SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by Registrant X
Filed by Party other than the Registrant __
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted
by Rule 14-6(e)(2)
/X/ Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
Stoico Restaurant Group, Inc.
- ------------------------------------------------------------------------------
Name of Registrant as Specified in its Charter
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
__ Fee computed on table below per Exchange Act Rules 14a- 6(i)(4) 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 filling 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>
STOICO RESTAURANT GROUP, INC.
3151 North Rock Road,
Wichita, Kansas 67226
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held May 5, 1997
-------------------
To the Stockholders of
Stoico Restaurant Group, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Stoico
Restaurant Group Inc. (the "Company") will be held at the Olive Tree Restaurant,
2949 North Rock Road, Wichita, Kansas 67226, on the 5th day of May 1997, at
1:30 p.m. (central time) for the following purposes:
1. To elect one Class II Director to serve for a term of three (3)
years;
2. To ratify the appointment of Allen, Gibbs & Houlik, L.C.,
certified public accountants, as independent auditors for the
Company for the fiscal year ending December 30, 1997; and
3. To transact such other business as may properly come before
the meeting and any adjournment(s) and postponement(s) thereof.
A list of Stockholders entitled to vote at the Annual Meeting will be open
for examination by any Stockholder for any purpose regarding the Annual Meeting
during ordinary business hours, for a period of 10 days prior to the Annual
Meeting at the office of the Company at 3151 North Rock Road, Wichita, Kansas
67226. Only Stockholders of record at the close of business on March 21, 1997,
are entitled to receive notice of and vote at the annual meeting and any
adjournment(s) thereof.
All Stockholders are cordially invited to attend the meeting in person.
However, if you are unable to be personally present and wish to have your shares
voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. No postage is necessary if mailed
in the United States. If you attend the meeting, we will be glad to return your
proxy so that you may vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Cathy K. Martsolf
Cathy K. Martsolf
Secretary and Treasurer
Wichita, Kansas
April 1, 1997
<PAGE>
STOICO RESTAURANT GROUP, INC.
PROXY STATEMENT
1997 ANNUAL MEETING
This proxy statement is being furnished on or about April 1, 1997, in
connection with the solicitation of proxies by the Board of Directors of Stoico
Restaurant Group, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held at the Olive Tree Restaurant, 2949
North Rock Road, Wichita, Kansas, at 1:30 p.m. (central time) on May 5, 1997,
for the purposes set forth in the foregoing Notice of Annual Meeting of
Stockholders.
SOLICITATION AND REVOCABILITY OF PROXIES
In order to provide every stockholder with an opportunity to vote on all
matters scheduled to come before the Annual Meeting and to be able to transact
business at the meeting, proxies are solicited by the Company's Board of
Directors. Upon execution and return of the enclosed proxy, the shares
represented by it will be voted by the persons designated therein as proxies, in
accordance with the stockholder's directions. A stockholder may vote on a matter
by marking the appropriate box on the proxy or, if no box is marked for a
specific matter, the shares will be voted as recommended by the Board of
Directors on that matter.
The enclosed proxy may be revoked at any time before it is voted by (i)
giving written notice to the Secretary of the Company prior to the date of the
Annual Meeting, (ii) exercising a proxy of a later date and delivering such
later proxy to the Secretary of the Company prior to the Annual Meeting or (iii)
attending the Annual Meeting and voting in person. Unless the proxy is revoked
or is received in a form that renders it invalid, the shares represented by it
will be voted in accordance with the instructions contained therein.
Solicitation of proxies is being made primarily by mail; however, there may
also be further solicitation in person and by telephone at nominal cost by
officers, directors, employees and agents of the Company, who will receive no
additional compensation. The cost of solicitation of these proxies will be paid
by the Company, including reimbursements paid to brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred in
forwarding the proxy material to, and solicitation of proxies from, the
beneficial owners of shares held of record by such persons.
VOTING AT MEETING
Only Stockholders of record on the books of the Company at the close of
business on March 21, 1997, the record date established for the Annual Meeting,
will be entitled to vote at the meeting. On March 21, 1997, there were 5,708,966
shares of common stock outstanding and no other voting securities (the "Common
Stock"). Each outstanding share of Common Stock entitles the record holder to
one vote. The presence, in person or by proxy, of the holders of a majority of
the shares of Common Shares issued and outstanding on March 21, 1997, is
necessary to constitute a quorum at the Annual Meeting. All votes at the Annual
Meeting specified in this Proxy Statement will be by written ballot.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of December 31, 1996, (i), by
each Stockholder who is known by the Company to own beneficially more than 5% of
the Common Stock, (ii) by each director, (iii) by each executive officer named
in the Summary Compensation Table set forth under "Executive Compensation" and
(iv) by all executive officers and directors as a group.
Name and Address Amount and Class Common
of Beneficial Owner Nature of Percent of Class
Beneficial Owner
- ----------------------------------------------------------------------------
W. Frank Barton 1,593,268(1) 27.9%
P.O. Box 781581
Wichita, Kansas 67278
Louis Stoico, Jr. 1,370,712 24.0%
3151 N. Rock Road
Wichita, Kansas 67226
Timothy J. Jeffrey 734,240(2) 12.9%
49736 Cooke Avenue
Plymouth, MI 48170
Robert W. Singleton 618,226(3) 10.8%
P.O. Box 780357
Wichita, Kansas 67278
Gary L. Poulton 405,005(4) 7.0%
3151 N. Rock Road
Wichita, Kansas 67226
John T. Mosley 18,360(5) *
3151 N. Rock Road
Wichita, Kansas 67226
James M. Ash 13,039(5) *
Two Pershing Square
2300 Main Street,
Suite 1100
Kansas City, Missouri 64108
Craig W. Barton 10,000 *
P.O. Box 781581
Wichita, Kansas 67278
All directors and executive 1,871,862 32.8%
*officers as a group(9)
* Less than one percent.
(1) Includes stock owned by the Barton Family Limited Partnership of which W.
Frank Barton is the general partner.
(2) Includes 100 shares of which Mr. Jeffrey is the beneficial owner.
(3) Includes a currently exercisable option to acquire 815 shares of common
Stock at an exercise price of $2.45 per share.
(4) Includes 150 shares of which Mr. Poulton is the beneficial owner.
(5) Includes a currently exercisable portion of an option to acquire a total
of 4,075 shares of Common Stock at an exercise price of $2.45 per share.
Such options vest at a rate of 20% over a five year period.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, with staggered three
year terms. At the Annual Meeting one director is to be elected. The proxies
named in the accompanying proxy card intend to vote for the election of James M.
Ash. In the event Mr. Ash should become unavailable for election, which is not
anticipated, the proxies will be voted for such a substitute nominee as may be
nominated by the Board of Directors. The nominee for election as a Class II
director who receives the greatest number of votes cast for election of
directors at the meeting, a quorum being present, shall be elected a director of
the Company. Abstentions, broker nonvotes and instructions on the accompanying
proxy card to withhold authority to vote for the nominee will result in the
nominee receiving fewer votes.
The Board of Directors Recommends a Vote for the Nominee.
INFORMATION CONCERNING NOMINEE
JAMES M. ASH
MR. ASH has been a director of the Company since 1995. He is currently
Assistant Secretary and has been a member of the Compensation Committee since
August 1996. Mr. Ash is an attorney with Blackwell Sanders Matheny Weary &
Lombardi L.C., based in Kansas City, Missouri, and specializes in corporate
finance transactions, including public offerings and mergers and acquisitions.
See "Certain Relationships and Related Transactions."
Term of Office: Term expires May 1997
Age: 40
INFORMATION CONCERNING DIRECTORS CONTINUING IN OFFICE
LOUIS STOICO, JR.
MR. STOICO has been a director of the Company since 1995 and a member of
the Compensation Committee since August 1996. Mr. Stoico founded the Company
in 1977 and Spaghetti Jack's in 1991. He is currently Chairman of the Board
and President of Stoico Restaurant Group, Inc.
Term of Office: Term expires May 1998
Age: 55
JOHN T. MOSLEY
MR. MOSLEY has been a director of the Company since 1995 and a member of
the Audit Committee since August 1996. Mr. Mosley is an Executive Vice
President and the Chief Financial Officer for Sheplers, Inc., a western
clothing store chain based in Wichita, Kansas.
Term of Office: Term expires May 1998
Age: 48
<PAGE>
CRAIG BARTON
MR. BARTON has been a director of the Company since December 1996 and a
member of the Audit Committee since February 1997. Mr. Barton has been President
of Apollo Capital Corporation since June 1996, a corporation which acquires real
estate properties, oil and gas properties as well as other securities. From 1994
to May 1996, he was President of Quasar Energy, Inc. From 1988 to 1994,
Mr. Barton was President of Delbarco, Inc., the predecessor of Apollo Capital.
Term of Office: Term expires May 1999
Age: 36
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
COMMITTEES
The standing committees of the Board of Directors consist of an Audit
Committee and a Compensation Committee.
The Audit Committee consists of Messrs. Mosley and Barton. Mr. Jeffrey,
the former Chief Executive Officer and President of the Company, was a member
of the Audit Committee. The Audit Committee annually makes recommendations to
the Board regarding the appointment of independent auditors of the Company and
reviews the scope of audits.
The Compensation Committee consists of Messrs. Stoico and Ash. The
Compensation Committee annually reviews and makes recommendations to the Board
of Directors regarding compensation arrangements with the executive officers of
the Company and reviews and approves the procedures for administering employee
benefit plans of all types.
During the 1996 fiscal year, the Board of Directors met four times. As the
Audit and Compensation Committees were not formed until August 1996, neither the
Audit Committee nor the Compensation Committee met in 1996. All Directors
attended 100% of the Board of Directors meetings.
COMPENSATION OF DIRECTORS
Non-employee directors received $500 for each meeting of the Board of
Directors they attended. In addition, the Company reimburses directors for
expenses incurred in connection with attendance at meetings of the Board of
Directors and committees thereof. Each non-employee director has also been
granted an option to purchase a total of 4,075 shares of Common Stock at an
exercise price of $2.45 per share of which 20% of the shares vest annually.
[Remainder of Page Intentionally Blank]
<PAGE>
CERTAIN INFORMATION CONCERNING EXECUTIVE OFFICERS
LOUIS STOICO, JR.
See "Information Concerning Directors Continuing in Office."
GARY L. POULTON
Mr. Poulton has been employed by the Company since 1977. He is currently
Executive Vice President of Stoico Restaurant Group, Inc. responsible for
purchasing, distribution and product development.
Term of Office: April 1979 to Present
Age: 42
CATHY K. MARTSOLF
Ms. Martsolf has been employed by the Company since June 1991 and is
currently Senior Vice President of Administration and has served as the
Secretary and Treasurer of Stoico Restaurant Group, Inc. since February 1996.
Ms. Martsolf is married to John E. Martsolf.
Term of Office: January 1992 to Present
Age: 41
SCOTT D. NAIL
Mr. Nail has been employed by the Company since June 1995 and is
currently Senior Vice President of Operations responsible for both Sub & Stuff
and Spaghetti Jack's restaurant concepts. From June 1993 to May 1995, Mr.
Nail was employed by Subway as Director of Operations in Atlanta, Georgia.
From June 1984 to May 1993, Mr. Nail was employed by Pizza Hut of America,
Inc. as an area manager.
Term of Office: June 1995 to Present
Age: 33
JOHN E. MARTSOLF
Mr. Martsolf has been employed by the Company since June 1994 and is
currently Vice President of Franchise Development of Stoico Restaurant Group,
Inc. From June 1992 to May 1994, Mr. Martsolf was employed as National
Account Executive for U.S. Foodservice, a food distributor in Oklahoma City,
Oklahoma. From June 1981 to May 1992, Mr. Martsolf was President of Lamar
Distribution Services, Inc. in Wichita, Kansas. Mr. Martsolf is married to
Cathy K. Martsolf.
Term of Office: June 1994 to Present
Age: 55
DONALD E. FOWLER
Mr. Fowler has been employed by the Company since June 1996, and is
currently Vice President of Real Estate and Construction of Stoico Restaurant
Group, Inc. From March 1993 to March 1996, Mr. Fowler was employed by Thorn
Americas, Inc. as the Director of Store Development. From March 1992 to March
1993, Mr. Fowler was self employed in the field of property and environmental
inspections. From March 1972 to March 1992, Mr. Fowler was employed by
McDonald's Corporation as Director of Development.
Term of Office: January 1997 to Present
Age: 56
<PAGE>
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires that directors and officers of the
Company and persons who beneficially own more than 10% of the Common Stock file
with the SEC initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Common Stock of the Company. Directors, officers and
greater than 10% beneficial owners are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, all Section 16(a) filing requirements applicable to
its directors, executive officers and 10% beneficial owners were satisfied
during the fiscal year ended December 31, 1996, except that one Form 3 for each
of Ms. Martsolf and Messrs. Nail, Poulton, Stoico, Singleton, Martsolf, Mosley,
Miller, Ash and Jeffrey was filed several days after the effective date of the
Company's registration statement under the Securities Act of 1933.
In addition, Mr. Jeffrey failed to file a Form 5.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Chief Executive
Officer of the Company and the other most highly compensated executive officer
of the Company whose compensation exceeded $100,000 during fiscal years 1994,
1995 or 1996. Mr. Jeffrey resigned from the Company in December 1996.
SUMMARY COMPENSATION TABLE
Name and Principal Other Annual All Other
Position Year Salary ($) Compensation Compensation
- --------------- ---- ------- ---------- ----------
Louis Stoico, Jr. 1996 $ 63,462 $9,000(1) $2,736(2)
Chairman of the Board 1995 $108,223 $9,000(1) $3,264(2)
& President 1994 $ 87,692 $9,000(1) $3,152(2)
Timothy J. Jeffrey 1996 $132,692 $11,314(3) $15,923(4)
Former Chief Executive 1995 $112,824(5) $ 7,956(3) $18,548(6)
Officer & President 1994 ---- ---- ----
(1) Monthly car allowance of $750.
(2) Consists of premiums paid by the Company for health and life insurance.
(3) Consists of amounts paid for a membership at Wichita Country Club and a
monthly car allowance of $750.
(4) Consists of $10,500 paid during 1996 for housing expense and premiums paid
by the Company for health and life insurance.
(5) Mr. Jeffrey was employed for only a portion of fiscal 1995 and was not an
employee during fiscal 1994.
(6) Consists of $13,110 paid during 1995 for housing expense and premiums paid
by the Company for health and life insurance.
[Remainder of Page Intentionally Blank]
<PAGE>
Option Exercises and Year-End Value Table
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year End at Fiscal Year End
-------------------- -------------------
Shares
Acquired on
Name Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Timothy
J. Jeffrey 378,873(1) $600,527 0 0 $0 $0
311,763(2) $495,000 0 0 $0 $0
</TABLE>
(1) Options granted by the Company.
(2) Options granted personally by Louis Stoico, Jr.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 11, 1996 and July 17, 1996, the Company made loans, of $158,127
and $66,873 respectively, each of which bears interest at a rate of 5.5% per
annum to Timothy J. Jeffrey, the former President, Chief Executive Officer and
Director of the Company. These loans are payable on March 31, 1997 and July 31,
1997, respectively.
In June 1995, the Company and the Barton Family Limited Partnership entered
into a promissory note with an original principal amount of $3,000,000 maturing
June 1, 2000, with an interest rate fixed at 10% per annum. This note was
secured by all the tangible property, intangible property and inventory of the
Company along with 1,309,466 shares of Common Stock owned by Louis Stoico, Jr.
and 311,763 shares of Common Stock owned by Timothy J. Jeffrey. In July 1996 the
Company and W. Frank Barton entered into a promissory note with an original
principal amount of $1,000,000 maturing June 1, 2000 with an interest rate fixed
at 10% per annum. In addition, in August 1996, an entity controlled by W. Frank
Barton opened a line of credit to the Company up to $750,000 accruing interest
at a fixed rate of 12% per annum payable quarterly. On November 7, 1996, the
Company accessed this line of credit for the full amount. All of the
aforementioned amounts owed to the Barton Family Limited Partnership and to W.
Frank Barton were repaid as of December 12, 1996. Barton Enterprises, Inc., an
entity affiliated with W.Frank Barton, owns the real property and building at
which the Company locates its principal executive offices and a Company-owned
Spaghetti Jack's restaurant. The Company leases this location pursuant to a
triple net lease and pays rent in the amount of $10,000 per month.
On December 20, 1996 the Company repaid loans made by Robert W. Singleton,
a 10.8% Stockholder and former director, in the amount of $1,700,000.
In December 1996, the Company paid $76,000 in legal fees to Blackwell
Sanders Matheny Weary & Lombardi L.C. for legal services provided to the Company
in its initial public offering. James M. Ash, a member of this law firm, is a
member of the Board of Directors of the Company and owns 12,224 shares of Common
Stock and an option to acquire a total of 4,075 shares at an exercise price of
$2.45 per share.
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Allen, Gibbs & Houlik, L.C. of Wichita,
Kansas as the Company's independent accountants to audit the financial
statements of the Company and its subsidiaries for the fiscal year ending
December 30, 1997. This selection is subject to the ratification by the
Stockholders at the Annual Meeting. This change in independent accountants was
recommended by the Audit Committee of the Company's Board of Directors and
approved by the Board of Directors on March 31, 1997.
KPMG Peat Marwick LLP served as the Company's independent accountants
auditing the financial statements of the Company and its subsidiaries for the
fiscal years ended December 31, 1996 and December 26, 1995. Representatives of
KPMG Peat Marwick LLP are expected to be present at the Annual Meeting to
respond to questions and will have an opportunity to make a statement if they
desire to do so.
KPMG Peat Marwick LLP's reports on the financial statements of the Company
and its subsidiaries for the fiscal years ended December 31, 1996 and December
26, 1995 did not contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
During the Company's fiscal years ended December 31, 1996 and December 26,
1995 there were no disagreements with KPMG Peat Marwick LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure that were not resolved to the satisfaction of KPMG Peat
Marwick LLP.
Representatives of Allen, Gibbs & Houlik, L.C. are not expected to be
present at the Annual Meeting.
The Board of Directors recommends a vote for the ratification of the
appointment of Allen, Gibbs & Houlik, L.C. as independent public accountants for
fiscal year 1997.
OTHER MATTERS
As of the date of this Proxy Statement, the Board knows of no other
business that will be presented by management for consideration at the Annual
Meeting. If any other business properly comes before the Annual Meeting, the
proxy holders intend to vote the proxies as recommended by the Board.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1998 Annual Meeting
of the Stockholders must be received by the Company in writing no later than
December 31, 1997 in order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to that meeting. Proposals must be mailed
to Stoico Restaurant Group, Inc., 3151 North Rock Road, Wichita, Kansas 67226,
ATTN: Secretary, Cathy K. Martsolf.
<PAGE>
APPENDIX
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<TABLE>
<S> <C>
PROXY THIS PROXY IS SOLICITATED ON BEHALF OF THE
STOICO RESTAURANT GROUP, INC. BOARD OF DIRECTORS.
3151 North Rock Road
Wichita, Kansas 67226 The undersigned, a holder of Common Stock of Stoico
Restaurant Group, Inc., a Kansas corporation, hereby
appoints Louis Stoico, Jr., as proxy for the undersigned,
with the power to appoint his substitute, and hereby authorizes
him to represent and to vote, as designated below, all the
shares of Common Stock of Stoico Restaurant Group, Inc. that
the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on Monday, May 5, 1997, at 1:30 p.m.,
central time, or any adjournment or postponement thereof. This
proxy revokes all prior proxies given by the undersigned.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED PREPAID ENVELOPE.
(Continued and to be signed
on the reverse side)
<PAGE>
PLEASE MARK VOTE IN SQUARE IN THE FOLLOWING MANNER USING DARK INK ONLY. ____
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE NOMINEE AND THE OTHER
PROPOSALS SET FORTH BELOW.
1. ELECTION OF DIRECTORS -- THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
FOR AGAINST WITHHOLD UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
NOMINEE: James M. Ash /_/ /_/ /_/ MADE, THIS PROXY WILL BE VOTED "FOR" ALL OF THE
PROPOSALS LISTED.
2. APPOINTMENT OF INDEPENDENT AUDITORS-- DATED: _____________, 1997
FOR AGAINST WITHHOLD
Allen, Gibbs & Houlik, L.C. /_/ /_/ /_/ Signature(s)_____________________________________
-------------------------------------
3. Upon such other matters as properly Please sign above exactly as name appears. When shares are
come before the Annual Meeting and any held by joint tenants, both should sign. When signing as
adjournments thereof. In their discretion, attorney, executor, administrator, trustee or guardian,
the proxies are authorized to vote upon such please give full title as such. If a corporation,
other business as may properly come before please sign in full corporate name by President or
the Annual Meeting, and any adjournment(s) other authorized officer. If a partnership, please sign
or postponement(s) thereof. in partnership name by an authorized person.
FOR AGAINST WITHHOLD
/_/ /_/ /_/
</TABLE>
