sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 28, 2004
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______ to ______
Commission file number 0-19907
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LONE STAR STEAKHOUSE & SALOON, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 48-1109495
-------- ----------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
224 East Douglas, Suite 700
Wichita, Kansas 67202
(Address of principal executive offices) (Zip code)
(316) 264-8899
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
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 / /
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. Yes / / No / X /
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12b-20). Yes /X/ No / /
As of June 15, 2004, the aggregate market value of the Registrant's
Common Stock held by non-affiliates of the Registrant was $499,238,829. Solely
for the purpose of this calculation, shares held by directors and officers of
the Registrant have been excluded. Such exclusion should not be deemed a
determination by or an admission by the Registrant that such individuals are, in
fact, affiliates of the Registrant.
As of April 23, 2005, there were 20,519,094 shares outstanding of
the Registrant's Common Stock.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the Directors
of the Company:
Name Age
---- ---
William B. Greene, Jr. 67
Anthony Bergamo 58
Fred B. Chaney 68
Thomas C. Lasorda 77
Michael A. Ledeen 63
Clark R. Mandigo 61
Mark G. Saltzgaber 37
John D. White 57
William B. Greene, Jr. has been Chairman of the Board since July 14,
2003 and a Director of the Company since August 1999. Mr. Greene has been
Chairman, Chief Executive Officer and President of BancTenn Corp since 1974 and
Chairman, Chief Executive Officer and President of Carter County BancCorp since
1972. At the age of 26, Mr. Greene was the youngest bank President and CEO in
the United States and formed the first statewide banking organization in the
history of Tennessee, United Tennessee Bancshares Corporation. Mr. Greene is the
immediate past Chairman of the Wake Forest University Board of Trustees and
Chairman of the Wake Forest University Trustee Investment Policy Committee for
the last nine years, which oversees the University's billion-dollar endowment.
Mr. Greene is also a member of the Board of Trustees of Milligan College where
he recently received his Honorary Doctor of Economics. Mr. Greene was a member
of the Young Presidents' Organization for eighteen years and in 1998 served as
International President of the World Presidents' Organization, the graduate
school of YPO. Mr. Greene is a graduate of Wake Forest University with a B.S.
Degree in Philosophy, Psychology and History. Mr. Greene did post graduate work
at Wake Forest University and the University of Illinois. He is a graduate of
the Bank Marketing and Public Relations School at Northwestern University, and a
graduate of the Stonier Graduate School of Banking at Rutgers University.
Anthony Bergamo has been a Director of the Company since May 29,
2002. Mr. Bergamo has served in a variety of capacities with Milstein Hotel
Group since April 1996, most recently as Vice Chairman and has been Chief
Executive Officer of Niagara Falls Redevelopment, Ltd. since August 1998. Mr.
Bergamo has held various positions with MB Real Estate, a property management
company based in New York City and Chicago since April 1996, including the
position of Vice Chairman since May 2003. Mr. Bergamo has also been a Director
since 1995, a Trustee since 1986 and currently is Chairman of the Audit
Committee of Dime Community Bancorp. Mr. Bergamo is also the Founder and
Chairman of the Federal Law Enforcement Foundation since 1988, a foundation that
provides economic assistance to both federal and local law enforcement officers
suffering from serious illness and to communities recovering from natural
disasters. Mr. Bergamo earned a B.S. in History from Temple University in 1968
and a J.D. from New York Law School in 1973.
Fred B. Chaney, Ph.D., has been a director of the Company since May
1995. Dr. Chaney was President and Chief Executive Officer of TEC's parent
company, Vedax Sciences Corporation, until March 1998 when he sold his interest.
Dr. Chaney, through the TEC program, formed a worldwide network of CEO's and key
executives serving over 8,000 mid-sized growth companies. Dr. Chaney's early
business career was with the Boeing Company and Rockwell, where he implemented
management systems and quality motivational programs. In 1968, he co-authored
the book HUMAN FACTORS IN QUALITY ASSURANCE with Dr. D. H. Harris. Dr. Chaney
has been a guest lecturer on customer service at UCLA, Loyola, University of
Southern California and University of Colorado Business Schools. Dr. Chaney
previously served as a Director of Rusty Pelican Seafood, Inc. Dr. Chaney earned
his Bachelors (1959), Masters (1960), and Ph.D. (1962) in managerial psychology
at Purdue University. He also completed a National Science Foundation
Post-Doctorial Fellowship at University of London in 1964.
Thomas C. Lasorda has been a Director of the Company since November
2001. Mr. Lasorda, a member of the Baseball Hall of Fame, was recently appointed
as Special Advisor to the Chairman of the Los Angeles Dodgers and was previously
a Senior Vice President of the Los Angeles Dodgers since February 1998 and prior
2
thereto was a Vice President of such team since July 1996. Mr. Lasorda is also
an internationally renowned motivational speaker. He was the manager of the gold
medal winning United States Baseball Team for the 2000 Summer Olympic Games in
Sydney, Australia and was the manager of the Los Angeles Dodgers for 20 years.
Michael A. Ledeen, Ph.D., has been a Director of the Company since
November 2001. Dr. Ledeen has been a resident scholar in the Freedom Chair at
the American Enterprise Institute since 1989 and was the Vice Chairman of the
U.S.- China Security Review Commission from 2001 to 2004. An expert in
contemporary history and international affairs, Dr. Ledeen is a frequent
contributor to the Wall Street Journal, the Weekly Standard, National Review,
and Commentary and serves as a contributing editor to the National Review
Online. During the Reagan administration, from 1981 to 1987, Dr. Ledeen held
numerous positions including a consultant to the National Security Adviser, the
Office of the Secretary of Defense, and the State Department and was a special
adviser to the Secretary of State. Dr. Ledeen is the author of eighteen books,
including most recently "The War Against the Terror Masters" (St. Martin's
Press, 2003).
Clark R. Mandigo served as the Chairman of the Board of the Company
from July 2001 through July 14, 2003 and has been a Director of the Company
since March 1992. Mr. Mandigo has been a Papa John's Pizza franchisee since
1995. From 1986 to 1991, he was President, Chief Executive Officer and Director
of Intelogic Trace, Inc., a corporation engaged in the sale, lease and support
of computer and communications systems and equipment. From 1985 to 1997, Mr.
Mandigo served on the Board of Directors of Physician Corporation of America, a
managed health care company, from 1993 to 1997, Mr. Mandigo served on the Board
of Palmer Wireless, Inc., a cellular telephone system operator, and from 1995 to
February 2004, Mr. Mandigo served on the Board of Horizon Organic Holdings
Corporation. Mr. Mandigo currently serves as a Trustee of Accolade Funds and
U.S. Global Investors Funds.
Mark G. Saltzgaber has been a Director of the Company since November
2001. Mr. Saltzgaber is an experienced investment banker, consultant and private
equity investor in the restaurant industry. He is currently an independent
consultant to emerging restaurant chains and private equity firms. Mr.
Saltzgaber was previously a Venture Partner until March 2004 of Dorset Capital
Management, LLC ("Dorset Capital"), a consumer-focused private equity firm he
co-founded in 1999. Prior to Dorset Capital, Mr. Saltzgaber was a Managing
Director in the Equity Capital Markets Department at Montgomery Securities where
he was responsible for advising consumer growth companies. Prior to that, Mr.
Saltzgaber was also a Principal and Co-Director of the restaurant investment
banking practice at Montgomery Securities. Mr. Saltzgaber is currently a
director of Pasta Pomodoro, Inc.
John D. White is Executive Vice President, Treasurer and a Director
of the Company, and was the Chief Financial Officer from 1992 to 1999 and has
been the Chief Financial Officer since September 2004. Prior to joining the
Company, Mr. White was employed as Senior Vice President of Finance for Coulter
Enterprises, Inc. Prior to that, Mr. White was a principal of Arthur Young &
Company and taught management development and computer auditing seminars in
their National Training Program. Mr. White earned a BBA in accounting from
Wichita State University in 1970 and is a graduate of the Stanford Executive
Program.
In addition to Mr. White, the other Executive Officers of the
Company are as follows:
Jamie B. Coulter, 64, has served as Chief Executive Officer of the
Company since January 1992, served as President of the Company from January,
1992 to June, 1995 and served as Chairman from January 1992 to July 2001. In
1993, Mr. Coulter was inducted into the Pizza Hut Hall of Fame and was named
INC. Magazine's Midwest Region Master Entrepreneur of the year. Mr. Coulter
received the Nation's Restaurant News Golden Chain Award in 1995 and was
Restaurants & Institutions CEO of the year in 1996. In 1997, Mr. Coulter
received the Nation's Restaurant News Hot Concept Award. Mr. Coulter has
previously served as Chairman of the Board of Directors of the Young Presidents'
Organization. Mr. Coulter received a BS degree in Business from Wichita State
University in 1963 and is a graduate of the Stanford University Executive
Program.
Tomlinson D. O'Connell, 36, joined the Company in 1995, and has been
President of Lone Star Restaurants since September 2002 and Chief Operating
Officer of Lone Star Restaurants since December 2003. From December 1999 to
September 2002, Mr. O'Connell was Senior Vice President of Operations of Lone
Star Steakhouse & Saloon, Inc. Mr. O'Connell is currently responsible for the
operation of all Lone Star Steakhouse & Saloon restaurants. Mr. O'Connell was
with the Ritz-Carlton Hotel Company from 1992 to 1995. During his tenure there
the company was awarded the Malcolm Baldrige Award. Mr. O'Connell graduated from
the University of Nevada at Las Vegas in 1992 with a Bachelor of Science degree
in Hotel Administration.
3
Gerald T. Aaron, 64, has been Senior Vice President -- Counsel and
Secretary of the Company since January 1994. From November 1991 to January 1994,
Mr. Aaron was employed as General Counsel for Coulter Enterprises, Inc. From
March 1989 to November 1991, Mr. Aaron operated a franchise consultant practice.
From 1969 to 1984 Mr. Aaron was Vice President -- Counsel for Pizza Hut, Inc.
and from 1984 to 1989, Mr. Aaron was President of International Pizza Hut
Franchise Holders Association.
Deidra Lincoln, 45, has been Vice President of Del Frisco's since
January, 2000. Ms. Lincoln is the co-founder of Del Frisco's Double Eagle Steak
House ("Del Frisco's"), which was acquired by the Company in 1995. Since 1995,
Ms. Lincoln has served in various managerial capacities and is responsible for
all of the Company's Del Frisco's operations.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
All directors, officers and beneficial owners of more than 10
percent of the Company's beneficial securities timely filed their Forms 3, 4 and
5.
AUDIT COMMITTEE
The Company has an Audit Committee consisting of Messrs. Bergamo,
Greene and Mandigo. The Company has determined that all the members of the Audit
Committee are "financial experts" as defined by the rules promulgated under the
Sarbanes-Oxley Act of 2002.
CODE OF ETHICS
The Company has adopted a code of ethics (the "Code") that applies
to all directors and officers. The Code is reasonably designed to deter
wrongdoing and promote (i) honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of interest between personal and
professional relationships, (ii) full, fair, accurate, timely and understandable
disclosure in reports and documents filed with, or submitted to, the SEC and in
other public communications made by the Company, (iii) compliance with
applicable governmental laws, rules and regulations, (iv) the prompt internal
reporting of violations of the Code to appropriate persons identified in the
Code, and (v) accountability for adherence to the Code. Amendments to the Code
and any grant of a waiver from a provision of the Code requiring disclosure
under applicable SEC rules will be disclosed on the Company's website at
www.lonestarsteakhouse.com. The Code was filed as an exhibit to the Company's
Form 10-KA for the fiscal year ended December 30, 2003 and is also available on
the Company's website referenced above.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the four most highly compensated executive officers of the Company
(collectively with the CEO the "Named Executive Officers") other than the CEO
whose salary and bonus exceeded $100,000 with respect to the fiscal year ended
December 28, 2004.
4
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------- --------------------------------
NUMBER OF
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL COMPENSATION (# OF COMPENSATION
POSITION YEAR SALARY BONUS ($) (1) SHARES) (2)
-------- ---- ------ --------- --- ------- ---
Jamie B. Coulter............... 2004 $856,731 $ 414,000(3) $ 148,162(4) 65,000 $ 110,823
Chief Executive Officer 2003 $823,558 $ 145,493 $ 110,104(4) -- $ 95,318
2002 $750,000 $1,051,500 $ 109,848(4) -- $ 180,150
John D. White.................. 2004 $623,077 $ 176,500 $ 93,878 60,000 $ 79,958
Chief Financial Officer, 2003 $600,000 $ 158,583 $ 61,047(5) -- $ 74,704
Executive Vice President and
Treasurer 2002 $600,000 $ 270,353 $ 50,522(5) -- $ 87,035
Tomlinson D. O'Connell......... 2004 $363,462 $ 176,500 $ 68,361 100,000 $ 53,996
President and 2003 $347,115 $ 151,500 -- -- $ 49,189
Chief Operating Officer of 2002 $200,000 $ 301,500 $ 57,785(6) -- $ 50,150
Lone Star Restaurants
Deidra Lincoln................. 2004 $270,000 $ 42,500 -- 20,000 $ 31,250
Vice President of Del 2003 $260,000 $ 34,035 -- -- $ 28,904
Frisco's 2002 $260,000 $ 70,918(3) -- -- $ 33,092
Gerald T. Aaron................ 2004 $259,615 $ 74,000 -- 35,000 $ 33,362
Senior Vice President, 2003 $250,000 $ 66,951 -- -- $ 31,214
Counsel & Secretary 2002 $250,000 $ 80,189 -- -- $ 25,000
-----------------------
(1) As to Named Executive Officers, except as set forth herein perquisites
and other personal benefits, securities or property received by each
Named Executive Officer did not exceed the lesser of $50,000 or 10% of
such Named Executive Officer's annual salary and bonus.
(2) Represents fifty percent matching contributions by the Company pursuant
to the Company's Deferred Compensation Plan which became effective
October 7, 1999.
(3) Of such bonus $162,500 was paid in 2005 for services performed in 2004.
(4) During the fiscal years ended December 28, 2004, December 30, 2003 and
December 31, 2002, Mr. Coulter received benefits primarily relating to
tax, accounting and administrative services provided by Company
personnel, $80,136, $87,038 and $82,850, respectively. The balance was
primarily for reimbursement for certain medical insurance premiums and
expenses.
(5) During the fiscal year ended December 28, 2004, Mr. White received
benefits primarily relating to personal use of the Company's airplane
($28,962). The balance was primarily for reimbursement for certain
medical insurance premiums and expenses. During the fiscal year ended
December 30, 2003 Mr. White received benefits primarily relating to
personal use of the Company's airplane ($38,209). The balance was
primarily for reimbursement for certain medical insurance premiums and
expenses. During the fiscal year ended December 31, 2002 Mr. White
received benefits primarily relating to certain medical insurance
premiums and expenses ($28,909) The balance was primarily for the
personal use of the Company's airplane.
(6) During the fiscal years ended December 28, 2004 and December 31, 2002,
Mr. O'Connell received benefits primarily relating to the personal use
of the Company's airplane ($37,230) and ($54,396), respectively. The
balance was primarily for reimbursement for certain medical insurance
premiums and expenses.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding stock
option grants made to the CEO and other Named Executive Officers for services
performed during the fiscal year ended December 28, 2004.
5
OPTION GRANT TABLE
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------------- ----------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE OR
(# OF EMPLOYEES IN BASE PRICE EXPIRATION
NAME SHARES)(1) FISCAL YEAR (#/SH) DATE 5% 10%
----------------------- ---------- ----------- ------------ ----------- ------------ -----------
Jamie B. Coulter 65,000 4.9 $ 27.80 12/28/14 $ 1,136,413 $ 2,879,893
John D. White 60,000 4.6 $ 27.80 12/28/14 $ 1,048,996 $ 2,658,362
Tomlinson D. O'Connell 100,000 7.6 $ 27.80 12/28/14 $ 1,748,327 $ 4,430,604
Deidra Lincoln 20,000 1.5 $ 27.80 12/28/14 $ 349,665 $ 886,121
Gerald T. Aaron 35,000 2.7 $ 27.80 12/28/14 $ 611,914 $ 1,550,711
------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) The options indicated were granted on December 28, 2004 and vest ratably
over a four-year period. Such options were granted pursuant to the
Company's 2004 Stock Option Plan which was approved by the Company's
stockholders in December 2004 (the "2004 Plan").
(2) The potential realizable portion of the foregoing table illustrates
value that might be realized upon exercise of options immediately prior
to the expiration of their term, assuming the specified compounded rates
of appreciation on the Company's Common Stock over the term of the
options. These numbers do not take into account provisions of certain
options providing for termination of the option following termination of
employment, nontransferability or differences in vesting periods.
Regardless of the theoretical value of an option, its ultimate value
will depend on the market value of the Common Stock at a future date,
and that value will depend on a variety of factors, including the
overall condition of the stock market and the Company's results of
operations and financial condition. There can be no assurance that the
values reflected in this table will be achieved.
OPTION EXERCISE TABLE
The following table provides information with respect to the
exercise of stock options by Named Executive Officers during the fiscal year
ended December 28, 2004, and also sets forth certain information concerning
unexercised options held as of December 28, 2004 by the CEO and the other Named
Executive Officers. At December 28, 2004, the closing price of the Company's
Common Stock, as reported by the Nasdaq National Market, was $27.80.
FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES
ACQUIRED UNDERLYING UNEXERCISED VALUE OF UNEXCERCISED
ON VALUE OPTIONS AT DECEMBER 28, IN-THE-MONEY OPTIONS AT
NAME EXERCISE REALIZED(1) 2004 DECEMBER 28, 2004(4)
---- -------- ----------- ---- --------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Jamie B. Coulter 737,611 13,819,253 1,162,389 65,000 22,470,432 --
John D. White 125,000 2,040,932 700,000 60,000 13,531,875 --
Tomlinson D. O'Connell -- -- 88,449 100,000 1,676,806 --
Deidra Lincoln 28,174 597,226 79,576 20,000 1,528,147 --
Gerald T. Aaron 100,000 1,648,650 375,000 35,000 7,249,219 --
-------------
(1) Based on the difference between the exercise price of the options and
the fair market value of a share of Common Stock at the date of
exercise, as reported on the Nasdaq National Market.
(2) All of the unexerciseable options held by the CEO and the other Named
Executive Officers were granted on December 28, 2004 and have an
exercise price equal to $27.80, the closing price of the Company's
Common Stock on such date.
6
DIRECTORS COMPENSATION
Directors who are not employees receive an annual fee of $20,000;
each Chairman of a Committee receives an additional annual fee of $5,000; each
member of the Audit Committee receives an additional annual fee of $5,000;
directors who are not employees also receive $1,000 for each telephonic meeting,
$2,000 for each Committee Meeting attended (if no Board of Directors Meeting is
being held on the same day) and $2,500 for attending Board and Committee
Meetings held on the same day. In addition, the Chairman of the Board is paid a
Chairman's fee of $100,000 per year. The Company revised the directors' fees as
a result of the additional time and effort required from the directors to ensure
that they are fulfilling their increased obligations under the Sarbanes-Oxley
Act. The Company previously granted options to non-employee directors under the
Company's 1992 Directors Stock Option Plan (the "Directors Plan") and the 2004
Plan. Currently, options to purchase an aggregate of 462,300 shares of Common
Stock are outstanding under the Directors Plan and the 2004 Plan at exercise
prices ranging from $7.438 per share to $27.59 per share.
EMPLOYMENT AGREEMENTS
The Company entered into separate employment agreements, with each
of Messrs. White, Aaron, and O'Connell, dated on April 29, 2003, providing for
the employment of these individuals as Executive Vice President, Senior Vice
President -- Counsel and Secretary and President of Lone Star Restaurants,
respectively. Each employment agreement provides that the officer shall devote
their entire business time to the business of the Company. The Employment
Agreements provide base salaries in the amounts of $600,000, $250,000 and
$350,000, respectively, for Messrs. White, Aaron and O'Connell, subject to
increases as determined by the Compensation/ Stock Option Committee and ratified
by the Board of Directors. Each agreement terminates in April 2006.
Additionally, each agreement contains non-competition and non-solicitation
provisions which apply for twenty-four months after cessation of employment and
confidentiality provisions which apply for ten years after cessation of
employment. Mr. Coulter does not have an employment, non-competition or
non-solicitation agreement with the Company. Mr. Coulter's non-competition and
non-solicitation agreement expired in 2001. In 2001, Mr. Coulter was not
re-elected to the Board of Directors of the Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information concerning ownership of
the Company's Common Stock, as of April 23, 2005, by each person known by the
Company to be the beneficial owner of more than five percent of the Common
Stock, each director, each executive officer as defined in Item 402(a)(3) of
Regulation S-K and by all directors and executive officers of the Company as a
group. Unless otherwise indicated, the address for five percent stockholders,
directors and executive officers of the Company is 224 East Douglas, Suite 700,
Wichita, Kansas 67202-3414. The percentage of shares owned is based on
20,519,094 shares outstanding as of April 23, 2005.
SHARES PERCENTAGE
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER HELD OF CLASS
Jamie B. Coulter.................................... 3,557,782(1) 16.4%
John D. White....................................... 848,025(2) 4.0%
Gerald T. Aaron..................................... 412,707(3) 2.0%
Tomlinson D. O'Connell.............................. 89,449(4) *
Deidra Lincoln ..................................... 84,576(5) *
Fred B. Chaney...................................... 15,600(6) *
William B. Greene, Jr............................... 64,300(7) *
Clark R. Mandigo.................................... 43,600(8) *
Mark Saltzgaber..................................... 39,300(9) *
Thomas Lasorda...................................... 48,100(10) *
Michael Ledeen...................................... 46,800(10) *
Anthony Bergamo..................................... 3,194 *
Dimensional Fund Advisors Inc....................... 1,810,903(11) 8.8%
Barclays Global Investors, NA and Barclays Global
Fund Advisors...................................... 1,253,433(12) 6.0%
Pioneer Global Asset Management..................... 1,318,000(13) 6.4%
All directors and executive officers as
a group (16) persons (1-10)........................ 5,253,433(14) 22.8%
--------------
* Less than 1%
(1) Includes presently exercisable options to purchase 1,162,389 shares of
Common Stock. Does not include 177,145 shares held by Intrust Bank as
Trustee of a Rabbi Trust for the Company. Under the terms of a Deferred
7
Compensation Agreement, Mr. Coulter defers receipt of the value of his
deferred compensation account until 30 days after the termination of his
employment with the Company.
(2) Includes presently exercisable options to purchase 700,000 shares of Common
Stock.
(3) Includes presently exercisable options to purchase 375,000 shares of Common
Stock.
(4) Includes presently exercisable options to purchase 88,449 shares of Common
Stock.
(5) Includes presently exercisable options to purchase 79,576 shares of Common
Stock.
(6) Includes presently exercisable options to purchase 13,600 shares of Common
Stock.
(7) Includes presently exercisable options to purchase 13,600 shares of Common
Stock.
(8) Includes presently exercisable options to purchase 13,600 shares of Common
Stock.
(9) Includes presently exercisable options to purchase 31,800 shares of Common
Stock.
(10) Includes or consists of presently exercisable options to purchase 46,800
shares of Common Stock.
(11) Based on a Schedule 13G filed in February 2005, Dimensional Fund Advisors
Inc. beneficially holds 1,810,903 shares of the Company's Common Stock.
Dimensional Fund Advisors Inc. disclaims beneficial ownership to the
1,810,903 shares of the Company's Common Stock due to its role as an
investment advisor or manager to numerous funds. The address of Dimensional
Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA
90401.
(12) Based on a Schedule 13G filed in February 2005, Barclays Global Investors,
N.A. beneficially holds sole voting power over 573,285 and sole dispositive
power over 756,326 shares of the Company's common stock and Barclays Global
Fund Advisors beneficially holds 476,391 shares of the Company's Common
Stock. The address of Barclays Global Investors, N.A. and Barclays Global
Fund Advisors is 45 Fremont Street, San Francisco, CA 94105.
(13) Based on a Schedule 13G filed in December 2001, Pioneer Global Asset
Management beneficially holds 1,318,000 shares of the Company's Common
Stock. The address of Pioneer Global Asset Management is Galleria San Carlo
6, 20122 Milan, Italy.
(14) Includes presently exercisable options to purchase 2,571,614 shares of
Common Stock.
EQUITY COMPENSATION PLAN INFORMATION
The Company previously issued options under the Directors Plan and
the Company's 1992 Incentive and Non-Qualified Stock Option Plan (the "Plan").
The ability to issue options under both plans has expired. In December 2004, the
Company's stockholders approved the adoption of the 2004 Plan. The following
table gives information about stock option awards under the Directors Plan, the
Plan and the 2004 Plan as of December 28, 2004. The plans are discussed further
in Note 6 to the Company's Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 28,
2004.
NUMBER OF
SECURITIES
NUMBER OF REMAINING AVAILABLE
SECURITIES TO BE FOR FUTURE ISSUANCE
ISSUED UPON WEIGHTED-AVERAGE UNDER EQUITY
EXERCISE OF EXERCISE PRICE OF COMPENSATION PLANS
OUTSTANDING OUTSTANDING (EXCLUDING
OPTIONS, WARRANTS OPTIONS, WARRANTS SECURITIES REFLECTED
AND RIGHTS AND RIGHTS IN COLUMN (A))
PLAN CATEGORY (A) (B) (C)
----------------------------------- ----------------- ------------------ --------------------
Equity compensation plans
approved by security holders......... 4,596,335 15.02 1,547,500
Equity compensation plans not
approved by security holders......... -- -- --
--------- ------------- ----------
Total................................ 4,596,335 15.02 1,547,500
========= ============= ==========
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not Applicable.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Aggregate fees for professional services rendered to the Company by
Ernst & Young LLP for the years ended December 28, 2004 and December 30, 2003,
were:
2004 2003
-------------- --------------
Audit.......................................... $ 951,807 $ 297,317
Audit Related.................................. 120,790 89,360
Tax............................................ 316,437 232,948
Other.......................................... -- --
------------- ---------
Total....................................... 1,389,034 619,625
============= =========
Audit Fees
----------
Audit fees for 2004 and 2003 were for professional services rendered
for the audits of the consolidated financial statements of the Company,
statutory and subsidiary audits, timely reviews of quarterly financial
statements, consents and assistance with review of documents filed with the
Securities Exchange Commission.
Audit Related Fees
------------------
Audit related fees for 2004 were primarily for matters related to
Sarbanes-Oxley Act advisory services. Audit Related fees for 2003 were primarily
for consultations relating to Stock-Repurchase and matters related to
Sarbanes-Oxley Act advisory services.
Tax Fees
--------
Tax fees for 2004 and 2003 were for services related to (i) tax
compliance ($221,425 for the fiscal year ended December 28, 2004 and $159,428
for the fiscal year ended December 30, 2003 and), including the preparation of
tax returns and (ii) tax planning and tax advice related primarily to the
Company's 2004 acquisition of Texas Land and Cattle Steakhouse and the Company's
Australian operations which were discontinued in December 2003.
All Other Fees
--------------
There were no other fees paid to Ernst & Young LLP for the fiscal
years ended December 28, 2004 and December 30, 2003.
The Audit Committee reviews audit and non-audit services performed
by Ernst & Young LLP as well as the fees charged by Ernst & Young LLP for such
services. In its review of non-audit service fees, the Audit Committee
considers, among other things, the possible effect of the performance of such
services on the auditor's independence.
PRE-APPROVAL POLICIES AND PROCEDURES
All audit and non-audit services to be performed by the Company's
independent accountant must be approved in advance by the Audit Committee.
Consistent with applicable law, limited amounts of services, other than audit,
review or attest services, may be approved by one or more members of the Audit
Committee pursuant to authority delegated by the Audit Committee, provided each
such approved service is reported to the full Audit Committee at its next
meeting.
All of the engagements and fees for the Company's fiscal year ended
December 28, 2004 were approved by the Audit Committee. In connection with the
audit of the Company's Financial Statements for the Fiscal Years ended December
9
28, 2004 and December 30, 2003, Ernst & Young LLP only used full-time, permanent
employees.
The Audit Committee of the Board of Directors considered whether the
provision of non-audit services by Ernst & Young LLP was compatible with its
ability to maintain independence from an audit standpoint and concluded that
Ernst & Young LLP's independence was not compromised.
10
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The required Financial Statements were previously filed on
this Form 10-K.
Exhibits
INDEX TO EXHIBITS
Exhibit
Number Exhibit
------ -------
**3.1 Company's Certificate of Incorporation as amended
***3.3 Company's Amended and Re-Stated By-Laws
******10.2 1992 Lone Star Steakhouse & Saloon, Inc. Directors' Stock
Option Plan, as amended (the "Director's Plan")
****10.3 1992 Lone Star Steakhouse & Saloon, Inc. Incentive and
Non-qualified Stock Option Plan, as amended (the "Plan").
**10.4 Form of Indemnification Agreement for officers and
directors of the Company
*****10.7 Employment Agreement between the Company and Gerald T.
Aaron, dated April 24, 2003.
*****10.9 Employment Agreement between the Company and T.D.
O'Connell, dated April 24, 2003
*****10.11 Employment Agreement between the Company and John D.
White, dated April 24, 2003
******10.20 Non-Qualified Deferred Compensation Plan
********10.23 Lone Star Steakhouse & Saloon, Inc. Stock Option Deferred
Compensation Plan dated September 30, 2002
********10.24 Deferred Compensation Agreement dated October 4, 2002
between LS Management, Inc. and Jamie B. Coulter
*******10.26 Amendment to the Director's Plan
*******10.27 Amendment to the Plan
**********10.28 Revolver Credit Loan Agreement dated October 8, 2004
between the Company and Suntrust Bank
***********10.29 2004 Stock Option Plan
*********14.1 Code of Ethics
************21.1 Subsidiaries of the Company
************23.1 Independent Auditors' consent to the incorporation by
reference in the Company's Registration Statements on
Form S-8 of the independent auditors' report included
herein
*31.1 Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act
*31.2 Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act
*32.1 Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
*32.2 Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
11
-----------------
* Filed herewith.
** Incorporated by reference to the Company's Registration
Statement on Form S-1, filed with the Commission on
January 31, 1992 (Commission File No. 33-45399), as
amended.
*** Incorporated by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 12, 2001.
**** Incorporated by reference to the Company's Registration
Statement on Form S-8, filed with the Commission on
January 12, 1996 (Commission File No. 33-00280), as
amended.
***** Incorporated by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 17, 2003.
****** Incorporated by reference to the Company's Registration
Statement on Form S-8, filed with the Commission on March
31, 2000 (Commission File No. 333-33762).
******* Incorporated by Reference to the Company's Registration
Statement on Form S-8, filed with the Commission on July
24, 2002 (Commission File No. 333-97271).
******** Incorporated by Reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 2002.
********* Incorporated by Reference to the Company's Annual Report
on Form 10-K/A for the year ended December 30, 2003.
********** Incorporated by Reference to the Company's Periodic
Report on Form 8-K, filed with the Commission on October
14, 2004.
*********** Incorporated by Reference to the Company's Periodic
Report on Form 8-K, filed with the Commission on December
20, 2004.
************ Incorporated by Reference to the Company's Annual Report
on Form 10-K, for the year ended December 28, 2004.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
LONE STAR STEAKHOUSE & SALOON, INC.
By: /s/ John D. White
------------------------------------------
John D. White, Chief Financial Officer
Dated: April 27, 2005