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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Secton 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FOODMAKER, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FOODMAKER, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Paying of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-7(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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FOODMAKER
January 10, 1994
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Foodmaker, Inc. to be held at 2:00 p.m. on Friday, February 11, 1994, at the San
Diego Mission Valley Hilton, 901 Camino del Rio South, San Diego, California.
We hope you will attend in person. If you plan to do so, please indicate
in the space provided on the enclosed proxy. Whether you plan to attend the
meeting or not, we urge you to sign, date and return the enclosed proxy as soon
as possible in the postage-paid envelope provided. This will ensure
representation of your shares in the event that you are unable to attend the
meeting.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Meeting and Proxy Statement.
The Directors and Officers of the Company look forward to meeting with
you.
Sincerely,
[SIG]
Jack W. Goodall
Chairman, Chief Executive
Officer and President
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FOODMAKER, INC.
9330 BALBOA AVENUE
SAN DIEGO, CALIFORNIA 92123
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 11, 1994
The Annual Meeting of Stockholders of Foodmaker, Inc. will be held at 2:00
p.m. on Friday, February 11, 1994, at the San Diego Mission Valley Hilton, 901
Camino del Rio South, San Diego, California.
The meeting will be held for the following purposes:
1. To elect nine directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To ratify the appointment of KPMG Peat Marwick as independent
accountants;
and to act upon such other matters as may properly come before the meeting.
Only stockholders of record at the close of business on December 27, 1993,
will be entitled to vote at the meeting.
By Order of the Board of Directors
[SIG]
William E. Rulon, Secretary
San Diego, California
January 10, 1994
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FOODMAKER, INC.
9330 BALBOA AVENUE
SAN DIEGO, CALIFORNIA 92123
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 11, 1994
January 10, 1994
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Foodmaker, Inc., a Delaware corporation
("Foodmaker" or the "Company"), for use at the Annual Meeting of Stockholders
(the "Meeting") to be held at 2:00 p.m. on Friday, February 11, 1994, and all
adjournments and postponements thereof. This Proxy Statement and form of proxy
were mailed to stockholders on or about January 10, 1994.
The cost of preparing, assembling and mailing the Notice of Annual Meeting
of Stockholders, Proxy Statement and form of proxy and the solicitation of
proxies will be paid by Foodmaker.
VOTING
The close of business on December 27, 1993 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. On that date, there were 38,485,800 shares of Foodmaker common
stock, $.01 par value (the "Common Stock"), outstanding. Each share is entitled
to one vote on any matter that may be presented for consideration and action by
the stockholders.
Proxies will be voted for management's nominees for election as directors
unless the stockholder otherwise directs in the proxy. Where the stockholder has
appropriately directed how the proxy is to be voted, it will be voted
accordingly. The proxy may be revoked at any time before it is voted at the
Meeting by submitting written notice of revocation to the Secretary of
Foodmaker, or by filing a duly executed proxy bearing a later date. A proxy will
not be voted if the stockholder who executed it is present at the Meeting and
elects to vote the shares represented thereby in person.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 15, 1993, information with
respect to beneficial ownership of voting securities of the Company by (i) each
person who is known to the Company to be the beneficial owner of more than 5% of
any class of the Company's voting securities, (ii) each director of the Company
and (iii) all directors and executive officers of the Company as a group.
NUMBER OF SHARES
NAME BENEFICIALLY OWNED(1) PERCENT OF CLASS(1)
- -------------------------------------------------------- --------------------- -------------------
The Fulcrum III Limited Partnership(2)(3)............... 10,430,688 27.2%
The Second Fulcrum III Limited Partnership(2)(3)........ 7,090,418 18.5%
Edward Gibbons(4)....................................... 17,521,106 45.7%
Tiger Management Corporation(6)......................... 2,410,400 6.3%
Jack W. Goodall......................................... 961,617 2.5%
Robert J. Nugent........................................ 551,203 1.4%
Charles W. Duddles...................................... 469,740 1.2%
Leonard I. Green(5)..................................... 50,000 *
L. Robert Payne......................................... 41,000 *
Paul T. Carter.......................................... 16,750 *
Christopher V. Walker................................... 12,000 *
Michael E. Alpert....................................... -- *
All directors and executive officers as a group (25
persons) 21,417,757 54.4%
<FN>
- ---------------
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of a given date which such person
has the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above on a given date, any security which such person or
persons has the right to acquire within 60 days after such date is deemed to
be outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.
(2) The Fulcrum III Limited Partnership and The Second Fulcrum III Limited
Partnership (collectively "Fulcrum III") are Delaware limited partnerships.
Gibbons, Goodwin, van Amerongen ("GGvA") successor to Gibbons, Green, van
Amerongen ("Gibbons Green"), is the general partner of each such
partnership, and may be deemed to be a beneficial owner of the shares held
by each such partnership.
(3) The address of The Fulcrum III Limited Partnership and The Second Fulcrum
III Limited Partnership is 600 Madison Avenue, New York, New York 10022.
(4) As a general partner of GGvA, Mr. Gibbons (who is a director of the Company)
and the other general partners of GGvA, Todd Goodwin, Lewis van Amerongen
and Elizabeth V. Camp, exercise shared voting and investment power with
respect to shares held by Fulcrum III and may be deemed beneficial owners of
the shares held by such partnerships.
(5) In addition to the shares owned directly and reflected above, pursuant to an
arrangement with GGvA, Mr. Green is entitled to the economic benefit of
102,946 shares of Common Stock held by Fulcrum III, which would include the
right to receive such shares upon a distribution of shares by Fulcrum III to
its partners. In addition, Mr. Green would be entitled to his 29.38% share
of any carried interest payable by Fulcrum III to GGvA as general partner of
Fulcrum III, which would result in Mr. Green having the economic benefit of
a greater number of shares.
(6) The address of Tiger Management Corporation is 101 Park Avenue, New York,
New York 10178.
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NOMINEES FOR ELECTION AS DIRECTORS
The directors of Foodmaker are elected annually. The term of office of all
present directors expires on the date of the Meeting, at which all nine
directors are to be elected to serve for the ensuing year and until their
successors are elected and qualified. The nominees of management for election as
directors are set forth below along with certain information regarding these
nominees. Should any nominee become unavailable to serve as a director, the
proxies will be voted for such other person as the Board of Directors shall
designate. To the best of Foodmaker's knowledge, all nominees are and will be
available to serve.
The following table provides certain information about each of the
Company's directors as of January 1, 1994:
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- -------------------------- --- -------------------------------------------- --------
Michael E. Alpert 51 Director 1992
Paul T. Carter(2) 71 Director 1991
Charles W. Duddles 53 Executive Vice President, Chief 1988
Administrative Officer, Chief Financial
Officer and Director
Edward Gibbons(1)(2)(3) 57 Director 1985
Jack W. Goodall(1) 55 Chairman of the Board, Chief Executive 1985
Officer and President
Leonard I. Green(1)(2)(3) 60 Director 1985
Robert J. Nugent 52 Executive Vice President, President and 1988
Chief Operating Officer of Jack In The Box
Division and Director
L. Robert Payne(1)(2) 60 Director 1986
Christopher V. Walker 47 Director 1988
<FN>
- ---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option Committee.
During the past five years, the business experience, principal occupations,
and the employment of the nominees has been as follows:
Mr. Alpert has been a director of the Company since August 1992. Mr. Alpert
was a partner in the San Diego Office of the law firm of Gibson, Dunn & Crutcher
for more than five years prior to his retirement on August 1, 1992. He is
currently Advisory Counsel to Gibson, Dunn & Crutcher. Gibson, Dunn & Crutcher
provides legal services from time to time to the Company.
Mr. Carter has been a director of the Company since June 1991. Since
February 1987, Mr. Carter has been an insurance consultant for the Government
Division of Corroon & Black Corporation. From February 1987 until December 1990,
he was also a consultant to the San Diego Unified School District on insurance
matters. He retired in February 1987 as Chairman and Chief Executive Officer of
Corroon & Black Corporation, Southwestern Region and as Director and Senior Vice
President of Corroon & Black Corporation, New York.
Mr. Duddles has been Executive Vice President and Chief Administrative
Officer of the Company since May 1988. He has been Chief Financial Officer of
the Company since October 1985 and was Senior Vice President from October 1985
to May 1988. He was previously Vice President and Controller of the Company from
August 1979 to July 1981 and Senior Vice President, Finance and Administration,
from August 1981 to October 1985. He has been a director since February 1988.
Mr. Gibbons has been a director of the Company since October 1985 and has
been a general partner of GGvA, an investment banking firm specializing in
management buyouts, for more than five years preceding the date hereof. Mr.
Gibbons is also a director of Robert Half International, Inc., Bath Iron Works
Corporation, Horace Mann Educators Corporation, Kash n' Karry Food Stores, Inc.,
Sealy Holdings, Inc. and Sealy Corp.
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Mr. Goodall has been President of the Company since April 1970, Chief
Executive Officer of the Company since February 1979 and Chairman since October
1985. He has been a director of Grossmont Bank, a wholly-owned subsidiary of
Bancomer, S.A., since 1980, a director of Van Camp Seafood Company, Inc. since
April 1992 and a director of Thrifty Holdings, Inc. since October 1992. He was
a Vice President of Ralston Purina Company ("Ralston"), a multinational holding
company, from July 1981 to October 1985, and he was a director of Budget
Rent-A-Car from June 1987 to March 1989.
Mr. Green has been a director of the Company since October 1985 and has
been a general partner of Leonard Green & Partners, an investment firm, since
June 1989. Until June 28, 1989 and for more than five years preceding that
date, he was a partner of Gibbons Green. Mr. Green is also a director of Horace
Mann Educators Corporation, Kash n' Karry Food Stores, Inc., Almac's
Supermarkets, Inc., Australian Resources N.L., Carr-Gottstein Foods Co., The
Rival Company, Thrifty Holdings, Inc. and United Merchandising Corp.
Mr. Nugent has been Executive Vice President of the Company since
February 1985 and is President and Chief Operating Officer of the Jack In The
Box Division of the Company. He was Executive Vice President, Operations and
Marketing from February 1985 to May 1988 and was previously Division Vice
President of the Company from August 1979 to April 1982 and Corporate Vice
President, Restaurant Operations from April 1982 through January 1985. He has
been a director since February 1988.
Mr. Payne has been a director of the Company since August 1986, having
served as a consultant to the Board of Directors since November 1985. He has
been Chairman of the Board of Grossmont Bank, a wholly-owned subsidiary of
Bancomer, S.A., since February 1974, President and Chief Executive Officer of
Multi-Ventures, Inc. since February 1976. Multi-Ventures, Inc. is a real estate
development and investment company that is also the managing partner of the San
Diego Mission Valley Hilton. He was a principal in the Company prior to its
acquisition by Ralston in 1968.
Mr. Walker has been a director of the Company since February 1988.
Since September 1989, Mr. Walker has been a general partner of Leonard Green &
Partners, an investment firm. He was associated with Gibbons Green from 1985
and was a partner thereof from January 1989 until September 1989. Prior to
joining Gibbons Green, Mr. Walker worked for Zimmerman Holdings, Inc., a
California based private holding company engaged in the acquisition and
operation of manufacturing companies. Prior to 1984, he was a Vice President
and Unit Manager of Security Pacific Bank, which he joined in 1971. He is also
a director of Kash n' Karry Food Stores, Inc. and Australian Resources N.L., an
Australian gold mining company.
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
During 1993 (fiscal year), the Board of Directors had an Executive
Committee, an Audit Committee and a Stock Option Committee. Foodmaker does not
have Compensation and Nominating Committees.
The Executive Committee, consisting of Messrs. Gibbons, Goodall, Green
and Payne, may exercise all the authority of the Board in the management of the
Company in the intervals between meetings of the Board of Directors. In 1993,
the Executive Committee held one meeting and on one occasion acted by unanimous
written consent.
The Audit Committee, consisting of Messrs. Carter, Gibbons, Green, and
Payne, directs the internal and external audit activities of Foodmaker as
deemed appropriate. The Audit Committee held no meetings in 1993.
The Stock Option Committee, consisting of Messrs. Gibbons and Green,
held no formal meetings in 1993. However, stock options were granted on several
occasions by unanimous written consents.
In 1993, the Board of Directors held six meetings. No director attended
fewer than 75% of such meetings. Directors who are also officers of Foodmaker
or its subsidiaries receive no additional compensation for their services as
directors. Three independent directors of the Company, Mr. Payne, Mr. Carter
and Mr. Alpert, receive an annual retainer of $18,000. They are also paid
$1,500 for each
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Board of Directors' meeting attended in person. No additional compensation is
paid for actions taken by the Board of Directors by written consent or
participating in telephonic meetings. Additionally, the Company paid Mr. Carter
$15,000 in fiscal 1993 and intends to pay him the same amount in fiscal 1994 for
consultation services relating to insurance matters. In February 1993, a
temporary special committee of the Board of Directors, consisting of Messrs.
Alpert, Carter, Green and Payne, was created to supervise, oversee and
coordinate the litigation in connection with the outbreak of food-borne illness.
As appointed chairman, Mr. Alpert received $17,373 in fiscal 1993. The committee
held three meetings prior to its dissolution in May 1993. Except as described
below under "Compensation Committee Interlocks and Insider Participation", no
additional compensation is paid to other members of the Board of Directors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation of the Company's chief executive officer and the other
four most highly compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries during the fiscal years
indicated. Bonus amounts were accrued during the year and paid shortly
thereafter.
ANNUAL COMPENSATION ALL OTHER
------------------------------- STOCK COMPENSATION
NAME AND POSITION YEAR SALARY($) BONUS($) OTHER($)(1) OPTIONS (#) ($)(2)
- ------------------------------- ----- -------- -------- ----------- ----------- ------------
Jack W. Goodall 1993 563,077 -- 87,943 -- 1,344
Chairman of the Board, Chief 1992 500,000 375,000 88,659 224,570 1,344
Executive Officer and 1991 500,000 250,000 77,918 -- 1,344
President
Robert J. Nugent 1993 328,461 -- 42,380 -- 1,344
Executive Vice President, 1992 300,000 180,000 47,112 135,205 1,344
President and Chief 1991 300,000 135,000 42,672 -- 1,344
Operating Officer of
Jack In The Box Division and
Director
Charles W. Duddles 1993 234,615 -- 44,666 -- 1,344
Executive Vice President, 1992 225,000 135,000 42,634 88,660 1,344
Chief Administrative Officer, 1991 225,000 90,000 40,514 -- 1,344
Chief Financial Officer and
Director
Kenneth R. Williams 1993 234,615 -- 47,588 -- 1,344
Senior Vice President, 1992 200,000 150,000 46,186 95,000 1,344
Executive Vice President of 1991 200,000 75,000 62,981 -- 1,344
Jack in the Box Division
Mohammad Iqbal 1993 211,154 -- 49,627 -- 1,344
Vice President, Executive 1992 180,000 81,000 39,950 75,045 1,344
Vice President -- Marketing 1991 180,000 67,500 42,628 -- 1,344
of Jack In The Box Division
<FN>
- ---------------
(1) Other annual compensation in each year includes automobile allowances of
approximately $48,000 for Mr. Goodall and $32,000 for each of the other
executive officers listed. Also included are the Company's matching
contributions to the deferred compensation plan, which for Mr. Goodall were
$28,142 in 1993 and $22,500 in 1992, and for Mr. Duddles $11,088 in 1993. In
1991, Mr. Williams received reimbursement for executive health benefits of
$24,451. Other included amounts do not exceed 25% of the total other annual
compensation.
(2) All other compensation represents the premiums on term life insurance for
the benefit of the named executive officer. The Company has no interest in
such insurance policies.
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STOCK OPTION GRANTS IN FISCAL 1993
No stock options or stock appreciation rights were granted in fiscal 1993
to the executives included in the Summary Compensation Table.
OPTION EXERCISES IN FISCAL 1993 AND FISCAL YEAR-END VALUES
Set forth below is information with respect to options exercised by the
named executive officers during the 1993 fiscal year, and the number and value
of unexercised stock options held by the named executive officers at the end of
the fiscal year.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------ --------- ------------ -------------- ------------ --------------
Jack W. Goodall......... 0 $ 0 307,644 42,356 $ 1,942,655 $0
Robert J. Nugent........ 0 0 146,431 28,569 776,323 0
Charles W. Duddles...... 0 0 100,446 14,554 619,279 0
Kenneth R. Williams..... 0 0 89,334 20,666 416,200 0
Mohammad Iqbal.......... 0 0 74,235 15,765 370,567 0
REPORT OF THE BOARD OF DIRECTORS AND STOCK OPTION COMMITTEE ON EXECUTIVE
COMPENSATION
The Board of Directors has the responsibility for determining executive
compensation. There is also a committee of disinterested directors (Messrs.
Gibbons and Green) with the responsibility for administering the 1992 Employee
Stock Incentive Plan. The Chief Executive Officer recommends the compensation to
be paid to executive officers of the Company other than himself; final
determination of the amount of compensation rests with the non-employee members
of the Board of Directors. Board members who are also executive officers do not
participate in discussions about, nor do they vote on, recommendations
concerning their respective compensation.
The Company's executive officer compensation program is comprised of base
salary, bonus opportunity, long-term incentive compensation in the form of stock
options, and other benefits such as health insurance and automobile allowance.
It is the objective of the Company to maintain base salaries that are
within the upper mid-range of amounts paid to senior executives with comparable
qualifications, experience and responsibilities at other companies engaged in
the same or similar business as the Company. Notwithstanding the Company's
desire to pay competitive salaries, for a period of over six months, all
executives' salaries were reduced by 15% due to the poor earnings performance
related to the outbreak of food-borne illness (the "Outbreak") in January 1993.
The Performance Bonus Plan provides for a bonus as a percent of base salary
which is dependent upon the Company's performance level achieved and the job
classification of the individual. The purpose of the Performance Bonus Plan is
to reward key employees, executives and officers for achievement of corporate
and/or division goals relating to earnings before depreciation, interest and
taxes, as well as achieving individual department budget targets. Also as a
result of the Outbreak, no performance bonuses were paid to executives for
fiscal 1993.
The 1992 Employee Stock Incentive Plan forms the basis for the Company's
long-term incentive plan for officers and key managers. The purpose of the Plan
is to enable the Company and its subsidiaries to attract, retain and motivate
employees by providing for or increasing the proprietary interests of such
employees in the Company. No new options were granted to the Chief Executive
Officer or any of the named executive officers in fiscal 1993.
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This report is submitted by the Board of Directors and the Stock Option
Committee.
BOARD OF DIRECTORS STOCK OPTION COMMITTEE
------------------ ----------------------
Michael E. Alpert Edward Gibbons
Paul T. Carter Leonard I. Green
Charles W. Duddles
Edward Gibbons
Jack W. Goodall
Leonard I. Green
Robert J. Nugent
L. Robert Payne
Christopher V. Walker
This report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1993, the members of the Board of Directors were primarily
responsible for determining executive compensation. The following executive
officers, who also are members of the Board of Directors, participated in
deliberations concerning executive officer compensation: Jack W. Goodall, Robert
J. Nugent, Charles W. Duddles. In addition, the Company is a party to the
transactions described below in which Edward Gibbons, Leonard I. Green and/or
Christopher V. Walker, who are members of the Board of Directors, have a
material interest.
Transactions with GGvA -- The Company has agreed to pay GGvA an annual fee
of $900,000 plus expenses through 1994, subject to certain conditions, for
providing management consulting and financial planning services to the Company,
including assistance in strategic planning, negotiating and structuring bank
loans and exploring potential acquisitions, mergers and restructurings for the
Company. The contacts and expertise provided in these areas enhance the
Company's opportunities and management's expertise in these matters. These
specialized consulting services do overlap somewhat with Messrs. Gibbons' and
Green's roles as directors, for which they do not receive any additional
compensation. A portion of such fee is paid to Leonard Green & Partners, L.P.,
in which Leonard I. Green and Christopher V. Walker, directors of the Company,
are general partners. The amount of the fee paid to GGvA was determined by
negotiations between the management of the Company and GGvA, and approved by the
Board of Directors of the Company. The Company believes that the terms of its
agreement with GGvA are comparable to what could be obtained from an unrelated,
but equally qualified, third party. Mr. Gibbons, who is a director of Foodmaker,
is a general partner of GGvA. In addition to providing ongoing management
consulting services, GGvA may receive additional fees for providing consulting
services in connection with major financial transactions that may be undertaken
in the future. GGvA is the general partner of Fulcrum III.
Proposed Restaurant Enterprises Group, Inc. Transaction -- In May 1993,
Foodmaker, Apollo Advisors, L.P. ("Apollo") and Leonard Green & Partners, L.P.,
(collectively, the "Investors"), announced plans to form a new entity to acquire
Chi-Chi's and restaurants operated by the Restaurant Enterprises Group, Inc.
("REGI"), a company that currently owns, operates and franchises various
restaurant chains including El Torito, Carrows and Coco's. In the third quarter,
modifications were made to the agreement among the Investors which provides that
Foodmaker would contribute its entire 235 restaurant Chi-Chi's chain in exchange
for $65 million in equity (40.6%) in the new entity, warrants to acquire an
additional 10% equity interest and $205 million in cash, less the face amount of
any Chi-Chi's debt assumed which is expected to aggregate approximately $35
million. Leonard Green & Partners would contribute $30 million in cash and hold
an 18.8% equity position in the new entity.
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PENSION TABLE
Retirement Plan. The Company maintains a retirement plan (the "Retirement
Plan"), which was adopted effective October 21, 1985 and restated effective as
of January 1, 1989. The Retirement Plan is a defined benefit plan covering
eligible regular employees employed in a sales, administrative, clerical, or
restaurant hourly capacity who have completed 1,000 Hours of Service (as defined
in the Retirement Plan) or reached age 21, whichever is later. The Retirement
Plan provides that a participant retiring at age 65 will receive an annual
retirement benefit equal in amount to one percent of Final Average Pay (as
defined in the Retirement Plan) multiplied by Benefit Service (as defined in the
Retirement Plan) plus .4% of Final Average Pay in excess of Covered Compensation
(as defined in the Retirement Plan) multiplied by Benefit Service subject to
grandfathered minimum benefit accruals under the previous plan as of December
31, 1988. The .4% portion of the calculation is limited to a maximum of 35 years
of service.
Although normal retirement is age 65, benefits may begin as early as age 55
if service requirements defined in the Retirement Plan are met. Benefits payable
may be reduced for early commencement.
At October 3, 1993, the number of years of Benefit Service under the
Retirement Plan for Messrs. Goodall, Nugent, Duddles, Williams and Iqbal was 25,
14, 20, 23 and 21, respectively; and the amount of covered compensation for each
of these individuals approximates the amounts reflected as salary and bonus in
the Summary Compensation Table.
Supplemental Retirement Plans. The Employee Retirement Income Security Act
of 1974 ("ERISA") and various tax laws may cause a reduction in the annual
retirement benefit payable under the Retirement Plan. If this occurs, the
Company intends to provide a compensating annuity supplement for Mr. Goodall,
pursuant to authority granted under ERISA. Under an unfunded excess benefits
plan, this supplement provides the difference between the maximum annual payment
permissible under ERISA from qualified plans and the amount determined under the
Retirement Plan's formula. The supplement plus the tax-qualified annuity will
not exceed the maximum amount the Company could have been required to provide
under the Retirement Plan but for the legislative limitations.
In addition, the Company established a non-qualified supplemental
retirement plan for selected executives effective April 2, 1990, known as the
Supplemental Executive Retirement Plan. The plan provides for a percentage of
replacement income based on Service and Final Average Compensation (each as
defined in the plan). The target replacement income from all Company funded
sources based upon a maximum of 30 full years of service is 60% of Final Average
Compensation. For those executives whose service lengths are less than 30 years,
the target percentage of 60% is reduced by applying a factor determined by
dividing the number of full years of actual service by 30. The plan is unfunded
and represents an unsecured claim against the Company.
Easy$aver Plus Plan. Effective October 21, 1985, the Company adopted the
Foodmaker Savings Investment Plan, currently named the Foodmaker Easy$aver Plus
Plan (the "E$P"), which includes a cash-or-deferred arrangement under Section
401(k) of the Internal Revenue Code. Eligible regular full-time employees who
have completed at least one year of service or reached age 21, whichever is
later, qualify for the E$P. Participants in the plan may defer up to 12% of
their pay on a pre-tax basis. In addition, the Company contributes on a
participant's behalf an amount equal to 50% of the first 4% of compensation that
is deferred by the participant.
Deferred Compensation Plan. Since January 1, 1989, all executive officers
and certain other members of management of the Company have been excluded from
participation in the E$P. Effective April 2, 1990, all such persons were offered
an opportunity to participate in a non-qualified deferred compensation plan
established by the Company. Participants of the plan, known as the Capital
Accumulation Plan for Executives, may defer up to 15% of base and/or bonus pay.
The Company matches 100% of the first 3% of participant deferrals. Benefits paid
under such plan also include an interest component. The plan is unfunded and
participant accounts represent unsecured claims against the Company.
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Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company match dollars in the E$P, Company match
dollars in the Deferred Compensation Plan, Supplemental Retirement Plan and
Social Security (50% of primary insurance amount).
AVERAGE YEARS OF SERVICE
ANNUAL ------------------------------------------------------------
EARNINGS 10 15 20 25 30
--------------- -------- -------- -------- -------- --------
$ 100,000...................... $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000
200,000...................... 40,000 60,000 80,000 100,000 120,000
300,000...................... 60,000 90,000 120,000 150,000 180,000
400,000...................... 80,000 120,000 160,000 200,000 240,000
500,000...................... 100,000 150,000 200,000 250,000 300,000
600,000...................... 120,000 180,000 240,000 300,000 360,000
800,000...................... 160,000 240,000 320,000 400,000 480,000
1,000,000...................... 200,000 300,000 400,000 500,000 600,000
1,200,000...................... 240,000 360,000 480,000 600,000 720,000
CERTAIN TRANSACTIONS
TRANSACTIONS WITH PRUDENTIAL
At October 3, 1993, the Company had outstanding borrowings of $23.3 million
from The Prudential Insurance Company of America ("Prudential"). Pursuant to
such borrowings, the Company expensed interest aggregating approximately $4.8
million during 1993. Prudential is a limited partner in Fulcrum III.
TRANSACTIONS WITH OTHERS
Sharon Payne, daughter of L. Robert Payne, a director of the Company, holds
a 25% equity interest in Foodmex, Inc. ("Foodmex"), which operates six Jack In
The Box franchises in Mexico. The majority of the funds invested by Ms. Payne in
Foodmex were loaned to her by Mr. Payne; this loan is secured by Ms. Payne's
equity position in Foodmex. As a franchisee of the Company, Foodmex has various
financial obligations to the Company for franchise fees and other trade accounts
payable, totalling approximately $280,000 per month. The Company believes the
terms of the franchise agreement are no more favorable to the franchisee than
could have been obtained by an entirely unrelated third party.
9
13
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock since the initial public offering on March 4, 1992 with
the Standard & Poor's ("S&P") 500 Index and Nations Restaurant News ("NRN")
Stock Index for the same period. The comparison assumes $100 was invested on
March 4, 1992 in the Company's Common Stock and in each of the comparison
groups, and assumes reinvestment of dividends. The Company paid no dividends
during the periods.
[CHART]
Measurement Period Foodmaker, S&P 500 NRN Stock
(Fiscal Year Covered) Inc. Index Index
March 4, 1992 100 100 100
September 27, 1992 70 101 102
October 3, 1993 65 113 122
COMPLIANCE WITH REPORTING OBLIGATIONS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each
executive officer, director and beneficial owner of more than 10% of the
Company's common stock is required to file certain forms with the Securities and
Exchange Commission. A report of beneficial ownership of the Company's common
stock on Form 3 is due at the time such person becomes subject to the reporting
requirements and a report on Form 4 must be filed to reflect changes thereafter.
Based on written statements and copies of forms provided to the Company by
persons subject to the reporting requirements, the Company believes that all
such reports required to be filed by such persons during fiscal 1993 were filed
on a timely basis, except that a late Form 3 was filed by Donald C. Blough,
Carlo E. Cetti and David M. Theno, upon their becoming executive officers of the
Company, a late Form 4 was filed by Leonard I. Green reflecting a roll-over from
his closed pension plan to a separate Individual Retirement Account ("IRA") for
him and a separate IRA for his wife, and one late Form 4, reflecting a single
purchase of the Company's common stock, was filed by Ta-Tung Wang.
10
14
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick as independent
accountants to examine the consolidated accounts of the Company for the fiscal
year ending October 2, 1994, subject to ratification by stockholders. KPMG Peat
Marwick has acted as accountants for Foodmaker since 1986. The firm will be
represented at the Meeting and will have the opportunity to make a statement and
respond to questions from stockholders.
OTHER BUSINESS
Foodmaker's management is not aware of any other matters to come before the
Meeting. If any matter not mentioned herein is properly brought before the
Meeting, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their best
judgment.
STOCKHOLDER PROPOSALS FOR
1995 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 1995 Annual
Meeting of Stockholders and to be included in the Company's proxy statement and
form of proxy for that meeting must be received by the Company, directed to the
attention of the Secretary, on or before September 12, 1994. Any such proposals
must comply in all respects with the rules and regulations of the Securities and
Exchange Commission.
1993 ANNUAL REPORT AND 10-K
A copy of the 1993 Annual Report to Stockholders accompanies this Proxy
Statement. Selected financial data for the Company and the Predecessor are
reflected in Appendix A to this Proxy Statement. Foodmaker's Annual Report on
Form 10-K for the year ended October 3, 1993, as filed with the Securities and
Exchange Commission, contains detailed information concerning Foodmaker and its
operations which is not included in the 1993 Annual Report. A COPY OF THE 1993
10-K WILL BE FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN WRITING
TO: Foodmaker Corporate Communications, P.O. Box 783, San Diego, California
92112.
By Order of the Board of Directors,
[SIG]
WILLIAM E. RULON
Secretary
11
15
APPENDIX A
SELECTED FINANCIAL DATA
The selected data presented in the following table summarizes certain
consolidated financial information concerning the Company and is derived from
financial statements which have been audited by KPMG Peat Marwick, independent
certified public accountants. The selected data for and as of the eight week
period ended November 27, 1988 is derived from the financial statements of
the Company prior to the December 1988 acquisition and is denoted "The
Predecessor." The accounting bases of the assets and liabilities of the
Company have changed as the result of the acquisition of the Predecessor,
effective as of November 28, 1988, and the capital structure has changed as
the result of the acquisition and the 1992 recapitalization of the Company.
The Company's fiscal year is 52 or 53 weeks, ending the Sunday closest to
September 30. The fiscal year ended October 3, 1993 includes 53 weeks.
THE
THE COMPANY PREDECESSOR
-------------------------------------------------------------- ------------
53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS 44 WEEKS 8 WEEKS
ENDED ENDED ENDED ENDED ENDED ENDED
10/3/93 9/27/92 9/29/91 9/30/90 10/1/89 11/27/88
---------- ---------- ---------- ---------- ---------- ------------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenues:
Restaurant sales................ $1,088,269 $1,061,904 $1,019,927 $ 985,797 $ 769,214 $ 133,092
Distribution sales.............. 108,546 104,041 94,815 94,259 64,121 11,114
Franchise rents and royalties... 35,232 38,803 35,277 35,901 25,225 4,170
Other revenues.................. 8,657 14,585 7,140 3,444 16,274 1,978
---------- ---------- ---------- ---------- ---------- ------------
Total revenues.......... 1,240,704 1,219,333 1,157,159 1,119,401 874,834 150,354
---------- ---------- ---------- ---------- ---------- ------------
Costs of revenues(1).............. 1,124,895 1,004,467 962,212 919,467 702,867 122,085
Selling, general and
administrative expenses......... 124,422 103,697 95,095 92,400 80,053 28,138
Interest expense.................. 57,586 72,455 93,573 94,676 83,780 10,159
---------- ---------- ---------- ---------- ---------- ------------
Earnings (loss) before income
taxes (benefit), extraordinary
item, and cumulative effect of
changes in accounting
principles...................... (66,199) 38,714 6,279 12,858 8,134 (10,028)
Income taxes (benefit)............ (22,071) 16,818 5,930 5,370 3,262 (4,108)
---------- ---------- ---------- ---------- ---------- ------------
Earnings (loss) before
extraordinary item and
cumulative effect of changes in
accounting principles........... (44,128) 21,896 349 7,488 4,872 (5,920)
Extraordinary item -- loss on
early extinguishment of debt,
net of income taxes............. -- (63,651) -- -- -- (7,031)
Cumulative effect on prior years
(to September 27, 1992) of
adopting SFAS 106 and SFAS
109............................. (53,980) -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ------------
Net earnings (loss)............... $ (98,108) $ (41,755) $ 349 $ 7,488 $ 4,872 $ (12,951)
---------- ---------- ---------- ---------- ---------- ------------
---------- ---------- ---------- ---------- ---------- ------------
BALANCE SHEET DATA
(at end of period):
Current assets.................... $ 93,534 $ 106,311 $ 71,534 $ 67,860 $ 60,457 $ 61,799
Current liabilities............... 203,349 153,851 185,022 151,820 139,037 111,955
Total assets...................... 890,420 915,487 864,848 889,325 861,565 876,028
Long-term debt and capitalized
lease obligations, net.......... 500,460 501,083 629,291 686,546 678,204 726,247
Stockholders' equity.............. 139,132 246,933 50,535 50,186 42,698 37,826
<FN>
- ---------------
(1) Reflects a provision of $44.5 million for the year ended October 3, 1993 to
cover franchisee settlements and associated costs related to the outbreak of
food-borne illness.
16
[BACK COVER LOGO]
17
PROXY FOODMAKER, INC. PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 11, 1994 AT 2:00 P.M.
SAN DIEGO MISSION VALLEY HILTON, 901 CAMINO DEL RIO SOUTH, SAN DIEGO, CA
The undersigned hereby appoints Jack W. Goodall, Charles W. Duddles and
William E. Rulon and each of them, acting by a majority or by one of them if
only one is acting, as lawful proxies, with full power of substitution, for and
in the name of the undersigned, to vote on behalf of the undersigned, with all
the powers the undersigned would possess if personally present at the Annual
Meeting of Stockholders of Foodmaker, Inc., a Delaware corporation
("Foodmaker"), on February 11, 1994, and any adjournments thereof. The above
named proxies are instructed to vote all the undersigned's shares of stock on
the proposals set forth in the Notice of Annual Meeting and Proxy Statement as
specified below and are authorized in their discretion to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
1. Election of Directors: Michael E. Alpert, Paul T. Carter, Charles W.
Duddles, Edward Gibbons, Jack W. Goodall, Leonard I. Green, Robert J.
Nugent, L. Robert Payne and Christopher V. Walker.
/ / FOR all nominees listed.
/ / FOR all nominees listed except
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. Ratification of appointment of KPMG
Peat Marwick as independent accountants. / / FOR / / AGAINST / / ABSTAIN
The Board of Directors recommends a vote FOR the above proposals.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1 AND 2.
Stockholder(s), please sign
below exactly as name appears
hereon; in the case of joint
holders, all should sign.
Fiduciaries should add their
full title to their signature.
Corporations should sign in full
corporate name by an authorized
officer. Partnerships should
sign in partnership name by an
authorized person.
Dated: , 1994
IMPORTANT - PLEASE SIGN, DATE
AND RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE; NO
POSTAGE NECESSARY.
I DO I DO NOT EXPECT
TO ATTEND THE ANNUAL MEETING.
18
BALLOT FOODMAKER, INC. BALLOT
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 11, 1994
The undersigned votes ( ) shares of stock, with respect to
the following:
1. Election of Directors: Michael E. Alpert, Paul T. Carter, Charles W.
Duddles, Edward Gibbons, Jack W. Goodall, Leonard I. Green, Robert J.
Nugent, L. Robert Payne and Christopher V. Walker.
/ / FOR all nominees listed.
/ / FOR all nominees listed except
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. Ratification of appointment of KPMG Peat Marwick as independent
accountants. / / FOR / / AGAINST / / ABSTAIN
Stockholder's signature
INSTRUCTION: IF BALLOT IS CAST BY PROXY, PRINT STOCKHOLDER NAME ABOVE OR, IF
MULTIPLE STOCKHOLDERS, PRINT "PROXIES FILED" ABOVE.
Proxy signature (if ballot is cast by
proxy)