<PAGE> 1
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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
UNIQUE CASUAL RESTAURANTS, 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 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
UNIQUE CASUAL RESTAURANTS, INC.
ONE CORPORATE PLACE
55 FERNCROFT ROAD
DANVERS, MASSACHUSETTS
(978) 774-6606
January __, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Unique Casual Restaurants, Inc. (the "Company") to be held on Monday, March
1, 1999 at 10:00 a.m., local time (the "Annual Meeting") at the Tara Hotel, 50
Ferncroft Road, Danvers, Massachusetts.
The Annual Meeting has been called for the purpose of electing two
Class II Directors each for a three-year term and considering and voting upon
such other business as may properly come before the meeting or any adjournments
or postponements thereof. The Board of Directors of the Company recommends that
you vote "FOR" the re-election of the nominees of your Board of Directors,
Erline Belton and Joseph W. O'Donnell.
CAUTION
As more fully described in the enclosed proxy statement, one
stockholder of the Company has nominated its own candidates for election as
Directors of the Company. This stockholder, Atticus Partners, L.P. ("Atticus"),
has filed preliminary proxy materials with the Securities and Exchange
Commission, indicating that it is soliciting proxies for election to the Board
of Directors of its nominees.
Over the past two years your Board of Directors has accomplished
important results, including the sale of the Company's foodservice division,
which returned to shareholders $7.50 per share net in cash and achieved a
drastic reduction in leverage, and the sale of Fuddruckers for $43 million
(before certain adjustments and escrows). As previously reported, your Board of
Directors is actively continuing with its financial advisor the process of
evaluating strategic alternatives to maximize stockholder value and as part of
this process has solicited offers for the sale of the Company. The Board of
Directors believes that it has acted in the best interests of the stockholders
and will continue to do so. Your Board of Directors believes that the
replacement of two experienced Directors, who have been significant participants
in the Company's recent transactions and evaluation of strategic alternatives,
would have a disruptive effect on this ongoing process. Moreover, if the Company
is not sold, your Board of Directors believes that a divided Board will
adversely impact management's ability to carry out a strategy to operate and
grow the Company's business. Accordingly, the Board of Directors recommends that
you reject the Atticus nominees and that you vote "FOR" the election of Erline
Belton and Joseph W. O'Donnell, the two nominees of your Board of Directors, as
Directors of the Company.
On behalf of your Board of Directors, your continued interest and
support are greatly appreciated.
Very truly yours,
Donald C. Moore
Chief Executive Officer
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND PROMPTLY MAIL THE ENCLOSED WHITE PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
<PAGE> 3
UNIQUE CASUAL RESTAURANTS, INC.
ONE CORPORATE PLACE
55 FERNCROFT ROAD
DANVERS, MASSACHUSETTS
(978) 774-6606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 1, 1999
The Annual Meeting of Stockholders of Unique Casual Restaurants, Inc.
(the "Company") will be held at the Tara Hotel, 50 Ferncroft Road, Danvers,
Massachusetts on Monday, March 1, 1999, at 10:00 a.m., local time, for the
following purposes:
1. To elect two Class II Directors of the Company; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof, including, if
presented, a proposed stockholder resolution concerning a sale
of the Company.
Only stockholders of record at the close of business on ________ __,
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 [color] 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
JANUARY __, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED [COLOR] PROXY CARD IN THE
ENCLOSED RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD. IF YOU HAVE ANY QUESTIONS,
PLEASE CALL MACKENZIE PARTNERS, INC., WHICH IS ASSISTING US, TOLL FREE AT
[_________].
<PAGE> 4
UNIQUE CASUAL RESTAURANTS, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY __, 1999
The enclosed proxy is solicited by the Board of Directors of Unique
Casual Restaurants, Inc., a Delaware corporation (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 Tara Hotel, 50 Ferncroft Road, Danvers,
Massachusetts on Monday, March 1, 1999 at 10:00 a.m., local time, and at any
adjournment thereof (the "annual Meeting). This Proxy Statement and the
enclosed Form of Proxy will be mailed to the Company's stockholders on or about
January __, 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.
RECENT TRANSACTIONS AND CURRENT INITIATIVES
OVERVIEW
Unique Casual Restaurants, Inc., a Delaware corporation, operates
upscale sports-theme Champps Americana restaurants through owned and franchised
stores. In addition, the Company owns a 17% passive interest in La Salsa, a
privately held restaurant company based in California, and a 50% interest in
Restaurant Consulting Services, Inc., a diversified consulting and technology
company offering data processing, strategic planning and other technology
services on an outsource basis to customers in the restaurant industry. The
Company was formed on May 27, 1997 through a spin-off to the holders of the
common stock of DAKA International, Inc. ("DAKA") in July 1997 (the "Spin-off
Transaction").
Prior to the recently completed sale of the Company's Fuddruckers
operations, the Company also operated Fuddruckers restaurants, which serve
customers in casual restaurant settings. On November 24, 1998, the Company
completed the sale of its Fuddruckers business to King Cannon, Inc. in a
transaction approved by the Company's shareholders at a Special Meeting of
Shareholders held on November 5, 1998.
RECENT TRANSACTIONS AND EVALUATION OF STRATEGIC ALTERNATIVES
Over the past two years your Board of Directors has undertaken, and
successfully completed, a series of strategic initiatives in the single-minded
pursuit of the best interests of the Company's shareholders.
- First, your Board of Directors and the Company's management
executed a very complex and challenging transaction whereby the
foodservice segment of the Company's predecessor, DAKA, was sold
to a strategic buyer, Compass Group PLC, and DAKA's restaurant
businesses, were spun off to shareholders (the "Spin-off
Transaction"). The Spin-off transaction, completed in July 1997,
eliminated substantially all of the Company's debt to banks,
and returned to shareholders $7.50 per share net in cash, in
addition to their continuing equity interest in the Company.
- Second, starting in May 1998, the Board and the Company's
management pursued a sale of Fuddruckers to an entity controlled
by Michael R. Cannon for $43 million in cash. The structuring,
negotiation and completion of the sale of Fuddruckers spanned a
six-month period, including some very turbulent market
conditions. Ultimately, on November 24, 1998, the sale of
Fuddruckers was completed. As reported by the Company, the sale
price was $43 million in cash, before adjustments. At the
closing the Company disbursed approximately $2.5 million to
escrow agents to be held pending resolution of certain
contingent obligations. The Company incurred approximately $10.4
million in costs associated with settling obligations not
assumed by the buyer, including early termination of leases,
landlord consents to the transaction, litigation settlements,
and legal, accounting and severance expenses. An additional $5.5
million was used to settle the Company's obligations under a
put/call agreement which was originally due to be paid in
January 2000. The Company received approximately $535,000 from
the buyer as reimbursement for working capital at the closing
date and expects to receive an additional approximate amount of
$2.6 million in previously restricted cash balances to be
released by virtue of the Company's settling certain of the
obligations discussed above. The Company also received and
recorded assets held for sale valued at approximately $1.6
million.
- Third, on September 24, 1998, the Company announced the
retention of Bear Stearns & Co., Inc. ("Bear Stearns') to assist
your Board of Directors in seeking and evaluating strategic
alternatives, including a sale of the Company. Beginning in
October, 1998, the Company and Bear Stearns sought indications
of interest from third parties, including competitors in the
casual restaurant industry and financial investors, for an
acquisition of the Company, which now consists principally of
the Champps Americana restaurants. Standard confidentiality
agreements were signed with fifteen third parties, each of whom
received a confidential offering memorandum and an invitation to
submit preliminary indications of interest to the Company. As a
result of this process, the Company received several indications
of interest from prospective purchasers, whose names the Company
is prohibited from disclosing under the terms of confidentiality
agreements. Shortly after receipt of preliminary indications of
interest, Bear Stearns notified those parties who had submitted
indications of interest that they would be provided with access
to senior management and properties of the Company, as well as
additional financial, operating and legal information to enable
them to formulate formal proposals. Certain prospective
purchasers have been supplied with proposed terms upon which the
Company would be willing to enter into a sale transaction and
have been asked to formulate and submit a formal proposal to the
Board of Directors of the Company. The process is continuing and
at this time your Board of Directors is not in a position to
disclose any additional details or to anticipate whether and
when the Company will enter into any binding agreement or the
process will be terminated.
Your Board of Directors is determined to seek the best
available price and most favorable terms for a sale of the
Company by continuing to pursue the sale process already begun by
the Company in accordance with the procedures outlined above. A
sale of the Company would likely involve a merger of the Company,
which would be subject to the approval of the holders of a
majority of the outstanding Common Stock of the Company entitled
to vote thereon, or a tender offer for all outstanding shares of
Common Stock of the Company conditioned upon acceptance by
holders of at least a majority of the outstanding Common Stock
of the Company. Final proposals will be evaluated by your Board
of Directors based on valuation and other terms, the financial
capability of the prospective purchaser, conditions to closing
and the prospective purchaser's ability to consummate a
transaction in a timely manner. If, in the exercise of its
fiduciary duties to all shareholders, your Board of Directors
does not accept the terms of any proposal, then the Company's
management will conduct a thorough operational and strategic
review of the Company to formulate medium and long term
strategies to grow the revenues and profitability of Champps
Americana.
Atticus has nominated its own candidates for election as
directors and is advocating a sale of the Company. Your Board of
Directors believes that the replacement of two experienced
Directors, who have been significant participants in the
Company's recent transactions and evaluation of strategic
alternatives, would have a disruptive effect on this ongoing
process. For these reasons, we strongly urge you to support your
Board of Directors and the Company's management and to oppose
Atticus' nominees. Moreover, if the Company is not sold, your
Board of Directors believes that a divided Board will adversely
impact management's ability to carry out a strategy to operate
and grow the Company's business.
<PAGE> 5
VOTING AND PROXIES
Only holders of shares of Common Stock of record at the close of
business on ________ __, 1999 are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. On such date, the Company had
outstanding __________ shares of Common Stock, each of which is entitled to one
vote on each matter properly submitted to a vote of stockholders at the Annual
Meeting.
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 capital
stock of the Company 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 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 nominees 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 nominees
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.
The Annual Report of the Company, including the financial statements
for the fiscal year ended June 28, 1998, is being mailed to stockholders of the
Company concurrently with this Proxy Statement. The Annual Report, however, is
not a part of the proxy solicitation material.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO SIGN, DATE AND PROMPTLY
MAIL THE ACCOMPANYING [COLOR] PROXY CARD IN THE ENCLOSED RETURN ENVELOPE. COMMON
STOCK REPRESENTED BY PROPERLY EXECUTED PROXIES RECEIVED BY THE COMPANY AND NOT
REVOKED WILL BE VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH THE INSTRUCTIONS
CONTAINED THEREIN. IF INSTRUCTIONS ARE NOT GIVEN THEREIN, PROPERLY EXECUTED
PROXIES WILL BE VOTED "FOR" THE ELECTION OF YOUR BOARD'S NOMINEES FOR DIRECTOR.
A STOCKHOLDER PROPOSAL CONCERNING A SALE OF THE COMPANY WILL ALSO BE PRESENTED
AT THE ANNUAL MEETING. WITH RESPECT TO THE STOCKHOLDER PROPOSAL AND ANY OTHER
MATTERS THAT MAY BE PRESENTED AT THE ANNUAL MEETING, PROXIES WILL BE VOTED IN
ACCORDANCE WITH THE DISCRETION OF THE PROXY HOLDERS.
2
<PAGE> 6
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
---------------- ------------ --------
<S> <C> <C>
Donald C. Moore(2)................................... 100,617(3) *
E.L. Cox(2).......................................... 14,880(4) *
Erline Belton (2).................................... 10,680(5) *
Alan D. Schwartz(2).................................. 14,880(6) *
Joseph W. O'Donnell (2).............................. 7,500(7) *
K.C. Moylan(2)....................................... 74,450(8) *
Timothy R. Barakett(9)............................... 1,908,506(10) 16.4
Douglas A. Hirsch(11)................................ 719,800(12) 6.2
Franklin Resources, Inc.(13)......................... 1,114,500(14) 9.6
Barrow, Hanley, Mewhinney & Strauss, Inc.(15)........ 579,600(16) 5.0
Atticus Management, Ltd.(17)......................... 820,200(18) 7.1
Atticus International, Ltd. (19)..................... 820,200(20) 7.1
All directors and executive officers
as a group (7 persons)............................. 245,196(21) 2.1
</TABLE>
- --------------------------
* Less than 1%
(1) Beneficial share ownership is determined pursuant to Rule 13d-3
promulgated under the Exchange Act. 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 December 1, 1998.
(2) The address of the beneficial owner is c/o Unique Casual Restaurants,
Inc., One Corporate Place, 55 Ferncroft Road, Danvers, Massachusetts
01923.
(3) Includes 100,000 shares of Common Stock issuable upon the exercise of
options.
(4) Includes 14,500 shares of Common Stock issuable upon the exercise of
options.
(5) Includes 10,000 shares of Common Stock issuable upon the exercise of
options.
(6) Includes 14,500 shares of Common Stock issuable upon the exercise of
options.
(7) Includes 7,500 shares of Common Stock issuable upon the exercise of
options.
(8) Includes 70,000 shares of Common Stock issuable upon the exercise of
options.
(9) The address of the beneficial owner is c/o Atticus Capital, L.L.C., 590
Madison Avenue, 32nd Floor, New York, NY 10022.
(10) This information is based on a Schedule 13D/A, dated September 1, 1998,
filed by Timothy R. Barakett with the SEC. 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 276,906
and 479,950 shares of Common Stock, respectively. Mr. Barakett is also
the President of Atticus Management, Ltd.,
3
<PAGE> 7
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 820,200 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 therefore 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.
(11) The address of the beneficial owner is c/o Seneca Capital Advisors LLC,
830 Third Avenue, 14th Floor, New York, NY 10022.
(12) 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.
(13) The address of the beneficial owner is 777 Mariners Island Blvd., 6th
Floor, San Mateo, CA 94404.
(14) This information is based on a Schedule 13G, dated February 11, 1998,
filed by Franklin Resources, Inc. with the SEC.
(15) The address of the beneficial owner is 3232 McKinney Avenue, 15th
Floor, Dallas, TX 75204-2429.
(16) This information is based on a Schedule 13G, dated February 13, 1997,
filed by Barrow, Hanley, Mewhinney and Strauss, Inc. with the SEC.
(17) The address of the beneficial owner is c/o Atticus Capital, L.L.C., 590
Madison Avenue, 32nd Floor, New York, NY 10022
(18) This information is based on a Schedule 13D/A, dated September 1, 1998,
filed by Atticus Management, Ltd. with the SEC. 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 276,906 and 479,950 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 820,200 shares of Common Stock. Mr.
Barakett is also the Managing Member of Atticus Capital, L.L.C, which
has investment discretion with respect to the Managed Accounts, which
collectively beneficially own 331,450 shares of Common Stock. Mr.
Barakett is therefore 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.
(19) The address of the beneficial owner is c/o Atticus Capital, L.L.C., 590
Madison Avenue, 32nd Floor, New York, New York 10022.
(20) This information is based on a Schedule 13D/A, dated September 1, 1998,
filed by Atticus International, Ltd. with the SEC. 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 276,906 and 479,950 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 820,200 shares of Common Stock. Mr.
Barakett is also the Managing Member of Atticus Capital, L.L.C, which
has investment discretion with respect to the Managed Accounts, which
collectively beneficially own 331,450 shares of Common Stock. Mr.
Barakett is therefore 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.
(21) Includes 237,800 shares of Common Stock issuable upon the exercise of
options.
4
<PAGE> 8
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. Two Class II directors will be elected at the Annual
Meeting to hold office for three years or until their respective successors are
elected and qualified. Two Class III directors and one Class I director who is
currently in office have one year and two years remaining in their respective
terms. Unless otherwise specified in the enclosed proxy, the persons named in
the enclosed proxy intend to vote the shares represented by each properly
executed proxy FOR the election of the nominees named below. The Board of
Directors has no reason to believe that either of the nominees will be unable to
serve if elected. In the event either or both of the nominees shall become
unavailable for election, the persons named in the enclosed proxy will vote such
shares for the election of such other person as the Board of Directors may
recommend.
NOMINEES FOR CLASS II DIRECTORS
The Board of Directors has nominated the following persons for election
as Class II directors for terms expiring in 2001:
Erline Belton
Joseph W. O'Donnell
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MS. BELTON
AND MR. O'DONNELL TO THE BOARD OF DIRECTORS.
For more detailed information regarding Ms. Belton and Mr. O'Donnell,
see "Directors and Committees--Incumbent Directors."
5
<PAGE> 9
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>
E. L. Cox................ 71 Chairman of the Board and September 1988 2000 I
Insurance Commissioner
for the State of Michigan
Erline Belton............ 55 President and Chief December 1993 1998* II
Executive Officer of
The Lyceum Group
Joseph W. O'Donnell...... 56 Partner, Osgood, August 1996 1998* II
O'Donnell & Walsh
Donald C. Moore.......... 44 Chief Executive Officer July 1998 1999 III
and Chief Financial Officer
of the Company
Alan D. Schwartz......... 48 Senior Managing Director September 1988 1999 III
of Corporate Finance for
Bear, Stearns & Co., Inc.
</TABLE>
- -----------------------
* Nominee for re-election at the Annual Meeting.
The name, age and principal occupation during the past five years and
other information concerning each non-employee director are set forth below:
E. L. Cox, 71, has served as a director of the Company since May 1997.
Prior to the Spin-off Transaction, Mr. Cox served as a director of DAKA since
September 1988 and as a director of Fuddruckers, Inc. from June 1988 until
November 1988. As of May of 1998 Mr. Cox is the Insurance Commissioner for the
State of Michigan. Prior thereto he worked as an insurance consultant from
August of 1996 until May of 1998, after serving as President and Chief Executive
Officer of the Michigan Accident Fund from February 1991 until August 1996.
Prior thereto Mr. Cox served as Chairman and Chief Executive Officer of Michigan
Mutual/Amerisure Companies and its affiliated insurance companies from May 1979
through January 1991. Mr. Cox is also a member of the Board of Directors of
Comerica, Inc., a publicly-traded financial institution, and a director of
various trade associations in the insurance industry.
Erline Belton, 55, has served as a director of the Company since May
1997. Prior to the Spin-off Transaction, Ms. Belton served as a director of DAKA
since December 1993. She has served as President and Chief Executive Officer of
The Lyceum Group, a human resource consulting firm, since September 1992. She
has served as a Director of Applebee's International, Inc. since August 1998.
She served as Senior Vice
6
<PAGE> 10
President of Human Resource and Organizational Development for Progressive
Insurance Companies from April 1991 through September 1992. She also served as
International Human Relations Director, as well as several other human resources
positions, with Digital Equipment Corporation from 1978 through April 1991. Ms.
Belton serves on the Board of Directors of: The National Leadership Coalition on
AIDS; National Minority AIDS Coalition; Museum of African American History.
Joseph W. O'Donnell, 56, has served as a director of the Company since
May 1997. Prior to the Spin- off Transaction, Mr. O'Donnell served as a director
of DAKA since August 1996. Mr. O'Donnell is a partner in the firm of Osgood,
O'Donnell & Walsh. Mr. O'Donnell has served as Chairman and Chief Executive
Officer of The J. Walter Thompson Company and Campbell-Mithun-Esty Advertising,
Inc.
Alan D. Schwartz, 48, has served as a director of the Company since May
1997. Prior to the Spin-off Transaction, Mr. Schwartz served as a director of
DAKA since September 1988 and as a director of Fuddruckers, Inc. from September
1984 until November 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 a director of Young & Rubicam, Inc.
and a member of the Board of Visitors of the Fuqua School of Business at Duke
University.
EXECUTIVE OFFICERS
Donald C. Moore, 44, has served as Chief Executive Officer and a
Director of the Company since July 1998. He has served as Executive Vice
President and Chief Financial Officer and Treasurer of the Company since Jun
1998 and was Senior Vice President and Chief Financial Officer and Treasurer
from May 1997. He served as Senior Vice President and Chief Financial Officer
and Treasurer of DAKA from January 1997 to May 1997. From November 1995 through
October 1996 he served as Senior Vice President and Chief Financial Officer for
Al Copeland Investments, a multi-business, privately held corporation. From
August 1990 until August 1995 he served principally as Senior Vice President and
Chief Financial Officer of Rally's Hamburgers, Inc., a publicly held multi-unit
quick service hamburger operator and franchiser. Mr. Moore is also a director of
Restaurant Consulting Services, Inc. and La Salsa Holding Co.
K. C. Moylan, 40, has served as President and Chief Executive Officer
of Champps since January 1998, and as Chief Operating Officer of Champps since
September 1996. He served as Senior Vice President of Operations of Champps from
February 1996 to January 1998. From 1991 through 1996 he served as Vice
President of Operations for The Pheasant Restaurants, Inc., a publicly held
restaurant corporation. Mr. Moylan is also a director of Goodwill.
Donna L. Depoian, 38, has served as Secretary, Vice President and
General Counsel of the company since May 1998. She served as Assistant Secretary
and Acting General Counsel from February 1998 to May 1998 and as Assistant
Secretary and Corporate Counsel since July 1997. Ms. Depoian also served as
Assistant Secretary and Corporate Counsel for DAKA International, Inc. since
April 1994. From May 1989 to April 1994, she practiced as an attorney for Bass &
Doherty, P.C., a Boston law firm concentrating in business and commercial real
estate. From February 1988 to April 1989 she practiced as an attorney for
Rossman, Rossman and Eschelbacher, a Boston based law firm.
MEETING AND COMMITTEES
The Board of Directors of the Company has an Audit Committee, a
Compensation Committee and a Nominating Committee. During the fiscal year ended
June 28, 1998, the Board of Directors held five meetings, the Audit Committee
held one meeting, and the Compensation Committee held one meeting. The
Nominating Committee does not meet separately and its business is conducted at
meetings of the full Board of Directors.
7
<PAGE> 11
Each director attended 75% or more of the aggregate of (a) the total number of
meetings of the Board of Directors during fiscal year 1998, and (b) the total
number of meetings held by all committees of the Board of Directors on which
such director served during fiscal year 1998.
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 Ms. Belton and Messrs. Cox, O'Donnell and Schwartz.
The Compensation Committee has the responsibility of reviewing on an
annual basis all officer and employee compensation. The Compensation Committee
is currently composed of Ms. Belton and Messrs. Cox, O'Donnell and 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 (collectively, the "Stock Option Plans").
The Nominating Committee has the responsibility of considering
qualified candidates to fill vacant seats on the Board which may arise during
the year and recommending to the Board for nomination for election to fill any
such vacancies with such candidates as it deems, in its discretion, appropriate.
The Nominating Committee does not meet separately from the full Board of
Directors. The Nominating Committee will consider recommendations only from
persons solicited by the Nominating Committee.
DIRECTORS' COMPENSATION
In fiscal year 1998, non-employee Directors received a quarterly
retainer of $3,000 and a fee of $1,000 per meeting attended, plus travel
expenses. In connection with their agreement to serve on the Board of Directors
of the Company following the Spin-off Transaction, each non-employee director
received in connection with the Spin-off Transaction an option to purchase 2,500
shares of Common Stock at an exercise price equal to the fair market value of
the Common Stock as of the date of grant. In addition, Messrs. Cox and Schwartz
and Ms. Belton each received $2,400 in connection with the repurchase of stock
options in August 1997.
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<PAGE> 12
\ EXECUTIVE COMPENSATION
Insofar as historical information on the executive compensation of the
Company's officers as such is not available prior to fiscal year 1998, the
following tables provide information as to compensation paid by DAKA and its
subsidiaries prior to the Spin-off Transaction during each of the two previous
fiscal years ending with the fiscal year ended June 29, 1997 to the Chief
Executive Officer and the four other most highly compensated executive officers
whose total salary and bonus for fiscal year 1998 exceeded $100,000. In
addition, compensation information is provided with respect to one person whose
employment terminated during the fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL AWARDS
NAME AND COMPENSATION OTHER ANNUAL OPTIONS/ALL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OTHER SARS(1) COMPENSATION
------------------ ---- -------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
William H. Baumhauer(2)...... 1998 $450,500 $175,000 250,000 $675,000(3)
Chairman and ........... 1997 449,869 265,014(4)
Chief Executive Officer. 1996 369,558 200,000
Donald C. Moore(5)........... 1998 $187,981 $80,000 35,000
Chief Executive Officer and 1997 70,673 30,000 $40,820(6)
Chief Financial Officer. 1996
K.C. Moylan.................. 1998 $200,000 $80,000 $31,000(7) 50,000
President and Chief .... 1997 163,130 50,000
Executive Officer....... 1996 51,923 21,000(8)
of Champps
Richard B. Wolf(9)........... 1998 $150,000 $17,500 $28,600(7) 25,000
Senior Vice President and 1997 150,000
Chief Operating Officer. 1996 147,500 10,000
Richard K. Hendrie(10)....... 1998 $145,000 $13,500 $25,000(7) 25,000
Senior Vice President... 1997 145,000
of Marketing............ 1996 142,000 10,000
- -----------------
Dean P. Vlahos(11)........... 1998 $224,815
President and Chief 1997 348,009
Executive Officer 1996 264,500
Champps Entertainment, Inc.
- -----------------
</TABLE>
(1) Represents the number of options to acquire Common Stock granted during
the fiscal year.
(2) Mr. Baumhauer resigned as Chairman and Chief Executive Officer of the
Company in July 1998 and is no longer an employee of the Company.
(3) Mr. Baumhauer's severance arrangements are described under "Certain
Transactions."
(4) Represents amounts earned under Mr. Baumhauer's long term incentive
plan, which vested during fiscal 1997. In connection with the Spin-off
Transaction, the Company's 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
9
<PAGE> 13
$265,014 based on the average closing price of the Company's Common
Stock during the period of July 21 through July 23, 1997.
(5) Mr. Moore was appointed Chief Executive Officer of the Company in July
1998.
(6) Represents reimbursed relocation expenses.
(7) Represents amounts paid in connection with the re-purchase of stock
options.
(8) Granted on February 19, 1996 pursuant to a long term incentive plan for
management pursuant to which the options will vest 100% on February 19,
1999. As issued, such options were options to purchase DAKA common
stock and had an exercise price equal to $22.63 per share (the fair
market price of DAKA common stock as of the date of grant) with respect
to one third of the options granted, $24.32 per share with respect to
another one third of the options granted and $26.02 per share with
respect to the remaining one third of the options granted. As converted
pursuant to the terms of the Spin-off Transaction, such options became
options to purchase Common Stock of the Company and have an exercise
price equal to $10.91 per share with respect to one third of the
options granted, $11.72 per share with respect to another one third of
the options granted and $12.54 per share with respect to the remaining
one third of the options granted.
(9) As of November 1998 Mr. Wolf was no longer an employee of the Company.
(10) As of November 1998 Mr. Hendrie was no longer an employee of the
Company.
(11) As of February 1998 Mr. Vlahos was no longer an employee of the
Company.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUES AT ASSUMED
% OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION (10 YEARS)
NAME GRANTED FISCAL YEAR PER SHARE DATE 5% ($) 10% ($)
---- ------- ------------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
William H. Baumhauer 250,000(1)(2) 44% $6.31 6/30/99 $ 78,875 $157,750
Donald C. Moore 35,000(2) 6 6.31 8/06/07 138,891 351,978
K.C. Moylan 50,000(2) 9 6.31 8/06/07 198,415 502,825
Richard B. Wolf 25,000(2) 4 6.31 8/06/07 99,208 251,413
Richard K. Hendrie 25,000(2) 4 6.31 8/06/07 99,208 251,413
</TABLE>
- -----------------------
(1) Pursuant to Mr. Baumhauer's severance arrangements Mr. Baumhauer may
exercise such options until June 1999.
(2) Such options under their terms vested in full upon the consummation of
the sale of Fuddruckers.
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<PAGE> 14
AGGREGATE OPTION EXERCISES IN FISCAL 1998
AND YEAR-END OPTION VALUES
There were no stock options exercised in fiscal year 1998 by any of the
named executive officers (as defined in Item 402 of Regulation S-K).
LONG-TERM INCENTIVE PLAN--AWARD IN FISCAL 1998
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER
SHARES, UNITS PERIOD UNTIL ESTIMATED FUTURE PAYOUTS UNDER
OR OTHER MATURATION NON STOCK-PRICE-BASED PLANS
NAME RIGHTS OR PAYOUT THRESHOLD TARGET MAXIMUM
<S> <C> <C> <C> <C> <C>
William H. Baumhauer..... (1) June 30, 1997 (1) (1) (1)
</TABLE>
- -------------
(1) The long-term incentive plan implemented by DAKA's Board of Directors
on July 3, 1994 for the Chief Executive Officer was designed to provide
an incentive payment, payable at DAKA's option in the form of either
cash or stock, equal to 2% of the increase in the market value of DAKA,
as determined by the average 30 day trading price of DAKA common stock
and the weighted average number of shares outstanding, from July 3,
1994 to June 30, 1997 in excess of 15% of the market value at June 30,
1994. As of June 30, 1997, Mr. Baumhauer's vested award under the plan
amounted to 2% of the excess (if any) of (A) the market value of DAKA
as of June 30, 1997 (determined based on the average aggregate trading
price of the outstanding shares of DAKA common stock during the period
beginning June 1, 1997 and ending June 30, 1997) over (B) $137,776,000.
To take into account the impact of the Spin-off Transaction on the
operation of the plan, the Board of Directors resolved to treat Mr.
Baumhauer's vested award as the equivalent of an option to acquire
228,260 shares of DAKA common stock at a price of $12.07 per share.
Upon the consummation of the Spin-off Transaction such deemed option
was canceled through the issuance to Mr. Baumhauer of 37,973 shares of
the Company's Common Stock, having a value of $265,014 based on the
average closing price of the Common Stock during the three trading days
immediately following the completion of the Spin-off Transaction.
EMPLOYMENT AGREEMENTS
The Moore Employment Agreement. On August 12, 1998, the Company entered
into an employment agreement with Donald C. Moore to serve the Company as acting
Chief Executive Officer and Chief Financial Officer. The agreement provides for
an initial term of one (1) year and for automatic renewal each year so that the
residual term of such agreement is never less than one year. Under the
agreement, Mr. Moore receives an annual base salary of $250,000, subject to
adjustment at the discretion of the Board of Directors. The agreement further
provides that, in the event the Company terminates Mr. Moore's employment
without "Cause" (as defined below) or Mr. Moore terminates his employment for
"Good Reason" (as defined below), the Company shall pay Mr. Moore an amount
equal to Mr. Moore's cash compensation for two years. "Good Reason" is 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" is 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. The Fuddruckers sale
itself did not trigger any of Mr. Moore's rights or termination benefits under
his employment agreement.
11
<PAGE> 15
The Moylan Employment Agreement. Effective as of August 12, 1998, the
Company entered into an employment agreement with K.C. Moylan to serve as Chief
Executive Officer and President of Champps. The agreement provides for an
initial term of one (1) year and for automatic renewal each year so that the
residual term of such agreement is never less than one year. Under the
agreement, Mr. Moylan receives an annual base salary of $240,000, subject to
adjustment at the discretion of the Board of Directors. The agreement further
provides that, in the event the Company terminates Mr. Moylan's employment
without "Cause" (as defined below) or Mr. Moylan terminates his employment for
"Good Reason" (as defined below), the Company shall pay Mr. Moylan an amount
equal to Mr. Moylan's cash compensation for one year. "Good Reason" is 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" is defined 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 and
demonstrated unwillingness to perform his duties under the agreement. The
Fuddruckers sale did not trigger any of Mr. Moylan's rights or termination
benefits under his employment agreement. The employment agreement further
provides that in the event the Company completes a sale of itself or Champps (or
a transaction with similar effect), the Company will 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,
12
<PAGE> 16
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.
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
13
<PAGE> 17
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.
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
"earned" through a combination of four factors: the Company's 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 related to individual, team, and the Company's performance.
Chief Executive Officer Compensation. Mr. Moore, the Company's current
Chief Executive Officer, was determined by the Board of Directors to be the
logical choice to serve as the Company's acting Chief Executive Officer upon the
departure of Mr. Baumhauer in July 1998. Upon the appointment of Mr. Moore as
Chief Executive Officer, Mr. Moore's salary was adjusted commensurate with his
new responsibilities. At the recommendation of the Compensation Committee, the
Company entered into an employment contract with Mr. Moore in order to retain
Mr. Moore as Chief Executive Officer while the Company resolves issues
concerning its strategic direction as disclosed elsewhere in this proxy
statement. The terms of Mr. Moore's employment agreement are comparable with
those of his predecessor and the Compensation Committee believes they are
appropriate in light of his key contribution to the completion of the sale of
Fuddruckers, the opportunity of motivating Mr. Moore to assist the Board of
Directors in the pursuit and evaluation of strategic alternatives and the need
to ensure that the services of an experienced officer knowledgeable of the
operations and affairs of the Company continue to be available to the Company
during this period of uncertainty and transition. Mr. Moore participates in the
compensation programs as outlined above.
Mr. Baumhauer, who served as the Company's Chief Executive Officer
during fiscal year 1998, was employed by the Company pursuant to an employment
contract. During the period of his employment, Mr. Baumhauer participated in the
compensation programs as outlined above. For fiscal 1998, the Company paid Mr.
Baumhauer a performance bonus of $175,000, the payment of which was in
consideration of Mr. Baumhauer's performance in returning the Fuddruckers
operations to profitability and positioning Fuddruckers for sale; in addition,
the payment of this bonus was contingent on the closing of the Fuddruckers sale.
The Compensation Committee believes that Mr. Baumhauer's bonus is consistent
with the bonuses paid to other officers of the Company. The consummation of the
Fuddruckers sale would have given rise to "good reason" under Mr. Baumhauer's
employment agreement such that he would have become entitled to termination
benefits equal to his base compensation for a period of three years following a
sale of Fuddruckers if he resigned after the closing of the Fuddruckers sale. In
connection with Mr. Baumhauer's resignation in July 1998 to pursue other
opportunities, the Board of Directors, at the recommendation of the Compensation
Committee, reached an agreement with Mr. Baumhauer whereby, in consideration of
Mr.
14
<PAGE> 18
Baumhauer's 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 the various pre-closing covenants and conditions required
in connection with the sale of Fuddruckers to King Cannon, Inc., Mr. Baumhauer
received, upon the consummation of such sale, (i) a cash payment in the amount
of $675,000 and (ii) immediate vesting of options to acquire 187,500 shares of
the Company's Common Stock at $6.31 per share which were not vested at the time
of Mr. Baumhauer's resignation, which options are exercisable until June 30,
1999 and terminate on that date unless exercised.
Compensation of Other Officers. After the departure of Mr. Baumhauer
and the election of Mr. Moore as the Company's Chief Executive Officer, it was
determined by the Board of Directors of the Company that it would be appropriate
to take steps to ensure for the Company the continued availability of the
services of Mr. Moylan as Chief Executive Officer of Champps while the Company
resolves issues concerning its strategic direction. At the recommendation of
the Compensation Committee, the Company entered into an employment contract with
Mr. Moylan, as disclosed elsewhere in this proxy statement. The terms of Mr.
Moylan's employment agreement are comparable with those of officers in similar
positions at competing casual restaurant companies and the Compensation
Committee believes they are appropriate in light of the need to ensure that the
services of an experienced officer knowledgeable of the operations and affairs
of Champps continue to be available to the Company during this period of
uncertainty and transition. 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.
Erline Belton
E.L. Cox
Alan D. Schwartz
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. Bear Stearns acted as financial advisor to DAKA in connection with the
Spin-off Transaction and earned a fee of approximately $1.8 million for such
services, which remains payable. In the past Bear Stearns and its affiliates
have provided financial advisory and financing services to DAKA and have
received fees for rendering such services. In addition, Bear Stearns is
presently acting as advisor to the Company in connection with evaluating and
seeking financial and strategic alternatives, including a possible sale of the
Company.
CERTAIN TRANSACTIONS
William H. Baumhauer, the former Chairman and Chief Executive Officer
of the Company, was a party to an employment agreement with the Company. Under
the agreement, Mr. Baumhauer received an annual base salary of $450,500, subject
to adjustment at the discretion of the Board. The Baumhauer Employment Agreement
further provided that in the event the Company terminated Mr. Baumhauer's
employment without "Cause" (as defined therein) or Mr. Baumhauer terminated his
employment for "Good Reason" (as defined therein), the Company would be required
to pay Mr. Baumhauer an amount equal to his cash compensation for three years.
"Good Reason" was defined in the agreement as (i) an assignment to Mr. Baumhauer
of duties other than those contemplated by the agreement, or a limitation on his
powers not contemplated by the agreement, (ii) the removal of Mr. Baumhauer from
or failure to elect him to his named position, or (iii) a reduction in his rate
of compensation or level of fringe benefits. "Cause" is defined in each
agreement as Mr. Baumhauer'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. The consummation of the Fuddruckers sale would have given rise to
"Good Reason" under Mr. Baumhauer's employment agreement such that he would have
become entitled to termination benefits equal to his base compensation for a
period of three years following a sale of Fuddruckers if he resigned after the
closing of the transaction. In connection with Mr. Baumhauer's resignation in
July 1998 to pursue other opportunities, the Company's Board of Directors
reached an agreement with Mr. Baumhauer whereby, in consideration of Mr.
Baumhauer's contribution to the Fuddruckers business and his commitment to
cooperate with the Company in satisfying the various pre-closing covenants and
conditions required by the Stock Purchase Agreement, Mr. Baumhauer received,
upon the consummation of the Fuddruckers sale, (i) a cash payment in the amount
of $675,000 and (ii) immediate vesting
15
<PAGE> 19
of options to acquire 187,500 shares of the Company's Common Stock at $6.31 per
share which were not vested at the time of Mr. Baumhauer's resignation, which
options are exercisable until June 30, 1999 and terminate on that date unless
exercised. In addition, the Board approved a bonus of $175,000 for Mr. Baumhauer
for his performance during fiscal 1998, which bonus was contingent on the
closing of the Fuddruckers sale. In addition, under DAKA's CEO Long Term
Incentive Plan Mr. Baumhauer was eligible to earn a percentage of an increase in
DAKA's value, as measured by stock appreciation above a predetermined rate of
return, over a specified three-year period. The amount due under the CEO Long
Term Incentive Plan vested at the end of fiscal year 1997. The Compensation
Committee determined that, as a result of the Spin-off Transaction, the Company
would pay the amounts due under the under the CEO Long Term Incentive Plan
through the issuance of Common Stock.
Joseph W. O'Donnell, a director of the Company who is also a member of
the Compensation Committee, is a principal in Osgood, O'Donnell & Walsh, which
provides marketing consulting services to the Company. During fiscal year 1997,
the Company paid Osgood, O'Donnell & Walsh $83,086 for such services and related
expenses. Mr. O'Donnell also owns a 66.2% interest in PulseBack, Inc.
("PulseBack"), a company in which the Company owns a 32.5% interest. PulseBack
provides customer satisfaction measurement services to the Company. During
fiscal 1998, the Company paid PulseBack $112,433 for such services.
On February 2, 1998 the Company sold a Champps Company-owned restaurant
in Minnetonka, Minnesota to Dean P. Vlahos, a former Director of the Company and
the former President and Chief Executive officer of Champps for $2.9 million,
representing the fair value of the restaurant based upon an independent
appraisal. The purchase price was settled through a cash payment by Mr. Vlahos
of $1.5 million and the cancellation of Mr. Vlahos' employment contract. The
Company recognized a net gain of approximately $700,000 on this transaction. As
part of this transaction, the Company entered into a separation agreement with
Mr. Vlahos which grants Mr. Vlahos the right, subject to certain restrictions,
to develop up to six franchised Champps restaurants in the United States by
February 2, 2006. Under the separation agreement, Mr. Vlahos will not pay a
franchise fee with respect to such restaurants and will pay a continuing royalty
of 1.25% of gross sales.
Under Mr. Vlahos' employment contract, Mr. Vlahos provided full-time
services to Champps in the capacity of Chief Executive Officer and President of
Champps and had the authority to control the operations of Champps so long as
the average gross revenues per square foot of the Champps-owned restaurants was
at least $400. During the period of Mr. Vlahos' full-time employment, Champps
paid Mr. Vlahos an initial base salary of $350,000 plus a bonus of 50% of his
base salary if he attained certain targets established by the Board, which
amount could be increased to up to 100% of his base salary if he exceeded such
performance targets by margins determined by the Board. Twenty percent (20%) of
the potential bonus payments for Mr. Vlahos were related to performance targets
established for DAKA as a whole (prior to the Spin-off Transaction) and eighty
percent (80%) were related to performance targets established for Champps.
Following the Spin-off Transaction and the assumption of Mr. Vlahos' employment
contract, 20% of the potential bonus payments for Mr. Vlahos related to the
Company as a whole and 80% related to performance targets established for
Champps. If Mr. Vlahos left the Company for "Good Reason," or was terminated by
the Company without "Cause," during the term of his employment contract, the
Company would have been obligated to pay Mr. Vlahos his remaining salary and
bonus as severance. "Good Reason" was defined in such agreement as (i) an
assignment to Mr. Vlahos of duties other than those contemplated by the
agreement, or a limitation on the powers of Mr. Vlahos not contemplated by the
agreement, (ii) the removal of Mr. Vlahos from or failure to elect Mr. Vlahos to
his named position, or (iii) a reduction in Mr. Vlahos' rate of compensation or
level of fringe benefits. "Cause" was defined in the agreement as Mr. Vlahos'
(i) theft from or fraud on the Company, (ii) conviction of a felony, (iii)
violation of the terms of the agreement, (iv) conscious disregard or neglect of
his duties, or (v) demonstrated unwillingness to perform his duties under the
agreement. In the event that Mr. Vlahos' employment was terminated for any
reason other than by the Company for cause, Mr. Vlahos would have been provided
the right, subject to certain obligations to the Company, to establish a
franchise for up to five Champps Americana restaurants anywhere in the world,
but no such restaurant could be within a 20 mile radius of any other Champps
restaurant, or in any territory that was franchised or licensed by Champps.
16
<PAGE> 20
PERFORMANCE GRAPH
COMPARISON TOTAL RETURN
Among Unique Casual Restaurants, Russell 300 Index and Peer Group
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
TOTAL RETURN
7/15/97 6/26/98
<S> <C> <C>
Unique Casual Restaurants $100.00 $ 91.96
Peer Group 100.00 64.55
Russell 3000 Index 100.00 119.44
</TABLE>
The companies included in the peer group are: Rare Hospitality
International, Inc.; Planet Hollywood International, Inc.; Avado Brands, Inc.;
The Cheesecake Factory; Dave and Buster's, Inc.; Landry's Seafood Restaurants,
Inc.; Rainforest Cafe, Inc.; and Logan's Roadhouse, Inc. The returns of each
issuer in the foregoing group have been weighted according to the respective
company's stock market capitalization as of the beginning of the period. The
graph assumes that the value of the instrument is the Company's Common Stock,
the Russell 3000 Index and the peer group was $100 at July 15, 1997 and that all
dividends were reinvested.
17
<PAGE> 21
The Common Stock prices shown are neither indicative nor determinative
of future stock price performance.
The Company's Common Stock was not publicly traded prior to July 15,
1997. Accordingly, stock performance data is not presented for periods prior to
that date.
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 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 executive officers and directors, the
Company believes that, during fiscal year 1998, (i) its executive officers and
directors, other than Mr. Moylan and Ms. Depoian, did not timely comply with all
applicable reporting requirements, and (ii) its 10% beneficial owners complied
with all applicable reporting requirements.
PROXY CONTEST
SOLICITATION IN OPPOSITION TO THE BOARD'S NOMINEES
According to preliminary proxy materials filed by Atticus Partners,
L.P. ("Atticus") on November 13, 1998 with the SEC with respect to the Annual
Meeting (the "Atticus Proxy Statement"), Atticus has indicated that it is
soliciting proxies for election to the Board of Directors of its nominees,
Timothy R. Barakett, James S. Goodwin, and Nathanial P.J.V. Rothschild to serve
until the year 2001 annual meeting.
YOUR BOARD RECOMMENDS THAT YOU REJECT THE ATTICUS NOMINEES AND VOTE FOR
THE BOARD'S NOMINEES ON THE ENCLOSED [COLOR] PROXY CARD. YOUR BOARD RECOMMENDS
THAT YOU NOT SIGN ANY PROXY CARD SENT TO YOU BY ATTICUS.
PROPOSED STOCKHOLDER RESOLUTION
The following proposed stockholder resolution (the "Atticus Sale
Proposal") was submitted for consideration at the Annual Meeting by Atticus:
"RESOLVED, that the stockholders of [the Company], believing that the full value
of [the Company] can best be realized by a sale of [the Company], request and
recommend that the [Company's] Board immediately pursue a sale of [the Company]
with a view to enhancing stockholder value."
The Atticus Sale Proposal will not be approved unless it receives the
affirmative vote of a majority of the votes cast at the Annual Meeting. Even if
approved, the Atticus Sale Proposal would serve as a recommendation to the Board
of Directors to immediately pursue a sale of the Company; the proposal does not
itself require the Board to take such steps. Abstentions will have the effect of
a vote against the Atticus Sale Proposal.
As previously discussed, the Board of Directors in discharging its
fiduciary duties to stockholders has completed a number of initiatives to
enhance stockholder value and is pursuing and evaluating additional
alternatives. The Board of Directors believes that it would be unproductive to
force the Board to commit to a particular initiative that is only one among a
number of alternatives currently being considered by the Board.
Accordingly, the Board does not support the Atticus Sale Proposal.
18
<PAGE> 22
The persons named in the enclosed proxy will have discretionary
authority to vote the shares represented by each properly executed proxy in
accordance with such persons' best judgment with respect to the Atticus Sale
Proposal. The persons named in the enclosed proxy intend to vote shares
represented by such proxies against the Atticus Sale Proposal.
PARTICIPANTS ON BEHALF OF THE COMPANY
As a result of the proxy contest initiated against the Company by
Atticus, SEC rules require the Company to provide to its stockholders certain
additional information with respect to participants (as defined in Schedule 14A
promulgated pursuant to the Exchange Act) in this proxy solicitation. Pursuant
to those rules, the members of the Board are, and certain employees and agents
of the Company may be deemed to be, participants. Unless otherwise indicated
below, the address of the participants described below is the address of the
Company's principal executive offices. Except as indicated below, no participant
listed below has purchased or sold or otherwise acquired or disposed of any
shares of Common Stock of the Company in the last two (2) years. Further, no
participant listed below has been convicted in a criminal proceeding during the
last ten years. See, "Information Regarding Directors." None of the participants
listed below are the record owners of shares of Common Stock of the Company
which are not beneficially owned by such person.
E. L. Cox has served as a Director of the Company since May 1997. Mr.
Cox is the Insurance Commissioner for the State of Michigan with an office at
611 W. Ottawa Street, Lansing, Michigan. He is the beneficial owner of 14,880
shares of the Common Stock of the Company, including 14,500 shares of Common
Stock deemed to be beneficially owned by Mr. Cox which are subject to options
previously granted.
Erline Belton, has served as a Director of the Company since May 1997.
She has served as President and Chief Executive Officer of The Lyceum Group, a
human resource consulting firm located at 41 Hawthorne Street, Roxbury,
Massachusetts, since September 1992. Ms. Belton is the beneficial owner of
10,680 shares of Common Stock of the Company, including 10,000 shares of Common
Stock deemed to be beneficially owned by Ms. Belton which are subject to options
previously granted.
Joseph W. O'Donnell, has served as a Director of the Company since May
1997. Mr. O'Donnell is a founding partner of the firm of Osgood, O'Donnell &
Walsh, a marketing consulting with a business address at P.O. Box 989,
Manchester, Vermont. Mr. O'Donnell is the beneficial owner of 7,500 shares of
Common Stock of the Company, which represents 7,500 shares of Common Stock
deemed to be beneficially owned by Mr. O'Donnell which are subject to options
previously granted. The firm of Osgood, O'Donnell & Walsh has had a marketing
consulting contract with the Company relative to the DAKA and Fuddrucker's
restaurants. See "Certain Transactions" for more information. Additionally, the
Company owns a 32.5% interest in PulseBack, Inc. a corporation of which Mr.
O'Donnell owns a 66.2% interest.
Alan D. Schwartz has served as a Director of the Company since May
1997. Mr. Schwartz is Senior Managing Director--Corporate Finance of Bear,
Stearns & Co., Inc., and a director of its parent, The Bear Stearns Companies,
Inc. Mr. Schwartz's office is located at 245 Park Avenue, New York, New York.
Bear Stearns acted as financial advisor to DAKA in connection with the Spin-off
Transaction and has provided financial advisory and financing services to DAKA
and received fees for rendering such services. In addition, Bear Stearns is
presently acting as advisor to the Company in connection with evaluating and
seeking financial and strategic alternatives, including a possible sale of the
Company. See "Compensation Committee Interlocks" for more information. Mr.
Schwartz is the beneficial owner of 14,880 shares of Common Stock of the
Company, including 7,500 shares of Common Stock deemed to be beneficially owned
by Mr. Schwartz which are subject to options previously granted.
Donald C. Moore has served as Chief Executive Officer and a Director of
the Company since July 1998. Mr. Moore is the beneficial owner of 100,617 shares
of Common Stock of the Company, including
19
<PAGE> 23
100,000 shares of Common Stock deemed to be beneficially owned by Mr. Moore
which are subject to options previously granted. Mr. Moore purchased his shares
of Common Stock through the Company's Employee Stock Ownership Plan, purchasing
254.2804 shares on September 30, 1997 and 362.7883 shares on December 31, 1997.
Mr. Moore has an employment agreement with the Company which is described above
under the caption "Employment Agreements."
K. C. Moylan has served as President and Chief Executive Officer of
Champps since January, 1998. Mr. Moylan is the beneficial owner of 74,450 shares
of Common Stock of the Company, including 70,000 shares of Common Stock deemed
to be beneficially owned by Mr. Moylan which are subject to options previously
granted. Mr. Moylan purchased 1000 shares of Common Stock in November of 1998.
Mr. Moylan has an employment agreement with the Company which is described above
under the caption "Employment Agreements."
Donna L. Depoian has served as Secretary, Vice President and General
Counsel of the company since May 1998. Ms. Depoian is the beneficial owner of
22,189 shares of Common Stock of the Company, including 21,300 shares of Common
Stock deemed to be beneficially owned by Ms. Depoian which are subject to
options previously granted. Ms. Depoian purchased her shares of Common Stock
through the Company's Employee Stock Ownership Plan, purchasing 121.1402 shares
on September 30, 1997, 155.4807 shares on December 31, 1997, 210.2607 shares on
March 31, 1998, 176.4706 shares on June 30, 1998 and 219.4128 shares on
September 30, 1998.
AUDITORS
The Board of Directors has selected the firm of Deloitte & Touche LLP
as auditors of the Company for fiscal year 1998. 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.
20
<PAGE> 24
MARKET VALUE
On January __, 1999, the closing price of a share of the Company's
Common Stock on the Nasdaq National Market was $_______.
EXPENSE OF SOLICITATION
The cost of soliciting proxies for use at the Annual Meeting will be
borne by the Company. 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 interviews, telephone or telegraph. In addition, the Company has
retained [MCKENZIE PARTNERS: INSERT TERMS OF ANY ADDITIONAL AGREEMENTS,
INCLUDING INDEMNIFICATION, AND APPROXIMATE NUMBER OF EMPLOYEES WHO WILL ASSIST]
to assist in soliciting proxies for the Annual Meeting at a fee estimated to be
approximately [$10,000] plus out-of-pocket expenses. Although no precise
estimate can be made at the present time, it is currently estimated that the
aggregate amount to be spend in connection with the solicitation of proxies by
the Company (excluding the salaries and fees of officers and employees) will be
approximately [$_______ ] or a greater amount if there is litigation in
connection with the solicitation, and the total cash expenditures to date
relating to the solicitation have been under [$_______ ].
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals intended to be presented at the next annual
meeting of stockholders must be received by the Company on or before [DATE],
1999 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.
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 provide 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, to 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).
21
<PAGE> 25
OTHER MATTERS
THIS PROXY STATEMENT IS ACCOMPANIED BY THE COMPANY'S ANNUAL REPORT TO
STOCKHOLDERS FOR FISCAL YEAR 1998. ADDITIONAL INFORMATION IS CONTAINED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 28, 1998,
INCLUDING ALL AMENDMENTS, 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, UNIQUE CASUAL
RESTAURANTS, INC., ONE CORPORATE PLACE, 55 FERNCROFT ROAD, DANVERS,
MASSACHUSETTS 01923-4001.
IMPORTANT
Your vote is important. Regardless of the number of shares of Stock you
own, please support your Board of Directors by promptly taking these few easy
steps:
1. Please sign, date and mail promptly the enclosed [COLOR] Proxy
Card in the post-paid envelope provided.
2. Your Board of Directors recommends that you NOT sign any proxy
card sent to you by Atticus, not even as a vote of protest.
3. If your shares are held in the name of a brokerage firm or
bank nominee, only it can sign a [COLOR] Proxy Card with
respect to your shares and only after receiving your specific
instructions. Accordingly, please provide your instructions by
signing, dating and mailing the enclosed [COLOR] Proxy Card in
the postage-paid envelope provided. Please do so for each
account you maintain. To ensure that your shares are voted,
you should also contact the person responsible for your
account and give instructions for a [COLOR] Proxy Card to be
issued representing your shares.
IF YOU VOTED ATTICUS' PROXY CARD BEFORE RECEIVING YOUR UNIQUE CASUAL
RESTAURANTS [COLOR] PROXY CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE SIMPLY
BY SIGNING, DATING AND MAILING THE ENCLOSED [COLOR] PROXY CARD. THIS WILL CANCEL
YOUR EARLIER VOTE SINCE ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.
If you have any questions or require assistance, please call:
[TO COME]
22
<PAGE> 26
INSERT AS FORM OF PROXY CARD
[FRONT OF CARD]
UNIQUE CASUAL RESTAURANTS, INC.
ONE CORPORATE PLACE
55 Ferncroft Road
Danvers, MA 01923
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Donald C. Moore and Donna L. Depoian, and
each of them, as proxies (the "Proxies"), each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote all the
shares of Common Stock of Unique Casual Restaurants, Inc. (the "Corporation")
held of record by the undersigned on __________, 1999, at the Annual Meeting of
Stockholders to be held on March 1, 1999 or any adjournment or postponement
thereof.
IF NO DIRECTION IS MADE, THIS PROXY IF PROPERLY EXECUTED AND SUBMITTED
WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR. A STOCKHOLDER WISHING TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION NEED ONLY SIGN AND DATE
THIS PROXY AND RETURN IT IN THE STAMPED ENVELOPE PROVIDED.
The undersigned hereby acknowledge(s) receipt of a copy of the
accompanying Notice of Annual Meeting of Stockholders, the Proxy Statement with
respect thereto and the Corporation's Annual Report to Stockholders for Fiscal
Year 1998 and hereby revoke(s) any proxy or proxies heretofore given. This
proxy may be revoked at any time before it is exercised.
(Continued and to be dated and signed on the reverse side)
(BACK OF CARD)
A [X] Please mark
your votes as
in this example
WITHHELD Nominees: Erline Belton
FOR from Joseph W. O'Donnell
the Nominees the Nominees
1. Election [ ] [ ]
of
Class II
Directors
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME ON THE LINE PROVIDED BELOW:)
- ---------------------------------------------
2. In their discretion, the proxies
are authorized to vote upon such other
business as may properly come before the meeting.
CHECK HERE IF YOU [_] CHECK [_]
PLAN TO ATTEND HERE FOR
THE MEETING ADDRESS
CHANGE
New Address:
---------------------------------
---------------------------------
Sign, Date and Return the Proxy Card Promptly using the Enclosed Envelope
SIGNATURE: DATE
--------------------- --------------
SIGNATURE: DATE
--------------------- --------------
NOTE: Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian please give full title as such. If a
corporation, please sign in full corporation name by President or other
authorized officer. If a partnership, please sign in partnership name
only.
