===============================================================================
As filed with the Securities and Exchange Commission on July 13, 1995
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BAYPORT RESTAURANT GROUP, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
59-1827599
(I.R.S. Employer Identification Number)
4000 Hollywood Boulevard
Hollywood, Florida 33021
Telephone: (305) 967-6700
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
David J. Connor
Chief Executive Officer
Bayport Restaurant Group, Inc.
4000 Hollywood Boulevard
Hollywood, Florida 33021
Telephone: (305) 967-6700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Philip B. Schwartz, P.A.
Broad and Cassel
Miami Center
201 South Biscayne Boulevard, Suite 3000
Miami, Florida 33131
Telephone: (305) 373-9437
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [X]
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<PAGE>
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A), OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Proposed
Amount Proposed Maximum Amount of
Title of Each Class of Securities Being Registered Being Maximum Aggregate Registration
Registered Offering Price Offering Fee
Per Security Price
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 518,750 $4.375 2,269,531 $782.53
- -----------------------------------------------------------------------------------------------------------------------------------
Total Registration Fee....................................... $782.53
------
===================================================================================================================================
<FN>
- ------------------
(1) Estimated solely for the purpose of calculating the registration fee, on
the basis of the last sale price of the Common Stock on July 7, 1995.
</FN>
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
BAYPORT RESTAURANT GROUP, INC.
CROSS-REFERENCE SHEET
REGISTRATION STATEMENT CAPTION OR
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
----------------------- ----------------------
<S> <C> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus Inside Front and Outside Back Cover
Pages of Prospectus
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges Prospectus Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security-Holders Selling Shareholders; Plan of Distribution
8. Plan of Distribution Front Cover Page; Selling Shareholders;
Plan of Distribution
9. Description of Securities to be Registered Description of Securities
10. Interests of Named Experts and Counsel Experts; Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information by
Reference Incorporation of Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities Not Applicable
</TABLE>
(iii)
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PRELIMINARY PROSPECTUS, DATED JULY 13, 1995
518,750 SHARES
BAYPORT RESTAURANT GROUP, INC.
COMMON STOCK
Bayport Restaurant Group, Inc. (the "Company") hereby registers 518,750
shares (the "Shares") of its common stock, $.001 par value (the "Common Stock")
for the account of certain selling shareholders. The Shares are issuable as
follows: (i) 437,500 of the Shares are issuable to holders of the Company's
Series B and Series C Warrants upon the exercise of those warrants; (ii) 31,250
of the Shares are issuable to Louis Hirsh ("Hirsh") upon the exercise of an
outstanding stock option (the "Hirsh Option"); and (iii) 50,000 of the Shares
are issuable to Radcliffe & Associates ("Radcliffe") upon the exercise of an
outstanding stock option (the "Radcliffe Option"). See "Description of
Securities" for a description of the Series B and Series C Warrants, the Hirsh
Option and the Radcliffe Option. For all purposes, the Series B and Series C
Warrants are sometimes collectively referred to herein as the "Warrants" and the
holders of the Warrants, Hirsh and Radcliffe are sometimes collectively referred
to herein as the "Selling Shareholders." See "Selling Shareholders."
The holders of the Shares may sell the Shares registered hereby from
time to time in the public market. See "Plan of Distribution." The Company will
receive the proceeds from the exercise of the Warrants, the Hirsh Option and the
Radcliffe Option, but will not receive any proceeds from the sale by the Selling
Shareholders of the Shares. Further, the Selling Shareholders will not bear any
of the expenses related to this registration.
The Common Stock is quoted on the National Association of Securities
Dealers, Inc. National Market System ("NASDAQ-NMS") under the symbol "PORT." On
July 7, 1995, the last sale price of the Common Stock on the NASDAQ-NMS was
$4.375 per share.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
DISCUSSION UNDER "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is , 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., and at its following
regional offices: Suite 788, 1375 Peachtree St. N.E., Atlanta, Georgia 30367;
Suite 1400, 500 West Madison Street, Chicago, Illinois; and 7 World Trade
Center, New York, New York. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Act") with respect
to the securities being offered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto. For further information about the Company and the securities
offered hereby, reference is made to the Registration Statement and to the
exhibits filed as a part thereof. The statements contained in this Prospectus as
to the contents of any contract or other document identified as exhibits in this
Prospectus are not necessarily complete and, in each instance, reference is made
to a copy of such contract or document filed as an exhibit to the Registration
Statement, each statement being qualified in any and all respects by such
reference. The Registration Statement, including exhibits, may be inspected
without charge at the principal reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all
or any part thereof may be obtained upon payment of fees prescribed by the
Commission from the Public Reference Section of the Commission at its principal
office in Washington, D.C. set forth above.
The Company's Common Stock is quoted on the NASDAQ-NMS under the symbol
"PORT." All of the reports required to be filed by the Company with NASDAQ and
other information concerning the Company can be inspected at 1735 K Street,
N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are hereby
incorporated by reference in this Prospectus: (1) the Company's Annual Reports
on Form 10-KSB for the years ended December 26, 1994 and December 27, 1993, (2)
the Company's Quarterly Report on Form 10-QSB for the quarter ended March 27,
1995, and (3) the Company's Proxy Statement, dated April 17, 1995, for its 1995
Annual Meeting of Shareholders. Additionally, each document filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to
the date of this Prospectus but prior to the termination of this offering to
which this Prospectus relates, shall be deemed to be incorporated by reference
in this Prospectus and made a part of this Prospectus from the date any such
document is filed. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents described above, other than exhibits to such
documents (unless such exhibits have been specifically incorporated by reference
therein). Requests for such copies should be directed to Ruth Stack, Corporate
Secretary, at the principal executive offices of the Company at 4000 Hollywood
Boulevard, Hollywood, Florida 33021, telephone (305) 967-6700.
(2)
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION AND FINANCIAL STATEMENTS (INCLUDING NOTES) APPEARING ELSEWHERE IN
THIS PROSPECTUS. UNLESS THE CONTEXT INDICATES OTHERWISE, THE "COMPANY" REFERS TO
BAYPORT RESTAURANT GROUP, INC., A FLORIDA CORPORATION, AND ITS SUBSIDIARIES.
UNLESS OTHERWISE SPECIFICALLY INDICATED, THE INFORMATION CONTAINED IN THIS
PROSPECTUS DOES NOT GIVE EFFECT TO THE EXERCISE OF ANY OUTSTANDING WARRANTS OR
OPTIONS TO PURCHASE SHARES OF COMMON STOCK. UNLESS OTHERWISE SPECIFICALLY
INDICATED, ALL REFERENCES HEREIN TO THE COMMON STOCK REFLECT A ONE-FOR-FOUR
REVERSE STOCK SPLIT EFFECTED BY THE COMPANY IN RESPECT OF ITS COMMON STOCK ON
AUGUST 18, 1993. INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH
UNDER THE HEADING "RISK FACTORS."
THE COMPANY
The Company operates full service "Crab House" seafood restaurants and
"Capt. Crab's Take-Away" seafood restaurants. The Company also operates a
seafood processing facility that provides the Company's restaurants with crab
products and sells crab products on a wholesale basis.
At present, the Company operates eleven "Crab House" full service
seafood restaurants. The Company has leased sites and/or commenced construction
on an additional six "Crab House" restaurants, all of which are expected to be
opened by the end of 1995. The Company's current expansion plan also calls for
the opening of between seven and nine additional "Crab House" restaurants during
1996.
Of the Company's presently opened "Crab House" restaurants, seven are
located in Florida (Miami, Ft. Lauderdale, Boca Raton, Key West, Plantation and
Orlando), two are located in the Atlanta, Georgia area, one is located in Myrtle
Beach, South Carolina and one is located in Biloxi, Mississippi. Of the five
"Crab House" restaurants presently under construction, one is located in
Chicago, Illinois, one is located in Aventura, Florida, one is located in Myrtle
Beach, South Carolina, one is located in Gulfport, Mississippi and two are
located in New York (Manhattan (Chelsea Piers) and Great Neck). Three of the
Company's restaurants are or will be located in hotels (Key West, Biloxi, and
Gulfport). In these restaurants, in addition to operating the restaurant, the
Company also provides hotel food service and banquet operations.
The Company's "Crab House" restaurants serve a broad selection of crab,
shrimp and seafood-entrees. Each restaurant also features a distinctive seafood
salad bar. The restaurants range in size from approximately 4,000 square feet to
14,000 square feet and operate in both tourist and convention markets and
densely populated areas with upper middle income demographics.
At present the Company operates four "Capt. Crab's Take-Away"
restaurants, three in Florida and one (recently opened) in Landover, Maryland.
The Company is presently constructing an additional "Capt. Crab's Take-Away"
restaurant in Forrestville, Maryland. This restaurant is expected to open during
the second quarter of 1995.
The Company's "Capt. Crab's Take-Away" restaurants feature garlic
crabs, stewed crabs and other seafood entrees served with a selection of side
dishes. The facilities each have a drive-thru pick up window. The Florida
restaurants are each approximately 1,500 to 2,000 square feet with little or no
interior seating. The two Maryland restaurants are approximately 3,000 square
feet with interior seating.
The Company's executive offices are located at 4000 Hollywood
Boulevard, Hollywood, Florida 33021. Its telephone number is (305) 967-6700.
(3)
<PAGE>
USE OF PROCEEDS
The Company will receive none of the proceeds from sales of the Shares
by the Selling Shareholders. Any proceeds received by the Company upon the
exercise of the Warrants, the Hirsh Option and/or the Radcliffe Option will be
used for working capital. See "Use of Proceeds."
COMMON STOCK OUTSTANDING
As of March 30, 1995, the Company has outstanding 9,474,667 shares of
Common Stock and 2,446,249 shares of Series B Convertible Preferred Stock. Each
share of Series B Convertible Preferred Stock is convertible into 1/4 of one
share of Common Stock (or into 611,562 shares of Common Stock in the aggregate).
Additionally, at that date, there were outstanding options and warrants to
purchase 2,446,086 shares of Common Stock (including the Warrants, the Hirsh
Option and the Radcliffe Option).
PLAN OF DISTRIBUTION
The distribution of the Shares by the Selling Shareholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market, on the NASDAQ-NMS, or any exchange
on which the Common Stock may then be listed, in negotiated transactions,
through the writing of options on shares (whether such options are listed on an
options exchange or otherwise), or a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Shareholders and/or
purchasers of shares for whom they may act as agent (which compensation may be
in excess of customary commissions).
The Selling Shareholders may also sell such shares pursuant to Rule 144
promulgated under the Act, or may pledge shares as collateral for margin
accounts and such shares could be resold pursuant to the terms of such accounts.
The Selling Shareholders and any broker-dealers that act in connection with the
sale of Common Stock might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Act and any commissions received by them and any profit on
the resale of the shares might be deemed to be underwriting discounts or
commissions under the Act. The Selling Shareholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the Common Stock against certain liabilities, including liabilities arising
under the Act.
(4)
<PAGE>
SUMMARY FINANCIAL DATA
THE SUMMARY FINANCIAL DATA SET FORTH BELOW IS DERIVED FROM THE AUDITED
FINANCIAL STATEMENTS FOR EACH OF THE THREE YEARS ENDED DECEMBER 1994, 1993 AND
1992, AND UNAUDITED STATEMENTS FOR EACH OF THE THREE MONTHS ENDED MARCH 1995 AND
1994, INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. SUCH INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS INCLUDING THE NOTES
THERETO.
<TABLE>
<CAPTION>
STATEMENT OF INCOME DATA
THREE MONTHS
ENDED MARCH, YEARS ENDED DECEMBER,
----------------- ---------------------
1995 1994 1994 1993 1992
---- ---- ---- ---- ----
REVENUES
<S> <C> <C> <C> <C> <C>
Restaurant sales $10,742,385 $8,297,711 $33,735,307 $23,799,997 $18,240,992
Processing plant sales 1,655,018 711,072 4,511,097 2,625,961 1,859,063
Interest and other 31,543 88,363 243,740 568,457 732,843
----------- ---------- ----------- ----------- -----------
Total Revenues 12,428,946 9,097,146 38,490,144 26,994,415 20,832,898
COSTS AND EXPENSES
Cost of sales 3,741,670 2,845,705 12,150,640 8,299,384 6,354,837
Payroll and related expenses 2,442,373 1,945,971 8,269,479 5,997,628 4,619,087
Other operating expenses 1,749,925 1,365,605 5,596,002 4,122,028 3,177,090
Occupancy and related expenses 911,649 673,483 2,739,770 2,096,768 1,589,848
Processing plant cost of sales and
operating expenses 1,688,900 688,483 4,444,153 2,625,038 1,820,063
Restaurant opening expenses 99,250 19,096 286,635 80,794 25,000
General and administrative 894,056 830,100 3,381,316 2,295,134 1,930,398
Interest expense - 22,904 39,861 212,512 266,795
Net loss on investment securities - - 248,768 - -
----------- ---------- ----------- ----------- -----------
Total costs and expenses 11,527,823 8,391,347 37,156,624 25,729,286 19,783,118
Income from operations 901,123 705,799 1,333,520 1,265,129 1,049,780
Provision for income taxes (306,382) (197,624) (393,695) - -
Minority interest in net
earnings of subsidiary - - - (121,765) (175,921)
Cumulative effect of accounting
change - - - 223,295 -
----------- ---------- ----------- ----------- -----------
Net earnings $ 594,741 $ 508,175 $ 939,825 $ 1,366,659 $ 873,859
========== ========== ========== =========== ==========
Net income per Common Share $ .06 $ .05 $ .09 $ .18 $ .17
========== ========== ========== =========== ==========
Weighted Average Shares
Outstanding 10,400,650 10,439,000 10,434,240 7,427,614 5,159,516
========== ========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET DATA
MARCH 27, 1995 DECEMBER 26, 1994
-------------- -----------------
<S> <C> <C>
Working capital $3,743,122 $8,080,942
Current Assets 6,977,553 10,715,075
Total assets 27,322,353 28,526,198
Current liabilities 3,234,431 2,634,133
Long Term Liabilities 2,075,161 4,778,228
Stockholders' equity 21,634,329 21,006,587
</TABLE>
(5)
<PAGE>
RISK FACTORS
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A DEGREE OF RISK
AND SHOULD BE REGARDED AS SPECULATIVE. IT IS IMPOSSIBLE TO FORESEE AND DESCRIBE
ALL THE RISKS AND BUSINESS, ECONOMIC AND FINANCIAL FACTORS WHICH MAY AFFECT THE
COMPANY. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, IN ADDITION TO MATTERS
SET FORTH ELSEWHERE IN THIS PROSPECTUS, THE FOLLOWING FACTORS BEFORE INVESTING
IN THE SECURITIES.
EXPANSION PLANS. The Company is pursuing an aggressive growth strategy
and its success is dependent upon its ability to open and operate new
restaurants on a profitable basis, particularly in new markets, and to manage
effectively the resulting larger business. In order to meet its expansion goals,
the Company must be able to locate and acquire attractive restaurant sites,
attract and retain competent personnel and open new restaurants on a timely and
cost-efficient basis. There can be no assurance that the Company's expansion
program will be successful.
DEPENDENCE ON SITE SELECTION. The Company believes that site selection
is critical to the success of its restaurant expansion plans. There can be no
assurance that the Company will be able to locate and acquire attractive sites
to meet its expansion goals.
CAPITAL REQUIREMENTS FOR EXPANSION PROGRAM. To date, the Company's
expansion program has been funded from the proceeds of a private placement
completed in 1993 and from existing bank lines of credit. The Company believes
that it can open all of the restaurants scheduled to be opened during 1995 and
several of the restaurants scheduled to be opened during 1996 without additional
financing. However, in order to complete its 1996 expansion program, and
continue expansion of the Company's restaurant chain during periods beyond 1996,
the Company will require additional capital. The Company intends to seek to
raise additional capital during the first half of 1996. While the Company
anticipates that it will be able to raise the capital required to continue its
expansion program during future periods, there can be no assurance of this fact.
To date, no commitments for funding have been received by the Company.
LIMITED NUMBER OF RESTAURANTS IN OPERATION; GEOGRAPHIC CONCENTRATION.
There are currently twelve full-service "Crab House" restaurants and four "Capt.
Crab's Take-Away" restaurants in operation. Of the existing restaurants, ten are
located in Florida. Consequently, the results achieved to date by the Company's
restaurants may not be indicative of the prospects or market acceptance of a
larger number of restaurants, particularly in wider and more geographically
dispersed areas with varied demographic characteristics. In addition, because of
the Company's relatively small restaurant base, an unsuccessful new restaurant
could have a more significant effect on the Company's results of operations than
would be the case in a larger restaurant chain.
SEAFOOD MENU; UNCERTAINTY OF MARKET ACCEPTANCE. The Company's
restaurants have an extensive menu comprised primarily of seafood items. There
can be no assurance that the Company's concept will achieve significant market
acceptance in new markets. Moreover, a decline in the sale of seafood products
due to industry trends, change in consumer preferences, increased prices or
other reasons, could adversely impact the Company.
(6)
<PAGE>
COMPETITION IN THE RESTAURANT INDUSTRY. The restaurant industry is
highly competitive and the Company competes with numerous other restaurants and
food service operations, many of which have greater financial resources and more
experienced personnel than the Company and many of which are better established
in the markets where the Company's restaurants are to be located. In addition,
the restaurant industry can be significantly affected by many factors, including
changes in local, regional or national economic conditions, changes in consumer
tastes, consumer concerns about the nutritional quality of food and increases in
the number of, and particular locations of, competing restaurants. Factors such
as inflation, increases in food, labor and energy costs and the availability of
an adequate number of hourly-paid employees also affect the restaurant industry
generally and the Company's restaurants in particular. There can be no assurance
that the Company can compete successfully in any given market or overall with
its competitors.
DEPENDENCE UPON KEY AND OTHER PERSONNEL. The success of the Company
will be highly dependent on the efforts of its key personnel, including David J.
Connor, its Vice Chairman and Chief Executive Officer, and William D. Korenbaum,
its President and Chief Operating Officer. In order to implement successfully
its proposed expansion and manage anticipated growth, the Company will be
dependent upon its ability to retain existing and hire additional qualified
personnel. Competition for such personnel is intense and, accordingly, there can
be no assurance that the Company will be able to retain or hire necessary
personnel. The Company will also be dependent on its ability to hire and train a
significant number of hourly employees. While the Company has never experienced
a problem in hiring hourly restaurant personnel, there can be no assurance that
such a problem will not arise in the future and, in such event, a shortage of
hourly restaurant personnel could have an adverse effect on the Company.
GOVERNMENT REGULATION. The restaurant business is subject to extensive
federal, state and local regulation relating to the development and operation of
restaurants, including regulations relating to building and zoning requirements,
preparation and sale of food, and laws governing the Company's relationship with
its employees, including minimum wage requirements, unemployment taxes and sales
taxes, overtime and working conditions and citizenship requirements. The failure
to obtain or retain required licenses, or a substantial increase in the minimum
wage rate, could adversely affect the operations of the Company's restaurants.
NO DIVIDENDS ANTICIPATED. The Company has not paid any cash dividends
on its Common Stock and does not anticipate paying dividends on its shares in
the foreseeable future, inasmuch as it expects to employ all available cash in
the growth of its business.
CERTAIN PROVISIONS IN THE ARTICLES OF INCORPORATION. The Company's
Articles of Incorporation include provisions designed to discourage attempts by
others to acquire control of the Company without negotiation with the Board, and
to attempt to insure that such transactions are on terms favorable to all of the
Company's shareholders. For various reasons, however, these provisions may not
always be in the best interest of the Company or its shareholders. Further, the
Company's By-laws include provisions which are intended to provide for
limitation of liabilities of officers and directors in certain circumstances and
for indemnification of officers and directors against certain liabilities.
POTENTIAL FUTURE RULE 144 SALES. There are approximately 1,400,000
shares of "restricted" Common Stock outstanding. Significantly all of these
shares may be sold under Rule 144 under the Act.
(7)
<PAGE>
Under Rule 144, a person who has held "restricted securities" for a period of
two years may sell a limited number of such shares in the public market. Sales
made pursuant to Rule 144 by the Company's existing shareholders may have a
depressive effect on the price of the shares of Common Stock in the public
market. Such sales could also adversely affect the Company's ability to raise
capital at that time through the sale of its equity securities.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered by the Selling Shareholders. Any net proceeds received by the
Company upon the exercise of the Warrants will be used for working capital. See
"Description of Securities."
DESCRIPTION OF SECURITIES
The securities being registered for sale in the public market are the
shares of Common Stock underlying the Warrants, and the Hirsh Option and the
Radcliffe Option. For a description of the method whereby the Selling
Shareholders will distribute the Shares in the public market, see "Plan of
Distribution."
The Warrants consist of: (i) the Company's outstanding Series B
Warrants (the "B Warrants") to purchase 375,000 shares of Common Stock at an
exercise price of $2.00 per share; and (ii) the Company's outstanding Series C
Warrants (the "C Warrants") to purchase 62,500 shares of Common Stock at an
exercise price of $1.00 per share. The B Warrants and the C Warrants may be
exercised at any time on or before January 31, 2002. The B Warrants and the C
Warrants were issued in January 1992 to Bayport Partners Limited Partnership
("BPLP") in connection with a series of transactions in which BPLP acquired
control of the Company. Effective April 1, 1995, BPLP distributed the Company
securities which it owns (shares of Common Stock, B Warrants and C Warrants) to
its partners, each of whom is a Selling Shareholder. The shares of Common Stock
distributed by BPLP in April 1995 to the Selling Shareholders are not being
registered hereby, but may be sold in the public market by the Selling
Shareholders under Rule 144 under the Act.
Other than as set forth above, the B Warrants and the C Warrants have
identical terms. The number and kind of securities purchasable upon exercise
thereof and the exercise price thereof is subject to adjustment upon the
occurrence of certain reclassification, subdivisions and combinations of
securities, consolidations and mergers of the Company, sales or other transfers
of all or substantially all of the Company's property and dividends or other
distributions of shares of Common Stock to holders thereof. In addition, holders
thereof have rights to certain additional distributions in the event the Company
distributes its assets to holders of its common stock as dividends in
liquidation or by way of return of capital or other than out of legally
available earnings or surplus.
The Hirsh Option permits Hirsh to purchase 31,250 shares of Common
Stock at an exercise price of $4.72 per share through April 1998.
The Radcliffe Option permits Radcliffe to purchase 50,000 shares of
Common Stock at an exercise price of $1.36 per share through September 1997.
(8)
<PAGE>
SELLING SHAREHOLDERS
The following table lists the number of shares of Common Stock being
registered in the Registration Statement (of which this Prospectus forms a part)
on behalf of each of the Selling Shareholders listed below and the approximate
percentage of the shares of Common Stock outstanding (assuming that no
outstanding options or warrants (except the Warrants, the Hirsh Option and the
Radcliffe Option) has been exercised). None of the Selling Shareholders, other
than Albert Clapps, David J. Connor, Arthur H. Kaplan, William D. Korenbaum,
Aloysius D. Rossi and Martin Rudolph (who are executive officers and/or
directors of the Company) is an affiliate of the Company. Other than with
respect to the Selling Shareholders set forth below, the Company is not aware of
the ownership of the Company's securities by any of the Selling Shareholders
(other than the shares of Common Stock which were distributed to them effective
April 1, 1995 by BPLP). See "Description of Securities." Resales or reoffers of
the Shares by the Selling Shareholders must be accompanied by a copy of this
Prospectus.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED(2) OWNED AFTER OFFERING
- ---- -------------------------- ----------------- -------------------------
NUMBER PERCENT(1) NUMBER PERCENT
------ ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Bruce Auerbach 55,783 * 5,862 49,921 *
William and Bella Cohen 83,676 * 8,794 74,882 *
Pamela L. Connor 11,250 * 5,000 6,250 *
Dr. Gilbert &
Joan Grossman 27,893 * 2,932 24,961 *
Internal Medicine -
Goldstein 27,893 * 2,932 24,961 *
Ismex Bermuda Ltd. 111,948 * 11,724 100,224 *
J. Kaplan Associates 83,866 * 8,794 75,072 *
Dr. Daniel Mazzocco and
Dr. Janet Golaszewski 125,511 1.1 13,189 112,322 1.0
Julius Newman and
Sandra Schultz-Newman 55,783 * 5,862 49,921 *
Jeffrey Orleans 13,945 * 1,465 12,480 *
Xandra and
Donald Pechence 27,893 * 2,932 24,961 *
</TABLE>
(9)
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED(2) OWNED AFTER OFFERING
- ---- -------------------------- ----------------- -------------------------
NUMBER PERCENT(1) NUMBER PERCENT
------ ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Radcliffe & Associates(3) 50,000 * 50,000 0 *
Esther Robinson 27,893 * 2,932 24,961 *
Joseph Robinson 55,783 * 5,862 49,921 *
Rosens Enterprises 55,783 * 5,862 49,921 *
David Rossi 55,783 * 5,862 49,921 *
Saltzman Partners 111,566 1.0 11,724 99,842 *
Nathan Schatz Pension
Plan 55,783 * 5,862 49,921 *
Herbert Schultz 27,893 * 2,932 24,961 *
Leon and Ruby Shaw 55,783 * 5,862 49,921 *
Melvin Smith 22,048 * 2,885 19,163 *
Robert Tunnessen 27,893 * 2,932 24,961 *
Ronald and Sara Lee Wahl 22,048 * 2,885 19,163 *
Eugene Wilcox 27,893 * 2,932 24,961 *
David Welsh 16,875 * 7,500 9,375 *
Louis Hirsh(4) 310,624 2.9% 79,696 230,928 2.2%
Hirsh Family Trust 295,236 2.8% 62,588 232,648 2.2%
Aloysius Rossi(5) 142,066 1.3% 21,724 120,342 1.1%
Albert and Jane Clapps(6) 135,033 1.3% 25,862 109,171 1.0%
Hickory Road Investment
Corporation(7) 78,283 * 15,862 62,421 *
David J. Connor(8) 409,687 3.8% 25,000 384,687 3.6%
William D. Korenbaum(9) 465,000 4.3% 20,000 445,000 4.1%
</TABLE>
(10)
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED(2) OWNED AFTER OFFERING
- ---- -------------------------- ----------------- -------------------------
NUMBER PERCENT(1) NUMBER PERCENT
------ ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Arthur Kaplan(10) 520,861 4.9% 40,000 375,773(14) 3.5%
Astor Weiss Kaplan
and Rosenblum(11) 16,875 * 7,500 9,375 *
Arthur Kaplan, as Trustee
for Alexander Kaplan(12) 39,375 * 17,500 21,875 *
Arthur Kaplan, as Trustee
for Max Kaplan(13) 39,375 * 17,500 21,875 *
--------
518,750
========
<FN>
- ------------------
*Less than 1%.
(1) Based upon 10,086,229 shares outstanding, plus (i) the exercise of all
of the Warrants, the Hirsh Option and the Radcliffe Option; and (ii) as
to each person, the exercise of other currently exercisable options or
options becoming exercisable within the next 60 days.
(2) Consisting of shares of Common Stock issuable upon the exercise of the
Warrants and the Hirsh Option. See "Plan of Distribution."
(3) Comprised of the shares comprising the Radcliffe Option.
(4) Includes 31,250 shares comprising the Hirsh Option. Does not include
Company securities owned by the Hirsh Family Trust, an irrevocable trust
established by Mr. Hirsh. Mr. Hirsh is not a trustee or beneficiary of
the Hirsh Family Trust (although members of his family are beneficiaries
of the Trust) and he disclaims any beneficial ownership over the Company
securities owned by the Hirsh Family Trust.
(5) Includes 8,000 shares which may be acquired upon the exercise of
currently exercisable options or options which will become exercisable
within the next 60 days. Does not include 4,500 shares which may be
acquired upon the exercise of options which are not yet exercisable or
to become exercisable within 60 days after the date hereof. Mr. Rossi is
a director of the Company.
(6) Includes 8,000 shares which may be acquired on the exercise of currently
exercisable options. Does not include 4,500 shares which may be
acquired upon the exercise of options which are not yet exercisable or
to become exercisable within 60 days after the date hereof. Mr. Clapps
is a director of the Company.
(7) Hickory Road Investment Corporation ("Hickory Road") is 50% owned by
Martin Rudolph, a director of the Company. Mr. Rudolph is also an
officer and director of Hickory Road. Shares
(11)
<PAGE>
beneficially owned by Hickory Road does not include 8,000 shares owned
by Mr. Rudolph which may be acquired on the exercise of currently
exercisable options or options which become exercisable within 60 days
of the date hereof.
(8) Includes 268,750 shares which may be acquired upon the exercise of
currently exercisable options. Does not include 400,000 shares which may
be acquired upon the exercise of options which are not yet exercisable
or to become exercisable within 60 days after the date hereof. Mr.
Connor is Vice Chairman and Chief Executive Officer of the Company.
(9) Includes 221,250 shares which may be acquired upon the exercise of
currently exercisable options. Does not include 360,000 shares which may
be acquired upon the exercise of options which are not yet exercisable
or to become exercisable within 60 days after the date hereof. Mr.
Korenbaum is President, Chief Operating and Financial Officer of the
Company, and a member of the Company's Board of Directors.
(10) Includes: (i) shares beneficially owned by the Hirsh Family Trust (Mr.
Kaplan serves as one of three trustees of the Trust and, as such, under
federal securities laws shares the power to vote and dispose of the
securities held by the Trust. Mr. Kaplan otherwise disclaims beneficial
ownership over securities owned by the Trust); (ii) 40,000 shares which
may be acquired on the exercise of currently exercisable options or to
become exercisable within 60 days after the date hereof; (iii) shares
owned by Astor Weiss, Kaplan & Rosenblum; (iv) shares owned by Arthur
Kaplan, as Trustee for Alexander Kaplan; and (v) shares owned by Arthur
Kaplan, as Trustee for Max Kaplan. Mr. Kaplan may be deemed to be the
beneficial owner of the securities described in (iii), (iv) and (v)
above by virtue of his power to vote and dispose of these securities.
Otherwise, except to the extent of his interest in Astor, Weiss, Kaplan
& Rosenblum, Mr. Kaplan disclaims beneficial ownership of all of these
securities. Does not include 22,500 shares which may be acquired upon
the exercise of options which are not yet exercisable or to become
exercisable within 60 days after the date hereof.
(11) Mr. Kaplan is a partner in Astor, Weiss, Kaplan & Rosenblum.
(12) Arthur Kaplan disclaims beneficial ownership over these securities.
(13) Arthur Kaplan disclaims beneficial ownership over these securities.
(14) The amount of "Shares Beneficially Owned After Offering" by Arthur
Kaplan assumes each of the entities described in Footnote 10 above has
sold all of the Shares each of them is offering hereby.
</FN>
</TABLE>
(12)
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock by the Selling
Shareholders may be effected from time to time in one or more transactions
(which may involve block transactions) in the over-the-counter market or on the
NASDAQ-NMS (or any exchange on which the Common Stock may then be listed) in
negotiated transactions, through the writing of options (whether such options
are listed on an Options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealer may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Shareholders
and/or purchasers of shares for whom they may act as agent. The Selling
Shareholders may also sell such shares pursuant to Rule 144 promulgated under
the Act, or may Pledge shares as collateral for margin accounts and such shares
could be resold pursuant to the terms of such accounts. The Selling Shareholders
and any broker-dealers that act in connection with the sale of the Common Stock
might be deemed to be "underwriters" within the meaning of Section 2(11) of the
Act and any commission received by them and any profit on the resale of the
shares of Common Stock as principal might be deemed to be underwriting discounts
and commissions under the Act. The Selling Shareholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the Common Stock against certain liabilities, including liabilities
arising under the Act.
Because the Selling Shareholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Act, the Selling Shareholders will be
subject to prospectus delivery requirements under the Act. Furthermore, in the
event of a "distribution" of the shares, such Selling Shareholders, any selling
broker or dealer and any "affiliated purchasers" may be subject to Rule 10b-6
under the Exchange Act, which Rule would prohibit, with certain exceptions, any
such person from bidding for or purchasing any security which is the subject of
such distribution until his participation in that distribution is completed. In
addition, Rule 10b-7 under the Exchange Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of Common Stock in connection with this offering.
In order to comply with certain state securities laws, if applicable,
the Common Stock will not be sold in a particular state unless such securities
have been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of shares
of Common Stock by the Selling Shareholders. The proceeds, if any, from the
exercise of the Warrants and the Hirsh Option will be received by the Company;
no brokerage commissions or discounts will be paid in connection therewith.
EXPERTS
The financial statements for the fiscal years ending December 1994 and
1993 and for each of the three years in the period ended December 26, 1994
included in this Prospectus have been so included in reliance on the report of
Grant Thornton LLP, independent certified public accountants, given on the
authority of said firm as experts in auditing and accounting.
(13)
<PAGE>
LEGAL MATTERS
Broad and Cassel, a partnership including professional associations,
has rendered an opinion as to the validity of the shares of Common Stock offered
hereby.
(14)
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY THE
COMPANY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
ANY OF THE DATES AS OF WHICH INFORMATION IS FURNISHED OR SINCE THE DATE OF THIS
PROSPECTUS.
----------------------------
TABLE OF CONTENTS
PAGE
Available Information..................................................... 2
Incorporation of Certain Documents
by Reference............................................................. 2
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 6
Use of Proceeds........................................................... 8
Description of Securities................................................. 8
Selling Shareholders...................................................... 9
Plan of Distribution ..................................................... 13
Experts................................................................... 13
Legal Matters............................................................. 14
518,750 SHARES
BAYPORT RESTAURANT GROUP, INC.
Common Stock
(PAR VALUE $.001 PER SHARE)
----------
PROSPECTUS
----------
, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the Offering:
AMOUNT*
-------
SEC Registration Fee........................... $ 782.53
Printing and Engraving ........................ 1,000.00
Legal Fees and Expenses........................ 25,000.00
Accounting Fees and Expenses................... 10,000.00
Blue Sky Fees and Expenses..................... 10,000.00
Miscellaneous.................................. 3,217.47
----------
Total........................................ $ 50,000.00
===========
- --------------------
* Estimated, except SEC Registration Fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 607.0831 of the Florida Business
Corporations Act, directors and officers of the Company are indemnified against
liability under certain circumstances. Reference is made to Article VIII of the
Company's Articles of Incorporation.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
3(i).1 Articles of Incorporation, as amended (previously filed as Exhibit
3(a) to the Company's Annual Report on Form 10-K for the year ended
August 30, 1987 (the "Annual Report") and as Exhibit 2(a) to the
Company's Registration Statement on Form S-18, File No. 2-74997-A
(the "S-18 Registration Statement")).
3(i).2 Amendment to Articles of Incorporation dated May 31, 1990
(previously filed as Exhibit 3(b) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990 (the "1990
Annual Report")).
3(i).3 Amendment to Articles of Incorporation filed with the Department of
State, State of Florida on January 30, 1992 (previously filed as
Exhibit 3(c) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991 (the "1991 Annual Report")).
II-1
<PAGE>
3(i).4 Amendment to Articles of Incorporation filed with the Department of
State, State of Florida on July 12, 1993 (previously filed as
Exhibit A(1) to the Company's Quarterly Report on Form 10-QSB for
the quarter ended June 28, 1993 (the "June 1993 Quarterly
Report")).
3(i).5 Amendment to the Company's Articles of Incorporation filed with the
Department of State, State of Florida on August 2, 1993 (previously
filed as Exhibit A(3) to the June 1993 Quarterly Report).
3(i).6 Amendment to the Company's Articles of Incorporation filed with the
Department of State, State of Florida on August 4, 1993 (previously
filed as Exhibit A(5) to the June 1993 Quarterly Report and
incorporated herein by reference).
3(i).7 Amendment to the Company's Articles of Incorporation designating
the rights and preferences of the Class B Shares (incorporated by
reference to Exhibit (A)(5) to Form 10-QSB for the Quarter ended
June 28, 1993).
3(ii).1 ByLaws, as previously amended, previously filed as Exhibit 3(b) to
the Company's Registration Statement on Form S-1, File No. 2-84392
(the "S-1 Registration Statement") and Exhibit 3(d) to the 1990
Annual Report.
3(ii).2 Amendments to ByLaws, previously filed as Exhibit 3(e) to the 1991
Annual Report.
3.(ii).3 Amendment to ByLaws dated August 4, 1993, previously filed as
Exhibit 3.9 to the Company's Registration Statement on Form S-3,
File No. 33-68794 (the "S-3 Registration Statement").
4.1 1985 Incentive Stock Option Plan (previously filed as Exhibit A to
the Company's Definitive Proxy Statement dated March 1, 1985,
File No. 0-10717).
4.2 Form of Series B Warrant and Series C Warrant (previously filed as
Exhibits 1.01(d), 1.01(e) and 1.01(f) to Exhibit 1 to Schedule 13D
with respect to shares of the Company's Common Stock filed by
Bayport Partners Limited Partnership, et al. (the "Schedule 13D")).
4.3 Form of Warrant dated August 19, 1993 issued to Alex. Brown & Co.
(previously filed as Exhibit 4.4 to the S-3 Registration
Statement).
4.4 Class B Convertible Stock Purchase Agreement (incorporated by
reference to Exhibit A(4) to the June 1993 Quarterly Report).
4.5 Common Stock Purchase Agreement used in connection with the
issuance of Common Stock in the Private Placement (incorporated by
reference to Exhibit A(6) to the June 1993 Quarterly Report).
4.6 1993 Stock Option Plan (previously filed as Exhibit A(2) to the
June 1993 Quarterly Report).
5.1 *Opinion of Broad and Cassel
II-2
<PAGE>
10.1 *Amended and Restated Employment Agreement, effective as of
April 1, 1994 by and between David J. Connor and the Company.
10.2 *Amended and Restated Employment Agreement, effective as of
April 1, 1995 by and between William D. Korenbaum and the Company.
10.3 Employment Agreement dated as of September 1, 1993 by and
between the Company and Dennis Snuszka (previously filed as Exhibit
10.3 to the Company's Form 10-KSB for the fiscal year ended
December 27, 1993 (the "1993 Annual Report")).
10.4 Form of Registration Rights Agreement of January 31, 1992
by and among the Company and BPLP (previously filed as Exhibit
9.01(p) to Exhibit 1 to Schedule 13D).
10.5 Office Lease Agreement and amendments thereto of May 20,
1991 by and between the Company and Hollywood Corporate Circle
Associates (previously filed as Exhibit 10(k) to the 1991 Annual
Report) and Office Lease Agreement Addendum dated August 13, 1993.
(previously filed as Exhibit 10.6 to the S-3 Registration
Statement).
10.6 Third Addendum to Lease, dated November 31, 1994
(previously filed as Exhibit 10.6 to the Company's Form 10-KSB for
the fiscal year ended December 26, 1994 (the "1994 Annual Report").
10.7 Agreement of Sale of January 31, 1992 by and between Fast Food
Properties II and Franchise Management Services, Inc. (previously
filed as Exhibit 10(l) to the 1991 Annual Report).
10.8 Agreement of Sale of January 31, 1992 by and between Fast
Food Properties II and the Company (previously filed as Exhibit
10(m) to the 1991 Annual Report).
10.9 Asset Purchase and Sales Agreement dated November 17,
1992 by and between the Company and Cryotech Industries, Inc.
(previously filed as Exhibit 10(p) to the Company's Form 10- KSB
for the fiscal year ended December 28, 1993 (the "1993 Annual
Report")).
10.10 Shopping Center Lease by and between BDC Center, Inc. and Crab
House Seafood Restaurant of Orlando, Inc. dated April 1, 1992
(previously filed as Exhibit 10(q) to the 1993 Annual Report).
10.11 Guaranty by the Company, dated April 1, 1992, of Shopping Center
Lease by and between BDC Center, Inc. and Crab House Seafood
Restaurant of Orlando II, Inc. (previously filed as Exhibit 10(r)
to the 1993 Annual Report).
10.12 Promissory Note issued by the Company, in the principal amount of
$1,415,000.00, to Select Properties, dated April 1, 1994
(previously filed as Exhibit 10.12 to the 1994 Annual Report).
10.13 Consulting Agreement by and between the Company and Radcliffe &
Associates dated September 8, 1992 (previously filed as Exhibit
10(v) to the 1993 Annual Report).
II-3
<PAGE>
10.14 Stock option granted by the Company to Radcliffe & Associates dated
as of September 9, 1992 (previously filed as Exhibit 10(w) to the
1993 Annual Report).
10.15 Stock Option granted by the Company to Louis Hirsh in connection
with a loan to the Company (previously filed as Exhibit 10.16 to
the Company's 1993 Annual Report).
10.16 Credit Agreement between the Company and The First National Bank of
Boston, as Agent (incorporated by reference from the Company's
Current Report on Form 8-K, dated December 14, 1994).
22 Subsidiaries of the Company (previously filed as Exhibit 22 to the
S-3 Registration Statement).
23.1 *Consent of Grant Thornton LLP.
23.2 Consent of Broad and Cassel (included as part of Exhibit 5.1).
- --------------------
* Filed herewith.
ITEM 17. UNDERTAKING.
(A) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement to include any additional or
changed material information with respect to the plan
of distribution.
(2) For the purposes of determining any liability under
the Securities Act of 1933, as amended, each
post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(4) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of
the registrant in the successful defense of any
action, suit or proceeding) is asserted by such
director, officer or controlling person in connection
with the securities being registered, the
II-4
<PAGE>
registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is
against public policy as expressed in the Act and
will be governed by the final adjudication of such
issue.
(5) For purposes of determining any liability under the
Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an
employee benefit plans' annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration
statement shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
II-5
<PAGE>
BAYPORT RESTAURANT GROUP, INC.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Bayport
Restaurant Group, Inc., hereby certifies that it has reasonable grounds to
believe that it meets all of the requirements of Form S-3 and has duly caused
this Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hollywood, Florida on the
30th day of June 1995.
BAYPORT RESTAURANT GROUP, INC.
By: /S/ DAVID J. CONNOR
----------------------------------
David J. Connor, Chairman and
Chief Executive Officer
Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints David J. Connor with full power to act
as his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities (until revoked in writing) to sign any and all amendments
(including post-effective amendments and amendments thereto) to this
Registration Statement on Form S-3 of Bayport Restaurant Group, Inc. and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully for all
intents and purposes, as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact or his substitute may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ DAVID J. CONNOR Chairman and June 30, 1995
- ------------------- Chief Executive Officer
David J. Connor
/S/ WILLIAM D. KORENBAUM President and Chief Operating and June 30, 1995
- ------------------------- Financial Officer and Director
William D. Korenbaum
II-6
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ DAVID KIRINCIC Controller and Chief Accounting June 30, 1995
- ------------------- Officer
David Kirincic
/S/ ARTHUR H. KAPLAN Director June 30, 1995
- --------------------
Arthur H. Kaplan
/S/ ALBERT A. CLAPPS Director June 30, 1995
- ---------------------
Albert A. Clapps
/S/ ALOYSIUS D. ROSSI Director June 30, 1995
- ----------------------
Aloysius D. Rossi
Director June __, 1995
- ---------------------
Martin Rudolph
/S/ ROBERT STETSON Director June 30, 1995
- ---------------------
Robert Stetson
/S/ THOMAS R. HITCHNER Director June 30, 1995
- ----------------------
Thomas R. Hitchner
II-7
BROAD AND CASSEL
ATTORNEYS AT LAW
SUITE 3000
MIAMI CENTER
201 SOUTH BISCAYNE BOULEVARD
MIAMI, FLORIDA 33131
(305) 373-9400
FAX (305) 373-9443
July 12, 1995
Bayport Restaurant Group, Inc.
4000 Hollywood Boulevard
Hollywood, Florida 33021
Re: Bayport Restaurant Group, Inc. (the "Company")
Registration Statement on Form S-3
Ladies and Gentlemen:
You have requested our opinion with respect to the securities included
in the Company's Registration Statement on Form S-3 (the "Registration
Statement") which has been filed with the Securities and Exchange Commission.
As counsel to the Company, we have examined the original or certified
copies of such records of the Company and such agreements, certificates of
public officials, certificates of officers or representatives of the Company and
others, and such other documents as we deem relevant and necessary for the
opinions expressed in this letter. In such examination, we have assumed the
genuineness of all signatures on original documents and the conformity to
original documents of all copies submitted to us as conformed or photostat
copies. As to various questions of fact material to such opinions, we have
relied upon statements or certificates of officials and representatives of the
Company and others.
The legal opinion expressed herein relates solely to Florida law.
Based upon and subject to the foregoing, we are of the opinion that:
When the Registration Statement becomes effective under the Securities
Act of 1933, as amended, and the securities are issued and distributed
as contemplated in the Registration
<PAGE>
Bayport Restaurant Group, Inc.
July 12, 1995
Page 2
Statement, the securities will constitute legally issued, fully paid
and non-assessable securities of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use or our name under "Legal
Matters" in the Prospectus constituting part of the Registration Statement. In
giving such consent, we do not thereby admit that we are included within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Broad and Cassel
BROAD AND CASSEL
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement")
is made this __ day of April, 1995, effective as of the 1st day of April, 1995,
by and between BAYPORT RESTAURANT GROUP, INC., a corporation organized under the
laws of the State of Florida, having its principal office at 4000 Hollywood
Boulevard, Hollywood, Florida (the "Company"), and DAVID J. CONNOR, residing at
1106 Buttonwood Lane, Sanibel, Florida 33957 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the ownership and operation of
seafood restaurants; and
WHEREAS, the Executive is presently employed by the Company, in the
capacity of Vice Chairman and Chief Executive Officer, pursuant to that certain
Employment Agreement, dated June 1, 1993 (the "Old Employment Agreement"); and
WHEREAS, the Company has determined that its best interests are served
by amending and restating the Old Employment Agreement to provide for a
long-term agreement whereby the Company will be assured of the Executive's
continued availability to render services to the Company and its subsidiaries;
and
WHEREAS, the Executive desires to continue to be so employed by the
Company on the terms and provisions hereinbelow set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties hereby agree as follows:
<PAGE>
1. TERMINATION OF OLD EMPLOYMENT AGREEMENT
The Old Employment Agreement is hereby amended and restated, effective
upon the effectiveness of this Agreement.
2. EMPLOYMENT, TERM, DUTIES AND ACCEPTANCE.
(a) The Company shall employ the Executive, for the
Employment Period (as hereinafter defined) as an executive to perform such
executive and managerial duties as are associated with his positions with the
Company as Vice Chairman and Chief Executive Officer and such other duties, as
may, from time to time, be assigned to the Executive by the Company's Board of
Directors. The Executive hereby agrees to accept such employment and to devote
his full time and attention to his duties and to use his best efforts in and to
the faithful performance of his duties hereunder, subject to the general
direction and control of the Board of Directors of the Company. The Executive
shall work full-time for the Company. The Executive further agrees that, if
requested, he will serve as a director of the Company for no additional
consideration.
(b) The Executive hereby agrees that all writing,
documentation, articles, brochures, proposed advertisements, ideas and drawings,
Company records, ledgers, accounts, customer lists and all related and similar
materials prepared or collected by him in connection with the rendering of his
services to the Company and its subsidiaries, as well as notes taken with
respect to lectures, seminars and other business-related activities attended
while in the employ of the Company, shall be the sole and exclusive property of
the Company. Accordingly, the Executive acknowledges that his employment does
not confer upon him any ownership interest in or personal claim upon any such
materials.
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(c) The Executive hereby agrees to abide by all
reasonable rules and regulations established by the Board of Directors of the
Company and such restrictions, if any, applicable to the Executive which may,
from time to time, be set forth in the Company's Articles of Incorporation and
Bylaws.
3. COMPENSATION AND REIMBURSEMENT.
(a) As compensation for all duties to be rendered by
the Executive hereunder, the Company agrees to pay to the Executive during the
Employment Period and hereby grants to the Executive the following:
(i) BASE SALARY: A salary (the "Base Salary")
at the rate of Two Hundred Eighty Six Thousand Two Hundred Eighty Seven Dollars
($286,287.00) per annum for the period April 1, 1995 through December 31, 1995;
and Three Hundred Thirty Thousand Dollars ($330,000) for the period January 1,
1996 through December 31, 1996. Commencing January 1, 1997, for each of the
three fiscal years ended December 1997, 1998 and 1999, Executive's Base Salary
shall be increased based on the following performance levels of the Company in
relation to Plan (as hereinafter defined):
(A) Realize less than 90% of Plan: No
Base Salary increase;
(B) Realize 90% but less than 100% of
Plan: 5% increase in Base Salary
from the prior year's Base Salary;
(C) Realize 100% but less than 110% of
Plan: 10% increase in Base Salary
from the prior year's Base Salary;
(D) Realize 110% or more of Plan: 15%
increase in Base Salary from the
prior year's Base Salary; plus
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<PAGE>
(ii) BONUS COMPENSATION:
(A) An annual bonus (the
"Annual Bonus") for the period through December 31, 1995, in an amount equal to
the annual bonus under the Old Employment Agreement for the period ended
December 31, 1995; plus
(B) An Annual Bonus, if any,
for each of the four years ended December 27, 1999 in an amount equal to the
following:
i) Realize less than
90% of Plan: No
Annual Bonus;
ii) Realize 90% but
less than 100% of
Plan: Annual Bonus
of 40% of prior
year's Base
Salary;
iii) Realize 100% but
less than 120% of
Plan: Annual Bonus
of 50% of prior
year's Base
Salary;
iv) Realize more than
120% of Plan:
Annual Bonus of
60% of prior
year's Base
Salary; plus
(iii) Options to acquire an aggregate of 500,000
shares of the Company's common stock, $.001 par value per share (the "Options")
at an exercise price of $4.00 per share (the fair market value of the Common
Stock on the date the Options were approved by the Board of Directors) upon the
following terms and conditions:
4
<PAGE>
(A) The Options shall vest at a rate of
100,000 upon the execution of this
Agreement, and 100,000 on each of
January 1, 1996, 1997, 1998 and 1999
so long as the Executive is still
employed by the Company on that
date;
(B) Any unexercised Options shall
automatically and without notice
terminate and become null and void
at the time of the earliest to
occur of the following:
(1) December 31, 1999;
(2) Except as set forth below,
the date of termination of
the Executive's employment
by the Company if Executive
is terminated For Cause (as
hereinafter defined) or if
Executive voluntarily
resigns from his employment
with the Company; and
(3) The expiration of
one year following the
issuance of letters
testamentary or letters of
administration to the
personal representative of
the Executive, if the
Executive's death occurs
during his employment by
the Company.
(C) The Options shall be exercised by
the Executive (or by his personal
representative) as to all or part of
the shares covered hereby, by the
giving of written notice of such
exercise to the Company at its
principal business office,
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<PAGE>
specifying the number of shares to
be purchased and further specifying
a business day, not less than five
(5) days nor more than fifteen (15)
days from the date such notice is
given, for the payment of the
purchase price against delivery of
the shares being purchased. The
Company shall cause certificates for
the shares so purchased to be
delivered to the Executive or his
personal representative, as the case
may be, at its principal business
office, against payment of the
purchase price, on the date
specified in the notice of exercise.
(D) The exercise price of the Options
shall be $4.00 per share.
(E) Neither the Executive nor his
personal representative shall
have any of the rights of a
shareholder of the company with
respect to the shares subject to the
Options until a certificate or
certificates for such shares shall
have been issued upon exercise of
the Options.
(F) The Options shall not be
transferable by the Executive other
than to his personal representative
by will or the laws of descent and
distribution. During the Executive's
lifetime, the Options shall be
exercisable only by the Executive
and may not be transferred, pledged
or otherwise hypothecated. In the
event of the Executive's death
during
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<PAGE>
his employment by the Company, the
Options shall thereafter be
exercisable only by his personal
representative.
(G) The Executive represents and
warrants to the Company that
any purchase of shares of common
stock upon exercise of the Options
shall be for his own account, for
investment and not with a view
toward distribution and that such
shares will not be transferred,
sold or otherwise disposed of
unless such transfer, sale or
disposition is pursuant to an
effective registration statement
under the Securities Act of 1933,
as amended (the "Act") or, in the
opinion of counsel for the Company,
is exempt from registration under
the Act. The Executive hereby
acknowledges that only the Company
can file such registration statement
and the Executive will bear the
investment risk of any shares of
common stock purchased upon the
exercise of the Options
for an indefinite period of time.
(H) The Company hereby agrees that if,
after execution of this Agreement,
it should file a registration
statement under the Act, it shall
offer the Executive the opportunity
to register, pursuant to such
registration statement, the shares
issuable upon the exercise of the
Options. The Company further
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<PAGE>
agrees that if the shares issuable
to the Executive upon the exercise
of the Options have not been
registered pursuant to the Act on or
before January 1, 1997, the Company
shall, within thirty days of receipt
from the Executive of written demand
for such registration, file with the
Securities and Exchange Commission a
registration statement on Form S-8
(or such other form of registration
statement as is appropriate) for
purposes of registering such shares
pursuant to the Act. The demand
registration rights granted hereby
to the Executive shall expire on the
expiration date of this Agreement.
Any and all shares issuable to the
Executive hereunder shall be issued
in the name of David J. Connor, and
shall bear the following restrictive
legend:
THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAW OF ANY OTHER
JURISDICTION AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF IN ANY
MANNER UNLESS THEY ARE REGISTERED
UNDER SUCH ACT AND THE SECURITIES
LAWS OF ANY APPLICABLE JURISDICTION
OR UNLESS PURSUANT TO AN EXEMPTION
THEREFROM.
(I) In connection with the exercise of
the Options, the Company agrees to
permit the Executive to exercise the
8
<PAGE>
Options by delivery of a
non-recourse promissory note
("Note") in an amount equal to the
exercise price of the Options being
exercised. The Executive shall
notify the Company of his intention
to exercise any or all of the
Options (as required under Section
3(a)(iii)(C) of this Agreement) by
delivery of a Note. The terms of the
Note shall be as follows: (1) the
Note shall be for a three year term;
(2) the Note shall be secured by the
shares being purchased upon exercise
of the Options (and the
certificate(s) representing the
shares being purchased upon the
exercise of the Options shall be
held in escrow until the Note is
paid in full; (3) the Note shall
bear interest at the lowest rate
allowable under applicable federal
and state law so as not to require
the imputation of interest with
respect to the Note; and (4) the
principal and interest due and
payable on the Note shall be payable
on the earlier of the maturity of
the Note or the sale of the shares
of Common Stock securing the Note.
In that regard, the Executive shall
execute such documents at the time
of the exercise of the Options
(including a form of Note and
security agreement) as are necessary
to document the terms of this
arrangement.
9
<PAGE>
(b) For all purposes under this Agreement, "Plan" is
defined as the Company's net-after tax income budget for a particular year as
approved by the Company's Board of Directors at the beginning of that particular
year. Further, for all purposes under this Agreement, compensation payable to
Executive under subparagraphs (a)(i) and (ii) of this Section 3 shall be
determined based upon Plan for each year after accounting for any Bonus
Compensation payable to Executive under Subparagraph (a)(ii) above hereunder for
such year or payable to the Company's Chief Operating Officer for such year.
(c) Under the Old Employment Agreement, options to
purchase an aggregate 131,250 shares of the Company's common stock are scheduled
to vest on or prior to May 31, 1996. The parties hereto agree that all of these
previously unvested options shall be deemed vested upon the execution of this
Agreement.
(d) The Executive shall be eligible, subject to the
terms and conditions of each plan or program, to participate, at the expense of
the Company, in such group medical, health, accident, disability and life
insurance and medical reimbursement programs as are made generally available
from time to time by the Company to other senior executives and such other
fringe benefit programs, including, but not limited to, retirement plans and
deferred compensation, which may be adopted by the Company from time to time.
(e) The Company shall provide the Executive with the
use of an automobile, which shall not at any time be more than three (3) years
old, in connection with the performance of his duties hereunder and shall pay
directly, or reimburse the Executive for, all amounts paid in connection with
the automobile, including without limitation, gasoline, repairs, maintenance and
automobile insurance expenses incurred on connection therewith.
10
<PAGE>
(f) The Company shall reimburse the Executive for his
reasonable out-of-pocket expenses and costs incurred in connection with the
performance of his services hereunder, upon presentation of proper vouchers and
documentary support therefor in accordance with the Company's usual and
customary practices and procedures.
(g) During the term of this Agreement, the Executive
shall be entitled to four weeks of paid vacation time per year. The time or
times at which the Executive will be permitted to take such vacation time shall
be determined by the mutual agreement of the Company and the Executive. Vacation
time may not be accumulated without Employer's consent and must be taken by
fiscal year end.
(h) The Company shall provide the Executive, at the
Company's expense, with One Million Five Hundred Thousand Dollars ($1,500,000)
of whole life insurance (the "Policy") on the life of the Executive naming such
beneficiaries thereunder as the Executive shall designate. The policy shall be
owned by the Executive or his designee.
(i) The Company shall provide the Executive with
additional compensation in the amount of Thirty Thousand Dollars ($30,000) for
each year ended December 1995, 1996, 1997, 1998 and 1999; payable $150,000 upon
execution of this Agreement and vesting one-fifth (1/5) for each year ended
December 1995, 1996, 1997, 1998 and 1999. In the event this Agreement is
terminated voluntarily by the Executive or For Cause (as hereinafter defined),
the unvested portion of such additional compensation shall be repaid to the
Company by the Executive. Upon execution of this Agreement, Executive shall
execute a guaranty in favor of the Company to repay the unvested portion of the
additional compensation upon the occurrence of the events set forth above.
11
<PAGE>
(i) The Company shall pay the carrying costs of the
Executive's residence located in Syracuse, New York until December 31, 1996.
4. TERM AND TERMINATION.
(a) Unless sooner terminated pursuant to the provisions
of this Section 4, the initial term of this Agreement shall be the period
commencing April 1, 1995 and expiring December 31, 1999 (the "Employment
Period").
(b) Notwithstanding anything contained herein to the
contrary, the Company shall have the right to terminate this Agreement and the
Executive's employment hereunder at any time for Cause (as hereinafter defined).
For purposes of this Agreement, "Cause" means the following:
(i) a material breach or violation by the
Executive of any provision of this Agreement or the failure of the Executive to
materially perform his duties or responsibilities hereunder (unless said
material default is caused by a physical or mental infirmity or disability which
renders Executive incapable of performing the customary duties for which
Executive was employed) after the Executive has been given at least thirty (30)
days prior written notice together with an opportunity to cure said breach,
violation or failure during such thirty (30) day period; or
(ii) actions by the Executive constituting
fraudand/or embezzlement; or
(iii) in the event that Executive becomes
incapable, for more than a six (6) month period, of performing the customary
duties for which Executive was employed due to a physical or mental infirmity or
disability, or as a result of Executive's death.
12
<PAGE>
The right of the Company to so terminate this Agreement and the
Executive's employment hereunder pursuant to this Section 4(b) shall be
exercisable by the Company upon the giving of written notice to the Executive
specifying the grounds for such termination. Such termination shall be effective
upon the giving of such written notice by the Company subject to the cure period
provided in this Section 4. Except as set forth in the next sentence, if the
Executive is terminated for Cause, the Executive shall only be compensated
through the date of his termination and the provisions set forth in Sections 5
and 6 hereof shall remain in full force and effect. If the Executive's
termination is the result of the happening of an event under subsection (iii)
above, other than the death of the Executive, then notwithstanding the
termination of this Agreement for Cause, the Company shall pay to the Executive,
an amount equal to the Executive's Base Salary for the twelve (12) month period
subsequent to Executive's termination of Employment, and an amount equal to
one-half (1/2) of the Executive's Base Salary for the subsequent twelve (12)
month period. If the Executive's termination is due to the death of the
Executive, the Company shall pay to the estate of the Executive an amount equal
to the Executive's Base Salary for the twelve (12) month period subsequent to
the Executive's termination of Employment. The provisions of this subsection
shall survive the termination of this Agreement.
(c) During the period between March 31, 1998 and April
30, 1998, if the Company has not met Plan during two of the three fiscal years
ending December 29, 1997, the Company may cancel this Agreement upon the giving
of written notice to the Executive; provided, however, that, in such event, the
options described in Section 3(a)(iv) shall
13
<PAGE>
automatically vest and shall remain exercisable through the end of their term,
whether or not Executive remains an employee of the Company during such period.
(d) In the event of a Change in Control (as hereinafter
defined) of the Company, whether or not such Change in Control has been approved
by the Company's present Board of Directors, the Executive may, at any time
within the six (6) month period following the date of such Change in Control,
terminate this Agreement and his employment hereunder if, in his sole
discretion, he reasonably determines that such Change in Control would be a
material detriment to his ability to effectively render services to the Company
hereunder. In the event that the Executive terminates this Agreement and his
employment hereunder pursuant to and in accordance with this Section 4(d), the
Executive shall receive the greater of: (i) the sum of One Million Five Hundred
Thousand Dollars ($1,500,000.00); or (ii) the aggregate balance due pursuant to
Section 3(a)(i) of this Agreement. Such greater amounts shall be payable within
60 days following the date of such termination, without the Executive having to
fulfill his obligations or perform his duties hereunder, and, in such event, the
Executive shall also be released from any and all restrictive covenants
contained herein during the Employment Period. Further, when the Executive
terminates his employment with the Company pursuant to and in accordance with
this Section 4(d), any unvested stock options granted to the Executive by the
Company pursuant to this Agreement or pursuant to any other agreements shall
automatically become vested and shall remain outstanding for the remainder of
their terms.
(e) In addition, upon a Change of Control, the Company
shall remain obligated to keep all benefits available and paid to the Executive
as if he were still an employee for a period of two years from the date that the
Executive terminates his employment with the
14
<PAGE>
Company pursuant to Section 4(d) of this Agreement. In the event that the
Executive's participation is such benefit programs is barred by any such plans
or programs, the Company shall arrange to provide Executive with substantially
similar benefits. Further, Executive shall not be required to mitigate the
amount of any payment provided by this Section 4 by seeking other employment or
otherwise nor shall the amount of any payment provided pursuant to this section
4 be reduced by any compensation earned or received by Employee from any source,
including without limitation compensation received as a result of other
employment.
(f) For purposes of Section 4(d), "Change in Control"
shall mean a change in control of a nature that would be required to be reported
in response to Item 5(f) of Schedule 14(a) of Regulation 14A promulgated under
the Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act"); provided that, without limitation, a Change in Control shall be deemed to
have occurred if: (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities; or (ii) individuals who, on the effective date of
this Agreement, constitute the Board of Directors cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors as of the effective date of this Agreement.
15
<PAGE>
(g) The right of the Executive to terminate this
Agreement and the Executive's employment hereunder pursuant to Section 4(d)
shall be exercisable by the Executive upon delivery of written notice to the
Company specifying the grounds for such termination.
5. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
The Executive hereby acknowledges and agrees that the duties
and services to be performed by the Executive hereunder are special and unique
and that, by reason of and/or as of a result of his employment hereunder, the
Executive will acquire, make use of and/or add to confidential information of a
special and unique nature and value relating to certain records, secrets,
documentation, ledgers and general information, accounts receivable and payable
ledgers, customer lists, prospective customer lists, financial and other records
of and/or with respect to the Company, its subsidiaries and affiliates,
customers and other similar matters (all such information, together with that
certain information described herein, being hereinafter referred to as
"Confidential Information"). The Executive further acknowledges and agrees that
the Confidential Information is of great value to the Company and/or its
subsidiaries and affiliates and that it is reasonably necessary to protect the
Confidential Information and the goodwill of the Company and/or its subsidiaries
and affiliates. Accordingly, the Executive hereby agrees that:
(a) The Executive will not, at any time, directly or
indirectly, except in connection with the Executive's employment hereunder or as
otherwise authorized by the Board of Directors of the Company for the benefit of
the Company:
(i) divulge to any person, firm or corporation
other than the Company (hereinafter referred to as "Third Parties"), or use or
cause or authorize any Third Parties to
16
<PAGE>
use, the Confidential Information or any other information relating to the
business or interests of the Company which the Executive knows or should know is
regarded as confidential and valuable by the Company and/or its subsidiaries and
affiliates (whether or not any of the foregoing information is actually novel or
unique or is actually known to others), except as required by law; or
(ii) solicit or cause or authorize to be
solicited, directly or indirectly, for or on behalf of himself or any Third
Parties, any business competitive to the business of the Company and/or its
subsidiaries and affiliates from Third Parties who are, at any time within one
(1) year prior to the expiration of the term of this Agreement, customers of the
Company and/or its subsidiaries and affiliates; or
(iii) accept, cause or authorize to be accepted,
directly or indirectly, for or on behalf of himself or the Third Parties, any
business competitive to the business of the Company or its subsidiaries and
affiliates from any such customers of the Company and/or its subsidiaries and
affiliates; or
(iv) solicit, cause or authorize to be solicited,
directly or indirectly, for employment for or on behalf of himself or any Third
Parties, any persons who are, at any time within one (1) year prior to the
expiration of the terms of this Agreement, employees of the Company or its
subsidiaries and affiliates in an executive capacity.
(b) Upon the termination of his employment with the
Company for any reason whatsoever, the Executive shall forthwith deliver or
cause to be delivered to the Company any and all Confidential Information,
including drawings, notebooks, keys, data and other documents and materials
belonging to the Company and/or its subsidiaries and affiliates which is in his
17
<PAGE>
possession or under his control relating to the Company and/or its subsidiaries
and affiliates, or the business of the Company and/or its subsidiaries and
affiliates, and will deliver to the Company upon such termination of employment
any other property of the Company and/or its subsidiaries and affiliates which
is in his possession or under his control.
(c) The Executive will disclose promptly in writing to
the Company all Inventions (as hereinafter defined), whether or not he considers
them to be patentable or having the ability to be trademarked or copyrighted,
which he alone or with others conceives or makes, whether or not during regular
working hours, and the Executive hereby assigns and agrees to assign to the
Company or its subsidiaries and affiliates all right, title and interest in and
to all Inventions which relate to the business of the Company or its
subsidiaries and affiliates and agrees not to disclose any Inventions to others
without the prior written consent of the Board of Directors of the Company,
except as required by the conditions of his employment hereunder. For purposes
of this Agreement, "Invention" means any and all machines, apparatus,
compositions of matter, methods, know-how, processes, designs, configurations,
uses, ideas, concepts or writings of any kind, concerning or relating in any way
to the business of the Company and/or its subsidiaries and affiliates,
discovered, conceived, developed, made or produced, or any improvements thereto,
and shall not be limited to the definition of an "invention" contained in United
States patent laws. The Executive understands and agrees that all Inventions,
trademarks, copyrights or service marks relating thereto which reasonably relate
to the business of the Company and/or its subsidiaries and affiliates and which
are conceived or made by him during the term of this Agreement, either alone or
with others, are the sole and
18
<PAGE>
exclusive property of the Company whether or not they are conceived or made
during or outside regular working hours.
(d) The Executive will, at any time during his
employment hereunder or after the termination of this Agreement for any reason,
at the request of the Company and without further consideration, execute (i)
specific assignments in favor of the Company and/or its subsidiaries and
affiliates, or their nominees, of any and all Inventions, (ii) all papers and
perform all acts which the Company and/or its subsidiaries and affiliates
considers necessary or advisable for the preparation, application, procurement,
maintenance, enforcement and defense of any United States or foreign patent
applications and patents for any and all Inventions, for the perfection or
enforcement of any trademarks or copyrights relating to Inventions and for the
transfer of any interest which the Executive may have, (iii) any and all papers
and documents required or necessary to vest sole right, title and interest in
the Company and/or its subsidiaries and affiliates, or their nominees, of any
and all Inventions, patents, patent applications or any trademarks, service
marks or copyrights relating thereto, and (iv) all documents including those
documents referred to above, and do all other acts necessary to assist in the
preservation of all of the interests of the Company and/or its subsidiaries and
affiliates in any and all Inventions arising under this Agreement.
(e) The Executive understands and agrees that all
Proprietary Information (as hereinafter defined) conceived by him either alone
or with others or provided to him by the Company and/or its subsidiaries and
affiliates or others is the sole and exclusive property of the Company and/or
its subsidiaries and affiliates. For purposes of this Agreement, "Proprietary
Information" means any information relating to the business of the Company
and/or its
19
<PAGE>
subsidiaries and affiliates that has not previously been publicly released by
duly authorized representatives of the Company and/or its subsidiaries and
affiliates and shall include, without limitation, information included in all
drawings, designs, plans, proposals, marketing and sales programs, financial
information, costs, pricing information, customer information and all methods,
concepts or ideas in or reasonably related to the business of the Company and/or
its subsidiaries and affiliates.
(f) The Executive hereby acknowledges and agrees that
the services to be rendered by him to the Company hereunder are of a special and
unique nature and that it would be very difficult or impossible to measure the
damages resulting from a breach of this Agreement. The Executive hereby further
acknowledges and agrees that the restrictions herein are reasonable and
necessary for the protection of the business and the goodwill of the Company and
its subsidiaries and affiliates and that a violation by the Executive of any
such covenant will cause irreparable damage to the Company and/or its
subsidiaries and affiliates. The Executive therefore agrees that any breach or
threatened breach by him of any provisions of this Section 5 shall entitle the
Company and/or its subsidiaries and affiliates, in addition to any other legal
remedy available to them, to apply to any court of competent jurisdiction for a
temporary and permanent injunction of any other applicable decree of specific
performance, without any bond or security being required thereof, in order to
enjoin such breach or threatened breach. The parties understand and intend that
each provision and restriction agreed to in this Section 5 shall be construed as
separate and divisible from every other provision and restriction and that the
unenforceability of any one provision or restriction shall not limit the
enforceability, in whole
20
<PAGE>
or in part, of any other provision or restriction and that one or more of all of
such provisions or restrictions may be enforced, in whole or in part, as the
circumstances warrant.
(g) The provisions of this Section 5 shall survive the
termination of this Agreement.
6. AGREEMENT NOT-TO-COMPETE.
The Executive hereby agrees, to the extent permitted by law,
that during the two year period subsequent to the date of termination of his
employment with the Company hereunder, for Cause or any reason other than if the
Executive terminates his employment with the Company pursuant to Section 4(d) of
this Agreement, the Executive shall not, directly or indirectly, engage in any
activity competitive with the Company's business whether alone, as a partner, or
as an officer, director, employee, agent, consultant or shareholder of any other
entity, or as a trustee, fiduciary or other representative of any other person
or entity. For this purpose, a business shall be competitive with the Company's
business if it involves the operation of one or more full service or take-out
seafood restaurants. In the event of a breach or threatened breach by Executive
of the covenants contained in this section, Executive acknowledges that the
Company will not have an adequate remedy at law and that the Company shall be
entitled to such equitable and injunctive relief as may be available to restrain
Executive from the violation of the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for breach or threatened breach, including the recovery of damages from
Executive. Executive acknowledges and agrees that the covenants contained in
this section are of the essence in this Agreement, that each of the covenants is
reasonable and necessary to protect and preserve the interests and properties of
the
21
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Company and the business of the Company, and that irreparable loss and damage
will be suffered by the Company should Executive breach any of such covenants.
The provisions of this section shall survive the termination of this Agreement.
7. KEY-MAN LIFE INSURANCE.
The Company may, at any time and from time to time, make
application for one or more policies of life insurance on the life of the
Executive, which policies shall name the Company as the beneficiary thereof. The
Executive hereby acknowledges and agrees that he shall have no interest
whatsoever in any such policies and that any amounts paid thereon will inure
solely to the benefit of the Company and not to the estate of the Executive. The
Executive hereby agrees to cooperate with the Company in obtaining any such
insurance, including submitting to physical examinations at a reasonable time or
times, if required, and completing applications furnished by insurers for such
purposes.
8. GENERAL PROVISIONS.
(a) The Executive may not at any time assign this
Agreement nor any right or interest hereunder. Except as otherwise herein
provided, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the Executive's legal representative and the Company's
successors and assigns.
(b) For purposes of this Agreement, the term "Company"
shall mean and include subsidiaries, parents and affiliated companies of the
Company in existence from time to time.
(c) Any notice, request, instruction or other
documentation required or permitted to be given hereunder shall be sufficient if
in writing and hand delivered or sent by
22
<PAGE>
United States Certified Mail, Return Receipt Requested, to the parties at their
respective addresses as shown on the face of this Agreement. Either party may
change the address to which notices shall be delivered by notice given to the
other party as provided herein. For all purposes, the date of the giving of any
notice hereunder shall be the date of the hand delivery or the mailing thereof.
(d) This Agreement contains the entire agreement of the
parties with respect to the Executive's employment by the Company and supersedes
any and all prior negotiations, agreements or understandings relating thereto,
written or oral, between the parties. This Agreement may not be changed,
modified, extended, renewed or supplemented and no provision hereof may be
waived, except by an instrument in writing signed by the party against whom
enforcement of any change, modification, extension, renewal, supplement or
waiver is sought.
(e) This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida. The invalidity of any
portion of this Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part thereof, all of which are inserted herein
conditionally on their being valid in law. In the event that any portion or
portions contained herein shall be invalid, this Agreement shall be construed so
as to make such portion or portions valid or, if such construction is not
legally possible, as if such invalid portion or portions had not been inserted.
(f) Failure to insist upon strict compliance with any
of the terms, covenants or conditions hereof shall not be deemed a waiver or
relinquishment of any such terms, covenants or conditions, nor shall any waiver
or relinquishment of any right or power hereunder
23
<PAGE>
at any one time or more times be deemed a waiver or relinquishment of such right
or power at any other time or times.
(g) Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs. Any suit, action or proceeding with
respect to this Agreement shall be brought in the courts of Broward County in
the State of Florida or in the U. S. District Court for the Southern District of
Florida. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding. Venue for any
such action, in addition to any other venue permitted by statute, will be
Broward County, Florida. The parties hereto hereby irrevocably waive, to the
fullest extent permitted by law, any objection that any of them may now or
hereafter have to delaying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any judgment entered by any court in
respect thereof brought in Broward County, Florida, and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
Broward County, Florida has been brought in an inconvenient forum.
(h) This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the day and year first above written.
BAYPORT RESTAURANT GROUP, INC.
By: /s/ William D. Korenbaum
-------------------------
Its: _________________________
Approved:
/s/ Arthur H. Kaplan
- -------------------------------------
Arthur H. Kaplan, as Chairman of the
Compensation Committee and as
Chairman of the Board
EXECUTIVE:
/s/ David J. Connor
-------------------
David J. Connor
25
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement")
is made this __ day of April, 1995, effective as of the 1st day of April, 1995,
by and between BAYPORT RESTAURANT GROUP, INC., a corporation organized under the
laws of the State of Florida, having its principal office at 4000 Hollywood
Boulevard, Hollywood, Florida (the "Company"), and WILLIAM D. KORENBAUM,
residing at 661 N.W. 100th Terr., Plantation, Florida 33324 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the ownership and operation of
seafood restaurants; and
WHEREAS, the Executive is presently employed by the Company, in the
capacity of President and Chief Operating Officer, pursuant to that certain
Employment Agreement, dated June 1, 1993 (the "Old Employment Agreement"); and
WHEREAS, the Company has determined that its best interests are served
by amending and restating the Old Employment Agreement to provide for a
long-term agreement whereby the Company will be assured of the Executive's
continued availability to render services to the Company and its subsidiaries;
and
WHEREAS, the Executive desires to continue to be so employed by the
Company on the terms and provisions hereinbelow set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties hereby agree as follows:
<PAGE>
1. TERMINATION OF OLD EMPLOYMENT AGREEMENT
The Old Employment Agreement is hereby amended and restated, effective
upon the effectiveness of this Agreement.
2. EMPLOYMENT, TERM, DUTIES AND ACCEPTANCE.
(a) The Company shall employ the Executive, for the Employment
Period (as hereinafter defined) as an executive to perform such executive and
managerial duties as are associated with his positions with the Company as
President and Chief Operating Officer and such other duties, as may, from time
to time, be assigned to the Executive by the Company's Board of Directors. The
Executive hereby agrees to accept such employment and to devote his full time
and attention to his duties and to use his best efforts in and to the faithful
performance of his duties hereunder, subject to the general direction and
control of the Board of Directors of the Company. The Executive shall work
full-time for the Company. The Executive further agrees that, if requested, he
shall serve as a director of the Company for no additional compensation.
(b) The Executive hereby agrees that all writing,
documentation, articles, brochures, proposed advertisements, ideas and drawings,
Company records, ledgers, accounts, customer lists and all related and similar
materials prepared or collected by him in connection with the rendering of his
services to the Company and its subsidiaries, as well as notes taken with
respect to lectures, seminars and other business-related activities attended
while in the employ of the Company, shall be the sole and exclusive property of
the Company. Accordingly, the Executive acknowledges that his employment does
not confer upon him any ownership interest in or personal claim upon any such
materials.
2
<PAGE>
(c) The Executive hereby agrees to abide by all reasonable
rules and regulations established by the Board of Directors of the Company and
such restrictions, if any, applicable to the Executive which may, from time to
time, be set forth in the Company's Articles of Incorporation and Bylaws.
3. COMPENSATION AND REIMBURSEMENT.
(a) As compensation for all duties to be rendered by the
Executive hereunder, the Company agrees to pay to the Executive during the
Employment Period and hereby grants to the Executive the following:
(i) BASE SALARY: A salary (the "Base Salary") at
the rate of Two Hundred Forty Thousand Dollars ($240,000.00) per annum for the
period April 1, 1995 through December 31, 1995; and Two Hundred Fifty-Two
Thousand Dollars ($252,000) for the period January 1, 1996 through December 31,
1996. Commencing January 1, 1997, for each of the three fiscal years ended
December 1997, 1998 and 1999, Executive's Base Salary shall be increased based
on the following performance levels of the Company in relation to Plan (as
hereinafter defined):
(A) Realize less than 90% of Plan: No
Base Salary increase;
(B) Realize 90% but less than 100% of
Plan: 5% increase in Base Salary
from the prior year's Base Salary;
(C) Realize 100% but less than 110% of
Plan: 10% increase in Base Salary
from the prior year's Base Salary;
(D) Realize 110% or more of Plan: 15%
increase in Base Salary from the
prior year's Base Salary; plus
3
<PAGE>
(ii) BONUS COMPENSATION:
(A) An annual bonus (the
"Annual Bonus") for the period through December 31, 1995, in an amount equal to
the annual bonus under the Old Employment Agreement for the period ended
December 31, 1995; plus
(B) An Annual Bonus, if any,
for each of the four years ended December 27, 1999 in an amount equal to the
following:
i) Realize less than
90% of Plan: No
Annual Bonus;
ii) Realize 90% but
less than 100% of
Plan: Annual Bonus
of 25% of prior
year's Base
Salary;
iii) Realize more than
100% of Plan:
Annual Bonus of
35% of prior
year's Base
Salary; plus
(iii) Options to acquire an aggregate of 450,000
shares of the Company's common stock, $.001 par value per share (the "Options")
at an exercise price of $4.00 per share (the fair market value of the Common
Stock on the date the Options were approved by the Board of Directors) upon the
following terms and conditions:
(A) The Options shall vest at a rate of
90,000 upon the execution of this
Agreement, and 90,000 on each of
January 1, 1996, 1997, 1998 and 1999
so long as the Executive is still
employed by the Company on that
date;
4
<PAGE>
(B) Any unexercised Options shall
automatically and without notice
terminate and become null and void
at the time of the earliest to occur
of the following:
(1) December 31, 1999;
(2) Except as set forth below,
the date of termination of
the Executive's employment
by the Company if Executive
is terminated For Cause (as
hereinafter defined) or if
Executive voluntarily
resigns from his employment
with the Company; and
(3) The expiration of one year
following the issuance of
letters testamentary or
letters of administration
to the personal
representative of the
Executive, if the
Executive's death occurs
during his employment by
the Company.
(C) The Options shall be exercised by
the Executive (or by his personal
representative) as to all or part of
the shares covered hereby, by the
giving of written notice of such
exercise to the Company at its
principal business office,
specifying the number of shares to
be purchased and further specifying
a business day, not less than five
(5) days nor more than fifteen (15)
days from the date such notice is
given, for the payment of the
purchase price
5
<PAGE>
against delivery of the shares being
purchased. The Company shall cause
certificates for the shares so
purchased to be delivered to the
Executive or his personal
representative, as the case may be,
at its principal business office,
against payment of the purchase
price, on the date specified in the
notice of exercise.
(D) The exercise price of the Options
shall be $4.00 per share.
(E) Neither the Executive nor his
personal representative shall have
any of the rights of a shareholder
of the company with respect to the
shares subject to the Options until
a certificate or certificates for
such shares shall have been issued
upon exercise of the Options.
(F) The Options shall not be
transferable by the Executive other
than to his personal representative
by will or the laws of descent and
distribution. During the Executive's
lifetime, the Options shall be
exercisable only by the Executive
and may not be transferred, pledged
or otherwise hypothecated. In the
event of the Executive's death
during his employment by the
Company, the Options shall
thereafter be exercisable only by
his personal representative.
6
<PAGE>
(G) The Executive represents and
warrants to the Company that any
purchase of shares of common stock
upon exercise of the Options shall
be for his own account, for
investment and not with a view
toward distribution and that such
shares will not be transferred, sold
or otherwise disposed of unless such
transfer, sale or disposition is
pursuant to an effective
registration statement under the
Securities Act of 1933, as amended
(the "Act") or, in the opinion of
counsel for the Company, is exempt
from registration under the Act. The
Executive hereby acknowledges that
only the Company can file such
registration statement and the
Executive will bear the investment
risk of any shares of common stock
purchased upon the exercise of the
Options for an indefinite period of
time.
(H) The Company hereby agrees that if,
after execution of this Agreement,
it should file a registration
statement under the Act, it shall
offer the Executive the opportunity
to register, pursuant to such
registration statement, the shares
issuable upon the exercise of the
Options. The Company further agrees
that if the shares issuable to the
Executive upon the exercise of the
Options have not been registered
pursuant to the Act on or before
January 1, 1997, the Company
7
<PAGE>
shall, within thirty days of receipt
from the Executive of written demand
for such registration, file with the
Securities and Exchange Commission a
registration statement on Form S-8
(or such other form of registration
statement as is appropriate) for
purposes of registering such shares
pursuant to the Act. The demand
registration rights granted hereby
to the Executive shall expire on the
expiration date of this Agreement.
Any and all shares issuable to the
Executive hereunder shall be issued
in the name of William D. Korenbaum
and shall bear the following
restrictive legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE
SECURITIES LAW OF ANY OTHER
JURISDICTION AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF IN ANY
MANNER UNLESS THEY ARE REGISTERED
UNDER SUCH ACT AND THE SECURITIES
LAWS OF ANY APPLICABLE JURISDICTION
OR UNLESS PURSUANT TO AN EXEMPTION
THEREFROM.
(I) In connection with the exercise of
the Options, the Company agrees to
permit the Executive to exercise the
Options by delivery of a
non-recourse promissory note
("Note") in an amount equal to the
exercise price of the
8
<PAGE>
Options being exercised. The
Executive shall notify the Company
of his intention to exercise any or
all of the Options (as required
under Section 3(a)(iii)(C) of this
Agreement) by delivery of a Note.
The terms of the Note shall be as
follows: (1) the Note shall be for a
three year term; (2) the Note shall
be secured by the shares being
purchased upon exercise of the
Options (and the certificate(s)
representing the shares being
purchased upon the exercise of the
Options shall be held in escrow
until the Note is paid in full; (3)
the Note shall bear interest at the
lowest rate allowable under
applicable federal and state law so
as not to require the imputation of
interest with respect to the Note;
and (4) the principal and interest
due and payable on the Note shall be
payable on the earlier of the
maturity of the Note or the sale of
the shares of Common Stock securing
the Note. In that regard, the
Executive shall execute such
documents at the time of the
exercise of the Options (including a
form of Note and security agreement)
as are necessary to document the
terms of this arrangement.
(b) For all purposes under this Agreement, "Plan" is defined
as the Company's net-after tax income budget for a particular year as approved
by the Company's Board of
9
<PAGE>
Directors at the beginning of that particular year. Further, for all purposes
under this Agreement, compensation payable to Executive under subparagraphs
(a)(i) and (ii) of this Section 3 shall be determined based upon Plan for each
year after accounting for any Bonus Compensation payable to Executive under
Subparagraph (a)(ii) above hereunder for such year or payable to the Company's
Chief Executive Officer for such year.
(c) Under the Old Employment Agreement, options to purchase an
aggregate 131,250 shares of the Company's common stock are scheduled to vest on
or prior to May 31, 1996. The parties hereto agree that all of these previously
unvested options shall be deemed vested upon the execution of this Agreement.
(d) The Executive shall be eligible, subject to the terms and
conditions of each plan or program, to participate, at the expense of the
Company, in such group medical, health, accident, disability and life insurance
and medical reimbursement programs as are made generally available from time to
time by the Company to other senior executives and such other fringe benefit
programs, including, but not limited to, retirement plans and deferred
compensation, which may be adopted by the Company from time to time.
(e) The Company shall provide the Executive with the use of an
automobile, which shall not at any time be more than three (3) years old, in
connection with the performance of his duties hereunder and shall pay directly,
or reimburse the Executive for, all amounts paid in connection with the
automobile, including without limitation, gasoline, repairs, maintenance and
automobile insurance expenses incurred on connection therewith.
(f) The Company shall reimburse the Executive for his
reasonable out-of-pocket expenses and costs incurred in connection with the
performance of his services hereunder,
10
<PAGE>
upon presentation of proper vouchers and documentary support therefor in
accordance with the Company's usual and customary practices and procedures.
(g) During the term of this Agreement, the Executive shall be
entitled to four weeks of paid vacation time per year. The time or times at
which the Executive will be permitted to take such vacation time shall be
determined by the mutual agreement of the Company and the Executive. Vacation
time may not be accumulated without Employer's consent and must be taken by
fiscal year end.
(h) The Company shall provide the Executive, at the Company's
expense, with One Million Dollars ($1,000,000) of whole life insurance (the
"Policy") on the life of the Executive naming such beneficiaries thereunder as
the Executive shall designate. The policy shall be owned by the Executive or his
designee.
(i) The Company shall provide the Executive with additional
compensation in the amount of Thirty Thousand Dollars ($30,000) for each year
ended December 1995, 1996, 1997, 1998 and 1999; payable $150,000 upon execution
of this Agreement and vesting one-fifth (1/5) for each year ended December 1995,
1996, 1997, 1998 and 1999. In the event this Agreement is terminated voluntarily
by the Executive or For Cause (as hereinafter defined), the unvested portion of
such additional compensation shall be repaid to the Company by the Executive.
Upon the execution of this Agreement, Executive shall execute a guaranty in
favor of the Company in order to document the Executive's obligation to the
Company to repay the unvested portion of the additional compensation upon the
occurrence of the events set forth above.
11
<PAGE>
4. TERM AND TERMINATION.
(a) Unless sooner terminated pursuant to the provisions of
this Section 4, the initial term of this Agreement shall be the period
commencing April 1, 1995 and expiring December 31, 1999 (the "Employment
Period").
(b) Notwithstanding anything contained herein to the contrary,
the Company shall have the right to terminate this Agreement and the Executive's
employment hereunder at any time for Cause (as hereinafter defined). For
purposes of this Agreement, "Cause" means the following:
(i) a material breach or violation by the
Executive of any provision of this Agreement or the failure of the Executive to
materially perform his duties or responsibilities hereunder (unless said
material default is caused by a physical or mental infirmity or disability which
renders Executive incapable of performing the customary duties for which
Executive was employed) after the Executive has been given at least thirty (30)
days prior written notice together with an opportunity to cure said breach,
violation or failure during such thirty (30) day period; or
(ii) actions by the Executive constituting fraud
and/or embezzlement; or
(iii) in the event that Executive becomes
incapable, for more than a six (6) month period, of performing the customary
duties for which Executive was employed due to a physical or mental infirmity or
disability, or as a result of Executive's death.
The right of the Company to so terminate this Agreement and the
Executive's employment hereunder pursuant to this Section 4(b) shall be
exercisable by the Company upon
12
<PAGE>
the giving of written notice to the Executive specifying the grounds for such
termination. Such termination shall be effective upon the giving of such written
notice by the Company subject to the cure period provided in this Section 4.
Except as set forth in the next sentence, if the Executive is terminated for
Cause, the Executive shall only be compensated through the date of his
termination and the provisions set forth in Sections 5 and 6 hereof shall remain
in full force and effect. If the Executive's termination is the result of the
happening of an event under subsection (iii) above, other than the death of the
Executive, then notwithstanding the termination of this Agreement for Cause, the
Company shall pay to the Executive, an amount equal to the Executive's Base
Salary for the twelve (12) month period subsequent to Executive's termination of
Employment, and an amount equal to one-half (1/2) of the Executive's Base Salary
for the subsequent twelve (12) month period. If the Executive's termination is
due to the death of the Executive, the Company shall pay to the estate of the
Executive an amount equal to the Executive's Base Salary for the twelve (12)
month period subsequent to the Executive's termination of Employment. The
provisions of this subsection shall survive the termination of this Agreement.
(c) During the period between March 31, 1998 and April 30,
1998, if the Company has not met Plan during two of the three fiscal years
ending December 29, 1997, the Company may cancel this Agreement upon the giving
of written notice to the Executive; provided, however, that, in such event, the
options described in Section 3(a)(iv) shall automatically vest and shall remain
exercisable through the end of their term, whether or not Executive remains an
employee of the Company during such period.
13
<PAGE>
(d) In the event of a Change in Control (as hereinafter
defined) of the Company, whether or not such Change in Control has been approved
by the Company's present Board of Directors, the Executive may, at any time
within the six (6) month period following the date of such Change in Control,
terminate this Agreement and his employment hereunder if, in his sole
discretion, he reasonably determines that such Change in Control would be a
material detriment to his ability to effectively render services to the Company
hereunder. In the event that the Executive terminates this Agreement and his
employment hereunder pursuant to and in accordance with this Section 4(d), the
Executive shall receive the greater of: (i) the sum of One Million Dollars
($1,000,000.00); or (ii) the aggregate balance due pursuant to Section 3(a)(i)
of this Agreement. Such greater amounts shall be payable within 60 days
following the date of such termination, without the Executive having to fulfill
his obligations or perform his duties hereunder, and, in such event, the
Executive shall also be released from any and all restrictive covenants
contained herein during the Employment Period. Further, when the Executive
terminates his employment with the Company pursuant to and in accordance with
this Section 4(d), any unvested stock options granted to the Executive by the
Company pursuant to this Agreement or pursuant to any other agreements shall
automatically become vested and shall remain outstanding for the remainder of
their terms.
(e) In addition, upon a Change of Control, the Company shall
remain obligated to keep all benefits available and paid to the Executive as if
he were still an employee for a period of two years from the date that the
Executive terminates his employment with the Company pursuant to Section 4(d) of
this Agreement. In the event that the Executive's participation is such benefit
programs is barred by any such plans or programs, the Company
14
<PAGE>
shall arrange to provide Executive with substantially similar benefits. Further,
Executive shall not be required to mitigate the amount of any payment provided
by this Section 4 by seeking other employment or otherwise nor shall the amount
of any payment provided pursuant to this section 4 be reduced by any
compensation earned or received by Employee from any source, including without
limitation compensation received as a result of other employment.
(f) For purposes of Section 4(d), "Change in Control" shall
mean a change in control of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14(a) of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act"); provided that, without limitation, a Change in Control shall be deemed to
have occurred if: (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities; or (ii) individuals who, on the effective date of
this Agreement, constitute the Board of Directors cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors as of the effective date of this Agreement.
(g) The right of the Executive to terminate this Agreement and
the Executive's employment hereunder pursuant to Section 4(d) shall be
exercisable by the Executive upon delivery of written notice to the Company
specifying the grounds for such termination.
15
<PAGE>
5. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
The Executive hereby acknowledges and agrees that the duties
and services to be performed by the Executive hereunder are special and unique
and that, by reason of and/or as of a result of his employment hereunder, the
Executive will acquire, make use of and/or add to confidential information of a
special and unique nature and value relating to certain records, secrets,
documentation, ledgers and general information, accounts receivable and payable
ledgers, customer lists, prospective customer lists, financial and other records
of and/or with respect to the Company, its subsidiaries and affiliates,
customers and other similar matters (all such information, together with that
certain information described herein, being hereinafter referred to as
"Confidential Information"). The Executive further acknowledges and agrees that
the Confidential Information is of great value to the Company and/or its
subsidiaries and affiliates and that it is reasonably necessary to protect the
Confidential Information and the goodwill of the Company and/or its subsidiaries
and affiliates. Accordingly, the Executive hereby agrees that:
(a) The Executive will not, at any time, directly or
indirectly, except in connection with the Executive's employment hereunder or as
otherwise authorized by the Board of Directors of the Company for the benefit of
the Company:
(i) divulge to any person, firm or corporation
other than the Company (hereinafter referred to as "Third Parties"), or use or
cause or authorize any Third Parties to use, the Confidential Information or any
other information relating to the business or interests of the Company which the
Executive knows or should know is regarded as confidential and valuable by the
Company and/or its subsidiaries and affiliates (whether or not any of the
16
<PAGE>
foregoing information is actually novel or unique or is actually known to
others), except as required by law; or
(ii) solicit or cause or authorize to be
solicited, directly or indirectly, for or on behalf of himself or any Third
Parties, any business competitive to the business of the Company and/or its
subsidiaries and affiliates from Third Parties who are, at any time within one
(1) year prior to the expiration of the term of this Agreement, customers of the
Company and/or its subsidiaries and affiliates; or
(iii) accept, cause or authorize to be accepted,
directly or indirectly, for or on behalf of himself or the Third Parties, any
business competitive to the business of the Company or its subsidiaries and
affiliates from any such customers of the Company and/or its subsidiaries and
affiliates; or
(iv) solicit, cause or authorize to be solicited,
directly or indirectly, for employment for or on behalf of himself or any Third
Parties, any persons who are, at any time within one (1) year prior to the
expiration of the terms of this Agreement, employees of the Company or its
subsidiaries and affiliates in an executive capacity.
(b) Upon the termination of his employment with the Company
for any reason whatsoever, the Executive shall forthwith deliver or cause to be
delivered to the Company any and all Confidential Information, including
drawings, notebooks, keys, data and other documents and materials belonging to
the Company and/or its subsidiaries and affiliates which is in his possession or
under his control relating to the Company and/or its subsidiaries and
affiliates, or the business of the Company and/or its subsidiaries and
affiliates, and will deliver to the
17
<PAGE>
Company upon such termination of employment any other property of the Company
and/or its subsidiaries and affiliates which is in his possession or under his
control.
(c) The Executive will disclose promptly in writing to the
Company all Inventions (as hereinafter defined), whether or not he considers
them to be patentable or having the ability to be trademarked or copyrighted,
which he alone or with others conceives or makes, whether or not during regular
working hours, and the Executive hereby assigns and agrees to assign to the
Company or its subsidiaries and affiliates all right, title and interest in and
to all Inventions which relate to the business of the Company or its
subsidiaries and affiliates and agrees not to disclose any Inventions to others
without the prior written consent of the Board of Directors of the Company,
except as required by the conditions of his employment hereunder. For purposes
of this Agreement, "Invention" means any and all machines, apparatus,
compositions of matter, methods, know-how, processes, designs, configurations,
uses, ideas, concepts or writings of any kind, concerning or relating in any way
to the business of the Company and/or its subsidiaries and affiliates,
discovered, conceived, developed, made or produced, or any improvements thereto,
and shall not be limited to the definition of an "invention" contained in United
States patent laws. The Executive understands and agrees that all Inventions,
trademarks, copyrights or service marks relating thereto which reasonably relate
to the business of the Company and/or its subsidiaries and affiliates and which
are conceived or made by him during the term of this Agreement, either alone or
with others, are the sole and exclusive property of the Company whether or not
they are conceived or made during or outside regular working hours.
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(d) The Executive will, at any time during his employment
hereunder or after the termination of this Agreement for any reason, at the
request of the Company and without further consideration, execute (i) specific
assignments in favor of the Company and/or its subsidiaries and affiliates, or
their nominees, of any and all Inventions, (ii) all papers and perform all acts
which the Company and/or its subsidiaries and affiliates considers necessary or
advisable for the preparation, application, procurement, maintenance,
enforcement and defense of any United States or foreign patent applications and
patents for any and all Inventions, for the perfection or enforcement of any
trademarks or copyrights relating to Inventions and for the transfer of any
interest which the Executive may have, (iii) any and all papers and documents
required or necessary to vest sole right, title and interest in the Company
and/or its subsidiaries and affiliates, or their nominees, of any and all
Inventions, patents, patent applications or any trademarks, service marks or
copyrights relating thereto, and (iv) all documents including those documents
referred to above, and do all other acts necessary to assist in the preservation
of all of the interests of the Company and/or its subsidiaries and affiliates in
any and all Inventions arising under this Agreement.
(e) The Executive understands and agrees that all Proprietary
Information (as hereinafter defined) conceived by him either alone or with
others or provided to him by the Company and/or its subsidiaries and affiliates
or others is the sole and exclusive property of the Company and/or its
subsidiaries and affiliates. For purposes of this Agreement, "Proprietary
Information" means any information relating to the business of the Company
and/or its subsidiaries and affiliates that has not previously been publicly
released by duly authorized representatives of the Company and/or its
subsidiaries and affiliates and shall include, without
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limitation, information included in all drawings, designs, plans, proposals,
marketing and sales programs, financial information, costs, pricing information,
customer information and all methods, concepts or ideas in or reasonably related
to the business of the Company and/or its subsidiaries and affiliates.
(f) The Executive hereby acknowledges and agrees that the
services to be rendered by him to the Company hereunder are of a special and
unique nature and that it would be very difficult or impossible to measure the
damages resulting from a breach of this Agreement. The Executive hereby further
acknowledges and agrees that the restrictions herein are reasonable and
necessary for the protection of the business and the goodwill of the Company and
its subsidiaries and affiliates and that a violation by the Executive of any
such covenant will cause irreparable damage to the Company and/or its
subsidiaries and affiliates. The Executive therefore agrees that any breach or
threatened breach by him of any provisions of this Section 5 shall entitle the
Company and/or its subsidiaries and affiliates, in addition to any other legal
remedy available to them, to apply to any court of competent jurisdiction for a
temporary and permanent injunction of any other applicable decree of specific
performance, without any bond or security being required thereof, in order to
enjoin such breach or threatened breach. The parties understand and intend that
each provision and restriction agreed to in this Section 5 shall be construed as
separate and divisible from every other provision and restriction and that the
unenforceability of any one provision or restriction shall not limit the
enforceability, in whole or in part, of any other provision or restriction and
that one or more of all of such provisions or restrictions may be enforced, in
whole or in part, as the circumstances warrant.
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(g) The provisions of this Section 5 shall survive the
termination of this Agreement.
6. AGREEMENT NOT-TO-COMPETE.
The Executive hereby agrees, to the extent permitted by law,
that during the two year period subsequent to the date of termination of his
employment with the Company hereunder, for Cause or any reason other than if the
Executive terminates his employment with the Company pursuant to Section 4(d) of
this Agreement, the Executive shall not, directly or indirectly, engage in any
activity competitive with the Company's business whether alone, as a partner, or
as an officer, director, employee, agent, consultant or shareholder of any other
entity, or as a trustee, fiduciary or other representative of any other person
or entity. For this purpose, a business shall be competitive with the Company's
business if it involves the operation of one or more full service or take-out
seafood restaurants. In the event of a breach or threatened breach by Executive
of the covenants contained in this section, Executive acknowledges that the
Company will not have an adequate remedy at law and that the Company shall be
entitled to such equitable and injunctive relief as may be available to restrain
Executive from the violation of the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for breach or threatened breach, including the recovery of damages from
Executive. Executive acknowledges and agrees that the covenants contained in
this section are of the essence in this Agreement, that each of the covenants is
reasonable and necessary to protect and preserve the interests and properties of
the Company and the business of the Company, and that irreparable loss and
damage will be
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suffered by the Company should Executive breach any of such covenants. The
provisions of this section shall survive the termination of this Agreement.
7. KEY-MAN LIFE INSURANCE.
The Company may, at any time and from time to time, make
application for one or more policies of life insurance on the life of the
Executive, which policies shall name the Company as the beneficiary thereof. The
Executive hereby acknowledges and agrees that he shall have no interest
whatsoever in any such policies and that any amounts paid thereon will inure
solely to the benefit of the Company and not to the estate of the Executive. The
Executive hereby agrees to cooperate with the Company in obtaining any such
insurance, including submitting to physical examinations at a reasonable time or
times, if required, and completing applications furnished by insurers for such
purposes.
8. GENERAL PROVISIONS.
(a) The Executive may not at any time assign this Agreement
nor any right or interest hereunder. Except as otherwise herein provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Executive's legal representative and the Company's successors and assigns.
(b) For purposes of this Agreement, the term "Company" shall
mean and include subsidiaries, parents and affiliated companies of the Company
in existence from time to time.
(c) Any notice, request, instruction or other documentation
required or permitted to be given hereunder shall be sufficient if in writing
and hand delivered or sent by United States Certified Mail, Return Receipt
Requested, to the parties at their respective
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addresses as shown on the face of this Agreement. Either party may change the
address to which notices shall be delivered by notice given to the other party
as provided herein. For all purposes, the date of the giving of any notice
hereunder shall be the date of the hand delivery or the mailing thereof.
(d) This Agreement contains the entire agreement of the
parties with respect to the Executive's employment by the Company and supersedes
any and all prior negotiations, agreements or understandings relating thereto,
written or oral, between the parties. This Agreement may not be changed,
modified, extended, renewed or supplemented and no provision hereof may be
waived, except by an instrument in writing signed by the party against whom
enforcement of any change, modification, extension, renewal, supplement or
waiver is sought.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida. The invalidity of any portion
of this Agreement shall not affect the enforceability of the remaining portions
of this Agreement or any part thereof, all of which are inserted herein
conditionally on their being valid in law. In the event that any portion or
portions contained herein shall be invalid, this Agreement shall be construed so
as to make such portion or portions valid or, if such construction is not
legally possible, as if such invalid portion or portions had not been inserted.
(f) Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver or
relinquishment of any such terms, covenants or conditions, nor shall any waiver
or relinquishment of any right or power hereunder at any one time or more times
be deemed a waiver or relinquishment of such right or power at any other time or
times.
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(g) Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs. Any suit, action or proceeding with
respect to this Agreement shall be brought in the courts of Broward County in
the State of Florida or in the U. S. District Court for the Southern District of
Florida. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding. Venue for any
such action, in addition to any other venue permitted by statute, will be
Broward County, Florida. The parties hereto hereby irrevocably waive, to the
fullest extent permitted by law, any objection that any of them may now or
hereafter have to delaying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any judgment entered by any court in
respect thereof brought in Broward County, Florida, and hereby further
irrevocably waive any claim that any such suit, action or proceeding brought in
Broward County, Florida has been brought in an inconvenient forum.
(h) This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
SIGNATURES ON NEXT PAGE
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the day and year first above written.
BAYPORT RESTAURANT GROUP, INC.
By: /s/ David J. Connor
-------------------
Its: _________________________
Approved:
/s/ Arthur H. Kaplan
- ------------------------------------
Arthur H. Kaplan, as Chairman of the
Compensation Committee and as
Chairman of the Board
EXECUTIVE:
/s/ William D. Korenbaum
------------------------
William D. Korenbaum
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We have issued our report dated March 10, 1995, accompanying the consolidated
financial statements of Bayport Restaurant Group, Inc. and Subsidiaries included
in the Annual Report on Form 10-KSB for the years ended December 26, 1994 and
December 27, 1993 which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report and to the use of our name as it appears
under the caption "Experts."
/S/ GRANT THORNTON LLP
_______________________________________
Grant Thornton LLP
Miami, Florida
July 13, 1995
