XML 73 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 12 - Subsequent Events
12 Months Ended
Mar. 03, 2013
Subsequent Events [Text Block]

NOTE 12. SUBSEQUENT EVENTS


On April 12, 2013, subsequent to the balance sheet date of March 3, 2013, the Company closed on a $2,104,500 equity investment by Bandera Master Fund L.P. (“Bandera”) in a negotiated and exempt private placement of 1,052,250 Company common shares at the purchase price of $2.00 per share. The Bandera investment was made pursuant to a Share Purchase Agreement, which was dated and closed on April 12, 2013, between the Company and Bandera. The transaction and related items are more fully described in a Form 8-K filed by the Company on April 15, 2013.


Subsequent to the end of the March 3, 2013 fiscal year, to facilitate Bandera’s investment, on April 10, 2013, the Company and Computershare Trust Company, N.A., as Rights Agent, amended the Company’s Shareholder Rights Agreement. The primary effect of the amendment was to amend the definition of who qualifies as an “Acquiring Person” under the Shareholder Rights Agreement. The Shareholder Rights Agreement now allows Bandera (or any of its associates or affiliates) to beneficially own in the aggregate not more than 27% of the Company’s issued and outstanding common shares without becoming an Acquiring Person.


On April 9, 2012 the Company’s Board of Directors adopted and approved Morgan’s Foods, Inc. Long-Term Incentive Plan (the “LTIP”). A total of 150,000 Company common shares are reserved and available for awards under the LTIP which is to be administered by the Company’s Compensation and Leadership Committee (“the Committee”). Also on April 9, 2013, the Committee granted incentive equity awards pursuant to the LTIP of (i) 2,285 restricted common shares each to James C. Pappas, Steven S. Kaufman, Marilyn A. Eisele and Bernard Lerner in consideration of their service on the Committee, and (ii) 6,000 restricted common shares each to Steven S. Kaufman, Marilyn A. Eisele and Bernard Lerner in consideration of their service on a Board Special Committee. In addition, on April 9, 2013, the Committee granted an incentive equity award pursuant to the LTIP of 3,429 restricted common shares to James C. Pappas as non-cash compensation for his service as Chairman of the Board. The LTIP is more fully described in a Form 8-K filed by the Company on April 15, 2013.


After the balance sheet date of March 3, 2013, the Company completed the rebuild of one KFC restaurant in May of 2013, at a cost of approximately $1,000,000 and installed seven additional KFC operations platforms (Merit P.O.S. system, next generation holding cabinets and speed of service timing system) at a cost of approximately $266,000 in accordance with the contracts requiring the remodels and installation of the operations platforms. Also, on April 2, 2013, the Company closed one of its Taco Bell restaurants as the lease had expired and the location was no longer deemed viable.