<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Roadhouse Grill, 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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<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 DECEMBER 9, 1998
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"), WILL
BE HELD ON DECEMBER 9, 1998, at 10:00 a.m., EST, at The Westin Hotel, 400
Corporate Drive, Fort Lauderdale, Florida 33334, for the following purposes:
I. To elect 5 directors who will serve until the next Annual Meeting of
Shareholders;
II. To ratify the selection of KPMG Peat Marwick LLP as independent
auditors for the Company for the 1999 fiscal year;
III. To approve the 1998 Omnibus Stock Option Plan which authorizes the
issuance of options to purchase up to 236,000 shares of the Company's
Common Stock;
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 October 27, 1998,
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 a copy of the Annual Report on the
Company's results of operations for the transition period ended April 26, 1998
(the "transition period"), Fiscal 1997, 1996 and 1995 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
Martin Bernholz,
SECRETARY
Fort Lauderdale, Florida
October 28, 1998
<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
December 9, 1998, at 10:00 a.m., EST. At the Annual Meeting, the shareholders
will consider and vote upon the following matters: (i) to elect 5 directors who
will serve until the next Annual Meeting of Shareholders; (ii) to ratify the
selection of KPMG Peat Marwick LLP as the independent auditors for the Company
for the 1999 fiscal year; and (iii) to approve the 1998 Omnibus Stock Option
Plan which authorizes the issuance of options to purchase up to 236,000 shares
of the Company's Common Stock. Shareholders will also consider any other
proposals or business that may properly come before the meeting although the
Board of Directors knows of no other proposal or business to be presented. The
Annual Meeting will be held at The Westin Hotel, 400 Corporate Drive, Fort
Lauderdale, Florida 33334.
By executing and returning the proxy (either by mail or by submitting your
proxy electronically via the Internet or by telephone), you authorize Ayman Sabi
and Martin Bernholz to represent you and vote your shares at the meeting in
accordance with your instructions. Those persons may also vote your shares to
adjourn the meeting from time to time and will be authorized to vote your shares
at any adjournment or postponements of the meeting. All shares represented by a
properly executed proxy on which no choice is specified will be voted by the
persons named on the proxy, to the extent applicable, (i) FOR the election of
the nominees as directors; (ii) FOR the ratification of KPMG Peat Marwick LLP as
the independent auditors of the Company; (iii) FOR the approval of the 1998
Omnibus Stock Option Plan; and (iv) at the discretion of the proxy holder as to
any other matters which may properly come before the Annual Meeting or any
adjournments or postponements thereof. This Proxy Statement ("Proxy Statement")
and accompanying proxy ("Proxy") are first being mailed on or about November 2,
1998 to all shareholders of record at the close of business on October 27, 1998
(the "Record Date").
VOTING RIGHTS AND OUTSTANDING SHARES
Only shareholders of record at the close of business on October 27, 1998
will be entitled to notice of, and to vote at, the Annual Meeting. At the close
of business on October 27, there were outstanding 9,708,741 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 is defined as a
majority of the shares entitled to vote on a matter by each voting group,
represented in person or by proxy, and 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 any vote required.
At the Record Date, Berjaya Group (Cayman) Limited ("Berjaya Cayman")
beneficially owned 6,035,466 shares of Common Stock. These shares represent
62.2% of the total outstanding Common Stock. 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 Cayman 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, Suite 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 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 supplemental proxy solicitation. Such soliciting agents,
if engaged, will be paid a reasonable fee for their services. No additional
1
<PAGE> 4
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 April 26, 1998, is as follows:
DENNIS C. JONES, age 44. Mr. Jones has served as Chief Financial Officer,
Executive 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.(1)
MARTIN J. BERNHOLZ, age 46. Mr. Bernholz has served as the Secretary and
General Counsel of the Company since February 1998. From 1989 to present, Mr.
Bernholz has served as the President of National Retail Group, Inc. ("NRG"), a
real estate and retailing consulting firm which has provided supportive
management services to a variety of retail companies, and provides services to
the Company. (See "Certain Relationships and Related Transactions" on page 13).
From 1986 to 1989, Mr. Bernholz served as a Director and as General Counsel of
the Record Bar, Inc., which operated 450 retail outlets. In addition, Mr.
Bernholz was a partner in the law firm of Coleman, Bernholz & Dickerson where he
specialized in Commercial and International Law. Mr. Bernholz has assisted
clients with acquisitions and the development of retail expansion and strategic
plans. Mr. Bernholz serves, or has served, as the Chairman of the Board of
various retail companies and as a member of the Board of Directors of various
retail companies including The White House, Inc.(2)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, there were outstanding 9,708,741 shares of Common
Stock. The table on the following page sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of the Record Date 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.
- -------------------------
(1) Subsequent to April 26, 1998, Mr. Jones resigned from his capacities
effective October 1998. Upon his departure, Mr. Glenn Glasshagel became the
Chief Financial Officer and Executive Vice-President of Finance of the Company.
(2) Intervening on behalf of investors and shareholders, Mr. Bernholz was
retained in October 1997 to provide management consulting services and
administrative direction in the restructuring of Roasters Corporation
("Roasters"), a company in serious financial distress. To protect the interests
of investors, Mr. Bernholz accepted the position of Chief Executive Officer and
Director of Roasters at that time. In March 1998, Roasters filed for protection
from creditors under Chapter 11 of the Bankruptcy Code, and Mr. Bernholz
relinquished the position of Chief Executive Officer. On behalf of the same
investor group, Mr. Bernholz accepted the offices of Chief Executive Officer and
Director of East Coast Bagels, Inc. ("East Coast"), also in financial distress,
concurrent with action by East Coast in February 1998 to seek protection from
creditors under Chapter 11 of the Bankruptcy Code.
2
<PAGE> 5
COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------------------------ ------------------ ----------------
Vincent Tan(1) 6,035,466 62.2%
Ayman Sabi(2) 200,000 2.1%
Philip Friedman(3) 10,000 0.1%
Phillip Ratner(4) 5,000 0.1%
Mark Scobee(5) 12,778 0.1%
Dr. Christian F. Horn(6) 582,922 6.0%
Berjaya Group (Cayman) Limited(1) 6,035,466 62.2%
Cupertino Ventures Partnership III, L.P.(6) 551,256 5.7%
Martin Bernholz(7) 67,500 0.7%
All executive officers and directors 6,330,744 65.2%
as a group (six persons)
(1)(2)(3)(4)(5)(7)(8)
- -----------------------------------
(1) Mr. Vincent Tan was elected Chairman of the Board of Directors of the
Company in February 1998. The Common Stock shown above includes 6,035,466 shares
beneficially owned by Berjaya Group (Cayman) Limited ("Berjaya Cayman"). As
Chairman/Chief Executive Officer of Berjaya Group Berhad, the owner of 100% of
the outstanding shares of Berjaya Cayman, Mr. Tan may be deemed to be the
beneficial owner of all of the shares owned by Berjaya Cayman in accordance with
Rule 13d-3 under the Securities and Exchange Act of 1934. Mr. Tan disclaims
ownership of the shares beneficially owned by Berjaya Cayman. The address for
Mr. Tan and Berjaya Cayman is Level 28, Menara Shahzan Insas, 30 Jalan Sultan
Ismail, 50250 Kuala Lumpur, Malaysia.
(2) Includes 200,000 shares of Common Stock issuable upon exercise of options
beneficially owned by Mr. Sabi that are exercisable within 60 days of October
27, 1998. Mr. Sabi owns no shares of record. Mr. Sabi is an agent for Arab
Multinational Investment Company and Societe Financiere Privee S.A. Geneve. Mr.
Sabi disclaims ownership of (i) 160,565 shares beneficially owned by Arab
Multinational Investment Company; and (ii) 411,950 shares beneficially owned by
Societe Financiere Privee S.A. Geneve, in accordance with Rule 13d-3 under the
Securities and Exchange Act of 1934. The address for Mr. Sabi is 6600 N. Andrews
Avenue, Suite 160, Ft. Lauderdale, Florida 33309.
(3) Represents 10,000 shares of Common Stock issuable upon exercise of options
beneficially owned by Mr. Friedman that are exercisable within 60 days of
October 27, 1998. The address for Mr. Friedman is 899 El Centro Street, South
Pasadena, California 91030.
(4) Represents 5,000 shares of Common Stock issuable upon exercise of options
beneficially owned by Mr. Ratner that are exercisable within 60 days of
October 27, 1998. The address for Mr. Ratner is 10 Eastshore, Heath, Texas
75087.
(5) Represents 12,778 shares of Common Stock issuable upon exercise of options
beneficially owned by Mr. Scobee that are exercisable within 60 days of
October 27, 1998. The address for Mr. Scobee is 6600 N. Andrews Ave, Suite 160,
Ft. Lauderdale, Florida 33309.
(6) Includes (i) 15,000 shares of Common Stock issuable upon exercise of options
beneficially owned by Dr. Horn that are exercisable within 60 days of October
27, 1998 and (ii) 551,256 shares beneficially owned by Cupertino Ventures
Partnership III, L.P. ("Cupertino"). As the Managing Partner of Horn Ventures
II, L.P., a general partner of Cupertino, Dr. Horn may be deemed to the
beneficial owner of all the shares owned by Cupertino in accordance with Rule
13d-3 under the Securities Exchange Act of 1934. Dr. Horn served as Chairman of
the Board of Directors of the Company from August 1996 to July 1997 and was a
director of the Company from January 1994 to July 1997. He resigned from both
capacities in July 1997. The address for Dr. Horn and Cupertino is 20300 Stevens
Creek Blvd., Suite 330, Cupertino, California, 95014.
(7) Includes (i) 60,000 shares of Common Stock issuable upon exercise of options
beneficially owned by Mr. Bernholz exercisable within 60 days of October 27,
1998 and (ii) 7,500 shares owned by Mr. Bernholz.
(8) Includes 302,778 shares subject to options that are exercisable within 60
days of October 27, 1998.
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 1998.
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.
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 voted 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 the next annual meeting of shareholders and until their successors have
been elected and qualified.
NOMINEES FOR DIRECTORS
VINCENT TAN, age 46. The Company's Board of Directors elected Vincent Tan
as Chairman of the Board of Directors of the Company in February 1998. Vincent
Tan is the Chairman and Chief Executive Officer of Berjaya Group Berhad
("Berjaya Group"), a Malaysian company which owns Berjaya Group (Cayman) Limited
("Berjaya Cayman"), the majority shareholder of the Company. Mr. Tan has been
Chief Executive Officer of Berjaya Group since 1984.(1)
AYMAN SABI, age 34. Mr. Sabi was elected President and Chief Executive
Officer of the Company in February 1998. He served as Chairman of the Company's
Executive Committee from November 1997 to February 1998. Mr. Sabi became a
director of the Company in February 1997. Mr. Sabi has served as the Chairman
and Chief Executive Officer of SABi International Developments, Inc., a trading,
contracting and investment company which owns, operates and invests in various
restaurant and retail concepts, both domestically and internationally since
1989. Mr. Sabi also serves, or has served, as a member of the Board of Directors
of various retail companies and financial institutions including The White
House, Inc.; Tunis International Bank, Tunisia and New Global Holdings.(1)
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. He is Chairman of the Board of Rosti
Restaurants, Inc. Mr. Friedman is also a director of Eateries, Inc., Paramark,
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, Inc. (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 of Finance Administration and
the 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 53. Mr. Ratner has served as a director of the Company
since March 1997. Since October 1998, he has served as the President and Chief
Executive Officer of Furrs Bishop Cafeteria, Inc. (NYSE "CHI"). In addition, he
was the Chairman, President and Chief Executive Officer of Spaghetti Warehouse,
Inc. (NYSE "SWH"), Garland, Texas and resigned from Spaghetti Warehouse, Inc.
during the transition period ended April 26, 1998. From 1984 to 1994, Mr. Ratner
served in various executive positions, including President and 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.
- ----------------------
(1) Mr. Tan (through Berjaya Group) was an investor and a director since 1993 of
Roasters, a distressed franchisor and operator of rotisserie chicken
restaurants. Mr. Sabi (directly and through affiliates) was also an investor in
Roasters. To assist in resolving operating and financial problems experienced by
Roasters, and with the objective of protecting the interest of Roasters'
shareholders, Mr. Sabi accepted a position as a director of Roasters. Mr. Sabi
joined the Roasters board of directors in April 1997 in order to evaluate the
distressed situation and to provide the Roasters board with options and
alternatives for a solution. Mr. Tan and Mr. Sabi ceased to be directors of
Roasters in November 1997 and December 1997, respectively. Efforts to improve
Roasters' performance were not successful and Roasters filed for protection from
creditors in March 1998 under Chapter 11 of the Bankruptcy Code.
5
<PAGE> 8
ALAIN K.K. LEE, age 42. Alain K.K. Lee was elected as a director of the
Company in January 1998. Mr. Lee is currently Vice President of Corporate
Affairs and Franchising of the Company. From 1993 to 1998, Mr. Lee served as the
Deputy General Manager for Berjaya Group, a Malaysian company which owns Berjaya
Cayman, the majority shareholder of the Company. He has served on the Board of
Roasters Asia Pacific (Malaysia) since 1994. In addition, Mr. Lee has served on
the Board of Roadhouse Grill Asia Pacific (Malaysia) since 1996. Mr. Lee has
also served as Berjaya Group Chief Financial Officer from 1990 to 1993, and
Deputy Chief Executive Officer of several other Berjaya Group companies from
1993 to 1998.
MEETINGS AND COMMITTEES OF THE BOARD
During 1997, the Board held three meetings and all directors attended each
of these Board meetings, either in person or by telephone. During the transition
period ended April 26, 1998, the Board held one meeting and all directors
attended this Board meeting.
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 Lee. 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 Messrs. Tan and Ratner.
During 1997 and the transition period ended April 26, 1998, employee
directors and non-employee directors both received reimbursement of
out-of-pocket expenses and directors' fees of $2,500 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 1999 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 1999 fiscal year.
KPMG Peat Marwick LLP served as the Company's independent auditors during the
1997 fiscal year and the transition period ended April 26, 1998. 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.
During fiscal year 1997 and the transition period ended April 26, 1998,
there were no disagreements or "reportable events" with the Company's
independent auditors.
7
<PAGE> 10
PROPOSAL III
APPROVAL OF THE 1998 OMNIBUS STOCK OPTION PLAN WHICH AUTHORIZES THE ISSUANCE
OF OPTIONS TO PURCHASE UP TO 236,000 SHARES OF THE COMPANY'S COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF THIS PROPOSAL.
The Board of Directors of Roadhouse Grill, Inc. has recommended the
1998 Omnibus Stock Option Plan for approval by the Company's shareholders.
(Please see complete plan in Exhibit A).
The 1998 Omnibus Stock Option Plan was authorized by the Board of
Directors of Roadhouse Grill, Inc. on August 28, 1998, and is subject to
approval by the Company's shareholders. A copy of the 1998 Omnibus Stock Option
Plan is attached hereto as Exhibit A and the following summary is qualified in
its entirety by reference thereto.
PURPOSES AND ELIGIBILITY
The purpose of the 1998 Omnibus Stock Option Plan (the "Plan") is to
promote the interest of Roadhouse Grill, Inc. (the "Company"), by providing
directors, officers, key employees and other consultants of the Company with an
opportunity to acquire a proprietary interest in the Company, and thereby
develop a stronger incentive to contribute to the Company's continued success
and growth. In addition, the ability to provide an opportunity to acquire a
proprietary interest in the Company by the offering and availability of stock
options ("Options") will assist the Company in attracting and retaining the
services of key personnel of outstanding ability. The 1998 Omnibus Stock Option
Plan authorizes the issuance of certain stock options to such individuals
(referred to in the Roadhouse Grill 1998 Omnibus Stock Option Plan as
"Participants"). As of October 28, 1998, Roadhouse Grill estimates that there
will be approximately three hundred Participants.
SHARES AVAILABLE UNDER THE 1998 OMNIBUS STOCK OPTION PLAN
An aggregate of 236,000 shares of Roadhouse Grill, Inc.'s Common Stock are
authorized for issuance under the 1998 Omnibus Stock Option Plan.
ADMINISTRATION
The Board of Directors of the Company (the "Board") will administer the 1998
Omnibus Stock Option Plan. The Board shall have full power, subject to the
provisions of the Plan, to grant Options, construe and interpret the Plan,
establish rules and regulations with respect to the Plan and/or Options granted
hereunder and perform all other acts, including the delegation of administrative
responsibilities, that it believes reasonable and necessary. The Board shall
have the sole discretion, subject to the provisions of the Plan, to determine
the Participants eligible to receive Options pursuant to the Plan and the
amount, type, and terms of any Options and the terms and conditions of option
agreements relating to any Option. The Board may correct any defect, supply any
omission, or reconcile any inconsistency in the Plan or in any Option granted
hereunder in the manner and to the extent it shall deem necessary to carry out
the terms of the Plan. Any decision made, or action taken, by the Board arising
out of or in connection with the interpretation and administration of the Plan
shall be final, conclusive and binding upon Optionees. The Board may appoint a
Committee and such would have the same powers granted to the Board of Directors
in the administration of the Plan.
STOCK OPTION PLAN - GENERAL
The 1998 Omnibus Stock Option Plan authorizes the issuance of Stock Options
("Stock Options") which consist of either non-statutory stock options or
incentive stock options. A Stock Option entitles the participant to acquire a
specified number of shares of the Company's Common Stock at an exercise price
determined by the Board, which generally may not be less than the fair market
value of the shares on the date of award of the Stock Option. The vesting,
exercisability, payment and other restrictions applicable to any Option (which
may include, without limitation, restrictions on transferability or provision
for mandatory resale to Roadhouse Grill, Inc.) shall be determined by the Board.
The Board may accelerate (i) the vesting or payment of any Award, (ii) the lapse
of restriction on any Award or (iii) the date on which any Stock Option first
becomes exercisable. The Board shall also have full authority to determine the
effect, if any, that a participant's termination of employment will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Award.
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 the transition period, fiscal
1997, fiscal 1996 and fiscal 1995 by the executive officers of the Company who
received annualized compensation in excess of $100,000 during the transition
period:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ----------------------------------------------------------------------- ------------------------- -------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Position Year(1) Salary Bonus Compensation Awards(s) Options/SAR's Payouts Compensation
- --------------------------- ------- ------ ----- ------------ --------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ayman Sabi 1998 $117,692 - - - 195,000 - -
Director, President 1997 - - $60,000(2) - 5,000 - -
and Chief Executive Officer
J. David Toole III(3) 1998 - - - - - - -
Former Director, President 1997 $296,154 $50,000 - - 316,666 - -
and Chief Executive Officer 1996 200,000 100,000 - - - - -
1995 120,000 34,566 - - - - -
Dennis C. Jones(5) 1998 $47,306 - - - - - -
Chief Financial Officer 1997 132,527 - - - 46,666 - -
and Executive Vice-President 1996 72,692 - - - - - -
1995 - - - - - - -
Mark Scobee 1998 $33,412 - - - - - -
Vice-President of 1997 89,915 - - - 16,666 - -
Operations 1996 78,461 - - - - - -
1995 67,734
Brad H. Haber(4) 1998 $36,681 - - - -
Former Vice-President 1997 103,373 - - - 21,666 - -
Operations 1996 73,461 - - - - - -
1995 49,841 - - - - - -
</TABLE>
AGGREGATED OPTION TABLE
The following table sets forth certain information with respect to options
exercised and options held, by the Named Executive. See "Security Ownership of
Certain Beneficial Owners and Management" for number of exercisable shares.
- -----------------------------
(1) 1998 amounts are for the 17 weeks ended April 26, 1998.
(2) Amount represents fees paid to SABi International, a management consulting
and investment firm owned by Mr. Sabi.
(3) Mr. Toole III resigned as Chief Executive Officer, President and Director of
the Company in July 1997. The compensation recorded in 1997 includes amounts
agreed upon by the Company in Mr. Toole III's separation agreement. During 1998,
the remaining amount of $84,615, based on the agreement, was paid to Mr. Toole
III. The Company accrued Mr. Toole III's entire severance expense in July 1997.
(4) Mr. Haber resigned as Vice-President of Operations of the Company in May
1998.
(5) Mr. Jones resigned as Chief Financial Officer and Executive Vice-President
of the Company effective October 1998.
9
<PAGE> 12
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR 1997 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 1997 AT END OF FISCAL 1997
- ---- ----------- -------- ------------------ ---------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
J. David Toole III 0 - 316,666 - $42,000 -
</TABLE>
OPTION GRANTS TABLES
The following table sets forth information concerning the stock options
granted to the Named Executives in 1997:
OPTION GRANTS IN 1997 FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF PRICE
SECURITIES UNDERLYING OPTIONS GRANTED TO EXERCISE OR BASE EXPIRATION APPRECIATION OVER
NAME OPTIONS GRANTED EMPLOYEES IN FISCAL YEAR PRICE ($/SH) DATE OPTION TERM
- ---- --------------- ------------------------ ------------ ---- -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Dennis C. Jones 30,000 16.0% $6.75 December 2004 $87,105 $204,840
Mark Scobee 10,000 5.3% $6.75 December 2004 $29,035 $68,280
Brad H. Haber(1) 15,000 8.0% $6.75 August 1998 $0 $0
</TABLE>
The following table sets forth information concerning the stock options
granted to the Named Executives during the transition period:
OPTION GRANTS IN TRANSITION PERIOD
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS GRANTED ANNUAL RATES OF PRICE
SECURITIES UNDERLYING TO EMPLOYEES IN THE EXERCISE OR BASE EXPIRATION APPRECIATION OVER
NAME OPTIONS GRANTED TRANSITION PERIOD PRICE ($/SH) DATE OPTION TERM
- ---- --------------- ------------------------ ------------ ---- -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Ayman Sabi 195,000 61.9% $3.50 February 2008 $429,221 $1,087,729
Martin J. Bernholz 60,000 19.0% $3.50 February 2008 $132,068 $334,686
</TABLE>
OPTION REPRICING TABLE
The following table sets forth information concerning stock options that
were repriced in 1997:
OPTION REPRICING
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET PRICE ORIGINAL
SECURITIES OF STOCK AT EXERCISE OPTION TERM
UNDERLYING TIME OF PRICE AT NEW REMAINING AT
OPTIONS REPRICING TIME OF EXERCISE DATE OF
NAME DATE REPRICED(#) ($) REPRICING PRICE($) REPRICING
- ---- ---- ----------- --- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dennis C. Jones 7/2/97 16,666 $5.88 $10.80 $6.75 78 months
Mark Scobee 7/2/97 6,666 $5.88 $10.80 $6.75 78 months
Brad H. Haber(1) 7/2/97 6,666 $5.88 $10.80 $6.75 78 months
</TABLE>
- ------------------------------
(1) Mr. Haber resigned as Vice-President of Operations of the Company in May
1998. The expiration date of his options was accelerated to August 1998 in
accordance with the Company's Stock Option Plan.
10
<PAGE> 13
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 of two 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 proprietary interest in
the success of the Company.
There are two major components of the Company's executive officer
compensation: (1) base salary and (2) long-term stock incentives. Formerly, the
Company had an annual cash bonus incentive program for the President and Chief
Executive Officer.
BASE SALARY
In establishing base salaries for executive officers for the transition
period, 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 preceding period by those
executive officers holding new positions, (4) the Committee's overall philosophy
of paying executive officers according to a competitive framework, and (5)
comparable compensation practices in the casual dining industry.
Compensation for the 1997 fiscal year and the transition period for Ayman
Sabi, Roadhouse Grill's President and Chief Executive Officer, consisted
primarily of a base salary, potential bonuses based on corporate performance and
stock option awards. The Committee determined Mr. Sabi's base salary for 1998
after considering several factors, including those described above with respect
to all executives under base compensation. Specifically, the Committee focused
on Mr. Sabi's role in the continuing profitability of Roadhouse Grill. The
Committee also focused on Mr. Sabi's experience, the demand for executives with
these skills and the Company's desire to continue to retain his services. In
addition, the Committee also considered Mr. Sabi's commitment to the long-term
success of Roadhouse Grill. Mr. Sabi's annual compensation for 1998 is $360,000
and he was awarded stock options to purchase 195,000 shares of Common Stock at
$3.50 per share. Compensation for the 1997 fiscal year for J. David Toole III,
the Company's former President and Chief Executive Officer, consisted primarily
of a base salary, potential bonuses based on corporate performance and stock
option awards. Mr. Toole's annual compensation for fiscal 1997 was $296,154, he
received a bonus of $50,000 and he was awarded stock options to purchase 316,666
shares of Common Stock at a weighted-average price per share of $6.59.
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.
11
<PAGE> 14
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 516,666 shares of Common Stock may be
issued pursuant to the Plan. As of April 26, 1998, options to purchase 384,260
shares were outstanding under the Plan at a weighted-average exercise price of
$6.59 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 options, which were not covered by the Plan. Options were granted to
J. David Toole, III (former President and Chief Executive Officer) to 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 had original expiration dates of September 2002 and October 2004,
respectively. Due to his resignation from the Company in July 1997, it was
determined in his severance agreement that the expiration dates for both sets of
options would be July 31, 1998. In February 1998, options were granted to the
President and Chief Executive Officer, the general counsel and a consultant of
the Company to purchase 300,000 shares of the Company's Common Stock at a
purchase price of $3.50 per share. According to the terms of the original
agreement, these options vested as follows: 100,000 vested at the date of grant,
100,000 vested upon attainment and maintenance of an average closing price for
the Company's Common Stock, over a ten day period, of at least $6.50 per share,
and the final 100,000 vested upon attainment and maintenance of an average
closing price for the Company's Common Stock, over a ten day period, of at least
$9.50 per share. The agreement was later amended with respect to the vesting
schedule, and the general counsel and consultant became employees of the
Company. According to the terms of the new agreement, all the options vest at
the date of grant. These options are exercisable for a period of ten years after
grant.
During 1997, the Committee evaluated the options which had been previously
granted to employees and officers of the Company. In order to be consistent with
the goal of encouraging employees and executive officers to remain in the
Company's employ, a repricing program was suggested. On February 11, 1997, the
Board of Directors authorized a repricing program which allowed employees to
elect to reprice all of their outstanding options to purchase Common Stock of
the Company, granted under the Stock Option Agreement dated May 1, 1996.
Effective February 11, 1997, the employees' stock options were repriced to $6.75
per share and registered with the Securities and Exchange Commission effective
July 2, 1997.
ANNUAL CASH BONUS INCENTIVES
J. David Toole III, the Company's former President and CEO, under his
employment agreement, was 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 1997 and 1996, Mr. Toole received an annual cash bonus of $50,000 and
$100,000, respectively. Mr. Toole resigned from the Company during 1997. No
other executive officers were covered under an annual cash incentive plan in
fiscal 1997 and 1996.
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 annualized compensation in excess of $1,000,000 during the transition
period 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.
12
<PAGE> 15
COMPENSATION AND STOCK OPTION COMMITTEE
- ---------------------------------------
Vincent Tan
Phillip Ratner
PERFORMANCE GRAPH
The following line graph compares the percentage change in the cumulative
total return of Roadhouse Grill's ("GRLL") Common Stock, Nasdaq Combination
Composite Index and a Company compiled peer group index ("Peer Group")
consisting of Rare Hospitality International, Inc. ("RARE"); Lone Star
Steakhouse & Saloon ("STAR"); Outback Steakhouse, Inc. ("OSSI"); and Logan's
Roadhouse, Inc. ("RDHS") over the period December 29, 1997 through April 26,
1998. The graph assumes an initial investment of $100 on December 29, 1997, the
first day of the transition period, and the reinvestment of dividends, if any.
Roadhouse Grill, Inc.
Peer Company Stock Comparison for Form 10-K dated April 26, 1998
<TABLE>
<CAPTION>
Peer Grp Peer Grp GRLL Nasdaq
GRLL OSSI RARE RDHS STAR Subtotal COMP Index index Comp indx
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
29-Dec-97 3.3130 28.7500 9.0000 14.2500 17.1880 69.1880 1537.4500 1.000 1.000 1.000
30-Jan-98 3.2500 32.0000 9.6250 18.2500 18.3130 78.1880 1619.3600 1.130 0.981 1.053
27-Feb-98 4.2500 35.7500 9.8750 21.2500 21.0630 87.9380 1770.5100 1.271 1.283 1.152
31-Mar-98 3.8750 39.1250 11.8750 22.6250 22.6880 96.3130 1835.6800 1.392 1.170 1.194
24-Apr-98 4.6250 37.8750 13.3130 24.3750 20.5000 96.0630 1868.9600 1.388 1.396 1.216
</TABLE>
Nasdaq
Peer Group GRLL Composite
Dec 100.0 100.0 100.0
Jan 113.0 98.1 105.3
Feb 127.1 128.3 115.2
Mar 139.2 117.0 119.4
Apr 138.8 139.6 121.6
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 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. 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 Cayman described below. The loan, the
proceeds of which were used to finance the opening of new restaurants, was
13
<PAGE> 16
secured by a lien on all of 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 is evidenced
by the Company's promissory note dated September 5, 1996, bearing interest at 5
percent per annum and payable in full upon the closing of the Company's initial
public offering. The proceeds of this loan were used for general corporate
purposes, including opening new restaurants.
In July 1996, the Company borrowed $500,000 from Cupertino, 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,
shareholder and former 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 Cayman, the
majority shareholder of the Company, under an unsecured promissory note dated
August 16, 1996, bearing interest at 8.5 percent per annum. The proceeds of this
loan were used to liquidate 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 Cayman under an unsecured promissory note
dated September 27, 1996, bearing interest at 8.5 percent per annum. The
proceeds of this loan were used for general corporate purposes, including
opening new restaurants. In November 1997, the Company paid Berjaya Cayman
$2,000,000 in order to liquidate the promissory note dated August 16, 1996. In
January 1998, the Company paid $1,500,000 of the outstanding amount of the
promissory note dated September 1996. On February 6, 1998, the Company's Board
of Directors approved the issuance of 400,000 shares of Common Stock to Berjaya
Cayman to convert the $1,500,000 debt outstanding to Common Stock at a price of
$3.75 per share, based on the closing market price as of February 6, 1998.
Vincent Tan, the Chairman of the Board of Directors of the Company, is Chairman
and Chief Executive Officer of Berjaya Group.
Berjaya Cayman owns Roadhouse Grill Asia Pacific (H.K) Limited ("Roadhouse
Grill Hong Kong") and Roadhouse Grill Asia Pacific (Cayman) Limited ("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 Roadhouse
Grill Asia's Master Development Agreement with the Company. 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. In addition, Roadhouse Grill Hong Kong was required to pay a royalty
in connection with the operation of each of its restaurants in the amount of 2%
of gross sales for each restaurant's first three years of operation and 3%
thereafter. Effective December 1, 1997, the agreement was amended with respect
to royalty fees. The royalty fees will remain at 2% of gross sales for the life
of the agreement. Under certain circumstances, Roadhouse Grill Hong Kong or the
Company was able to grant franchises to third parties in Hong Kong. In that
event, the Company was entitled to receive 50% of any franchise and reservation
fees and 50% 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% of gross sales in the
case of royalty fees. Effective December 1, 1997, the agreement was amended to
allow the Company to receive 40% of any royalty fee payable by the third party
franchisee, subject to a limitation of 2% of gross sales. Amounts for franchise
and reservation fees were unchanged.
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, Singapore, South Korea,
the Philippines and Thailand. Under the agreement, Roadhouse Grill Asia is
required to open and maintain at least thirty 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 arrangement under the agreement is substantially the same as
those under the agreement between the Company and Roadhouse Grill Hong Kong.
As of December 28, 1997, there were three Roadhouse Grill restaurants
operating in Malaysia under the Master Development Agreement with Roadhouse
Grill Asia. Subsequent to December 28, 1997, one franchised restaurant in
Malaysia ceased operations. The Company recorded $44,000, $51,000, and $95,000
in royalty income from those restaurants during fiscal 1996, 1997 and the 17
weeks ended April 26, 1998, respectively.
On April 13, 1998, the Company issued a promissory note to Berjaya Cayman
for $1,000,000, with an annual interest rate of 10.55%. The note was scheduled
to be repaid on June 15, 1998. The Company extended payment of the note to July
24, 1998, at which date the note was paid.
14
<PAGE> 17
During the fourth quarter of 1997, the Company engaged National Retail
Group Inc. ("NRG"), a real estate and retailing consulting firm, and SABi
International Developments, Inc. ("SABi"), a management consulting and
investment firm, to provide specified real estate development and management
consulting services to the Company. SABi is wholly-owned by Ayman Sabi and NRG
is an affiliate of Ayman Sabi. Mr. Sabi was and remains a director of the
Company, was Chairman of the Company's Executive Committee from November 1997 to
February 1998, and was elected President and Chief Executive Officer of the
Company on February 6, 1998. During fiscal 1997, the Company paid fees and
reimbursed expenses in the aggregate amounts of $168,214 and $60,000 to NRG and
SABi, respectively. During the transition period, the Company paid fees and
reimbursed expenses in the aggregate amount of $141,048 to NRG. The Company did
not make any payments to SABi during the 17 weeks ended April 26, 1998. The
Company believes amounts paid for services rendered by NRG and SABi were fair
and competitive, and represented the fair market value of such services. Martin
J. Bernholz, Secretary and General Counsel of the Company, has served as the
President of NRG since 1989.
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented by such
shareholders at the Company's 1999 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 by July 5, 1999, 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.
YEAR 2000
The Company has developed a plan to address the Year 2000 compliance
issues. As part of that plan the Company will evaluate its internal information
infrastructure, its major suppliers, financial institutions and credit card
vendors. The Company cannot preclude that the Year 2000 may pose a significant
impact until it completes such plan, which is currently underway. The Company
will assess the costs related to Year 2000 compliance after each area is
evaluated. At such point, the Company will accrue all costs that it expects to
incur for each area. Roadhouse Grill is working diligently to complete the
evaluation and its estimated date of completion is April 1999.
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
Martin Bernholz,
SECRETARY
Fort Lauderdale, Florida
October 28, 1998
15
<PAGE> 18
Exhibit A
ROADHOUSE GRILL, INC.
1998 OMNIBUS STOCK OPTION PLAN
1. PURPOSE
The purpose of this Stock Option Plan (the "Plan") is to promote the interest of
Roadhouse Grill, Inc. (the "Company"), by providing directors, officers, key
employees and other consultants of the Company with an opportunity to acquire a
proprietary interest in the Company, and thereby develop a stronger incentive to
contribute to the Company's continued success and growth. In addition, the
ability to provide an opportunity to acquire a proprietary interest in the
Company by the offering and availability of stock options will assist the
Company in attracting and retaining the services of key personnel of outstanding
ability.
2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meaning set forth
below:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code, as amended, and the rules and
regulations promulgated thereunder.
2.3 "Committee" means the Committee which may be designated from time to
time by the Board to administer the Plan. If so designated, the
Committee may be composed of (i) not less than two persons (who need
not be members of the Board) who are appointed from time to time to
serve on the Committee by the Board, or (ii) not less than three
persons (who need not be members of the Board) who are appointed from
time to time to serve on the Committee by the Board and who qualify as
"disinterested persons" within the meaning of Rule 16b-3 of the
Securities and Exchange Act of 1934, as the same now exists or may
hereafter be amended from time to time. In the absence of a designated
committee, the Board shall be deemed to be the Committee for the
purposes of this Plan.
2.4 "Fair Market Value" shall mean, as of a specified date, (1) the fair
market value of the Stock as determined in good faith by the Board,
taking into account restrictions on such Stock, if any, or (2) if the
Stock is publicly traded, the average of the highest and lowest bid and
ask prices of the Stock as reported by such responsible reporting
agency as the Board may select, or if the Stock is reported on the
basis of a closing sales price, the average of the highest and lowest
sales price of the Stock as reported by such agency.
2.5 "Incentive Stock Option" or "ISO" means a stock option which is
intended to qualify as an incentive stock option as defined in Section
422A of the Code.
1.
<PAGE> 19
2.6 "Non-Statutory Stock Option" or "NSO" means a stock option to purchase
stock that does not qualify as an incentive stock option as defined in
Section 422A of the Code and any other tax-qualified discriminatory
stock options which are currently or may be incorporated within the
Code as it may from time to time be amended.
2.7 "Option" means, where required by the context of the Plan, an ISO
and/or NSO granted pursuant to the Plan.
2.8 "Optionee" means a Participant in the Plan who has been granted one or
more Options under the Plan.
2.9 "Participant" means an individual described in Section 5 of this Plan
who may be granted Options under the Plan.
2.10 "Stock" means the Common Stock of the Company.
2.11 "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of Corporations beginning with the Company if each of
the corporations other than the last corporation in an unbroken chain
owns 50% or more of the voting stock in one of the other corporations
in such chain.
3. ADMINISTRATION
3.1 The Plan shall be administered by the Board, which shall have full
power, subject to the provisions of the Plan, to grant Options,
construe and interpret the Plan, establish rules and regulations with
respect to the Plan and/or Options granted hereunder and perform all
other acts, including the delegation of administrative
responsibilities, that it believes reasonable and necessary.
3.2 The Board shall have the sole discretion, subject to the provisions of
the Plan, to determine the Participants eligible to receive Options
pursuant to the Plan and the amount, type, and terms of any Options and
the terms and conditions of option agreements relating to any Option.
3.3 The Board may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or in any Option granted hereunder in the
manner and to the extent it shall deem necessary to carry out the terms
of the Plan.
3.4 Any decision made, or action taken, by the Board arising out of or in
connection with the interpretation and administration of the Plan shall
be final, conclusive and binding upon Optionees.
3.5 If the Board has appointed a Committee pursuant to Section 2.3 of the
Plan, then the Committee shall administer the Plan and exercise the
powers enumerated in Sections 3.1 through 3.4 with respect to such
administration
2.
<PAGE> 20
and other powers granted to the Board in this Plan, including, without
limitation the right to grant Options pursuant to the Plan and to
establish the Option price as provided in the Plan.
4. SHARES SUBJECT TO THE PLAN
The total number of shares of Stock reserved for issuance upon exercise of
Options under the Plan is two hundred and thirty-six thousand (236,000) subject
to any adjustments as may occur in accordance with Section 14 hereof. Such
shares may consist, in whole or in part, of authorized but unissued Stock or
treasury Stock, as determined by the Board. If any Option granted under the Plan
lapses or terminates for any reason before being completely exercised, the
shares covered by the unexercised portion of such Option may again be made
subject to Options under the Plan.
5. ELIGIBLE PARTICIPANTS
The following persons are eligible to participate in the Plan and to be granted
Options hereunder:
5.1 INCENTIVE STOCK OPTIONS: Incentive Stock Options may be granted only to
any key employee of the Company, including any officer or director of
the Company, who is in the regular, full-time employ of the Company.
5.2 NON-STATUTORY STOCK OPTIONS: Non-Statutory Stock Options may be granted
to (i) any key employee of the Company, including any officer or
director of the Company, who is in the regular, full-time employ of the
Company; (ii) any non-employee director of the Company; or (iii) any
consultant to, or other independent contractor of, the Company.
6. GRANT OF OPTIONS
6.1 Subject to the terms, conditions, and limitations set forth in this
Plan, the Company, by action of its Board, may from time to time grant
Options to purchase shares of the Company's Stock to those eligible
Participants as may be selected by the Board, in such amounts and on
such other terms as the Board in its sole discretion shall determine.
Such Options may be (i) "Incentive Stock Options" so designated by the
Board and which when granted, are intended to qualify as incentive
stock options as defined in Section 422A of the Code; (ii)
"Non-Statutory Stock Options" so designated by the Board and which when
granted do not qualify as incentive stock options under Section 422A of
the Code; or (iii) a combination of both. The date on which the Board
approves the granting of an Option shall be the date on which such
Option is granted. Notwithstanding the foregoing, with respect to the
grant of any Incentive Stock Option under the Plan, the aggregate Fair
Market Value of Stock (determined as of the date the Option is granted)
with respect to which such Options are exercisable for the first time
by an
3.
<PAGE> 21
Optionee in any calendar year (under all such stock option plans
of the Company or subsidiaries) shall not exceed $100,000. Each grant
of an Option under the Plan shall be evidenced by a written stock
option agreement between the Company and the Optionee setting forth the
terms and conditions not inconsistent with the Plan under which the
Option so granted may be exercised pursuant to the Plan and containing
such other terms with respect to the Option as the Board in its sole
discretion may determine.
6.2 In its grant of any Options under the Plan, the Company may establish,
as a condition of such Options, the requirement that the Optionee
execute, upon exercise, a Stock Restriction Agreement in a form
established from time to time by the Board, which may provide, among
other things, that the Company shall have a right of first refusal to
purchase the shares issuable upon exercise of the Option in the event
of any attempted sale, and shares purchased pursuant to the exercise of
such Option shall be subject to such Stock Restriction Agreement.
7. OPTION PRICE; FORM OF PAYMENT
The purchase price for a share of Stock subject to an Option granted hereunder
shall not be less than 100% of the Fair Market Value of the Stock, as defined in
Section 2.4 herein. Notwithstanding the foregoing and to the extent permitted by
the Plan, in the case of an Incentive Stock Option granted to any Optionee then
owning more than 10% of the voting power of all classes of the Company's stock,
the purchase price per share of the Stock subject to such Stock shall be not
less than 110% of the Fair Market Value of the Stock on the date of grant of the
Incentive Stock Option, determined as provided in Section 2.4.
The purchase price of each share of Stock purchased upon the exercise of any
Option shall be paid in United States dollars in cash or by check, bank draft or
money order payable to the order of the Company, or by delivery to the Company
of an equivalent number of shares of Stock having a Fair Market Value on the
date the Option is exercised equal to the exercise price of such Option, or by a
combination of cash or check and such shares of Stock.
8. EXERCISE OF OPTIONS
8.1 MANNER OF EXERCISE: An Option, or any portion thereof, shall be
exercised by the Optionee delivering a written notice of exercise to
the Board and paying to the Company the full purchase price of the
shares acquired upon the exercise of the Option. Until certificates for
the shares acquired upon the exercise of an Option are issued to an
Optionee, such Optionee shall not have any rights of a shareholder.
8.2 LIMITATIONS AND CONDITIONS ON EXERCISE OF OPTIONS: In addition to any
other limitations or conditions contained in this Plan or that may be
imposed
4.
<PAGE> 22
by the Board from time to time consistent with the Plan in the stock
option agreements to be entered into with respect to Options granted
hereunder, the following limitations and conditions shall apply to the
exercise of Options granted under this Plan:
8.2.1. No Incentive Stock Option, by its terms shall
be exercisable hereunder after the expiration of 10
years from the date of the grant thereof.
8.2.2. With respect to any Incentive Stock Option
granted under the Plan, no Incentive Stock Options
granted pursuant to the Plan to an eligible
Participant then owning more than 10% of the voting
power of all classes of the Company's stock (to the
extent any Option may be granted under the Plan) may
be exercised by its terms after the expiration of 5
years from the date of the grant thereof.
9. INVESTMENT PURPOSE
Unless a registration statement under the Securities Act of 1933 is in effect
with respect to Stock to be purchased or options to be granted under the Plan,
the Company shall require that an Optionee agree with and represent to the
Company in writing that he or she is acquiring such shares of Stock for the
purpose of investment and with no present intention to transfer, sell or
otherwise dispose of such shares of Stock other than by transfers which may
occur by will or by the laws of descent and distribution. No shares of Stock may
be transferred unless, in the opinion of counsel to the Company, such transfer
shall at such time be in compliance with applicable securities laws. In
addition, unless a registration statement under the Securities Act of 1933 is in
effect with respect to the Stock to be purchased under the Plan, each
certificate representing any shares of Stock issued to an Optionee hereunder
shall have endorsed thereon legends in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "ACT") OR ANY STATE SECURITIES ACT AND
MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT ANY SUCH TRANSFER IS NOT IN VIOLATION OF ANY SUCH LAWS. ANY
SALES OF THE SHARES UNDER RULE 144 OF THE ACT SHALL REQUIRE PROVISION TO THE
COMPANY OF SUCH INFORMATION AS IT MAY REQUEST FOR COMPLIANCE WITH THAT RULE, AND
APPLICABLE STATE SECURITIES LAWS."
10. TRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be transferable by an Optionee (whether
by sale, assignment, hypothecation or otherwise) other than by will or the laws
of descent and distribution. Options granted under the Plan shall be exercisable
during the Optionee's lifetime only by Optionee.
5.
<PAGE> 23
11. TERMINATION OF EMPLOYMENT
11.1 GENERALLY: Except as otherwise provided in this Section 11, if an
Optionee is an employee of the Company and if his or her employment
with the Company should be terminated (hereinafter "Termination of
Employment"), other than by death or Disability (as hereinafter
defined) the Optionee may, but only within thirty (30) days after the
date of the Optionee's Termination of Employment, exercise an Option
granted under the Plan, but only to the extent the Optionee was
entitled to exercise the Option at the date of Termination of
Employment and only if the term of the Option has not expired. The
exercise of an Option under this Section shall be deemed to have
occurred one (1) day prior to the date of Termination of Employment.
11.2 DEATH OR DISABILITY OF OPTIONEE: In the event of the death or
Disability of an Optionee prior to expiration of an Option held by him
or her, the following provision shall apply:
11.2.1 If the Optionee is at the time of his or her death or
Disability employed by the Company and has been in
continuous employment (as determined by the Board in
its sole discretion) since the date of the grant of
the Option, then the Option may be exercised: (i) in
the case of Disability, by the Optionee within one
(1) year following the date of such Disability, but
only to the extent the Optionee was entitled to
exercise such Option at the time of his or her
Disability; or (ii) in the case of death, by the
Optionee's estate, or by a person who acquired the
right to exercise the Option by will or the laws of
descent or distribution within one (1) year from the
date of the Optionee's death, but only to the extent
to which Optionee was entitled to exercise the Option
at the time of death. For the purpose of this
Section, the term "Disability" shall have the meaning
given to it in Section 22(e)(3) of the Code. The
Disability of an Optionee within the meaning of
Section 22 (e)(3) shall be determined by the Board,
in its sole discretion.
11.2.2 If the Optionee dies within thirty (30) days after
the Termination of Employment, the Option may be
exercised at any time within one (1) year following
the date of death, by the Optionee's estate or by a
person who acquired the right to exercise the Option
by will or the laws of descent or distribution but
only to the extent the Optionee was entitled to
exercise the Option at the time of Termination of
Employment.
11.3 CANCELLATION OF OPTIONS: If the employment of an Optionee is terminated
by the Company for cause, or if an Optionee enters into competition
with or
6.
<PAGE> 24
becomes employed by a competitor of the Company, or if the Optionee
otherwise conducts himself or herself in a manner which the Board
determines detrimental to the Company, then the Board shall have the
right to cancel any Options granted to the Optionee under the Plan.
12. SPECIAL RULES FOR NON-EMPLOYEE OPTIONS
12.1 CONDITIONS AND LIMITATIONS ON EXERCISE: If an Optionee who is a
non-employee director, consultant or independent contractor of the
Company ceases to be such a director, consultant or independent
contractor of the Company for any reason (hereinafter the "Termination
Date"), then the Optionee may, but only within thirty (30) days after
the Termination Date, exercise a NSO granted hereunder but only to the
extent the Optionee was entitled to exercise the NSO on the Termination
Date and only if the term of the NSO has not expired. In the event an
Optionee who is a non-employee dies during his or her term as director,
consultant or independent contractor then any NSO held by such Optionee
may be exercised within one (1) year from the date of such Optionee's
death, by the Optionee's estate, or by the person who acquired the
right to exercise the Option by will or the laws of descent or
distribution, but only to the extent the Optionee was entitled to
exercise the Option at the time of death.
12.2 CANCELLATION OF OPTION: In the event an Optionee who is a non-employee
director, consultant or independent contractor of the Company is
removed as such for cause or default, or if an Optionee enters into
competition with or becomes employed by a competitor of the Company,
the Option of such person shall be deemed canceled.
12.3 APPLICABILITY OF OTHER PROVISIONS OF PLAN: Except as specifically set
forth above, all other provisions of this Plan generally applicable to
NSO's shall apply to any NSO granted to an Optionee who is a
non-employee director, consultant or independent contractor of the
Company.
13. AMENDMENT AND TERMINATION OF THE PLAN
13.1 The Board, without approval by the shareholders of the Company, may at
any time, and from time to time, suspend or terminate the Plan in whole
or in part or amend it from time to time in such respects as may be in
the best interests of the Company, provided, however, that no such
amendment shall be made without approval of the shareholders which
would: (a) materially modify the eligibility requirements for Options;
(b) increase the total number of shares of Stock which may be issued
pursuant to Options, except in accordance with Section 14 of the Plan;
(c) reduce the minimum option price per share, except for adjustments
made pursuant to Section 14 of the Plan; (d) extend the period of
granting stock options; or (e) materially increase in any other way the
benefits accruing to Optionees.
7.
<PAGE> 25
13.2 No amendment, suspension or termination of this Plan shall, without the
Optionee's consent, alter or impair any of the rights or obligations
under any Option theretofore granted to him or her under the Plan.
13.3 The Board may amend the Plan, subject to the limitations cited above,
in such manner as it deems necessary to permit the granting of Options
meeting the requirements of future amendments or regulations of the
Code.
14. CHANGES IN CAPITAL STRUCTURE
14.1 In the event a stock dividend is declared upon the Stock or a stock
split-up is authorized, the shares of Stock then subject to each Option
(and the number of shares reserved for issuance pursuant thereto) shall
be increased proportionately and the purchase price per share
proportionately decreased. In the event the Company declares or
authorizes a reverse stock split or combination of shares, the shares
of Stock subject to each option shall be proportionately reduced and
the purchase price per share shall be proportionately increased.
Subject to the provisions of Section 14.2, if the Stock shall be
changed into or exchanged for a different number or class of shares of
Stock, or other securities of the Company or of another corporation,
whether through reorganization, recapitalization, merger or
consolidation, there shall be substituted for each such share of Stock
then subject to each Option (and for each share of Stock then reserved
for issuance pursuant thereto) the number and class of shares of Stock
or other securities into which each outstanding share of Stock shall be
so exchanged, all without any change in the aggregate purchase price
for the shares then subject to each Option.
14.2 If the Company is dissolved or liquidated, or if the Company is not the
surviving or resulting corporation, in connection with a merger or
consolidation, then, in such event, in the sole discretion of the
Committee, each Optionee may be granted the right to exercise an Option
prior to the occurrence of the event otherwise terminating the Options,
over such period and upon such terms as the Committee, in its sole and
absolute discretion, shall determine.
15. MISCELLANEOUS PROVISIONS
15.1 RIGHT TO CONTINUED EMPLOYMENT: No person shall have any claim or right
to be granted an Option under the Plan, and the grant of an Option
under the Plan shall not be construed as giving an Optionee the right
to continued employment with the Company. The Company further expressly
reserves the right at any time to dismiss an Optionee with or without
cause, free from any liability, or any claim under the Plan, except as
provided herein or in a stock option agreement.
15.2 GOVERNING LAW: The Plan shall be administered in the State of Florida,
and
8.
<PAGE> 26
the validity, construction, interpretation, administration and all
rights relating to the Plan shall be determined solely in accordance
with the laws of such state.
16. SHAREHOLDER APPROVAL AND EFFECTIVE DATES
The effective date of the Plan shall be July 1, 1998. Notwithstanding the
foregoing, this Plan and any Option granted hereunder are contingent upon the
approval of this Plan by the shareholders of the Company. No Option may be
granted subsequent to June 30, 2008, provided, however, that the Plan and all
outstanding Options shall remain in effect until such Options have expired or
until such Options are canceled.
9.
<PAGE> 27
Exhibit B
ROADHOUSE GRILL, INC.
This Proxy is solicited on behalf of the Board of Directors
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 9, 1998
The undersigned shareholder of Roadhouse Grill, Inc. hereby appoints
Ayman Sabi and Martin Bernholz or any of them acting by majority or acting
singly in the absence of the others, attorneys and proxies, with full power of
substitution, to represent the undersigned and vote all of the shares of
Roadhouse Grill, Inc.'s Common Stock of which the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held at The Westin Hotel, 400
Corporate Drive, Fort Lauderdale, Florida, on Wednesday, December 9, 1998, at
10:00 a.m., EST, or any adjournment(s) thereof:
You are encouraged to specify your choice by marking the appropriate
box, SEE REVERSE SIDE, but you need not mark any box if you wish to vote in
accordance with the Board of Directors recommendations.
The Proxies cannot vote your shares unless you sign and return this
card.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
A /X/ Please mark your
votes as in this
example.
<TABLE>
<CAPTION>
The shares represented by this proxy will be voted as directed
by the shareholder. If no direction is given when the duly executed
For all proxy is returned, such shares will be voted "FOR ALL" nominees
(except as Withhold in Item 1 and "For" proposals 2 and 3.
indicated) For All FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of / / / / Nominees: Vincent Tan 2. Ratification of KPMG Peat / / / / / /
Directors Marwick as independent
Ayman Sabi Auditors for the Company.
FOR, Except vote withheld from the following
nominees(s) Philip Friedman
3. Approval of the 1998 / / / / / /
Phillip Ratner Omnibus Stock Option
Plan which authorizes the
Alain K.K. Lee issuance of options to
- ------------------------------------------- purchase up to 236,000
shares of the Company's
Common Stock.
The undersigned hereby authorizes the proxies, in
their discretion to vote on any other business
which may properly be brought before the meeting
or any adjournment thereof.
Change of / /
Address/comments
on reverse side
I plan to / / I do not / /
Attend the plan to
meeting Attend the
meeting
Signature(s) _____________________________________________________________________________________ Date __________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as executor, administrator, trustee,
guardian, etc., please give full titles as such.
</TABLE>
