<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:
[ ] 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
FAMOUS DAVE'S OF AMERICA, 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
FAMOUS DAVE'S OF AMERICA, INC.
12700 Industrial Park Boulevard, Suite 60
Plymouth, Minnesota 55441
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1997
TO THE SHAREHOLDERS OF FAMOUS DAVE'S OF AMERICA, INC.:
Please take notice that the Annual Meeting of Shareholders of Famous Dave's
of America, Inc. will be held, pursuant to due call by the Board of Directors of
the Company, at the Calhoun Blues Club, 3001 Hennepin Avenue, Calhoun Square,
Minneapolis, Minnesota, on Thursday, May 22, 1997, at 10:30 a.m., or at any
adjournment or adjournments thereof, for the purpose of considering and taking
appropriate action with respect to the following:
1. To elect five directors.
2. To approve an amendment to the Company's 1995 Stock Option and
Compensation Plan to increase the number of shares of Common Stock
reserved for issuance thereunder from 500,000 to 900,000 shares.
3. To transact any other business as may properly come before the meeting
or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of record on
April 11, 1997 will be entitled to vote at the meeting or any adjournments
thereof.
A PROXY FOR THE MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL IN
AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Mark A. Payne
Mark A. Payne
Secretary
April 25, 1997
<PAGE> 3
FAMOUS DAVE'S OF AMERICA, INC.
12700 Industrial Park Boulevard, Suite 60
Plymouth, Minnesota 55441
---------------------------------------------
PROXY STATEMENT
---------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 22, 1997
VOTING AND REVOCATION OF PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Famous Dave's of America, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders of the Company to be
held on Thursday, May 22, 1997, at 10:30 a.m. at the Calhoun Blues Club, 3001
Hennepin Avenue, Calhoun Square, Minneapolis, Minnesota. The approximate date on
which this Proxy Statement and the accompanying proxy were first sent or given
to shareholders was April 25, 1997. Each shareholder who signs and returns a
proxy in the form enclosed with this Proxy Statement may revoke the same at any
time prior to its use by giving notice of such revocation to the Company in
writing, in open meeting or by executing and delivering a new proxy to the
Secretary of the Company. Unless so revoked, the shares represented by each
proxy will be voted at the meeting and at any adjournments thereof. Presence at
the meeting of a shareholder who has signed a proxy does not alone revoke that
proxy. Only shareholders of record at the close of business on April 11, 1997
(the "Record Date") will be entitled to vote at the meeting or any adjournments
thereof.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Company has outstanding one class of voting securities, Common Stock,
$0.01 par value, of which 6,015,250 shares were outstanding as of the close of
business on the Record Date. Each share of Common Stock is entitled to one vote
on all matters put to a vote of shareholders.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the Record Date, by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director, (iii) each executive officer named
in the Summary Compensation Table, and (iv) all executive officers and directors
as a group. Unless otherwise
<PAGE> 4
indicated, each of the following persons has sole voting and investment power
with respect to the shares of Common Stock set forth opposite their respective
names.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENT OF CLASS
--------------------------- ------ ----------------
<S> <C> <C>
David W. Anderson.................................... 1,781,000(2) 29.6%
Douglas S. Lanham.................................... 60,000(3) 1.0%
Thomas J. Brosig..................................... 20,000(4) *
130 Cheshire Lane
Minnetonka, MN 55305
Richard L. Monfort................................... 0 --
3519 Holman Court
Greeley, CO 80631
Martin J. O'Dowd..................................... 16,000 *
720 South 5th Street
Hopkins, MN 55343
Okabena Investment Services, Inc. ................... 632,750(5) 10.5%
5140 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
All executive officers and directors as a group
(eight persons).................................... 1,877,000(6) 30.9%
</TABLE>
- -------------------------
* Less than 1%.
(1) Unless otherwise indicated, the address of each person is 12700 Industrial
Park Boulevard, Suite 60, Plymouth, Minnesota 55441.
(2) Includes 100,000 shares owned by Grand Pines Resorts, Inc., a corporation
wholly-owned by Mr. Anderson. Mr. Anderson disclaims beneficial ownership of
such shares.
(3) Includes 50,000 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
(4) Includes 5,000 shares issuable upon exercise of warrants exercisable within
60 days of the Record Date.
(5) Figures based on a Schedule 13D filed with the Securities and Exchange
Commission on October 30, 1996. Includes 602,750 shares beneficially owned
by Okabena Partnership K and 20,000 shares beneficially owned by Okabena
Partnership L, as to both of which Okabena Investment Services, Inc. ("OIS")
is the managing partner. Also includes 10,000 shares beneficially owned by
Gary S. Kohler, Vice President of OIS and the portfolio manager for Okabena
Partnership K.
(6) Includes 55,000 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
2
<PAGE> 5
ELECTION OF DIRECTORS
(PROPOSAL 1)
Five directors are to be elected at the meeting, each director to hold
office until the next Annual Meeting of Shareholders, or until his successor is
elected and qualified. All of the persons listed below are now serving as
directors of the Company.
The names and ages of the nominees, and their principal occupations and
tenure as directors, are set forth below based upon information furnished to the
Company by such nominees. All of the persons listed below have consented to
serve as a director, if elected.
<TABLE>
<CAPTION>
NAME POSITIONS WITH THE COMPANY AGE DIRECTOR SINCE
---- -------------------------- --- --------------
<S> <C> <C> <C>
David W. Anderson.................... Chairman of the Board 43 1994
Douglas S. Lanham.................... Chief Executive Officer, 47 1997
Chief Operating Officer and
Director
Thomas J. Brosig..................... Director 47 1996
Richard L. Monfort................... Director 42 1996
Martin J. O'Dowd..................... Director 48 1996
</TABLE>
DAVID W. ANDERSON was the founder of the Company and has been the Chairman
of the Board since its formation. Mr. Anderson is also a founder and formerly a
director of Rainforest Cafe, Inc. In October 1990, Mr. Anderson co-founded Grand
Casinos, Inc. and through March 1996 served as a director and Executive Vice
President of that company.
DOUGLAS S. LANHAM joined the Company as President, Chief Operating Officer
and a Director in January 1997. In April 1997 Mr. Lanham assumed the title of
Chief Executive Officer and Chief Operating Officer. Mr. Lanham is a 25-year
veteran of full-service casual dining, including positions at Steak & Ale,
Bennigan's, Grady's American Grill and Chili's. At varying times from 1984 to
1996, Mr. Lanham held positions as a Chili's franchisee and a Senior Vice
President for Brinker International.
THOMAS J. BROSIG has been a Director of the Company since August 1996. Mr.
Brosig has served as President of Grand Casinos, Inc. since September 1996. From
August 1994 to that time, he served as its Executive Vice President -- Investor
Relations and Special Projects. From its inception until May 1995, Mr. Brosig
served as Secretary of Grand Casinos, Inc., and served as its President from May
1993 until August 1994. Mr. Brosig also served as Grand Casinos, Inc.'s Chief
Operating Officer from October 1991 until May 1993, and as its Chief Financial
Officer from its inception until January 1992. Mr. Brosig is also a Director of
G-III Apparel Group Ltd., a manufacturer and distributor of leather apparel.
RICHARD L. MONFORT became a Director of the Company in December 1996. From
1990 to 1995, Mr. Monfort served as the President of the red meats division of
Conagra, which division had $8 billion in sales of beef and pork annually. From
September 1995 to the present, Mr. Monfort has been engaged in the management of
various private business and investment interests, including acting as managing
partner of the Hyatt Grand Champion Hotel (Palm Springs, California), owner of
the Hilltop Steakhouse (Boston, Massachusetts), and partner in the Montera
Cattle Company. Mr. Monfort is also a director of Electronic Fabrication
Technology Corporation (Greeley, Colorado), a producer of circuit boards and
other components for computer manufacturers.
MARTIN J. O'DOWD has been a Director of the Company since August 1996.
Since May 1995, Mr. O'Dowd has served as President and Chief Operating Officer
of Rainforest Cafe, Inc. In June 1995 he became a Director and Secretary of
Rainforest Cafe, Inc. From July 1987 to May 1995, Mr. O'Dowd was Corporate
Director, Food and Beverage Services, for Holiday Inn Worldwide. From August
1985 to July 1987, Mr. O'Dowd was Vice President and General Operations Manager
for the Hard Rock Cafe in New York. Mr. O'Dowd is also a director of Elephant &
Castle Group, Inc.
3
<PAGE> 6
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by its Chairman of the Board
and Chief Executive Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- ------------------
OTHER ANNUAL COMMON STOCK
SALARY BONUS COMPENSATION UNDERLYING OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)
--------------------------- ---- ------- ----- ------------ ------------------
<S> <C> <C> <C> <C> <C>
David W. Anderson......................... 1996 $78,680 $0 $16,320 0
Chairman of the Board and 1995 0 0 -- 0
Chief Executive Officer 1994 0 0 -- 0
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the number of individual grants of stock
options made during fiscal year 1996 to its Chairman of the Board and Chief
Executive Officer:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF
UNDERLYING TOTAL OPTIONS MARKET PRICE
OPTIONS GRANTED TO EXERCISE OR ON DATE
GRANTED EMPLOYEES IN BASE PRICE OF GRANT EXPIRATION
NAME (#) FISCAL YEAR ($/SHARE) ($/SHARE) DATE
---- ---------- ------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
David W. Anderson.................... 0 -- -- -- --
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table summarizes information with respect to options held by
the executive officers named in the Summary Compensation Table, and the value of
the options held by such persons at the end of fiscal 1996. No options were
exercised by the executive officer named in the Summary Compensation Table
during fiscal 1996.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
David A. Anderson.............................. 0 0 $0 $0
</TABLE>
EMPLOYMENT AGREEMENTS
David W. Anderson, Chairman of the Board, has a two-year employment
agreement which expires on March 4, 1998. It is subject to early termination for
variety of reasons, including voluntary termination by Mr. Anderson. Mr.
Anderson's base salary is $100,000 per year for the first year of the agreement.
Such base salary may be adjusted annually as determined by the Company's Board
of Directors. Such agreement also provides that Mr. Anderson will receive six
months' severance if terminated by the Company for a reason other than "cause,"
as defined therein. Mr. Anderson receives medical, dental and other customary
benefits. The employment agreement provides that Mr. Anderson will not compete
with the Company for two years if he resigns or is terminated for cause.
Douglas S. Lanham, Chief Executive Officer and Chief Operating Officer, has
a four-year employment agreement with the Company which expires on January 31,
2001, subject to early termination for a variety of reasons. Mr. Lanham will
receive a base salary of $225,000 during the first year of employment. The base
salary will be adjusted annually to reflect, at a minimum, increases in the
consumer price index. Mr. Lanham
4
<PAGE> 7
will be eligible to receive an annual bonus in the amount of up to 20% of his
base salary during the first year of his employment and in the amount of up to
40% of his base salary thereafter. Such agreement provides that Mr. Lanham will
receive one year's severance if terminated by the Company for a reason other
than "cause" or if Mr. Lanham resigns for "good reason," as defined therein,
except that if Mr. Lanham resigns for any reason between the sixth and 12th
month of the agreement, he shall continue to receive his base salary for the
remainder of the calendar year or for three months, if greater. Mr. Lanham also
receives medical, dental and other customary benefits. The employment agreement
provides that Mr. Lanham will not compete with the Company for two years if he
resigns or is terminated for cause.
Mark A. Payne, President, Treasurer and Secretary, has a three-year
employment agreement which expires on August 12, 1999, subject to early
termination for a variety of reasons. Mr. Payne will receive a base salary of
$125,000 during his first year of employment. Such base salary is subject to
annual adjustment as may be determined by the Company's Board of Directors. Mr.
Payne is eligible to receive annual bonuses in the discretion of the Board of
Directors. Such agreement also provides that Mr. Payne will receive six months'
severance if terminated by the Company for a reason other than "cause," as
defined therein, within the first year of his employment and 12 months'
severance if terminated by the Company for a reason other than cause after the
first year of employment. Mr. Payne also receives medical, dental and other
customary benefits. The employment agreement provides that Mr. Payne will not
compete with the Company for two years if he resigns or is terminated for cause.
Stanley R. Herman, Executive Vice President of Strategic Planning and
Marketing, has a three-year employment agreement which expires on January 2,
2000, subject to early termination for a variety of reasons. Mr. Herman will
receive a base salary of $125,000 during the first year of employment and such
subsequent amounts as may be determined by the Company's Board of Directors. Mr.
Herman will receive a $25,000 bonus upon completion of a long-term strategic
business plan that has been approved by the Board of Directors, and is eligible
to receive an annual bonus of up to 25% of his base salary. Such agreement
provides that Mr. Herman will receive six months' severance if terminated by the
Company for a reason other than "cause." Mr. Herman also receives medical,
dental and other customary benefits. The employment agreement provides that Mr.
Herman will not compete with the Company for two years if he resigns or is
terminated for cause.
The Company intends to retain other management employees pursuant to
employment and consulting agreements. The Company intends to offer stock options
to such employees.
DIRECTOR COMPENSATION
Directors receive no fees for serving as directors. The Company's three
non-management directors, Messrs. Brosig, Monfort and O'Dowd, each received
ten-year options to purchase 25,000 shares of common stock when they became
members of the Board in 1996. One-third of the options vest on each of the
first, second and third anniversaries of the date of grant. The options granted
to Messrs. Brosig and O'Dowd have an exercise price of $4.33 a share and the
options granted to Mr. Monfort have an exercise price of $6.75 a share. Members
of the Board who are also employees of the Company receive no options for their
services as directors.
CERTAIN TRANSACTIONS
On January 1, 1996, the Company transferred the real estate, excluding
improvements, of its Linden Hills restaurant and the site of the proposed
restaurant in the Highland Park area of St. Paul, Minnesota to David W.
Anderson, Chairman and Chief Executive Officer of the Company, in exchange for
amounts due to Mr. Anderson and assumption of bank debt totaling $781,023. These
properties were transferred to Mr. Anderson at the Company's cost which, due to
the short amount of time which elapsed between the transfer and the Company's
original acquisition, the Company believes approximated the fair market values
of the real estate exchanged. Mr. Anderson concurrently transferred the real
estate to S&D Land Holdings, Inc. ("S&D"), a Minnesota company wholly owned by
Mr. Anderson, and entered into leases with the Company
5
<PAGE> 8
for such real estate. The Company also leases the Roseville restaurant and the
real estate for the Minnetonka restaurant from S&D. The Company does not
currently intend to enter into any additional leases with S&D.
During 1996, S&D agreed to an abatement of rent in favor of the Company
under the leases relating to the Minnetonka and Highland Park units in the
amounts of $118,956 and $44,900, respectively.
Pursuant to a license and trademark agreement between the Company and Grand
Pines Resorts, Inc. a Minnesota corporation wholly-owned by David W. Anderson
("Grand Pines"), the Company licenses its trademarks and recipes to Grand Pines
in exchange for a four per cent royalty fee on gross food sales. Also, pursuant
to a management agreement between the Company and Grand Pines, the Company has
agreed to provide certain management services relative to a restaurant operated
by Grand Pines in Hayward, Wisconsin in exchange for a fee of three per cent of
gross food sales.
PROPOSAL TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK RESERVED FOR ISSUANCE
UNDER THE COMPANY'S 1995 STOCK OPTION AND COMPENSATION PLAN
(PROPOSAL 2)
On December 29, 1995, the Board of Directors of the Company unanimously
approved the 1995 Stock Option and Compensation Plan (the "Plan"). On August 12,
1996, the Board of Directors approved an amendment to the Plan to increase the
number of shares reserved for issuance by 200,000, subject to approval by the
Company's shareholders. On February 4, 1997, the Board of Directors approved an
amendment to the Plan to increase the number of shares reserved for issuance by
another 200,000 shares, again subject to approval by the Company's shareholders.
A complete text of the Plan is set forth as Annex A to this Proxy Statement. The
brief summary of the Plan which follows is qualified in its entirety by
reference to the complete text.
GENERAL
The purpose of the Plan is to increase shareholder value and to advance the
interests of the Company by furnishing a variety of economic incentives
("Incentives") designed to attract, retain and motivate employees of and
consultants to the Company.
The Plan provides that a committee (the "Committee") composed of at least
two disinterested members of the board of directors of the Company may grant
Incentives in the following forms: (a) stock options; (b) stock appreciation
rights; (c) stock awards; (d) restricted stock; (e) performance shares; and (f)
cash awards. Incentives may be granted to participants who are employees of or
consultants to the Company (including officers and directors of the Company who
are also employees of or consultants to the Company) selected from time to time
by the Committee.
The number of shares of Common Stock which may be issued under the Plan if
this amendment is approved may not exceed 900,000 shares, subject to adjustment
in the event of a merger, recapitalization or other corporate restructuring.
This represents approximately 15.0% of the outstanding shares of Common Stock on
April 11, 1997. On April 11, 1997, the closing sale price of the Common Stock as
reported by NASDAQ was $9.25 per share.
STOCK OPTIONS
Under the Plan, the Committee may grant non-qualified and incentive stock
options to eligible employees to purchase shares of Common Stock from the
Company. The Plan confers on the Committee discretion, with respect to any such
stock option, to determine the number and purchase price of the shares subject
to the option, the term of each option and the time or times during its term
when the option becomes exercisable. The purchase price for incentive stock
options may not be less than the fair market value of the shares subject to the
option on the date of grant. The number of shares subject to an option will be
reduced proportionately to the extent that the optionee exercises a related SAR.
The term of a non-qualified option may not exceed 10 years and one day from the
date of grant and the term of an incentive stock option may not exceed 10 years
6
<PAGE> 9
from the date of grant. Any option shall become immediately exercisable in the
event of specified changes in corporate ownership or control. The Committee may
accelerate the exercisability of any option or may determine to cancel stock
options in order to make a participant eligible for the grant of an option at a
lower price. The Committee may approve the purchase by the Company of an
unexercised stock option for the difference between the exercise price and the
fair market value of the shares covered by such option.
The option price may be paid in cash, check, bank draft or by delivery of
shares of Common Stock valued at their fair market value at the time of purchase
or by withholding from the shares issuable upon exercise of the option shares of
Common Stock valued at their fair market value or as otherwise authorized by the
Committee.
In the event that an optionee ceases to be an employee of or consultant to
the Company for any reason, including death, any stock option or unexercised
portion thereof which was otherwise exercisable on the date of termination of
employment shall expire at the time or times established by the Committee.
STOCK APPRECIATION RIGHTS
A stock appreciation right or a "SAR" is a right to receive, without
payment to the Company, a number of shares, cash or any combination thereof, the
amount of which is determined pursuant to the formula described below. A SAR may
be granted with respect to any stock option granted under the Plan, or alone,
without reference to any stock option. A SAR granted with respect to any stock
option may be granted concurrently with the grant of such option or at such
later time as determined by the Committee and as to all or any portion of the
shares subject to the option.
The Plan confers on the Committee discretion to determine the number of
shares as to which a SAR will relate as well as the duration and exercisability
of an SAR. In the case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains will be reduced in
the same proportion that the holder exercises the related option. The term of a
SAR may not exceed ten years and one day from the date of grant. Unless
otherwise provided by the Committee, a SAR will be exercisable for the same time
period as the stock option to which it relates is exercisable. Any SAR shall
become immediately exercisable in the event of specified changes in corporate
ownership or control. The Committee may accelerate the exercisability of any
SAR.
Upon exercise of a SAR, the holder is entitled to receive an amount which
is equal to the aggregate amount of the appreciation in the shares of Common
Stock as to which the SAR is exercised. For this purpose, the "appreciation" in
the shares consists of the amount by which the fair market value of the shares
of Common Stock on the exercise date exceeds (a) in the case of a SAR related to
a stock option, the purchase price of the shares under the option or (b) in the
case of a SAR granted alone, without reference to a related stock option, an
amount determined by the Committee at the time of grant. The Committee may pay
the amount of this appreciation to the holder of the SAR by the delivery of
Common Stock, cash, or any combination of Common Stock and cash.
RESTRICTED STOCK
Restricted stock consists of the sale or transfer by the Company to an
eligible participant of one or more shares of Common Stock which are subject to
restrictions on their sale or other transfer by the employee. The price at which
restricted stock will be sold will be determined by the Committee, and it may
vary from time to time and among employees and may be less than the fair market
value of the shares at the date of sale. All shares of restricted stock will be
subject to such restrictions as the Committee may determine. Subject to these
restrictions and the other requirements of the Plan, a participant receiving
restricted stock shall have all of the rights of a shareholder as to those
shares.
7
<PAGE> 10
STOCK AWARDS
Stock awards consist of the transfer by the Company to an eligible
participant of shares of Common Stock, without payment, as additional
compensation for services to the Company. The number of shares transferred
pursuant to any stock award will be determined by the Committee.
PERFORMANCE SHARES
Performance shares consist of the grant by the Company to an eligible
participant of a contingent right to receive cash or payment of shares of Common
Stock. The performance shares shall be paid in shares of Common Stock to the
extent performance objectives set forth in the grant are achieved. The number of
shares granted and the performance criteria will be determined by the Committee.
CASH AWARDS
A cash award consists of a monetary payment made by the Company to an
eligible participant as additional compensation for his services to the Company.
Payment may depend on the achievement of specified performance objectives. The
amount of any monetary payment constituting a cash award shall be determined by
the Committee.
NON-TRANSFERABILITY OF MOST INCENTIVES
No stock option, SAR, performance share or restricted stock granted under
the Plan will be transferable by its holder, except in the event of the holder's
death, by will or the laws of descent and distribution. During an employee's
lifetime, an Incentive may be exercised only by him or her or by his or her
guardian or legal representative.
AMENDMENT OF THE PLAN
The Board of Directors may amend or discontinue the Plan at any time.
However, no such amendment or discontinuance may, subject to adjustment in the
event of a merger, recapitalization, or other corporate restructuring, (a)
change or impair, without the consent of the recipient thereof, an Incentive
previously granted, (b) materially increase the maximum number of shares of
Common Stock which may be issued to all employees under the Plan, (c) materially
change or expand the types of Incentives that may be granted under the Plan, (d)
materially modify the requirements as to eligibility for participation in the
Plan, or (e) materially increase the benefits accruing to participants. Certain
Plan amendments require shareholder approval, including amendments which would
materially increase benefits accruing to participants, increase the number of
securities issuable under the Plan, or change the requirements for eligibility
under the Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion sets forth certain United States income tax
considerations in connection with the ownership of Common Stock. These tax
considerations are stated in general terms and are based on the Internal Revenue
Code of 1986, as amended, regulations thereunder and judicial and administrative
interpretations thereof. This discussion does not address state or local tax
considerations with respect to the ownership of Common Stock. Moreover, the tax
considerations relevant to ownership of the Common Stock may vary depending on a
holder's particular status.
Under existing Federal income tax provisions, a participant who receives a
stock option or performance shares or a SAR under the Plan or who purchases or
receives shares of restricted stock under the Plan which are subject to
restrictions which create a "substantial risk of forfeiture" (within the meaning
of section 83 of the Internal Revenue Code) will not normally realize any
income, nor will the Company normally receive any deduction for federal income
tax purposes in the year such Incentive is granted. A participant who receives a
stock award under the Plan consisting of shares of Common Stock will realize
ordinary income in the year of the award in an amount equal to the fair market
value of the shares of Common Stock covered by the award on the date it is made,
and the Company will be entitled to a deduction equal to the amount the
participant is
8
<PAGE> 11
required to treat as ordinary income. A participant who receives a cash award
will realize ordinary income in the year the award is paid equal to the amount
thereof, and the amount of the cash will be deductible by the Company.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the participant will realize ordinary income measured by the
difference between the aggregate purchase price of the shares of Common Stock as
to which the option is exercised and the aggregate fair market value of shares
of the Common Stock on the exercise date, and the Company will be entitled to a
deduction in the year the option is exercised equal to the amount the
participant is required to treat as ordinary income.
Options which qualify as incentive stock options are entitled to special
tax treatment. Under existing federal income tax law, if shares purchased
pursuant to the exercise of such an option are not disposed of by the optionee
within two years from the date of granting of the option or within one year
after the transfer of the shares to the optionee, whichever is longer, then (i)
no income will be recognized to the optionee upon the exercise of the option;
(ii) any gain or loss will be recognized to the optionee only upon ultimate
disposition of the shares and, assuming the shares constitute capital assets in
the optionee's hands, will be treated as long-term capital gain or loss; (iii)
the optionee's basis in the shares purchased will be equal to the amount of cash
paid for such shares; and (iv) the Company will not be entitled to a federal
income tax deduction in connection with the exercise of the option. The Company
understands that the difference between the option price and the fair market
value of the shares acquired upon exercise of an incentive stock option will be
treated as an "item of tax preference" for purposes of the alternative minimum
tax. In addition, incentive stock options exercised more than three months after
retirement are treated as non-qualified options.
The Company further understands that if the optionee disposes of the shares
acquired by exercise of an incentive stock option before the expiration of the
holding period described above, the optionee must treat as ordinary income in
the year of that disposition an amount equal to the difference between the
optionee's basis in the shares and the lesser of the fair market value of the
shares on the date of exercise or the selling price. In addition, the Company
will be entitled to a deduction equal to the amount the participant is required
to treat as ordinary income.
If the exercise price of an option is paid by surrender of previously owned
shares, the basis of the shares received in replacement of the previously owned
shares is carried over. If the option is a nonstatutory option, the gain
recognized on exercise is added to the basis. If the option is an incentive
stock option, the optionee will recognize gain if the shares surrendered were
acquired through the exercise of an incentive stock option and have not been
held for the applicable holding period. This gain will be added to the basis of
the shares received in replacement of the previously owned shares.
When a stock appreciation right granted pursuant to the Plan is exercised,
the participant will realize ordinary income in the year the right is exercised
equal to the value of the appreciation which he is entitled to receive pursuant
to the formula described above, and the Company will be entitled to a deduction
in the same year and in the same amount.
A participant who receives restricted stock or performance shares subject
to restrictions which create a "substantial risk of forfeiture" (within the
meaning of section 83 of the Internal Revenue Code) will normally realize
taxable income on the date the shares become transferable or no longer subject
to substantial risk of forfeiture or on the date of their earlier disposition.
The amount of such taxable income will be equal to the amount by which the fair
market value of the shares of Common Stock on the date such restrictions lapse
(or any earlier date on which the shares are disposed of) exceeds their purchase
price, if any. A participant may elect, however, to include in income in the
year of purchase or grant the excess of the fair market value of the shares of
Common Stock (without regard to any restrictions) on the date of purchase or
grant over its purchase price. The Company will be entitled to a deduction for
compensation paid in the same year and in the same amount as income is realized
by the employee.
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PROXIES AND VOTING
Only holders of record of the Company's Common Stock at the close of
business on April 11, 1997, the record date for the Annual Meeting, are entitled
to notice of and to vote at the Annual Meeting. On the record date, there were
6,015,250 shares of Common Stock outstanding. Each share of Common Stock
entitles the holder thereof to one vote upon each matter to be presented at the
Annual Meeting. A quorum, consisting of a majority of the outstanding shares of
the Common Stock entitled to vote at the Annual Meeting, must be present in
person or represented by proxy before action may be taken at the Annual Meeting.
Each proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. The proxy will be voted FOR the election of the
nominees for the Board of Directors named in this Proxy Statement unless a
contrary choice is specified. If any nominee should withdraw or otherwise become
unavailable for reasons not presently known, the proxies which would have
otherwise been voted for such nominee will be voted for such substitute nominee
as may be selected by the Board of Directors. A shareholder who abstains with
respect to the election of directors is considered to be present and entitled to
vote on the election of directors at the meeting, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, on the election of
directors, shall not be considered present and entitled to vote on the election
of directors.
All shares represented by proxies will be voted for approval of the
proposed Plan amendment unless a contrary choice is specified. A shareholder who
abstains with respect to the proposed Plan amendment is considered to be present
and entitled to vote at the meeting, and is in effect casting a negative vote,
but a shareholder (including a broker) who does not give authority to a proxy to
vote on the proposed Plan amendment shall not be considered present and entitled
to vote on the proposed amendment.
While the Board of Directors knows of no other matters to be presented at
the Annual Meeting or any adjournment thereof, all proxies returned to the
Company will be voted on any such matter in accordance with the judgment of the
proxy holders.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held two meetings during 1996 and took action by
written action in lieu of a meeting four times. There were no committee meetings
of the Board in 1996.
INDEPENDENT ACCOUNTANTS
Lund Koehler Cox & Company, PLLP has acted as the Company's independent
public accountants since the Company's inception and will serve as such for the
current fiscal year. A representative of Lund Koehler Cox & Company, PLLP is
expected to attend this year's Annual Meeting of Shareholders and will be
available to respond to appropriate questions from shareholders.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission and NASDAQ. Officers, directors and greater than ten per
cent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the year ended December 31, 1996 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten per cent
beneficial owners were complied with, except that Richard L. Monfort did not
timely file a Form 3 to report his joining
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the Board on December 2, 1996 and his receipt of the options described under the
caption "Executive Compensation -- Director Compensation." Mr. Monfort has since
filed a Form 3.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented at the 1998 Annual
Meeting of Shareholders of the Company must be received by the Company at its
executive offices on or before December 19, 1997.
SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
proxy, Proxy Statement, Annual Report and other material which may be sent to
the shareholders in connection with this solicitation. Brokerage houses and
other custodians, nominees and fiduciaries may be requested to forward
soliciting material to the beneficial owners of stock, in which case they will
be reimbursed by the Company for their expenses in doing so. Proxies are being
solicited primarily by mail but, in addition, officers and regular employees of
the Company may solicit proxies personally, by telephone, by telegram or by
special letter.
The Board of Directors does not intend to present to the meeting any other
matter not referred to above and does not presently know of any matters that may
be presented to the meeting by others. However, if other matters come before the
meeting, it is the intent of the persons named in the enclosed proxy to vote the
proxy in accordance with their best judgment.
By Order of the Board of Directors
Mark A. Payne
Mark A. Payne
Secretary
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ANNEX A
FAMOUS DAVE'S OF MINNEAPOLIS, INC.
1995 STOCK OPTION AND
COMPENSATION PLAN
a. Purpose. The purpose of this Famous Dave's of Minneapolis, Inc. (the
"Company") 1995 Stock Option and Compensation Plan (the "Plan") is to increase
stockholder value and to advance the interests of the Company by furnishing a
variety of economic incentives ("Incentives") designed to attract, retain and
motivate employees and certain key consultants. Incentives may consist of
opportunities to purchase or receive shares of Common Stock, $0.01 par value, of
the Company ("Common Stock"), monetary payments, or both, on terms determined
under this Plan.
b. Administration. The Plan shall be administered by the stock option
committee (the "Committee") of the board of directors of the Company. If the
Company stock is privately held, the Committee shall consist of one or more
directors of the Company as shall be appointed from time to time by the Chairman
of the board of directors of the Company. If the Company stock becomes the
subject of a public offering, the Committee shall then consist of not less than
two directors of the Company who shall be appointed from time to time by the
board of directors of the Company, each of which such appointees shall be a
"disinterested person" within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934, and the regulations promulgated thereunder (the "1934
Act"), and the board of directors of the Company may from time to time appoint
members of the Committee in substitution for, or in addition to, members
previously appointed, and may fill vacancies, however caused, in the Committee.
If more than one person is on the Committee, the following shall apply: (a) the
Committee shall select one of its members as its chairman and shall hold its
meetings at such times and places as it shall deem advisable; (b) a majority of
the Committee's members shall constitute a quorum; (c) all action of the
Committee shall be taken by the majority of its members; and (d) any action may
be taken by a written instrument signed by majority of the members and actions
so taken shall be fully effective as if they had been made by a majority vote at
a meeting duly called and held. The Committee may appoint a secretary, shall
keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable. The Committee shall have
complete authority to award Incentives under the Plan, to interpret the Plan,
and to make any other determination which it believes necessary and advisable
for the proper administration of the Plan. The Committee's decisions and matters
relating to the Plan shall be final and conclusive on the Company and its
participants.
c. Eligible Participants. Employees of or consultants to the Company or its
subsidiaries or affiliates (including officers and directors, but excluding
directors who are not also employees of or consultants to the Company or its
subsidiaries or affiliates), shall become eligible to receive Incentives under
the Plan when designated by the Committee. Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate. Participation by officers of the Company or its
subsidiaries or affiliates and any performance objectives relating to such
officers must be approved by the Committee. Participation by others and any
performance objectives relating to others may be approved by groups or
categories (for example, by pay grade) and authority to designate participants
who are not officers and to set or modify such targets may be delegated.
d. Types of Incentives. Incentives under the Plan may be granted in any one
or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (section 6); (b) stock appreciation rights ("SARs")
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); (e)
performance shares (section 9); and (f) cash awards (section 10).
e. Shares Subject to the Plan.
i. Number of Shares. Subject to adjustment as provided in Section
11.6, the number of shares of Common Stock which may be issued under the
Plan shall not exceed 500,000 shares of Common Stock.
ii. Cancellation. To the extent that cash in lieu of shares of Common
Stock is delivered upon the exercise of a SAR pursuant to Section 7.4, the
Company shall be deemed, for purposes of applying the limitation on the
number of shares, to have issued the greater of the number of shares of
Common Stock
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which it was entitled to issue upon such exercise or on the exercise of any
related option. In the event that a stock option or SAR granted hereunder
expires or is terminated or canceled unexercised as to any shares of Common
Stock, such shares may again be issued under the Plan either pursuant to
stock options, SARs or otherwise. In the event that shares of Common Stock
are issued as restricted stock or pursuant to a stock award and thereafter
are forfeited or reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may again be issued
under the Plan, either as restricted stock, pursuant to stock awards or
otherwise. The Committee may also determine to cancel, and agree to the
cancellation of, stock options in order to make a participant eligible for
the grant of a stock option at a lower price than the option to be
canceled.
iii. Type of Common Stock. Common Stock issued under the Plan in
connection with stock options, SARs, performance shares, restricted stock
or stock awards, may be authorized and unissued shares.
f. Stock Options. A stock option is a right to purchase shares of Common
Stock from the Company. Each stock option granted by the Committee under this
Plan shall be subject to the following terms and conditions:
i. Price. The option price per share shall be determined by the
Committee, subject to adjustment under Section 11.6.
ii. Number. The number of shares of Common Stock subject to the option
shall be determined by the Committee, subject to adjustment as provided in
Section 11.6. The number of shares of Common Stock subject to a stock
option shall be reduced in the same proportion that the holder thereof
exercises a SAR if any SAR is granted in conjunction with or related to the
stock option.
iii. Duration and Time for Exercise. Subject to earlier termination as
provided in Section 11.4, the term of each stock option shall be determined
by the Committee but shall not exceed ten years and one day from the date
of grant. Each stock option shall become exercisable at such time or times
during its term as shall be determined by the Committee at the time of
grant. The Committee may accelerate the exercisability of any stock option.
Subject to the foregoing and with the approval of the Committee, all or any
part of the shares of Common Stock with respect to which the right to
purchase has accrued may be purchased by the Company at the time of such
accrual or at any time or times thereafter during the term of the option.
iv. Manner of Exercise. A stock option may be exercised, in whole or
in part, by giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased and accompanied by the full purchase
price for such shares. The option price shall be payable in United States
dollars upon exercise of the option and may be paid by cash; uncertified or
certified check; bank draft; by delivery of shares of Common Stock in
payment of all or any part of the option price, which shares shall be
valued for this purpose at the Fair Market Value on the date such option is
exercised; by instructing the Company to withhold from the shares of Common
Stock issuable upon exercise of the stock option shares of Common Stock in
payment of all or any part of the option price, which shares shall be
valued for this purpose at the Fair Market Value or in such other manner as
may be authorized from time to time by the Committee. Prior to the issuance
of shares of Common Stock upon the exercise of a stock option, a
participant shall have no rights as a stockholder.
v. Incentive Stock Options. Notwithstanding anything in the Plan to
the contrary, the following additional provisions shall apply to the grant
of stock options which are intended to qualify as Incentive Stock Options
(as such term is defined in Section 422A of the Internal Revenue Code of
1986, as amended):
(1) The aggregate Fair Market Value (determined as of the time the
option is granted) of the shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any
participant during any calendar year (under all of the Company's plans)
shall not exceed $100,000.
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(2) Any Incentive Stock Option certificate authorized under the
Plan shall contain such other provisions as the Committee shall deem
advisable, but shall in all events be consistent with and contain all
provisions required in order to qualify the options as Incentive Stock
Options.
(3) All Incentive Stock Options must be granted within ten years
from the earlier of the date on which this Plan was adopted by board of
directors or the date this Plan was approved by the stockholders.
(4) Unless sooner exercised, all Incentive Stock Options shall
expire no later than 10 years after the date of grant.
(5) The option price for Incentive Stock Options shall be not less
than the Fair Market Value of the Common Stock subject to the option on
the date of grant.
(6) No Incentive Stock Options shall be granted to any participant
who, at the time such option is granted, would own (within the meaning
of Section 422A of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
employer corporation or of its parent or subsidiary corporation.
g. Stock Appreciation Rights. A SAR is a right to receive, without payment
to the Company, a number of shares of Common Stock, cash or any combination
thereof, the amount of which is determined pursuant to the formula set forth in
Section 7.4. A SAR may be granted (a) with respect to any stock option granted
under this Plan, either concurrently with the grant of such stock option or at
such later time as determined by the Committee (as to all or any portion of the
shares of Common Stock subject to the stock option), or (b) alone, without
reference to any related stock option. Each SAR granted by the Committee under
this Plan shall be subject to the following terms and conditions:
i. Number. Each SAR granted to any participant shall relate to such
number of shares of Common Stock as shall be determined by the Committee,
subject to adjustment as provided in Section 11.6. In the case of a SAR
granted with respect to a stock option, the number of shares of Common
Stock to which the SAR pertains shall be reduced in the same proportion
that the holder of the option exercises the related stock option.
ii. Duration. Subject to earlier termination as provided in Section
11.4, the term of each SAR shall be determined by the Committee but shall
not exceed ten years and one day from the date of grant. Unless otherwise
provided by the Committee, each SAR shall become exercisable at such time
or times, to such extent and upon such conditions as the stock option, if
any, to which it relates is exercisable. The Committee may in its
discretion accelerate the exercisability of any SAR.
iii. Exercise. A SAR may be exercised, in whole or in part, by giving
written notice to the Company, specifying the number of SARs which the
holder wishes to exercise. Upon receipt of such written notice, the Company
shall, within ninety (90) days thereafter, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both, as determined
by the Committee, to which the holder is entitled pursuant to Section 7.4.
iv. Payment. Subject to the right of the Committee to deliver cash in
lieu of shares of Common Stock (which, as it pertains to officers and
directors of the Company, shall comply with all requirements of the 1934
Act), the number of shares of Common Stock which shall be issuable upon the
exercise of a SAR shall be determined by dividing:
(1) the number of shares of Common Stock as to which the SAR is
exercised multiplied by the amount of the appreciation in such shares
(for this purpose, the "appreciation" shall be the amount by which the
Fair Market Value of the shares of Common Stock subject to the SAR on
the exercise date exceeds (1) in the case of a SAR related to a stock
option, the purchase price of the shares of Common Stock under the stock
option or (2) in the case of a SAR granted alone, without reference to a
related stock option, an amount which shall be determined by the
Committee at the time of grant, subject to adjustment under Section
11.6); by
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(2) the Fair Market Value of a share of Common Stock on the
exercise date.
In lieu of issuing shares of Common Stock upon the exercise of a SAR,
the Committee may elect to pay the holder of the SAR cash equal to the Fair
Market Value on the exercise date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock shall be issued
upon the exercise of a SAR; instead, the holder of the SAR shall be
entitled to receive a cash adjustment equal to the same fraction of the
Fair Market Value of a share of Common Stock on the exercise date or to
purchase the portion necessary to make a whole share at its Fair Market
Value on the date of exercise.
h. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by
applicable law for the issuance of a share of Common Stock) and subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:
i. Number of Shares. The number of shares to be transferred or sold by
the Company to a participant pursuant to a stock award or as restricted
stock shall be determined by the Committee.
ii. Sale Price. The Committee shall determine the price, if any, at
which shares of restricted stock shall be sold to a participant, which may
vary from time to time and among participants and which may be below the
Fair Market Value of such shares of Common Stock at the date of sale.
iii. Restrictions. All shares of restricted stock transferred or sold
hereunder shall be subject to such restrictions as the Committee may
determine, including, without limitation any or all of the following:
(1) a prohibition against the sale, transfer, pledge or other
encumbrance of the shares of restricted stock, such prohibition to lapse
at such time or times as the Committee shall determine (whether in
annual or more frequent installments, at the time of the death,
disability or retirement of the holder of such shares, or otherwise);
(2) a requirement that the holder of shares of restricted stock
forfeit, or (in the case of shares sold to a participant) resell back to
the Company at his or her cost, all or a part of such shares in the
event of termination of his or her employment or consulting engagement
during any period in which such shares are subject to restrictions;
(3) such other conditions or restrictions as the Committee may deem
advisable.
iv. Escrow. In order to enforce the restrictions imposed by the
Committee pursuant to Section 8.3, the participant receiving restricted
stock shall enter into an agreement with the Company setting forth the
conditions of the grant. Shares of restricted stock shall be registered in
the name of the participant and deposited, together with a stock power
endorsed in blank, with the Company. Each such certificate shall bear a
legend in substantially the following form:
The transferability of this certificate and the shares of
Common Stock represented by it are subject to the terms and
conditions (including conditions of forfeiture) contained in
the 1995 Stock Option and Compensation Plan of Famous Dave's
of Minneapolis, Inc. (the "Company"), and an agreement entered
into between the registered owner and the Company. A copy of
the Plan and the agreement is on file in the office of the
secretary of the Company.
v. End of Restrictions. Subject to Section 11.5, at the end of any
time period during which the shares of restricted stock are subject to
forfeiture and restrictions on transfer, such shares will be delivered free
of all restrictions to the participant or to the participant's legal
representative, beneficiary or heir.
vi. Stockholder. Subject to the terms and conditions of the Plan, each
participant receiving restricted stock shall have all the rights of a
stockholder with respect to shares of stock during any period
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in which such shares are subject to forfeiture and restrictions on
transfer, including without limitation, the right to vote such shares.
Dividends paid in cash or property other than Common Stock with respect to
shares of restricted stock shall be paid to the participant currently.
i. Performance Shares. A performance share consists of an award which shall
be paid in shares of Common Stock, as described below. The grant of performance
share shall be subject to such terms and conditions as the Committee deems
appropriate, including the following:
i. Performance Objectives. Each performance share will be subject to
performance objectives for the Company or one of its operating units to be
achieved by the end of a specified period. The number of performance shares
granted shall be determined by the Committee and may be subject to such
terms and conditions, as the Committee shall determine. If the performance
objectives are achieved, each participant will be paid in shares of Common
Stock or cash. If such objectives are not met, each grant of performance
shares may provide for lesser payments in accordance with formulas
established in the award.
ii. Not Stockholder. The grant of performance shares to a participant
shall not create any rights in such participant as a stockholder of the
Company, until the payment of shares of Common Stock with respect to an
award.
iii. No Adjustments. No adjustment shall be made in performance shares
granted on account of cash dividends which may be paid or other rights
which may be issued to the holders of Common Stock prior to the end of any
period for which performance objectives were established.
iv. Expiration of Performance Share. If any participant's employment
or consulting engagement with the Company is terminated for any reason
other than normal retirement, death or disability prior to the achievement
of the participant's stated performance objectives, all the participant's
rights on the performance shares shall expire and terminate unless
otherwise determined by the Committee. In the event of termination by
reason of death, disability, or normal retirement, the Committee, in its
own discretion may determine what portions, if any, of the performance
shares should be paid to the participant.
j. Cash Awards. A cash award consists of a monetary payment made by the
Company to a participant as additional compensation for his or her services to
the Company. Payment of a cash award will normally depend on achievement of
performance objectives by the Company or by individuals. The amount of any
monetary payment constituting a cash award shall be determined by the Committee
in its sole discretion. Cash awards may be subject to other terms and
conditions, which may vary from time to time and among participants, as the
Committee determines to be appropriate.
k. General.
i. Effective Date. The Plan will become effective upon its adoption by
unanimous written action by all holders of shares of Common Stock. Unless
approved within one year after the date of the Plan's adoption by the board
of directors, the Plan shall not be effective for any purpose.
ii. Duration. The Plan shall remain in effect until all Incentives
granted under the Plan have either been satisfied by the issuance of shares
of Common Stock or the payment of cash or been terminated under the terms
of the Plan and all restrictions imposed on shares of Common Stock in
connection with their issuance under the Plan have lapsed. No Incentives
may be granted under the Plan after the tenth anniversary of the date the
Plan is approved by the stockholders of the Company.
iii. Non-transferability of Incentives. No stock option, SAR,
restricted stock or performance award may be transferred, pledged or
assigned by the holder thereof except, in the event of the holder's death,
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986,
as amended, or Title I of the Employee Retirement Income Security Act, or
the rules thereunder, and the Company shall not be required to recognize
any attempted assignment of such rights by any participant. During a
participant's lifetime, an Incentive may be exercised only by him or her or
by his or her guardian or legal representative.
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iv. Effect of Termination or Death. In the event that a participant
ceases to be an employee of or consultant to the Company for any reason,
including death, any Incentives may be exercised or shall expire at such
times as may be determined by the Committee.
v. Additional Condition. Notwithstanding anything in this Plan to the
contrary: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of award of any Incentive or the
issuance of any shares of Common Stock pursuant to any Incentive, require
the recipient of the Incentive, as a condition to the receipt thereof or to
the receipt of shares of Common Stock issued pursuant thereto, to deliver
to the Company a written representation of present intention to acquire the
Incentive or the shares of Common Stock issued pursuant thereto for his or
her own account for investment and not for distribution; and (b) if at any
time the Company further determines, in its sole discretion, that the
listing, registration or qualification (or any updating of any such
document) of any Incentive or the shares of Common Stock issuable pursuant
thereto is necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of,
or in connection with the award of any Incentive, the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions imposed
on such shares, such Incentive shall not be awarded or such shares of
Common Stock shall not be issued or such restrictions shall not be removed,
as the case may be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Company.
vi. Adjustment. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or corporations,
there shall be substituted for each of the shares of Common Stock then
subject to the Plan, including shares subject to restrictions, options, or
achievement of performance share objectives, the number and kind of shares
of stock or other securities to which the holders of the shares of Common
Stock will be entitled pursuant to the transaction. In the event of any
recapitalization, stock dividend, stock split, combination of shares or
other change in the Common Stock, the number of shares of Common Stock then
subject to the Plan, including shares subject to restrictions, options or
achievements of performance shares, shall be adjusted in proportion to the
change in outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option, the performance objectives
of any Incentive, and the shares of Common Stock issuable pursuant to any
Incentive shall be adjusted as and to the extent appropriate, in the
discretion of the Committee, to provide participants with the same relative
rights before and after such adjustment.
vii. Incentive Plans and Agreements. Except in the case of stock
awards or cash awards, the terms of each Incentive shall be stated in a
plan or agreement approved by the Committee. The Committee may also
determine to enter into agreements with holders of options to reclassify or
convert certain outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-statutory stock options and in order to
eliminate SARs with respect to all or part of such options and any other
previously issued options.
viii. Withholding.
(1) The Company shall have the right to withhold from any payments
made under the Plan or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when a participant is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with a distribution of Common
Stock or upon exercise of an option or SAR, the participant may satisfy
this obligation in whole or in part by electing (the "Election") to have
the Company withhold from the distribution shares of Common Stock having
a value up to the amount required to be withheld. The value of the
shares to be withheld shall be based on the Fair Market Value of the
Common Stock on the date that the amount of tax to be withheld shall be
determined ("Tax Date").
(2) Each Election must be made prior to the Tax Date. The Committee
may disapprove of any Election, may suspend or terminate the right to
make Elections, or may provide with respect to any
A-6
<PAGE> 20
Incentive that the right to make Elections shall not apply to such
Incentive. An Election is irrevocable.
(3) If a participant is an officer or director of the Company
within the meaning of Section 16 of the 1934 Act, then an Election must
comply with all of the requirements of the 1934 Act.
ix. No Continued Employment. Engagement or Right to Corporate
Assets. No participant under the Plan shall have any right, because of his
or her participation, to continue in the employ of, or to continue his or
her consulting engagement for, the Company for any period of time or to any
right to continue his or her present or any other rate of compensation.
Nothing contained in the Plan shall be construed as giving an employee, a
consultant, such persons' beneficiaries, or any other person, any equity or
interests of any kind in the assets of the Company or creating a trust of
any kind or a fiduciary relationship of any kind between the Company and
any such person.
x. Deferral Permitted. Payment of cash or distribution of any shares
of Common Stock to which a participant is entitled under any Incentive
shall be made as provided in the Incentive. Payment may be deferred at the
option of the participant if provided in the Incentive.
xi. Amendment of the Plan. The Board may amend or discontinue the Plan
at any time. However, no such amendment or discontinuance shall, subject to
adjustment under Section 11.6, (a) change or impair, without the consent of
the recipient, an Incentive previously granted, (b) materially increase the
maximum number of shares of Common Stock which may be issued to all
participants under the Plan, (c) materially increase the benefits that may
be granted under the Plan, (d) materially modify the requirements as to
eligibility for participation in the Plan, or (e) materially increase the
benefits accruing to participants under the Plan.
xii. Immediate Acceleration of Incentives. Notwithstanding any
provision in this Plan or in any Incentive to the contrary, (a) the
restrictions on all shares of restricted stock award shall lapse
immediately, (b) all outstanding options and SARs will become exercisable
immediately, and (c) all performance shares shall be deemed to be met and
payment made immediately, if subsequent to the date that the Plan is
approved by the Board of Directors of the Company, any of the following
events occur unless otherwise determined by the board of directors and a
majority of the Continuing Directors (as defined below).
(1) any person or group of persons becomes the beneficial owner of
thirty percent (30%) or more of any equity security of the Company
entitled to vote for the election of directors;
(2) a majority of the members of the board of directors of the
Company is replaced within the period of less than two (2) years by
directors not nominated and approved by the board of directors; or
(3) the stockholders of the Company approve an agreement to merge
or consolidate with or into another corporation or an agreement to sell
or otherwise dispose of all or substantially all of the Company's assets
(including a plan of liquidation).
For purposes of this Section 11.12, beneficial ownership by a person or
group of persons shall be determined in accordance with Regulation 13D (or any
similar successor regulation) promulgated by the Securities and Exchange
Commission pursuant to the 1934 Act. Beneficial ownership of more than thirty
percent (30%) of an equity security may be established by any reasonable method,
but shall be presumed conclusively as to any person who files a Schedule 13D
report with the Securities and Exchange Commission reporting such ownership. If
the restrictions and forfeitability periods are eliminated by reason of
provision (1), the limitations of this Plan shall not become applicable again
should the person cease to own thirty percent (30%) or more of any equity
security of the Company.
For purposes of this Section 11.12, "Continuing Directors" are directors
(a) who were in office prior to the time any of provisions (1), (2) or (3)
occurred or any person publicly announced an intention to acquire
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<PAGE> 21
twenty percent (20%) or more of any equity security of the Company, (b)
directors in office for a period of more than two years, and (c) directors
nominated and approved by the Continuing Directors.
xiii. Definition of Fair Market Value. Whenever "Fair Market Value" of
Common Stock shall be determined for purposes of this Plan, it shall be
determined by reference to the last sale price of a share of Common Stock
on the principal United States Securities Exchange registered under the
1934 Act on which the Common Stock is listed (the "Exchange"), or, on the
National Association of Securities Dealers, Inc. Automatic Quotation System
(including the National Market System) ("NASDAQ") on the applicable date.
If the Exchange or NASDAQ is closed for trading on such date, or if the
Common Stock does not trade on such date, then the last sale price used
shall be the one on the date the Common Stock last traded on the Exchange
or NASDAQ. If the Common Stock is not listed on an Exchange or on NASDAQ,
"Fair Market Value" shall be determined by the Board of Directors of the
Company, which such valuation determination shall be conclusive.
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<PAGE> 22
================================================================================
FAMOUS DAVE'S OF AMERICA, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 22, 1997
The undersigned, a shareholder of Famous Dave's of America,
Inc., hereby appoints David A. Anderson and Mark A. Payne, and each
of them, as proxies, with full power of substitution, to vote on
behalf of the undersigned the number of shares which the
undersigned is then entitled to vote, at the Annual Meeting of
Shareholders of Famous Dave's of America, Inc. to be held at the
Calhoun Blues Club, 3001 Hennepin Avenue, Calhoun Square,
Minneapolis, Minnesota, at 10:30 a.m. on Thursday, May 22, 1997,
and at any and all adjournments thereof, with all the powers which
the undersigned would possess if personally present, upon:
<TABLE>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below
</TABLE>
David A. Anderson, Thomas J. Brosig, Douglas S. Lanham, Richard L.
Monfort, Martin J. O'Dowd
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below:
-------------------------------------------------------------------
(2) To approve an amendment to the Company's 1995 Stock Option and
Compensation Plan to increase the number of shares of Common
Stock reserved for issuance thereunder by 400,000 shares to
900,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Upon such other business as may properly come before the
meeting or any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES
AND FOR THE AMENDMENT TO THE 1995 STOCK
OPTION AND COMPENSATION PLAN.
(continued, and to be completed and signed on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from other side)
The undersigned hereby revokes all previous proxies relating to
the shares covered hereby and acknowledges receipt of the Notice
and Proxy Statement relating to the Annual Meeting of Shareholders.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
When properly executed, this proxy will be voted on the proposals
set forth herein as directed by the shareholder, but if no
direction is made in the space provided, this proxy will be voted
FOR the election of all nominees for director and FOR the proposal
to increase the number of shares reserved for issuance under the
Company's 1995 Stock Option and Compensation Plan.
Dated:
---------------------------------
, 1997
X
---------------------------------
X
---------------------------------
(Shareholder must sign exactly as
the name appears at left. When
signed as a corporate officer,
executor, administrator, trustee,
guardian, etc., please give full
title as such. Both joint tenants
must sign.)
