SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement o Confidential, for use of the Commission
o Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
o Definitive Additional Materials
o Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BIG CITY BAGELS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
1
<PAGE>
BIG CITY BAGELS, INC.
99 Woodbury Road
Hicksville, New York 11801
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
July 1, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
("Annual Meeting") of Big City Bagels, Inc. ("Company") will be held at the
offices of Graubard Mollen & Miller at 600 Third Avenue, New York, New York
10016, on Tuesday, July 1, 1997, at 10:00 a.m., for the following purposes, all
as more fully described in the attached Proxy Statement:
1. To elect five directors to hold office until the next
Annual Meeting of Shareholders and until their
respective successors have been duly elected and
qualified;
2. To approve an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
shares of Common Stock authorized for issuance
thereunder from 10,000,000 shares to 25,000,000 shares;
and
3. To transact such other business as may properly come
before the Annual Meeting and any and all adjournments
thereof.
The Board of Directors has fixed the close of business on May
30, 1997, as the record date for the determination of shareholders entitled to
notice of, and to vote at, the meeting or any adjournment thereof.
You are earnestly requested to date, sign and return the
accompanying form of proxy in the envelope enclosed for that purpose (to which
no postage need be affixed if mailed in the United States) whether or not you
expect to attend the meeting in person. The proxy is revocable by you at any
time prior to its exercise and will not affect your right to vote in person in
the event you attend the meeting or any adjournment thereof. The prompt return
of the proxy will be of assistance in preparing for the meeting and your
cooperation in this respect will be appreciated.
By Order of the Board of Directors
Stanley Raphael, Secretary
Hicksville, New York
June 3, 1997
<PAGE>
BIG CITY BAGELS, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 1, 1997
This Proxy Statement and the accompanying form of proxy is
furnished to shareholders of Big City Bagels, Inc. ("Company") in connection
with the solicitation of proxies by the Board of Directors of the Company for
use in voting at the Annual Meeting of Shareholders to be held at the offices of
Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016, on
Tuesday, July 1, 1997, at 10:00 a.m., and at any and all adjournments thereof.
Any proxy given pursuant to this solicitation may be revoked by the shareholder
at any time before it is exercised by written notification delivered to the
Secretary of the Company, by voting in person at the Annual Meeting, or by
delivering another proxy bearing a later date. Attendance by a shareholder at
the Annual Meeting does not alone serve to revoke his or her proxy. Unless
otherwise specified in the form of proxy, shares represented by proxies will be
voted "FOR" the election of the nominees listed below under Proposal I, "FOR"
the approval of the amendment to the Company's Restated Certificate of
Incorporation as described below under Proposal II and, in the discretion of the
proxies named on the proxy card, with respect to any other matters properly
brought before the Annual Meeting and any adjournments thereof. In such
unanticipated event that any other matters are properly presented at the Annual
Meeting for action, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
The Company's executive offices are located at 99 Woodbury Road,
Hicksville, New York 11801. On or about June 3, 1997, this Proxy Statement and
the accompanying form of proxy, together with a copy of the Annual Report of the
Company for the year ended December 31, 1996, are to be mailed to each
shareholder of record at the close of business on May 30, 1997.
VOTING SECURITIES
The Board of Directors has fixed the close of business on May
30, 1997, as the record date for the determination of shareholders of the
Company who are entitled to receive notice of, and to vote at, the Annual
Meeting. Only shareholders of record at the close of business on that date will
be entitled to vote at the Annual Meeting or any and all adjournments thereof.
As of May 30, 1997, the Company had issued and outstanding 4,932,021 shares of
Common Stock, the Company's only class of voting securities outstanding. Each
shareholder of the Company will be entitled to one vote for each share of Common
Stock registered in his or her name on the record date. The presence, in person
or by proxy, of a majority of all of the outstanding shares of Common Stock will
constitute a quorum at the Annual Meeting. Proxies that are marked "abstain" and
proxies relating to "street name" shares that are returned to the Company but
marked by brokers as "not voted" ("broker non-votes") will be treated as shares
present for purposes of determining the presence of a quorum on all matters
unless authority to vote is completely withheld on the proxy. The election of
directors requires a plurality of votes cast at the Annual Meeting with respect
to the election of directors. "Plurality" means that the five nominees who
receive the largest number of votes cast "FOR" will be elected as directors.
Accordingly, abstentions and broker non-votes will not affect the outcome of the
election of directors. The proposal to amend the Company's Restated Certificate
of Incorporation requires the affirmative vote of a majority of all of the
outstanding shares of the Company's Common Stock. Accordingly, abstentions and
broker non-votes will have the same effect as a vote against the proposal. All
other matters to be voted on will be decided by the affirmative vote of a
majority of the votes cast by the holders of shares entitled to vote thereon. On
any such matter, abstentions and broker non-votes will not be counted in
determining the number of votes required for a majority and will therefore have
no effect on the outcome.
<PAGE>
The following table sets forth certain information as of May 30,
1997, with respect to (i) those persons or groups known to the Company to
beneficially own more than 5% of the Company's Common Stock, (ii) each director
and nominee, (iii) each executive officer whose compensation exceeded $100,000
in the year ended December 31, 1996, and (iv) all directors and executive
officers as a group. The information is determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934 based upon information
furnished by the persons listed or contained in filings made by them with the
Securities and Exchange Commission. Except as indicated below, the shareholders
listed possess sole voting and investment power with respect to their shares.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner (1) Beneficial Ownership of Class
- ----------------------------------------- -------------------- --------
<S> <C> <C>
Management Group (2)............................................................ 2,895,456 58.2%
Mark Weinreb.................................................................... 869,538(3)(4) 17.6%
Jerry Rosner.................................................................... 800,154(3)(4) 16.2%
Stanley Weinreb................................................................. 615,851(3)(4) 12.5%
Stanley Raphael................................................................. 609,913(3)(4)(5) 12.3%
Stephen J. Drescher............................................................. 32,500(4)(6) *
All executive officers and directors
as a group (five persons)..................................................... 2,927,956(7) 58.5%
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<FN>
* Less than 1%
(1) The address of each of the persons listed, other than Mr. Rosner and Mr. Drescher, is c/o Big City Bagels, Inc. 99 Woodbury
Road, Hicksville, New York 11801. Mr. Rosner's address is c/o Big City Bagels, Inc. 151 Kalmus Drive, C-100, Costa Mesa,
California 92626. Mr. Drescher's address is c/o Monroe Parker Securities, Inc., 2500 Westchester Avenue, Purchase, New
York 10577.
(2) The Management Group consists of Messrs. Mark Weinreb, Jerry Rosner,
Stanley Weinreb and Stanley Raphael, each of whom is a party to, and has
agreed to vote their shares in accordance with, the Founders'
Shareholder Agreement described below. Each of the members of this group
shares voting power with respect to the shares of Common Stock held by
each of the members. The number of shares set forth in the table
includes the shares held by each member.
(3) Does not include shares held by other members of the Management Group (see Note 2) with respect to which each member
shares voting power with the other members of such group.
(4) Includes 10,000 shares of Common Stock issuable upon exercise of currently exercisable options.
(5) Includes 5,938 shares of Common Stock owned by Trade Consultants, Inc. Pension Fund, of which Mr. Raphael is the trustee.
(6) Includes 11,250 shares of Common Stock and 11,250 shares of Common Stock
underlying Class A Redeemable Common Stock Purchase Warrants
("Warrants") issuable upon exercise of a purchase option issued to Mr.
Drescher as a designee of Monroe Parker Securities, Inc., the
underwriter of the Company's initial public offering.
(7) Includes an aggregate of 50,000 shares of Common Stock issuable to the directors of the Company upon exercise of currently
exercisable options.
</FN>
</TABLE>
Founders' Shareholder Agreement
Messrs. Mark Weinreb, Jerry Rosner, Stanley Weinreb and Stanley
Raphael are parties to the Founders' Shareholder Agreement and the shares of
Common Stock beneficially owned by them are subject to the terms of the
Founders' Shareholder Agreement. Pursuant to the Founders' Shareholder
Agreement, each of these members has agreed to vote his shares for the election
of each of the other members of the group as a director of the Company as long
as each such other member owns at least 100,000
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<PAGE>
shares of Common Stock. In addition, the members have granted a right of first
refusal to the others with respect to any sales of Common Stock held by them
other than pursuant to a registration statement under the Securities Act or
pursuant to Rule 144 promulgated thereunder.
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors consists of five members, including Mark
Weinreb, Chairman of the Board, Jerry Rosner, Stanley Weinreb, Stanley Raphael
and Stephen J. Drescher. The term of the directors will expire on the date of
this year's Annual Meeting. Each director serves from the date of his election
until the end of his term and until his successor is elected and qualified.
Five persons will be elected at the Annual Meeting to serve as
directors for a term of one year and until their successors have been duly
elected and qualified. The Board of Directors has nominated Mark Weinreb, Jerry
Rosner, Stanley Weinreb, Stanley Raphael and Stephen J. Drescher as the
candidates for election. Unless authority is withheld, the proxies solicited by
the Board of Directors will be voted FOR the election of these nominees. In case
any of the nominees become unavailable for election to the Board of Directors,
an event which is not anticipated, the persons named as proxies, or their
substitutes, shall have full discretion and authority to vote or refrain from
voting for any other candidate in accordance with their judgment.
Information About the Nominees
Mark Weinreb has been the Chairman of the Board and Chief
Executive Officer of the Company since its inception in December 1992 and is 44
years old. From 1975 to 1989, Mr. Weinreb was employed by Bio Health
Laboratories, Inc. ("Bio Health"), a medical testing laboratory, and from 1985
to 1989, he was an owner and vice president of Bio Health, which was sold in
1989. During his tenure at Bio Health, Mr. Weinreb was responsible for
day-to-day operations, including overseeing the technical aspects of the
laboratory, negotiating property and equipment leases and handling financing
proposals, mergers and acquisitions. From 1989 to 1992, Mr. Weinreb managed his
private investments. Mark Weinreb is the son of Stanley Weinreb.
Jerry Rosner has been President, Chief Operating Officer and a
director of the Company since inception and is 37 years old. From 1983 to August
1995, Mr. Rosner was President and co-owner of Bagel Boss East, Inc. ("Bagel
Boss"), a company that owned and operated a bagel store in Bay Shore, New York.
At Bagel Boss, Mr. Rosner was responsible for all aspects of operations,
including production, recipe development, equipment purchases, lease
negotiations, labor relations and wholesale operations. Mr. Rosner has over 20
years of experience in the bagel industry.
Stanley Weinreb has been Vice President and a director of the
Company since inception and is 69 years old. From 1952 to 1989, he was President
and owner of Bio Health, a company which he founded. During his tenure at Bio
Health, Mr. Weinreb was the medical director of the laboratory and was
responsible for quality control, obtaining state and federal licenses and
regulatory compliance. Stanley Weinreb is the father of Mark Weinreb.
Stanley Raphael has been Secretary and a director of the Company
since inception and is 61 years old. Since 1984, he has served as President and
a director of Trade Consultants, Inc., a management consulting company. Prior to
1984, Mr. Raphael was an international trader of oils, chemicals and
petrochemicals. He currently is a director of Edge Petroleum Corp.
Stephen J. Drescher has been a director of the Company since
October 1996 and is 34 years old. From September 1993 to January 1996, Mr.
Drescher served as the President and Chief Executive Officer of Questron
Technology, Inc., a company that provides mediation and arbitration services.
Since June 1995, Mr. Drescher has served as the Director of Corporate Finance at
Monroe Parker Securities, Inc. ("Underwriter"), the underwriter of the Company's
initial public offering. Pursuant to the Underwriting Agreement between the
Company and the Underwriter, until May 1999, the Company is required to nominate
a person selected by the Underwriter and reasonably acceptable to the Company
for election to serve as a member of the Company's Board of Directors. Mr.
Drescher is the designee of the Underwriter. Mr. Drescher also has been a
licensed attorney since 1989. He currently is a director of Dualstar
Technologies Corporation and Sonics & Materials, Inc.
The executive officers of the Company are elected annually by
the Board of Directors and serve at the discretion of the Board.
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<PAGE>
During the year ended December 31, 1996, the Company's Board of
Directors held three meetings and acted by unanimous written consent on five
occasions. The Company does not have a standing audit, compensation or
nominating committee.
Executive Compensation
The following table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to the
Company's Chief Executive Officer and each of the other most highly paid
executive officers whose compensation exceeded $100,000 in the year ended
December 31, 1996:
<TABLE>
<CAPTION>
=====================================================================================================
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------
Annual Compensation
-----------------------------------------------------
Other Annual
Salary Bonus Compensation
Name and Principal Position Year ($) ($) ($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mark Weinreb 1996 149,000 -- --
Chairman of the Board and 1995 17,138 -- --
Chief Executive Officer
- -----------------------------------------------------------------------------------------------------
1996 149,000 -- --
Jerry Rosner 1995 17,138 -- --
President
=====================================================================================================
</TABLE>
The executive officers of the Company named above routinely
receive other benefits from the Company, the amounts of which are customary in
the industry. The Company has concluded, after reasonable inquiry, that the
aggregate amounts of such benefits during the year ended December 31, 1996 did
not exceed the lesser of $50,000 or 10% of the compensation set forth above as
to any named individual.
Employment Agreements
The Company has entered into employment agreements with each of
Mark Weinreb, its Chairman of the Board and Chief Executive Officer and Jerry
Rosner, its President and Chief Operating Officer, providing for initial
three-year terms commencing January 1, 1996, and base annual salaries of
$125,000 until completion of the Company's initial public offering (which was
completed in May 1996) and $165,000 thereafter, plus annual 10% increases. These
agreements also provide that the Company will continue to pay the base salary to
the employee or legal representative in the event of the employee's termination
due to disability or death for a six-month period following termination. The
agreements contain provisions prohibiting the employee from competing with the
Company during the term of employment and for a period of two years thereafter.
1996 Performance Equity Plan
In March 1996, the Company adopted the 1996 Performance Equity
Plan ("1996 Plan"). The 1996 Plan authorizes the granting of awards of up to
350,000 shares of Common Stock to the Company's key employees, officers,
directors and consultants. Awards consist of stock options (both nonqualified
options and options intended to qualify as "Incentive" stock options under
Section 422 of the Internal Revenue Code of 1986, as amended), restricted stock
awards, deferred stock awards, stock appreciation rights and other stock-based
awards, as described in the 1996 Plan.
On March 31st of each calendar year during the term of the 1996
Plan, assuming there are enough shares then available for grant under the 1996
Plan, each person who is then a director of the Company will be awarded stock
options to purchase 10,000 shares of Common Stock at the fair market value
thereof (as determined in accordance with the 1996 Plan), all of which options
are immediately exercisable as of the date of grant and have a term of ten
years. These are the only awards which may be granted to a director of the
Company under the 1996 Plan. The 1996 Plan is administered by the Board of
Directors which determines the persons (other than directors) to whom awards
will be granted, the number of awards to be granted and the specific terms of
each grant, including the exercisability thereof, subject to the provisions of
the 1996 Plan.
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<PAGE>
In connection with qualified stock options, the exercise price
of each option may not be less than 100% of the fair market value of the Common
Stock on the date of grant (or 110% of the fair market value in the case of a
grantee holding more than 10% of the outstanding stock of the Company). The
aggregate fair market value of shares for which qualified stock options are
exercisable for the first time by such employee during any calendar year may not
exceed $100,000. Nonqualified stock options granted under the 1996 Plan are also
required to have exercise prices not less than the fair market value of the
Common Stock on the date of grant.
The 1996 Plan also contains certain change in control provisions
which could cause options and other awards to become immediately exercisable and
restrictions and deferral limitations applicable to other awards to lapse in the
event any "person," as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, including a "group" as defined in Section 13(d), but excluding
certain shareholders of the Company, acquires beneficial ownership of more than
25% of the Company's outstanding shares of Common Stock.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's officers, directors and persons who beneficially
own more than ten percent of the Company's Common Stock to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
These reporting persons also are required to furnish the Company with copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
its review of the copies of such forms furnished to it and representations that
no other reports were required, the Company believes that all Section 16(a)
reporting requirements were complied with during the year ended December 31,
1996.
Certain Relationships and Related Transactions
Since the Company's inception, its operations have been
partially funded from time to time by loans to the Company made directly by
Messrs. Mark Weinreb, Stanley Weinreb and Stanley Raphael, or indirectly through
corporations controlled by Messrs. Mark Weinreb and Stanley Weinreb, certain
amounts of which have been repaid (the "Shareholder Loans"). At December 31,
1995, the principal amount of the Shareholder Loans, which bear interest at 10%
per annum, aggregated $462,468, of which an aggregate of $375,000 was paid
during the year ended December 31, 1996, and the balance is payable in equal
monthly installments of $12,000, which commenced in January 1997.
Pumpernickel Partners, L.P. ("Pumpernickel Partners") was a
Delaware limited partnership formed in August 1993 that owned and operated two
Big City Bagels franchises in Costa Mesa and Laguna Niguel, California. Messrs.
Mark Weinreb, Stanley Weinreb and Stanley Raphael each owned 22.5%, and Jerry
Rosner owned 10%, of the general partner, Bagel Partners, Inc. ("Bagel
Partners"), which owned a 5% interest in Pumpernickel Partners. The remaining
22.5% interest of Bagel Partners was owned by an individual responsible for the
day-to-day operations of the two stores operated by Pumpernickel Partners.
Messrs. Mark Weinreb, Stanley Weinreb and Stanley Raphael also owned a 6.9%,
6.9% and 3.45% limited partnership interest in Pumpernickel Partners,
respectively. Immediately prior to the closing of the Company's initial public
offering, all of the limited partners of Pumpernickel Partners contributed to
the Company their limited partnership interests in Pumpernickel Partners, and
all of the shareholders of Bagel Partners contributed to the Company all of the
capital stock of Bagel Partners in exchange for an aggregate of 181,250 shares
of Common Stock of the Company. As a result of their interests in Bagel Partners
and Pumpernickel Partners, Messrs. Mark Weinreb, Jerry Rosner, Stanley Weinreb
and Stanley Raphael received 13,913, 904, 13,913 and 7,975 shares of Common
Stock, respectively.
In connection with the Company's initial public offering in May
1996, the Company agreed to sell to the Underwriter, for a nominal fee, Unit
Purchase Options to purchase up to an aggregate of 112,500 units ("Units"), each
Unit consisting of one share of Common Stock and one Warrant. The Unit Purchase
Options are exercisable at $4.80 per Unit from May 1997 to May 2001. As a
designee of the Underwriter, Stephen Drescher, the Director of Corporate Finance
of the Underwriter and now a director of the Company, received 11,250 Unit
Purchase Options. Pursuant to the Underwriting Agreement, the Company also
engaged the Underwriter as its financial consultant until May 1998 for a monthly
fee of $1,000.
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<PAGE>
PROPOSAL II: TO APPROVE THE AMENDMENT
TO THE RESTATED CERTIFICATE OF INCORPORATION
General
The Company currently is authorized by its Restated Certificate
of Incorporation to issue 10,000,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock. As of the record date, 4,932,021 shares of Common Stock were
outstanding and no shares of Preferred Stock were designated and outstanding,
and the Company was obligated to reserve an aggregate of 2,618,750 shares of
Common Stock for issuance under the 1996 Plan and upon exercise of the Company's
Class A Redeemable Common Stock Purchase Warrants and Class B Redeemable Common
Stock Purchase Warrants. As further discussed herein, while the Board of
Directors believes that there is an adequate number of authorized shares of
Common Stock under the Restated Certificate of Incorporation for management to
be able to meet the Company's current obligations, the Board of Directors
believes that the current number of authorized shares of Common Stock is
inadequate for the Company's long term growth and development. Accordingly, the
Board of Directors proposes to amend the Restated Certificate of Incorporation
to increase the authorized number of shares of Common Stock by an additional
15,000,000 shares of Common Stock to 25,000,000 shares of Common Stock.
The Board of Directors has unanimously approved the proposal to
amend the Restated Certificate of Incorporation. As of the record date, the
Company's directors and executive officers directly or indirectly owned of
record 2,855,456 shares of Common Stock, representing approximately 58% of the
shares of Common Stock entitled to vote at the Annual Meeting.
Reason for the Proposal
The Board of Directors believes approval of the amendment to the
Restated Certificate of Incorporation is in the best interest of the Company and
its shareholders. The authorization of additional shares of Common Stock will
enable the Company to issue options, awards and warrants in the future. In
addition, the proposed amendment will give the Board of Directors flexibility to
authorize the issuance of shares of Common Stock for financing the Company's
business, acquiring other businesses, forming strategic partnerships and
alliances, stock dividends and stock splits, and for director and employee
benefit plans.
Approval of the proposal will permit the Board of Directors to
issue additional shares of Common Stock without further approval of the
shareholders of the Company unless shareholder approval is required by
applicable law, the Restated Certificate of Incorporation or stock market or
exchange requirements. This additional flexibility afforded to the Board of
Directors could be used to discourage an unsolicited takeover proposal which the
Board of Directors believes is not in the best interest of the shareholders. For
example, shares of Common Stock could be privately placed with purchasers who
may support the Board of Directors in opposing a hostile takeover bid. Although
the Board of Directors is required to make any determination to issue securities
based on its judgment as to the best interests of the shareholders of the
Company, the Board of Directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority, of the
shareholders nevertheless might believe to be in their best interests or in
which shareholders might receive a premium for their stock over the then market
price of their stock. In addition, the issuance of such shares might make it
more difficult or discourage attempts to remove incumbent management. Moreover,
the issuance of such shares might have a dilutive effect on earnings per share
and on the voting rights of the existing shareholders.
Description of Common Stock
The holders of Common Stock of the Company are entitled to one
vote for each share held of record on all matters to be voted on by the
shareholders of the Company. There is no cumulative voting with respect to the
election of directors, with the result that the holders of more than 50% of the
shares of Common Stock of the Company voted in an election of directors can
elect the directors of the Company. The holders of Common Stock are entitled to
receive dividends when, as, and if declared by the Board of Directors out of
funds legally available therefor. The Company never has paid dividends on its
shares of Common Stock. In the event of liquidation, dissolution or winding up
of the Company, the holders
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of the shares of Common Stock are entitled to share ratably in all assets
remaining available for distribution to them after payment of liabilities and
after provision has been made for each class of stock, if any, having preference
over the Common Stock. Holders of shares of Common Stock have no conversion,
preemptive or other subscription rights, and there are no redemption provisions
applicable to the Common Stock.
If the proposal to amend the Restated Certificate of
Incorporation is approved, the text of paragraph (a) to Article Fourth of the
Restated Certificate of Incorporation will read in its entirety as follows:
"FOURTH: (a) The aggregate number of shares of stock
which the Corporation shall have authority to issue is
26,000,000 shares, consisting of 25,000,000 shares, with a par
value of $.001 per share, classified as common shares (the
"Common Stock"), and 1,000,000 shares, with a par value of $.001
per share, classified as preferred shares (the "Preferred
Stock")."
The financial statements, management's discussion and analysis
of financial condition and results of operations and related information is
incorporated by reference from the Company's Annual Report to Shareholders for
the year ended December 31, 1996.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL
OF THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the independent accounting
firm of Richard A. Eisner & Company, LLP as the auditors of the Company for the
year ending December 31, 1997. A representative of Richard A. Eisner & Company,
LLP, the auditors of the Company for the year ended December 31, 1996, is
expected to be present at the Annual Meeting. The representative will have the
opportunity to make a statement and will be available to respond to appropriate
questions from shareholders.
1998 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1998 Annual Meeting
of Shareholders to be eligible for inclusion in the Company's Proxy Statement,
they must be received by the Company at its principal office in Hicksville, New
York not later than February 3, 1998.
SOLICITATION OF PROXIES
The solicitation of proxies in the enclosed form is made on
behalf of the Company and the cost of this solicitation is being paid by the
Company. In addition to the use of the mails, proxies may be solicited
personally or by telephone or telephone using the services of directors,
officers and regular employees of the Company at nominal cost. Banks, brokerage
firms and other custodians, nominees and fiduciaries will be reimbursed by the
Company for expenses incurred in sending proxy material to beneficial owners of
the Company's stock.
7
<PAGE>
OTHER MATTERS
The Board of Directors knows of no matter which will be
presented for consideration at the Annual Meeting other than the matters
referred to in this Proxy Statement. Should any other matter properly come
before the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote such proxy in accordance with their best judgment.
Stanley Raphael, Secretary
Hicksville, New York
June 3, 1997
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<PAGE>
BIG CITY BAGELS, INC. - PROXY
Solicited By The Board Of Directors
for Annual Meeting To Be Held on July 1, 1997
P The undersigned shareholder(s) of BIG CITY BAGELS, INC., a New York
corporation ("Company"), hereby appoints Mark Weinreb, Jerry Rosner and
R Stanley Raphael, or any of them, with full power of substitution and to act
without the others, as the agents, attorneys and proxies of the
O undersigned, to vote the shares standing in the name of the undersigned at
the Annual Meeting of Shareholders of the Company to be held on July 1, 1997
X and at all adjournments thereof. This proxy will be voted in accordance
with the instructions given below. If no instructions are given, this proxy
Y will be voted FOR all of the following proposals:
1. Election of the following Directors:
FOR all nominees listed below except WITHHOLD AUTHORITY to vote
as marked to the contrary below |_| for all nominees listed below |_|
Mark Weinreb Jerry Rosner Stanley Weinreb Stanley Raphael Stephen J. Drescher
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.
-----------------------------------------------------
2. Approval of the amendment to the Company's Certificate of Incorporation:
FOR |_| AGAINST |_| ABSTAIN |_|
3. In their discretion, the proxies are authorized to vote upon such
other business as may come before the meeting or any adjournment
thereof.
Date _________________, 1997
-----------------------------
Signature
-----------------------------
Signature if held jointly
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
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