-----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, LxkLo32kc+e4bsdQRuoqqNigRe/VA0hfckDpygDdZirNE2Y2r/0UpL+ybIt7EUQf J6xUwkVUxhzc5ioHnwUraw== /in/edgar/work/20000526/0000703799-00-000016/0000703799-00-000016.txt : 20000919 0000703799-00-000016.hdr.sgml : 20000919 ACCESSION NUMBER: 0000703799-00-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000416 FILED AS OF DATE: 20000526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VICORP RESTAURANTS INC CENTRAL INDEX KEY: 0000703799 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 840511072 STATE OF INCORPORATION: CO FISCAL YEAR END: 1026 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12343 FILM NUMBER: 644963 BUSINESS ADDRESS: STREET 1: 400 W 48TH AVE CITY: DENVER STATE: CO ZIP: 80216 BUSINESS PHONE: 3032962121 10-Q 1 SECOND QUARTER 10-Q UNITED STATES SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 16, 2000 --------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ----------------------------- Commission file number 0-12343 ------- VICORP Restaurants, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) COLORADO 84-0511072 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 West 48th Avenue, Denver, Colorado 80216 -------------------------------------------- (Address of principal executive offices) (Zip Code) (303) 296-2121 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 registrant had 6,745,890 shares of its $.05 par value Common Stock outstanding as of May 25, 2000. PART I - FINANCIAL INFORMATION Item 1. Financial Statements VICORP Restaurants, Inc. BALANCE SHEETS
(in thousands) April 16, October 31, 2000 1999 --------- ----------- (unaudited) ASSETS Current assets Cash $ 5,820 $ 33,187 Receivables 2,781 5,801 Inventory (Note 3) 6,238 9,989 Deferred income taxes 7,059 7,059 Prepaid expenses and other 1,790 1,253 -------- -------- Total current assets 23,688 57,289 -------- -------- Property and equipment, net 130,530 128,753 Deferred income taxes 29,988 33,303 Long-term receivables 852 1,204 Other assets 7,826 7,722 -------- -------- Total assets $ 192,884 $ 228,271 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current maturities of long-term debt and capitalized lease obligations $ 1,497 $ 1,582 Accounts payable, trade 16,719 18,054 Accrued compensation 7,225 7,616 Accrued taxes 9,229 11,008 Accrued insurance 2,155 2,246 Other accrued expenses 5,645 6,528 -------- -------- Total current liabilities 42,470 47,034 -------- -------- Long-term debt 3,501 40 Capitalized lease obligations 3,651 4,548 Non-current accrued insurance 2,375 2,757 Other non-current liabilities and credits 21,562 22,044 Commitments and contingencies Shareholders' equity Common stock, $.05 par value,20,000,000 shares authorized, 6,745,890 and 8,845,581 shares issued and outstanding 339 444 Paid-in capital 40,868 80,673 Retained earnings 78,118 70,731 ------- ------- Total shareholders' equity 119,325 151,848 ------- ------- Total liabilities and shareholders' equity $ 192,884 $ 228,271 ======== ========
The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data)
Twelve Twelve Twenty-four Twenty-four weeks weeks weeks weeks ended ended ended ended --------- --------- --------- --------- April 16, April 18, April 16, April 18, 2000 1999 2000 1999 --------- --------- --------- --------- Revenues Restaurant operations $ 84,376 $ 81,090 $ 170,959 $ 164,467 Franchise operations 924 764 1,536 1,480 --------- --------- --------- --------- Total revenues 85,300 81,854 172,495 165,947 --------- --------- --------- --------- Costs and expenses Restaurant operations Food 24,373 24,611 51,365 50,999 Labor 27,990 26,585 55,489 52,953 Other operating 20,599 20,120 41,062 40,306 General and administrative 6,457 6,739 12,897 12,957 --------- --------- --------- --------- Operating Profit 5,881 3,799 11,682 8,732 Interest expense 247 235 434 474 Other income, net (132) (104) (385) (185) --------- --------- --------- --------- Income before income tax expense 5,766 3,668 11,633 8,443 Income tax expense 2,104 1,339 4,246 3,082 --------- --------- --------- --------- Net income $ 3,662 $ 2,329 $ 7,387 $ 5,361 ========= ========= ========= ========= Basic earnings per share $ .54 $ .26 $ .99 $ .59 ========= ========= ========= ========= Diluted earnings per share $ .54 $ .26 $ .98 $ .59 ========= ========= ========= ========= Weighted average common shares 6,743 9,001 7,481 9,046 ========= ========= ========= ========= Weighted average common shares and dilutive common share equivalents 6,806 9,025 7,531 9,064 ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
Twenty-four Twenty-four weeks weeks ended ended ----------- ----------- April 16, April 18, 2000 1999 ----------- ----------- Operations Net income $ 7,387 $ 5,361 Reconciliation of net income to cash provided by operations Depreciation and amortization 8,201 8,799 Deferred income tax provision 3,315 2,574 Loss on disposition of assets 14 28 Other, net (792) (280) Change in assets and liabilities: Receivables 3,020 669 Inventory 3,751 2,408 Accounts payable, trade (1,335) 196 Other current assets and liabilities (3,681) (1,499) Non-current accrued insurance (382) (701) -------- -------- Cash provided by operations 19,498 17,555 -------- -------- Investing activities Purchase of property and equipment (11,342) (14,706) Purchase of other assets (359) (789) Proceeds from disposition of property 1,239 512 Collection of non-trade receivables 352 981 Other, net 676 -- -------- -------- Cash used for investing activities (9,434) (14,002) -------- -------- Financing activities Proceeds from issuance of debt 10,750 -- Payment of debt and capitalized lease obligations (8,188) (837) Purchase of common stock (40,151) (2,557) Issuance of common stock 241 86 Other, net (83) 373 -------- -------- Cash used for financing activities (37,431) (2,935) -------- -------- Increase (decrease) in cash (27,367) 618 Cash at beginning of period 33,187 10,262 -------- -------- Cash at end of period $ 5,820 $ 10,880 ======== ======== Supplemental information: Cash paid during the period for Interest (net of amount capitalized) $ 412 $ 484 Income taxes 426 597
The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. NOTES TO FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation --------------------- The accompanying unaudited financial statements of VICORP Restaurants, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments considered necessary (which are of a normal and recurring nature) for fair presentation have been included. These financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended October 31, 1999, filed with the Securities and Exchange Commission in the Company's Annual Report on Form 10-K. 2. Debt ---- As of April 16, 2000, the Company had borrowings outstanding of $3,501,000 and letters of credit of $700,000 placed in connection with its insurance programs under its bank credit facility. The bank credit facility was amended effective April 14, 2000 to extend the maturity date to February 28, 2003, as well as amend certain fee calculations and debt covenants. 3. Inventory --------- Inventory consisted of the following (in thousands):
April 16, October 31, 2000 1999 --------- ----------- Inventory at production facilities and third party storage locations: Raw materials $2,394 $2,401 Finished goods 1,616 5,192 ----- ----- 4,010 7,593 Restaurant inventory 2,228 2,396 ----- ----- $6,238 $9,989 ===== =====
4. Earnings per Share ------------------ Basic earnings per share is calculated using the average number of common shares outstanding. Diluted earnings per share is computed on the basis of the average number of common shares outstanding plus the effect of potentially dilutive common stock equivalents using the treasury stock method. Weighted average common shares outstanding for the twelve weeks ended April 16, 2000 and April 18, 1999 are as follows:
Twelve Twelve weeks ended weeks ended April 16, 2000 April 18, 1999 -------------- -------------- Basic 6,743,902 9,001,262 Effect of dilutive common stock equivalents 61,924 23,820 --------- --------- Diluted 6,805,826 9,025,082 ========= =========
Weighted average common shares outstanding for the twenty-four weeks ended April 16, 2000 and April 18, 1999 are as follows:
Twenty-four Twenty-four weeks ended weeks ended April 16, 2000 April 18, 1999 -------------- -------------- Basic 7,480,921 9,046,061 Effect of dilutive common stock equivalents 49,880 18,323 --------- --------- Diluted 7,530,801 9,064,384 ========= =========
5. Tender Offer ------------ On November 23, 1999, the Company commenced a tender offer to purchase up to 2,000,000 shares of the outstanding common stock for $19.00 per share. The tender offer concluded on December 22, 1999, and the Company funded the transaction on December 29, 1999 whereby 2,000,000 shares were purchased. 6. Operating Segment ----------------- The Company has three reportable segments; Village Inn, Bakers Square and Franchising. All amounts not attributed to segments relate to administrative functions and other non-reportable segments. Certain asset balances at October 31, 1999 were reclassified between the Company's segments. Summarized financial information concerning the Company's reportable segments is shown in the following table (in thousands).
Bakers Square Village Inn Franchising Other Total ------------- ----------- ----------- ----- ----- Twelve weeks ended April 16, 2000 Net Sales $ 49,104 $ 35,272 $ -- $ -- $ 84,376 Operating profit/(loss) 5,178 6,236 924 (6,457) 5,881 Twelve weeks ended April 18, 1999 Net Sales $ 48,752 $ 32,338 $ -- $ -- $ 81,090 Operating profit/(loss) 4,313 5,461 764 (6,739) 3,799 Twenty-four weeks ended April 16, 2000 Net Sales $102,129 $ 68,830 $ -- $ -- $170,959 Operating profit/(loss) 11,207 11,836 1,536 (12,897) 11,682 Twenty-four weeks ended April 18, 1999 Net Sales $ 99,801 $ 64,666 $ -- $ -- $164,467 Operating profit/(loss) 9,247 10,962 1,480 (12,957) 8,732 Total assets April 16, 2000 $ 80,711 $ 46,317 $ 3,753 $ 62,103 $192,884 October 31, 1999 85,758 43,099 5,137 94,277 228,271
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview - -------- VICORP Restaurant, Inc. operates family style restaurants under the names "Bakers Square" and "Village Inn," and franchises restaurants under the Village Inn brandname. At April 16, 2000, the Company operated two hundred fifty-five Company-owned restaurants in thirteen states. Of the two hundred fifty-five Company-owned restaurants, one hundred forty-nine were Bakers Squares and one hundred six were Village Inns, with an additional one hundred fifteen franchised Village Inn restaurants in twenty-one states. The Company-owned and franchised restaurants are concentrated in Arizona, California, Florida, the Rocky Mountain region and the Midwest. The Company operates a pie manufacturing division to support Bakers Square, which operates under the name "VICOM". VICOM has three production facilities located in Santa Fe Springs, California, Oak Forest, Illinois and the recently acquired Chaska, Minnesota plant. The Company operated the Chaska, Minnesota production facility under an agreement with Pies, Inc. for a term of five months and purchased the facility at the completion of the operating term on February 1, 2000 for $2,600,000. Results of Operations - --------------------- The Company's quarterly financial information is subject to seasonal fluctuation and may not be indicative of annual results. The following table sets forth selected operating statistics by concept (in thousands, except restaurants at quarter-end).
Second Quarter Year-to-Date -------------------------- ---------------------------- Twelve Twelve Twenty-four Twenty-four weeks ended weeks ended weeks ended weeks ended ----------- ----------- ----------- ----------- April 16, April 18, April 16, April 18, 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Bakers Square Restaurant sales $ 49,104 $ 48,752 $ 102,129 $ 99,801 Restaurant operating profit 5,178 4,313 11,207 9,247 Restaurant operating profit % 10.5% 8.8% 11.0% 9.3% Divisional administrative costs 1,126 1,329 2,226 2,803 Divisional operating profit 4,052 2,984 8,981 6,444 Company operated restaurants 149 150 Village Inn Restaurant sales $ 35,272 $ 32,338 $ 68,830 $ 64,666 Restaurant operating profit 6,236 5,461 11,836 10,962 Restaurant operating profit % 17.7% 16.9% 17.2% 17.0% Franchise income 924 764 1,536 1,480 Divisional administrative costs 1,051 980 2,137 2,073 Divisional operating profit 6,109 5,245 11,235 10,369 Company operated restaurants 106 100 Franchise operated restaurants 115 110 Consolidated Restaurant sales $ 84,376 $ 81,090 $ 170,959 $ 164,467 Food cost % 28.9% 30.4% 30.0% 31.0% Labor cost % 33.2% 32.8% 32.5% 32.2% Other operating cost % 24.4% 24.8% 24.0% 24.5% Restaurant operating profit % 13.5% 12.0% 13.5% 12.3% Restaurant operating profit 11,414 9,774 23,043 20,209 Franchise income 924 764 1,536 1,480 Divisional general and administrative costs 2,177 2,309 4,363 4,876 ---------- --------- -------- --------- Divisional operating profit 10,161 8,229 20,216 16,813 ---------- --------- -------- --------- Unallocated general and administrative costs 4,280 4,430 8,534 8,081 ---------- --------- -------- --------- Operating profit $ 5,881 $ 3,799 $ 11,682 $ 8,732 =========== ========== ========== ==========
Certain executive compensation, which had been accounted for as Bakers Square divisional administrative costs in fiscal 1999, is accounted for as unallocated general and administrative costs in fiscal 2000. Twelve Weeks Ended April 16, 2000 Compared to the Twelve Weeks Ended April 18, 1999 Restaurant Sales - ---------------- Consolidated restaurant sales increased 4.1% or $3,286,000 for the quarter compared to the quarter ended April 18, 1999. The Company experienced an overall same store sales increase of 1.4% over the prior year quarter. This increase is notable in light of the fact that the Easter holiday, which fell in the second quarter of 1999, will fall in the third quarter of fiscal 2000. The Company's stores experience a significant increase in volume over this holiday weekend. During the second quarter of fiscal 2000, the Bakers Square concept captured an additional $352,000 or .7% in sales compared to the prior year quarter. Same store sales and same store guest counts increased 1.0% and 1.5%, respectively. Overall, Village Inn sales increased by 9.1% or $2,934,000. This is a result of the Company operating six additional Village Inn restaurants during the second quarter of 2000, compared to the second quarter of 1999 (subsequent to April 18, 1999, ten new restaurants were opened, three Company-owned restaurants were converted to franchise operations and one restaurant was closed). Village Inn same store sales increased 2.0% and same store customer counts decreased 1.0% over the prior year quarter. The decrease in same store customer counts is partially attributable to the initial impact of opening new stores in established market areas. Of the ten new Village Inn restaurants opened since April 18, 1999, five were opened during the current fiscal year, including four during the second quarter of fiscal 2000, and the Company expects to open three additional units during the fourth quarter. The following table sets forth selected quarterly statistics related to Bakers Square and Village Inn operations:
Bakers Square Village Inn ------------- ----------- Comparable Comparable Comparable Store Store Comparable Store Store Store Guest Operating Store Guest Operating Sales Counts Margin Sales Counts Margin ----------------------------------- --------------------------------- 2000: 1st Qtr 3.5% 1.6% 11.4% (0.2%) (3.5%) 16.7% 2nd Qtr 1.0% 1.5% 10.5% 2.0% (1.0%) 17.7% 1999: 1st Qtr 5.5% 0.5% 9.7% 2.0% (0.4%) 17.0% 2nd Qtr 4.7% 1.0% 8.8% 0.8% (0.8%) 16.9% 3rd Qtr 5.6% 2.6% 10.6% 0.5% (1.8%) 17.1% 4th Qtr 3.0% 1.3% 9.9% 0.1% (3.2%) 16.3%
Restaurant Operating Profit - --------------------------- Consolidated restaurant operating profit increased 16.8% or $1,640,000 for the quarter compared to the quarter ended April 18, 1999. Bakers Square restaurant operating profit increased 20.1% or $865,000 over the prior year quarter, while restaurant operating profit as a percent of sales increased to 10.5% from 8.8% for the quarter ended April 18, 1999. The significant operating profit expansion was due to a 1.0% increase in same stores sales, as well as effective food cost and other operating expense management at the store-level. Village Inn restaurant operating profit increased 14.2% or $775,000 as a result of the Company operating six additional stores in the second quarter of 2000 versus the quarter ended April 18, 1999. Restaurant operating profit as a percent of sales increased to 17.7% from 16.9% due to a same store sales increase of 2.0% and a .8% decrease in food costs as a percentage of restaurant sales. Franchise Operations - -------------------- Net franchise income increased 20.9% or $160,000 between the quarter ended April 16, 2000 and the quarter ended April 18, 1999, primarily as a result of increased royalties. General and Administrative Expenses - ----------------------------------- General and administrative expenses for the second quarter of 2000 were $6,457,000 compared to $6,739,000 during the second quarter of 1999. The $282,000 or 4.2% decrease is primarily attributable to the non- reoccurrence of Year 2000 related expenditures. General and administrative expense as a percent of restaurant sales declined favorably to 7.7% compared to 8.3% for the prior year quarter. Other Income - ------------ Other income for the quarter ended April 16, 2000 increased $28,000 from the quarter ended April 16, 1999. Interest Expense - ---------------- Interest expense increased $12,000 due to the Company maintaining an average draw on the line of credit of $5,323,000 compared to $0 for the prior year quarter. The remaining interest expense represents interest incurred on approximately fifty capital leases. Interest expense in the amount of $15,000 was capitalized for the quarter ended April 16, 2000 under the requirements of Statement of Financial Accounting Standards ("SFAS") No. 34, "Capitalization of Interest Cost." Effective Tax Rate - ------------------ The Company's effective tax rate for the quarter ended April 16, 2000 and the quarter ended April 18, 1999 was 36.5%. A significant portion of the provision for income taxes represents the non-cash utilization of deferred tax assets established for remaining net operating loss carryforwards. Taxes currently payable continue to be limited to Federal alternative minimum taxes and state income taxes. Twenty-four Weeks Ended April 16, 2000 Compared to the Twenty-four Weeks Ended April 18, 1999 Restaurant Sales - ---------------- Consolidated restaurant sales increased 4.0% or $6,492,000 for the twenty-four weeks ended April 16, 2000 compared to the twenty-four weeks ended April 18, 1999. The Company experienced an overall same store sales increase of 1.8% over the prior year period. This increase is notable in light of the fact that the Easter holiday, which fell in the second quarter of 1999, will fall in the third quarter of fiscal 2000. The Company's stores experience a significant increase in volume over this holiday weekend. Bakers Square restaurant sales increased $2,328,000 or 2.3% as a result of a 2.4% increase in same store sales for the twenty-four weeks ended April 16, 2000 compared to the twenty-four weeks ended April 18, 1999. The Company was successful in capturing an additional $1,975,000 in sales during the key holiday pie season in the first quarter of 2000 compared to the first quarter of 1999. The year to date increase was largely driven by a 1.6% increase in same store guest counts. During the twenty-four weeks ended April 16, 2000 compared to the twenty-four weeks ended April 18, 1999, Village Inn sales increased by 6.4% or $4,164,000 due to the Company operating six additional Village Inn restaurants in the current period (subsequent to April 18, 1999, ten new restaurants were opened, three Company-owned restaurants were converted to franchise operations and one restaurant was closed). Village Inn same store sales increased .9% and same store customer counts decreased 2.2% over the prior year period. The decrease in same store customer counts is partially attributable to the initial impact of opening new stores in established market areas. Of the ten new Village Inn restaurants opened since April 18, 1999, five were opened during the current fiscal year, including four during the second quarter of fiscal 2000, and the Company expects to open three additional units during the fourth quarter. The following table sets forth selected year-to-date statistics related to Bakers Square and Village Inn operations:
Bakers Square Village Inn ------------- ----------- Comparable Comparable Comparable Store Store Comparable Store Store Store Guest Operating Store Guest Operating Sales Counts Margin Sales Counts Margin ------------------------------------ --------------------------------- 2000: 2.4% 1.6% 11.0% .9% (2.2%) 17.2% 1999: 5.1% .8% 9.3% 1.4% (.6%) 17.0%
Restaurant Operating Profit - --------------------------- Consolidated restaurant operating profit increased 14.0% or $2,834,000 for the twenty-four weeks ended April 16, 2000 compared to the twenty- four weeks ended April 18, 1999. Bakers Square restaurant operating profit for the twenty-four weeks ended April 16, 2000 increased 21.2% or $1,960,000 over the twenty-four weeks ended April 18, 1999, while restaurant operating profit as a percent of sales increased to 11.0% from 9.3%. The significant improvement of Bakers Square restaurant operating profit was driven by a 2.4% increase in same stores sales, improved execution during the first quarter's key holiday pie season and effective food cost and other operating expense management at the store-level. Village Inn restaurant operating profit for the twenty-four weeks ended April 16, 2000 increased 8.0% or $874,000 due to the Company operating six additional restaurants in fiscal 2000 and improved cost management at the store-level. Restaurant operating profit as a percent of sales increased to 17.2% from 17.0% for the twenty-four weeks ended April 16, 2000 versus the twenty-four weeks ended April 18, 1999. Franchise Operations - -------------------- Net franchise income increased 3.8% or $56,000 between the twenty-four weeks ended April 16, 2000 and the twenty-four weeks ended April 18, 1999 primarily as a result of the overall addition of five franchisee restaurants (subsequent to April 18, 1999, five new franchisee operations were opened, three Company-owned restaurants were converted to franchisee operations and three franchisee operations were terminated). General and Administrative Expenses - ----------------------------------- General and administrative expenses for the twenty-four weeks ended April 16, 2000 were $12,897,000 compared to $12,957,000 during the twenty-four weeks ended April 18, 1999. The $60,000 or .5% decrease is primarily attributable to the non-reoccurrence of Year 2000 related expenditures. Overall, general and administrative expenses decreased favorably as a percent of restaurant sales to 7.5% for the twenty-four weeks ended April 16, 2000 compared to 7.9% for the same period in fiscal 1999. Other Income - ------------ Other income for the twenty-four weeks ended April 16, 2000 increased $200,000 or 108.1% from the prior year period, due primarily to interest earned on the $28,700,000 in net proceeds received from the sale leaseback transaction completed on October 28, 1999. The proceeds were used to fund the tender offer for 2,000,000 shares at $19.00 per share on December 29, 1999. Interest Expense - ---------------- Interest expense declined 8.4%, or $40,000 between the twenty-four weeks ended April 16, 2000 and the twenty-four weeks ended April 18, 1999 primarily due to twelve capital leases being paid in full during 1999, offset by interest incurred on line of credit draws and capitalized interest. The average line of credit draw for the twenty- four week period of fiscal 2000 was $3,423,000 compared to $0 for the same period of the prior year. Interest expense in the amount of $37,000 was capitalized during the current period under the requirements of SFAS 34, "Capitalization of Interest Cost." Effective Tax Rate - ------------------ The Company's effective tax rate for the twenty-four weeks ended April 16, 2000 and the twenty-four weeks ended April 18, 1999 was 36.5%. A significant portion of the provision for income taxes represents the non-cash utilization of deferred tax assets established for remaining net operating loss carryforwards. Taxes currently payable continue to be limited to Federal alternative minimum taxes and state income taxes. Liquidity and Capital Resources - ------------------------------- Net cash provided by operating activities for the twenty-four weeks ended April 16, 2000 was $19,498,000 compared with $17,555,000 for the twenty-four weeks ended April 18, 1999. The $1,943,000 increase was primarily due to a $2,026,000 or 37.8% increase in net income, as well as effective working capital management. The Company's investing activities for the twenty-four weeks ended April 16, 2000 utilized $9,434,000 compared with $14,002,000 for the twenty-four weeks ended April 18, 1999. The $4,568,000 decrease was primarily attributable to a $3,364,000 reduction in capital expenditures. Management expects to invest approximately $29,600,000 during fiscal 2000 in developing eight to ten Company-operated locations (including five Bakers Square locations in the Chicago area) and completing several remodel projects on existing restaurants. During the twenty-four weeks ending April 16, 2000, five new Village Inn restaurants were opened; one in Colorado, two in Arizona, one in Nebraska, and one in Iowa. The Company also purchased the Chaska facility for $2.6 million as previously noted. The Company's financing activities for the twenty-four weeks ended April 16, 2000 utilized $37,431,000 compared with $2,935,000 for the twenty-four weeks ended April 18, 1999. The $34,496,000 increase was as a result of the tender offer commenced on November 23, 1999 to purchase up to 2,000,000 shares of the outstanding common stock at $19.00 per share. The tender offer concluded on December 22, 1999, and the Company funded the transaction on December 29, 1999 whereby 2,000,000 shares were purchased. The transaction was funded using the $28,700,000 in net proceeds received from the sale leaseback transaction completed on October 28, 1999, as well as a $4,000,000 draw on the credit facility. An additional 115,000 shares were repurchased subsequent to the tender offer under the Company's share repurchase plan. As of April 16, 2000, 338,375 common shares remained available for purchase under the Board of Directors authorizations. Future purchases under the authorizations may be made from time to time in the open market or through privately negotiated transactions and will be dependent upon various business and financial considerations. On December 19, 1997, the Company executed an amended and restated credit agreement, which provides for an available credit limit of $40,000,000 in the aggregate with a sublimit of $10,000,000 on letters of credit. The bank credit facility was amended effective April 14, 2000 to extend the maturity date to February 28, 2003, as well as amend certain fee calculations and debt covenants. As of April 16, 2000, the Company had $3,501,000 outstanding under the Company's bank credit facility and $700,000 in letters of credit issued in connection with its insurance programs. Cash and cash equivalents at April 16, 2000 equaled $5,820,000. The Company believes anticipated cash flow from operations, as well as the availability of funds under the $40,000,000 line of credit, and other financing sources will provide sufficient capital to meet current foreseeable cash needs, including working capital and capital expenditures. At April 16, 2000, the Company had thirty properties which it was seeking to dispose of, six of these were idle and twenty-four were subleased. The Company owns five of the properties in fee and is the prime lessee on twenty-five leases (four of the fee properties are idle). The Company estimates potential proceeds of $938,000 on the disposal of the fee properties. The two remaining idle properties will be disposed of through lease terminations within a year. At April 16, 2000, loss reserves previously established for the disposal of these properties had a remaining balance of $3,362,000, including $1,638,000 to reduce the properties to realizable value and $1,724,000 to provide for carrying costs and sublease losses. During the twenty-four weeks ended April 16, 2000, closure and carrying costs of $99,000 were charged against the liability. At present, the Company anticipates the reserves will be adequate to cover the future losses and operating costs for these properties. During the first quarter of 2000, the Company sold its Denver bakery facility yielding cash proceeds of $690,000. A resulting loss of $614,000 was applied against the property disposal reserve previously established for this purpose. The Company guaranteed certain leases for twenty-five restaurant properties sold in 1986 and sixteen restaurant leases of certain franchisees. Minimum future rental payments remaining under these leases were $5,300,000 as of October 31, 1999. These guarantees are included in the definition of financial instruments with off-balance- sheet risk of accounting loss. The Company has no reason to believe that any material liability exists and believes it is impracticable to estimate the fair value of these financial guarantees (e.g., amounts the Company could pay to remove the guarantees). Outlook - ------- The Company is evaluating various alternative investment strategies for utilizing cash flow from operations. These alternatives include, but may not be limited to, new Village Inn and Bakers Square restaurant properties, repurchase of common stock, and acquisition of restaurant concerns in the family style segment. Forward-Looking Statements - -------------------------- Certain matters discussed in this report are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risk and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those currently anticipated. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this report and the Company undertakes no obligation to publicly update such forward- looking statements to reflect subsequent events or circumstances. New Accounting Pronouncements - ----------------------------- In June 1999, the Financial Accounting Standards Board issued SFAS No. 137 which delayed the effective date of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", until fiscal quarters of fiscal years beginning after June 15, 2000. SFAS 133 requires all derivatives to be recognized as assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives should be recognized in either net income or other comprehensive income, depending on the designated purpose of the derivative. At present the Company is investigating the effect the adoption of this statement will have on the Company's results of operations, financial position and cash flows, if any. Item 1. Legal Proceedings With respect to Kirk v. VICORP Restaurants, Inc., Case No. BC-198202 commenced in the Superior Court of Los Angeles County, California, reported in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1999, on February 16, 2000, Kirk's motion for class certification was denied. Kirk filed an appeal of the denial on April 14, 2000. The case has been stayed pending the appeal. With respect to Ontiveros v. VICORP Restaurants, Inc., Case No. BC- 202962 commenced in the Superior Court of Los Angeles County, California, reported in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1999, on January 3, 2000, the Court issued an order staying the case under the primary jurisdiction doctrine. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (10) Material contracts Fourth Amendment to Amended and Restated Credit Agreement Stock Option Agreement for Joseph F. Trungale dated May 8, 2000 (27) Financial data schedule (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VICORP Restaurants, Inc. (Registrant) May 26, 2000 By: /s/ Joseph F. Trungale ----------------------- Joseph F. Trungale Chief Executive Officer and President May 26, 2000 By: /s/ Richard E. Sabourin ----------------------- Richard E. Sabourin Executive Vice President and Chief Financial Officer EX-10 2 FOURTH CREDIT AMENDMENT April 14, 2000 VICORP Restaurants, Inc. 400 West 48th Avenue Denver, Colorado 80216 Attention: Stanley Ereckson, Jr. Re: Fourth Amendment to Amended and Restated Credit Agreement --------------------------------------------------------- Ladies and Gentlemen: Reference is made to that certain $40,000,000 Amended and Restated Credit Agreement dated as of December 19, 1997 (as amended, the "Agreement"), among VICORP Restaurants, Inc. (the "Borrower"), the financial institutions named therein as lenders (the "Lenders"), and Bank of America, N.A., as Agent for the Lenders (the "Agent"). Unless otherwise indicated, all capitalized terms herein are used as defined in the Agreement. Whereas, the Borrower has requested various modifications to the Agreement; and Whereas, the Lenders are willing to make such modifications, subject to the terms and conditions set forth herein; Now, therefore and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrower, the Agent and the Lenders agree as follows: 1. Commitment Fee. The definition of "Applicable Commitment Fee" in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows: "Applicable Commitment Fee" means, on any day, the commitment fee percentage based on the ratio of Adjusted Debt to Adjusted Consolidated EBITDAR, calculated as set forth in the definition of "Applicable Margin", as follows:
Applicable Ratio of Adjusted Debt to Commitment Adjusted Consolidated EBITDAR Fee Percentage -------------------------------- ---------- Less than 2.00 to 1.00 0.225% Greater than or equal to 2.00 to 0.250% 1.00, but less than 2.75 to 1.00 Greater than or equal to 2.75 to 0.350% 1.00, but less than 3.25 to 1.00 Greater than or equal to 3.25 to 0.400% 1.00
2. Applicable Margin. The definition of "Applicable Margin" in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows: "Applicable Margin" means, on any day, the interest margin over the Eurodollar Rate, based on a ratio of Adjusted Debt to Adjusted Consolidated EBITDAR, as follows:
Applicable Margin for Ratio of Adjusted Debt to Eurodollar Adjusted Consolidated EBITDAR Rate Advances -------------------------------- ---------- Less than 2.00 to 1.00 0.75% Greater than or equal to 2.00 to 1.00% 1.00, but less than 2.75 to 1.00 Greater than or equal to 2.75 to 1.25% 1.00, but less than 3.25 to 1.00 Greater than or equal to 3.25 to 1.50% 1.00
For purposes of determining the Applicable Margin, the ratio shall be calculated quarterly as of the last day of the fiscal quarter for which the most recent quarterly financial statements have been delivered pursuant to Section 7.01(b), and shall apply to all Advances made on or after the date such financial statements are delivered, until recalculated in accordance with this paragraph. If Borrower fails to furnish Agent any such financial statements (or the related compliance certificate) when required pursuant to Section 7.02(b), then the highest applicable margin identified above shall apply to all subsequent Advances until Borrower furnishes the required financial statements and compliance certificate. 3. Maturity Date. The definition of "Maturity Date" in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows: "Maturity Date" means February 28, 2003. 4. Rate Adjustment Periods. Section 3.06(d) of the Agreement and the definitions of "Rate Adjustment Period" and "Required Rate Adjustment Level" in Section 1.01 of the Agreement are hereby deleted. 5. Schedule of Capital Expenditures. Section 7.01(b)(ii) of the Agreement is hereby amended by adding the following language at the end of such Section: ", together with a Schedule of Consolidated Capital Expenditures for such fiscal year satisfactory to Agent, detailing the breakdown between (A) maintenance capital expenditures in connection with the replacement or restoration of assets used in calculating the minimum fixed charge coverage ratio under Section 7.03(d), and (B) non- maintenance capital expenditures for Permitted Asset Acquisitions and other expenditures; provided that the Schedule of Consolidated Capital Expenditures for fiscal year 1999 shall not be due until May 31, 2000;" 6. Use of Proceeds. Section 7.01(j) of the Agreement is hereby amended to read in its entirety as follows: (j) Use of Proceeds. The Borrower will use the proceeds of the Advances only to repay its obligations under the NationsBank Agreement, for working capital, capital expenditures and other general corporate purposes (including the purchase of shares of the Borrower's capital stock pursuant to the Tender Offer or as otherwise permitted under this Agreement), and for Permitted Asset Acquisitions. 7. Restricted Payments. Section 7.02(c) of the Agreement is hereby amended by adding the following to the end of the last sentence of such Section: ", or if, immediately after giving effect to such proposed action, the ratio of Adjusted Debt to Adjusted Consolidated EBITDAR would exceed 3.25 to 1.00." 8. Dispositions of Assets. (a) Section 7.02(h)(i) of the Agreement is hereby amended by adding the phrase underlined below, so that such subsection shall read in its entirety as follows: "(i) Sell, lease, assign, transfer or otherwise dispose of any real property (or enter into an agreement to do any of the foregoing), or permit any of its subsidiaries to sell, lease, assign, transfer or otherwise dispose of any real property (or enter into an agreement to do any of the foregoing), except for the properties described on Schedule 7.02(h) (listing properties held for sale as of December 19, 1997) and up to six additional non-operating properties in any fiscal year, without the prior written consent of all of the Lenders; or" (b) Section 7.02(h) of the Agreement is hereby further amended by adding the following to the end of such Section: "The foregoing limitations on dispositions of assets shall not be deemed to restrict the sale and leaseback by Borrower of the 12 properties developed or acquired in 1998 and 1999 which are listed on Schedule 7.02(h)-A and new properties developed or acquired in 2000 and thereafter." (c) The Agreement is hereby further amended by adding a new Schedule 7.02(h)-A (listing new properties developed in 1998, 1999 and 2000 which are eligible for sale-leaseback transactions) in the form attached to this Amendment. 9. Restrictions on Operating Leases. Section 7.02(j) of the Agreement is hereby amended by replacing "$20,000,000" with "$25,000,000." 10. Loans, Advances, Investments. The final clause of Section 7.02(k) of the Agreement is hereby amended to read in its entirety as follows: "and (xi) repurchases of the Borrower's capital stock pursuant to the Tender Offer or as otherwise permitted under this Agreement." 11. Minimum Consolidated Tangible Net Worth. Section 7.03(b) of the Agreement is hereby deleted in its entirety and replaced with "[Reserved]." 12. Minimum Fixed Charge Coverage Ratio. Section 7.03(d) of the Agreement is hereby amended to read in its entirety as follows: (d) Minimum Fixed Charge Coverage Ratio. Commencing with the Borrower's fiscal year 2000, maintain a ratio of (i) Adjusted Consolidated EBITDAR minus cash income tax payments and minus maintenance capital expenditures made by the Borrower and its subsidiaries in connection with the replacement or restoration of assets to (ii) the sum of Consolidated Fixed Charges plus the cash value of any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of capital stock of the Borrower made by the Borrower or any of its subsidiaries, determined in each case as of the last day of each fiscal quarter, of at least 1.25 to 1. For the first, second and third fiscal quarters of the Borrower's fiscal year 2000, such ratio shall be calculated for the quarter, two quarters, or three quarters of fiscal year 2000 ending on such date. Thereafter, such ratio shall be calculated for the four quarters ending on such date. 13. Conditions. This letter shall not be effective if a material adverse change has occurred and until each of the following items have occurred or been delivered to the Agent: (a) this letter signed by the Borrower and each Lender; (b) satisfactory review by the Lenders of the Borrower's 1999 audited financial statements, current long- range plan and such other information as the Lenders may reasonably request; (c) payment by the Borrower to the Agent for the benefit of the Lenders, in accordance with their respective Pro Rata Shares, of an amendment fee in the amount of $18,000; (d) payment by the Borrower to the Agent of all other amounts due under theexisting Fee Letter between the Borrower and the Agent; and (e) such other documents, if any, as the Agent may reasonably request. 14. No Waiver of Defaults. Except as expressly set forth above, the Borrower agrees that this letter does not constitute a waiver of, or a consent to, any present or future violation of or noncompliance with any provision of any Loan Document, or a waiver of the Agent's and the Lenders' right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents, and the Loan Documents shall continue to be binding upon, and inure to the benefit of, the Borrower, the Agent and the Lenders and their respective successors and assigns. 15. Representations and Warranties. The Borrower represents and warrants to the Agent and the Lenders that (a) the execution and delivery of this letter have been authorized by all requisite corporate action on its part and will not violate its organizational documents, (b) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof (except to the extent that (i) such representations and warranties speak to a specific date or (ii) the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents or this letter), and (c) it is in full compliance with all covenants and agreements contained in each Loan Document to which it is a party. 16. Loan Document; Effect. This letter is a Loan Document, and, therefore, this letter is subject to the applicable provisions of Article IX of the Agreement, all of which applicable provisions are incorporated herein by reference the same as if set forth herein verbatim. Except as affected by this letter, the Loan Documents are unchanged and continue in full force and effect. The Borrower agrees that all Loan Documents to which it is a party remain in full force and effect and continue to evidence its legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this letter). The Borrower hereby releases the Agent and the Lenders from any liability for actions or failures to act in connection with the Loan Documents prior to the date hereof. This letter shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns. 17. Multiple Counterparts. This letter may be executed in more than one counterpart, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. 18. Fees and Expenses. The Borrower agrees to pay the reasonable fees and expenses of counsel to the Agent rendered in connection with the preparation, negotiation and execution of this letter. 19. Final Agreement. THE LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES. If you are in agreement with the foregoing, please so indicate by executing the enclosed counterparts of this letter in the spaces provided below and returning them to the Agent to the attention of the officer named below. Very truly yours, BANK OF AMERICA, N.A. U.S. BANK NATIONAL ASSOCIATION By:/s/ Richard G. Parkhurst By:/s/ Andrea C. Koeneke ------------------------ --------------------- Richard G. Parkhurst, Jr. Andrea C. Koeneke Managing Director Vice President AGREED AND ACCEPTED: VICORP RESTAURANTS, INC. By:/s/ Michael R. Kinnen --------------------- Michael R. Kinnen Treasurer SCHEDULE 7.02(h)-A PROPERTIES DEVELOPED OR ACQUIRED IN 1998 AND 1999 WHICH ARE ELIGIBLE FOR SALE-LEASEBACK TRANSACTIONS -------------------------------------------------- Village Inn Restaurants - ----------------------- 9050 E. Hampden Ave. Denver, CO 80231 1430 Harrison Road Colorado Springs, Colorado 80906 6370 South Parker Road Aurora, Colorado 80016 5239 Elmore Avenue Davenport, Iowa 52807 1780 West 5600 South Roy, Utah 84067 1906 Rue Street Council Bluffs, Iowa 51503 7837 Dodge Street Omaha, Nebraska 68114 7101 S. 27th Street Lincoln, Nebraska 68114 12622 W. Ken Caryl Littleton, CO 80127 Bakers Square Restaurants - ------------------------- 1881 West Highway 36 Roseville, Minnesota 55113 12608 Wayzata Boulevard Minnetonka, Minnesota 55305 2110 S. Harbor Blvd. Anaheim, CA 92802 EX-10 3 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT This Stock Option Agreement (the "Option Agreement") dated as of May 8, 2000, provides for the grant of stock options by VICORP Restaurants, Inc., a Colorado corporation (the "Company"), to Joseph F. Trungale, an employee of the Company (the "Optionee"). The Company has determined that the Optionee is to be granted options to buy shares of the Company's common stock, par value $.05 per share ("Common Stock"), on the terms and subject to the conditions hereinafter provided. I. NUMBER OF SHARES, OPTION PRICE, AND VESTING. ------------------------------------------- A. The Company hereby grants to the Optionee non- qualified options (the "Options") to purchase 100,000 shares of Common Stock for the exercise price of $20.00 per share. The Optionee shall not have any rights as a shareholder with respect to the shares unless and until one or more certificates for such shares are delivered to him upon the exercise of one or more of the Options. B. The options shall vest and become exercisable according to the following schedule: 33,333 shares vest on May 8, 2000 33,333 shares vest on May 8, 2001 33,334 shares vest on May 8, 2002 C. In the event that the outstanding shares of the Company's common stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation, through reorganization, merger, consolidation, liquidation, recapitalization, stock split up, or a combination of shares or dividends payable in stock of the class which is subject to this Option Agreement, appropriate adjustment in the number of shares subject to the Options shall be made so that the proportionate number of shares subject to the Options shall be maintained as before the occurrence of such event and an appropriate adjustment shall be made to the exercise price. D. Upon a change of control of the Company, all of the Options shall immediately vest and become exercisable in full. Change in control for purposes of this Agreement shall be deemed to have occurred if: 1. Any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the beneficial owner, directly or indirectly, of securities of the Company representing greater than or equal to fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; 2. During any period of twelve (12) months, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's shareholders of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period; or 3. A person (as defined in clause (1) above) acquires (or, during the twelve (12) month period ending on the date of the most recent acquisition by such person or group of persons, has acquired) gross assets of the Company that have an aggregate fair market value greater than or equal to over fifty percent (50%) of the fair market value of all of the gross assets of the Company immediately prior to such acquisition or acquisitions. E. Optionee acknowledges that the shares which are to be reserved for issuance upon the exercise of the Options are not at this time registered in accordance with applicable securities laws. The Company agrees that upon receipt of a written request by Optionee, it will, consistent with applicable securities laws and regulations, promptly prepare and file with the Securities and Exchange Commission an appropriate registration statement on Form S-8 and/or Form S-3, depending upon whether the Options have then been exercised (or any successor forms to such form subsequently promulgated by the Securities and Exchange Commission) pertaining to the shares covered by the Options and will use its reasonable good faith efforts to cause such registration statement to be declared effective as soon as practical thereafter. The Company will bear the expense to prepare and file such registration statement. II. TERM. ---- Each option granted shall expire ten years from the date of grant, unless canceled or terminated earlier in accordance with the terms of this Agreement. III. EXERCISE OF OPTIONS. ------------------- Only options which are vested may be exercised. IV. MANNER OF EXERCISE. ------------------ A. Notice to the Company: Each exercise of an option shall be made by the delivery by the Optionee of written notice of such election to the Corporation, either in person or by mail, stating the number of shares with respect to which the option is being exercised and specifying a date on which the shares will be taken and payment made therefor. The date shall be at least fifteen (15) days after the giving of such notice. B. Issuance of Stock: Subject to any law or regulation of the Securities and Exchange Commission or other body having jurisdiction requiring an action to be taken in connection with the shares specified in a notice of election before the shares can be delivered to the Optionee, on the date specified in the notice of election, the Company shall deliver, or cause to be delivered to the Optionee stock certificates for the number of shares with respect to which the option is being exercised, against payment therefor. In the event of any failure to take and pay, on the date stated, for the full number of shares specified in the notice of election, the option shall become inoperative only as to those shares which are not taken, but shall continue with respect to any remaining shares subject to the option as to which exercise has not yet been made. V. ASSIGNMENT. ---------- Any option granted under the Plan shall not be assigned, pledged, or hypothecated in any way, shall not be subject to execution, and shall not be transferable other than by will or the laws of descent and distribution. Any attempted assignment or other prohibited disposition shall be null and void. VI. TERMINATION. ----------- A. Termination Other Than At Death Or Disability: If the Optionee terminates his position as an Employee of the Corporation for any reason other than death or disability, any unexercised options (whether vested or unvested) shall be canceled three (3) months after the effective date of the Optionee's termination. No options shall vest subsequent to the date of termination of employment. B. Termination At Death Or Disability: In the event of the death of the Optionee, any option held by him at the time of his death shall be transferred as provided in his will or by the laws of descent and distribution, and may be exercised by such transferee at any time within twelve months after the date of death, to the extent the option is exercisable on the date of death, and provided it is exercised within the time prescribed in Article II hereof. In the event of the disability of the Optionee, any option held by him may be exercised in whole or in part, by the Optionee or his personal representative at any time within twelve months after the date of disability, to the extent the option is exercisable on the date of disability, and provided that it is exercised within the time prescribed in Article II hereof. Disability and time of disability shall be determined by the Board. VII. FAILURE TO ENFORCE NOT A WAIVER. ------------------------------- The failure of the Company to enforce at any time any provision of this Option Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. VIII. SEVERABILITY. ------------ If any provision of this Option Agreement shall be held to be illegal, invalid, or unenforceable under any applicable law, then such contravention or invalidity shall not invalidate the entire Option Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid, and enforceable, and if no such modification shall render it legal, valid, and enforceable, then this Option Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties shall be construed and enforced accordingly. IX. COMPLETE AGREEMENT. ------------------ This Option Agreement between Optionee and the Company embodies the complete agreement and understandings with respect to the subject matter hereof between the parties and supersede and preempt any prior understandings, agreements, or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. X. GOVERNING LAW. ------------- This Option Agreement shall be governed by and construed according to the laws of the State of Colorado. IN WITNESS WHEREOF, the Company has executed this Option on the day and year first above-written. VICORP Restaurants, Inc. a Colorado corporation By /s/ Charles R. Frederickson ---------------------------- Charles R. Frederickson, Chairman The undersigned hereby accepts and agrees to all terms and provisions of the foregoing Option Agreement. /s/ Joseph F. Trungale ---------------------- Joseph F. Trungale, Optionee This is Page 4 of a 4-page Option Agreement between VICORP Restaurants, Inc. and Joseph F. Trungale dated May 8, 2000. EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VICORP RESTAURANTS, INC. BALANCE SHEETS AND STATEMENTS OF OPERATIONS AS OF APRIL 16, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS OCT-29-2000 APR-16-2000 5,820 0 3,273 492 6,238 23,688 300,072 169,542 192,884 42,470 7,152 0 0 339 118,986 192,884 84,376 85,300 24,373 24,373 55,046 0 247 5,766 2,104 3,662 0 0 0 3,662 .54 .54
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