CHAMPPS ENTERTAINMENT, INC.
One Corporate Place
55 Ferncroft Road
Danvers, Massachusetts
(978) 774-6606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 8, 1999
The Annual Meeting of Stockholders of Champps Entertainment, Inc.
(formerly Unique Casual Restaurants, Inc., the "Company") will be held at the
Harvard Club of New York City, 27 West 44th St., New York City on Wednesday,
December 8, 1999, at 9:00 a.m., local time, for the following purposes:
1. To elect one Class III director of the Company; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on November 8,
1999 are entitled to notice of, and to vote at, the meeting or any adjournment
thereof.
We hope you will be represented at the meeting by signing and returning
the enclosed proxy card in the accompanying envelope as promptly as possible,
whether or not you expect to be present in person. The vote of every stockholder
is important and the Board of Directors of the Company appreciates the
cooperation of stockholders in promptly returning proxies in order to help limit
expenses incidental to proxy solicitation.
By Order of the Board of Directors
DONNA L. DEPOIAN
Secretary
Danvers, Massachusetts
November 8, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
KINDLY REQUESTED TO SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY CARD, SO
YOUR SHARES CAN BE REPRESENTED AT THE MEETING. IF YOU ATTEND THE ANNUAL METING,
YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR
PROXY CARD.
<PAGE>
CHAMPPS ENTERTAINMENT, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
December 8, 1999
The enclosed proxy is solicited by the Board of Directors of Champps
Entertainment, Inc., a Delaware corporation (formerly Unique Casual Restaurants,
Inc., the "Company"), from the holders of shares of the Company's common stock,
par value $.01 per share ("Common Stock"), to be voted at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at the Harvard Club of New York
City, 27 West 44th St., New York City on Wednesday, December 8, 1999, at 9:00,
local time, and at any adjournment thereof. This Proxy Statement and the
enclosed Form of Proxy will be mailed to the Company's stockholders on or about
November 8, 1999.
The Company's principal executive office is located at One Corporate
Place, 55 Ferncroft Road, Danvers, Massachusetts 01923-4001. The Company's
telephone number at its principal executive office is (978) 774-6606.
The Company was formed on May 27, 1997 in preparation for its spin-off
from its then holding company, DAKA International, Inc. ("DAKA"). The spin-off
was a two step transaction: first DAKA distributed to its shareholders all of
the shares of capital stock of the Company to accomplish a spin-off of DAKA's
restaurant businesses, consisting principally of the Fuddruckers and Champps
Americana restaurant chains; then DAKA's food service business was sold to a
U.S. subsidiary of Compass Group PLC through a tender offer for all outstanding
shares of capital stock of DAKA and a subsequent merger. The transaction
described above is referred to in this Proxy Statement as the "Spin-Off
Transaction." On November 1998, the Company sold its Fuddruckers restaurant
segment and during fiscal 1998 ceased the operations of its Specialty Concepts
business, including The Great Bagel & Coffee Company. Effective on July 15,
1999, the Company disposed of its investment in La Salsa Fresh Mexican Grill
("La Salsa") as part of the acquisition of La Salsa by Santa Barbara Restaurant
Group ("SBRG"), whereby the Company exchanged its convertible preferred shares
of La Salsa for common shares of SBRG. Finally, during fiscal year 1999, the
Company disposed of its 50% equity interest in Restaurant Consulting Services,
Inc.
VOTING AND PROXIES
Only holders of shares of Common Stock of record at the close of
business on November 8, 1999 are entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. On such date, the Company had outstanding
11,652,692 shares of Common Stock, each of which is entitled to one vote on each
matter submitted to a vote of stockholders.
Pursuant to the Company's By-laws, the presence, in person or by proxy,
of at least a majority of the total number of outstanding shares of Common Stock
issued and outstanding and entitled to vote is necessary to constitute a quorum
for the transaction of business at the Company's Annual Meeting. Abstentions,
votes withheld with respect to director nominees and "broker non-votes" (i.e.
shares represented at the Annual Meeting held by brokers or nominees with
respect to which instructions have not been received from beneficial owners or
persons entitled to vote such shares and with respect to which the broker or
nominee does not have discretionary voting power to vote such shares), shall be
treated as shares that are present and entitled to vote for purposes of
<PAGE>
determining whether a quorum is present. With respect to the election of
directors, the Company's By-laws provide that such election shall be determined
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of directors.
The Board of Directors recommends that all stockholders vote FOR the
election to the Board of Directors of the nominee named in this Proxy Statement.
Properly executed proxies will be voted in accordance with the directions
indicated thereon. If no direction is indicated thereon, the shares will be
voted: (1) FOR the election to the Board of Directors of the nominee named in
this Proxy Statement; and (2) in the discretion of the persons named as proxies,
upon such other matters as may properly come before the Annual Meeting.
Any stockholder giving a proxy has the power to revoke such proxy at
any time before it is voted by appearing and voting in person at the Annual
Meeting, by delivering a later-dated proxy, or by delivering to the Secretary of
the Company a written revocation of such proxy prior to the exercise of such
proxy.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information, as of October 18,
1999, with respect to each person known by the Company to be the beneficial
owner of more than 5% of the Common Stock, each director of the Company,
executive officers included in the Summary Compensation Table below, and all
directors and executive officers of the Company as a group:
Amount and
Nature of
Name and Address of Beneficial Percent
Beneficial Owner Ownership(1) Of Class
---------------- ------------ --------
William H. Baumhauer(2)................. 446,037(3) 3.7%
Timothy R. Barakett(4).................. 1,908,506(5) 16.4%
James Goodwin(4)........................ 0(6) *
Nathaniel P.Z.J. Rothschild(4).......... 0(7) *
Alan D. Schwartz(2)..................... 14,880(8) *
Donna L. Depoian(2)..................... 22,433(9) *
Cynthia S. Randall (2).................. 17,825(10) *
Atticus Holdings, L.L.C.(4)............. 1,025,500(5) 8.8%
Atticus Qualified Partners, L.P.(4). ... 607,450(5) 5.2%
Franklin Resources, Inc(11)............. 1,135,000(12) 9.7%
Douglas A. Hirsch(13)................... 719,880(14) 6.2%
All directors and executive officers
as a group (7 persons)................ 2,409,681(15) 19.9%
- --------------------
* Less than 1%
(1) Beneficial share ownership is determined pursuant to Rule 13d-3
promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended. Accordingly, a
beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares the power to vote such security
or the power to dispose of such security. The amounts set forth in the
table as beneficially owned include shares owned, if any, by spouses and
relatives living in the same home as to which beneficial ownership may be
disclaimed. The amounts set forth in the table as beneficially owned
include shares of Common Stock which directors and executive officers
have the right to acquire pursuant to previously granted options
exercisable within 60 days of October 18, 1999.
(2) The address of the beneficial owner is c/o Champps Entertainment, Inc.,
One Corporate Place, 55 Ferncroft Road, Danvers, Massachusetts 01923.
<PAGE>
(3) Includes 437,000 shares of Common Stock issuable upon the exercise of
options.
(4) The address of the beneficial owner is c/o Atticus Capital, L.L.C., 590
Madison Avenue, 32nd Floor, New York, NY 10022
(5) Mr. Barakett is the Managing Member of Atticus Holdings, L.L.C., a
Delaware limited liability company that serves as the general partner of
Atticus Partners, L.P. and Atticus Qualified Partners, L.P., which
beneficially own 418,050 and 607,450 shares of Common Stock,
respectively. Mr. Barakett is also the President of Atticus Management,
Ltd., an international business company organized under the laws of the
British Virgin Islands that serves as the manager of Atticus
International, Ltd., which beneficially owns 551,556 shares of Common
Stock. Mr. Barakett is also the Managing Member of Atticus Capital,
L.L.C, which has investment discretion with respect to certain managed
accounts (the "Managed Accounts"), which collectively beneficially own
331,450 shares of Common Stock. Mr. Barakett is deemed to be the
beneficial owner of all shares of Common Stock owned by Atticus Partners,
L.P., Atticus Qualified Partners, L.P., Atticus International, Ltd. and
the Managed Accounts.
(6) In connection with Mr. Goodwin's appointment to the Board of Directors in
March 1999, Atticus Capital, L.L.C. entered into an agreement with Mr.
Goodwin which provides that Atticus Capital, L.L.C. will pay to Mr.
Goodwin an amount equal to five percent of the proceeds above $4.875 per
share of Common Stock realized by Atticus Partners, L.P., Atticus
Qualified Partners, L.P. and Atticus International, Ltd. upon the sale or
disposition of the Common Stock beneficially owned by them. In addition,
Atticus Partners, L.P. agreed to indemnify Mr. Goodwin against any and
all losses, claims, liabilities and expenses in connection with serving
as a member of the Company's Board of Directors. Mr. Goodwin does not
have or share the power to vote or the power to dispose of any shares of
Common Stock beneficially owned by Atticus Partners, L.P., Atticus
Qualified Partners, L.P. or Atticus International, Ltd., and therefore
disclaims beneficial ownership of any of the 1,577,056 shares of Common
Stock held by them collectively.
(7) Mr. Rothschild is Executive Vice President of Atticus Capital, L.L.C., a
Delaware limited liability company that (i) is an affiliate of Atticus
Holdings, L.L.C., a Delaware limited liability company that serves as the
general partner of Atticus Partners, L.P. and Atticus Qualified Partners,
L.P., which beneficially own 418,050 and 607,450 shares of Common Stock,
respectively, and (ii) has investment discretion with respect to certain
managed accounts (the "Managed Accounts"), which collectively
beneficially own 331,450 shares of Common Stock. He is also Vice
President of Atticus Management, Ltd., an international business company
organized under the laws of the British Virgin Islands that serves as the
manager of Atticus International, Ltd., which beneficially owns 551,556
shares of Common Stock. Mr. Rothschild does not have or share the power
to vote or the power to dispose of any shares of Common Stock
beneficially owned by Atticus Partners, L.P., Atticus Qualified Partners,
L.P., Atticus International, Ltd. or the Managed Accounts, and therefore
disclaims beneficial ownership of any of the 1,908,506 shares of Common
Stock held by them collectively.
(8) Includes 14,500 shares of Common Stock issuable upon the exercise of
options.
(9) Includes 21,300 shares of Common Stock issuable upon the exercise of
options.
(10) Includes 10,000 shares of Common Stock issuable upon the exercise of
options.
(11) The address of the beneficial owner is 777 Mariners Island Blvd., 6th
Floor, San Mateo, CA 94404.
(12) This information is based on a Schedule 13G/A, dated February 9, 1999,
filed by Franklin Resources, Inc. with the SEC.
(13) The address of the beneficial owner is c/o Seneca Capital Advisors LLC,
830 Third Avenue, 14th Floor, New York, NY 10022.
(14) Includes 569,800 shares beneficially owned by Seneca Capital Advisors LLC
and Seneca Capital Investments, LLC, of which Mr. Hirsch is a controlling
person. Includes 150,000 shares with respect to which Mr. Hirsch
disclaims beneficial ownership. This information is based on a Schedule
13D, dated June 23, 1997, filed by Seneca Capital Advisors LLC on behalf
of Douglas Hirsch with the SEC.
(15) Includes 482,800 shares of Common Stock issuable upon the exercise of
options.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors consists of five members. The five directors are
divided into three classes, with the directors of each class elected to
three-year terms. One class stands for election at each annual meeting of the
Company's stockholders. One Class III director will be elected at the Annual
Meeting to hold office for three years or until his successor is elected and
qualified. Two Class I and two Class II directors who are currently in office
have one year and two years remaining in their respective terms. Unless
otherwise specified in the enclosed proxy, the person named in the enclosed
proxy intends to vote the shares represented by each properly executed proxy FOR
the election of the nominee named below. The Board of Directors has no reason to
believe that the nominee will be unable to serve if elected. In the event the
nominee shall become unavailable for election, the person named in the enclosed
proxy will vote such shares for the election of such other person as the Board
of Directors may recommend.
Nominee for Class III Director
The Board of Directors has nominated the following person for election
as a Class III director for a term expiring in 2002:
Alan D. Schwartz
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MR. SCHWARTZ.
For more detailed information regarding Mr. Schwartz, see "Directors
and Committees--Incumbent Directors."
DIRECTORS AND COMMITTEES
Incumbent Directors
The following table sets forth certain information regarding current
members of the Board of Directors:
<TABLE>
<CAPTION>
Principal Director Expiration
Name Age Occupation Since of Term Class
---- --- ---------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
William H. Baumhauer............... 51 Chairman, President and June 1999 2001 II
Chief Executive Officer of the
Company
Timothy R. Barakett................ 34 President of Atticus Capital,L.L.C. March 1999 2000 I
James Goodwin...................... 43 Independent Consultant March 1999 2000 I
Nathaniel P.J.V. Rothschild........ 28 Executive Vice President of
Atticus Capital, L.L.C. August 1999 2001 II
Alan D. Schwartz................... 49 Senior Managing Director May 1997 1999 III
of Corporate Finance for
Bear, Stearns & Co., Inc.
</TABLE>
- -----------------------
The name, age and principal occupation during the past five years and
other information concerning each director are set forth below:
William H. Baumhauer, 51, has served as a director and Chairman of the
Board of Directors since August 23, 1999, and as President and Chief Executive
Officer of the Company since June 24, 1999. Mr. Baumhauer also held these
positions with the Company or its predecessors from September 1988 until July
24, 1998, when he left the Company to serve as President and Chief Operating
Officer of Planet Hollywood International, Inc., a position he held until his
return to the Company on June 24, 1999. He served Fuddruckers, Inc. as Chairman
of the Board, President and Chief Executive Officer between March 1985 and the
merger of Fuddruckers, Inc. with DAKA in 1988.
<PAGE>
Timothy R. Barakett, 34, has been the President and Managing Member of
Atticus Capital, L.L.C., a private investment management company and an
affiliate of Atticus Partners, since October 1995. From June 1993 until March
1995, Mr. Barakett was a Managing Director at Junction Advisors Inc., a private
investment management company.
James Goodwin, 43, has been a private investor since 1998. From 1990
until February 1998, Mr. Goodwin was a Managing Director at Gleacher Natwest,
Inc., an investment banking company.
Nathaniel P.Z.J. Rothschild, 28, has been Executive Vice President of
Atticus Capital, L.L.C. since January 1999. From April of 1997 to January of
1999, Mr. Rothschild was a Vice President at Atticus Management (Bermuda) Ltd.
From July 1995 to April 1997 Mr. Rothschild was a Financial Analyst with
Gleacher & Co. and prior to that time he was a Financial Analyst with Lazard
Brothers & Co. Ltd. in London.
Alan D. Schwartz, 49, has served as a director of the Company or its
predecessors since September 1988 and served as a director of Fuddruckers, Inc.
from September 1984 until its merger with DAKA in 1988. Mr. Schwartz is Senior
Managing Director--Corporate Finance of Bear, Stearns & Co., Inc., and a
director of its parent, The Bear Stearns Companies, Inc. He has been associated
with such investment banking firm for more than five years. Mr. Schwartz is also
a director of Young & Rubicam, Inc., Atwood Richards, Inc., St. Vincent's
Services, the American Foundation for AIDS Research, the New York Blood Center
and NYU Medical Center and a member of the Board of Visitors of the Fuqua School
of Business at Duke University.
Meetings and Committees
The Board of Directors of the Company has a Compensation Committee, a
Nominating Committee and an Audit Committee. During the fiscal year 1999, the
Board of Directors held 19 meetings and the Compensation Committee held three
meetings. The Nominating and Audit Committees did not meet separately, as their
duties were performed by the full Board of Directors. Each director attended 75%
or more of the aggregate of (a) the total number of meetings of the Board of
Directors during fiscal year 1999, and (b) the total number of meetings held by
all committees of the Board of Directors on which such director served during
fiscal year 1999.
The Audit Committee has the responsibility of selecting the Company's
independent auditors and communicating with the Company's independent auditors
on matters of auditing and accounting. The Audit Committee is currently composed
of Mr. Barakett, Mr. Goodwin and Mr. Rothschild.
The Compensation Committee has the responsibility of reviewing on an
annual basis all officer and employee compensation. The Compensation Committee
is currently composed of Mr. Barakett, Mr. Goodwin, Mr. Rothschild and Mr.
Schwartz. The Compensation Committee also acts as the Stock Option Committee,
and has the responsibility of administering the Company's 1997 Stock Option and
Incentive Plan and the 1997 Stock Purchase Plan.
Directors' Compensation
In fiscal year 1999, non-employee directors received a quarterly
retainer of $3,000 and a fee of $1,000 per meeting attended, plus travel
expenses. Effective for fiscal year 2000, the directors' compensation has been
revised. Directors will not receive any cash compensation for their service on
the Board of Directors or committees other than reimbursement of expenses.
Instead, while serving on the Board of Directors each director will receive an
annual grant of options to acquire 5,000 shares of Common Stock at an exercise
price at least equal to the fair market value of the Common Stock as of the date
of grant.
<PAGE>
EXECUTIVE COMPENSATION
The following table provides information as to compensation paid by the
Company for fiscal years 1997, 1998 and 1999 to the Chief Executive Officer and
the four other most highly compensated executive officers whose total salary and
bonus for fiscal year 1999 exceeded $100,000 (the "Named Executives").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Awards
Name and Compensation Other Annual Options/ All Other
Principal Position Year Salary Bonus Compensation SARs(1) Compensation
------------------ ---- ------ ----- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
William H. Baumhauer(2)...... 1999 $58,950 $ 0 0(3) $ 0(3)
Chairman, President and 1998 $450,500 $175,000(4) 250,000 $675,000(5)
Chief Executive Officer 1997 $449,869 $ 0 $265,014(6)
Donald C. Moore(7)........... 1999 $250,000 $ 0 35,000
Chief Executive Officer 1998 $187,981 $ 80,000 35,000
1997 $ 70,673 $ 30,000 $40,820(8)
K.C. Moylan(9)............... 1999 $240,000 $ 0 20,000
1998 $200,000 $ 80,000 $31,700(10) 50,000
1997 $163,130 $ 50,000
Donna L. Depoian............. 1999 $120,000 $ 0 20,000 $120,000(11)
Vice President, General 1998 $ 80,000 $ 35,000
Counsel and Secretary 1997 $ 76,000 $ 0
Cynthia S. Randall........... 1999 $ 110,000 $ 0 5,000
Director of Human Resources 1998 $ 90,000 $ 11,000
1997 $ 76,800 $ 9,000
</TABLE>
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(1) Represents the number of options to acquire Common Stock granted during
the applicable fiscal year.
(2) Mr. Baumhauer resigned as President and Chief Executive Officer of the
Company in June 1998 and returned to the Company as President and Chief
Executive Officer effective June 24, 1999. He was elected a director of
the Company and appointed Chairman of the Board of Directors in August
1999.
(3) Does not include the extension until June 30, 1999, upon Mr.
Baumhauer's resignation from the Company in July 1998, of the
termination date of options to acquire 437,000 shares of Common Stock
at exercise prices ranging from $1.21 per share to $6.31 per share
(including options to acquire 187,500 shares of Common Stock at an
exercise price of $6.31 per share which were not vested at the time of
Mr. Baumhauer's resignation from the Company on July 24, 1998 and which
would have terminated on such date unless exercised). The termination
date of these options was further extended until June 30, 2001 upon Mr.
Baumhauer's return to the Company on June 24, 1999. The Company
recorded $1,243,000 of non-cash compensation expense in fiscal year
1999 on account of these modifications to employee stock options.
(4) Represents a bonus for fiscal year 1998 made conditional and paid upon
the consummation of the sale of Fuddruckers awarded to Mr. Baumhauer in
consideration of his contribution to the turnaround of the Fuddruckers
business, his role in positioning Fuddruckers for sale, and his
commitment to cooperate with the Company in satisfying various
pre-closing covenants and conditions.
(5) Represents a cash payment made to Mr. Baumhauer upon the consummation
of the sale of Fuddruckers pursuant to separation arrangements in July
1998, in part in consideration of his contribution to the Fuddruckers
business during fiscal year 1998 and his commitment to cooperate with
the Company in completing the sale of Fuddruckers during fiscal year
1999 and in part in consideration of the fact that the sale of
Fuddruckers would have allowed Mr. Baumhauer to terminate his
employment agreement with the Company for "good reason", thereby
becoming entitled to termination benefits equal to his base salary of
$450,500 per year for a period of three years, if he had resigned after
the date of consummation of the sale.
<PAGE>
(6) Represents amounts earned under Mr. Baumhauer's long term incentive
plan, which vested during fiscal year 1997. In connection with the
Spin-off Transaction, the Board of Directors determined to pay amounts
due to Mr. Baumhauer pursuant to his long term incentive plan through
the issuance of Common Stock of the Company rather than in cash. On
July 23, 1997 the Company issued to Mr. Baumhauer 37,973 shares of
Common Stock, having a value of $265,014 based on the average closing
price of the Company's Common Stock during the period from July 21,
1997 through July 23, 1997.
(7) Mr. Moore served as Chief Executive Officer and Chief Financial Officer
of the Company from July 1998 through June 1999. As of July 1999 Mr.
Moore was no longer employed by the Company.
(8) Represents reimbursed relocation expenses.
(9) Mr. Moylan served as President and Chief Executive Officer of the
Company's Champps Entertainment, Inc. subsidiary during fiscal years
1998 and 1999. As of August 1999 Mr. Moylan was no longer employed by
the Company.
(10) Represents amounts paid in connection with the repurchase of stock
options.
(11) Represents a cash payment made to Ms. Depoian upon the consummation of
the sale of Fuddruckers in consideration of her in role in completing
the sale.
Option Grants in Fiscal Year 1999
The following table provides certain information with respect to stock
options granted by the Company during fiscal year 1999 to the Chief Executive
Officer and the Named Executives, all of which became fully vested upon the
consummation of the sale of Fuddruckers.
<TABLE>
<CAPTION>
% of
Total Options
Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year Per Share Date Grant Date Valuation
---- ------- ----------- --------- ---- --------------------
<S> <C> <C> <C> <C> <C>
William H. Baumhauer 0(1)
Donald C. Moore 35,000 22.65% $6.50 8/12/08 $49,457(2)
Kevin C. Moylan 20,000 12.94% $6.50 8/12/08 $28,261(2)
Donna L. Depoian 20,000 12.94% $6.50 8/12/08 $28,261(2)
Cynthia S. Randall 5,000 3.23% $5.12 9/02/08 $ 5,188(3)
</TABLE>
- --------------------
(1) Does not include options to acquire 437,000 shares of Common Stock at
exercise prices ranging from $1.21 per share to $6.31 per share
(including options to acquire 187,500 shares of Common Stock at an
exercise price of $6.31 per share which were not vested at the time of
Mr. Baumhauer's resignation from the Company on July 24, 1998, which
would have terminated on such date unless exercised and which became
immediately vested) the termination date of which was extended until June
30, 1999 upon Mr. Baumhauer's resignation from the Company in July 1998.
The termination date of these options was further extended until June 30,
2001 upon Mr. Baumhauer's return to the Company in June 1999. The Company
recorded $1,243,000 of non-cash compensation expense in fiscal year 1999
on account of these modifications to employee stock options.
(2) Calculated using the binomial pricing model. The assumptions used in
determining the present value of these options using this methodology are
as follows: option term of 10 years; risk-free rate of 5.72%; .3728
volatility over the course of a year; closing price of Common Stock on
date of grant of $6.50; and a 0% reduction factor for the risk of
forfeiture due to vesting restrictions. The actual value, if any, that an
executive officer may realize will depend on the continued employment of
the executive officer holding the option through its vesting period, and
the excess of the market price over the exercise price on the date the
option is exercised so that there is no assurance that the value realized
by an executive officer will be at or near the value estimated by the
binomial pricing model, which is based on assumptions as to the variables
of stock price volatility, future dividend yield, interest rates, etc.
<PAGE>
(3) Calculated using the binomial pricing model. The assumptions used in
determining the present value of these options using this methodology are
as follows: option term of 10 years; risk-free rate of 5.72%; .4122
volatility over the course of a year; closing price of Common Stock on
date of grant of $5.12; and a 0% reduction factor for the risk of
forfeiture due to vesting restrictions. The actual value, if any, that an
executive officer may realize will depend on the continued employment of
the executive officer holding the option through its vesting period, and
the excess of the market price over the exercise price on the date the
option is exercised so that there is no assurance that the value realized
by an executive officer will be at or near the value estimated by the
binomial pricing model, which is based on assumptions as to the variables
of stock price volatility, future dividend yield, interest rates, etc.
Aggregate Option Exercises in Fiscal Year 1999
and Year-End Option Values
Neither the Chief Executive Officer nor any of the Named Executives
exercised any of their stock options during fiscal year 1999. The following
table sets forth the number of shares of Common Stock covered by the stock
options held by the Chief Executive Officer and the Named Executives as of the
end of fiscal year 1999. The value of unexercised in-the-money options is based
on the closing price of the Common Stock as reported by Nasdaq on June 25, 1999
minus the exercise price, multiplied by the number of shares underlying the
options.
<TABLE>
<CAPTION>
Value of Outstanding
Shares Number of Beneficial In-the-Money options
Acquired Value Options at Fiscal Year-End at Fiscal Year-End(1)
Name On Exercise Realized Exercisable Unexercisable ExercisableUnexercisable
---- ----------- -------- ------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
William H. Baumhauer 0 $0 437,000 750,000(1) $319,640 $0
Donald C. Moore 0 $0 100,000 0 $0 $0
K.C. Moylan 0 $0 70,000 0 $0 $0
Donna L. Depoian 0 $0 21,300 0 $0 $0
Cynthia S. Randall 0 $0 10,000 0 $0 $0
</TABLE>
- --------------------
(1) Granted effective July 1, 1999.
Employment and Termination Agreements
William H. Baumhauer Employment Agreement.
On June 24, 1999 the Company entered into a two-year employment
contract with Mr. Baumhauer. The agreement provides for a base salary of
$400,000 per year. The agreement further provides that, in the event the Company
terminates Mr. Baumhauer's employment without "Cause" (as defined below) or Mr.
Baumhauer terminates his employment for "Good Reason" (as defined below), the
Company shall continue to pay Mr. Baumhauer's base salary through the term of
the agreement as described above. "Good Reason" is defined as: (i) any
assignment to Mr. Baumhauer of any duties other than those contemplated by or
any limitation of the powers of Mr. Baumhauer in any respect not contemplated by
the agreement; (ii) removal of Mr. Baumhauer from or failure to re-elect or
elect Mr. Baumhauer to the positions of President and Chief Executive Officer of
the Company except in connection with termination of employee's employment for
cause or (iii) a reduction in Mr. Baumhauer's rate of compensation. "Cause" is
defined as: (i) theft or fraud from the Company; (ii) Mr. Baumhauer's conviction
of or pleading guilty or no contest to a felony; (iii) violation of terms and
conditions of his employment; (iv) his willful disregard or neglect in the
duties required to be performed under the agreement or (v) his willful and
demonstrated unwillingness to prosecute and perform such duties to the extent
deemed reasonably necessary and advisable and which duties encompass the duties
reasonably required of a President and Chief Executive Officer of a restaurant
company. The agreement grants Mr. Baumhauer certain rights in the event of a
sale of the Company which would cause a termination of his employment. These
rights include a payment on account of Mr. Baumhauer's stock options if the
amount of salary paid to him plus gross proceeds received by him, net of any
cash exercise price paid, upon the exercise or other disposition of stock
options is less than $1,200,000. Mr. Baumhauer was granted, pursuant to the
agreement, options to acquire 750,000 shares of Common Stock at an exercise
price of $4.00 per share, which will vest in December 2000 or earlier if Mr.
Baumhauer's employment is terminated by the Company without Cause or by Mr.
Baumhauer with Good Reason, or if the Company is sold. In addition, all stock
options held by Mr. Baumhauer and fully vested as of June 24, 1999 were extended
until June 30, 2001.
<PAGE>
Donna L. Depoian Employment Agreement.
Effective as of February 26, 1999, the Company entered into an
employment agreement with Donna L. Depoian to serve as Vice President, General
Counsel and Secretary of the Company. The agreement provides for an initial term
of one year and for successive one-year renewals thereafter. Under the
agreement, Ms. Depoian receives an annual base salary of $120,000, subject to
adjustment at the discretion of the Board of Directors. The agreement further
provides that, in the event the Company terminates Ms. Depoian's employment
without "Cause" (as defined below) or Ms. Depoian terminates her employment
for"Good Reason" (as defined below), the Company shall pay Ms. Depoian an amount
equal to Ms. Depoian's cash compensation for one year. "Good Reason" is defined
in the agreement as: (i) an assignment to Ms. Depoian of duties other than those
contemplated by the agreement, or a limitation on the powers of Ms. Depoian not
contemplated by the agreement; (ii) the removal of Ms. Depoian from or failure
to elect Ms. Depoian to her named position, including the position of Vice
President, General Counsel and Secretary of the Company or (iii) a reduction in
Ms. Depoian's rate of compensation or level of fringe benefits. "Cause" is
defined in the agreement as: Ms. Depoian's (i) theft from or fraud on the
Company; (ii) conviction of a felony or crime of moral turpitude; (iii) willful
violation of the terms of the agreement; (iv) conscious disregard or neglect of
her duties or (v) willful and demonstrated unwillingness to perform her duties
under the agreement.
Donald C. Moore Termination Agreement
On July 21, 1999 Donald C. Moore entered into a Termination Agreement
and General Release (the "Termination Agreement"). The Termination Agreement
provides that Mr. Moore will be paid $500,000 in liquidated damages over a
two-year period. In August 1999, the Company paid Mr. Moore a $50,000 advance
toward future liquidated damages payments. With respect to Mr. Moore's options
to acquire 100,000 shares of Common Stock of the Company, the period during
which all unexercised and unexpired options may be exercised was extended until
July 21, 2001. The Termination Agreement provided for a mutual release from Mr.
Moore and the Company from any actions, suits, debts, demands, or claims. Mr.
Moore was party to an employment agreement with the Company dated August 12,
1999. The agreement provided for an initial term of one year. Under the
agreement, Mr. Moore received an annual base salary of $250,000, subject to
adjustment at the discretion of the Board of Directors. The agreement further
provided that, in the event the Company terminated Mr. Moore's employment
without "Cause" (as defined below) or Mr. Moore terminated his employment for
"Good Reason" (as defined below), the Company would pay Mr. Moore an amount
equal to Mr. Moore's cash compensation for two years. "Good Reason" was defined
in the agreement as (i) an assignment to Mr. Moore of duties other than those
contemplated by the agreement, or a limitation on the powers of Mr. Moore not
contemplated by the agreement, (ii) the removal of Mr. Moore from or failure to
elect Mr. Moore to his named position, including the position of Chief Executive
Officer of the Company, or (iii) a reduction in Mr. Moore's rate of compensation
or level of fringe benefits. "Cause" was defined in the agreement as Mr. Moore's
(i) theft from or fraud on the Company, (ii) conviction of a felony or crime of
moral turpitude, (iii) willful violation of the terms of the agreement, (iv)
conscious disregard or neglect of his duties, or (v) willful and demonstrated
unwillingness to perform his duties under the agreement.
Kevin C. Moylan Termination Agreement
On August 31, 1999, Mr. Moylan resigned as President and Chief
Executive Officer of the Company's Champps Entertainment, Inc. subsidiary and
received a termination payment of $87,692 (including unpaid vacation) in cash.
Mr. Moylan was party to an employment agreement with the Company dated November
17, 1998, as amended as of July 27, 1999. The agreement provided for an initial
term of one year. Under the agreement, Mr. Moylan received an annual base salary
of $240,000, subject to adjustment at the discretion of the Board of Directors.
The agreement further provided that, in the event the Company terminated Mr.
Moylan's employment without "Cause" (as defined below) or Mr. Moylan terminated
this employment for "Good Reason" (as defined below), the Company would pay Mr.
Moylan an amount equal to Mr. Moylan's cash compensation for one year. "Good
Reason" was defined in the agreement as (i) an assignment to Mr. Moylan of
duties other than those contemplated by the agreement, or a limitation on the
powers of Mr. Moylan not contemplated by the agreement, (ii) the removal of Mr.
Moylan from or failure to elect Mr. Moylan to his named position, including the
position of Chief Executive Officer of Champps, or (iii) a reduction in Mr.
Moylan's rate of compensation or level of fringe benefits. "Cause" was defined
<PAGE>
in the agreement as Mr. Moylan's (i) theft from or fraud on the Company, (ii)
conviction of a felony or crime of moral turpitude, (iii) willful violation of
the terms of the agreement, (iv) conscious disregard or neglect of his duties,
or (v) willful an demonstrated unwillingness to perform his duties under the
agreement. The employment agreement further provided that in the event the
Company completed a sale of itself or Champps (or a transaction with similar
effect), the Company would pay Mr. Moylan upon the closing of such sale or
transaction a lump sum amount equal to his base salary in effect at the time of
the sale.
Indemnification Agreements
The Company has entered into Indemnification Agreements with certain of
the executive officers of the Company and members of the Board who are not
officers of the Company (the "Indemnitees"), pursuant to which the Company has
agreed to advance expenses and indemnify such Indemnitees against certain
liabilities incurred in connection with their services as executive officers
and/or directors of the Company and in connection with their services as
executive officers and/or directors of DAKA prior to the completion of the
Spin-Off Transaction. In the event of a proceeding brought against an Indemnitee
by or in the right of DAKA or the Company, such Indemnitee shall not be entitled
to indemnification if such Indemnitee is adjudged to be liable to DAKA or the
Company, as the case may be, or if applicable law prohibits such
indemnification; provided, however, that, if applicable law so permits,
indemnification shall nevertheless be made by the Company in such event if, and
only to the extent that, the Court of Chancery of the State of Delaware, or
another court in which such proceeding shall have been brought or is pending,
shall determine.
Under the terms of each Indemnification Agreement, the Company shall
advance all reasonable expenses incurred by or on behalf of such Indemnitee in
connection with any proceeding in which such Indemnitee is involved by reason of
Indemnitee's service to the Company or by reason of Indemnitee's service to DAKA
prior to the completion of the Spin-Off Transaction. Such statement shall
include, among other things, an undertaking by or on behalf of such Indemnitee
to repay any expenses so advanced if it shall be ultimately determined that such
Indemnitee is not entitled to indemnification for such expenses.
Compensation Committee Report
The Compensation Committee reviews and approves compensation levels for
the Company's executive officers and oversees and administers the Company's
executive compensation programs. All members of the Compensation Committee,
listed at the end of this report, are outside directors who are not eligible to
participate in the compensation programs that the Compensation Committee
oversees except for non-discretionary option grants. See "--Directors'
Compensation."
Philosophy. The Compensation Committee believes that the interests of
the Company's stockholders are best served when compensation is directly aligned
with the Company's financial performance. Therefore, the Compensation Committee
has approved overall compensation programs which award a competitive base
salary, and then encourage exceptional performance through meaningful incentive
awards, both short and long term, which are tied to the Company's performance.
Responsibilities. The responsibilities of the Compensation Committee include:
- developing compensation programs that are consistent with and are
linked to the Company's strategy;
- assessing the performance of and determining an appropriate
compensation package for the Chief Executive Officer; and
- ensuring that compensation for the other executive officers reflects
individual, team, and the Company's performance appropriately.
<PAGE>
Purpose. The Company's executive compensation programs are designed to:
- attract, retain, and motivate key executive officers;
- link the interests of executive officers with stockholders by
encouraging stock ownership;
- support the Company's goal of providing superior value to its
stockholders and customers; and
- provide appropriate incentives for executive officers, based on
achieving key operating and organizational goals.
The Compensation Committee believes that the Company's executive
compensation policies should be reviewed during the first quarter of the fiscal
year when the financial results of the prior fiscal year become available. The
policies should be reviewed in light of their consistency with the Company's
financial performance, its business plan and its position within the restaurant
industry, as well as the compensation policies of similar companies in the
restaurant business. The compensation of individual executives is reviewed
annually by the Compensation Committee in light of its executive compensation
policies for that year.
In setting and reviewing compensation for the executive officers, the
Compensation Committee considers a number of different factors designed to
assure that compensation levels are properly aligned with the Company's business
strategy, corporate culture and operating performance. Among the factors
considered are the following:
Comparability -- The Compensation Committee considers the
compensation packages of similarly situated executives at companies
deemed comparable to the Company. The objective is to maintain
competitiveness in the marketplace in order to attract and retain the
highest quality executives. This is a principal factor in setting base
levels of compensation.
Pay for Performance -- The Compensation Committee believes
that compensation should in part be directly linked to operating
performance. To achieve this link with regard to short-term
performance, the Compensation Committee relies on cash bonuses which
are determined on the basis of certain objective criteria and
recommendations of the Chief Executive Officer.
Equity Ownership -- The Compensation Committee believes that
equity-based, long-term compensation aligns executives' long-range
interests with those of the stockholders. These long-term incentive
programs are reflected in the Company's stock option plans. The
Compensation Committee believes that significant stock ownership is a
major incentive in building stockholder value and reviews grants of
options with that goal in mind.
Qualitative Factors -- The Compensation Committee believes
that in addition to corporate performance and specific business unit
performance, in setting and reviewing executive compensation it is
appropriate to consider the personal contributions that a particular
individual may make to the overall success of the Company. Such
qualitative factors as leadership skills, planning initiatives and
employee development have been deemed to be important qualitative
factors to take into account in considering levels of compensation.
Annual Cash Compensation. Annual cash compensation for the executive
officers consists of a base salary and a variable, at-risk incentive bonus under
the Company's Management Annual Incentive Plan.
<PAGE>
It is the Company's general policy to pay competitive base compensation
to its executive officers. The Compensation Committee annually reviews and, if
appropriate, adjusts executive officers' base salaries. In making individual
base salary recommendations, the Compensation Committee considers the
executive's experience, management and leadership ability and technical skills,
his or her compensation history, as well as the performance of the Company as a
whole and, where applicable, the performance of specific business units.
Under the Management Annual Incentive Plan, each executive is assigned
a target incentive award. This incentive award, or some portion thereof, is
awarded by the Compensation Committee in its discretion based on its assessment
of a combination of four factors: the Company's overall performance, business
unit performance, attainment of predetermined individual goals, and the level of
personal/leadership impact. This evaluation process is not strictly
quantitative, but is largely based on qualitative judgments made by the Chief
Executive Officer, with the concurrence of the Compensation Committee, related
to individual, team, and the Company's performance.
Chief Executive Officer Compensation. Upon the departure of Mr.
Baumhauer on July 24, 1998, the Board of Directors determined that Mr. Moore was
the logical choice to serve as the Company's acting Chief Executive Officer
while the Company pursued the sale of Fuddruckers and tackled issues concerning
its strategic direction. Upon the appointment of Mr. Moore as acting Chief
Executive Officer, his salary was adjusted commensurate with his new
responsibilities, while he also continued to perform the duties of Chief
Financial Officer. At the recommendation of the Compensation Committee, the
Company entered into an employment contract with Mr. Moore on terms comparable
to those of his predecessor, as disclosed elsewhere in this Proxy Statement, to
ensure that his services as an executive knowledgeable of the operations and
affairs of the Company continued to be available to the Company during a period
of uncertainty and transition. For fiscal year 1999 Mr. Moore participated in
the compensation programs outlined above. As disclosed elsewhere in this Proxy
Statement, on July 21, 1999 Mr. Moore entered into a Termination Agreement and
General Release with the Company.
At the time of his departure in July 1998, Mr. Baumhauer was employed
by the Company as Chairman of the Board of Directors and Chief Executive Officer
under the terms of an employment contract and, upon the recommendation of the
Compensation Committee, entered into separation arrangements with the Company,
as disclosed elsewhere in this Proxy Statement. For fiscal year 1999 Mr.
Baumhauer did not participate in the compensation programs outlined above except
for the period prior to his departure. On June 24, 1999, Mr. Baumhauer returned
to the Company as President and Chief Executive Officer and in August 1999 was
elected as a director and was appointed Chairman of the Board of Directors. At
the recommendation of the Compensation Committee, the Company entered into a new
employment contract with Mr. Baumhauer, as disclosed elsewhere in this Proxy
Statement. The Compensation Committee believes that the terms of Mr. Baumhauer's
new employment contract are appropriate in light of the Company's strategic
direction following the sale of Fuddruckers, the Board of Directors' decision
that the Company would remain independent and pursue the growth of the Champps
Americana restaurant concept, and Mr. Baumhauer's experience and reputation in
the restaurant industry.
Compensation of Other Officers. The Company's executive compensation
program for other executive officers is described above, although the corporate
business unit and individual performance goals and the relative weighting of the
quantitative performance factors described above varies, depending upon the
responsibilities of particular officers.
Timothy R. Barakett
James Goodwin
Nathaniel P.Z.J. Rothschild
Alan D. Schwartz
<PAGE>
Compensation Committee Interlocks
Alan D. Schwartz, a director of the Company who is also a member of the
Compensation Committee, is Senior Managing Director-Corporate Finance of Bear
Stearns & Co., Inc. In the past Bear Stearns and its affiliates have provided
financial advisory and financing services to the Company and have received fees
and reimbursement of expenses for rendering such services. In particular, during
fiscal year 1999 Bear Stearns (i) received payment of an approximately $1.8
million fee earned in fiscal year 1997 in connection with its role as a
financial advisor to the Company with respect to the Spin-Off Transaction, which
had not been paid during fiscal year 1997, and (ii) was entitled to the
reimbursement of out of pocket expenses of approximately $50,000, which remain
payable, related to its role as financial advisor to the Company in connection
with evaluating and seeking financial and strategic alternatives, including a
possible sale of the Company.
Timothy R. Barakett and Nathaniel P.Z.J. Rothschild, two directors of
the Company who are also members of the Compensation Committee, are President
and Executive Vice President, respectively, of Atticus Capital, L.L.C. As
disclosed elsewhere in this Proxy Statement, Mr. Barakett may also be deemed the
beneficial owner of 1,908,506 shares of Common Stock, or approximately 16.4% of
all Common Stock outstanding. During fiscal year 1999 Atticus Capital, L.L.C.
and certain of its affiliates (collectively, "Atticus") conducted a proxy
contest regarding the Company's annual meeting of stockholders held on March 17,
1999, which proxy contest was settled by agreement between the Company and
Atticus on March 11, 1999. Under the terms of the settlement agreement, among
other things, Mr. Barakett and James Goodwin were appointed to the Board of
Directors as Class I directors to serve until the 2000 annual meeting of
stockholders and the Company paid certain of Atticus' expenses incurred in
connection with the solicitation of proxies in the amount of $150,000. Mr.
Goodwin is also a member of the Compensation Committee. In connection with Mr.
Goodwin's appointment to the Company's Board of Directors, Atticus Capital,
L.L.C. entered into an agreement with Mr. Goodwin which provides that Atticus
Capital, L.L.C. will pay to Mr. Goodwin an amount equal to five percent of the
proceeds above $4.875 per share of Common Stock realized by Atticus Partners,
L.P., Atticus Qualified Partners, L.P. and Atticus International, Ltd. upon the
sale or disposition of 1,577,056 shares of Common Stock beneficially owned by
them. In addition, Atticus Partners, L.P. agreed to indemnify Mr. Goodwin
against any and all losses, claims, liabilities and expenses in connection with
serving as a member of the Company's Board of Directors.
Joseph W. O'Donnell, who was a director of the Company and a member of
the Compensation Committee until his resignation in August 1999, is a principal
in Osgood, O'Donnell and Walsh, which has in the past provided marketing
consulting services to the Company and received fees for providing such
services. During fiscal year 1999, the Company paid Osgood, O'Donnell and Walsh
$30,000 for such services and related expenses. Mr. O'Donnell also owns a
controlling equity interest in PulseBack, Inc., a company engaged in providing
customer satisfaction measurement services to the restaurant industry to which
the Company paid $67,744 for services rendered during fiscal year 1999. The
Company owns a non-controlling equity interest in PulseBack, the value of which
was written down to zero by the Company before fiscal year 1999. During fiscal
year 1999 the Company wrote off a $75,000 note receivable from PulseBack.
PERFORMANCE GRAPH
[Performance Graph]
COMPANY/INDEX/MARKET 7/15/1997 6/26/1998 6/25/1999
Champps Entertainment Inc. 100.00 91.96 53.57
Customer Selected Stock List 100.00 98.34 82.41
Russell 3000 Index 100.00 119.44 142.18
Selected Index Group:
Avado Brands Inc.
Cheesecake Factory Inc.
Dave & Buster's Inc.
Landrys Seafood Rest Inc.
Rainforest Cafe Inc.
Rare Hospitality Int Inc.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers, directors and persons who own more
than 10% of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish copies to the Company.
Based upon a review of the reports furnished to the Company and
representations made to the Company by its officers and directors, the Company
believes that, during fiscal year 1999, its officers, directors and its 10%
beneficial owners, other than Messrs. Baumhauer, Moore, Moylan, Cox, O'Donnell
and Schwartz and Mmes. Depoian and Randall, complied with all applicable
reporting requirements.
AUDITORS
The Board of Directors appointed the firm of Deloitte & Touche LLP as
auditors of the Company for fiscal year 1999. Representatives of Deloitte &
Touche LLP are expected to be present at the Annual Meeting and will have an
opportunity to make a statement if they desire to do so, and they will be
available to respond to appropriate questions.
EXPENSE OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In
addition, the Company will reimburse its transfer agent for charges and expenses
in connection with the distribution of proxy materials to brokers or other
persons holding stock in their names or in the names of their nominees and for
charges and expenses in forwarding proxies and proxy materials to the beneficial
owners. Solicitations may further be made by officers and regular employees of
the Company, without additional compensation, by use of the mails, personal
interview, telephone or telegraph.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals intended to be presented at the next annual
meeting of stockholders must be received by the Company no later than July 13,
2000 in order to be considered for inclusion in the Company's proxy statement.
Such a proposal must also comply with the requirements as to form and substance
established by the SEC in order to be included in the proxy statement and should
be directed to: the Secretary of the Company at the principal executive offices
of the Company located at One Corporate Place, 55 Ferncroft Road, Danvers,
Massachusetts 01923-4001.
<PAGE>
Stockholder proposals to be presented at the next annual meeting of
stockholders other than proposals to be considered for inclusion in the
Company's proxy statement described above, must comply with the requirements set
forth in the Company's By-laws. The Company's By-laws provided that any
stockholder of record wishing to have such a stockholder proposal considered at
an annual meeting must provide written notice of such proposal and appropriate
supporting documentation, as set forth in the By-laws of the Company at its
principal executive office not less than 75 days nor more than 120 days prior to
the anniversary date of the immediately preceding annual meeting (the
"Anniversary Date"); provided, however, that in the event the annual meeting is
scheduled to be held on a date more than 30 days before or more than 60 days
after the Anniversary Date, notice must be so delivered not later than the close
of business on the later of (i) the 75th day prior to the scheduled date of such
annual meeting or (ii) the 15th day after public disclosure of the date of such
meeting. Proxies solicited by the Board of Directors may, under certain
circumstances prescribed in Rule 14a-4 of the Exchange Act, be voted in
accordance with the discretion of the proxy holders with respect to stockholder
proposals presented at the next annual meeting of stockholders (other than
proposals included in the Company's proxy statement).
OTHER MATTERS
The Board of Directors is not aware of any other matter to be presented
for action at the Annual Meeting; however, if any other matter is properly
presented it is the intention of the persons named in the enclosed form of proxy
to vote in accordance with their judgment on such matter.
THIS PROXY STATEMENT IS ACCOMPANIED BY THE COMPANY'S ANNUAL REPORT TO
STOCKHOLDERS FOR FISCAL YEAR 1999. ADDITIONAL INFORMATION IS CONTAINED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 27, 1999,
INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO. THE COMPANY WILL
FURNISH WITHOUT CHARGE TO ANY STOCKHOLDER A COPY OF ITS ANNUAL REPORT ON FORM
10-K UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, CHAMPPS ENTERTAINMENT, INC.,
ONE CORPORATE PLACE, 55 FERNCROFT ROAD, DANVERS, MASSACHUSETTS 01923-4001.
DONNA L. DEPOIAN
Secretary
November 8, 1999
