SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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CKE RESTAURANTS, INC.
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(Name of Registrant as Specified In Its Charter)
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NEWS RELEASE
CONTACT: CKE Restaurants, Inc: Dennis Lacey
EVP and CFO
714.778.7109
Santa Barbara Restaurant Group, Inc.: Ted Abajian
CEO
805.563.3644 x110
CKE RESTAURANTS, INC. AND SANTA BARBARA RESTAURANT GROUP, INC.
ANNOUNCE THE SIGNING OF A LETTER OF INTENT FOR CKE RESTAURANTS
TO ACQUIRE SANTA BARBARA RESTAURANT GROUP
CKE Restaurant Group, Inc. (NYSE: CKR), and Santa Barbara Restaurant
Group, Inc. (Nasdaq: SBRG), today announced that they have signed a letter of
intent contemplating the merger of a newly formed, wholly-owned subsidiary of
CKE Restaurants with Santa Barbara Restaurant Group.
Under the terms of the letter of intent, the parties expect to enter
into a definitive merger agreement providing that each share of Santa Barbara
Restaurant Group will be converted into the right to receive 0.50 shares of CKE
common stock. If the Average CKE Common Share Price is less than $6.25, SBRG
will have the right to terminate the merger agreement, and if the Average CKE
Common Share Price is greater than $9.50, CKE will have the right to terminate
the merger agreement. The "Average CKE Common Share Price" will be determined
based on the average closing price of CKE common stock during the 10-day trading
period ending on and including the second business day immediately prior to the
effective time of the merger.
There can be no assurances that the parties will enter into a mutually
acceptable agreement. Furthermore, completion of the merger will be subject to
due diligence, regulatory and financial institution approvals and other
customary conditions, and requires approval of the
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merger by the stockholders of Santa Barbara Restaurant Group and approval of the
issuance of CKE Restaurants common stock in connection with the merger by the
stockholders of CKE.
Andrew F. Puzder, CKE's President and Chief Executive Officer, stated:
"The merger will be accretive to CKE and is the natural and logical culmination
of the close relationship that has existed between the companies for years. The
Chairman of CKE's Board of Directors, William P. Foley, is also the Chairman of
SBRG's Board of Directors. I am a member of SBRG's Board of Directors and served
as its President and CEO from August of 1997 until June of 2000 when I became
CKE's President and CEO. We are obviously very familiar with SBRG and its
brands.
"The merger will allow CKE to take advantage of certain administrative
synergies. Additionally, through the merger, CKE will acquire direct ownership
of the Green Burrito brand. Carl's Jr. presently operates, as Green Burrito's
largest franchisee, 107 Carl's Jr./Green Burrito dual concept restaurants. The
merger will eliminate any further royalty and development obligations owing to
SBRG by CKE and will allow CKE to develop further Green Burrito dual concept
restaurants as it deems appropriate.
The merger will also provide CKE and its franchisees with a new growth
opportunity in the La Salsa concept. La Salsa is a Mexican fast-casual chain
located primarily in Southern California an area with which we are very familiar
as a company. However, in order to assure our sustained focus on the growth of
Carl's Jr. and the continuing recovery of our Hardee's brand, La Salsa will
maintain its own independent operations management team.
"Given CKE's, our Chairman's and my close involvement in SBRG over the
years, I look forward to a smooth integration of the Companies. The fact that
SBRG's corporate headquarters is located next door to CKE's Santa Barbara,
California corporate office will enhance the effectiveness of the integration."
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Ted Abajian, President and CEO of Santa Barbara Restaurant Group stated:
"The merger with CKE provides greater liquidity for our shareholders, additional
infrastructure and capital to grow our brands and an opportunity to reduce
operating expenses. I look forward to SBRG's concepts being an integral and
contributing member of the CKE family."
CKE Restaurants owns, operates and franchises 3,783 quick-service
restaurants, primarily under the Carl's Jr. and Hardee's brand names.
Santa Barbara Restaurant Group is engaged in the food service industry.
As of November 15, 2001 the Company operated 40 La Salsa restaurants, 25 Timber
Lodge Steakhouse restaurants, and 5 Green Burrito restaurants. Santa Barbara
Restaurant Group also franchises 40 La Salsa restaurants, 35 Green Burrito
stand-alone restaurants, one Timber Lodge Steakhouse restaurant and 197 Green
Burrito dual-concept restaurants.
This press release contains forward-looking statements regarding certain
discussions between CKE Restaurants and Santa Barbara Restaurant Group related
to a potential merger transaction that are subject to substantial risks and
uncertainties. These discussions may not result in the effectuation of a
transaction such as that described above, or any other transaction, as a result
of a number of factors, including but not limited to the companies not coming to
agreement on definitive terms for any potential transaction, and the failure to
receive necessary regulatory, Board or stockholder approvals. The words
"estimate," "project," "potential," "intended," "expect," "believe" and similar
expressions or words are intended to identify forward-looking statements. Such
forward-looking statements may be included in, but are not limited to, various
filings made by the Company with the Securities and Exchange Commission,
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press releases or oral statements made with the approval of an authorized
executive officer of the Company. Actual results could differ materially from
those projected or suggested in any forward-looking statements as a result of a
wide variety of factors and conditions.
Both companies will be jointly filing relevant documents concerning the
merger with the Securities and Exchange Commission. EACH OF THE COMPANIES URGES
ITS STOCKHOLDERS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Stockholders of either company will be able to obtain the documents
free of charge at the SEC's website, www.sec.gov. In addition, documents filed
with the Securities and Exchange Commission by CKE Restaurants and Santa Barbara
Restaurant Group will be available free of charge from both the Corporate
Secretary of CKE Restaurants at 401 West Carl Karcher Way, Anaheim, CA 92801,
telephone (714) 774-5796, and the Corporate Secretary of Santa Barbara
Restaurant Group at 3938 State Street, Suite 200, Santa Barbara, California
93105, telephone (805) 563-3644. The directors and executive officers of both
companies may be deemed to be participants in the solicitation of proxies. The
direct or indirect interests of such participants, by security holdings or
otherwise, will be included in the joint proxy statement to be filed with the
SEC. In addition, you can review related information set forth in CKE
Restaurants' proxy statement for its Annual Meeting of Stockholders held June
12, 2001, as filed with the SEC on May 14, 2001, and in Santa Barbara Restaurant
Group's proxy statement for its Annual Meeting of Stockholders held August 6,
2001, as filed with the SEC on July 13, 2001. STOCKHOLDERS OF BOTH CKE
RESTAURANTS AND SANTA BARBARA RESTAURANT GROUP SHOULD READ CAREFULLY THESE PROXY
STATEMENTS AND OTHER DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
INFORMATION.
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