<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ROADHOUSE GRILL, INC.
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(Name of Registrant as Specified in Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(set forth the amount on which the
filing fee is calculated and state how it was determined)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE> 2
[ROADHOUSE GRILL LOGO]
6600 NORTH ANDREWS AVENUE, SUITE 160, FT. LAUDERDALE, FL 33309
ROADHOUSE GRILL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 3, 1997
To The Shareholders of Roadhouse Grill, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Roadhouse Grill, Inc., a Florida Corporation (the
"Company"), TO BE HELD ON JUNE 3, 1997, at 10:00 a.m., EST, at The Westin
Hotel, 400 Corporate Drive, Fort Lauderdale, Florida 33334, for the following
purposes:
I. To elect six directors;
II. To ratify the selection of KPMG Peat Marwick, LLP as independent
auditors for the Company for the 1997 fiscal year;
III. To increase the number of shares of the Company's Common Stock
available for issuance under the Amended and Restated 1994 Stock
Option Plan from 216,666 shares to 516,666 shares; and
IV. To transact such other business as properly may come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
THE BOARD OF DIRECTORS RECOMMENDS A "YES" VOTE ON ALL PROPOSALS.
The Board of Directors has fixed the close of business on April 14, 1997,
as the record date for the determination of shareholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof. The stock transfer books will not be closed.
The Proxy Statement, form of Proxy and copy of the Annual Report on the
Company's operations during the fiscal year ended December 29, 1996 accompany
this Notice.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION
AT THE MEETING. A POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE.
SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON IF THEY SO DESIRE.
By Order of the Board of Directors
Dan Busbee,
Secretary
Fort Lauderdale, Florida
May 5, 1997
<PAGE> 3
ROADHOUSE GRILL, INC.
6600 NORTH ANDREWS AVENUE, SUITE 160, FT. LAUDERDALE, FL 33309
----------------------------
PROXY STATEMENT
----------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Roadhouse Grill, Inc., a Florida Corporation (the "Company"), for
use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on
June 3, 1997, at 10:00 a.m., EST, and at any adjournment or postponement
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. The Annual Meeting will be held at The Westin Hotel,
400 Corporate Drive, Fort Lauderdale, Florida 33334.
This Proxy Statement and accompanying proxy ("Proxy Statement") are first
being mailed on or about May 5, 1997 to all shareholders entitled to vote at
the Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only shareholders of record at the close of business on April 14, 1997 will be
entitled to notice of, and to vote at, the Annual Meeting. At the close of
business on April 14, there were outstanding 9,305,408 shares of the Company's
Common Stock, par value $.03 per share (the "Common Stock"). Each share of
Common Stock outstanding on the record date is entitled to one vote. The
election of directors requires a plurality of the votes cast. All other
proposals require the affirmative vote of a quorum. A quorum shall consist of
not less than one third of the shares entitled to vote at the meeting. Shares
represented by proxies marked to withhold authority to vote, and shares
represented by proxies that indicate that the broker or nominee shareholder
thereof does not have discretionary authority to vote them, will be counted to
determine the existence of a quorum at the Annual Meeting, but will not affect
the plurality vote required.
At the record date, Berjaya Group (Cayman) Limited ("Berjaya")
beneficially owned 5,635,466 shares. These shares represent 60.6% of the total
outstanding shares. As a result, Berjaya is able to control the vote on all
matters requiring approval by the shareholders of the Company, to elect the
entire Board and, effectively, to control the Company. Berjaya has advised the
Company it intends to vote in favor of each of the proposals presented at the
Annual Meeting.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it any time before it is voted by filing a written notice of revocation
or a duly executed proxy bearing a later date with the Secretary of the Company
at 6600 North Andrews Avenue, Ste 160, Fort Lauderdale, Florida 33309, or by
attending the Annual Meeting and voting in person.
SOLICITATION
The enclosed Proxy is solicited by the management of the Company at the
direction of the Board. The Company will bear the entire cost of solicitation
of proxies in the enclosed form, including preparation, assembly, printing and
mailing of this Proxy Statement and any additional information furnished by the
Company to shareholders. Original solicitation of proxies by mail may be
supplemented by telephone, telegraph or personal solicitation by directors,
officers or other regular employees of the Company or by agents employed by the
Company for the specific purpose of
1
<PAGE> 4
supplemental proxy solicitation. Such soliciting agents, if engaged, will be
paid a reasonable fee for their services. No additional compensation will be
paid to directors, officers or other regular Company employees for such
services. The Company may reimburse persons holding shares in their names for
others, or holding shares for others who have the right to give voting
instructions, such as brokers, banks, fiduciaries and nominees, for such
persons' reasonable expenses in forwarding the proxy materials to their
principals.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
This information is contained under Proposal I.
CERTAIN INFORMATION CONCERNING EXECUTIVE OFFICERS
Information regarding the executive officers of the Company, who are not
also directors of the Company, as of December 29, 1996, is as follows:
DENNIS C. JONES, age 43. Mr. Jones has served as Chief Financial Officer,
Vice President of Finance and Treasurer of the Company since March 1996. From
October 1994 to January 1996, Mr. Jones served as Chief Financial Officer of
Louise's Trattoria, Inc., which operated 19 Italian restaurants, primarily in
southern California. From 1984 to October 1994, Mr. Jones was employed by
Acapulco Restaurants, Inc., which operated approximately 50 Mexican
restaurants, primarily in California, in various financial management
positions, including Chief Financial Officer from January 1991 to October 1994.
JOHN D. TOOLE, JR., age 60 . Mr. Toole has served as Vice President of
Real Estate and Construction of the Company since March 1993. From 1986 to
March 1993, Mr. Toole owned and operated a real estate brokerage company in
Smyrna, Georgia. Mr. Toole is the father of J. David Toole III, the Chief
Executive Officer and President of the Company.
H. TODD KAUFMAN, age 34. Mr. Kaufman has served as Vice President of
Operations of the Company since December 1995. Mr. Kaufman joined the Company
in March 1994 and has served in various capacities, including area supervisor
and regional director. From September 1991 until February 1994, Mr. Kaufman
served as an area supervisor in the Atlanta market for O'Charley's Restaurants,
Inc. From 1987 until 1991, Mr. Kaufman served as a restaurant manager for
Ryan's Family Steak Houses, Inc.
BRAD H. HABER, age 36. Mr. Haber has served as Vice President of Training
of the Company since September 1997. From February 1992 to March 1995, Mr.
Haber served as Manager Training Supervisor and a restaurant general manager of
O'Charley's Restaurants, Inc. From June 1990 to February 1992, Mr. Haber was
employed by Brinker International, Inc. as the manager of a Chili's restaurant.
DAN BUSBEE, age 64. Mr. Busbee has served as Secretary of the Company
since April 1997. Mr. Busbee is a shareholder in the law firm of Locke Purnell
Rain Harrell (A Professional Corporation) where he has worked since
January 1970.
SECURITY OWNERSHIP OF OFFICERS, DIRECTORS AND CERTAIN BENEFICIAL OWNERS
The Board has fixed the close of business on April 14, 1997, as the record
date, on which there were outstanding 9,305,408 shares. The following table
sets forth certain information regarding the beneficial ownership of the
Company's Common Stock as of April 14, 1997 by each person known to the Company
to own beneficially more than five percent of the Company's Common Stock, each
director, each named executive, and all executive officers and directors as a
group.
2
<PAGE> 5
<TABLE>
<CAPTION>
COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------------------------ ------------------ ----------------
<S> <C> <C>
J. David Toole III (1) 273,777 2.9%
Tan Kim Poh (2) (3) 5,637,132 60.6%
Dr. Christian F. Horn(4) (5) 571,255 6.1%
Philip Friedman(6) 0 -
Ayman Sabi (7) 729,747 7.8%
Phillip Ratner (8) 0 -
Berjaya Group (Cayman) Limited (3) 5,635,466 60.6%
Cupertino Ventures Partnership III, L.P. (5) 551,256 5.9%
All executive officers and directors
as a group (ten persons) (1) ( 2) ( 4) (7) (9) 7,232,974 77.7%
</TABLE>
- -----------------------------------
(1) Includes 111,111 shares subject to options beneficially owned by Mr. Toole
that are exercisable within 60 days of the date of this Proxy Statement. The
Address for Mr. Toole is 6600 N. Andrews Avenue, Suite 160, Ft. Lauderdale,
Florida 33309.
(2) Includes (i) 1,666 shares subject to options beneficially owned by Mr. Tan
that are exercisable within 60 days of the date of this Proxy Statement and
(ii) 5,635,466 shares beneficially owned by Berjaya. As Group Executive
Director of Berjaya Berhad, the owner of 100% of the outstanding shares of
Berjaya, Mr. Tan may be deemed to be the beneficial owner of all of the shares
owned by Berjaya in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934. Mr. Tan disclaims beneficial ownership of the shares beneficially
owned by Berjaya.
(3) The address for Mr. Tan and Berjaya is Level 16, Shahzan Prudential Tower,
30 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.
(4) Includes (i) 3,333 shares subject to options beneficially owned by Dr. Horn
that are exercisable within 60 days of the date of this Proxy Statement and
(ii) 551,256 shares beneficially owned by Cupertino. As the Managing Partner of
Horn Venture Partners II, L.P., a general partner of Cupertino, Dr. Horn may be
deemed to be the beneficial owner of all of the shares owned by Cupertino in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934.
(5) The address for Dr. Horn and Cupertino is 20300 Stevens Creek Blvd., Suite
330, Cupertino, California 95014.
(6) The address for Mr. Friedman is 899 El Centro Street, South Pasadena,
California 91030.
(7) Mr. Sabi owns no shares of record. The number above represents (i) 160,565
beneficially owned by Arab Multinational Investment; (ii) 333,333 shares
beneficially owned by Banque Scandinave En Suisse; and (iii) 235,849 shares
beneficially owned by Societe Financiere Privee. As agent for these entities,
Mr. Sabi may be deemed to be the beneficial owner of all of the shares owned by
these entities in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934. The address for Mr. Sabi is 6118 St. Giles Street, Raleigh North
Carolina 27612.
(8) The address for Mr. Ratner is 402 West I-30, Garland, Texas 75043.
(9) Includes 136,995 shares subject to options that are exercisable within 60
days of the date of this Proxy Statement.
3
<PAGE> 6
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership in the Company's Common Stock. Specific due dates for
these records have been established and the Company is required to report in
this proxy statement any failure to file by these dates in 1996.
Based solely on its review of the copies of such reports received by the
Company, or written representations from certain reporting persons, the Company
believes that, during the last fiscal year, all of the Company's executive
officers, directors and greater-than-ten-percent beneficial owners were in
compliance with Section 16(a) filing requirements, except that the Form 4s
for certain individuals were filed as follows: Berjaya Group (Cayman) Limited
(one transaction), filed on 1/30/97; Dennis Jones (one transaction), filed on
1/6/97; Gerald Shore (one transaction), filed on 12/26/96; Charlie Barnett (one
transaction), filed on 12/20/96; David Toole III (two transactions) filed on
12/20/96.
4
<PAGE> 7
PROPOSAL I
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF EACH NAMED NOMINEE.
Shares of Common Stock represented by executed proxies will be voted, if
authority to do so is not withheld, for the election of the Nominees named
below. If any Nominee should become unavailable for election as a result of an
unexpected occurrence, such shares will be noted for the election of such
substitute Nominee as the Board may propose. Each nominee is currently a
director of the Company.
Directors are elected annually by the Company's shareholders and serve
until their successors have been elected and qualified.
NOMINEES FOR DIRECTORS
DR. CHRISTAIN F. HORN, age 69. Dr. Horn has served as a director of the
Company since January 1994 and as Chairman of the Board since August 1996.
Since January 1996, Dr. Horn has served as the President of Horn Investment
Corp. Since 1990, Dr. Horn has been the Managing Partner of Horn Venture
Partners II, L.P., a general partner of Cupertino Ventures Partnership III,
L.P. (formerly known as Grace Ventures Partnership III, L.P.) ("Cupertino"),
which is a shareholder of the Company. From 1983 until December 1995, Dr. Horn
was also President of Grace Ventures Corp., which had been a General Partner of
Grace Ventures Partnership III, L.P. Dr. Horn is a director of Buffets, Inc., a
buffet-style restaurant chain, a subsidiary of which operates Roadhouse Grill
restaurants in Gresham, Oregon and San Diego, California pursuant to licensing
arrangements with the Company.
TAN KIM POH, age 44. Mr. Tan has served as a director of the Company since
May 1995. Since 1991, Mr. Tan has served as Group Executive Director of Berjaya
Berhad. Mr. Tan has also served as a director of the following companies since
the indicated dates: Berjaya Industrial Berhad, since May 1990; Berjaya
Prudential Assurance Berhad, since March 1992; Berjaya Capital Berhad, since
March 1995; Topgroup Holdings Berhad, since January 1995; UNZA Holdings Berhad,
since January 1995; Berjaya Holdings (H.K.) Ltd., since July 1993; Rossmont
Plc, since September 1994; STM Wireless, Inc., since October 1994; and
Carlovers Carwash Ltd., since December 1994.
PHILIP FRIEDMAN, age 51. Mr. Friedman has served as a director of the
Company since September 1996. Since January 1996, Mr. Friedman has served as
President of Panda Management, Inc. In addition, since June 1986, Mr. Friedman
has served as the President of P. Friedman & Associates, Inc., a business
planning and management consulting firm. Mr. Friedman is also a director of
Eateries, Inc.; T.J. Cinnamons, Inc.; and P&E Production Technology Management,
Inc. On occasion, Mr. Friedman has taken interim advisory positions with
clients of P. Friedman & Associates, Inc. and these positions have included:
Advisor to the President of Roy Rogers Restaurants (1993), Chief Financial
Officer for Service America Corporation (1990) and Executive Vice President for
Sutton Place Gourmet (1988). From 1984 to 1986, Mr. Friedman was Vice
President, Finance, Administration and Senior Planning Associate of Cini-Little
International, Inc. Prior to that, he was Vice President of Planning and Vice
President, Big Boy Franchising for Marriott Corporation. Mr. Friedman held
similar executive positions with Chi-Chi's, Inc. and Pepsico's Pizza Hut
division.
PHILLIP RATNER, age 52. Mr. Ratner has served as a director of the Company
since March 1997. He is the Chairman, President and Chief Executive Officer of
Spaghetti Warehouse, Inc., Garland, Texas. From 1984 to 1987, Mr. Ratner served
in various executive positions, including Chief Executive Officer in 1987, with
Acapulco Restaurants, Inc. Prior to his association with Acapulco Restaurants,
Mr. Ratner was employed by El Torito from 1979 to 1984, serving as Executive
Vice President of Operations from 1982 to 1984.
AYMAN SABI, age 33. Mr. Sabi became a director of the Company in February
1997. He is presently the Chairman and Chief Executive Officer of Sabi
International Developments, a trading, contracting and investment company which
owns, operates and invests in various restaurant concepts, both domestically
5
<PAGE> 8
and internationally. Mr. Sabi also serves, as a member of the Board of
Directors of Tunis International Bank, Tunisia.
J. DAVID TOOLE III, age 38. Mr. Toole founded Roadhouse Grill in October
1992 and has served since that time as Chief Executive Officer, President and a
director of the Company. From 1988 to October 1992, Mr. Toole served as
President of Bluegrass Steaks, Inc. From 1983 to 1988, Mr. Toole was employed
by Ryan's Family Steak Houses, Inc. in various capacities, including restaurant
general manager and area supervisor. In 1988, Ryan's was a 120-unit chain which
operated in the Southeast, Northeast and Midwest regions of the United States.
J. David Toole, Jr., the Vice President of Real Estate and Construction of the
Company, is the father of Mr. Toole.
MEETINGS AND COMMITTEES OF THE BOARD
During fiscal year 1996, the Board held eight meetings. During fiscal year
1996, each director attended at least 75% of the Board meetings.
The Board has two standing committees: the Audit Committee and the
Compensation and Stock Option Committee. The Audit Committee recommends
engagement of the Company's auditors, reviews and approves services performed
by such auditors, reviews and evaluates the Company's accounting system and its
system of internal controls, and performs other related duties delegated to
such Committee by the Board. The members of the Audit Committee are Messrs.
Friedman, Sabi, and Tan. The Compensation and Stock Option Committee is
responsible for recommending to the Board executive compensation levels and
executive and overall compensation policies. The members of the Compensation
and Stock Option Committee are Dr. Horn and Messrs. Ratner and Tan.
During fiscal year 1996, directors who were not employees received
reimbursement of out-of-pocket expenses and, except for Dr. Horn, directors'
fees of $2,000 for each regular Board meeting attended.
6
<PAGE> 9
PROPOSAL II
RATIFICATION OF KPMG PEAT MARWICK, LLP AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE 1997 FISCAL YEAR
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
The Audit Committee has selected the accounting firm of KPMG Peat Marwick
LLP to serve as the Company's independent auditors for the 1997 fiscal year.
The shareholders are being asked to ratify this selection.
It is expected that representatives of KPMG Peat Marwick LLP will attend
the meeting, will have the opportunity to make a statement if they so desire
and will be available to respond to appropriate shareholder questions.
The Company dismissed its auditors on February 13, 1995 and again on
November 28, 1995. Both such dismissals were approved by the Board and neither
was the result of the resignation of either auditing firm. Further, the changes
were not the result of any disagreement with either of the former auditors on
any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure. The reports rendered by such
auditors for fiscal 1993 and fiscal 1994 do not contain an adverse opinion or
disclaimer of opinion and are not qualified or modified as to uncertainty,
audit scope or accounting principles. During fiscal 1994 and fiscal 1995, there
were no disagreements or "reportable events" with the former independent
auditors.
7
<PAGE> 10
PROPOSAL III
INCREASE THE NUMBER OF SHARES AVAILABLE UNDER THE
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF THIS PROPOSAL.
The Amended and Restated 1994 Stock Option Plan (the "Plan") is available
to employees of the Company, and any officer, director, or consultant of the
Company who is not an employee of the Company. Two hundred sixteen thousand six
hundred and sixty six (216,666) shares of the Company's Common Stock were
reserved for issuance pursuant to such plan at April 14, 1997. Options vest over
a three-year period from the date of grant and are exercisable for a period of
no greater than ten years after grant.
The Board declared a one-for-three reverse stock split (the "Stock Split")
in October 1996. Concurrent with the stock split, the number of shares issuable
upon the exercise of each outstanding option and the exercise price of each
outstanding option was adjusted such that the total amount paid upon exercise
of the option in full did not change.
On April 27, 1997, the Board approved a proposal to amend the Amended and
Restated 1994 Stock Option Plan to increase the number of shares available for
option grants under the Plan from 216,666 to 516,666. As of April 14, 1997
there were 7,257 shares available for option grants under the Plan.
The Board has determined of the 300,000 share increase in options
available for issuance under the Plan, 30,000 will be granted to non-employee
directors. As of the date of this Proxy Statement, the benefits that will be
paid under the Plan are not determinable. A presentation of the benefits
awarded to the Company's executives under the Plan for fiscal 1996 may be found
in "Security Ownership of Officers, Directors and Certain Beneficial Owners",
page 2 and "Options Granted in Last Fiscal Year", page 9.
In fiscal 1996, as a group, executive officers received 186,664 options,
non-employee directors received 15,000 options and employees received 78,752
options.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the amount of compensation for services
rendered in all capacities to the Company during fiscal 1996, 1995 and 1994 by
the Company's Chief Executive Officer. No other executive officer of the
Company received compensation in excess of $100,000 during 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
J. David Toole III
Director, President 1996 $200,000 $100,000 -
And Chief Executive Officer 1995 120,000 34,566 -
1994 120,000 63,084 -
</TABLE>
In October 1996, the Company and J. David Toole, III entered in to an
employment agreement providing for Mr. Toole's employment as President of the
Company through October 23, 1999. The agreement provides for an annual base
salary of $200,000 and an annual cash bonus of $100,000, payable within ninety
days after fiscal year end if the Company's net income before taxes for such
fiscal year exceeds the net income before taxes for the preceding fiscal year.
In addition, the agreement provides for the grant of certain options to
purchase Common Stock to Mr. Toole on an annual basis, including an option to
purchase 150,000 shares of Common Stock at an exercise price of $5.58 per
share, for which options were granted in October 1996. The agreement provides
that Mr. Toole will not compete with the Company for three years after
termination of his employment.
OPTIONS GRANTS TABLE
The following table sets forth information concerning the stock options
granted to the Named Executive in 1996:
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANTED TO EXERCISE OR BASE EXPIRATION
NAME OPTIONS GRANTED EMPLOYEES IN FISCAL YEAR PRICE ($/SH) DATE
- ---- --------------- ------------------------ ------------ ----
<S> <C> <C> <C> <C>
J. David Toole III 150,000(1) 53%(2) $5.58 October 2004
</TABLE>
(1) This grant of options was not made under the Plan.
(2) Based on a total of 130,416 options granted under the Plan plus 150,000
options granted outside the Plan.
9
<PAGE> 12
AGGREGATED OPTION TABLE
The following table sets forth certain information with respect to options
exercised during, and options held at the end of, fiscal 1996 by the Named
Executive. See "Security Ownership of Officers, Directors and Certain
Beneficial Owners" for number of exercisable shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES SUBJECT VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE TO UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
NAME ON EXERCISE REALIZED END OF FISCAL 1996 AT END OF FISCAL 1996
- ---- ----------- -------- ------------------ ---------------------
<S> <C> <C> <C> <C>
J. David Toole III 0 - 316,666 $42,250
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation and Stock Option Committee (the "Committee") of the Board, which
has responsibility for all aspects of the compensation program for the
executive officers of the Company. The Committee is composed entirely of
non-employee directors who are not eligible to participate in any of the
Company's executive compensation programs.
Overview and Philosophy
The Objectives of the Company's executive compensation programs are to:
- Attract, motivate and retain the highest quality executives.
- Align their financial interests with those of the Company's long-term
investors.
- Inspire them to achieve tactical and strategic objectives in a manner
consistent with the Company's corporate values.
In furtherance of these objectives, the Company's executive compensation
policies and programs are designed to:
- Focus participants on high priority goals to increase shareholder
value.
- Encourage behaviors that exemplify the Company's core values relating
to customers, quality of performance, employees, integrity, teamwork
and good citizenship.
- Increase executive stock ownership to promote a propriety interest in
the success of the Company.
There are three major components of the Company's executive officer
compensation: (1) base salary, (2) annual cash bonus incentives, and (3)
long-term stock incentives.
Base Salary
In establishing base salaries for executive officers for 1996, the
Committee considered (1) the significant scope of the duties and
responsibilities of each officer's position, (2) individual contributions, (3)
the increased experience level gained over the past year by those executive
officers holding new positions, (4) the Company's generally positive financial
results, (5) the Committee's overall philosophy of paying executive officers
according to a competitive framework, and (6) comparable compensation practices
in the casual dining industry.
10
<PAGE> 13
Annual Cash Bonus Incentives
J. David Toole III, the Company's President and CEO, under his employment
agreement, is eligible to receive an annual cash bonus of $100,000 through
fiscal 1999 if the Company's net income before taxes for such fiscal year
exceeds the net income before taxes for the preceding fiscal year. In fiscal
1996, Mr. Toole received a $100,000 annual cash bonus. No other executive
officers were covered under an annual cash incentive plan in fiscal 1996.
Long-Term Stock Incentives
The Committee believes that stock options are an important component of
executive compensation. The Company believes that stock options encourage
executive officers to remain in the Company's employ, as long-term rewards are
linked to stock price appreciation.
The Board adopted the 1994 Stock Option Plan (the "Original Plan") with an
effective date of February 14, 1994. The Board and the shareholders of the
Company amended and restated the Original Plan effective November 8, 1996 by
adopting and approving the Plan. The Plan provides for grants of nonqualified
stock options to Company employees and to non-employee officers, directors and
consultants of the Company. The Plan is administered by the Compensation and
Stock Option Committee. A maximum of 216,666 shares of Common Stock may be
issued pursuant to the Plan. As of December 29, 1996, options to purchase
192,030 shares were outstanding under the Plan at a weighted-average exercise
price of $9.30 per share. Except for 3,333 options which vested immediately upon
their grant, all of the options granted to date under the Plan vest over a three
year period from the date of grant, subject to the acceleration of vesting upon
a change of control of the Company.
The term of the options is determined by the Committee, but in any event
may not exceed ten years from the date of grant. The exercise price, which is
the fair market value on the date of the grant, may be paid in cash, Common
Stock or a combination of both cash and Common Stock.
In addition to options that have been granted under the Plan, the Company
has granted two options, which were not covered by the Plan to J. David Toole,
III. Pursuant to these options, Mr. Toole may acquire up to 166,666 shares of
the Company's Common Stock at a price of $7.50 per share and up to 150,000
shares of the Company's Common Stock at $5.58 per share. These options have
expiration dates of September 2002 and October 2004, respectively.
Other Information
Section 162(m) of the Internal Revenue Code places an annual limitation of
$1,000,000 on the compensation of certain executive officers of publicly held
corporations that can be deducted for federal income tax purposes unless such
compensation is based on performance. No executive officer of the Company
received annual compensation in excess of $1,000,000 in 1996 or in any prior
year. The Company's bonus and equity-based compensation plans are designed to
meet the requirements of Section 162(m) by basing all incentive compensation on
identifiable performance criteria. The Committee does not anticipate that any
executive officer base salary will exceed $1,000,000.
COMPENSATION AND STOCK OPTION COMMITTEE
Dr. Christian F. Horn
Phillip Ratner
Tan Kim Poh
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PERFORMANCE GRAPH
The following line graph compares the percentage change in the cumulative
total return of the Company's Common Stock, Nasdaq Combination Composite and a
company compiled peer group (the "Peer Group") consisting of Rare Hospitality
Intl, Inc., Lone Star Steakhouse & Saloon, Outback Steakhouse, Inc. and Logan's
Roadhouse, Inc. over the period November 26, 1996 through December 31, 1996. The
graph assumes an initial investment of $100 on November 26, 1996, the date the
Company's Common Stock began trading on the Nasdaq National Market, and the
reinvestment of dividends, if any. The assumed investment in the Company's
Common Stock at the beginning of the period is at a price per share of $6.125,
the closing price of the stock on November 26, 1996.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
11/26 12/2 12/9 12/16 12/23 12/31
------ ------ ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Roadhouse Grill, Inc 100.00 100.00 97.96 97.96 97.96 91.84
Peer Group 100.00 97.06 101.85 99.23 95.47 97.90
Nasdaq Combination Composite Index 100.00 101.45 102.42 98.42 99.87 100.77
- --------------------------------------------------------------------------------------------------------
</TABLE>
CERTAIN INDEMNIFICATION AGREEMENTS
Pursuant to the Company's Articles of Incorporation and Bylaws, the
Company is obligated to indemnify each of its directors and officers to the
fullest extent permitted by Florida law with respect to all liability and loss
suffered, and reasonable expense incurred, by such person in any action, suit
or proceeding in which such person was or is made or threatened to be made a
party or is otherwise involved by reason of the fact that such person is or was
a director or officer of the Company. The Company is also obligated to pay the
reasonable expenses of indemnified directors or officers in defending such
proceedings if the indemnified party agrees to repay all amounts advanced
should it be ultimately determined that such person is not entitled to
indemnification.
The Company maintains an insurance policy covering directors and officers
under which the insurer agrees to pay, subject to certain exclusions, for any
claim made against the directors and officers of the Company for a wrongful act
for which they become legally obligated to pay or for which the Company is
required to indemnify its directors or officers.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal 1995, the Company obtained loans in the aggregate amount of
approximately $2.5 million from John Y. Brown, Jr. During fiscal 1995, Mr.
Brown was the former Chairman of the Board of Directors of the Company and was
a shareholder. In January 1996, these loans were consolidated and extended
under the Company's unsecured promissory note dated January 15, 1996, in the
principal amount of $2.5 million, bearing interest at 8.5 percent per annum,
the principal of and accrued interest on which were due and payable in full
upon the closing, and from the proceeds, of the Company's initial public
offering which was completed in December 1996. The funds obtained by the
Company from such loan were used to finance the opening of new restaurants. The
loan was initially unsecured but in July 1996 was cross-collateralized by the
lien granted on the additional $1.5 million loan described in the next
paragraph.
In July 1996, the Company borrowed an additional $1.5 million from Mr.
Brown under the Company's secured promissory note dated July 12, 1996, bearing
interest at 8.5 percent per annum, the principal of and accrued interest on
which were paid on August 19, 1996 from a portion of the proceeds of the
Company's $2.0 million loan from Berjaya described below. The loan from Mr.
Brown, the proceeds of which were used to finance the opening of new
restaurants, was secured by a lien on all of
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<PAGE> 15
the furniture, fixtures and equipment located in the Company's restaurants on
July 12, 1996 that had not been previously pledged to a third party. Following
the repayment of this loan, the Company in September 1996 obtained a new loan
from Mr. Brown in the amount of $1.5 million, which was secured by the same
collateral as the July 1996 note and which as evidenced by the Company's
promissory note dated September 5, 1996, bearing interest at 5.0 percent per
annum and payable in full upon the closing of the Company's initial public
offering. The proceeds of the September 1996 loan were used for general
corporate purposes, including opening new restaurants.
In July 1996, the Company borrowed $500,000 from Cupertino Ventures, a
shareholder of the Company, under the Company's unsecured promissory note dated
July 15, 1996, bearing interest at 8.5 percent per annum, the principal of and
accrued interest on which were paid on August 19, 1996. The proceeds of this
loan were used to finance the opening of new restaurants. Dr. Christian F.
Horn, the Chairman of the Board of Directors of the Company, is the Managing
Partner of Horn Ventures Partners II, L.P., which is a General Partner of
Cupertino.
In August 1996, the Company borrowed $2.0 million from Berjaya, its
principal shareholder, under an unsecured promissory note dated August 16,
1996, bearing interest at 8.5 percent per annum, the principal of and accrued
interest on which were due and payable in full upon the closing of the
Company's initial public offering. In November 1996, the maturity of such loan
was extended and will be due and payable on November 25, 1997. The proceeds of
this loan were used to repay the July 1996 $1.5 million loan from Mr. Brown and
the $500,000 loan from Cupertino described above. In September 1996, the
Company borrowed $3.0 million from Berjaya, its principal shareholder, under an
unsecured promissory note dated September 27, 1996, bearing interest at 8.5
percent per annum, the principal of and accrued interest on which were due and
payable in full upon the closing of the Company's initial public offering. In
November 1996, the maturity of such loan was extended and will be due and
payable on November 25, 1997. The proceeds of this loan were used for general
corporate purposes, including opening new restaurants. Mr. Tan, a director of
the Company, is Group Executive Director of Berjaya Berhad, which directly or
indirectly owns Berjaya.
Berjaya, directly or indirectly, owns Roadhouse Grill Hong Kong and
Roadhouse Grill Asia. In January 1996, the Company entered into a Master
Development Agreement with Roadhouse Grill Hong Kong, which provides for the
development and franchising of Roadhouse Grill restaurants in Hong Kong. Under
the agreement, Roadhouse Grill Hong Kong is not required to develop any
specific number of restaurants in Hong Kong, but any restaurants that it
develops are credited against the development obligations of Roadhouse Grill
Asia under an additional Master Development Agreement between Roadhouse Grill
Asia and the Company, which is described below. Roadhouse Grill Hong Kong is
not required to pay any franchise or reservation fee for restaurants that it
develops, but it is responsible for paying or reimbursing approved expenses
incurred by the Company in connection with the opening of each restaurant.
Roadhouse Grill Hong Kong is required to pay a royalty in connection with the
operation of each of its restaurants in the amount of 2.0 percent of gross
sales for each restaurant's first three years of operation and 3.0 percent
thereafter. Under certain circumstances, Roadhouse Grill Hong Kong or the
Company may grant franchises to third parties in Hong Kong. In that event, the
Company is entitled to receive 50 percent of any franchise and reservation fees
and 50 percent of any royalty fee payable by the third party franchisee,
subject to limitations on the amounts payable to the Company of $10,000 per
restaurant in the case of franchise and reservations fees and 2.5 percent of
gross sales in the case of royalty fees.
In January 1996, the Company also entered into a Master Development
Agreement with Roadhouse Grill Asia, which covers countries in Asia and the
Pacific Rim (other than Hong Kong), including but not limited to, Australia,
China, India, Indonesia, Japan, Malaysia, New Zealand, North Korea, South
Korea, The Philippines and Thailand. Under the agreement, Roadhouse Grill Asia
is required to open and maintain at least 30 Roadhouse Grill restaurants during
the first ten years of the term of the agreement, with a minimum of two
restaurants to be developed each year. Under certain circumstances, Roadhouse
Grill Asia or the Company may grant franchises to third parties in the
territory. The fee arrangements under the agreement are substantially the same
as those under the agreement between the Company and Roadhouse Grill Hong Kong.
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<PAGE> 16
The obligations of the original tenant, New York Roasters, Inc., under the
leases for the sites covering the Company's two restaurants in Buffalo, New
York were assumed by the Company in December 1995. At the time of such
assumptions, Mr. Brown was Chairman of the Board of Directors of the Company
and also Chairman and President of Roasters Corp. New York Roasters, Inc. was a
former franchisee of Roasters Corp. Except for the franchise relationship,
neither Mr. Brown nor Roasters Corp. had, or currently has, any financial or
other interest in New York Roasters, Inc.
Dr. Christian F. Horn, the Chairman of the Board of Directors of the
Company, is a director of Buffets, Inc. A subsidiary of Buffets, Inc. is the
licensee of the Company in the operation of Roadhouse Grill restaurants in
Gresham, Oregon and San Diego, California and is presently negotiating with the
Company for the development of additional Roadhouse Grill restaurants.
Dan Busbee, the Secretary of the Company, is a shareholder in the law firm
of Locke Purnell Rain Harrell (A Professional Corporation), ("LPRH"), Dallas
Texas. Mr. Busbee owns no share of the Company. LPRH provides legal services to
the Company for which the Company pays fees.
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented by such
shareholders at the Company's 1998 Annual Meeting of Shareholders must comply
with the rules of the Securities and Exchange Commission ("SEC") and must be
received by the Company from qualified shareholders no later than January 1,
1998 in order to be included in the proxy statement and proxy relating to that
meeting. Shareholders wishing to bring any matter before a meeting should
consult the Company's Bylaws with respect to any applicable notice or other
procedural requirements.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no matter
other than those set forth herein which will be presented for consideration at
the Annual Meeting of Shareholders. If any other matter or matters are properly
brought before the meeting or any adjournment thereof, it is the intention of
the persons named in the accompanying proxy to vote, or otherwise act, on such
matters in accordance with their best judgement.
The Board of Directors encourages each shareholder to attend the Annual
Meeting. Whether or not you plan to attend, you are urged to complete, sign and
return the enclosed proxy in the accompanying envelope. Shareholders who attend
the meeting may vote their shares personally even though they have sent in
their proxies.
By Order of the Board of Directors
Dan Busbee, Secretary
Fort Lauderdale, Florida
May 5 1997
14
