SCHEDULE 14A - INFORMATION REQUIRED IN PROXY
STATEMENT
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.-14a-11(c) or
Sec 240.14a-12
HUDSON'S GRILL OF AMERICA, INC.
(Name of Registrant as Specified in its Charter)
HUDSON'S GRILL OF AMERICA, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X ] $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: N/A
(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:
Set forth the amount on which the filing fee is
calculated and state how it was determined.
[ ] 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:
HUDSON'S GRILL OF AMERICA, INC.
16970 Dallas Parkway
Suite 402
Dallas, Texas 75248
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of HUDSON'S GRILL OF
AMERICA, INC. (the "Company"), will be held at the Hudson's
Grill restaurant located at the Keystone Shopping Center,
Spring Valley and Central Expressway, Dallas, Texas, on June
10, 1999, at 10:00 a.m. to act upon the following proposals:
1. To elect three (3) directors;
2. To ratify the selection of independent auditors;
3. To consider such other business as may properly come
before the meeting and any adjournments or postponements
thereof.
Details relating to the above matters are set forth in
the attached Proxy Statement. Your management is not aware of
any other matters to come before the meeting. The Board of
Directors has fixed the close of business on April 29, 1999,
as the record date for shareholders entitled to notice of and
to vote at the Annual Meeting.
You are urged to fill in, date, sign and promptly return
the Proxy in the enclosed addressed envelope to which no
postage need be affixed if mailed in the United States. If
you do not attend the Annual Meeting, you may supersede your
executed Proxy prior to voting by filing a Proxy bearing a
later date, by filing a written revocation of the Proxy or by
attending the meeting and voting in person. In order to be
valid, the enclosed Proxy (or any new proxy or proxy
revocation) must be received by the Secretary not later than
10:00 a.m., June 10, 1999.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED
TO DATE, SIGN AND RETURN THE ENCLOSED PROXY WITHOUT DELAY. A
BUSINESS REPLY ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Mitzy Ferguson
Secretary
Dallas, Texas
May 12, 1999
PROXY STATEMENT
HUDSON'S GRILL OF AMERICA, INC.
16970 Dallas Parkway
Suite 402
Dallas, Texas 75248
GENERAL INFORMATION
The enclosed Proxy is solicited by the Board of Directors
(the "Board") of HUDSON'S GRILL OF AMERICA, INC. (the
"Company").
This Proxy Statement is furnished in connection with the
solicitation of the Proxies by the Company to be voted at its
Annual Meeting of Shareholders to be held June 10, 1999, and
at any adjournment and postponement thereof. The Annual
Meeting is to be held at 10:00 a.m. at the Hudson's Grill
restaurant at the Keystone Shopping Center at Spring Valley
and Central Expressway, Dallas, Texas.
A person giving the Proxy may revoke it at any time prior
to the exercise thereof by giving written notice to the
Secretary of the Company, attending the meeting and voting in
person, or filing a duly executed Proxy bearing a later date
with the Secretary. The mailing to shareholders of this Proxy
Statement and the enclosed form of Proxy will commence on or
about May 17, 1999.
All of the expenses involved in preparing, assembling and
mailing this Proxy Statement and the material enclosed
herewith, will be paid by the Company. Officers and employees
of the Company may communicate with shareholders personally or
by mail, telegraph, telephone or otherwise, for the purpose of
soliciting such Proxies, but in such event no additional
compensation will be paid to any such persons for such
solicitation. Brokerage houses, nominees, fiduciaries and
other custodians will be requested to forward soliciting
materials to the beneficial owners of shares, in which case
they will be reimbursed for their expenses.
Shares represented by valid Proxies will be voted in
accordance with the instructions indicated thereon. Unless
otherwise directed, votes will be cast for the election of
directors herewith named, for the ratification of the
Company's selection of Hein + Associates, LLP, as independent
auditors for the Company, and for the ratification of the
creation and spinning off of a subsidiary to the shareholders
of the Company.
VOTING SHARES
Shareholders of record as of the close of business on
April 29, 1999, will be entitled to vote at the Annual Meeting
and at any adjournments thereof. At such date there were Six
Million, Fifty-Six Thousand, Nine Hundred Eighty Six
(6,056,986) shares of Common Stock. Each shareholder of
record is entitled to one (1) vote for each share of stock
owned, except that shareholders may have cumulative voting
rights with respect to the election of directors. See
"Cumulative Voting."
CUMULATIVE VOTING
Pursuant to California law, no shareholder may cumulate
votes unless the candidate's or candidates' name(s) for which
such votes are to be cast have been placed in nomination prior
to the voting and a shareholder who is present in person at
the Annual Meeting has given notice at the Annual Meeting and
prior to voting of the shareholder's intention to cumulate the
shareholder's votes. If any shareholder has given such
notice, all shareholders may cumulate their votes for
candidates in nomination. Management does not, at this time,
intend to give such notice nor to cumulate the votes it may
hold pursuant to the proxies solicited hereby, unless the
required notice by a shareholder is given in proper form at
the Annual Meeting, in which instance management intends to
cumulatively vote all the proxies held by it in favor of the
nominees for office as set forth herein in such a way as to
maximize the possibility that the nominees will be elected.
In the event cumulative voting shall be utilized, each
shareholder may give one candidate a number of votes equal to
the number of directors to be elected (three) multiplied by
the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same
principle among as many candidates as the shareholder desires.
The three (3) candidates receiving the highest number of votes
are elected.
COMMITTEES OF THE BOARD
The Board held five meetings during fiscal 1998. Each
incumbent director during the fiscal year ended January 3,
1999, attended more than seventy-five percent (75%) of all
meetings of the Board during the time he was a member and of
the Committees of which he was a member.
The Board does not have an Audit Committee. The whole
board acts as an audit committee and whenever necessary
supervises and reviews the fiscal and accounting procedures
and practices of the Company, and reviews the audit and
financial statements with the Company's independent
accountants.
The Board does not have a Nominating Committee, and it
does not have a Compensation Committee. Nominees may be
recommended to the Board in writing by any shareholder.
Compensation matters are considered by the whole Board of
Directors.
Each of the nominees has consented to be named herein and
to serve if elected. However, if any nominee at the time of
election is unable or unwilling to serve as a director, or is
otherwise unavailable for election, the shares represented by
proxies will be voted for the election of such other person as
the Board may designate or, in the absence of such
designation, for a nominee selected by the persons named in
the enclosed form of Proxy, or, if there is no qualified
nominee willing to serve, the position will be left vacant.
Certain information concerning the director nominees is
set forth below:
Name Age Position
DAVID L. OSBORN 50 Chairman of the Board,
President & Chief Executive
Officer
ROBERT W. FISCHER 47 Director
ANTHONY B. DUNCAN 42 Director
David L. Osborn was elected as a Director in May 1990 and
has served continuously since then. He was elected Chairman
of the Board, President and Chief Executive Officer in August
1993. Since 1988, Mr. Osborn has been the Chief Executive
Officer of Southpoint Management Corporation, which owns and
operates restaurants, and is Chief Executive Officer of Famous
Bars, Grills & Cafes of America, Inc., which has been a
franchisee of Hudson's Grill. He is also a partner in D.A.C.
Associates, which has been a franchisee of Hudson's Grill
since 1986, and he is a partner in Wood, Osborn and Osborn,
which is the landlord of the premises that the Company leases
as its headquarters.
Robert W. Fischer was elected a director in 1997. He is
a partner in Fischer & Sanger, attorneys, in Dallas, Texas.
He has practiced law for the last twenty years in the State of
Texas and has been an outside counsel for the Company for the
last five years.
Anthony B. Duncan has been in the restaurant business for
more than 28 years, and progressed from trainee, to assistant
manager, to manager of his own Pelican's Restaurant in El
Paso, Texas, at the age of 21. He formed his own operating
company, and proceeded to purchase interests in two additional
Pelican's. At one time, he was the president and minority
owner of Southpoint Management Corporation, the parent company
of multiple dinner houses and casual dining restaurants and
bars. He is the current owner of the two franchised Hudson's
Grills in El Paso, and is the owner and sole shareholder of
Borderland Grills, Inc. Mr. Duncan previously was president
of the Texas Restaurant Association, and currently serves on
its Board of Directors.
No director currently receives any direct compensation as
a director, except for reimbursement of expenses.
All directors are elected for a term of one (1) year and
serve until their successors have been duly elected and
qualified.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with
respect to the shares of Common Stock beneficially owned,
directly or indirectly, by (i) persons owning, to the
Company's knowledge, five percent (5%) or more of the
outstanding shares of Common Stock, (ii) each director of the
Company, and (iii) all directors and executive officers of the
Company as a group, in each case as of January 3, 1999.
Number of
Shares Percentage
Beneficially of Total Shares
Name and Address Owned Outstanding
Directors/Officers:
DAVID L. OSBORN 1,956,368 (1) 32.3%
16970 Dallas Parkway, Suite 402
Dallas, Texas 75248
ROBERT W. FISCHER 47,615 (1) 0.7%
5956 Sherry Lane, Suite 1204
Dallas, Texas 75225
ANTHONY B. DUNCAN 616,750 (1) 10.2%
10732 Alta Lomo
El Paso, TX 79935
MITZY FERGUSON 220 (1) 0.0%
16970 Dallas Parkway, Suite 402
Dallas, Texas 75248
JANE TAYLOR 0 0.0%
16970 Dallas Parkway, Suite 402
Dallas, Texas 75248
All directors and executive
officers as a group
(5 persons) 2,620,953 43.3%
Others Owning 5% or More
Of the Company's Common Stock:
CLIFFORD J. OSBORN 745,618 (1) 12.3%
5581 East Finisterra Drive
Tucson, Arizona 85715
D. MARION WOOD 513,895 (1) 8.5%
16970 Dallas Parkway, Suite 500
Dallas, TX 75248
ROY J. MILLENDER, JR. 500,000 (1) 8.3%
129 Calle Bello
Santa Barbara, CA 93108
CHARLES L. BOPPELL 495,556 (1) 8.1%
1010 Hot Springs Road
Santa Barbara, CA 93108
TRAVIS B. BRYANT 4,000,000 (2) 37.5%
Big Sur, California
(1) Shared voting and investment power is held for these
shares.
(2) In 1994 Mr. Bryant received warrants for the
purchase of 4,000,000 shares of the Company's stock in
exchange for the restructuring and cancellation of obligations
owed by the Company to Mr. Bryant. These warrants terminate
in 2004 and have an exercise price of $0.0625 per share.
Currently none of these warrants have been exercised.
In August 1993, David L. Osborn purchased control of the
Company from Roy J. Millender, Jr. Mr. Osborn bought
2,679,000 shares of common stock from Mr. Millender for $1
(paid by Mr. Osborn without any financing) and Mr. Osborn's
efforts to revitalize and reorganize the Company. Prior to
this purchase, Mr. Osborn beneficially owned, either directly,
indirectly or through a voting trust, 1,398,652 shares of
stock, of which 913,235 shares were in a voting trust that
terminated May 4, 1994. On August 28, 1995, Mr. Osborn
distributed 1,297,000 shares to certain parties to whom he had
promised shares without receiving any monetary consideration
for the transfer. D. Marion Wood received 505,000 shares from
Mr. Osborn; Clifford J. Osborn received 200,000 shares; and
Anthony B. Duncan received 592,000 shares. As of January 3,
1999, Mr. Osborn was the beneficial owner of 1,956,368 shares
of stock, which is 32.3% of the Company's outstanding shares.
Mr. Osborn directly owns 1,439,856 shares of stock, which is
23.8% of the Company's outstanding shares.
Effective January 27, 1994, the Company, as part of an
agreement to reduce its secured debt, agreed with Travis
Bryant, its largest creditor, to grant Mr. Bryant a stock
warrant for four (4) million shares exercisable at a price of
one-sixteenth (1/16th) of a dollar for a period of ten (10)
years. In exchange, Mr. Bryant forgave most of the Company's
secured debt owed to him. If Mr. Bryant exercises a
substantial portion of his stock warrant, he could become the
Company's largest shareholder; in addition, Mr. Osborn's
control of the Company would be greatly reduced.
REMUNERATION AND RELATED INFORMATION
The following table sets forth for the year ended January
3, 1999, certain information as to each of the Company's five
(5) most highly compensated executive officers and as to all
executive officers as a group:
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name and Other
Principal Annual
Position Year Salary ($) Bonus ($) Compensation ($)
(a) (b) (c) (d) (e)
David L. 1998 0(1) 0 0
Osborn 1997 0(1) 0 0
President 1996 0(1) 0 0
Mitzy 1998 14,400(1) 0 0
Ferguson 1997 18,900(1) 0 0
Secretary 1996 36,000(1) 0 0
Jane Taylor 1998 21,600(1) 0 0
Treasurer 1997 20,535(1) 0 0
1996 12,895(1) 0 0
All 36,000(1) 0 0
executive
officers
as a
group (3 persons)
</TABLE>
SUMMARY COMPENSATION TABLE, Continued
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Long Term Compensation
Restricted Securities LTIP Other
Stock Underlying Payouts Annual
Awards($) Options/SARs ($) Compensa
(#) tion ($)
Name and
Principal Year
Position
(a) (b) (f) (g) (h) (i)
David L. Osborn 1998 0(1) 0 0 0
President 1997 0(1) 0 0 0
CEO 1996 0(1) 0 0 0
Mitzy Ferguson 1998 0(1) 0 0 0
Secretary 1997 0(1) 0 0 0
1996 0 0 0 0
Jane Taylor 1998 0(1) 0 0 0
Treasurer 1997 0 0 0 0
1996 0 0 0 0
All executive
officers as a
group (3 0 0 0 0
persons)
</TABLE>
Option/SAR Grants in the Last Fiscal Year
(Individual Grants)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Number of Percent of
Securities total
underlying options/SARs Exercise or
options/SARs granted to base price
Name granted (#) employees in ($/Sh) Expiration
(a) (b) fiscal year (d) date
(c) (e)
David L.
Osborn,
President,
CEO
Mitzy
Ferguson,
Secretary
Jane Taylor,
Treasurer
All executive 0
officers as a
group (3
persons)
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal
Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> Number of
securities Value of
underlying unexercised
unexercised in-the-money
options/SARs options/SARs
Shares at FY-end (#) at FY-end ($)
acquired on Value exercisable/u exercisable/u
Name exercise (#) realized ($) n-exercisable n-exercisable
(a) (b) (c) (d) (e)
David L.
Osborn,
President,
CEO
Mitzy
Ferguson,
Secretary
Jane Taylor,
Treasurer
All executive 0
officers as a 0
group (3
persons)
</TABLE>
(1) Mr. Osborn and/or companies affiliated with him were
reimbursed for travel expenses incurred on behalf of the
Company, but received no remuneration for his work. In 1998
he or his affiliated companies were reimbursed $4,022.52 for
his travel. Ms. Ferguson was reimbursed $222.00 for her
travel expenses, and Ms. Taylor had no travel expenses.
Under the Company's Amended and Restated Incentive Stock
Option Plan adopted in 1989, and approved by the shareholders
(the "Plan"), the Company is authorized to grant options to
selected officers and employees to purchase up to an aggregate
of Eight Hundred Twenty Five Thousand (825,000) shares of
Common Stock. As of January 3, 1999, there were no
outstanding options to purchase shares of Common Stock under
the Plan. Under the terms of the Plan, options are granted at
not less than the fair market value on the date of grant,
become exercisable in increments of twenty percent (20%) per
year for each year of employment after the date of grant
(except the final twenty percent (20%) increment becomes
exercisable four (4) years and six (6) months after the date
of the grant) and remain exercisable for a period of five (5)
years from the date of grant. The options terminate once
employment terminates.
CERTAIN TRANSACTIONS
As of February 1994, the Company's headquarters were
moved from California to Dallas, Texas. The Company is now
leasing space for its headquarters from Wood, Osborn and
Osborn, a company partially owned by David Osborn, one of the
Company's directors, for $1,440 per month plus its share of
utilities expenses. The Company considers this rental a fair
market value for the space it is renting. This space is in
the same office building that leases space to the Company's
President and the companies controlled by him; thus the
management of the Company is more efficient because its
executives work near the headquarters, and travel costs are
reduced.
Mr. David L. Osborn is affiliated with Southpoint
Management Corporation, DAC Associates and Famous Bars, Grills
& Cafes of America, Inc. ("FGA"). These companies, in turn,
are affiliated with owning and operating several restaurants,
and also owned the franchise rights to develop Hudson' Grills
in Texas. During the past year, these companies paid no
franchise fees to the Company, and did not purchase any
franchises. The franchise agreement for Texas was entered
into before Mr. Osborn became involved in the management of
the Company, and that agreement provides that Mr. Osborn does
not have to pay royalties. In March 1997, FGA agreed to
assign most of its exclusive franchise rights to Texas to a
company controlled by Mr. Travis Bryant. Mr. Bryant's company
will have the rights to develop Hudson's Grills in Texas,
excluding areas in or around El Paso, Austin and Dallas/Fort
Worth. Mr. Bryant has more capital available to him than FGA
does, and thus, FGA and Mr. Bryant decided that Mr. Bryant
would be able to develop these markets more rapidly. In
November 1997, Mr. Osborn transferred his interest in two
Hudson's Grills in El Paso, Texas, to Anthony Duncan, who is
affiliated with the same companies that Mr. Osborn is, and is
a nominee for director.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION OF THE THREE(3) NOMINEES FOR
DIRECTORS NAMED IN THIS PROXY STATEMENT.
Three (3) directors are to be elected, with each director
to hold office until the next Annual Meeting or until his
successor is elected and qualified. The persons named as
proxies in the enclosed Proxy have been designated by
management and intend to vote for the election of the three
persons named as nominees in this proxy statement
("Nominees"), except where authority is withheld by the
shareholder or specifically requested to be voted for someone
else. If no one is written in to be voted for as a director
who is willing to serve and no vote is specifically withheld,
then the persons holding the proxies will vote for the three
Nominees. If one person other than a Nominee is voted for on
the proxy, then the persons holding the proxy will vote for
the one requested person, provided he(she) is willing to serve
as a director, and will decide which of the three Nominees to
vote for. If two persons are voted for on the proxy, then
the person's holding the proxy will vote for the two requested
persons, provided they are willing to serve as a director, and
will decide which of the three Nominees to vote for. If three
persons other than Nominees are voted for on the proxy, then
the persons holding the proxy will vote for the three
requested persons, provided they are willing to serve as a
director. If more than three persons are voted for on the
proxy, then the persons holding the proxies will vote for the
Nominees regardless of those requested.
PROPOSAL NO. 2
RATIFICATION OF THE SELECTION OF
INDEPENDENT AUDITORS
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THIS
PROPOSAL.
Hein + Associates, LLP, has been selected as the
Company's independent auditors for the fiscal year ending
December 31, 1999. This firm served as the Company's
independent auditors for the period ended January 3, 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has invited its accountants from Hein +
Associates, LLP, to be present at the Annual Meeting;
therefore they may be present. If a representative of Hein +
Associates, LLP, is present at the Annual Meeting of
Shareholders, the representative will be allowed to answer
appropriate questions, and will be afforded an opportunity to
make a statement if so desired.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's
equity securities, to file reports of ownership and changes of
ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and ten-percent shareholders are
required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely upon a review of the copies of the forms
furnished to the Company, or written representations from
certain reporting persons that no Forms 5 were required, the
Company believes that filing requirements applicable to its
officers and directors were complied with during the 1998
fiscal year.
DEADLINE FOR STOCKHOLDER PROPOSALS FOR 2000
Stockholder proposals to be presented at the 1999 Annual
Meeting must be received by the Company on or before February
1, 2000, for inclusion in the proxy statement and form of
proxy relating to that meeting.
OTHER MATTERS
Management of the Company does not know of any other
matters to be presented for action at the Annual Meeting.
However, if any other matters should be properly presented at
the Annual Meeting, it is the intention of the persons named
in the accompanying Proxy to vote said Proxy in accordance
with their best judgment.
OTHER INFORMATION
The Annual Report to Shareholders of the Company for the
year ended January 3, 1999, is mailed herewith to shareholders
of record at the close of business on April 29, 1999.
IF YOU WOULD LIKE A COPY OF THE COMPANY'S ANNUAL REPORT
OR FORM 10-KSB, PLEASE CONTACT THE SECRETARY AT (972) 931-
9237.
Mitzy Ferguson
Secretary
Dallas, Texas
May 12, 1999
f\sec\990428.O01
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
The undersigned hereby appoints DAVID L. OSBORN or ROBERT W.
FISCHER, each with the power to appoint his or her substitute
and hereby authorizes them to represent and to vote, as
designated below, all shares of common stock of HUDSON'S GRILL
OF AMERICA, INC., held on record by the undersigned on April
29, 1999, at the annual meeting to be held June 10, 1999.*
1. ELECTION OF DIRECTORS
FOR ALL NOMINEES PRINTED BELOW (except as
marked to the contrary below).
FOR THE FOLLOWING DIRECTORS (name up to
three):
WITHHOLD AUTHORITY TO VOTE FOR ALL
NOMINEES LISTED.
D.L. Osborn , R.W. Fischer, and A.B. Duncan.
(Instructions: To withhold authority to vote for
any individual nominees, line out that nominee's
name).
2. RATIFICATION OF SELECTION OF HEIN + ASSOCIATES, LLP
FOR AGAINST ABSTAIN
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the
manner directed by the undersigned stockholder. If no
direction is made, this proxy will be voted for the Nominees
and for Proposal 2.
Date:
Signature
Signature
* Cumulative voting is permitted. See the proxy statement for
details.
