UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter ended June 28, 1995
Commission File No. 0-14311
FAMILY STEAK HOUSES OF
FLORIDA, INC.
Incorporated under the laws of IRS Employer Identification
Florida No. 59-2597349
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
Registrant's Telephone No. (904) 249-4197
Indicate by check mark whether the registrant has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No_____
FAMILY STEAK HOUSES OF FLORIDA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 28, 1995
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
the instructions to Form 10-Q, and do not include all
the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered
necessary for a fair presentation of the results for
the interim periods have been included. Operating
results for the thirteen and twenty-six week periods ended
June 28, 1995 are not necessarily indicative of the
results that may be expected for the fiscal year ending
January 3, 1996. For further information, refer to
the financial statements and footnotes included in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 28, 1994.
The consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All
significant intercompany profits, transactions and
balances have been eliminated.
Note 2. Earnings Per Share
Earnings per share for the thirteen and twenty-six weeks
ended June 28, 1995 and June 29, 1994 were computed
based on the weighted average number of common and
common equivalent shares outstanding. Common equivalent
shares are represented by shares under option and stock
warrants.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Quarter Ended June 28, 1995 versus June 29, 1994
The Company experienced a decrease in sales during the
second thirteen weeks of 1995 because it operated three
fewer restaurants in 1995 as compared to the same period
in 1994. Second quarter sales decreased 4.1% to
$11,034,200 from $11,509,600 for the same period in
1994. Average sales per restaurant increased 5.0% in the
second quarter of 1995 from the same period in 1994.
Sales at restaurants open throughout both three-month
periods increased an average of approximately .8%.
Management believes that the increase in comparable
store sales is primarily due to the implementation of a
remodeling program for the Company's restaurants begun in
1994. As of August 1, 1995, the Company had remodeled 11
of its restaurants, and plans to complete 5 more
restaurant remodels by March 1996. Each of these remodels
included the installation of scatter bars, consisting of
four or five island food bars, which management believes
provide easier access and greater variety for customers.
The costs and expenses of the Company's restaurants
include food and beverage, payroll and benefits,
depreciation and amortization, repairs, maintenance,
utilities, supplies, advertising, insurance, property
taxes, rents, and licenses. The Company's food, beverage,
payroll and benefit costs are believed to be higher than
the industry average as a percentage of sales as a result
of the Company's philosophy of providing customers with
high value of food and service for every dollar a customer
spends. In total, food and beverage, payroll and
benefits, depreciation and amortization and other
operating expenses as a percentage of sales decreased to
84.9% in the second quarter of 1995, from 86.3% in the
same quarter of 1994, primarily due to lower food and
beverage costs.
Food and beverage costs as a percentage of sales
decreased to 39.6% in the second quarter of 1995 from
40.7% in the same period of 1994, primarily due to lower
beef costs and sales price increases implemented throughout
1994.
Payroll and benefits as a percentage of sales decreased
from 27.4% in the second quarter of 1994 to 26.3% in the
same quarter of 1995, primarily due to costs incurred in
1994 associated with a program designed to re-train every
Ryan's employee.
Other operating expenses as a percentage of sales
increased from 13.8% in the second quarter of 1994 to
15.0% in 1995, primarily due to higher repair and
maintenance, advertising, and operating supplies costs.
Depreciation and amortization decreased as a
percentage of sales in the second quarter of 1995 compared
to 1994, as a result of certain assets becoming fully
depreciated or amortized.
General and administrative expenses as a percentage of
sales decreased to 5.8% in the second quarter of 1995, from
7.2% in the same quarter of 1994 as a result of expenses
paid to professional business consultants and attorneys
in connection with the Company's debt restructuring
negotiations in the prior year.
Franchise fees decreased to 3.0% of sales from 3.5% in
1994 in accordance with the Company's amended Franchise
Agreement.
Interest expense decreased from $495,700 during the
second quarter of 1994 to $414,800 in 1994. The
decrease was due primarily to lower outstanding principal
balances, resulting from principal payments made throughout
the last twelve months, and due to a lower interest rate
on the Company's obligations to The Travelers Insurance
Company and certain of its affiliates ("The Travelers
Notes").
The effective income tax rates for the quarters ended
June 28, 1995 and June 29, 1994 were 17.8% and (9.5%),
respectively.
In 1993, the Company closed a restaurant and
established a reserve to close two additional restaurants in
1994 (resulting in a total closed restaurant cost of
$2,557,300 in 1993). In April 1994, the Company closed a
restaurant in Ft. Pierce, Florida which had not been
included in the 1993 restaurant closing reserve. The
April 1994 restaurant closing resulted in pre-tax charges
to second quarter earnings totaling $802,900, reflecting
a reduction in market value of the property as
determined by appraisal.
Based on the results of appraisals of Company
properties held for resale, done during the second
quarter of 1994, the Company wrote-down the value of
several such properties by a total of $393,000 in the
second quarter of 1994.
Net earnings for the second quarter of 1995 were
$308,200, compared to a net loss of $1,223,100 in 1994.
Earnings per share were $.03 for 1995, compared to a loss
per share of $.11 in 1994.
Six Months Ended June 28, 1995 versus June 29, 1994
For the six months ended June 28, 1995, total
sales decreased 5.0% compared to the same period of
1994, primarily because it operated three fewer
restaurants in 1995. Revenues from restaurants closed
during 1994 amounted to $1,419,000 in 1994, representing
a 6.0% decrease. Sales at restaurants open in both six
month periods increased 1.0%. Average sales per
restaurant increased 5.3% for the first six months of 1995
from the same period of 1994.
Food and beverage costs for the six month period ended
June 28, 1995 was 39.4%, compared to 40.6% for the same
period in 1994, due primarily to lower beef costs and sales
price increases implemented throughout 1994. Payroll and
benefits decreased from 26.9% in 1994 to 26.0% in 1995. The
decrease was primarily due to the increase in average store
sales, which resulted in increased efficiencies in labor
scheduling, and due to sales price increases
implemented throughout 1994.
For the six months ended June 28, 1995, other
operating expenses increased to 14.3% from 13.4% in 1994,
primarily due to increased advertising costs and increased
operating supply costs.
Depreciation and amortization decreased as a
percentage of sales for the six month period ended June
28, 1995, compared to the same period of 1994, as a result
of certain assets becoming fully depreciated or amortized.
For the six months ended June 28, 1995, General
and Administrative expenses decreased to 5.6% of sales from
6.0% for the same period in 1994, primarily due to
expenses incurred in 1994 in connection with the
Company's debt restructuring negotiations. Franchise fees
decreased as a percentage of sales in accordance with the
Company's amended franchise agreement.
Interest expense decreased for the first six months of
1995 to $864,500 from $981,400 for the same period in
1994, due to reduced principal balances and a lower
interest rate on the Travelers' Notes.
Net earnings for the six months ended June 28, 1995
were $886,800 or $.08 per share, compared to net losses of
$1,009,400, or $.09 per share for the same period in 1994.
The Company's operations are subject to some
seasonal fluctuations. Revenues per restaurant generally
increase from January through April and decline September
through December. Operating results for the quarter ended
June 28, 1995 are not necessarily indicative of the
results that may be expected for the fiscal year ending
January 3, 1996.
The Company's operations for the six months ending
June 28, 1995 have benefitted from increased sales and
reduced costs associated with the Company's turnaround
efforts, which were commenced approximately one year
ago. However, as the first anniversary of the Company's
turnaround passes and the Company begins to compare
current sales to the increased sales of a year ago,
management anticipates that it will be more difficult to
post the increases in same store sales that the Company
has enjoyed through the first two quarters of 1995.
Recent Developments
In July 1995 the Company sold its investment in Cross
Creek Barbeque L.C. The Company will recognize a gain of
approximately $30,000 on the sale in the third quarter of
1995.
On July 21, 1995, the Company received a notice
from The Travelers Insurance Company that it is selling
the Travelers Notes and certain warrants it holds for
purchases of the Company's common stock (see discussion
at Liquidity and Capital Resources below) to Cerberus
Partners, L.P.. The terms, provisions and covenants of
the Company's Note Agreement will not change as a result of
this transaction.
Liquidity and Capital Resources
Substantially all of the Company's revenues are derived
from cash sales. Inventories are purchased on credit
and are converted rapidly to cash. Therefore, the Company
does not carry significant receivables or inventories. As
a result, working capital requirements for continuing
operations are not significant.
At June 28, 1995, the Company had a working capital
deficit of $2,969,100, compared to a working capital
deficit of $2,673,300 at December 28, 1994. The
increase in the working capital deficit during the first
six months in 1995 was due primarily to an increase in
the current portion of long-term debt due in connection with
the Company's loan agreements.
Cash provided by operating activities decreased
32.8% to $1,600,800 in the first six months of 1995 from
$2,383,400 in the same period of 1994. This decrease
is primarily due to reductions in accrued liabilities
as a result of timing differences in payments.
The Company spent approximately $1,656,000 in
1994, $1,446,000 in 1993, $523,000 in 1992 and $1,780,600
in the first six months of 1995 for restaurant
renovation and equipment. Capital expenditures for 1995
and 1996, based on present costs and plans for expansion,
are estimated to be $2,225,000 and $750,000
respectively. The Company projects that cash generated
from operations will be sufficient to fund these
improvements.
In March 1995, the Company entered into an Amended
and Restated Note Agreement, dated as of February 1, 1995,
with The Travelers Insurance Company and certain of its
affiliates ("the Travelers Agreement"). The Travelers
Notes are due May 30, 1998 and provide for an interest rate
of 9.0% with $65,000 monthly in principal reductions
beginning January 1, 1996. As of June 28, 1995, the
outstanding balance due under the Travelers Notes was
$11,672,800.
The Travelers Agreement includes detachable Warrants
for purchases of up to 1,750,000 shares of the Company's
common stock at an exercise price of $.40 per share. The
Travelers Notes are secured by second mortgages on
twenty-two Company restaurant properties.
The Travelers Agreement provides for various
covenants including prepayment options, the maintenance of
prescribed debt service coverages, limitations on the
declaration of cash dividends, sale of assets, and certain
other restrictions.
Also in March 1995, the Company entered into an
Amended and Restated Loan Agreement with The Daiwa
Bank, Limited, and SouthTrust Bank of Alabama, National
Association (the "Bank Loan") which extends the maturity
date of the Bank Loan until May 30, 1998. The Bank Loan
bears interest at prime rate plus 0.50%, with monthly
principal payments of $41,250 beginning April 1,
1995 ($67,100 prior to April 1, 1995). The Bank Loan is
secured by first mortgages on twenty-two of the
Company's restaurant properties, and provides for
various covenants substantially consistent with those of
the Travelers Agreement. As of June 28, 1995, the
outstanding balance under the Bank Loan was $4,451,800.
Impact of Inflation
Costs of food, beverage, and labor are the expenses
most affected by inflation in the Company's business.
Although inflation has not had a significant impact on the
Company in the past, there can be no assurance that it
will not in the future. A significant portion of the
Company's employees are paid at the federally established
statutory minimum wage. Therefore, any increase in the
statutory minimum wage would have an adverse effect on
payroll and benefit costs. At present there are no
statutory minimum wage increases scheduled for 1995. Sales
prices were increased approximately 4% in 1994.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
(a) On June 16, 1995, the Company held its
annual meeting of shareholders to elect
directors to serve for the upcoming year.
(b) The following table sets forth the number of
votes for, against or withheld, and
number of abstentions and non-votes,
regarding each of the nominees for director.
Nominee For Against
Lewis E. Christman, Jr. 7,758,604 816,055
Robert J. Martin 7,760,214 814,445
Joseph M. Glickstein, Jr. 7,754,279 820,380
Richard M. Gray 7,758,604 816,055
William Stanley Smith, Jr. 7,735,650 839,009
All nominees for director were elected by the
affirmative vote of a majority of the 8,574,659 shares
of the Company's common stock represented in person or
by proxy at the annual meeting of shareholders.
(c) The following table sets forth the number of votes
for, against or withheld, and number of
abstentions and non-votes, regarding approval of
the Company's 1995 Long-Term Incentive Plan.
For Against Abstain Non-Votes
4,680,711 269,365 98,846 3,525,737
(d) Not Applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part
of this report on Form 10-Q, and this
list comprises the Exhibit Index.
No. Exhibit
10.01 Employment agreement between the
Company and William Stanley Smith, Jr.,
dated as of June 20, 1995.
10.02 Employment agreement between the Company
and Lewis E. Christman, Jr., dated as of
June 20, 1995.
10.03 Employment agreement between the Company
and Edward B. Alexander, dated as of April 1,
1995.
10.04 Employment agreement between the Company
and Robert J. Martin, dated as of June 20, 1995.
10.05 Employment agreement between the Company
and Robert Scott, dated as of June 20, 1995.
10.06 Agreement between the Company and
Kraft Foodservice, Inc., as the Company's
primary food product distributor.
27.01 Financial Data Schedule.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Registrant)
/s/ Lewis E. Christman
Date: August 7, 1995 Lewis E. Christman, Jr.
President and CEO
/s/ Edward B. Alexander
Date: August 7, 1995 Edward B. Alexander
Secretary/Treasurer
(Principal Financial and
Accounting Officer)
/s/ Michael J. Walters
Date: August 7, 1995 Michael J. Walters
Controller
Exhibit 10.06
Certain proprietary information has been omitted.
June 13, 1995
Mr. Lewis Christman
President
Family Steak House of Florida Inc.
DBA Ryan's Family Steak House
2113 Florida Boulevard
Neptune Beach, FL 32233
Dear Mr. Christman:
Based on the terms of this letter agreement, Kraft
Foodservice,Inc. Tampa, Florida (sometimes "we" or "Kraft")
offer to sell to your unit(s) products carried by our
distribution center, subject to the availability of product,
for the time period slated in this agreement. This
agreement is binding only upon our distribution center and
does not extend to other Kraft locations.
The conditions of our offer to sell are as follows:
The average order size per unit per delivery will be xxx
cases. We recognize that there will be exceptions; however,
this program is based on the condition that the average
order size over a reasonable period of time will be
maintained at xxx cases and an average case value of $xx.xx
per unit per delivery. Upon thirty (30) days advance notice
to you and your failure to correct the deficiency within
such time period, Kraft reserves the right at anytime to
adjust the terms of this agreement, including margins, upon
prior notice if there is a significant change in pack size,
product mix or a failure to regularly meet the average order
size measured in number of cases and average case value
requirements. The above parameters are based on information
which you have provided to us.
PRICING Listed below are the product categories and the
pricing applicable under this agreement:
All Products - xx.xx per case
Produce is not covered by this agreement.
Landed Cost is defined as:
I. Kraft Branded Products - Landed Cost for such products
shall be based on Price List(s) or such other price list as
may be applicable, plus in bound freight, if applicable.
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June 13, 1995
Family Steak House of Florida, Inc.
II.All Other Products - Invoice cost plus freight (where
applicable). Cost may include an incidental fee for
national procurement activities which provide procurement
leverage and order consolidation and administration, product
marketing and quality assurance, (Kraft may employ the
services of a food broker to assure purchases of commodity
food products at the most competitive rate). Forward
purchases and consigned products may include applicable
storage and financing charges shall be based on local market
replacement cost at Kraft Foodservice's option.
FREIGHT - Unless inbound freight is included in vendor's
delivered pricing, freight charges shall not exceed the then
current standard rate for the applicable route.
PRICE CHANGES - Prices are subject to change monthly except
for those which are subject to change as market conditions
dictate; commodity beef, poultry, pork, produce including
prepared salad, commodity cheeses and oils.
DISCOUNTS/ALLOWANCES/INCENTIVES Under this agreement, you
will be eligible for promotional allowances reflected on
invoice as offered by Kraft suppliers. There will be no
promotional allowances given on Kraft Branded products under
this agreement. Kraft shall be entitled to prompt payment
discounts and other supplier incentives. Kraft will ensure
net billing whenever available through Family Steak House
vendor contracts. Because of the competitive nature of our
pricing and other terms of sale, Kraft has no additional
marketing monies to fund special customer requests (for
example,customer sponsored events, donations to customer
directed causes,etc.).
PAYMENT Terms are net 30 days, measured from invoice
delivery date to date of our receipt of payment.
TERM This agreement shall continue until either party
elects to terminate, which shall require ninety (90) days'
prior written notice to the other party. Certain
circumstances, such as tardiness in payment, are grounds for
immediate termination. A seven (7) day grace period will be
extended for two consecutive months only. Either party may
request changes to this agreement by giving ninety (90) days
prior written notice of such request to the other party.
RETAIL CLASSIFIED PRODUCTS To the extent that we sell you
products packaged under trade marks owned by Kraft General
Foods, Inc. and/or its subsidiaries and sold at retail
(excluding Kraft Foodservice - labelled product), you agree
that all such products are for the sole use within your
units as food preparation ingredients or to be directly
served to your patrons, and in any event you
Page 3
June 13, 1995
Family Steak Houses of Florida, Inc.
agree that such products will not be resold or exchanged in
their original individual or case-lot packaging.
KRAFT LINK If Kraft agrees to provide you with one or more
KRAFTLINK terminal installations, any such installations
will be conditioned on a continuing obligation to meet a
minimum purchase requirement of $300,000.00 per year per
installed location. Furthermore, you will be required to
sign and return a standard KRAFT LINK contract for each such
location. (Kraft Link is presently covered by an existing
contract.)
PRICE SUBSTANTIATION RIGHT TO AUDIT Upon reasonable notice
and during regular business hours, but no more frequently
than once every six months, you may examine, at the local
Kraft Foodservice District servicing your operations, a
computer verification of costs for the products to be priced
verified, documentation to support pricing of products sold
to you pursuant to this agreement; provided, however, that
any such audit shall be limited to no more than 25 items.
Vendor invoices and appropriate freight bills will be made
available through our processing center. The audited period
shall be limited to the six (6) months immediately preceding
such audit.
The applicable price list for Kraft Branded Products will be
made available to you to verify the contract cost of Kraft
Branded Products.
CUSTOMER INVENTORY To effectively service our customers,
Kraft Foodservice is obligated to maximize warehouse
capacity and limit inventory proliferation. Accordingly, we
reserve the right not to stock any special or proprietary
inventory which does not meet our minimum velocity
requirement of 20 cases per four (4) week period and 12
turns annually. We also request that our customers afford
us the opportunity to present alternatives to customer
requested special and/or proprietary products.
Upon termination of this agreement for any reason, you agree
to purchase at Landed Cost plus normal margin all products
that Kraft has in inventory, in transit, or for which
unconditional orders have been place, that have been
Page 4
June 13, 1995
Family Steak Houses of Florida, Inc.
purchased, transferred or consigned at your request, or
otherwise for your account, including but not limited to
customer labelled or other proprietary products. If product
is being sold to a new distributor product will be sold at
landed cost F.O.B. Kraft Foodservice, Tampa dock.
In addition to the foregoing, you agree that at any time,
with respect to any obsolete products purchased specially
for you (which includes specially ordered and proprietary
products), you will either purchase such products directly
or advise us how to dispose of such products. In either event,
we will be entitled to the full price, including the applicable
normal margin, which we would otherwise be entitled to under
this agreement.
For purposes of this agreement, for each Kraft distribution
center, obsolete products shall mean those which have a sales
velocity of less than the above stated minimum velocity
requirement.
CUSTOMER SPECIFIED VENDORS - If you specify a particular
vendor for your account which is not currently authorized by
Kraft, then such vendor will be required to complete our
standard vendor documentation before purchases can be made
by Kraft for resale to your unit(s).
REPORTS/ORDER GUIDES Kraft will provide the following
reports upon your request:
1.Customized Order/Inventory Guides. One copy will be
furnished to each purchasing location.
2.Monthly Standardized Usage Report. One copy will be
furnished monthly to the location of your choice.
FORCE MAJEURE Either party hereto shall be relieved of its
obligations under this agreement for so long as such party
is prevented from fulfilling its obligations by causes
outside its reasonable control, including but not limited to
casualty, labor strikes and serious adverse weather
conditions. This provision shall not be interpreted to relieve
either party of its obligations to make any payments due hereunder.
MISCELLANEOUS - Your agree that you will not assign this agreement,
in whole or in part, or otherwise extend the benefits of this agreement
to any third party, without our prior written consent. At Kraft's option,
the provisions of this agreement shall not apply to any unit(s) following
the transfer or sale of such unit(s).
If this offer is acceptable to you, please sing both copies of this
agreement and return one to us. the contract is effective July 1, 1995.
Any written notice called for in this agreement may be given by registered
mail only.
Sincerely,
KRAFT FOODSERVICE TAMPA
By: President
LE:gcm
ACCEPTED:
Family Steak House of Florida, Inc.
Signature
Title
Date June 29, 1995
Exhibit 10.01
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into as of this 20th day of June, 1995 by and
between FAMILY STEAK HOUSES OF FLORIDA, INC., a corporation
organized under the laws of the State of Florida
(hereinafter referred to as the "Company") and WILLIAM
STANLEY SMITH, JR. (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee to
serve in the position of Executive Vice President of the
Company; and WHEREAS, the Company and Employee have agreed
upon an Employment Agreement and desire to reduce to writing
its terms and conditions as hereinafter set forth, intending
that this Employment Agreement will replace and supersede
all prior agreements or understandings concerning Employee's
employment.
NOW, THEREFORE, in consideration of the premises, the
parties hereto do hereby agree as follows:
Section 1.Employment. Subject to the terms and
conditions contained herein, the Company hereby employs
Employee, effective upon the date hereof, as the Executive
Vice President of the Company and Employee, hereby accepts
such employment and agrees to devote his best efforts and as
much time as may be necessary, during or after the regular
working hours of the Company, to perform his duties
hereunder.
Section 2.Employment Duties. During the term of this
Agreement, the Employee shall perform the duties typically
performed by the Executive Vice President of the Company,
subject to direction of the President and Chief Executive
Officer, according to such policies and procedures as may be
adopted from time to time by the Board of Directors. The
Employee shall report directly to the President and Chief
Executive Officer.
Section 3.Stock Option. In consideration of Employee's
agreement to serve as Executive Vice President, the Company
agrees to grant to him an option to acquire up to 100,000
shares of the Company's common stock at an option price of
$1.07 per share. The option shall be exercisable, in whole
or in part and from time to time for a period expiring five
(5) years from the date hereof. The award of the option
shall be evidenced by an agreement containing usual and
customary provisions. In addition, Employee shall be
entitled to receive the Stock Option previously granted
under that certain Consulting Agreement dated June 16, 1994.
The Company,in its discretion, may from time to time grant
Employee additional options to acquire shares of the
Company's common stock.
Section 4.Compensation
4.1 Salary. Employee shall receive a salary from the
Company of Ninety Thousand Dollars ($90,000) per annum
payable in semi-monthly installments, subject to increase at
any time as determined by the Compensation Committee of the
Board of Directors of the Company.
4.2 Reimbursement. Employee shall be entitled to
receive bi-weekly reimbursement for, or seek direct payment
by the Company of, such reasonable expenses incurred by
Employee as are consistent with specific policies of the
Company in the performance of his duties under this
Agreement, provided that Employee accounts therefor in
writing and that such expenses are ordinary and necessary
business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits. Employee
shall be entitled to reasonable paid vacation in accordance
with the policies of the Company, and such other employee
benefits as the Board may fix from time to time; provided,
however, that, in the Employee's case, such employee
benefits shall include comprehensive medical,
hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies
of the Company, including the cost of an annual physical
examination.
4.4 Automobile. The Company shall provide a bi-annual
allowance of up to Fifteen Thousand Dollars ($15,000) (the
"Allowance Amount") for the Consultant's purchase of a new
or used automobile, first exercisable June 20, 1996. The
automobile shall be titled in the name of Consultant and
shall remain Consultant's property upon any termination of
this Agreement. If the automobile selected by Consultant has
a purchase price in excess of the Allowance Amount,
Consultant shall be responsible for all amounts in excess of
the Allowance Amount. Furthermore, during the term of this
Agreement, the Company shall pay the expense of reasonable
insurance for such automobile (including, but not limited to
collision, liability, comprehensive and uninsured motorist
coverage). Such automobile may be used by Employee for both
business and personal purposes.
Section 5.Term.
5.1 Duration. Unless sooner terminated in accordance
with provisions for termination set forth under Subsections
5.2 or 5.3 below, this Agreement shall continue in full
force and effect for a term ending on June 19, 1997, and
shall thereafter renew for additional one year terms
unless either party notifies the other at least 10 days
prior to the end of any term.
5.2 Termination for Cause. This Agreement may be
terminated for cause as follows:
(a) At the election of the Company, upon Employee's
breach of any material provision of this Agreement;
(b) At the election of Employee, upon the Company's
breach of any material provision of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the total
disability of Employee to perform his
normal duties for a period of one hundred eighty (180)
consecutive days, but only after the Company provides ten
(10) days' prior written notice to Employee;
(e) At the election of the Company, upon the
indictment of Employee or upon Employee entering a plea of
guilty or nolo contendere to the alleged commission by
Employee, as principal, accomplice or accessory, of a crime
involving moral turpitude, or an act of fraud,
embezzlement or dishonesty; or
(f) At the election of the Company, upon the
occurrence of gross or willful misconduct by Employee in the
performance of his responsibilities hereunder during the
course of employment.
In the event that the Company or the Employee elects to
terminate this Agreement because of a breach of any material
provision hereof pursuant to paragraph (a) or (b) of this
Subsection 5.2, respectively, the party electing to
terminate this Agreement shall give at least fourteen (14)
days written notice to the other party or its intention to
terminate this Agreement, which notice shall specify the
breach of this Agreement upon which such termination is
based, and no such termination shall occur if the other
party cures the breach so specified within said fourteen
(14) day period, except that a party shall only have the
opportunity to cure a breach of a material provision on two
occasions and thereafter that party need not be given the
opportunity to cure any further material breaches.
All obligations of the Company under this Agreement,
including obligations under the stock option agreement
contained in Section 3 hereof, shall immediately cease upon
termination of this Agreement by the Company for cause by
the Company.
5.3 Termination Without Cause. Either party may
terminate this Agreement without cause upon giving 30 days
written notice to the other. If the Company elects to
terminate this Agreement without cause, then the parties
agree that Employee shall be entitled to receive, in a
lump sum, the payments due him under Section 4.1 for the
remaining term of this Agreement, which amount shall be in
full satisfaction of any and all claims of Employee as a
result of his employment by the Company. Should the
Employee elect to terminate this Agreement without
cause prior to the expiration hereof, then all obligations
of the Company hereunder shall cease as of the date of
termination.
Section 6. Notice. All notices provided for herein
shall be in writing and shall be deemed to be given when
delivered in person or deposited in the United States Mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid and addressed as
follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
William Stanley Smith, Jr.
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7.Miscellaneous.
7.1 If any provision or any part of any provision of
this Agreement is found not to be valid for any reason, such
provision shall be entirely severable from, and shall have
no effect upon the remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of the
Company, its successors and assigns, and be binding upon the
Employee, his executor, administrator, heirs and personal
representatives.
7.3 This Agreement may be modified only by written
instrument signed by each of the parties hereto.
7.4 This Agreement shall be construed under and
governed by the laws of the State of Florida.
7.5 Any failure of either party, on one or more
occasions, to enforce and require the strict compliance with
and performance of any of the terms and conditions of this
Agreement shall not constitute a waiver of any such terms or
conditions at any future time and shall not prevent
such party from insisting on the strict compliance with and
performance of such terms and conditions at any later time.
7.6 This Agreement comprises the entire agreement
between the parties hereto with respect to the subject
matter hereof and there are no agreements, undertakings,
covenants or conditions concerning the subject matter
hereof, whether oral or written, express or implied, that
are not merged herein or superseded hereby. That certain
Consulting Agreement between the Company and the Employee
dated as of June 16, 1994 is hereby terminated.
7.7 The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of
convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
7.8 All payments to be made or benefits to be provided
hereunder by the Company shall be subject to reduction for
any applicable payroll-related or withholding taxes.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
Lewis E. Christman, Jr.
Attest:
Edward B. Alexander, Secretary
EMPLOYEE:
William Stanley Smith, Jr.
Exhibit 10.05
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into as of this 20th day of June, 1995 by and
between FAMILY STEAK HOUSES OF FLORIDA, INC., a corporation
organized under the laws of the State of Florida
(hereinafter referred to as the "Company") and ROBERT F.
SCOTT (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee to
serve in the position of Vice President of Operations of the
Company; and
WHEREAS, the Company and Employee have agreed upon an
Employment Agreement and desire to reduce to writing its
terms and conditions as hereinafter set forth, intending
that this Employment Agreement will replace and supersede
all prior agreements or understandings concerning Employee's
employment.
NOW, THEREFORE, in consideration of the premises, the
parties hereto do hereby agree as follows:
Section 1.Employment. Subject to the terms and
conditions contained herein, the Company hereby employs
Employee, effective upon the date hereof, as the Vice
President of Operations of the Company and Employee, hereby
accepts such employment and agrees to devote his best
efforts and as much time as may be necessary, during or
after the regular working hours of the Company, to perform
his duties hereunder.
Section 2.Employment Duties. During the term of this
Agreement, the Employee shall perform the duties typically
performed by the Vice President of Operations of the
Company, subject to direction of the President and Chief
Executive Officer, according to such policies and
procedures as may be adopted from time to time by the Board
of Directors. The Employee shall report directly to the
President and Chief Executive Officer.
Section 3.Stock Option. In consideration of Employee's
agreement to serve as Vice President of Operations, the
Company may from time to time grant him options to acquire
shares of the Company's common stock. The award of any
options shall be evidenced by an agreement containing usual
and customary provisions. In addition, Employee shall be
entitled to receive the Stock Option previously granted
under that certain Employment Agreement dated June 20, 1994.
Section 4.Compensation
4.1 Salary. Employee shall receive a salary from the
Company of Ninety Thousand Dollars ($90,000) per annum
payable in semi-monthly installments, subject to increase at
any time as determined by the Compensation Committee of the
Board of Directors of the Company.
4.2 Reimbursement. Employee shall be entitled to
receive bi-weekly reimbursement for, or seek direct payment
by the Company of, such reasonable expenses incurred by
Employee as are consistent with specific policies of the
Company in the performance of his duties under this
Agreement, provided that Employee accounts therefor in
writing and that such expenses are ordinary and necessary
business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits. Employee
shall be entitled to reasonable paid vacation in accordance
with the policies of the Company, and such other employee
benefits as the Board may fix from time to time; provided,
however, that, in the Employee's case, such employee
benefits shall include comprehensive medical,
hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies
of the Company, including the cost of an annual physical
examination.
4.4 Automobile. The Company shall lease for the
benefit and use of Employee during the term of this
Agreement a suitable automobile and shall pay for or
reimburse Employee for all reasonable expenses associated
therewith and such automobile may be used by Employee for
both business and personal purposes.
Section 5.Term.
5.1 Duration. Unless sooner terminated in accordance
with provisions for termination set forth under Subsections
5.2 or 5.3 below, this Agreement shall continue in full
force and effect for a term ending on June 19, 1997, and
shall thereafter renew for additional one year terms
unless either party notifies the other at least 10 days
prior to the end of any term.
5.2 Termination for Cause. This Agreement may be
terminated for cause as follows:
(a) At the election of the Company, upon Employee's
breach of any material provision of this Agreement;
(b) At the election of Employee, upon the Company's
breach of any material provision of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the total
disability of Employee to perform his normal duties for a
period of one hundred eighty (180) consecutive days, but
only after the Company provides ten (10) days' prior written
notice to Employee;
(e) At the election of the Company, upon the
indictment of Employee or upon employee entering a plea of
guilty or nolo contendere to the alleged commission by
Employee, as principal, accomplice or accessory, of a crime
involving moral turpitude, or an act of fraud, embezzlement
or dishonesty; or
(f) At the election of the Company, upon the
occurrence of gross or willful misconduct by Employee in the
performance of his responsibilities hereunder during the
course of employment.
In the event that the Company or the Employee elects to
terminate this Agreement because of a breach of any material
provision hereof pursuant to paragraph (a) or (b) of this
Subsection 5.2, respectively, the party electing to
terminate this Agreement shall give at least fourteen (14)
days written notice to the other party or its intention to
terminate this Agreement, which notice shall specify the
breach of this Agreement upon which such termination is
based, and no such termination shall occur if the other
party cures the breach so specified within said fourteen
(14) day period, except that a party shall only have the
opportunity to cure a breach of a material provision on two
occasions and thereafter that party need not be given the
opportunity to cure any further material breaches.
All obligations of the Company under this Agreement,
including obligations under the stock option agreement
contained in Section 3 hereof, shall immediately cease upon
termination of this Agreement by the Company for cause by
the Company.
5.3 Termination Without Cause. Either party may
terminate this Agreement without cause upon giving 30 days
written notice to the other. If the Company elects to
terminate this Agreement without cause, then the parties
agree that Employee shall be entitled to receive, in a
lump sum, the payments due him under Section 4.1 for the
remaining term of this Agreement, which amount shall be in
full satisfaction of any and all claims of Employee as a
result of his employment by the Company. Should the
Employee elect to terminate this Agreement without
cause prior to the expiration hereof, then all obligations
of the Company hereunder shall cease as of the date of
termination.
Section 6. Notice. All notices provided for herein
shall be in writing and shall be deemed to be given when
delivered in person or deposited in the United States Mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid and addressed as
follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
Robert F. Scott
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7.Miscellaneous.
7.1 If any provision or any part of any provision of
this Agreement is found not to be valid for any reason, such
provision shall be entirely severable from, and shall have
no effect upon the remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of the
Company, its successors and assigns, and be binding upon the
Employee, his executor, administrator, heirs and personal
representatives.
7.3 This Agreement may be modified only by written
instrument signed by each of the parties hereto.
7.4 This Agreement shall be construed under and
governed by the laws of the State of Florida.
7.5 Any failure of either party, on one or more
occasions, to enforce and require the strict compliance with
and performance of any of the terms and conditions of this
Agreement shall not constitute a waiver of any such terms or
conditions at any future time and shall not prevent such
party from insisting on the strict compliance with and
performance of such terms and
conditions at any later time.
7.6 This Agreement comprises the entire agreement
between the parties hereto with respect to the subject
matter hereof and there are no agreements, undertakings,
covenants or conditions concerning the subject matter
hereof, whether oral or written, express or implied, that
are not merged herein or superseded hereby.
7.7 The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of
convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
7.8 All payments to be made or benefits to be provided
hereunder by the Company shall be subject to reduction for
any applicable payroll-related or withholding taxes.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
Lewis E. Christman, Jr.
Attest:
Edward B. Alexander, Secretary
EMPLOYEE:
Robert F. Scott
Exhibit 10.04
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into as of this 20th day of June, 1995 by and
between FAMILY STEAK HOUSES OF FLORIDA, INC., a
corporation organized under the laws of the State of Florida
(hereinafter referred to as the "Company") and ROBERT J.
MARTIN (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee to
serve in the position of Vice President of the Company; and
WHEREAS, the Company and Employee have agreed upon an
Employment Agreement and desire to reduce to writing its
terms and conditions as hereinafter set forth, intending
that this Employment Agreement will replace and supersede
all prior agreements or understandings concerning Employee's
employment.
NOW, THEREFORE, in consideration of the premises, the
parties hereto do hereby agree as follows:
Section 1.Employment. Subject to the terms and
conditions contained herein, the Company hereby employs
Employee, effective upon the date hereof, as the Vice
President of the Company and Employee hereby accepts such
employment and agrees to devote his best efforts and
as much time as may be necessary, during or after the
regular working hours of the Company, to perform his duties
hereunder.
Section 2.Employment Duties. During the term of this
Agreement, the Employee shall perform the duties typically
performed by the Vice President of the Company, subject to
direction of the President and Chief Executive Officer,
according to such policies and procedures as may
be adopted from time to time by the Board of Directors. The
Employee shall report directly to the President and Chief
Executive Officer.
Section 3.Stock Option. In consideration of Employee's
agreement to serve as Vice President, the Company may from
time to time grant him options to acquire shares of the
Company's common stock. The award of any options shall be
evidenced by an agreement containing usual and customary
provisions. In addition, Employee shall be entitled to
receive the Stock Option previously granted under that
certain Employment Agreement dated June 20, 1994.
Section 4.Compensation
4.1 Salary. Employee shall receive a salary from the
Company of Sixty Thousand Dollars ($65,000) per annum
payable in semi-monthly installments, subject to increase at
any time as determined by the Compensation Committee of the
Board of Directors of the Company.
4.2 Reimbursement. Employee shall be entitled to
receive bi-weekly reimbursement for, or seek direct payment
by the Company of, such reasonable expenses incurred by
Employee as are consistent with specific policies of the
Company in the performance of his duties under this
Agreement, provided that Employee accounts therefor in
writing and that such expenses are ordinary and necessary
business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits. Employee
shall be entitled to reasonable paid vacation in accordance
with the policies of the Company, and such other employee
benefits as the Board may fix from time to time; provided,
however, that, in the Employee's case, such employee
benefits shall include comprehensive medical,
hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies
of the Company, including the cost of an annual physical
examination.
Section 5.Term.
5.1 Duration. Unless sooner terminated in accordance
with provisions for termination set forth under Subsections
5.2 or 5.3 below, this Agreement shall continue in full
force and effect for a term ending on June 19, 1996, and
shall thereafter renew for additional one year terms
unless either party notifies the other at least 10 days
prior to the end of any term.
5.2 Termination for Cause. This Agreement may be
terminated for cause as follows:
(a) At the election of the Company, upon Employee's
breach of any material provision of this Agreement;
(b) At the election of Employee, upon the Company's
breach of any material provision of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the total
disability of Employee to perform his normal duties for a
period of one hundred eighty (180) consecutive days, but
only after the Company provides ten (10) days' prior written
notice to Employee;
(e) At the election of the Company, upon the
indictment of Employee or upon Employee entering a plea of
guilty or nolo contendere to the alleged commission by
Employee, as principal, accomplice or accessory, of a crime
involving moral turpitude, or an act of fraud,
embezzlement or dishonesty; or (f) At the election of the
Company, upon the occurrence of gross or willful misconduct
by Employee in the performance of his responsibilities
hereunder during the course of employment.
In the event that the Company or the Employee elects to
terminate this Agreement because of a breach of any material
provision hereof pursuant to paragraph (a) or (b) of this
Subsection 5.2, respectively, the party electing to
terminate this Agreement shall give at least fourteen (14)
days written notice to the other party or its intention to
terminate this Agreement, which notice shall
specify the breach of this Agreement upon which such
termination is based, and no such termination shall occur if
the other party cures the breach so specified within said
fourteen (14) day period, except that a party shall only
have the opportunity to cure a breach of a material
provision on two occasions and thereafter that party need
not be given the opportunity to cure any further material
breaches. All obligations of the Company under this
Agreement, including obligations under the stock
option agreement contained in Section 3 hereof, shall
immediately cease upon termination of this
Agreement by the Company for cause by the Company.
5.3 Termination Without Cause. Either party may
terminate this Agreement without cause upon giving 30 days
written notice to the other. If the Company elects to
terminate this Agreement without cause, then the parties
agree that Employee shall be entitled to receive, in a
lump sum, the payments due him under Section 4.1 for the
remaining term of this Agreement, which amount shall be in
full satisfaction of any and all claims of Employee as a
result of his employment by the Company. Should the
Employee elect to terminate this Agreement without
cause prior to the expiration hereof, then all obligations
of the Company hereunder shall cease as of the date of
termination.
Section 6. Notice. All notices provided for herein
shall be in writing and shall be deemed to be given when
delivered in person or deposited in the United States Mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid and addressed as
follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
Robert J. Martin
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7.Miscellaneous.
7.1 If any provision or any part of any provision of
this Agreement is found not to be valid for any reason, such
provision shall be entirely severable from, and shall have
no effect upon the remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of the
Company, its successors and assigns, and be binding upon the
Employee, his executor, administrator, heirs and personal
representatives.
7.3 This Agreement may be modified only by written
instrument signed by each of the parties hereto.
7.4 This Agreement shall be construed under and
governed by the laws of the State of Florida.
7.5 Any failure of either party, on one or more
occasions, to enforce and require the strict compliance with
and performance of any of the terms and conditions of this
Agreement shall not constitute a waiver of any such terms or
conditions at any future time and shall not prevent
such party from insisting on the strict compliance with and
performance of such terms and conditions at any later time.
7.6 This Agreement comprises the entire agreement
between the parties hereto with respect to the subject
matter hereof and there are no agreements, undertakings,
covenants or conditions concerning the subject matter
hereof, whether oral or written, express or implied, that
are not merged herein or superseded hereby.
7.7 The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of
convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
7.8 All payments to be made or benefits to be provided
hereunder by the Company shall be subject to reduction for
any applicable payroll-related or withholding taxes.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
Lewis E. Christman, Jr.,
President
Attest:
Edward B. Alexander, Secretary
EMPLOYEE:
Robert J. Martin
Exhibit 10.03
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into as of this 1st day of April, 1995 by and
between FAMILY STEAK HOUSES OF FLORIDA, INC., a
corporation organized under the laws of the State of Florida
(hereinafter referred to as the "Company") and EDWARD B.
ALEXANDER (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee
to serve in the position of Chief Financial Office,
Secretary and Treasurer of the Company; and
WHEREAS, the Company and Employee have agreed upon an
Employment Agreement and desire to reduce to writing its
terms and conditions as hereinafter set forth, intending
that this Employment Agreement will replace and supersede
all prior agreements or understandings
concerning Employee's employment.
NOW, THEREFORE, in consideration of the premises, the
parties hereto do hereby agree as follows:
Section 1. Employment. Subject to the terms and
conditions contained herein, the Company hereby employs
Employee effective upon the date hereof, as the Chief
Financial Officer, Secretary and Treasurer of the Company
and Employee hereby accepts such employment and
agrees to devote his best efforts and as much time as may be
necessary, during or after the regular working hours of the
Company, to perform his duties hereunder.
Section 2. Employment Duties. During the term of
this Agreement, the Employee shall perform the duties
typically performed by the Chief Financial Officer,
Secretary and Treasurer of the Company subject direction of
the President according to such policies and procedures as
may be adopted from time to time by the Board of Directors.
Section 3. Stock Option. In consideration of
Employee's agreement to serve as Chief Financial Officer,
Secretary and Treasurer, the Company may from time to time
grant him options to acquire shares of the Company's common
stock. The award of any options shall be evidenced
by an agreement containing usual and customary provisions.
Section 4. Compensation
4.1 Salary. Employee shall receive a salary from
the Company of Seventy Five Thousand Dollars ($75,000) per
annum payable in semi-monthly installments, subject to
increase at any time as determined by the Compensation
Committee of the Board of Directors of the
Company.
4.2 Reimbursement. Employee shall be entitled to
receive bi-weekly reimbursement for, or seek direct payment
by the Company of, such reasonable expenses incurred by
Employee as are consistent with specific policies of the
Company in the performance of his duties under this
Agreement, provided that Employee accounts therefor in
writing and that such expenses are ordinary and necessary
business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits.
Employee shall be entitled to reasonable paid vacation in
accordance with the policies of the Company, and such other
employee benefits as the Board may fix from time to time;
provided, however, that, in the Employee's case, such
employee benefits shall include comprehensive medical,
hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies
of the Company, including the cost of an annual physical
examination.
Section 5. Term.
5.1 Duration. Unless sooner terminated in
accordance with provisions for termination set forth under
Subsections 5.2 or 5.3 below, this Agreement shall continue
in full force and effect for a term ending on April 1, 1997,
and shall thereafter renew for additional one year terms
unless either party notifies the other at least 10 days
prior to the end of any term.
5.2 Termination for Cause. This Agreement may be
terminated for cause as follows:
(a) At the election of the Company, upon
Employee's breach of any material provision of this
Agreement;
(b) At the election of Employee, upon the
Company's breach of any material provision
of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the
total disability of Employee to perform his normal duties
for a period of one hundred eighty (180) consecutive days,
but only after the Company provides ten (10) days' prior
written notice to Employee;
(e) At the election of the Company, upon the
indictment of Employee or upon Employee entering a plea of
guilty or nolo contendere to the alleged commission by
Employee, as principal, accomplice or accessory, of a crime
involving moral turpitude, or an act of fraud,
embezzlement or dishonesty; or
(f) At the election of the Company, upon the
occurrence of gross or willful misconduct by Employee in the
performance of his responsibilities hereunder during the
course of employment.
In the event that the Company or the Employee elects to
terminate this Agreement because of a breach of any material
provision hereof pursuant to paragraph (a) or (b) of this
Subsection 5.2, respectively, the party electing to
terminate this Agreement shall give at least five (5) days
written notice to the other party or its intention to
terminate this Agreement, which notice shall specify
the breach of this Agreement upon which such termination is
based, and no such termination shall occur if the other
party cures the breach so specified within said five (5) day
period, except that a party shall only have the opportunity
to cure a breach of a material provision on two occasions
and thereafter that party need not be given the opportunity
to cure any further material breaches.
All obligations of the Company under this Agreement,
including obligations under the stock option agreement
contained in Section 3 hereof, shall immediately cease upon
termination of this Agreement by the Company for cause by
the Company.
5.3 Termination Without Cause. Either party may
terminate this Agreement without cause upon giving 60 days
written notice to the other. If the Company elects to
terminate this Agreement without cause, then the parties
agree that Employee shall be entitled to receive, in a
lump sum, the payments due him under Section 4.1 for the
remaining term of this Agreement, which amount shall be in
full satisfaction of any and all claims of Employee as a
result of his employment by the Company. Should the Employee
elect to terminate this Agreement without
cause prior to December 31, 1995, then the stock option
provided in Section 3 hereof shall be cancelled and of no
further force or effect and, regardless of the date
terminated, all other obligations of the Company shall
cease.
Section 6. Notice. All notices provided for herein
shall be in writing and shall be deemed to be given when
delivered in person or deposited in the United States Mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid and addressed as
follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
Edward B. Alexander
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7. Miscellaneous.
7.1 If any provision or any part of any provision
of this Agreement is found not to be valid for any reason,
such provision shall be entirely severable from, and shall
have no effect upon the remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of
the Company, its successors and assigns, and be binding upon
the Employee, his executor, administrator, heirs and
personal representatives.
7.3 This Agreement may be modified only by written
instrument signed by each of the parties hereto.
7.4 This Agreement shall be construed under and
governed by the laws of the State of Florida.
7.5 Any failure of either party, on one or more
occasions, to enforce and require the strict compliance with
and performance of any of the terms and conditions of this
Agreement shall not constitute a waiver of any such terms or
conditions at any future time and shall not prevent
such party from insisting on the strict compliance with and
performance of such terms and conditions at any later time.
7.6 This Agreement comprises the entire agreement
between the parties hereto with respect to the subject
matter hereof and there are no agreements, undertakings,
covenants or conditions concerning the subject matter
hereof, whether oral or written, express or implied, that
are not merged herein or superseded hereby.
7.7 The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of
convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
7.8 All payments to be made or benefits to be
provided hereunder by the Company shall be subject to
reduction for any applicable payroll-related or withholding
taxes.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
Lewis E. Christman, Jr.
Edward B. Alexander
Exhibit 10.02
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into as of this 20th day of June, 1995 by and
between FAMILY STEAK HOUSES OF FLORIDA, INC., a
corporation organized under the laws of the State of Florida
(hereinafter referred to as the "Company") and LEWIS E.
CHRISTMAN, JR. (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee to
serve in the position of Chief Executive Officer of the
Company; and WHEREAS, the Company and Employee have agreed
upon an Employment Agreement and desire to reduce to writing
its terms and conditions as hereinafter set forth, intending
that this Employment Agreement will replace and supersede
all prior agreements or understandings concerning Employee's
employment.
NOW, THEREFORE, in consideration of the premises, the
parties hereto do hereby agree as follows:
Section 1.Employment. Subject to the terms and
conditions contained herein, the Company hereby employs
Employee, effective upon the date hereof, as the Chief
Executive Officer of the Company and Employee hereby accepts
such employment and agrees to devote his
best efforts and as much time as may be necessary, during or
after the regular working hours of the Company, to perform
his duties hereunder.
Section 2.Employment Duties. During the term of this
Agreement, the Employee shall perform the duties typically
performed by the Chief Executive Officer of the Company,
subject to direction of, and according to such policies and
procedures as may be adopted from time to
time by, the Board of Directors. The Employee shall report
directly to the Board of Directors. Employee's duties and
responsibilities shall not be materially diminished or
reduced, without the consent of Employee.
Section 3.Stock Option. In consideration of Employee's
agreement to serve as Chief Executive Officer, the Company
may from time to time grant him options to acquire shares of
the Company's common stock. The award of any options shall
be evidenced by an agreement containing usual and customary
provisions. In addition, Employee shall be entitled to
receive the Stock Option previously granted under that
certain Employment Agreement dated June 20, 1994.
Section 4.Compensation
4.1 Salary. Employee shall receive a salary from the
Company of One Hundred Thirty Thousand Dollars ($130,000)
per annum payable in semi-monthly installments, subject to
increase at any time as determined by a majority of the
disinterested members of the Compensation
Committee of the Board of Directors of the Company.
4.2 Reimbursement. Employee shall be entitled to
receive bi-weekly reimbursement for, or seek direct payment
by the Company of, such reasonable expenses incurred by
Employee as are consistent with specific policies of the
Company in the performance of his duties under this
Agreement, provided that Employee accounts therefor in
writing and that such expenses are ordinary and necessary
business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits. Employee
shall be entitled to reasonable paid vacation in accordance
with the policies of the Company, and such other employee
benefits as the Board may fix from time to time; provided,
however, that, in the Employee's case, such employee
benefits shall include comprehensive medical,
hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies
of the Company, including the cost of an annual physical
examination.
4.4 Automobile. The Company shall provide a bi-
annual allowance of up to Twenty Thousand Dollars ($20,000)
(the "Allowance Amount") for the Employee's purchase of a
new or used automobile, exercisable for the first time on or
after June 20, 1995. The automobile shall
be titled in the name of Employee and shall remain
Employee's property upon any termination of this Agreement.
If the automobile selected by Employee has a purchase price
in excess of the Allowance Amount, Employee shall be
responsible for all amounts in excess of the Allowance
Amount. Furthermore, during the term of this Agreement, the
Company shall pay the expense of reasonable insurance for
such automobile (including, but not limited to collision,
liability, comprehensive and uninsured motorist coverage).
Section 5.Term.
5.1 Duration. Unless sooner terminated in accordance
with provisions for termination set forth under Subsections
5.2 or 5.3 below, this Agreement shall continue in full
force and effect for a term ending on June 19, 1997, and
shall thereafter renew for additional one year terms
unless either party notifies the other at least 10 days
prior to the end of any term.
5.2 Termination for Cause. This Agreement may be
terminated for cause as follows:
(a) At the election of the Company, upon Employee's
breach of any material provision of this Agreement;
(b) At the election of Employee, upon the Company's
breach of any material provision of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the total
disability of Employee to perform his normal duties for a
period of one hundred eighty (180) consecutive days, but
only after the Company provides ten (10) days' prior written
notice to Employee;
(e) At the election of the Company, upon the
indictment of Employee or upon Employee entering a plea of
guilty or nolo contendere to the alleged commission by
Employee, as principal, accomplice or accessory, of a crime
involving moral turpitude, or an act of fraud,
embezzlement or dishonesty; or
(f) At the election of the Company, upon the
occurrence of gross or willful misconduct by Employee in the
performance of his responsibilities hereunder during the
course of employment.
In the event that the Company or the Employee elects to
terminate this Agreement because of a breach of any material
provision hereof pursuant to paragraph (a) or (b) of this
Subsection 5.2, respectively, the party electing to
terminate this Agreement shall give at least fourteen (14)
days written notice to the other party or its intention to
terminate this Agreement, which notice shall specify the
breach of this Agreement upon which such termination is
based, and no such termination shall occur if the other
party cures the breach so specified within said fourteen
(14) day period, except that a party shall only have the
opportunity to cure a breach of a material provision on two
occasions and thereafter that party need not be given the
opportunity to cure any further material breaches.
All obligations of the Company under this Agreement,
including obligations under the stock option agreement
contained in Section 3 hereof, shall immediately cease upon
termination of this Agreement by the Company for cause by
the Company.
5.3 Termination Without Cause. Either party may
terminate this Agreement without cause upon giving 30 days
written notice to the other. If the Company elects to
terminate this Agreement without cause, then the parties
agree that Employee shall be entitled to receive, in a
lump sum, the payments due him under Section 4.1 for the
remaining term of this Agreement, which amount shall be in
full satisfaction of any and all claims of Employee as a
result of his employment by the Company. Should the Employee
elect to terminate this Agreement without cause prior to the
expiration hereof, then all obligations of the Company
hereunder shall cease as of the date of termination.
Section 6. Notice. All notices provided for herein
shall be in writing and shall be deemed to be given when
delivered in person or deposited in the United States Mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid and addressed as
follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
Lewis E. Christman, Jr.
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7.Miscellaneous.
7.1 If any provision or any part of any provision of
this Agreement is found not to be valid for any reason, such
provision shall be entirely severable from, and shall have
no effect upon the remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of the
Company, its successors and assigns, and be binding upon the
Employee, his executor, administrator, heirs and personal
representatives.
7.3 This Agreement may be modified only by written
instrument signed by each of the parties hereto.
7.4 This Agreement shall be construed under and
governed by the laws of the State of Florida.
7.5 Any failure of either party, on one or more
occasions, to enforce and require the strict compliance with
and performance of any of the terms and conditions of this
Agreement shall not constitute a waiver of any such terms or
conditions at any future time and shall not prevent
such party from insisting on the strict compliance with and
performance of such terms and conditions at any later time.
7.6 This Agreement comprises the entire agreement
between the parties hereto with respect to the subject
matter hereof and there are no agreements, undertakings,
covenants or conditions concerning the subject matter
hereof, whether oral or written, express or implied, that
are not merged herein or superseded hereby.
7.7 The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of
convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
7.8 All payments to be made or benefits to be provided
hereunder by the Company shall be subject to reduction for
any applicable payroll-related or withholding taxes.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
Robert J. Martin, Vice
President
Attest:
Edward B. Alexander, Secretary
EMPLOYEE:
Lewis E. Christman, Jr.
Family Steak Houses of Florida, Inc.
Consolidated Balance Sheets
(Unaudited)
June 28, December 28,
1995 1994
============ ============
ASSETS
Current assets:
Cash and cash equivalents $1,436,600 $1,603,100
Investments 600,300 710,700
Receivables 144,800 104,900
Income taxes receivable 187,000 332,200
Current portion of mortgage receivable 103,200 32,500
Inventories 291,300 324,800
Prepaids and other current assets 244,800 475,500
------------ ------------
Total current assets 3,008,000 3,583,700
Mortgages receivable 1,271,200 537,500
Property and equipment:
Land 9,342,200 9,677,800
Buildings and improvements 18,209,800 18,726,800
Equipment 12,059,200 11,139,500
------------ ------------
39,611,200 39,544,100
Accumulated depreciation (12,661,600) (12,648,200)
------------ ------------
Net property and equipment 26,949,600 26,895,900
Investment in joint venture 54,500 100,000
Property held for resale 543,300 1,039,300
Other assets, principally deferred charges,
net of accumulated amortization 615,200 652,200
------------ ------------
$32,441,800 $32,808,600
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,762,500 $1,462,900
Accrued liabilities 3,024,600 3,942,900
Current portion of long-term debt 1,190,000 851,200
------------ ------------
Total current liabilities 5,977,100 6,257,000
Long-term debt 15,288,600 16,304,800
Deferred revenue 146,700 55,200
Other non-current liabilities 47,100 198,300
------------ ------------
Total liabilities 21,459,500 22,815,300
Shareholders' equity:
Preferred stock of $.01 par;
authorized 10,000,000 shares;
none issued -- --
Common stock of $.01 par;
authorized 20,000,000 shares;
outstanding 10,845,000 shares in
in 1995 and 10,725,200 in 1994 108,500 107,300
Additional paid-in capital 8,103,300 8,002,300
Retained earnings 2,770,500 1,883,700
------------ ------------
Total shareholders' equity 10,982,300 9,993,300
------------ ------------
$32,441,800 $32,808,600
============ ============
See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc.
Consolidated Statements of Operations
(UNAUDITED)
For The Quarters Ended
June 28, June 29,
1995 1994
------------ ------------
Sales $11,034,200 $11,509,600
Cost and expenses:
Food and beverage 4,366,400 4,687,100
Payroll and benefits 2,904,300 3,155,900
Depreciation and amortization 440,600 501,600
Other operating expenses 1,655,100 1,591,300
General and administrative expenses 636,400 836,200
Franchise fees 331,000 404,700
Loss on disposition of equipment 27,000 25,000
Equity loss in joint venture 18,800 --
Closed restaurant costs -- 802,900
------------ ------------
10,379,600 12,004,700
Earnings (loss) from operations 654,600 (495,100)
Interest and other income 135,100 32,900
Write-down of property held for resale -- (393,000)
Interest expense (414,800) (495,700)
------------ ------------
Earnings (loss) before income ta 374,900 (1,350,900)
Provision (benefit) for income taxes 66,700 (127,800)
------------ ------------
Net earnings (loss) $308,200 ($1,223,100)
============ ============
Net earnings (loss) per common and equiv $0.03 ($0.11)
============ ============
Weighted average common shares and equiv 11,794,000 10,783,000
============ ============
See accompanying notes to consolidated financial statements.
Consolidated Statements of Operations
(UNAUDITED)
For The Six Months Ended
June 28, June 29,
1995 1994
------------ ------------
Sales $22,376,300 $23,552,100
Cost and expenses:
Food and beverage 8,810,200 9,553,400
Payroll and benefits 5,821,300 6,326,000
Depreciation and amortization 881,200 1,017,100
Other operating expenses 3,208,200 3,152,100
General and administrative expenses 1,242,700 1,407,300
Franchise fees 671,300 933,900
Loss on disposition of equipment 52,000 50,000
Equity loss in joint venture 45,500 --
Closed restaurant costs -- 802,900
------------ ------------
20,732,400 23,242,700
Earnings (loss) from operations 1,643,900 309,400
Interest and other income 276,100 55,600
Write-down of property held for resale -- (393,000)
Interest expense (864,500) (981,400)
------------ ------------
Earnings (loss) before income ta 1,055,500 (1,009,400)
Provision (benefit) for income taxes 168,700 --
------------ ------------
Net earnings (loss) $886,800 ($1,009,400)
============ ============
Net earnings (loss) per common and equiv $0.08 ($0.09)
============ ============
Weighted average common shares and equiv 11,448,000 10,782,000
============ ============
See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc.
Consolidated Statements of Cash Flows
(UNAUDITED)
For the Six Months Ended
=========== ============
June 28, June 29,
1995 1994
=========== ============
Operating activities:
Net earnings (loss) $886,800 ($1,009,400)
Adjustments to reconcile net earnings
(loss) to net cash provided
by operating activities:
Depreciation and amortization 881,200 1,017,100
Directors' fees in the form of stock options 20,000 20,000
Loss from joint venture 45,500 --
Closed restaurant costs -- 802,900
Write-down of land held for resale -- 393,000
Amortization of loan discount 46,900 66,000
Amortization of loan fees 39,100 59,400
Loss on disposition of equipment 52,000 50,000
Decrease (increase) in:
Receivables (39,900) 58,200
Income tax receivable 145,200 268,100
Inventories 33,500 (12,100)
Prepaids and other current assets 230,700 (157,500)
Other assets (272,300) --
Increase (decrease) in:.
Accounts payable 299,600 101,900
Accrued liabilities (719,600) 855,000
Deferred revenue 91,500 --
Other non-current liabilities (151,200) (129,200)
----------- ------------
Net cash provided by operating activities 1,589,000 2,383,400
----------- ------------
Investing activities:
Net proceeds from sale of land held for resale 496,000 --
Proceeds from sale of restaurant and land 106,600 33,900
Proceeds from notes receivable 30,600 --
Proceeds from sale of investments 110,400 --
Capital expenditures (1,757,000) (908,100)
----------- ------------
Net cash used by investing activities (1,013,400) (874,200)
----------- ------------
Financing activities:
Payments on long-term debt (743,300) (404,700)
Proceeds from the issuance of common stock 1,200 200
----------- ------------
Net cash used by financing activities (742,100) (404,500)
----------- ------------
Net (decrease) increase in cash and cash equivalen (166,500) 1,104,700
Cash and cash equivalents - beginning of period 1,603,100 1,513,200
----------- ------------
Cash and cash equivalents - end of period $1,436,600 $2,617,900
=========== ============
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $802,000 $517,700
=========== ============
Cash paid during the period for income tax $35,000 $ --
Non-cash transactions: =========== ============
Mortgage receivable as partial proceeds on prope $835,000 $ --
=========== ============
Warrants issued $81,000 $ --
=========== ============
Accrued interest reclassed to long-term debt $100,000
Equipment from closed restaurants =========== ============
transferred to other current assets $ -- $166,300
=========== ============
See accompanying notes to consolidated financial statements.