RARE HOSPITALITY INTERNATIONAL, INC.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): February 8, 2006
RARE Hospitality International, Inc.
(Exact Name of Registrant as Specified in Charter)
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| Georgia
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0-19924
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58-1498312 |
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| (State or Other
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(Commission
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(IRS Employer |
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File Number)
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Identification No.) |
| Incorporation) |
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8215 Roswell Road, Bldg. 600, Atlanta, GA 30350
(Addresses of Principal Executive Offices, including Zip Code)
(770) 399-9595
(Registrant’s Telephone Number, including Area Code)
___________________________
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry Into A Material Definitive Agreement.
Amendment to Executive Officer Performance Incentive Plan. The Company maintains the
RARE Hospitality International, Inc. Executive Officer Performance Incentive Plan (the “Executive
Incentive Plan”), an incentive plan approved by the Company’s shareholders at the 2005 Annual
Meeting of Shareholders. The Executive Incentive Plan allows the Company to provide
performance-based incentive compensation in the form of cash and restricted stock awards to its
executive officers. On February 8, 2006, the Board of Directors approved an amendment to the
Executive Incentive Plan to permit the authorization thereunder of performance-based restricted
stock units, which may be designated as awards intended to meet the exemption for performance-based
compensation under Section 162(m) of the Internal Revenue Code. Like awards of restricted stock
authorized under the Executive Incentive Plan, such restricted stock units would be granted under
and pursuant to the terms and conditions of the Company’s Amended and Restated 2002 Long-Term
Incentive Plan (“LTIP”), such that the Executive Incentive Plan would not constitute a separate
source of shares for the grant of the restricted stock or performance-based restricted stock units.
A copy of the Executive Incentive Plan, as so amended and restated, is attached to this report
as Exhibit 99.1 and is incorporated herein by reference.
Designation of Participants, Performance Goals and Target Awards under the Equity
Incentive Plan.
(a) Subject to the Board’s approval of the amendment to the Executive Incentive Plan described
above, the Compensation Committee established target equity award opportunities for each of Philip
J. Hickey, Jr., the Company’s Chairman and Chief Executive Officer, and Eugene I. Lee, Jr., the
Company’s President and Chief Operating Officer, under the Executive Incentive Plan for a
three-year performance period ending on December 28, 2008. On February 8, 2006, the Committee
granted to each such officer an award of performance-based restricted stock units, which are
intended to qualify for the exemption for performance-based compensation under Section 162(m) of
the Internal Revenue Code. These units will convert to shares of common stock of the Company
following the end of the performance period based on the level of the Company’s performance against
set targets for growth in earnings per share and revenue over the performance period, as certified
by the Committee. The awards, which are denominated in terms of a target number of shares, will be
forfeited if performance falls below a designated threshold level and may vest for up to 150% of
the target number of shares for exceptional performance. The target number of shares under these
awards to Messrs. Hickey and Lee is reported below in this Report.
(b) The Committee also established target cash award opportunities for each of Messrs. Hickey
and Lee under the Executive Incentive Plan for fiscal year 2006 based on the Company’s performance
against a set target for growth in earnings per share in 2006 over 2005. The target awards are
expressed in terms of a percentage of base salary (100% for Mr. Hickey and 100% for Mr. Lee).
Actual bonus amounts can range from 0% for performance below threshold to 200% for exceptional
performance.
Grants of Equity Awards to Executive Officers.
(a) In 2005, the Committee established target awards of stock options and restricted stock to
be granted in 2006 to certain persons, including the Company’s executive officers, based on the
level of achievement against a set target for growth in earnings per share in 2005 over 2004.
Based on the Company’s actual growth in adjusted earnings per share in 2005, the Company granted,
on February 8, 2006, the following equity awards to the Company’s executive officers under the
LTIP:
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Stock Options (#) |
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Restricted Stock (#) |
Philip J. Hickey, Jr. |
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54,734 |
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15,873 |
Eugene I. Lee, Jr. |
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43,787 |
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12,698 |
W. Douglas Benn |
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21,893 |
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6,349 |
Joia M. Johnson |
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13,683 |
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3,968 |
David C. George |
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8,839 |
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2,563 |
Other Executive Officers
(4 persons) |
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32,496 |
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9,423 |
(b) On February 8, 2006, the Board of Directors approved for the executive officers of the
Company, and other employees at the vice president level and above, an equity compensation program
for 2006 that encompasses a combination of stock options, time-lapse restricted stock, and
performance-based restricted stock units. The performance-based restricted stock units will
convert to shares of common stock of the Company following December 28, 2008, based on the level of
the Company’s performance against set targets for growth in adjusted earnings per share and revenue
over a three-year performance period, as certified by the Compensation Committee. These awards,
which are denominated in terms of a target number of shares, will be forfeited if performance falls
below a designated threshold level and may vest for up to 150% of the target number of shares for
exceptional performance. Pursuant to this 2006 equity compensation program, the Company granted
the following equity awards to the Company’s executive officers under the LTIP on February 8, 2006:
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Stock Options |
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Restricted Stock |
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Performance-Based Restricted Stock |
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Units (# at target award level; can |
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earn up to 150% of target) |
Philip J. Hickey, Jr. |
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48,166 |
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6,984 |
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13,968* |
Eugene I. Lee, Jr. |
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38,533 |
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5,587 |
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11,174* |
W. Douglas Benn |
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19,266 |
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2,793 |
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5,587 |
Joia M. Johnson |
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12,041 |
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1,746 |
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3,492 |
David C. George |
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12,041 |
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1,746 |
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3,492 |
Other Executive
Officers (4 persons) |
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38,969 |
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5,648 |
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11,299 |
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| *These grants were made pursuant to the terms of the Executive Incentive Plan, as described
above. |
Copies of the forms of stock option, restricted stock, and performance-based restricted
stock unit award agreements for these equity awards are attached to this report as Exhibits 99.2,
99.3 and 99.4, respectively, and are incorporated herein by reference.
Correction to Prior Report on Form 8-K. On October 25, 2005, the Company filed a
Current Report on Form 8-K to report that the Board of Directors approved a compensation package
for its non-employee directors for 2006. The report incorrectly stated that each non-employee
director will receive an annual grant of 7,500 stock options on the day immediately following the
release of the Company’s financial results for the preceding fiscal year, provided that the Company
achieves certain performance measures for the preceding fiscal year. The report should have stated
that each non-employee director will receive up to 7,500 stock options for the 2006 fiscal year,
and that the actual award will be based upon the Company’s achievement of certain performance
measures for the 2006 fiscal year. Further, the report should have stated that the grant of such
stock options will be made on the day immediately preceding the release of the Company’s financial
results for the 2006 fiscal year, rather than on the day immediately following the release of
those results.
This program for 2006 non-employee director compensation is embodied in a document entitled
“Stock Plan for Non-Employee Directors” which is operated as a subplan of the LTIP. A copy of this
subplan is attached to this report as Exhibits 99.5, and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
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99.1
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RARE Hospitality International, Inc. Amended and Restated Executive
Officer Performance Incentive Plan |
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99.2
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Forms of Stock Option Certificates |
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99.3
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Form of Restricted Stock Award Certificate |
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99.4
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Form of Performance-Based Restricted Stock Unit Certificate |
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99.5
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Stock Plan for Non-Employee Directors, a subplan of the RARE
Hospitality International, Inc. Amended and Restated 2002 Long-Term
Incentive Plan |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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RARE HOSPITALITY INTERNATIONAL, INC.
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/s/ W. Douglas Benn
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Name: |
W. Douglas Benn |
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Title: |
Executive Vice President, Finance
and Chief Financial Officer |
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Date: February 14, 2006