FLANIGAN'S ENTERPRISES, INC.
2841 Cypress Creek Road
Fort Lauderdale, Florida 33309
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 23, 1996
Fort Lauderdale, Florida
January 29, 1996
To the Stockholders of Flanigan's Enterprises, Inc.,
Please take notice that the Annual Meeting of Stockholders of
Flanigan's Enterprises, Inc. (the "Company") will be held on Friday, February
23, 1996, at 10:00 A.M., at its corporate headquarters, 2841 Cypress Creek Road,
Fort Lauderdale, Florida, 33309 to consider and act upon the following matters:
(1) To elect three directors of the Company to hold office until the
1999 Annual Meeting;
(2) To approve the selection of independent auditors;
(3) To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on January 23, 1996,
will be entitled to vote at the meeting.
The Company invites each stockholder to attend the meeting in person.
However, whether or not you expect to be present, your cooperation in promptly
signing and returning the enclosed proxy in the envelope provided will be
appreciated. Regardless of the number of shares you own, your vote is important.
If you are present and vote in person at the meeting, the proxy will not be
used.
Management recommends and requests a vote "FOR" the three nominees to
the Board of Directors, and "FOR" approval of the independent auditors.
FLANIGAN'S ENTERPRISES, INC.
Mary C. Reymann, Secretary
<PAGE>
FLANIGAN'S ENTERPRISES, INC.
2841 Cypress Creek Road
Fort Lauderdale, Florida 33309
PROXY STATEMENT
January 29, 1996
ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is furnished in connection with the solicitation
by the management of Flanigan's Enterprises, Inc. (the "Company") of proxies for
use at the Annual Meeting of Stockholders of the Company to be held on Friday,
February 23, 1996, at 10:00 A.M. at its corporate headquarters, 2841 Cypress
Creek Road, Fort Lauderdale, Florida, 33309 or at any adjournment of such
meeting.
Stockholders of record as of the close of business on January 23, 1996
are entitled to vote at the meeting. On that date there were outstanding 934,608
shares of Common Stock ($.10 par value) of the Company, with each entitled to
one vote.
The Company's Annual Report (including the Form 10-KSB filed with the
Securities and Exchange Commission) for the fiscal year ended September 30, 1995
is enclosed.
The accompanying proxy is revocable by the stockholder at any time
before it is exercised. Any stockholder attending the meeting may vote in person
whether or not a proxy was previously signed. Unless revoked, properly executed
proxies will be voted in accordance with specifications therein. Proxies with no
specifications will be voted in favor of the proposals. There are no rights of
appraisal or similar rights of dissenters with respect to any matter to be acted
upon at the meeting.
Solicitation of proxies is to be made by use of the mails, and in
addition, may be made by directors, officers and regular employees of the
Company, either personally or by telephone. The cost of the solicitation will be
borne by the Company, including reimbursement of brokerage firms and other
custodian or nominees for reasonable expenses incurred in distributing these
proxy materials to their beneficiaries.
<PAGE>
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors which shall
consist of three classes of directors of three directors each. Three directors
are to be elected to replace those of the class whose terms expire this year.
The three directors to be elected at the annual meeting shall serve for a
three-year term expiring in 1999 and until their respective successors are
elected and qualified.
Shares of stock represented by valid proxies received in time for the
meeting will be voted for the election of the nominees listed below. It is not
anticipated that any of the nominees will be unavailable for election as a
director, but in case any of the nominees should become unavailable, the proxies
will be voted for such substitute as shall be designated by the Board of
Directors. William Patton has been a director since 1990. Germine M. Bell has
been a director since 1984 and Patrick J. Flanigan has been a director since
1991.
<TABLE>
<CAPTION>
Shares of
Common Stock
Principal Occupation for the Beneficially
Last Five Years and Certain Director Owned as of Percent
Name Other Directorships Age Since January 23, 1996 of Class
- ------------------ --------------------------- --- -------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Term Ending 1999
William Patton Vice President of Community 73 1990 7,666 (7) *
Relations since 1981, prior
thereto Vice President,
Lounge Operations
Germaine M. Bell Former Assistant Secretary 63 1984 -- --
of the Company
Patrick J. Flanigan Vice President of B.D. 43 35 1991 20,775 (2) 1.9
(1) Corporation, a Franchisee
since 1985
<PAGE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE AFTER THE MEETING
Shares of
Common Stock
Principal Occupation for the Beneficially
Last Five Years and Certain Director Owned as of Percent
Name Other Directorships Age Since January 23, 1996 of Class
- ------------------ --------------------------- --- -------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Term Ending 1997
Charles E. McManus Certified Manufacturing 81 1982 11,462 1.1
Engineer and Independent
Sales Representative for Food
Service Equipment Co.,
Baltimore, MD, President of
Preferred Food Purveyors,
Inc. Baltimore, MD.
Mary C. Reymann Financial Vice President and 71 1982 7,766 (7) *
Secretary of the Company
James G. Flanigan Vice President of Twenty- 31 1991 24,900 (3) 2.3
(1) Seven Birds Corporation, a
Franchisee since 1985
Term Ending 1998
Joseph G. Flanigan Chairman of the Board 66 1960 323,428 (4) 30.4
President and Chief Executive
Officer of the Company
Jeffrey D. Kastner Principal, law firm of Jeffrey 42 1985 100,500 (5)(8) 9.4
D. Kastner, P.A. since 1985,
and General Counsel and
Assistant Secretary of
the Company
Charles F. Kuhn Former Vice President of 66 1985 -- --
Package Operations, Package
Store Manager since 1992, of
Big Daddy's #14, Inc. a
Franchisee
Total shares beneficially owned by all directors
and executive officers as a group (ten in number) 459,073 (4)(6)(9) 43.2
</TABLE>
- -----------------------------
* Less than 1%
(1) James G. and Patrick J. Flanigan are the sons of the Chairman of the Board.
<PAGE>
(2) Includes 16,100 shares owned by a trust which Mr. Patrick J. Flanigan is one
of three trustees and a beneficiary.
(3) Includes 16,100 shares owned by a trust of which Mr. James G. Flanigan is
one of three trustees and a beneficiary.
(4) Includes options to acquire 46,450 shares of common stock, see Notes (2) &
(3) to Cash Compensation Table. Includes 16,100 shares owned by a trust of
which the spouse of the Chairman of the Board is one of three trustees and
1,200 shares owned by grandchildren of the Chairman of the Board.
(5) Includes 80,500 shares owned equally by five trusts of which Mr. Kastner is
one of three trustees. The five trusts include the trusts of Mr. Patrick J.
Flanigan (See Note (2) above) and Mr. James G. Flanigan (See Note (3) above)
and the 16,100 shares owned by each trust.
(6) Includes 48,300 shares owned equally by the three trusts of which Mr.
Kastner is one of the three trustees. The 16,100 shares of stock owned by
each of the trusts of Mr. Patrick J. Flanigan (See Note (2) above) and Mr.
James G. Flanigan (See Note (3) above) are included in the calculation of
beneficial stock ownership of those individuals only. The 16,100 shares of
stock owned by a trust of which the spouse of the Chairman of the Board is
one of three trustees is not included, as that stock is already included in
the calculation of beneficial ownership of Mr. Kastner.
(7) Includes options to acquire 5,000 shares of common stock pursuant to the
Company's Key Employee Incentive Stock Option Plan.
(8) Includes options to acquire 20,000 shares of Common Stock pursuant to the
Company's Key Employee Incentive Stock Option Plan.
(9) Includes options to acquire 10,000 shares of Common Stock granted to Edward
A. Doxey, Treasurer of the Company, pursuant to the Company's Key Employee
Incentive Stock Option Plan.
The Board of Directors met three times during the past fiscal year and each
director attended those meetings of the Board and its committees. Each director
who is not a full time employee of the Company receives an annual director's fee
of $5,000 plus $250 for attendance at each Directors Meeting and Audit Committee
Meeting.
BOARD OF DIRECTORS, COMMITTEES AND NOMINATIONS
The principal committee of the Board of Directors is the Audit
Committee. The functions of this committee include recommending the engaging and
discharging of the Company's independent auditors, reviewing with the
independent auditors the plan and results of the audit engagement, approving
professional services provided by the independent auditors prior to the
performance of such services, reviewing the range of audit and non-audit fees
and reviewing the adequacy of the Company's system of internal accounting
controls. The Audit Committee held one meeting during the past fiscal year. The
members of the Audit Committee for fiscal year 1995 were Charles McManus,
Jeffrey Kastner and Charles Kuhn.
<PAGE>
While there is no nominating committee, the entire Board selects
nominees for election as directors and considers the performance of directors in
determining whether to nominate them for re-election. In performing these
functions, the Board considers any stockholder recommendations with respect to
the composition of the Board. Any recommendation by a stockholder of a proposed
candidate must be in writing, accompanied by a description of the proposed
nominee's qualification and other relevant biographical information together
with the consent of the proposed nominee to serve. The recommendation should be
directed to the Board of Directors, Attention: Secretary, Flanigan's
Enterprises, Inc., 2841 Cypress Creek Road, Fort Lauderdale, Florida, 33309.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company
during the fiscal year ended September 30, 1995 to all of the Company's
executive officers whose aggregate direct re-numeration exceeded $60,000, and to
all executive officers as a group.
CASH COMPENSATION TABLE
<TABLE>
<CAPTION>
Name of individual Capacities in Cash compensation
or number in group which served (1)(2)(3)
------------------ ------------- -----------------
<S> <C> <C>
Joseph G. Flanigan (2)(3) Chairman of the Board, Chief $150,000
Executive Officer and President
Edward A. Doxey Treasurer 65,000
Others (2) 70,000
-------
All Executive Officers
as a group (4) $285,000
</TABLE>
- ------------------
(1) This table does not include incidental personal benefits of a limited
nature. Although the amount of such benefits and the extent to which they
are related to job performance cannot be ascertained specifically, the
Company has concluded that the aggregate amount does not exceed the lesser
of $25,000 or 10% of the cash compensation disclosed above for any one
person or all executive officers as a group.
<PAGE>
(2) On June 3, 1987, the Company entered into an Employment Agreement with
Joseph G. Flanigan effective January 1, through December 31, 1988 and
subject to one year extensions unless either the Company or such executive
shall have delivered a notice that the term will not be extended. This
Agreement was approved by the Bankruptcy Court in the Company's
reorganization proceedings and was ratified by stockholders at the Company's
1988 annual meeting (83% of the stockholders voting ratified the agreement),
Mr. Flanigan receives a base salary of $150,000 and participates in a profit
sharing program in the event the Company exceeds certain financial
projections. As disclosed fully on page 3 of the Employment Agreement Mr.
Flanigan is entitled to 10% of the cash flow of the Company's projections;
provided, however, that the payment of such does not reduce the Company's
cash position below its projected amounts. For the fiscal years ended
September 29, 1990 and September 28, 1991 no bonus was earned under the
Agreement. For the period ended October 3, 1992 a bonus of $148,000 was
earned and for the period ended October 2, 1993 a bonus of $170,000 was
earned.
For the fiscal years ended October 1, 1994 and September 30, 1995 no bonus
was earned under the Agreement. Payments under the Employment Agreement
continue in the event of termination of his employment by reason of death or
termination by the Company for reasons other than his breach of the
Agreement, or in the event of his resignation upon (i) a failure by the
Board to appoint or reappoint Mr. Flanigan to his present office, (ii) any
material change by the Company in Mr. Flanigan's function, duties or
responsibilities or (iii) a material change (25%) in the ownership of the
Company due to an event not initiated by the Company.
Subsequent to the end of fiscal year 1995, and prior to December 30, 1995,
Mr. Flanigan exercised the option to purchase 93,092 shares of the Company's
common stock, pursuant to the Employee Agreement, at $0.875 per share. The
option price in the Employment Agreement had been reduced to $0.875 per
share in December, 1989 and approved at the Company's 1990 Annual Meeting.
The Employment Agreement further provides that in the event of a "change in
control" of the Company, the term of the Agreement will continue for a
period of three years thereafter, provided that any damages due Mr. Flanigan
as a result of a change in control of the Company will be subordinate to the
claims of the secured creditors in the Company's bankruptcy proceedings,
whose damages would also be due in full. In the event of termination, Mr.
Flanigan would be entitled to a maximum of $450,000.
(3) During the quarter ended March 28, 1992, the Board of Directors approved
issuance of additional options to Joseph G. Flanigan to purchase up to
46,450 shares of the Company's common stock. The exercise price of $2.25
equaled the fair market value on the date of issuance. These options expire
February 27, 1997.
By written Resolution, dated January 12, 1994, the Board of Directors
approved an amendment to the stock option granted Joseph G. Flanigan at the
Annual Meeting of the Board of Directors, held on February 28, 1992,
increasing the amount of the option price to $6.50 per share, which
reflected in excess of 110% of the per share price of the Company's stock as
of the close of business on January 12, 1994. The expiration date of the
stock option was also extended through February 27, 2002. This action was
approved by the stockholders at the Company's 1994 Annual Meeting.
(4) See "Related Party Transactions."
<PAGE>
RELATED PARTY TRANSACTIONS
In fiscal 1995, Walter L. McManus, Sr., former Vice Chairman, (together
with his children; Castlewood and Co., a family owned Maryland partnership; and
Castlewood Realty Company, Inc., a family owned Maryland Corporation) received
an aggregate of $271,000 from the Company in lease rentals for three locations
where they leased to the Company the land or building. The Company owed agreed
to lease rejection damages of $138,000 to companies controlled by the former
Vice Chairman of the Board, which are included in and payable pursuant to the
Company's Plan of Reorganization.
Certain of the officers and directors of the Company hold securities of
a limited partnership in King of Prussia, Pennsylvania which is managed by the
Company as General Partner for a management fee of 49% of the profits. The
partnership interests of all said officers and directors represent 18.22% of the
total invested capital of $960,000 in this limited partnership.
Members of Mr. Flanigan's family own four units sold to them on a
franchise basis in prior years. The terms of these sales were similar to one or
more of the Company's other franchise sales. As a result of these sales, the
Company had accounts receivable aggregating $86,000 from parties related to Mr.
Flanigan at year-end. All such accounts were in good standing.
During fiscal 1990, Mr. Flanigan acquired a 33.33% interest in one unit
sold to his family on a franchise basis in prior years. Mr. James G. Flanigan, a
member of the Board of Directors of the Company, is also a 33.33% owner of this
unit and is the manager of the day-to-day operation of the same.
The Company assigned the Lease Agreement for this unit to the
franchisee, and vacated the sublease agreement which had been a part of the
franchise purchase. With this transaction, the franchisee becomes responsible
for all rent due under the Lease Agreement, while the Company received a fixed
franchise fee equal to $70,000 per annum through the end of the fiscal year, in
addition to the royalty contained in the franchise agreement.
During fiscal 1990, Mr. Flanigan also became a 50% owner of a
corporation which assumed management of the day-to-day operation of another unit
sold to his family on a franchise basis in prior years. Mr. Flanigan became
involved in the day-to-day operation of this unit during fiscal year 1995 on a
limited basis.
During fiscal year 1995, three of the four franchises purchased by
members of Mr. Flanigan's family in prior years, whose franchise agreements
expired during the past fiscal year, executed the Company's new franchise
agreement for the continued operation of their restaurants under the "Flanigan's
Seafood Bar and Grill" service mark or other service marks approved by the
Company.
<PAGE>
During fiscal 1990, the Company completed a foreclosure to take one
unaffiliated franchise back. This unit was sold pursuant to a private offering
to a Subchapter S Corporation whose president is the Chairman and whose
investors include three directors and members of the Chairman's family. This
unit was managed by the Company through the end of fiscal year 1992. As of the
end of fiscal year 1992, the Company was owed the sum of $86,000 representing
losses funded by the Company through that date. In the first quarter of fiscal
year 1993, the unit was operating profitably, but even without a management fee,
the losses funded by the Company had only been reduced to $77,000. As a result,
the Board of Directors agreed to purchase this unit from the group of investors
for a purchase price equal to the original investment, ($300,000), the
outstanding losses ($77,000) and the balance due on the promissory note given to
the Company when the assets were purchased in June 1990, ($56,000). In
purchasing this unit, the Board of Directors determined that the projected
profitability will provide a fair return upon investment, whereas without this
purchase, the Company would only have received its 4% management fee until the
Subchapter S Corporation received its full investment back from this unit.
During fiscal 1992, one unaffiliated franchisee expressed an interest
in selling his unit or returning it to the Company pursuant to the terms of its
franchise agreement and related documents. As a result of the substantial
investment necessary to upgrade and renovate this unit, an affiliated group of
investors formed a Subchapter S Corporation and purchased this unit from the
franchisee. The shareholder interest of all officers and directors represents
42% of the total invested capital. The shareholder interest of the Chairman's
family represents an additional 47.5% of the total invested capital. The Company
continues to receive the same royalties, rent and mortgage payments as it had
received from the unaffiliated franchisee.
The Company paid or accrued $4,400 in fees to a service company owned
by the husband of Mary C. Reymann during the past fiscal year.
The Company paid or accrued legal fees to Mr. Kastner of $90,000 during
the past fiscal year.
See footnote (2) to the Cash Compensation table for a discussion of an
Employment Agreement between the Company and its Chairman of the Board.
Each of the above transactions was reviewed by the Board of Directors
at the time made and were, in the opinion of management and the Board, entered
into on terms which were no less favorable to the Company than could be obtained
in similar transactions with disinterested third parties.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 23, 1996, the names of
persons who own of record, or are known by the Company to own beneficially, more
than 5 percent of its Common Stock, and the beneficial ownership of all such
stock as of that date by all officers and directors as a group. See footnote (2)
and (3) to the Cash Compensation Table for a discussion of stock options granted
to Mr. Flanigan.
<TABLE>
<CAPTION>
Number of
Name of Beneficial Owner Shares Percentage
------------------------ --------- ----------
<S> <C> <C>
Joseph G. Flanigan 323,428 30.4
Jeffrey D. Kastner 100,500 9.4
All Officers and Directors
as a Group (ten in number) 459,073 43.2
</TABLE>
SELECTION OF AUDITORS
The Company's Board of Directors has recommended Arthur Andersen & Co.,
independent certified public accountants as its auditors for fiscal year 1996.
They have been the Company's accountants since 1968.
During the fiscal year ended September 30, 1995, Arthur Andersen & Co.
rendered audit services to the Company, including audit of its annual financial
statements, review of reports on Form 10-KSB to the Securities and Exchange
Commission and various other accounting matters. The Audit Committee approves
audit services before they are rendered, approves the other professional
services after each is rendered, and considers the possible effect of such
services on the independence of such firm.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The rules and regulations of the Securities and Exchange commission
afford stockholders the right to submit proposals to the Company which the
Company must then include in its proxy materials and which will voted on by
stockholders at the Annual Meeting next ensuing. Under these regulations any
stockholder desiring to submit a proposal to be voted on at the 1997 Annual
Meeting of the Company must deliver the proposal to the Company no later than
September 25, 1996.
OTHER MATTERS
As of the date of this proxy statement, the management does not intend
to present, and has not been informed that any other person intends to present,
any matters for action at the meeting other than those specifically referred to
herein. If, however, any other matters are properly presented at the meeting it
is the intention of the persons named in the proxies to vote the shares of stock
represented thereby in accordance with their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
Mary C. Reymann
Secretary
January 29, 1996
<PAGE>
P R O X Y
FLANIGAN'S ENTERPRISES INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting February 23, 1996
The undersigned hereby constitutes and appoints Jeffrey D. Kastner and Mary C.
Reymann, jointly and severally as his true and lawful agents and proxies with
full power of substitution in each, to represent the undersigned at the Annual
Meeting of Stockholders of Flanigan's Enterprises Inc. to be held at the
Company's Executive Offices, 2841 Cypress Creek Road, Ft. Lauderdale, FL 33309
on Friday, February 23, 1996 at 10:00 A.M. and at any adjournments thereof on
all matters coming before said meeting.
Dated: , 1996
------------------------------------------------------
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Signature of Stockholder
This Proxy Must be Signed
Exactly as Name Appears Hereon
Executors, administrators, trustees, etc., should
give full title as such. If the signer is a
corporation, please sign full corporate name by duly
authorized officer.
(Continued on other side)
<PAGE>
(Please date and sign on reverse side)
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
for all Proposals.
1. ELECTION OF DIRECTORS.
Nominees William Patton, Germaine M. Bell, Patrick J. Flanigan
[ ] VOTE FOR all nominees listed (except as marked to the contrary below).
[ ] VOTE WITHHELD from all nominees.
Instruction: To withhold authority to vote for any individual nominee, write
nominee's name below.
-----------------------------------------------------------------------------
2. Vote to approve and ratify the selection of Arthur Andersen & Co., as
independent auditors for the Company for the 1996 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon other matters as may properly come before the
meeting.
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PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
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