-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EMBzoSbhdjszXRyUTOhKeguIIJSwGHCheK05RJ2Lg3gUvij7pSwzqGN0N9s7aLFT 9uEiYIINuLKUhbbaxNuP9A== 0000950152-96-005655.txt : 19961106 0000950152-96-005655.hdr.sgml : 19961106 ACCESSION NUMBER: 0000950152-96-005655 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960922 FILED AS OF DATE: 19961104 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRISCHS RESTAURANTS INC CENTRAL INDEX KEY: 0000039047 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 310523213 STATE OF INCORPORATION: OH FISCAL YEAR END: 0530 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07323 FILM NUMBER: 96653926 BUSINESS ADDRESS: STREET 1: 2800 GILBERT AVE CITY: CINCINNATI STATE: OH ZIP: 45206 BUSINESS PHONE: 5139612660 MAIL ADDRESS: STREET 1: 2800 GILBERT AVE CITY: CINCINNATI STATE: OH 10-Q 1 FRISCH'S RESTAURANTS QUARTERLY REPORT 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 FOR QUARTER ENDED September 22, 1996 COMMISSION FILE NUMBER 1-7323 FRISCH'S RESTAURANTS, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 31-0523213 - --------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2800 GILBERT AVENUE, CINCINNATI, OHIO 45206 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 513-961-2660. ------------- Not Applicable - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) 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 ----- ----- The total number of shares outstanding of the issuer's no par common stock, as of September 30, 1996 was: 6,882,609 2 TABLE OF CONTENTS
PAGE PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF EARNINGS ....................... 3 CONSOLIDATED BALANCE SHEET ............................... 4 - 5 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY ........... 6 CONSOLIDATED STATEMENT OF CASH FLOWS ..................... 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ............... 8 - 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ......................14 - 15 PART II - OTHER INFORMATION 15 - 16
3 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS SIXTEEN WEEKS ENDED SEPTEMBER 22, 1996 AND SEPTEMBER 17, 1995 (UNAUDITED)
1996 1995 ----------- ----------- REVENUE Sales $51,284,261 $52,206,975 Other 445,517 459,004 ----------- ----------- Total revenue 51,729,778 52,665,979 COSTS AND EXPENSES Cost of sales Food and paper 16,218,678 16,503,309 Payroll and related 16,854,329 18,334,137 Other operating costs 12,658,085 12,961,011 ----------- ----------- 45,731,092 47,798,457 General and administrative 1,835,338 1,532,900 Advertising 1,251,028 1,303,635 Interest 699,521 733,512 ----------- ----------- Total costs and expenses 49,516,979 51,368,504 ----------- ----------- Earnings before income taxes 2,212,799 1,297,475 INCOME TAXES 786,000 415,000 ----------- ----------- NET EARNINGS $ 1,426,799 $ 882,475 =========== =========== Primary and fully diluted net earnings per share of common stock $ 0.21 $ 0.13 =========== ===========
The accompanying notes are an integral part of these statements. 3 4 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
ASSETS September 22, June 2, 1996 1996 (unaudited) ------------ ------------ CURRENT ASSETS Cash $ 222,151 $ 134,944 Receivables Trade 1,069,696 1,107,394 Other 744,238 963,347 Inventories 3,983,697 3,725,755 Prepaid expenses and sundry deposits 2,191,414 1,280,006 Prepaid and deferred income taxes 766,043 1,352,315 ------------ ------------ Total current assets 8,977,239 8,563,761 PROPERTY AND EQUIPMENT - AT COST Land and improvements 25,623,310 24,712,017 Buildings 57,340,240 54,871,830 Equipment and fixtures 55,574,908 53,876,413 Leasehold improvements and buildings on leased land 25,073,376 24,640,369 Capitalized leases 9,249,614 9,632,186 Construction in progress -- 2,393,653 ------------ ------------ 172,861,448 170,126,468 Less accumulated depreciation and amortization 72,858,463 70,886,768 ------------ ------------ Net property and equipment 100,002,985 99,239,700 OTHER ASSETS Intangible assets 759,764 761,017 Investments in land - at cost 2,008,234 2,001,135 Property held for sale 1,386,935 1,766,068 Net cash surrender value-life insurance policies 3,580,079 3,447,360 Deferred income taxes 551,072 551,072 Other 2,047,243 2,065,728 ------------ ------------ Total other assets 10,333,327 10,592,380 ------------ ------------ $119,313,551 $118,395,841 ============ ============
The accompanying notes are an integral part of these statements 4 5 LIABILITIES
September 22, June 2, 1996 1996 (unaudited) ------------ ------------ CURRENT LIABILITIES Long-term obligations due within one year Long-term debt $ 1,816,337 $ 2,162,860 Obligations under capitalized leases 455,011 467,706 Self insurance 1,702,399 1,862,957 Accounts payable 9,197,707 8,109,024 Accrued expenses 5,037,979 5,805,262 Income Taxes 465,706 50,161 ------------ ------------ Total current liabilities 18,675,139 18,457,970 LONG-TERM OBLIGATIONS Long-term debt 20,700,000 20,098,890 Obligations under capitalized leases 6,037,812 6,229,351 Self insurance 5,288,632 5,879,111 Other 2,704,049 2,423,485 ------------ ------------ Total long term obligations 34,730,493 34,630,837 COMMITMENTS -- -- SHAREHOLDERS' EQUITY Capital stock Preferred stock - authorized, 3,000,000 shares without par value; none issued -- -- Common stock - authorized, 12,000,000 shares without par value; issued, 7,080,195 shares - stated value $1 7,080,195 7,080,195 Additional contributed capital 56,794,272 56,794,272 ------------ ------------ 63,874,467 63,874,467 Retained earnings 5,461,598 4,860,713 ------------ ------------ 69,336,065 68,735,180 Less cost of treasury stock (197,586 shares) 3,428,146 3,428,146 ------------ ------------ Total shareholders' equity 65,907,919 65,307,034 ------------ ------------ $119,313,551 $118,395,841 ============ ============
5 6 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY SIXTEEN WEEKS ENDED SEPTEMBER 22, 1996 AND SEPTEMBER 17, 1995 (UNAUDITED)
Common stock at $1 per share- Additional Shares and contributed Retained Treasury amount capital earnings shares Total ---------- ----------- ----------- ----------- ------------ Balance at May 28, 1995 $6,808,939 $54,624,224 $ 6,622,375 ($3,428,146) $ 64,627,392 Net earnings for sixteen weeks -- -- 882,475 -- 882,475 Dividends Cash - $.12 per share -- -- (794,274) -- (794,274) ---------- ----------- ----------- ----------- ------------ Balance at September 17, 1995 6,808,939 54,624,224 6,710,576 (3,428,146) 64,715,593 Net earnings for thirty-seven weeks -- -- 1,427,264 -- 1,427,264 Dividends Cash - $.12 per share -- -- (835,823) -- (835,823) Stock - 4% 271,256 2,170,048 (2,441,304) -- -- ---------- ----------- ----------- ----------- ------------ Balance at June 2, 1996 7,080,195 56,794,272 4,860,713 (3,428,146) 65,307,034 Net earnings for sixteen weeks -- -- 1,426,799 -- 1,426,799 Dividends Cash - $.12 per share -- -- (825,914) -- (825,914) ---------- ----------- ----------- ----------- ------------ Balance at September 22, 1996 $7,080,195 $56,794,272 $ 5,461,598 ($3,428,146) $ 65,907,919 ========== =========== =========== =========== ============
The accompanying notes are an integral part of these statements. 6 7 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS SIXTEEN WEEKS ENDED SEPTEMBER 22, 1996 AND SEPTEMBER 17, 1995 (UNAUDITED)
1996 1995 ----------- ----------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income $ 1,426,799 $ 882,475 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 3,131,999 3,165,587 Loss on disposition of assets 240,885 137,331 Changes in assets and liabilities: Decrease in receivables 256,807 14,595 Increase in inventories (257,942) (248,369) Increase in prepaid expenses and sundry deposits (911,408) (1,325,807) Decrease in prepaid and deferred income taxes 586,272 521,761 Increase in accounts payable 675,726 76,448 Decrease in accrued expenses (767,283) (646,385) Increase in accrued income taxes 415,545 97,952 Decrease in other assets 8,934 95,703 (Decrease) increase in self insured obligations (751,031) 1,398,084 Increase in other liabilities 280,564 14,353 ----------- ----------- Net cash provided by operating activities 4,335,867 4,183,728 CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES: Additions to property (4,151,095) (5,018,209) Proceeds from disposition of property 310,930 851,893 Increase in other assets (124,980) (410,960) ----------- ----------- Net cash (used in) investing activities (3,965,145) (4,577,276) CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: Proceeds from borrowings 1,000,000 4,000,000 Payment of long-term obligations (870,558) (2,888,525) Cash dividends paid (412,957) (397,137) ----------- ----------- Net cash (used in) provided by financing activities (283,515) 714,338 ----------- ----------- Net increase in cash and equivalents 87,207 320,790 Cash and equivalents at beginning of year 134,944 219,650 ----------- ----------- Cash and equivalents at end of quarter $ 222,151 $ 540,440 =========== =========== Supplemental disclosures: Interest paid $ 709,489 $ 886,919 Income taxes paid 370,455 287,455 Income tax refunds received 586,272 492,168 Dividends declared but not paid 412,957 397,137
The accompanying notes are an integral part of these statements. 7 8 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - ACCOUNTING POLICIES A summary of the Company's significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: Description of the Business - --------------------------- Frisch's Restaurants, Inc., operates and licenses family restaurants with drive-thru service under the name Frisch's Big Boy. These operations are located in Ohio, Indiana and Kentucky. Additionally, the Company operates two hotels with restaurants in metropolitan Cincinnati, where it is headquartered. Trademarks which the Company has the right to use include "Frisch's," "Big Boy," and "Quality Hotel." Consolidation Practices - ----------------------- The consolidated financial statements include the accounts of Frisch's Restaurants, Inc. and all of its subsidiaries. Significant inter-company accounts and transactions are eliminated in consolidation. Cash and Cash Equivalents - ------------------------- Highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Outstanding checks in the amount of $548,255 were included in accounts payable at September 22, 1996. Receivables - ----------- The Company values its trade notes and accounts receivable on the reserve method. The reserve balance was immaterial at September 22, 1996 and June 2, 1996. Inventories - ----------- Inventories, comprised principally of food items, are valued at the lower of cost, determined by the first-in, first-out method, or market. Income Taxes - ------------ Taxes are provided on all items included in the statement of earnings regardless of when such items are reported for tax purposes. Property and Equipment - ---------------------- Depreciation is provided principally on the straight-line method over the estimated service lives of the assets. Intangible Assets and Other Assets - ---------------------------------- The excess of cost over equity in net assets of subsidiaries acquired prior to November 1, 1970, is not currently being amortized because, in the opinion of management, the value has not decreased. Net cash surrender value of life insurance policies includes the cash values of two policies written by a life insurance company that is under regulatory supervision pursuant to an Order of Rehabilitation on August 12, 1994. There are restraints which restrict policy surrenders, loans and reductions in face amount. Although adjustments may become necessary to values in existence prior to August 12, 1994, it is expected that assumption reinsurance transactions will provide replacement policies with a creditworthy carrier that fully preserve cash values and which contain rights and benefits comparable to the rights and benefits under the original policies. 8 9 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE A - ACCOUNTING POLICIES (CONTINUED) New Store Opening Costs - ----------------------- New store opening costs are capitalized and amortized over a one year period from the date each new store opened. Items capitalized include new employee training costs, the cost of an employee team to coordinate the opening and the cost of certain replacement items such as uniforms and china. Opening expense for the sixteen weeks was approximately $204,000 at September 22, 1996 and $489,000 at September 17, 1995. Benefit Plans - ------------- The Company has two defined benefit pension plans covering substantially all of its employees. The benefits are based on years-of-service and other factors. The Company's funding policy is to contribute annually the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to service-to-date, but also for those expected to be earned in the future. The Company also has a non-qualified supplemental retirement plan for certain key employees. Self Insurance - -------------- The Company self-insures portions of its casualty and employee medical coverages. Self insurance costs are accrued based on management's estimate for future claims. There is insurance in place which provides for catastrophic losses. Revenue Recognition - ------------------- Franchise fees, based on sales of franchisees, are recorded on the accrual method as earned. There was no significant income from initial fees. Fair Value of Financial Instruments - ----------------------------------- The carrying value of the Company's financial instruments approximates fair value. Investment in Sports Franchise - ------------------------------ The Company's limited partnership investment in the Cincinnati Reds is carried at cost. Income distributions are recorded in earnings when received. Business Segments - ----------------- Restaurant operations constitute a dominant segment in accordance with SFAS statement No. 14, "Financial Reporting for Segments of a Business Enterprise." Use of Estimates - ---------------- The preparation of financial statements requires management to use estimates and assumptions in certain areas that affect the amounts reported. These judgments are based on knowledge and experience about past and current events, and assumptions about future events. Although management believes its estimates are reasonable and adequate, future events affecting them may differ markedly from current judgment. Some of the more significant areas requiring the use of estimates include self insurance liabilities, deferred store closing costs, value of goodwill, real estate held for sale, and deferred executive compensation. New Accounting Standards - ------------------------ Effective June 3, 1996, the Company adopted Financial Accounting Standard Number 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed of" and SFAS 123 "Accounting for Stock Based Compensation." 9 10 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE A - ACCOUNTING POLICIES (CONTINUED) SFAS 121 requires impairment losses to be recognized on long-lived assets, whether used in the operation of the business or held for disposal, when events or changes in circumstances indicate that the assets' carrying amount may not be fully recoverable. The Company considers a history of cash flow losses in established areas to be its primary indicator of potential impairment. The effect upon adoption was immaterial. SFAS 123 establishes new accounting and reporting standards for stock based compensation plans. Companies may elect to adopt this standard using a fair-value based method or continue using the intrinsic value method of measuring compensation expense prescribed under the current guidance of Accounting Principles Board Opinion Number 25 (APB 25). Since the Company elected to continue using the intrinsic value method, SFAS 123 has not affected the Company's statement of earnings or financial position. SFAS 123 requires companies electing to continue using the rules of APB 25 to make pro forma disclosures of net income and earnings per share as though the fair value method had been elected. Pro forma disclosures of options granted and stock issued will be reflected in the footnotes of the Company's consolidated financial statements when required. NOTE B - LONG-TERM DEBT
September 22, 1996 June 2, 1996 ---------------------- -------------------- Payable Payable Payable Payable within after within after one year one year one year one year --------- -------- -------- -------- (in thousands) Revolving credit loan $ - $ 12,500 $ - $ 11,500 Term loan 1,500 8,000 1,625 8,375 Other 316 200 538 224 ------- --------- ------- --------- $ 1,816 $ 20,700 $ 2,163 $ 20,099 ======= ========= ======= =========
The portion payable after one year matures as follows:
September 22, June 2, 1996 1996 ------------- --------- (in thousands) Period ending in 1998 $ 1,700 $ 1,724 1999 14,000 1,500 2000 1,500 13,000 2001 1,500 1,500 Subsequent to 2001 2,000 2,375 --------- --------- $ 20,700 $ 20,099 ========= =========
The revolving credit loan is a $20,000,000 line of credit, $12,500,000 of which is outstanding at September 22, 1996. This credit loan matures on September 1, 1999, unless extended. Interest is payable quarterly determined by various indices, currently 6.66%. The term loan is payable in monthly installments of $125,000 through December 31, 2002. Interest is also payable monthly at a rate equal to the prime rate up to a maximum of 7.5% through December 31, 1997. The rate for the final five years shall also be equal to the prime rate, not to exceed 8.5%. These agreements contain covenants relating to net worth, interest expense, debt and capitalization changes, asset dispositions, investments, leases, and restrictions on pledging certain restaurant operating assets. The Company also has a $2,233,000 outstanding letter of credit in support of its self insurance. 10 11 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE B - LONG TERM DEBT (CONTINUED) Other debt includes industrial revenue bonds that were issued in 1978, payable in annual installments of $200,000 through 1998 which bear interest at 7.4%. Property and equipment having a book value at September 22, 1996 of $3,195,000 is pledged as collateral for the bonds. NOTE C - LEASED PROPERTY The Company has capitalized the leased property of 52% of its non-owned restaurant locations. The majority of the leases are for fifteen or twenty years and contain renewal options for ten to fifteen years. Delivery equipment is held under capitalized leases expiring during periods to 2001. The Company also occupies office space under an operating lease which expires during 2003. An analysis of the leased property follows:
Asset balances at -------------------------- Sept. 22, June 2, 1996 1996 ---- ---- (in thousands) Restaurant facilities $ 8,680 $ 8,762 Equipment 570 870 --------- -------- 9,250 9,632 Less accumulated amortization (5,048) (5,154) --------- -------- $ 4,202 $ 4,478 ========= ========
Total rental expense of operating leases for the sixteen weeks was approximately $481,000 at September 22, 1996 and $492,000 at September 17, 1995. Future minimum lease payments under capitalized leases and operating leases having an initial or remaining term of one year or more follow:
Capitalized Operating Period ending September 22, leases leases --------------------------- ----------- --------- (in thousands) 1997 $ 1,136 $ 1,292 1998 1,065 1,245 1999 999 1,083 2000 945 967 2001 835 842 2002 to 2020 6,738 3,672 -------- ------- Total 11,718 $ 9,101 ======= Amount representing interest (5,226) ------- Present value of obligations 6,492 Portion due within one year (454) ------- Long-term obligations $ 6,038 =======
NOTE D - INCOME TAXES The provision for income taxes in all periods has been computed based on management's estimate of the tax rate for the entire fiscal year. 11 12 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE E - CAPITAL STOCK Shareholders approved the 1993 Stock Option Plan on October 4, 1993. The plan authorizes the grant of stock options for up to 540,800 shares of the Common Stock of the Company for a ten year period beginning May 9, 1994. Shares may be optioned at not less than seventy-five percent of the fair market value on the date granted and may include stock appreciation rights. No options have been granted under the 1993 plan. The 1984 Stock Option Plan expired on May 8, 1994. Outstanding options are exercisable within ten years from the date of grant. The exercise price is the fair market value as of the date granted. The outstanding stock options for the 1984 plan follow:
Option Price -------------------------------- Shares Per Share Total ------ -------------------------------- Chairman 82,110 $17.48 $1,435,283 President 97,975 $14.95-$21.66 1,956,804 Other key employees 74,551 $17.48 1,303,151
The Company also has reserved 56,243 shares for issuance under the Frisch's Executive Savings Plan. Shares reserved under these plans have been adjusted for stock dividends. There are no other outstanding options, warrants or rights. NOTE F - PENSION PLANS The following table sets forth the plans' funded status and amounts recognized in the Company's balance sheet at June 2, 1996 and May 2, 1995 (latest available data, in thousands):
1996 1995 --------- --------- Plan assets at fair market value, primarily marketable securities and insurance funds $ 18,597 $ 16,451 Actuarial present value of benefit obligations: --------- --------- Vested benefits 9,895 8,300 Non vested benefits 802 823 --------- --------- Accumulated benefit obligations 10,697 9,123 Effect of projected future salary increases 2,997 3,201 --------- --------- Projected benefit obligations 13,694 12,324 --------- --------- Plan assets in excess of projected benefit obligations (including approximately $369 at 1996 and $360 at 1995 withdrawable by participants upon demand) 4,903 4,127 Unrecognized net gains (4,349) (3,259) Unrecognized prior service cost 641 599 Unrecognized net transition (assets) (1,421) (1,658) --------- --------- Net accrued pension cost included in the balance sheet $ (226) $ (191) ========= =========
Assumptions used to develop net periodic pension cost and the actuarial present value of projected benefit obligations:
1996 1995 --------- ------- Expected long-term rate of return on plan assets 8.50% 8.50% Weighted average discount rate 7.25 7.25 Rate of increase in compensation levels 5.50 5.50
Pension expense for the sixteen weeks ended September 22, 1996 and September 17, 1995 was $63,193 and $110,208, respectively. 12 13 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE G - EARNINGS PER SHARE Earnings per common share are based on the weighted average number of common and common equivalent shares outstanding during each period, which gives effect to stock options.
Weighted average common shares (Primary and fully diluted) -------------- Quarter ending September 22, 1996 6,882,609 Quarter ending September 17, 1995 6,882,609
NOTE H - COMPANY REPRESENTATIONS The financial information is unaudited but in the opinion of management includes all adjustments (all of which were normal recurring adjustments) necessary for a fair presentation of results of operations for such periods. 13 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - --------------------- Total revenue was $51,730,000 for the first quarter of fiscal 1997, a decrease of $936,000 or 1.8% from last year's record level. Sales were also off 1.8% from last year. Last year's sales included $1,336,000 from the Company's former Hardee's operation. An analysis of Big Boy sales shows a modest same store sales increase. In addition, the loss of sales from restaurants that have closed since the beginning of fiscal 1996 was outpaced by sales increases of newer restaurants. Menu prices were increased approximately 1% and 2%, respectively, in the third and first quarters of fiscal 1996. The effect of these increases is difficult to quantify due to factors such as the introduction of new menu items, product sales mix changes after price increases and competition. Other income declined 2.9% during the quarter due to lower franchise fees, as seven licensed restaurants closed during the last twelve months. Two new licensed Big Boy restaurants opened shortly after the quarter ended. At the end of the quarter, the Company operated 104 Big Boy restaurants and two Quality Hotels. During the quarter, three new Big Boy restaurants were opened, two of which replaced existing restaurants, completing the 1996 construction cycle. No restaurants were closed during the quarter. Cost of sales decreased $2,067,000 or 4.3%, as costs fell to 88.4% of revenue from 90.8% a year ago. The largest component of this improvement was a reduction in payroll related expense, as favorable claims experience in the Company's self insurance programs allowed estimates for future obligations to once again be lowered. This year's favorable adjustment was $1,396,000 greater than last year's first quarter adjustment. Improvements in safety have allowed the Company to withdraw from the Ohio Workers' Compensation system in the current year. This withdrawal, along with other enhancements to the Company's insurance programs, has resulted in additional savings. Other cost reductions reflected in the lower cost of sales include lower opening expenses, resulting from a slow-down in new restaurant construction, and the savings from eliminating underperforming Big Boy and Hardee's restaurants. Offsetting these improvements was a charge to other operating expense of approximately $485,000 associated with the loss of sub-leases. Also, higher payroll expenses due to tight labor markets continue to put pressure on restaurant margins. The Company does not expect the Federal minimum wage increase that became effective October 1, 1996 to have an immediate material effect on earnings because of these labor market conditions. Creeping commodity prices caused food and paper costs to rise slightly as a percentage of revenue. General and Administrative expense was 19.7% or $302,000 higher than last year due primarily to the cost of the 1996 proxy fight and a charge to lower the carrying cost of property held for sale. Advertising expense was 2.4% of revenue versus 2.5% last year, reflecting the Company's policy of spending a constant percentage of sales dollars. Marketing stategies emphasizing the quality of specific menu items will be carried on television throughout fiscal 1997. A new Big Boy menu has now been rolled out in all markets and has been positively received by customers. Interest expense decreased 4.6% or $34,000 during the quarter, as borrowing has leveled-off and average interest rates were lower than last year. It remains the Company's intention to operate within cash flow and to reduce long-term debt when cash flow permits. It is expected that interest expense will continue to decline as the year progresses. The estimated annual income tax rate is 35.5% this year versus 32% last year. The Work Opportunity Tax Credit that became available under the Internal Revenue Code on October 1, 1996 is expected to have a minimal favorable impact on the effective tax rate. Liquidity and Capital Resources - ------------------------------- Cash provided by operating activities was $4,350,000, generated principally from net income and depreciation. Investing activities included $4,150,000 in property additions, a reduction of approximately $850,000 from last year. Capital spending consisted of $1,850,000 to complete the 1996 construction cycle, $1,600,000 to remodel existing operations, and $700,000 in normal equipment replacements and other capital costs. Proceeds of $300,000 from the sale of land were also included in investing activities. 14 15 Financing activities included $1,000,000 of new debt. Scheduled long-term debt payments of approximately $900,000 were made and the Company paid a regular quarterly dividend to shareholders of over $400,000 during the quarter. Current plans do not call for any new Big Boy restaurants to be constructed in fiscal 1997. Scheduled hotel renovations and Big Boy remodelings will continue. Point of sale systems are installed and being tested in five Big Boy restaurants. Enhancements to this pilot phase are expected to be completed before the end of fiscal 1997, at which time installation of the fully functional system will commence, requiring a capital outlay of $30,000 to $35,000 per restaurant. The Company intends to fund these expenditures out of cash flow. PART II - OTHER INFORMATION - --------------------------- Items 1, 2, 3, and 5, the answers to which are either "none" or "not applicable", are omitted. Item 4. Submission of matters to a vote of Security Holders. a) The annual meeting of Shareholders was held on October 7, 1996. b) Directors elected on October 7, 1996: Jack C. Maier William A. Mauch Barry S. Nussbaum Jerry L. Ruyan Directors whose terms continued after the meeting: Marvin G. Fields Daniel W. Geeding Blanche F. Maier Craig F. Maier c) The following matters were voted upon: 1) Election of Directors Name For ---- --- Alfred M. Cohen 7,420 Jack C. Maier 6,703,435 William A. Mauch 5,180,163 Louis J. Ullman 294,380 Jerry L. Ruyan 6,695,902 Barry S. Nussbaum 6,695,902 Thomas W. Doan 737 Arthur Engel 1,879 2) Management proposal to approve the appointment of Grant Thornton LLP as independent auditors received the following votes: For Against Abstain --- ------- ------- 5,954,260 375,001 139,365 3) Shareholder proposal to amend the Company's Code of Regulations to eliminate the classified Board of Directors was defeated as it failed to achieve a majority of the outstanding shares entitled to vote. It received the following votes: For Against Abstain --- ------- ------- 3,407,520 3,038,071 27,740 4) Shareholder proposal to amend the Company's Code of Regulations to require that a majority of the Board of Directors and each committee of Directors be composed of non-management Directors was approved. It received the following votes: For Against Abstain --- ------- ------- 3,604,502 2,830,406 38,423 15 16 Item 6. Exhibits and reports on Form 8-K. a) Exhibits (3) Articles of Incorporation and By-Laws (3)(a) Code of Regulations, as amended October 16, 1996 (27) Financial Data Schedule b) Reports on Form 8-K. The Company did not file a report on Form 8-K during the sixteen weeks ended September 22, 1996. SIGNATURE --------- 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. FRISCH'S RESTAURANTS, INC. -------------------------- (registrant) DATE November 4, 1996 ---------------- November 4, 1996 BY Donald H. Walker -------------------------------- Donald H. Walker Vice President - Finance and Principal Financial Officer 16 EX-3.A 2 EXHIBIT 3(A) 1 EXHIBIT 3-A CODE OF REGULATIONS OF FRISCH'S RESTAURANTS, INC. (as amended on October 16, 1996) ARTICLE I Section 1. The principal officers of the corporation shall be a President, an Executive Vice President and one or more Vice Presidents, a Secretary, and a Treasurer, and, if the Board of Directors and the Chairman of the Board of Directors shall be members of the Board of Directors. Any two of the offices may be held by the same person (except that the same person shall not be both President and Vice President). Section 2. All principal officers shall be elected, and all vacancies in such offices be filled by the Board of Directors. The terms of office of said officers shall extend from their respective elections to the next organization meeting of the Board of Directors, and until their respective successors are elected, but the Board of Directors may, at any time, remove any officer with or without cause. Section 3. The board of directors may, from time to time, in its discretion, create, and fill by the election, or cause to be filled by appointment by one of the principal officers, one or more assistant secretaryships, one or more assistant treasureships, and such other offices, assistant or subordinate to any of the principal offices above named, as it shall deem necessary to the proper conduct of the business of the corporation, and may prescribe the terms of office, qualifications, authorities and duties of the holders of such offices. The board of directors may, at any time, in its discretion, abolish any such office created by it, and the term of office of any holder of such office shall thereupon terminate, anything in these regulations contained to the contrary notwithstanding. In case of the absence or 17 2 EXHIBIT 3-A disability of any officer of the corporation, the board of directors may, unless otherwise provided herein, delegate to any other officer, or to any director, of the corporation, all, or any part, of the authority and duties of such absent or disabled officer. Section 4. The compensation of the officers of the corporation shall be such as shall from time to time be fixed by the board of directors, and the fixing of the salaries of the principal officers shall not be delegated to a committee. The board of directors may, in its discretion, at any time, require any officer of the corporation to give, for the faithful performance of his duties, bond, in form and amount, and with surety, satisfactory to the board of directors. Section 5. (a) If there be a chairman of the board of directors, he shall preside at all meetings of said board, and of the shareholders, and shall perform such other duties, and have such authority, not inconsistent with law and these regulations, as shall be imposed or conferred upon him by the board of directors. (b) The president shall (unless the chairman of the board of directors, if any, be present), preside at all meetings of the shareholders and board of directors of the corporation; shall, subject to the direction and control of the board of directors, be the chief executive office of the corporation, and have general supervision and direction of all other officers of the corporation, and general charge of its business and property; and shall be ex officio a member of all standing committee of the board of directors, except the executive committee, if there be one; shall, unless otherwise ordered by the board of directors, or provided herein, sign all instruments of writing to which it is customary to affix the seal of the corporation (provided however, that certificates for shares may be signed by the chairman of the board or any vice-president of the corporation); shall keep the board of directors and the executive committee, if there be one, fully informed about the affairs of the corporation; and shall make to the 18 3 EXHIBIT 3-A annual meeting of the shareholders a full and true statement of the corporate affairs. (c) The vice-presidents shall be designated, "Executive Vice-President," "First Vice-President," "Second Vice-President," etc. and shall, in the order of such designation (unless another order be specified by the board of directors), in case of the absence or disability of the president, exercise his authority and perform his duties, and shall respectively perform such other duties, and have such other authority, not inconsistent with these regulations, as shall be imposed or conferred upon them by the board of directors; but a vice-president who is not a director may not succeed to the office of president. (d) The secretary, in addition to all authority and duties provided by law, shall attend, as hereinbefore, or by law, provided, to the giving of notices of shareholders' meetings; shall give notice of directors' meetings, when required by the by-laws or resolutions of the board of directors so to do; shall keep and sign the minutes of all meetings of the shareholders, the board of directors, and the committees thereof; shall keep such other records as the board of directors or any committee thereof shall require; shall have charge of the corporate seal, and (subject to the rules and regulations of the board of directors and the transfer agents and registrars, if any, of the shares of the corporation) shall have custody of the share certificate books and share records, and attend to the issuance of certificates for shares, of the corporation; and shall sign all instruments to which the seal of the corporation shall be authorized to be affixed (provided, however, that certificates for shares of the corporation may be signed by the treasurer or by any assistant treasurer or assistant secretary of the corporation); but, subject to the general control and direction of the secretary, any of his authorities or duties may be delegated by him, or by the board of directors, to any assistant secretary of the corporation. 19 4 EXHIBIT 3-A (e) The treasurer, in addition to all authority and duties provided by law, shall, subject to the direction of the board of directors of the corporation, have custody of the corporate funds and securities; shall keep full and accurate accounts of all receipts and disbursements thereof; shall deposit all moneys and other funds of the corporation in such depositories as shall from time to time be designated by the board of directors, the same to be withdrawn as the board of directors shall from time to time direct; shall render, at meetings of shareholders, such financial statements of the corporation as shall be required by law, and from time to time, as requested by the president or board of directors of the corporation, shall render statements of his transactions and accounts, and of the financial condition of the corporation; shall, unless otherwise ordered by the board of directors, sign all commercial paper of the corporation and shall, upon the expiration of his term of office, account for and deliver to the corporation all books, vouchers, papers, moneys and other property of whatever kind, of the corporation, in his possession or under his control; but, subject to the general control and direction of the treasurer, any of his authorities or duties may be delegated by him, or by the board of directors, to any assistant treasurer of the corporation. (f) In addition to the authorities and duties hereinabove provided, the principal officers of the corporation shall have such other authorities and duties as are usually incident to such offices in corporation engaged in business similar to that of this corporation, and such other authorities and duties as shall from time to time be conferred upon, or required of, them, respectively, by the Board of Directors. Anything in these regulations to the contrary notwithstanding, the Board of Directors may at any time provide, either for specific cases, or generally, that any written instrument to be executed, signed or delivered, or any other thing to be done, in the name or upon behalf of the corporation, may be so signed, executed, 20 5 EXHIBIT 3-A delivered or done, by any one or more of the principal officers, or by any other officer, agent or attorney, of the corporation, designated for such purpose by the Board of Directors; provided, however, that certificates for shares of the corporation shall be signed as provided in Section 1 of Article 1 of these regulations. ARTICLE II Section 1. The business of the corporation shall be managed and conducted by a Board of Directors consisting of not less than five (5) nor more than nine (9) members, one of whom shall be designated Chariman and none of whom need be shareholders of the corporation. A majority of the Directors and of each committee of the Directors of the Corporation shall be persons who are not, and have not been within three years of the date of their selection, an officer or employee of the Corporation or a relative of any such person or a person having a material relationship with the Corporation as an advisor or consultant. Section 2. The Board of Directors shall be elected at the annual meeting of the shareholders, or, if not then elected, or if such meeting be not held at the time fixed therefore, then at a special meeting held for the purpose of electing directors. The Board of Directors shall be divided into two classes consisting of not less than three Directors each. Directors elected at the first election of the first class shall hold office for a term of one year. Directors elected at the first election of the second class shall hold office for a term of two years. In each instance, such Directors shall hold office until their successors are elected and qualified. Upon expiration of the terms of office of the Directors as set forth above, their successors shall be elected for a term of two years and until their successors are elected and qualified. The election of directors shall, if the number of persons nominated be greater than the number of directorships to be filled, be by ballot. At all election of directors the candidates receiving the 21 6 EXHIBIT 3-A greatest number of votes shall be elected. In the event that less than nine (9) be elected at any annual meeting of shareholders any vacancy or vacancies left open may be filled at anytime by the Board. Section 3. Any director may, at any time, resign, by the written resignation delivered to the secretary, or an assistant secretary, of the corporation, and such resignation shall, unless otherwise specified therein, be effective upon such delivery. Vacancies in the Board of Directors may be filled by a majority vote of the remaining directors until the next annual meeting. Shareholders entitled to elect Directors shall have the right to fill any vacancy in the Board (whether the same has been temporarily filled by the remaining directors or not, and notwithstanding the provisions of Section 2 above) at any meeting of the shareholders attended by a quorum thereof, held for any purpose during the interim, and any directors elected at such meeting of the shareholders shall serve until the next annual election of directors, and until their successors are elected and qualified. If the office of the Chairman of the Board becomes vacant between annual meetings, it may likewise be filled at any subsequent or interim meeting of the shareholders. Section 4. For their attendance at meetings of the Board of Directors or of any committee of the Board, directors who do not receive regular compensation from the corporation in any other capacity may be paid such compensation as the Board of Directors shall from time to time fix, and there shall be paid to all directors their reasonable expenses incurred in attending meetings of the Board of Directors or of any committee thereof. Section 5. The Board of Directors shall have all authority, in the conduct, control and management of the business and property of the corporation, which shall be consistent with law, the articles and these regulations, including (but not hereby limiting the generality of the foregoing grant of authority) authority to adopt and alter the corporate 22 7 EXHIBIT 3-A seal; to fix the fiscal year of the corporation; to fix, within the limits prescribed in the articles, the plan of its principal office; to establish and discontinue, at such times and places as the board of directors shall deem proper, offices of the corporation, in addition to its principal office; and to appoint, from the board's own number, change the membership of, and remove, an executive committee, and other committees, with such authority (including the authority to act by writing, signed by all members of the committee, without a meeting) and duties, not inconsistent with the law, the articles and these regulations, as provided in these regulations, any authority herein or by law conferred upon the board of directors, may, in the interval between meetings of the board of directors, be exercised by any committee of the board to whom the board shall delegate the same. ARTICLE III Section 1. The Annual Meeting of the Stockholders shall be held at Cincinnati, Ohio on the first Monday in October, at which meeting the Board of Directors shall be chosen. If for any reason it be impractical to hold the meeting at such time, the President shall call a meeting as soon thereafter as its practical. Section 2. Upon the election of the Directors, the Secretary shall notify the several Directors of their election, and they shall within five days after their election meet for the purpose of organizatio and transaction of business. Section 3. Stockholders shall be entitled to one vote for each share of stock held by them. Section 4. Special meetings of shareholders may be called at any time by the Presidnet, and must be called by the President upon written request of the holders of 50% of the outstanding shares entitled to vote at such special meeting. Written notice of such 23 8 EXHIBIT 3-A meetings stating the place, date and hour of the meeting, the purpose or purposes for which it is called, shall be given not less than 7 nor more than 60 days before the date set for the meeting by directing said notice to each stockholder at his last known place of residence. No business other than that specified in the notice of meeting shall be transacted at any such special meeting. ARTICLE IV Section 1. The annual meeting of the Board of Directors shall be held on the third Monday in August commencing with the calendar year 1961, and for every year thereafter. Section 2. The Board of Directors shall have the right to designate at which times and places it shall hold other meetings. Section 3. Sepcial meetings of the Board of Directors may be called by any two of the Directors by written notice of the time and place and object of such meeting, which notice shall be mailed to or personally served on all the Directors at least two days before the time fixed for said meeting. If notice be sent by mail, said notice shall be directed to the last known place of residence of each said Directors. ARTICLE V Any meeting of stockholders or of the Board of Directors may be held within or without the State of Ohio. ARTICLE VI It shall be the duty of the Board of Directors to exercise general supervision over the affairs of the Company, advise with its officers, fix their compensation, and cause to be prepared a report of the business 24 9 EXHIBIT 3-A setting forth the assets and liabilities and submit the same for the consideration of the stockholders at the annual meetings, to declare dividends and order the same paid at such times as they may determine upon and as the net earnings and conditions of the business warrant. Said Board of Directors, or any officer thereof, to commence, prosecute or enforce or to defend, answer or oppose all actions or other legal proceedings touching any of the matters concerning said corporation, or to compromise, require an arbitration or submit a judgment in any action or proceeding brought against said company. ARTICLE VII Section 1. Each shareholder of the corporation shall be entitled to a certificate, certifying (or certificates, certifying in the aggregate), the number and class of paid-up shares of the corporation held by him, but no certificates shall be issued for a share until it is fully paid. Such certificates shall be of such form and content, not inconsistent with law and the articles, as shall be determined by the board of directors, shall be consecutively numbered in each class of shares, shall be signed by the chairman of the board of directors or the president or any vice-president and by the secretary, or, any assistant secretary, or the treasurer, or any assistant treasurer, (and shall bear an impression of the seal, of the corporation or a facsimile thereof); provided, however, that when any such certificate is countersigned by a transfer agent, who is not an employee of the corporation, or by a transfer clerk or by a registrar, the signatures of any such chairman, president, vice-president, secretary, assistnat secretary, treasurer or assistant treasurer (and the seal of the corporation), upon such certificate may be facsimiles, engraved, stamped or printed. A full record of each certificate so issued shall be kept by the secretary, or by a transfer agent of the shares, of the corporation. Such record shall show the number of the certificate, the number and class of shares represented thereby, the date of issuance, the name of the shareholder, his address, as furnished by him to the corporation, and, if the certificate 25 10 EXHIBIT 3-A be issued upon a transfer of shares, from whom transferred, and the number of the certificate surrendered for transfer. Certificates may, if authorized by the Board of Directors, be issued for fractions of shares. Section 2. Subject to any applicable provisions of law or of the articles, transfers of shares of the corporation shall be made only upon its books, upon surrender and cancellation of a certificate or certificates for the shares to transferred, and upon compliance with such reasonable requirements as shall be prescribed by the Board of Directors, or by the respective transfer agents and registrars, if any, of the shares of the corporatin. Any certificate so presented for transfer shall be indorsed, or shall be accompanied by a separate written assignment or a power of attorney to sell, assign and transfer such certificate and the shares represented thereby, signed, by the person appearing by the certificate to be the owner of the shares represented thereby, or by a duly appointed guardian, or executor or administrator, of the estate of such person. Section 3. The Board of Directors, may from time to time, appoint and remove one or more agents, to keep the records of the corporation's shares, and to transfer or register (or both) such shares, in such places, and with such powers, not inconsistent with law and these regulations, as the Board of Directors shall deem proper. Section 4. No certificate of stock shall be transferred so long as the holder thereof, whether legally or equitably, shall be indebted to the company, and the company shall have a first and paramount lien upon all stock of any holder who may be indebted to the company. ARTICLE VIII Unless changed by a majority vote, at all stockholder's meetings the order of business shall be as follows: 26 11 EXHIBIT 3-A 1. Reading of the Minutes; 2. Reading of Reports and Statements; 3. Unfinished Business; 4. Election of Directors; 5. New or Miscellaneous Business. ARTICLE IX The corporation shall indemnify any person who was or is a party to any pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, or who is threatened to be made a party to any such action, suit or proceeding whether threatened, pending or completed, by reason of the fact that the person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, partner or trustee of another corporation, partnership, joint venture trust or other enterprise, against all expenses actually and reasonably incurred by the person in connection with such action, suit, or proceeding, including but not limited to judgments, fines and amounts paid in settlement, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that the person's conduct was unlawful. 27 12 EXHIBIT 3-A Further, the corporation shall indemnify any person who was or is a party to any pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor or who is threatened to be made a party to any such action suit or proceeding, whether threatened, pending or completed, by reason of the fact that the person is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise, against all expenses actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit, but not including judgments or amounts paid in settlement, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation; provided, however, that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of the person's duty to the corporation unless, and only to the extent that the court of common pleas or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper. Any indemnification, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indeminification of the director, officer, partner or trustee is proper in the circumstances because such person has met the applicable standard of conduct set forth above. Such determination shall be made by a majority vote of a quorum consisting of directors of the corporation who were not and are not parties to or threatened with such action, suit, or proceeding, or if such a quorum is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel 28 13 EXHIBIT 3-A other than an attorney, or a firm having associated with it an attorney, who has been retained buy or who has performed services for the corporation or any person to be indemnified within the past five years. Any determination made by the disinterested directors or by independent legal counsel shall be promptly communicated to any person who threatened or brought an action or suit by or in the right of the corporation. The foregoing notwithstanding, to the extent that such a director, officer, partner or trustee has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to above or in defense of any claim, issue, or matter therein such person shall be entitled to indemnification against all expenses actually and reasonably incurred by such person in connection therewith as a matter of right, without the necessity of a determination that indemnification is proper. Expenses incurred in defending any action, suit, or proceeding, may be paid by the corporation in advance of the final disposition of the same as authorized by the directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, partner or trustee to repay such amount if it is ultimately determined that such person is not entitled to indemnification under this article. The rights of indemnification granted by this article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the Ohio General Corporation Law, the Articles of Incorporation or Code of Regulations of this corporation or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to actions in such person's official capacity and as to actions in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, executors, and administrators of such person. 29 14 EXHIBIT 3-A The corporation may purchase and maintain insurance on behalf of any person required or authorized to be indemnified under this article against any liability asserted against or incurred by such person in or arising out of such persons status as a director, officer, partner or trustee as specified in this article, whether or not the corporation would have the power to indemnify such person under this article. As used in this article, references to "the corporation" include all constituent corporations and the new or surviving corporation in a consolidation or merger so that any person who is or was a director or officer of such a constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, partner or trustee of another corporation, partnership, joint venture, trust, or other enterprise shall stand in the same position under this article with respect to the new or surviving corporation as the person would if the person had served the new or surviving corporation or at the request of the new or surviving corporation in the same capacity. In the discretion of the board of directors of the corporation, any person who is or was serving as an employee or agent of the corporation or, at the request of the corporation, as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified by the corporation under the circumstances and to the extent that indemnification would be required or authorized for a person acting as a director or officer of the corporation or director, officer, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise under this article. ARTICLE X These Regulations or any of them may be altered, amended, repealed or suspended at any special meeting of the stockholders, provided that notice of the proposed alteration, amendment or repeal 30 15 EXHIBIT 3-A shall be filed with the Secretary of the company not less than two (2) weeks before the time of such special meeting and its purpose shall be given to each stockholder at least seven (7) days prior to the date thereof, at his last known place of residence. Action at such meeting may be taken by a majority vote of stockholders represented thereat. These Regulations or any of them may be altered, amended, repealed or suspended at any annual meeting of the stockholders by a majority vote of stockholders represented at such meeting, and in such event no previous advice to stockholders shall be required. EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENT OF EARNINGS OF FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-1-1997 JUN-3-1996 SEP-22-1996 222,151 0 1,813,934 0 3,983,697 8,977,239 172,861,448 72,858,463 119,313,551 18,522,847 26,737,812 7,080,195 0 0 58,827,724 119,313,551 51,284,261 51,729,778 45,731,092 45,731,092 3,086,366 0 699,521 2,212,799 786,000 1,426,799 0 0 0 1,426,799 .21 .21
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