<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-2
</TABLE>
NATHAN'S FAMOUS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NATHAN'S FAMOUS, INC.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
NATHAN'S FAMOUS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 14, 2000
To our Stockholders
The Annual Meeting of Stockholders of NATHAN'S FAMOUS, INC. will be held on
Thursday, September 14, 2000 at the de Seversky Conference Center, Northern
Boulevard, Old Westbury, New York at 10:00 a.m. At the meeting, you will be
asked to vote on
1. The election of seven directors to the Board of Directors; and
2. Any other matters that properly come before the meeting.
If you are a stockholder of record at the close of business on July 17,
2000, you are entitled to vote at the meeting or at any adjournment or
postponement of the meeting. This notice and proxy statement are first being
mailed to stockholders on or about July 24, 2000.
Please sign, date and return the enclosed proxy as soon as possible so your
shares may be voted as you direct.
By Order of the Board of Directors,
RONALD G. DEVOS
Secretary
Dated: Westbury, New York
July 24, 2000
<PAGE> 3
NATHAN'S FAMOUS, INC.
1400 OLD COUNTRY ROAD
WESTBURY, NEW YORK 11590
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, SEPTEMBER 14, 2000
Our annual meeting of stockholders will be held on Thursday, September 14,
2000 at the de Seversky Conference Center, Northern Boulevard, Old Westbury, New
York at 10:00 a.m. This proxy statement contains information about the matters
to be considered at the meeting or any adjournments or postponements of the
meeting.
ABOUT THE MEETING
What is being considered at the meeting?
You will be voting for the election of directors. You will be voting for
the election of 7 directors for a term of 1 year.
In addition, our management will report on our performance during fiscal
2000 and respond to your questions.
Who is entitled to vote at the meeting?
You may vote if you owned stock as of the close of business on July 17,
2000. Each share of stock is entitled to one vote.
How do I vote?
You can vote in two ways:
1. By attending the meeting; or
2. By completing, signing and returning the enclosed proxy card.
Can I change my mind after I vote?
Yes, you may change your mind at any time before the polls close at the
meeting. You can do this by (1) signing another proxy with a later date and
returning it to us prior to the meeting, or (2) voting again at the meeting.
What if I return my proxy card but do not include voting instructions?
Proxies that are signed and returned but do not include voting instructions
will be voted FOR the election of the nominee directors.
What does it mean if I receive more than one proxy card?
It means that you have multiple accounts with brokers and/or our transfer
agent. Please vote all of these shares. We recommend that you contact your
broker and/or our transfer agent to consolidate as many accounts as possible
under the same name and address. Our transfer agent is American Stock Transfer &
Trust Company, 718-921-8000.
Will my shares be voted if I do not provide my proxy?
Yes, if they are held in a brokerage account. Your shares may be voted
under certain circumstances if they are held in the name of the brokerage firm.
Brokerage firms generally have the authority to vote customers unvoted shares on
certain routine matters, including the election of directors. When a brokerage
firm votes its customer's unvoted shares, these shares are also counted for
purposes of establishing a quorum.
<PAGE> 4
If you hold your shares directly in your own name, they will not be voted
if you do not provide a proxy.
How many votes must be present to hold the meeting?
Your shares are counted as present at the meeting if you attend the meeting
and vote in person or if you properly return a proxy by telephone or mail. In
order for us to conduct our meeting, a majority of our outstanding shares as of
July 17, 2000, must be present at the meeting. This is referred to as a quorum.
On July 17, 2000, we had 7,065,199 shares issued and outstanding.
What vote is required to elect directors?
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and entitled to vote will be required to elect each
director. On July 17, 2000, there were 7,065,199 shares outstanding and entitled
to vote. A properly executed proxy marked ABSTAIN will not be voted, although it
will be counted for purposes of determining whether there is a quorum.
Accordingly, an abstention will have the effect of a negative vote.
2
<PAGE> 5
PROPOSAL 1 -- ELECTION OF DIRECTORS
Our Certificate of Incorporation presently provides for a Board of
Directors consisting of not less than three nor more than twenty-seven
directors. Our Board of Directors now consists of seven directors, as set forth
below.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME AGE OCCUPATION SINCE
---- --- ---------- --------
<S> <C> <C> <C>
Wayne Norbitz........................... 52 President, Chief Operating Officer 1989
and Director
Robert J. Eide(1)(2).................... 47 Chairman and Treasurer -- Aegis 1987
Capital Corp.
Brian S. Genson(1)(2)................... 51 President -- Pole Position 1999
Investments
Barry Leistner(1)(2).................... 49 President and Chief Executive 1989
Officer -- Koenig Iron Works, Inc.
Howard M. Lorber........................ 51 President and Chief Operating 1987
Officer -- New Valley Corp.
Donald L. Perlyn........................ 57 President -- Miami Subs Corporation 1999
A. F. Petrocelli........................ 56 President and Chairman of the 1993
Board -- United Capital Corp.
</TABLE>
---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Unless you indicate otherwise, shares represented by executed proxies will
be voted for the election as directors of the persons listed above. If any of
them is unavailable, the shares will be voted for a substitute nominee
designated by the board of directors. We have no reason to believe that any of
the nominees will be unavailable or, if elected, will decline to serve.
DIRECTOR BIOGRAPHIES
The following is a brief account of our directors' business experience for
the past five years:
ROBERT J. EIDE has been Chairman, Treasurer and a principal shareholder in
Aegis Capital Corp., a broker dealer and a member firm of the NASD, since 1984.
He has been a director of Vector Group Ltd, formerly Brooke Group Ltd., a
company engaged through its subsidiaries in the manufacture and sale of
cigarettes in the United States and Russia since November 1993, and a director
of each of its subsidiaries BGLS Inc. since November 1993 and New Valley
Holdings, Inc. since September 1994.
BRIAN S. GENSON has been President of Pole Position Investments, a company
engaged in the motor sport business, since 1989. Mr. Genson also serves as a
managing director of Grand Prix Topgear located in Stanstead, England and is
engaged in investing in the motor sport industry. Mr Genson was also responsible
for introducing Ben and Jerry's Ice Cream Company to the Japanese market. Mr.
Genson previously served as a director of Nathan's from 1987 to 1989.
BARRY LEISTNER has been President and Chief Executive Officer of Koenig
Iron Works, Inc., a company engaged in the fabrication and erection of
structural steel, since 1979. Mr. Leistner is also a partner in Weinstock
Brothers Hardware and is engaged in real estate development in Maine and New
York.
HOWARD M. LORBER has been our Chairman of the Board since 1990, Chief
Executive Officer since 1993 and a director since 1987. Mr. Lorber was elected
President and Chief Operating Officer of New Valley Corporation, a company
engaged in the ownership and management of commercial real estate in the United
States and, through its subsidiaries, in investment banking, brokerage and real
estate development in the United States and Russia since November 1994 and has
served as a director since 1991. He is also the Chairman and Chief Executive
Officer of Hallman & Lorber Associates, Inc., an employee benefit and pension
consulting firm. He also serves as a director of United Capital Corp., a
manufacturing and real estate
3
<PAGE> 6
company, Prime Hospitality Corporation, an owner and operator of hotel
properties and PLM International, Inc., a diversified leasing company. He is
also a trustee of Long Island University and Babson College.
WAYNE NORBITZ has been an employee since 1975 and was elected President in
October 1989. He previously held the positions of Director of Operations, Vice
President of Operations, Senior Vice President of Operations and Executive Vice
President. Prior to joining us, Mr. Norbitz held the position of Director of
Operations of Wetson's Corporation. Mr. Norbitz also serves as a member of the
Advisory Board of the Penton Foodservice Branding Institute and is a member of
the board of directors of Long Island Philharmonic Orchestra.
DONALD L. PERLYN has been an Executive Vice President since October 1999.
Prior to our merger with Miami Subs, Mr. Perlyn was a member of Miami Subs'
Board of Directors. In July 1998, Mr. Perlyn was appointed President and Chief
Operating Officer of Miami Subs and continues to serve in that capacity. Prior
to July 1998, Mr. Perlyn had been Miami Subs' Executive Vice President of
Franchise Development since March 1992. From September 1990 to February 1992,
Mr. Perlyn served as Miami Subs' Senior Vice President of Franchising and
Development. Between August 1990 and December 1991, he was Senior Vice President
of Franchising and Development for QSR, Inc., one of Miami Subs' predecessors
and an affiliate. Mr. Perlyn also serves as a director of Arthur Treachers, Inc.
and is an officer, director and a principal of DEMAC Restaurant Corp., a former
franchisee of Miami Subs.
A. F. PETROCELLI has been the Chairman of the Board and President of United
Capital Corp., a company engaged in the ownership and management of real estate
and the manufacture and sale of engineered products, for more than the last five
years. Mr. Petrocelli is also a director of Prime Hospitality Corp. since 1992
and Chairman, Chief Executive Officer and President since 1998. He is a director
of Philips International Realty Corp., a real estate investment trust, since
1997 and a director of the Boyar Value Fund, Inc., a public mutual fund, since
1997.
DIRECTORS' COMPENSATION
Directors who are not our employees receive an annual fee of $7,500 and a
fee of $750 for each board of directors or committee meeting attended. In
addition, members of committees of the board of directors also receive an annual
fee of $1,000 for each committee on which they serve.
There were four meetings of the Board of Directors during the fiscal year
ended March 26, 2000. Each director attended or participated in at least 75% of
the meetings of the Board of Directors and the committees thereof on which he
served.
For the fiscal year ended March 26, 2000, there was one meeting of the
Audit Committee and one meeting of the Compensation Committee. Our Audit
Committee is involved in discussions with our independent auditors with respect
to the scope and results of our year-end audit, our internal accounting controls
and the professional services furnished by the independent auditors. See "Audit
Committee Report." The Compensation Committee recommends to the Board of
Directors executive compensation and the granting of stock options to key
employees. See "Compensation Committee Report on Executive Compensation." During
fiscal 2000, we had no standing nominating committee or any committee performing
similar functions.
SECURITY OWNERSHIP
The following table sets forth as of July 17, 2000 certain information with
regard to ownership of our common stock by (i) each beneficial owner of 5% or
more of our common stock, based solely on filings made
4
<PAGE> 7
with the Securities and Exchange Commission; (ii) each director and executive
officer named in the "Summary Compensation Table" below; and (iii) all of our
executive officers and directors as a group:
<TABLE>
<CAPTION>
COMMON STOCK PERCENT
NAME AND ADDRESS(1) BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
<S> <C> <C>
Steel Partners II L.P. ..................................... 352,200 5.0
Quest Equities Corp......................................... 360,000 5.1
DS Equity Partners.......................................... 425,085 6.0
Kenneth S. Hackel........................................... 785,100 11.1
Howard M. Lorber(2)......................................... 819,846 11.5
Wayne Norbitz(3)............................................ 183,000 2.5
Robert J. Eide(4)........................................... 123,653 1.7
Brian S. Genson............................................. 3,134 *
Barry Leistner(5)........................................... 57,500 *
Donald Perlyn(6)............................................ 192,558 2.7
A. F. Petrocelli(5)......................................... 106,000 1.5
Ronald G. DeVos(7).......................................... 26,500 *
Carl Paley(8)............................................... 19,000 *
Donald P. Schedler(8)....................................... 21,000 *
Directors and officers as a group (9 persons)(9)............ 1,502,191 20.3
</TABLE>
---------------
* Less than 1%
(1) The addresses of the individuals and entities in this table are: Steel
Partners II, L.P. 150 East 52nd Street, 21st Floor, New York, New York
10022; Quest Equities Corp., 8 Old Canal Crossing, Farmington, Connecticut
06032; DS Equity Partners, LLC, 70 East Sunrise Highway, Valley Stream, New
York 11581; Kenneth S. Hackel, P.O. Box 726, Alpine, New Jersey 07620;
Robert J. Eide and Howard M. Lorber, 70 East Sunrise Highway, Valley Stream,
New York 11581; Barry Leistner, 223 West 19th Street, New York, New York
10011; Donald Perlyn, 6300 N.W. 31st Avenue, Fort Lauderdale, FL 33309; A.
F. Petrocelli, 9 Park Place, Suite 401, Great Neck, New York 11021; and
Wayne Norbitz, Ronald G. DeVos, Carl Paley and Donald Schedler, 1400 Old
Country Road, Suite 400, Westbury, New York 11590.
(2) Includes options exercisable within 60 days to purchase an aggregate of
208,334 shares and warrants exercisable within 60 days to purchase 300,000
shares. Also includes 50,000 shares owned by the Howard M. Lorber
Irrevocable Trust, as to which Mr. Lorber disclaims beneficial ownership.
(3) Includes options exercisable within 60 days to purchase 143,000 shares.
(4) Includes options exercisable within 60 days to purchase 57,500 shares and
50,000 shares owned by the Howard M. Lorber Irrevocable Trust, for which Mr.
Eide is trustee.
(5) Includes options exercisable within 60 days to purchase 57,500 shares.
(6) Includes options exercisable within 60 days to purchase 192,558 shares.
(7) Includes options exercisable within 60 days to purchase 26,500 shares.
(8) Includes options exercisable within 60 days to purchase 19,000 shares.
(9) Includes 418,165 shares beneficially owned by Messrs. Eide, Genson, Lorber,
Perlyn, Petrocelli, Leistner, Norbitz, DeVos, Paley and Schedler, after
elimination of shares as to which beneficial ownership is shared by more
than one member of this group (see notes 2 and 4, above), 780,892 shares
subject to stock options exercisable within 60 days and 300,000 shares
subject to warrants exercisable within 60 days by Mr. Lorber.
5
<PAGE> 8
MANAGEMENT
OFFICERS OF THE COMPANY
Our executive officers are:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Howard M. Lorber................................... 51 Chairman of the Board and Chief Executive
Officer
Wayne Norbitz...................................... 52 President and Chief Operating Officer
Donald L. Perlyn................................... 57 Executive Vice President
Carl Paley......................................... 63 Senior Vice President -- Franchise and Real
Estate Development
Ronald G. DeVos.................................... 45 Vice President -- Finance, Chief Financial
Officer and Secretary
Donald P. Schedler................................. 47 Vice President -- Architecture and
Construction
</TABLE>
CARL PALEY joined us as Director of Franchise Development in May 1989 and
was promoted to Vice President -- Franchise Development in September 1989 and
Senior Vice President in April 1993. From November 1985 to May 1989 he provided
consulting services to franchise companies through Carl Paley Enterprises. Mr.
Paley served as Vice President of Franchising of The Haagen-Dazs Shoppe Co.,
Inc. from June 1978 to November 1985. Prior to November 1985, Mr. Paley was a
Vice President of Carvel Corporation and was responsible for marketing, public
relations, advertising, promotions and training.
RONALD G. DEVOS joined us as Vice President -- Finance and Chief Financial
Officer in January 1995 and became Secretary in April 1995. Prior to January
1995, he was Controller of a large Wendy's franchisee, from June 1993 to
December 1994. Mr. DeVos was Vice President -- Controller of Paragon Steakhouse
Restaurants, Inc., a wholly owned subsidiary of Kyotaru Company Ltd., from May
1989 to October 1992, and Controller of Paragon Restaurant Group, Inc. and its
predecessors, from October 1984 to May 1989. Mr. DeVos holds an M.B.A. from St.
John's University and a B.A. from Queens College.
DONALD P. SCHEDLER joined us in March 1989 as Director of Architecture and
Construction and was made Vice President -- Architecture and Construction in
February 1991. Prior to March 1989, he was a Director of Construction for The
Riese Organization, restauranteurs, from January 1988 to February 1989 and an
Associate and Project Architect with Frank Guillot Architects, Ltd. from June
1985 to January 1988. Mr. Schedler is a registered architect in the states of
Vermont and New York, and holds a B.A. degree in economics from Susquehanna
University and a M.A. degree in architecture from Syracuse University.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to our Chief Executive
Officer and each of the four other highest paid executive officers for the three
fiscal years ended March 26, 2000, March 28, 1999 and March 29, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ----------------------------
------------------------------------- RESTRICTED SECURITIES
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS($) OPTIONS/SARS(#) COMPENSATION(2)
------------------ ------ -------- -------- --------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Howard M. Lorber.......... 2000 $ 1 $250,000 $12,000(3) -- 250,000 $ 630
Chairman of the Board 1999 1 121,586 12,000(3) -- 40,000 599
and Chief Executive 1998 1 95,684 12,000(3) -- 150,000(4) 252
Officer
Wayne Norbitz............. 2000 $260,096 $ 60,000 -- -- 100,000 $12,133
President and 1999 250,000 60,289 -- -- 30,000 11,787
Chief Operating 1998 250,000 35,275 -- -- -- 10,447
Officer
Ronald G. DeVos........... 2000 $155,000 $ 35,000 -- -- 50,000 $ 1,768
Vice President -- 1999 140,000 33,762 -- -- 12,500 1,691
Finance and Chief 1998 109,923 2,954 -- -- -- 1,099
Financial Officer
Donald P. Schedler........ 2000 $124,615 $ 10,000 -- -- 10,000 $ 1,582
Vice President -- 1999 120,000 10,000 -- -- 5,000 1,536
Architecture and 1998 120,000 8,532 -- -- -- 1,252
Development
Carl Paley................ 2000 $120,000 -- -- -- -- $ 1,557
Senior Vice President -- 1999 120,000 $ 25,021 -- -- 5,000 1,530
Franchise and Real 1998 120,000 10,032 -- -- -- 1,263
Estate Development
</TABLE>
---------------
(1) Except where otherwise indicated, no other annual compensation is shown
because the amounts of perquisites and other non-cash benefits provided by
us do not exceed the lesser of $50,000 or 10% of the total annual base
salary and bonus disclosed in this table for the respective officer.
(2) The amounts disclosed in this column include our contributions on behalf of
the named executive officer to the Nathans' 401(k) retirement plan and
premiums for life and/or disability insurance, respectively, for fiscal
2000, for Mr. Lorber in the sums of $0 and $630, for Mr. Norbitz in the sums
of $1,311 and $10,822, for Mr. DeVos in the sum of $1,138 and $630, for Mr.
Paley in the sum of $927 and $630 and for Mr. Schedler in the sums of $952
and $630.
(3) Represents automobile allowance.
(4) Common stock purchase warrant exercisable for an aggregate of 150,000 shares
of Nathans common stock at an exercise price equal to $3.25 per share issued
in connection with the extension of Mr. Lorber's employment agreement.
EMPLOYMENT CONTRACTS
We entered into a new employment agreement with Howard M. Lorber, our
Chairman and Chief Executive Officer, effective as of January 1, 2000. The
agreement expires December 31, 2004. Pursuant to the agreement, Mr. Lorber
receives a base salary of $1 and an annual bonus equal to 5 percent of our
consolidated pre-tax earnings for each fiscal year, with a minimum bonus of
$250,000. The agreement further provides for a three-year consulting period
after the termination of employment during which Mr. Lorber will receive
consulting payments in an annual amount equal to two-thirds of the average of
the annual bonuses awarded to him during the three fiscal years preceding the
fiscal year of termination of his employment. The employment agreements also
provide for life insurance and for the continuation of certain benefits
following death or disability. In connection with the agreement, we issued to
Mr. Lorber 25,000 shares of common stock.
7
<PAGE> 10
In the event that Mr. Lorber's officer's employment is terminated without
cause, he is entitled to receive his salary and incentive payment, if any, for
the remainder of the contract term. The employment agreement further provides
that in the event there is a change in the control, as defined in the agreement,
Mr. Lorber has the option, exercisable within one year after such event, to
terminate his employment agreement. Upon such termination, he has the right to
receive a lump sum cash payment equal to the greater of (A) his salary and
annual bonuses for the remainder of the employment term (including a prorated
bonus for any partial fiscal year), which bonus shall be equal to the average of
the annual bonuses awarded to him during the three fiscal years preceding the
fiscal year of termination; or (B) 2.99 times his salary and annual bonus for
the fiscal year immediately preceding the fiscal year of termination, as well as
a lump sum cash payment equal to the difference between the exercise price of
any exercisable options having an exercise price of less than the then current
market price of our common stock and such then current market price. In
addition, we will provide Mr. Lorber with a tax gross-up payment to cover any
excise tax due.
In December 1992, we entered into an employment agreement with Wayne
Norbitz, for a term expiring on December 31, 1996, providing for an annual base
salary of $275,000, as amended, and various benefits, including participation in
our executive bonus program. The agreement also provides, among other things,
that, if Mr. Norbitz is terminated without cause (as defined), we will pay Mr.
Norbitz an amount equal to his annual salary and benefits for a six-month period
following the delivery of the notice of termination plus a severance benefit of
one year's annual compensation. The agreement, as amended, provides that Mr.
Norbitz shall have the right, exercisable for a six-month period, to terminate
the agreement and receive an amount equal to three times his compensation during
the most recent fiscal year, less $100, in the event of a change in control of
the company. The employment agreement was extended through December 31, 1997, on
the original terms and automatically renews for successive one year periods
unless 180 days prior written notice is delivered to Mr. Norbitz. No
non-extension notice has been delivered to date.
On September 30, 1999, we entered into an employment agreement with Donald
L. Perlyn, pursuant to the merger agreement, for a term expiring on September
30, 2002, providing for an annual base compensation of $200,000 and certain
other benefits, including participation in our executive bonus program. The
agreement also provides, among other things, that, if Mr. Perlyn is terminated
without cause (as defined), we will pay Mr. Perlyn an amount equal to three time
his base salary as in effect at the time of his termination. The agreement
provides that Mr. Perlyn shall have the right, exercisable for a thirty-day
period, to terminate the agreement and receive an amount equal to three times
his base salary, together with a pro rata portion of his bonus, for the most
recent fiscal year, in the event of a change in control of the company. The
agreement automatically renews for successive one year periods unless 180 days
prior written notice is delivered. In the event a non-renewal notice is
delivered, we must pay Mr. Perlyn an amount equal to his base salary as then in
effect.
In January 2000, we entered into an employment agreement with Ronald DeVos,
for a term expiring on January 31, 2002, providing for an annual base salary of
$155,000. The agreement provides that in the event there is a change in control,
as defined in the agreement, Mr. DeVos shall receive a lump sum payment equal to
three times his salary at the then current annual rate, plus a pro rata portion
of any bonus accrued through the date of the change in control.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to the officers named in the Summary Compensation Table during
the fiscal year ended March 26, 2000.
8
<PAGE> 11
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZED VALUE AT
---------------------------- ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE APPRECIATION
NUMBER OF OPTIONS GRANTED EXERCISE FOR TEN-YEAR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE ---------------------------
NAME GRANTED(1) FISCAL YEAR PER SHARE EXPIRATION DATE 5% 10%
---- ---------- --------------- --------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Howard M. Lorber......... 250,000 52% $3.3438 October 29, 2009 $525,724 $1,332,289
Wayne Norbitz............ 100,000 21% $3.3438 October 29, 2009 210,290 532,916
Ronald G. DeVos.......... 50,000 10% $3.3438 October 29, 2009 105,145 266,458
Donald P. Schedler....... 10,000 2% $3.3438 October 29, 2009 21,029 53,292
</TABLE>
<TABLE>
<CAPTION>
5% 10%
------------- -------------
<S> <C> <C>
Increase in market value of Nathan's stock for all stockholders at 5% 10%
assumed annual rates of stock price appreciation over ten-year period (to $5.45/sh) (to $8.67/sh)
used in the table above(3)............................................ $14,805,000 $37,518,000
</TABLE>
---------------
(1) These options are exercisable for ten years. Each grant of these options is
exercisable for 33.3% of the shares covered thereby as of the first
anniversary from the date of grant, 33.4% of the shares covered thereby as
of the second anniversary from the date of grant and for the remaining 33.3%
of the shares covered on the third anniversary from the date of grant.
(2) Potential Realizable Value is based on the assumed annual growth rates for
the ten-year option term. Annual growth of 5% results in a stock price of
$5.45 per share and 10% results in a price of $8.67 per share. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the stock. There can be no assurance that the amounts reflected in this
table will be achieved.
(3) These amounts represent the increase in the market value of Nathan's
outstanding shares (7.0 million) as of March 26, 2000, that would result
from the same stock price assumptions used to show the Potential Realizable
Value for the named executive.
STOCK OPTION AND OTHER PLANS
1992 Stock Option Plan
In December 1992, in order to attract and retain persons necessary for our
success, we adopted the 1992 Stock Option Plan, as amended, covering up to
525,000 shares of common stock, under which our officers, directors and key
employees are eligible to receive incentive and/or non-qualified stock options.
The 1992 plan, which expires on December 2, 2002, provides that it will be
administered by the Board of Directors or a committee designated by the Board of
Directors, currently the Compensation Committee, which consists of "non-employee
directors" as defined in the Securities Exchange Act of 1934. The selection of
participants, allotments of shares, determination of price and other conditions
relating to options are determined by the Board of Directors, or a committee
thereof, in the Board's sole discretion. Incentive stock options granted under
the 1992 plan are exercisable for a period of up to ten years from the date of
grant at an exercise price which is not less than the fair market value of the
common stock on the date of the grant, except that the term of an incentive
stock option granted under the 1992 plan to a stockholder owning more than 10%
of the outstanding common stock may not exceed five years and its exercise price
may not be less than 110% of the
9
<PAGE> 12
fair market value of the common stock on the date of grant. At March 26, 2000,
options for the following shares, exercisable during a ten-year period, had been
granted and were outstanding under the 1992 plan:
<TABLE>
<C> <S>
72,834 shares exercisable at $7.00 per share as follows: 23,334
shares to Howard M. Lorber; 25,000 shares to Wayne Norbitz;
6,000 shares to Carl Paley; 6,000 shares to Donald Schedler
and 12,500 shares in the aggregate to eight other employees.
25,000 shares exercisable at $6.00 per share to Wayne Norbitz.
34,000 shares exercisable at $8.00 per share as follows: 26,000
shares to Wayne Norbitz; 4,000 shares to Carl Paley; and
4,000 shares to Donald Schedler.
25,000 shares exercisable at $6.60 per share to Howard M. Lorber.
25,000 shares exercisable at $9.25 per share to Wayne Norbitz.
100,000 shares exercisable at $4.375 per share to Howard M. Lorber.
10,000 shares exercisable at $4.81 per share to Ronald DeVos.
55,000 shares exercisable at $4.00 per share as follows: 25,000
shares to Howard M. Lorber, 15,000 shares to Wayne Norbitz,
and 5,000 shares to each of Carl Paley, Donald P. Schedler
and Ronald DeVos.
</TABLE>
Each of the above options is exercisable for 20% of the shares covered by
these options as of the date of grant and for an additional 20% of the shares
covered by the options each year thereafter.
<TABLE>
<S> <C>
105,000 shares exercisable at $3.9375 per share as follows 40,000
shares to Howard M. Lorber, 30,000 shares to Wayne Norbitz,
12,500 shares to Ronald DeVos, 5,000 shares to Carl Paley
5,000 shares to Donald Schedler and 15,000 shares in the
aggregate to five other employees.
</TABLE>
Each of the above options is now fully exercisable.
Through March 26, 2000, 25,833 options were cancelled under the 1992 plan.
Through March 26, 2000, 2,000 options granted under the 1992 plan have been
exercised, 176,166 options have been cancelled and no options have lapsed since
the inception of the 1992 plan.
Outside Director Plan
We adopted the Nathan's Outside Director Stock Option Plan as of June 1,
1994 which covers up to 200,000 shares of common stock. The primary purposes of
the director plan are to attract and retain well-qualified persons for service
as directors of Nathans and to provide our outside directors with the
opportunity to increase their proprietary interest in Nathans, and thereby to
increase their personal interest in our success and further align their
interests with the interests of our stockholders through the grant of options to
purchase shares of common stock. Options to purchase up to 200,000 shares of
common stock have been issued and are outstanding under the director plan. Since
the director plan is a formula plan which provides for grants only through June
1996, no additional shares are available for grant under the director plan.
Under the director plan, each non-employee director then serving received:
- on September 8, 1994, the date on which the director plan was approved by
stockholders, options to purchase 25,000 shares of common stock at a
price of $6.25 per share, which was the average of the mean between the
last reported "bid" and "asked" prices of shares of common stock on the
five trading days preceding June 1, 1994;
- on June 1, 1995 options to purchase 12,500 shares of common stock at a
price of $4.50 per share, which was the average of the mean between the
last reported "bid" and "asked" prices of shares of common stock on the
five trading days preceding June 1, 1995; and
- on June 1, 1996 options to purchase 12,500 shares of common stock at a
price of $3.40 per share, which was the average of the mean between the
last reported "bid" and "asked" prices of the common stock on the five
trading days immediately preceding June 1, 1996.
10
<PAGE> 13
Options awarded to each non-employee director vest over a period of two
years, subject to forfeiture under conditions specified in the option
agreements, and are exercisable by the non-employee director upon vesting.
Accordingly, all of the options currently outstanding under the director plan
are now fully vested.
The Board of Directors has the responsibility and authority to administer
and interpret the provisions of the director plan. The board shall appropriately
adjust the number of shares for which awards may be granted under the director
plan in the event of reorganization, recapitalization, stock split, reverse
stock split, stock dividend, exchange or combination of shares, merger,
consolidation, rights offering, or any change in capitalization. The board of
directors of Nathans may at any time amend, rescind or terminate the director
plan, as it shall deem advisable; provided, however that:
1. no change may be made in awards previously granted under the
director plan which would impair participants' rights without their
consent; and
2. no amendment to the director plan shall be made without approval of
Nathans stockholders if the effect of the amendment would be to:
A. increase the number of shares reserved for issuance under the
director plan;
B. change the requirements for eligibility under the director plan;
or
C. materially modify the method of determining the number of
options awarded under the director plan.
Through March 26, 2000, 50,000 options were cancelled under the director
plan. Through March 26, 2000, 50,000 options have been cancelled and no options
have lapsed since the inception of the director plan.
1998 Stock Option Plan
In April 1998, our Board of Directors adopted the Nathan's Famous, Inc.
1998 Stock Option Plan, under which any of our directors, officers, employees or
consultants, or those of a subsidiary or an affiliate, may be granted options to
purchase an aggregate 500,000 shares of common stock. The 1998 option plan is to
be administered by the Board of Directors of Nathans; provided, however, that
the Board may, in the exercise of its discretion, designate from among its
members a compensation committee or a stock option committee consisting of no
fewer than two "non-employee directors", as defined in the Securities Exchange
Act of 1934. The Compensation Committee administers the 1998 option plan.
Subject to the terms of the 1998 option plan, the Board of Directors or the
committee may determine and designate those directors, officers, employees and
consultants who are to be granted stock options under the 1998 option plan and
the number of shares to be subject to options and the term of the options to be
granted, which term may not exceed ten years. The Board of Directors or the
committee shall also, subject to the express provisions of the 1998 option plan,
have authority to interpret the 1998 option plan and to prescribe, amend and
rescind the rules and regulations relating to the 1998 option plan. Only
non-qualified stock options may be granted under the terms of the 1998 option
plan. The exercise price for the options granted under the 1998 option plan will
be not less than the fair market value on the date of grant. The option price,
as well as the number of shares subject to the option, shall be appropriately
adjusted by the committee in the event of stock splits, stock dividends,
recapitalizations, and other specified events involving a change in Nathans
capital.
Under the 1998 option plan, options to purchase 465,000 shares of common
stock were issued to the officers and outside directors on October 29, 1999 at a
price of $3.3438 per share, which was the closing price of our common stock on
October 28, 1999.
On March 26, 2000, there were options outstanding to purchase an aggregate
487,500 shares of common stock with a weighted average exercise price of
$3.3712, each of which has a term of ten years from its grant date.
Through March 26, 2000, 7,500 options were cancelled under the 1998 plan.
Through March 26, 2000, 7,500 options have been cancelled and no options have
lapsed since the inception of the 1998 plan.
11
<PAGE> 14
401(k) Savings Plan
We sponsor a retirement plan intended to be qualified under Section 401(k)
of the Internal Revenue Code of 1986. All non-union employees over age 21 who
have been employed by us for at least one year are eligible to participate in
the plan. Employees may contribute to the plan on a tax deferred basis up to 15%
of their total annual salary, but in no event more than the maximum permitted by
the Internal Revenue Code ($10,500 in calendar 2000). Company contributions are
discretionary. For the plan year ended December 31, 1999, we elected to make
matching contributions at the rate of $.25 per dollar contributed by each
employee vesting at the cumulative rate of 20% per year of service starting one
year after commencement of service and, accordingly, after six years of an
employee's service with us, matching contributions are fully vested. As of March
26, 2000, approximately 59 employees had elected to participate in the plan. For
the fiscal year ended March 26, 2000, we contributed approximately $21,000 to
the 401(k) plan, of which $1,311 was a matching contribution for Mr. Norbitz,
$1,138 was a matching contribution for Mr. DeVos, $927 was a matching
contribution for Mr. Paley and $952 was a matching contribution for Mr.
Schedler.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During fiscal 2000 our Compensation Committee of the Board consisted of
Messrs. Eide, Leistner, Petrocelli and, from December 15, 1999, Mr. Genson. None
of the Compensation Committee members are employees of the Company or any of its
subsidiaries. During fiscal 2000, Howard M. Lorber, our Chairman of the Board
and Chief Executive Officer, served as a director of United Capital Corp., of
which A. F. Petrocelli, one of our directors and a former member of the
Compensation Committee of the Board of Directors, is Chairman of the Board and
President. Mr. Petrocelli resigned as a member of the Compensation Committee of
the Board of Directors on May 18, 2000.
Filings made by companies with the Securities and Exchange Commission
sometimes "incorporate information by reference." This means the company is
referring you to information that has been previously filed with the SEC and
that this information should be considered as part of the filing you are
reading. The Compensation Committee Report, Stock Performance Graph and Audit
Committee Report in this proxy statement are not incorporated by reference into
any other filings with the SEC.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of Nathan's executive officers is generally determined by
the Compensation Committee of the Board of Directors. Each member of the
Compensation Committee is a director who is not employed by Nathan's or any of
its affiliates.
GENERAL POLICIES
Nathan's compensation programs are intended to enable it to attract,
motivate, reward and retain the management talent required to achieve aggressive
corporate objectives in a rapidly changing industry, and thereby increase
stockholder value. It is Nathan's policy to provide incentives to its senior
management to achieve both short-term and long-term objectives and to reward
exceptional performance and contributions to the development of Nathan's
business. To attain these objectives, Nathan's executive compensation program
includes a competitive base salary, coupled with an executive bonus program
which is "at risk" based on the performance of Nathan's business, primarily as
reflected in the achievement of certain earnings goals.
Many of Nathan's employees, including its executive officers, also are
eligible to be granted stock options periodically in order to more directly
align their interests with the long-term financial interests of Nathan's
stockholders.
RELATIONSHIP OF COMPENSATION TO PERFORMANCE
The Compensation Committee annually establishes, subject to the approval of
the Board of Directors and any applicable employment agreements, the salaries
which will be paid to Nathan's executive officers during the coming year. In
setting salaries, the Compensation Committee takes into account several factors,
including
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<PAGE> 15
competitive compensation data, the extent to which an individual may participate
in the incentive compensation and stock option plans maintained by Nathan's and
its affiliates, and qualitative factors bearing on an individual's experience,
responsibilities, management and leadership abilities, and job performance.
The Compensation Committee also determines the terms of Nathan's executive
bonus program. In doing so, the Compensation Committee reviews management's plan
for the company's growth and profitability, determines the criteria to be used
for the determination of bonus awards under the executive bonus program and
fixes the levels of target and maximum awards for participants and the level of
attainment of financial performance objectives necessary for awards to be made
under the executive bonus program.
In addition, stock options may be granted to key employees, including
executive officers, by the Compensation Committee under stock option plans.
Among executive officers, the number of shares subject to options granted to
each individual generally depends upon his or her base salary and the level of
that officer's management responsibility. During fiscal 2000, 410,000 options
were granted to executive officers.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In fiscal 2000, Nathan's entered into a new employment agreement with
Howard M. Lorber, Chairman of the Board and Chief Executive Officer. Under the
new employment agreement, Mr. Lorber receives a base salary of $1 and an
incentive bonus equal to five percent (5%) of the Company's consolidated pre-tax
earnings, but no less than $250,000. In this way, Mr. Lorber's cash compensation
is tied to Nathan's profitability. In light of this employment agreement, the
Compensation Committee was not required to make any decision regarding the cash
compensation of Mr. Lorber. In fiscal 2001, in connection with the entry into
the new employment agreement, Nathan's issued to Mr. Lorber 25,000 shares of
common stock. In this way, Mr. Lorber's interests are directly aligned with the
interests of the company's stockholders. The Compensation Committee believes
that these shares provide an incentive for Mr. Lorber to maximize long-term
shareholder value.
ROBERT EIDE
BARRY LEISTNER
BRIAN S. GENSON
AUDIT COMMITTEE REPORT
The Audit Committee has adopted a charter to set forth its
responsibilities. A copy of the charter is attached as Exhibit A to this proxy
statement.
As required by the charter, the Compensation Committee reviewed the
company's audited financial statements and met with management, as well as with
Arthur Andersen, LLP, the company's auditors, to discuss the financial
statements.
The Audit Committee received the report of Arthur Andersen regarding the
results of their audit. In connection with its review of the financial
statements and the auditors' report, the members of the Audit Committee
discussed with a representative of Arthur Andersen, their independence, as well
as the following:
- the auditors' responsibilities in accordance with generally accepted
accounting standards;
- the initial selection of, and whether there were any changes in,
significant accounting policies or their application;
- managements' judgments and accounting estimates;
- whether there were any significant audit adjustments;
- whether there were any disagreements with management;
13
<PAGE> 16
- whether there was any consultation with other accountants;
- whether there were any major issues discussed with management prior to
the auditors' retention;
- whether the auditors encountered any difficulties in performing the
audit; and
- the auditor's judgments about the quality of the company's accounting
principles.
Based on its discussions with management and the company's auditors, the
Audit Committee did not become aware of any material misstatements or omissions
in the financial statements. Accordingly, the Audit Committee recommended to the
Board of Directors that the financial statements be included in the Annual
Report on Form 10-K for the period ended March 26, 2000 for filing with the SEC.
ROBERT J. EIDE
BRIAN S. GENSON
BARRY LEISTNER
INDEPENDENCE OF AUDIT COMMITTEE
In fiscal 2000, our Audit Committee consisted of Robert J. Eide (Chairman),
Barry Leistner, Attilio Petrocelli and, from December 15, 1999, Brian S. Genson.
Attilio Petrocelli resigned as a member of the Committee on May 18, 2000. Each
of the persons who served on the Committee during fiscal 2000 is independent, as
defined by NASD rules.
STOCK PERFORMANCE CHART
The following graph illustrates a comparison of cumulative shareholder
return among Nathan's, Standard and Poors' 500 companies and Standard and Poors'
restaurant companies for the period since March 1995 to our fiscal year end on
March 26, 2000:
<TABLE>
<CAPTION>
NATHAN'S FAMOUS,
INC. S&P 500 S&P RESTAURANTS
---------------- ------- ---------------
<S> <C> <C> <C>
Mar 95 100 100 100
Mar 96 86 132 137
Mar 97 85 158 134
Mar 98 82 234 167
Mar 99 82 278 263
Mar 00 89 327 204
</TABLE>
---------------
* $100 Invested in stock or in Index, including reinvestment of dividends.
Fiscal year ending March 26, 2000.
14
<PAGE> 17
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires our executive officers,
directors and persons who own more than ten percent of a registered class of our
equity securities to file report of ownership and changes in ownership on Forms
3, 4 and 5 with the SEC and the NASD. These officers, directors and greater than
ten percent beneficial owners are required by SEC regulation to furnish us with
copies of all Forms 3, 4 and 5 they file with the SEC and NASD.
Based solely on our review of the copies of the forms we have received, we
believe that all our executive officers, directors and greater than ten percent
of beneficial owners complied on a timely basis with all filing requirements
applicable to them with respect to transactions during fiscal year 2000.
INDEPENDENT AUDITORS
Arthur Andersen LLP acted as the Company's independent auditors for the
fiscal year ended March 26, 2000. A representative of Arthur Andersen LLP plans
to be present at the annual meeting with the opportunity to make a statement if
he desires to do so, and will be available to respond to appropriate questions.
FINANCIAL STATEMENTS
A copy of our Annual Report of Stockholders for the fiscal year ended March
26, 2000 is being provided to all stockholders as of July 17, 2000. Stockholders
are referred to the report for financial and other information about us, but
such report is not incorporated in this proxy statement and is not a part of the
proxy soliciting material.
MISCELLANEOUS INFORMATION
The Board of Directors does not have a standing nominating committee. The
Board of Directors does not intend to present to the meeting any matters not
referred to in the form of proxy. If any proposal not set forth in this Proxy
Statement should be presented for action at the meeting, and is a matter which
should come before the meeting, it is intended that the shares represented by
proxies will be voted with respect to such matters in accordance with the
judgment of the persons voting them.
The cost of soliciting proxies in the accompanying form has been or will be
paid by us. In addition to solicitations by mail, arrangements may be made with
brokerage houses and other custodians, nominees and fiduciaries to send proxy
material to their principals, and we may reimburse them for their expenses in so
doing. To the extent necessary in order to assure sufficient representation, our
officers and regular employees may request the return of proxies personally, by
telephone or telegram. The extent to which this will be necessary depends
entirely upon how promptly proxies are received, and stockholders are urged to
send in their proxies without delay.
Stockholder proposals with respect to our next Annual Meeting of
Stockholders must be received by us no later than May 17, 2001 to be considered
for inclusion in our next Proxy Statement.
WE WILL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER AS OF THE RECORD DATE,
COPIES OF THE OUR ANNUAL REPORT ON FORM 10-K, UPON WRITTEN REQUEST DELIVERED TO
RONALD G. DEVOS, SECRETARY, AT THE COMPANY'S OFFICES AT 1400 OLD COUNTRY ROAD,
SUITE 400, WESTBURY, NEW YORK 11590.
By Order of the Board of Directors,
RONALD G. DEVOS
Secretary
Dated: July 24, 2000
Westbury, New York
15
<PAGE> 18
EXHIBIT A
NATHAN'S FAMOUS, INC.
CHARTER OF THE AUDIT COMMITTEE
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors.
- Provide an avenue of communication among the independent auditors,
management and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Company's expense, special legal, accounting,
or other consultants or experts it deems necessary in the performance of its
duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the NASD. The Audit
Committee shall be comprised of such number of directors as determined by the
Board, but no less than three directors, each of whom shall be an independent
director (as such is defined by Nasdaq rules), free from any relationship that
would interfere with the exercise of his or her independent judgment. All
members of the Committee shall have a basic understanding of finance and
accounting and be able to read and understand fundamental financial statements,
and at least one member of the Committee shall have past employment experience
in finance or accounting, requisite professional certification in accounting or
comparable experience or background resulting in the individual's financial
sophistication.
Audit Committee members shall be elected by the Board at the annual meeting
of the Board or until their successors shall be duly elected and qualified. If
an audit committee Chair is not designated, the members of the Committee may
designate a Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually (in person or
telephonically) to review the Company's financial results, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or approve an
agenda in advance of each meeting. The Committee should meet privately in
executive session at least annually with management, the independent auditors,
and as a committee to discuss any matters that the Committee or each of these
groups believe should be discussed. In addition, the Committee, or at least its
Chair, should communicate with management and the independent auditors quarterly
to review the Company's financial statements and significant findings based upon
the auditors limited review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
16
<PAGE> 19
accounting principles, practices, and judgments. Discuss the following
items required to be communicated by the independent auditors in
accordance with AICPA Statement of Auditing Standards 61:
(a) the auditor's responsibilities in accordance with generally
accepted accounting standards;
(b) the initial selection of and changes in significant accounting
policies or their application;
(c) managements' judgments and accounting estimates;
(d) significant audit adjustments;
(e) other information in documents containing audited financial
statements, such as the MD&A;
(f) disagreements with management;
(g) consultation with other accountants;
(h) major issues discussed with management prior to retention;
(i) difficulties encountered in performing the audit; and
(j) the auditor's judgments about the quality of the Company's
accounting principles.
3. In consultation with management and the independent auditors consider
the integrity of the Company's financial reporting process and
controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control, and report exposures. Review
significant findings prepared by the independent auditors together with
management's responses.
4. Review with management and the independent auditors the company's
quarterly financial results prior to the release of earnings and/or the
company's quarterly financial statements prior to filing or
distribution. Discuss the items required to be communicated by the
independent auditors in accordance with AICPA Statement of Auditing
Standards 61, as more fully set forth in paragraph 2 above.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence and performance of the auditors and annually recommend
to the Board of Directors the appointment of the independent auditors
or approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships the auditors have
with the Company that could impair their independence.
8. Review the independent auditors audit plan and internal audit and
general audit approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors, including the matters required to
be communicated to audit committees in accordance with AICPA Statement
of Auditing Standards 61, as then in effect.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
Legal Compliance
11. On at least an annual basis, review with the Company's counsel any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from regulators
or governmental agencies.
17
<PAGE> 20
Other Audit Committee Responsibilities
12. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.
13. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
14. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's Code of Conduct.
18
<PAGE> 21
NATHAN'S FAMOUS, INC.
BOARD OF DIRECTORS
The undersigned hereby appoints Wayne Norbitz and Howard M. Lorber, or either
of them, attorneys and Proxies with full power of substitution in each of them,
in the name and stead of the undersigned to vote as Proxy all the stock of the
undersigned in NATHAN'S FAMOUS, INC., a Delaware corporation, at the Annual
Meeting of Stockholders scheduled to be held September 14, 2000 and any
adjournments thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
SEE REVERSE SIDE
<PAGE> 22
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C>
The Board of Directors recommends a vote FOR the following proposals:
1. Election of the fol- FOR WITHHOLD
lowing nominees, all nominees listed below AUTHORITY
as set forth in the (except as marked to the contrary below) to vote for all nominees listed below.
proxy statement: [ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual
nominee, print that nominee's name on the line provided below.)
</TABLE>
<TABLE>
<CAPTION>
<C> <C>
NOMINEES: Robert J. Eide 2. Upon such other business as may properly come before the meeting
Howard M. Lorber
Brian S. Genson
Wayne Norbitz
Barry Leistner
Donald Perlyn
A.F. Petrocelli
___________________________________
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, AND EACH OF
THEM, AS SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING, SHAREHOLDERS MAY WITH-
HOLD THE VOTE FOR ONE OR MORE NOMINEE(S) BY WRITING THE NOMINEE(S)
NAME(S) IN THE BLANK SPACE PROVIDED. IF NO SPECIFICATION IS MADE, THE
SHARES WILL BE VOTED FOR THE PROPOSALS SET FORTH.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
</TABLE>
SIGNATURE(S) _____________________________________ DATED: _____________, 2000
(NOTE: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving full
title as such. If signer is a corporation, execute in full corporate name by
authorized officer. If shares are held in the name of two or more persons, all
should sign.)
