriters counsel, whether in connection with the Facility, the IPO or otherwise; provided that (i) each of such persons shall agree to be bound by the confidentiality provisions hereof and (ii) the Borrower shall be liable for any breach of such confidentiality provisions by any such person), except as may be required by law (including, without limitation, applicable securities laws and disclosure requirements) or applicable judicial process or as consented to by Wachovia. If the Borrower does show or circulate this Commitment Letter, the Fee Letter or the Term Sheet, or disclose the contents thereof, in breach of the foregoing sentence, then the Borrower shall be deemed to have accepted this Commitment Letter and the Fee Letter.
Notwithstanding the foregoing, the Borrower acknowledges and agrees that Wachovia and FUSI may share with their respective affiliates any information relating to the Facility, the other Transactions, the Borrower and its subsidiaries (subject to Regulation FD). The Borrower further acknowledges and agrees to the disclosure by Wachovia and FUSI of information relating to the Facility to Gold Sheets and other similar bank trade publications, with such information to consist of deal terms and other information customarily found in such publications.
Prior to the Closing Date, Wachovia shall have the right to review and approve any public announcement made after the date hereof relating to the Facility, or to Wachovia or FUSI in connection therewith, before any such announcement is made (such approval not to be unreasonably withheld or delayed).
This Commitment Letter and the Fee Letter shall be governed by and construed in accordance with the internal laws of the State of North Carolina and constitute the entire
Red Robin Gourmet Burgers, Inc.
June 6, 2002
agreement between the parties relating to the subject matter hereof and thereof and supersede any previous agreement, written or oral, between the parties with respect to the subject matter hereof and thereof. This Commitment Letter shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto, but shall not be assigned in whole or in part by the Borrower without the prior written consent of Wachovia. This Commitment Letter may not be amended, assigned or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto. The Commitment is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits on, or create any rights in favor of, any other person or entity. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement.
The Commitment shall terminate at 5:00 p.m. on June 7, 2002, unless
this Commitment Letter is accepted by the Borrower in writing prior to such time
and, if accepted prior to such time, shall expire at the earlier of (i) Wachovia
discovering or becoming aware of any information not previously disclosed to it
that it believes, in the exercise of its reasonable judgment, to be materially
inconsistent with its understanding, based on the information provided to it by
or on behalf of the Borrower prior to the date hereof, of the business,
properties, operations, condition (financial or otherwise) or prospects of the
Borrower and its subsidiaries taken as a whole, (ii) the occurrence of a
material adverse change in the business, properties, operations, condition
(financial or otherwise) or prospects of the Borrower and its subsidiaries,
(iii) the cancellation by the Borrower of the IPO and (iv) 5:00 p.m. on August
16, 2002, if the Closing Date shall not have occurred by such time.
Wachovia and FUSI each agrees to keep confidential, and to not publish,
disclose or otherwise divulge to any party or person, the Information or the
Projections, and to cause its respective officers, directors, employees, agents
and representatives to keep confidential (including for purposes of Regulation
FD), and to not publish, disclose or otherwise divulge to any party or person,
the Information or the Projections, except that Wachovia and FUSI each shall be
permitted to disclose the Information or the Projections (i) to such of its, or
any affiliates', officers, directors, employees, agents, legal counsel and
representatives as need to know such Information or Projections in connection
with the syndication of the Facility and the servicing and protection of its
interests in respect of its loans under the Facility and the transactions
contemplated thereby; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
regulatory authority having jurisdiction over it; (iii) to the extent such
Information or Projections (A) become publicly available other than as a result
of a breach of this agreement or (B) becomes available to Wachovia or FUSI on a
non-confidential basis from a source other than the Borrower or its affiliate;
(iv) to prospective Lenders in connection with the syndication of the Facility
as referred to herein; or (v) to the extent that the Borrower shall have
consented to such disclosure in writing. Wachovia and FUSI each agrees that it
will use the Information and Projections only for purposes related to the
Facility and the transactions contemplated hereby. Wachovia and FUSI each agree
that it will not disclose any of the Information or the Projections to any
Red Robin Gourmet Burgers, Inc.
June 6, 2002
prospective lender under the Facility except under confidentiality arrangements satisfactory to you.
If you are in agreement with the foregoing, please sign the enclosed copy of this Commitment Letter and return it to Wachovia and FUSI, together with an executed copy of the Fee Letter and payment of that portion of the any fee referenced in the Fee Letter which is payable upon acceptance of this Commitment Letter, by no later than 5:00 p.m. on June 7, 2002.
Sincerely,
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Braxton B. Comer --------------------------------- Name: Braxton B. Comer ------------------------------- Title: Managing Director ------------------------------ |
FIRST UNION SECURITIES, INC.
By: /s/ Braxton B. Comer --------------------------------- Name: Braxton B. Comer ------------------------------- Title: Managing Director ------------------------------ |
Agreed to and accepted as of
the date first above written:
RED ROBIN INTERNATIONAL, INC.
By: /s/ James P. McCloskey ------------------------------------------- Name: James P. McCloskey ---------------------------------------- Title: Chief Financial Officer and Secretary ------------------------------------- |