SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ X ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FLANIGAN'S ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
FLANIGAN'S ENTERPRISES, INC.
2841 Cypress Creek Road
Fort Lauderdale, Florida 33309
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 28, 1997
Fort Lauderdale, Florida
January 30, 1997
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
28, 1997, 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 year 2000 Annual Meeting;
(2) To amend Section 5(b) of the Company's Employment Agreement
with Joseph G. Flanigan.
(3) To amend Section 5(c) of the Company's Employment Agreement
with Joseph G. Flanigan.
(4) To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on January 28, 1997,
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 amendments to the Employee
Agreement.
FLANIGAN'S ENTERPRISES, INC.
/s/Mary C. Reymann
------------------
Mary C. Reymann, Secretary
<PAGE>
FLANIGAN'S ENTERPRISES, INC.
2841 Cypress Creek Road
Fort Lauderdale, Florida 33309
PROXY STATEMENT
January 30, 1997
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 28, 1997, 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 28, 1997
are entitled to vote at the meeting. On that date there were outstanding 907,000
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 28, 1996
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 2000 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. Charles McManus and Mary C. Reymann have been directors since 1982
and James G. 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 28, 1997 of Class
---- ------------------- --- ----- ---------------- --------
<S> <C> <C> <C> <C> <C>
Term Ending 2000
Charles E. McManus Certified Manufacturing 82 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 72 1982 7,766 (7) *
Secretary of the Company
James G. Flanigan Vice President of Twenty- 32 1991 38,900 (3)(10) 3.7
(1) Seven Birds 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 28, 1997 of Class
---- ------------------- --- ----- ---------------- --------
<S> <C> <C> <C> <C> <C>
Term Ending 1998
Joseph G. Flanigan Chairman of the Board 67 1960 323,428 (4) 30.7
President and Chief Executive
Officer of the Company
Jeffrey D. Kastner Principal, law firm of Jeffrey 43 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 67 1985 - -
Package Operations, Package
Store Manager since 1992, of
Big Daddy's #14, Inc. a
Franchisee
Term Ending 1999
William Patton Vice President of Community 74 1990 7,666 (7) *
Relations since 1981, prior
thereto Vice President,
Lounge Operations
Germaine M. Bell Former Assistant Secretary 64 1984 - -
of the Company
Patrick J. Flanigan President of B.D. 43 36 1991 20,775 (2) 2.0
(1) Corporation, a Franchisee
since 1985
Total shares beneficially owned by all directors
and executive officers as a group (ten in number). 473,073 (4)(6)(9) 44.9
* Less than 1%
<PAGE>
<CAPTION>
(1) James G. and Patrick J. Flanigan are the sons of the Chairman of
the Board.
(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.
(10) Includes options to acquire 14,000 shares of Common stock
pursuant to the Company's Key employee Incentive Stock Option Plan.
</TABLE>
The Board of Directors met four 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.
<PAGE>
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 1996 were Charles McManus,
Jeffrey Kastner and Charles Kuhn.
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 28, 1996 to all of the Company's
executive officers whose aggregate direct re-numeration exceeded $60,000, and to
all executive officers as a group.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Other
Name and Principal Position Annual Compensation Compensation (2)
- --------------------------- ------------------- ----------------
<S> <C> <C>
Joseph G. Flanigan, (3) $150,000 $34,000
Chairman of the Board,
Chief Executive Officer
and President
Jeffrey D. Kastner, 96,000
Assistant Secretary
and General Counsel
Edward A. Doxey, 65,000
Treasurer
Others (2) 67,000 8,000
------- -------
All Executive Officers
as a group (5) $378,000 $42,000
<PAGE>
<CAPTION>
(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.
(2) Represents value of Premium paid by the Company for life
insurance.
(3) 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. For the fiscal years ended September 30, 1995 and
September 28, 1996 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.
During fiscal year 1996, (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.
(4) 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.
<PAGE>
<CAPTION>
By written Resolution, dated January 12, 1994, the Board of
Directors approved an amendment to the stock option granted Joseph
G. Flanigan 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.
(5) See "Related Party Transactions."
</TABLE>
RELATED PARTY TRANSACTIONS
In fiscal year 1996, 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 $233,000 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 $95,000 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 held securities of
a limited partnership in King of Prussia, Pennsylvania which was 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 represented 18.22% of
the total invested capital of $960,000 in this limited partnership. This unit
was sold September 20, 1996. See page 10 of the Form 10-KSB for the period ended
September 28, 1996 for further discussion of the sale.
Members of Mr. Flanigan's family purchased 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 $3,000 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. Under the new Franchise agreement
the Company receives the royalty fee only.
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.
<PAGE>
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.
During the past fiscal year, the Company's franchise agreement with the
fourth member of Mr. Flanigan's family expired and was not renewed nor was a new
franchise agreement executed with said franchisee. Subsequent to the end of the
fiscal year and the filing of Form 10-KSB for the period ended September 28,
1996, the Company filed suit against the franchisee for servicemark
infringement.
Effective September 30, 1996, one franchised combination package store
and restaurant terminated its franchise agreement. The franchise was sold to a
related third party (the "First Purchaser"), with the Company's agreement to
manage the franchise for this related party. The management agreement was to
provide the Company with management fees equal to 50% of the franchise's cash
flow. Subsequent to the sale of the franchise, the Company accepted the offer of
another franchisee (the "Manager"), also a related party and member of Mr.
Flanigan's family, to purchase the Company's right to manage the franchise for
the sum of $150,000. Additionally, the Manager also purchased the franchise from
the First Purchaser. (The Company expects to record $150,000 of income in the
first quarter of fiscal 1997, upon the sale of the management rights.)
To raise capital for the renovations, a Florida limited partnership
will be formed, of which the Manager will be the general partner. The limited
partnership units will be sold as follows: 25% to Manager, 25% to the Company,
25% to related parties and 25% to unrelated parties. The Manager will receive a
management fee of 50% of the franchise's cash flow.
The Company paid or accrued $6,000 in fees to a service company owned
by the husband of Mary C. Reymann during the past fiscal year.
See footnote (3) to the 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 30, 1997, 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 (3)
and (4) to the 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 30.7
Jeffrey D. Kastner 100,500 9.4
All Officers and Directors
as a Group (ten in number) 473,073 44.9
</TABLE>
<PAGE>
SELECTION OF AUDITORS
The Company's Board of Directors anticipates retaining Arthur Andersen
LLP, independent certified public accountants as its auditors for fiscal year
1997. They have been the Company's accountants since 1968.
During the fiscal year ended September 28, 1996, Arthur Andersen LLP,
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 1998 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 1998 Annual
Meeting of the Company must deliver the proposal to the Company no later than
September 26, 1997.
Amendment to Section 5(b) Of The Executive Employment Agreement
Between The Company And Joseph G. Flanigan.
As described in Note (2) to the Compensation Table, 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. The Company is seeking shareholder approval of a proposed amendment
to the Employment Agreement to provide that:
Section 5(b) be modified to provide that during the period of Mr. Flanigan's
employment, the Company shall pay Mr. Flanigan, in addition to the base salary
set forth in subparagraph 5(a), an amount equal to fifteen (15%) percent of the
annual income of the Company before income taxes, in excess of Six Hundred Fifty
Thousand Dollars ($650,000.00), excluding extraordinary items.
The proposed amendment is contained in paragraph 1 of the First
Amendment to Employee Agreement, dated January 8, 1997 by and between the
Company and Joseph G. Flanigan, a copy of which is attached to the Employee
Agreement, which is attached hereto as Exhibit A.
Amendment to Section 5(c) Of The Executive Employment Agreement
Between The Company And Joseph G. Flanigan.
The Company is seeking shareholder approval of a proposed amendment to the
Employment Agreement to provide that:
<PAGE>
Section 5(c) be modified to grant Mr. Flanigan the option to acquire
4.99% of the amount of common stock of the Company outstanding as of the date of
exercise, but not less than 45,350 shares, at the option price of $4.95 per
share. The option price shall be adjusted pro rata to reflect any stock splits,
stock dividends or other stock issuances. The sale shall be completed by
delivery of the shares against full payment in cash therefore on such date not
later than December 31, 2001. These options are not subject to any forfeiture by
Mr. Flanigan and may be exercised by Mr. Flanigan before or subsequent to the
termination of this Agreement. If a "change in control of the Company" as
defined in Section 7(g) occurs, the entire amounts can be immediately
exercisable.
The proposed amendment is contained in paragraph 2 of the First
Amendment to Employee Agreement, dated January 8, 1997 by and between the
Company and Joseph G. Flanigan, a copy of which is attached to the Employee
Agreement, which is attached hereto as Exhibit A.
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
/s/Mary C. Reymann
------------------
Mary C. Reymann
Secretary
January 30, 1997
<PAGE>
EXHIBIT A TO FLANIGAN'S ENTERPRISES, INC. 1997 PROXY STATEMENT
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), by and between FLANIGAN'S
ENTERPRISES, INC., a Florida corporation (the "Company"), and Joseph G. Flanigan
(the "Executive"), is dated this 3rd day of June, 1987.
PRELIMINARY STATEMENT
In order to prosper as a significant member of the financial, business, and
civic community of South Florida, the Company needs to retain capable and
experienced senior executive personnel. The Executive has been an employee of
the Company for over twenty (20) years and has been Chairman of the Board and
Chief Executive Officer of the Company during the last five (5) years. The
Executive has successfully developed the Company's business plan and guided the
Company and its employees through various financial difficulties encountered by
the Company, including its recent filing for protection under Chapter 11 of the
United States Bankruptcy Code.
Over the last three (3) years, the Executive has been employed by the Company
pursuant to an employment agreement dated January 1, 1983 providing for an
annual salary of $250,000.00. The Company desires to amend the terms of the
January 1, 1983 employment agreement to provide for options to acquire
approximately 93,000 shares of the Company's common stock, par value $.IO per
share (the "Common Stock"), in return for a $100,000.00 per year reduction in
the Executive's salary. The Company and the Executive believe the annual cash
savings to, and cash infusion in, the Company upon the Executive's exercise of
the options are in the Company's best interest. The Company also desires to
encourage the Executive to strive for the profitability and success of the
Company and desires to assure both itself and the Executive of the continuity of
management in the event of any actual or threatened change in control of the
Company.
TERMS
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, the receipt and adequacy of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
1. EMPLOYMENT
The Company hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to continue to serve the Company, on the terms and conditions set
forth herein.
<PAGE>
2. TERM
The employment of the Executive by the Company as provided in Section I will
commence on the date hereof and end on December 31, 1988, unless further
extended or sooner terminated &a hereinafter provided. On December 31, 1988 and
annually thereafter (the "Renewal Date"), the term of the Executive's employment
shall automatically be extended one (1) additional year, unless prior to such
Renewal Date, the Company shall have delivered to the Executive, or the
Executive shall have delivered to the Company, written notice that the term of
the Executive's employment hereunder will not be extended.
3. POSITION AND DUTIES
The Executive shall serve as Chairman of the Board and Chief Executive Officer
of the Company and shall have such responsibilities and authority as may from
time to time be assigned to the Executive by the Board of Directors of the
Company. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company.
4. PLACE OF PERFORMANCE
In connection with the Executive's employment by the Company, the Executive
shall be based at the principal executive offices of the Company, which shall
remain in Dade or Broward County, Florida, except for required travel on the
Company's business to an extent substantially consistent with present travel
obligations.
5. COMPENSATION AND RELATED MATTERS
(a) Base Salary. During the period of the Executive's employment
hereunder, the Company shall pay to the Executive a base salary of not more than
$150,000.00 per annum in 26 equal installments as nearly as practicable on every
other Thursday in arrears. This base salary Now be increased or decreased from
time to time in accordance with the normal business practices of the Company.
The base salary compensation of the Executive shall neither be deemed exclusive
nor shall it prevent the Executive from participating in any other compensation
or benefit plan of the Company.
The term "Base Salary" shall be deemed to include any and all amounts received
by the Executive from either the Company or any of its Subsidiaries and
Affiliates. The base salary payments (including any increased base salary
payments) hereunder shall not in any way limit or reduce any other obligation of
the Company nor any other compensation benefit or payment hereunder shall in any
way limit or reduce the obligation of the Company to pay the Executive's base
salary.
(c) Stock Options. The Company hereby grants the Executive options to
acquire the following amounts of the Company's common stock in the years
indicated:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Exercisable on or after
January 1, 1986 4.99% of the amount of common Stock outstanding as of
the date of exercise, but not less than 46,546 shares, at the
option price of $.875 per share.
Exercisable on or after
January 1, 1987 4.99% of the amount of common Stock outstanding as of
the date of exercise but not less than 46,546 shares, at the
option price of $.875 per share.
</TABLE>
Such option price shall be adjusted pro rata to reflect any stock splits, stock
dividends, or other stock issuances. The sale shall be completed by delivery of
the shares against full payment in cash therefore on such date not later than
December 31, 1995. These options are not subject to any forfeiture by the
Executive and may be exercised by the Executive before or subsequent to the
termination of this Agreement. If a "change in Control of the Company" as
defined in Section 7(g) occurs, the entire amounts can be immediately
exercisable.
(d) Expenses. During the tern of the Executive's employment hereunder,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing services hereunder,
including all travel and living expenses while away from home and on business or
at the request of and in the service of the Company, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company.
(e) Other Benefits. The Company shall maintain in full force and
effect, and the Executive shall be entitled to continue to participate in, all
of its benefit plans and arrangements in effect on the date hereof in which the
Executive participates, including without limitation each pension and retirement
plan and arrangement, supplemental pension and retirement plans and
arrangements, stock option plans, employee stock ownership plans, life insurance
and health-and-accident plans and arrangement, medical insurance plans,
disability plans, survivor income plans, and relocation and vacation plans. The
Company shall not make any changes in such plans or arrangements which will
adversely affect the Executive's rights or benefits thereunder. The Executive
shall also be entitled to participate in or receive benefits under any employee
benefit plan or arrangement made available by the Company in the future to its
executives and key management employees, subject to, and on a basis consistent
with, the terms, conditions, and overall administration of such plans and
arrangements.
Nothing paid to the Executive under any plan or arrangement which is
presently in effect, or made available in the future, shall be deemed to be in
lieu of the base salary payable to the Executive pursuant to Paragraphs (a) and
(b) of this Section.
(f) Vacations. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation, in accordance with the
Company's vacation plan, but not more than six weeks per year. The Executive
shall also be entitled to all paid holidays given by the Company to its
executives.
<PAGE>
(g) Services Furnished. The Company shall furnish the Executive with
office space, secretarial assistance, and such other facilities and services at
the Company's executive offices in Dade or Broward County, Florida, as shall be
suitable to the Executive's position and adequate for the performance of his
duties as set forth in Section 3 hereof.
(h) Subsidiaries and Affiliates. When used in this Agreement, the term
"Company" shall be deemed to include any and all Subsidiaries and Affiliates of
the Company.
6. OFFICES
The Executive agrees to serve, if elected or appointed thereto, as a
Director of the Company and any of its Subsidiaries and Affiliates provided that
the Executive is indemnified for serving in any and all such capacities on a
basis no less favorable than is currently provided for under the Company's
By-laws.
7. TERMINATION
The Executive's employment hereunder my be terminated without any
breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate
immediately upon his death.
(b) Disability. The Company my terminate the Executive's employment
hereunder if, due to physical or mental illness, the Executive shall have been
absent from his duties on a full-time basis for an entire period of six
consecutive months, and, if within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such six-month
period), the Executive fails to return and perform his duties on a full time
basis.
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon the willful
commission of an act of dishonesty or fraud by the Executive. For purposes of
this Paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Executive shall not
be deemed to have been terminated for Cause without (i) reasonable notice to the
Executive setting forth the reasons for the Company's intention to terminate for
Cause, (ii) an opportunity for the Executive, together with his counsel, to be
heard before the full Board of Directors of the Company, and (iii) delivery to
the Executive of a Notice of Termination as defined in subsection (e) hereof
finding that in the good faith opinion of such Directors the Executive was
guilty of conduct set forth above in the preceding sentence, and specifying the
particulars thereof in detail.
(d) Termination by the Executive. The Executive may terminate his
employment hereunder for Good Reason.
<PAGE>
For purposes of this Agreement, "Good Reason" shall seen (A) a failure
by the Company to comply with any material provision of this Agreement which has
not been cured within ten (10) days after notice of such noncompliance has been
given by the Executive; (B) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of paragraph (a) hereof (for purposes of this Agreement no such
purported termination by the Company shall be effective); (C) an assignment to
the Executive of any duties inconsistent with, or a significant change in the
nature or scope of this Executive's authorities or duties from those authorities
and duties held by the Executive as of the date hereof and as increased from
time to time; (D) failure by the Company to obtain the assumption of the
commitment to perform this Agreement by any successor corporation; or (E)
relocation of the Company's executive offices outside of Dade or Broward
Counties, provided said relocation is not at the Executive's direction.
(e) Any termination of the Executive's employment by the Company or by
the Executive (other than termination pursuant to subsection (a) above) shall be
communicated by written Notice of Termination to the other party. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for the termination of the Executive's employment under the
provision so indicated.
(f) "Date of Termination" shall mean (i) if the Executive's employment
is terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated pursuant to subsection (b) above, thirty (30) days
after Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties an a full-time basis), (iii) if the
Executive's employment is terminated pursuant to subsections (b), (c), or (a)
above, the date specified in the Notice of Termination; (iv) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given, provided that if within (30) day after any Notice of
Termination is given, the party receiving such Notice of Termination notifies
the other party that no dispute exists concerning the termination, or if there
is a dispute concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined by a mutual, written agreement
of the parties, by a binding and final arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected).
(g) For purposes of this Agreement, a "Change in Control of the
Company" shall mean a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A or Regulation 14A promulgated
under the Securities and Exchange Act of 1934 (the "1934 Act"), provided that
without limitation, such a change in control shall be deemed to have occurred if
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the 1934 Act), other than the Company or the Executive, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or (ii)
individuals who at -the beginning of such period Constitute the Board of
Directors cease for any reason to constitute at least a majority thereof, unless
the election of each Director who was not a Director at the beginning of such
period has been approved in advance by Directors representing at least two
thirds of the Directors then in office who were Directors at the beginning of
the period.
<PAGE>
8. COMPENSATION UPON TERMINATION
(a) If the Executive's employment is terminated due to Death,
Disability, or Good Reason, the Executive, at his election, shall receive (i)
the amount to be paid under Section 5(a) hereof for the remaining term of this
Agreement; or (ii) a lump sum payment equal to the present value, based on a
discount rate equal to the prime rate of Citibank, N.A. then in effect, of the
total of the amount specified in Section 8(a)(i) hereof.
Except that if a "Change in Control of the Company" as defined in
Section 7(g) of this Agreement has occurred prior to the time the Executive's
employment is terminated, the remaining term of this Agreement shall be assumed
to be three (3) years from the Date of Termination for the purposes of
determining the amounts payable under this Section 8(a). Notwithstanding
anything contained herein to the contrary, the Executive acknowledges and agrees
that any payment due hereunder shall be subordinate to any payments due the
Class 6 Unsecured Creditors in the Company's Plan of Reorganization due to the
acceleration of the promissory notes of the Class 6 Unsecured Creditors as a
result of a "Change in Control of the Company."
(b) Unless the Executive is terminated for Cause, the Company shall
maintain in full force and effect, for the continued benefit of the Executive
for the greater of the number of years (including partial years) remaining in
the term of employment hereunder, all employee benefit plans and programs in
which the Executive was entitled to participate immediately prior to the Date of
Termination, provided that the Executive's continued participation is possible
under the general term and provisions of such plans and programs. In the event
that the Executive's participation in the Company's group health plan and/or
life insurance program is barred, the Company shall be required to provide the
Executive with benefits substantially similar to those which the Executive would
otherwise have been entitled to receive under such plan and program from which
his continued participation is barred. In the event that the Executive's
participation in any plan or program, other than the group health plan and/or
life insurance program is barred, the Company shall not be required to provide
the Executive with benefits substantially similar to those which the Executive
would otherwise have been entitled to receive under such plans and programs from
which his continued participation is barred.
Notwithstanding the foregoing and subject to all other limitations set
forth in this Agreement, should the Executive elect to receive a lump sum payout
as specified in Section 8(a)(ii) hereof, the benefits payable to the Executive
hereunder shall be paid i ' n the form of a cash payment equal to 20% of the
lump sum payable to the Executive under Section 8(a)(ii).
(c) Notwithstanding the foregoing, in no event shall the total amount
of payments made under this Agreement on account of any termination occurring as
a result of a "change in control of the Company" exceed the aggregate present
value of three times the "Base Salary Amount" minus one dollar. "Base Salary
Amount" means the average annualized compensation income from the Company in the
Executive's gross income for Federal income tax purposes over the five years
preceding the year in which control of the Company occurred. This paragraph, and
the language therein, shall be interpreted consistently with Section 280g of the
Internal Revenue Code of 1954, as amended, and any regulations thereunder.
<PAGE>
9. SUCCESSORS; BINDING AGREEMENT
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by Agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place., Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same. amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, the term "Company" also means the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executed and delivers the agreement provided for in this Section
(a) or which otherwise becomes bound by all of the terms and provisions of this
Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder, including
but not limited to stock options, shall inure to the benefit of and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee or other designee or, if there be no such designee, to the
Executive's estate. If the Executive should die prior to exercising the stock
options granted herein, his personal or legal representative, executor or
administrator may exercise the same for a period of six (6) months following the
date of the Executive's death.
10. NOTICE
For purposes of this Agreement, notices, demands, and all other
communications provided for under the terms of this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Joseph G. Flanigan
29 Cayuga Road
Sea Ranch Lakes, Florida 33308
If to the Company: Flanigan's Enterprises, Inc.
2841 Cypress Creek Road
Ft. Lauderdale, Florida 33309
11. MISCELLANEOUS
No Provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification, or discharge is agreed to in writing and
signed by the Executive and a duly authorized officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time, or compliance with any condition or provision of this Agreement to be
performed by such other party, shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
<PAGE>
The Company and Executive agree that no agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof, have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Florida.
12. VALIDITY
The validity or unenforceability of any provision of this Agreement
shall not affect the validity of enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
14. ARBITRATION
Any dispute or controversy arising under, or in connection with this
Agreement, shall be settled exclusively by arbitration to be conducted before a
panel of three arbitrators, in Miami, Florida, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
FLANIGAN'S ENTERPRISES, INC.
Attest:
By:/s/ Mary C. Reymann By:/s/Stephen L. Bobersky
------------------- ----------------------
MARY C. REYMANN STEPHEN L. BOBERSKY, PRESIDENT
FLANIGAN'S ENTERPRISES, INC.
EXECUTIVE
By:/s/ Germaine M. Bell By:/s/Joseph G. Flanigan
-------------------- ---------------------
GERMAINE M. BELL JOSEPH G. FLANIGAN
<PAGE>
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT, (the "First Amendment"),
is entered into on this the 8th day of January, 1997, by and between FLANIGAN'S
ENTERPRISES, INC., a Florida corporation, (the "Company"), and JOSEPH G.
FLANIGAN, (the "Executive"), and this First Amendment alters, modifies,
supersedes and amends that certain Employment Agreement, dated June 3, 1987, by
and between the Company and the Executive, in any manner in which it is
inconsistent therewith.
1 . Section 5(b), entitled "Profit Sharing", is hereby deleted in its
entirety and in its place is substituted the following:
(b) Profit Sharing. In an attempt to increase the Company's
projected annual profits, the Company will allow the
Executive to participate and share in a profit sharing
program. During the period of the Executive's employment
hereunder, the Company shall pay the Executive, in addition
to the base salary set forth in subparagraph 5(a) above, an
amount equal to fifteen (15%) percent of the annual income
of the Company before income taxes, in excess of Six Hundred
Fifty Thousand Dollars ($650,000.00), excluding
extraordinary items.
2. In view of the fact that the Executive has exercised the stock
options provided in Section 5(c) of the Employment Agreement, Section 5(c) is
hereby modified to add the following language thereto:
The Company hereby grants the Executive the option to
acquire 4.99% of the Common Stock of the Company outstanding
as of the date of exercise, but not less than Forty Five
Thousand Three Hundred Fifty (45,350) shares, at the option
price of Four Dollars and Ninety Five Cents ($4.95) per
share. Such option price shall be adjusted prorata to
reflect any stock splits, stock dividends or other stock
issuances. The sale shall be completed by delivery of the
shares against full payment in cash therefore on such date
not later than December 31, 2001. These options are not
subject to any forfeiture by the Executive and may be
exercised by the Executive before or subsequent to the
termination of this Agreement, If a "Change in Control of
the Company" as defined in Section 7(g) occurs, the entire
amounts can be immediately exercisable.
3. Except as expressly modified herein, all other terms and conditions
of the Employment Agreement remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this First Amendment on
the day and year first above written.
THE COMPANY:
FLANIGAN'S ENTERPRISES, INC.
By: /s/ William Patton
--------------
WILLIAM PATTON, V.P.
Attest:/s/ Jeffrey D. Kastner
------------------
JEFFREY D. KASTNER, ASST. SECRETARY
THE EXECUTIVE:
/s/Jeffrey D. Kastner By: /s/ Joseph G. Flanigan
- --------------------- ------------------
JEFFREY D. KASTNER JOSEPH G. FLANIGAN
/s/Clare Kauffman
- -----------------
CLARE KAUFFMAN
<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 28, 1997
The undersigned hereby constitutes and appoints Jeffrey D. Kastner and Mary C.
Reymann, jointly and severely 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 28, 1997 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.
I. ELECTION OF DIRECTORS.
Nominees Charles E. McManus, Mary C. Reymann, James G. 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. To amend Section 5(b) of the Company's Employment Agreement with Joseph G.
Flanigan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To amend Section 5(c) of the Company's Employment Agreement with Joseph G.
Flanigan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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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