SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange
Act of 1934)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Name of Registrant as specified in its Charter)
BISCO INDUSTRIES, INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[x] No Fee Required
[ ] 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 0-11:1
(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 No.:
(3) Filing Parties:
BISCO INDUSTRIES, INC.
704 W. Southern Avenue
Orange, California 92865
July 23, 1997
Dear Fellow Family Steak Houses of Florida, Inc. Shareholder:
I enclose for your consideration Bisco Industries, Inc.'s
proxy statement and BLUE proxy card relating to the Special Meeting
of Family Steak Houses of Florida, Inc. shareholders.
By now, most of you are familiar with Bisco's efforts to
increase its equity interest in Family Steak Houses. On March 6,
1997, Bisco commenced a tender offer for up to 2,600,000 shares of
Common Stock for $0.90 net per share in cash. Shortly thereafter,
the Board adopted several anti-takeover measures to prevent the
offer from proceeding, including amended and restated bylaws and a
"poison pill." The Board also refused to "opt out" of Florida's
Control Share Act to allow Bisco to vote any shares it may acquire
in the offer.
On April 30, 1997, Bisco commenced a consent solicitation to
repeal the newly adopted bylaws and the "poison pill" and adopt
proposals to "opt out" of the Control Share Act the "poison pill"
and require that future bylaws be approved by the shareholders. At
the conclusion of the consent solicitation, Bisco had received
written consents from the holders of approximately 45% of Family
Steak Houses' outstanding shares. Because Florida law requires
that action taken by written consent be approved by a majority of
the outstanding shares, the proposals included in Bisco's consent
solicitation were not adopted.
At the Family Steak Houses annual meeting on July 2, 1997, the
shareholders considered both a management proposal to increase the
authorized common stock (which was required to be adopted to fully
implement the "poison pill") and a proposal by Bisco to amend the
company's articles of incorporation to "opt out" of the Control
Share Act. Although Bisco did not solicit proxies in opposition to
management's proposal or for its own proposal, more shareholders
voted against management's proposal than for it, and Bisco's
proposal received more votes in favor than against. After the
annual meeting, the Board invited me to become a director of Family
Steak Houses, but continued to be unwilling to amend or redeem the
"poison pill" and otherwise permit Bisco's tender offer to be
consummated.
I believe that the results of Bisco's consent solicitation and
the annual meeting prove that there is significant shareholder
support for Bisco's efforts. Accordingly, Bisco has called for a
special meeting of shareholders and is soliciting your proxy to
amend the Company's bylaws to require the Board to redeem the
"poison pill" and require prior shareholder approval for adoption
of any future "poison pill" or similar anti-takeover measure, to
"opt out" of the Control Share Act and to remove three nonemployee
members of the current Board and replace them with Bisco's
nominees. If elected, Bisco's nominees presently intend, subject
to their fiduciary duties under Florida law, to take all actions
necessary to expedite consummation of Bisco's offer, including, to
the extent possible, amending or redeeming the "poison pill," and
to work with management to maximize shareholder value.
Thank you for your attention and support.
Sincerely,
Glen F. Ceiley, President
IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR FEW SHARES YOU OWN.
IF YOU CANNOT ATTEND THE SPECIAL MEETING IN PERSON, YOUR PROXY IS
THE ONLY MEANS AVAILABLE FOR YOU TO VOTE. PLEASE VOTE THE BLUE
PROXY CARD IN FAVOR OF BISCO'S PROPOSALS. ONLY YOUR LATEST DATED
PROXY WILL COUNT AT THE SPECIAL MEETING.
Special Meeting of Shareholders
of
Family Steak Houses of Florida, Inc.
________________________
PROXY STATEMENT
OF
BISCO INDUSTRIES, INC.
This Proxy Statement and the accompanying BLUE proxy card are
being furnished to the holders of shares of common stock, par value
$.01 per share (the "Shares"), of Family Steak Houses of Florida,
Inc., a Florida corporation (the "Company") in connection with its
solicitation of proxies by Bisco Industries, Inc. ("Bisco") for use
at a Special Meeting of Shareholders of the Company, and at any
adjournments or postponements thereof (the "Special Meeting").
The holders of more than 10% of the outstanding Shares have
requested that the Special Meeting be convened on or about
September 15, 1997. The Company has not yet indicated when and
where the Special Meeting will be held, although it is anticipated
that such information will be set forth in the definitive proxy
statement of the Company (the "Company Proxy") that will be
disseminated to shareholders in connection with the Special
Meeting.
At the Special Meeting, shareholders will be asked to vote
upon the following proposals (collectively, the "Bisco Proposals"):
1. To amend the Company's bylaws to require the Company to
redeem the "poison pill" recently adopted by the
Company's Board of Directors (the "Board") and require
prior shareholder approval for adoption of any "poison
pill" or similar anti-takeover measure in the future (the
"Proposal to Revoke the Poison Pill");
2. To amend the Company's bylaws to provide that Section
607.0902 of the Florida Business Corporation Act (the
"Control Share Act") shall not apply to control share
acquisitions of shares of the Company (the "Control Share
Proposal"); and
3. To adopt the following proposals (the "Director
Proposals") so that nominees of Bisco will constitute a
majority of the Board:
(a) To remove three nonemployee members of the
current Board (Joseph M. Glickstein, Jr., Richard M. Gray
and Robert J. Martin) and any person elected or
designated by the Board to fill any vacancy or any newly
created directorships; and
(b) To elect Glen F. Ceiley, Stephen Catanzaro and
_____________ (the "Bisco Nominees") as directors of the
Company, to serve as directors until the Company's next
annual meeting of shareholders and until their successors
are elected and qualified.
Bisco is conducting this proxy solicitation to facilitate the
completion of its tender offer to purchase (the "Offer") up to
2,600,000 Shares for $0.90 net per Share in cash. However, whether
or not you intend to tender your Shares pursuant to the Offer,
Bisco urges you to vote for the Proposal to Revoke the Poison Pill
and the Control Share Proposal, because of its belief that anti-
takeover defenses like "poison pills" and the Control Share Act
reduce shareholder value over the long run by entrenching
management and by reducing the probability that someone, like
Bisco, will make a bid for Shares at a price above market value.
In addition, because Bisco believes that the Board's recent actions
are clear evidence of the Board's desire to entrench itself, Bisco
urges you to vote for the Director Proposals, which will result in
the election of the Bisco Nominees to a majority of the Board
seats. The Bisco Nominees are committed, subject to the
fulfillment of the fiduciary duties they would have as directors of
the Company, to take such steps as are necessary to permit the
Offer to proceed, and to work with management to maximize
shareholder value. See "Background and Reason for the Special
Meeting."
YOUR FUTURE SHAREHOLDER VALUE IS AT STAKE. BISCO URGES YOU TO
SIGN, DATE AND RETURN A PROXY CARD TODAY, WHETHER OR NOT YOU INTEND
TO TENDER YOUR SHARES PURSUANT TO THE OFFER. The Board has fixed
the close of business on as the record date
(the "Record Date") for determining shareholders entitled to vote
at the Special Meeting. Unless otherwise indicated by you, the
BLUE proxy card authorizes the persons named therein to vote, and
such persons will vote, properly executed and duly returned proxies
FOR each of the Proposals. Bisco is not presently aware of any
other matters to be brought before the Special Meeting. However,
should other matters be brought before the Special Meeting, the
persons named in the proxies will vote in accordance with what they
consider to be the best interests of the shareholders and the
Company. Any shareholder who executes and delivers a proxy for use
at the Special Meeting has the right to revoke it at any time
before it is exercised by filing with the Secretary of the Company
at its principal offices, an instrument revoking it or a duly
executed proxy bearing a later date, or by appearing in person and
voting at the Special Meeting. See "General Information-Voting at
the Special Meeting." This Proxy Statement is first being given or
sent to shareholders on or about , 1997.
BISCO RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS BY
SIGNING, MARKING AND DATING THE ENCLOSED BLUE PROXY CARD AND
RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU HAVE
ALREADY SUBMITTED A PROXY TO THE BOARD, YOU MAY CHANGE YOUR VOTE BY
SIGNING, MARKING AND RETURNING THE ENCLOSED BLUE PROXY, WHICH MUST
BE DATED AFTER THE PROXY YOU SUBMITTED TO THE BOARD.
IMPORTANT VOTING INFORMATION
Please review this Proxy Statement carefully. YOUR VOTE IS
IMPORTANT, NO MATTER HOW MANY OR FEW SHARES YOU OWN. IF YOU CANNOT
ATTEND THE SPECIAL MEETING IN PERSON, YOUR PROXY IS THE ONLY MEANS
AVAILABLE FOR YOU TO VOTE. PLEASE VOTE THE BLUE PROXY CARD IN
FAVOR OF BISCO'S PROPOSALS. ONLY YOUR LATEST DATED PROXY WILL
COUNT AT THE SPECIAL MEETING
If you own Shares but your stock certificate is held for you
by a brokerage firm, bank or other institution, only it can execute
a BLUE proxy and vote your Shares. The brokerage firm, bank or
other institution holding your Shares is required to forward proxy
materials to you and solicit your instructions with respect to the
granting of proxies. Please sign, date and return the BLUE proxy
card to such brokerage firm, bank or other institution in the
envelope provided by that firm.
If you have any questions about giving your proxy or require
assistance in voting your shares, please call:
Garland Associates, Inc.
P.O. Box 3355
Grand Central Station
New York, New York 10163
Toll-Free (800) 455-6034
or
Collect (212)866-0095
GENERAL INFORMATION
SOLICITATION OF PROXIES; REVOCATION
The solicitation of the enclosed BLUE proxy is made by and on
behalf of Bisco to be used at the Special Meeting, which will be
held at _____________________, at ______ a.m. on ___________,
__________ ___, 1997. The principal executive offices of the
Company are located at 2113 Florida Boulevard, Neptune Beach,
Florida 32266. The approximate mailing date of this Proxy
Statement is _____________, 1997.
Unless contrary instructions are indicated on the enclosed
BLUE proxy card, all shares represented by valid proxies received
pursuant to this solicitation (and which have not been revoked in
accordance with the procedures set forth below) will be voted FOR
each of the Proposals. In the event a shareholder specifies a
different choice by means of the enclosed proxy, his shares will be
voted in accordance with the specification so made.
The giving of a proxy does not preclude the right to vote in
person at the Special Meeting should any shareholder giving the
proxy so desire. Shareholders have an unconditional right to
revoke their proxy at any time prior to the exercise thereof,
either in person at the Special Meeting or by filing with the
Secretary of the Company at the Company's principal executive
offices a written revocation or duly executed proxy bearing a later
date; however, no such revocation will be effective until written
notice of the revocation is received by the Company at or prior to
the Special Meeting.
CALL OF THE SPECIAL MEETING
Pursuant to Florida law, the Company must hold a special
meeting of shareholders if the holders of not less than 10% of all
the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting sign, date and deliver
to the Company's Secretary one or more written demands for the
meeting describing the purpose or purposes for which it is to be
held. Pursuant to Article II, Section 2.3 of the Company's Amended
and Restated Bylaws, written notice of the day, hour, place and
purposes of a special meeting must be delivered, either personally
or by U.S. mail, by or at the direction of the Chairman or the
Secretary of the Company, not less than 20 nor more than 90 days
after the receipt of a request from shareholders entitled to call
a special meeting. On July 24, 1997, Bisco delivered to the
Company's Secretary written demands to convene the Special Meeting,
signed by the holders of more than 10% of the outstanding Shares,
which demands requested that the Special Meeting be convened on or
about September 15, 1997, or on a date 30 days subsequent to the
date this Proxy Statement is first distributed to holders of
Shares. The Company has not yet indicated when and where the
Special Meeting will be held, although it is anticipated that such
information will be set forth in the Company Proxy.
RECORD DATE AND VOTING SECURITIES OUTSTANDING
The Board has fixed the close of business on _____________,
1997 as the Record Date. As of the Record Date, the Company had
outstanding 11,030,000 Shares. Each Share entitles its record
holder to one vote on each matter submitted to a vote at the
Special Meeting. The shares do not have cumulative voting rights.
As of the Record Date, Glen F. Ceiley, the President and sole
stockholder of Bisco, beneficially owned 1,066,260 Shares,
representing approximately 9.7% of the 11,030,000 Shares
outstanding as of May 7, as reported in the Company's Quarterly
Report on Form 10-Q for the Quarter Ended April 2, 1997. See
"Security Ownership of Certain Beneficial Owners and Management."
Voting at the Special Meeting
The attendance, in person or by proxy, of the holders of
a majority of the outstanding Shares is necessary to constitute a
quorum at the Special Meeting. If a quorom exists at the Special
Meeting, each of the Proposals, other than the election of Bisco's
Nominees as directors, and any other matter that may be submitted
to a vote of the shareholders at the Special Meeting, will be
approved if the votes cast favoring the Proposal exceed the votes
opposing the Proposal. The election of each of the Bisco Nominees
as Directors will require the affirmative vote of a plurality of
the votes cast by the Shares in the election. Under Florida law,
abstentions and Shares referred to as "broker or nominee non-votes"
(shares held by brokers or nominees as to which instructions have
not been received from the beneficial owners or persons entitled to
vote and the broker or nominee does not have discretionary voting
power on a particular matter) are treated as Shares that are
present and entitled to vote for purposes of determining the
presence of a quorum. For purposes of determining the outcome of
any matter as to which the proxies reflect abstentions or broker or
nominee non-votes, Shares represented by such proxies are treated
as not present and not entitled to vote on that subject matter and
therefore will not be considered when counting votes cast on the
matter (even though those shares are considered entitled to vote
for quorum purposes and may be entitled to vote on other matters.)
If less than a majority of the outstanding Shares are represented
at the Special Meeting, a majority of the shares so represented may
adjourn the Special Meeting from time to time without further
notice.
SOLICITATION EXPENSES
Bisco intends to solicit proxies by mail, telephone or
telecopier and in person. Solicitations may be made by the
directors, officers and other employees of Bisco, none of whom will
receive additional compensation for such solicitations. Bisco will
request banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all of its solicitation materials to the
beneficial owners of the Shares they hold of record, and will
reimburse these record holders for customary clerical and mailing
expenses incurred by them in forwarding these materials to their
customers. Bisco estimates that its total expenditures relating to
the solicitation of proxies will be approximately $_______, all of
which will be borne by Bisco.
Bisco has retained Garland Associates, Inc. to assist in the
solicitation of proxies and for related services. Garland
Associates, Inc. will solicit proxies from individuals, brokers,
banks, bank nominees and other institutional holders. Garland
Associates, Inc. is also acting as Information Agent in connection
with the Offer. The fees payable by Bisco to Garland Associates,
Inc. for its services in connection with this solicitation of
proxies will be approximately $________. Bisco has also agreed to
reimburse Garland Associates, Inc. for certain out-of-pocket
expenses and to indemnify Garland Associates, Inc. against certain
liabilities and expenses, including liabilities and expenses under
the federal securities laws.
BACKGROUND AND REASON FOR THE SPECIAL MEETING
BISCO'S TENDER OFFER
On March 6, 1997, Bisco commenced the Offer for up to
2,600,000 Shares for $0.90 net per Share in cash (the "Offer").
The purpose of the Offer is to acquire a significant equity
interest in the Company and to influence the management and
direction of the Company. Bisco has no present intention to seek
to acquire the entire equity interest in the Company or to
consummate a merger or other business combination transaction
between the Company and Bisco or any of its affiliates. The Offer
is subject to certain terms and conditions described in the Offer
to Purchase, including that (i) Bisco shall be satisfied, in its
reasonable discretion, that the Control Share Act is inapplicable
to the Offer, or that the Control Share Act will not deny voting
rights to the Shares acquired by Bisco in the Offer (the "Control
Share Condition"), (ii) the Company shall not have issued,
distributed or sold, or authorized or proposed the issuance,
distribution or sale of, additional Shares (subject to certain
exceptions), shares of any other class of capital stock or other
equity interests, other voting securities, debt securities or any
securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, and
(iii) the Company's Articles of Incorporation and Bylaws shall not
have been amended.
Under the guise of protecting the shareholder's interests, the
Board has refused to "opt out" of the Control Share Act to allow
Bisco to vote any Shares it may acquire in the Offer and has
adopted several anti-takeover measures in response to the Offer,
including a "poison pill." See "-The Board's Response to the
Offer." As a result of the Board's actions, Bisco's acquisition of
Shares pursuant to the Offer, in the absence of the shareholders
voting for the actions described herein or the Board agreeing to
the Offer, would be impracticable. Bisco currently contemplates
that Shares will not be accepted for payment pursuant to the Offer
until all of the conditions of the Offer, including those described
above, have been satisfied.
Complete information about the Offer is contained in the Offer
to Purchase, which is available upon request from the Information
Agent for the Offer, Garland Associates, Inc., and in the Tender
Offer Statement on Schedule 14D-1, which was filed by Bisco with
the Securities and Exchange Commission (the "Commission") on March
6, 1997, as amended (the "Schedule 14D-1"). Pursuant to Rule 14d-5
under the Securities Exchange Act of 1934, as amended, the Company
elected to mail Bisco's tender offer materials to holders of the
Shares. Bisco believes that the Company has mailed to each holder
of Shares the copies of the Offer to Purchase and the related
Letter of Transmittal and other tender offer materials that Bisco
furnished to the Company. The Schedule 14D-1 may be obtained from
the Commission, upon payment of the Commission's customary charges,
by writing to its principal office at 450 Fifth Street, N.W.,
Judiciary Plaza, Room 1024, Washington, D.C. 20549. The Schedule
14D-1 is also available for inspection and copying at the
Commission's principal office at the above address and at its
regional offices at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and may be accessed electronically
on the World Wide Web at http://www.sec.gov.
As of the close of business on July ___, 1997, ____________
Shares had been tendered pursuant to the Offer. On July 14, 1997,
Bisco issued a press release announcing that it had extended the
expiration date of the Offer until 5:00 p.m., New York City time,
on October 31, 1997. Bisco extended the Offer until that date to
allow adequate time for the Special Meeting to be called and held
and for the results of the meeting to be determined.
Although Bisco does not presently intend to alter the terms of
the Offer, it is possible that, depending on the facts and
circumstances existing at the time, the terms might be altered in
one or more respects. It is not possible at this time to determine
whether, if Bisco should withdraw, or materially amend the terms of
the Offer prior to the Special Meeting, Bisco would continue to
seek to elect the Bisco Nominees or to seek adoption of the
Proposals. Bisco will, however, promptly disseminate information
regarding such changes, if any, to the Company's shareholders.
THIS PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES,
NOR AN OFFER WITH RESPECT THERETO. THE OFFER IS BEING MADE ONLY BY
MEANS OF THE OFFER TO PURCHASE AND THE RELATED LETTER OF
TRANSMITTAL.
THE BOARD'S RESPONSE TO THE OFFER
On March 19, 1997, the Board responded to the Offer. The
Company filed a Solicitation/Recommendation Statement on Schedule
14D-9 (such statement, as subsequently amended on March 20, 1997,
is referred to herein as the "Schedule 14D-9") and a Registration
Statement on Form 8-A (such registration statement, as subsequently
amended on March 20, 1997, is referred to herein as the "Form 8-A")
on that date.
According to the Schedule 14D-9, the Board decided at a March
18, 1997 meeting not to "opt out" of the Control Share Act with
respect to any Shares acquired by Bisco pursuant to the Offer. The
Schedule 14D-9 also disclosed that the Board had adopted an anti-
takeover plan commonly referred to as a "poison pill" (the "Poison
Pill"). The Poison Pill purportedly was adopted on February 11,
1997, although no disclosure of such adoption was made until March
19, 1997, almost two weeks after Bisco commenced the Offer. The
Schedule 14D-9 also disclosed that the Board had adopted Amended
and Restated Bylaws to implement certain anti-takeover measures,
including a classified board of directors and limitations on
shareholders' proposals of business at shareholder meetings and on
director nominations by shareholders.
The Board recommended that shareholders reject the Offer on
the basis that it had unanimously determined that the Offer was
"inadequate" and "not in the best interests of [the Company] and
its shareholders." The Board purportedly considered a variety of
factors in deciding to reject the Offer, including, among other
things, the range of values for the Company revealed in a valuation
study prepared by a nationally-recognized investment banking firm
(which concluded, after employing five different valuation
methodologies, that the $0.90 per Share offered by Bisco was
"within the range of value of the Company"). The Board determined
that it should explore negotiations with Bisco to better determine
Bisco's plans for the Company. The Board also determined that,
given additional time, it could negotiate a better deal than the
Offer and that the Company should attempt to increase the price per
Share in the Offer. However, management has never attempted to do
so during the several discussions management has held with Bisco's
representatives. See "-Bisco's Negotiations With Management."
MANAGEMENT HAS DONE NOTHING TO INCREASE YOUR SHAREHOLDER VALUE,
DESPITE THE LIP SERVICE GIVEN BY THE BOARD TO DEPLOYING THE "POISON
PILL" AND OTHER ANTI-TAKEOVER MEASURES AS A MEANS OF PROTECTING
YOU.
THE POISON PILL
The following summary of the Poison Pill has been derived from
the descriptions of the Poison Pill contained in the Schedule 14D-9
and the Form 8-A, and reference is made to the Schedule 14D-9 and
the Form 8-A for a more complete description of the Poison Pill.
Under the Rights Agreement dated March 18, 1997 between the
corporation and ChaseMellon Shareholder Services, Inc., a copy of
which has been filed by the Company as an exhibit to the Form 8-A
(the "Poison Pill Agreement"), the Company will issue one right for
each Share outstanding or newly issued prior the Distribution Date
(as defined below). The rights trade with and are not separable
from the Shares until the Distribution Date. The rights become
exercisable and trade separately from the Shares upon the earlier
to occur of (a "Distribution Date"): (i) the tenth business day
after the date of public announcement that a person or group of
affiliated or associated persons have become the beneficial owners
of 15% or more of the outstanding Shares or voting securities
representing 15% or more of the total voting power (an "Acquiring
Person"), (ii) the tenth business day or such later date determined
by the Board of Directors after the first public announcement of a
tender or exchange offer, which, upon consummation, would result in
a person or a group being the beneficial owner of 15% or more of
the outstanding Shares (or 15% or more of the total voting power)
or (iii) the tenth business day after a majority of the Board who
are not officers of the Company have determined that a person is an
Adverse Person. The Poison Pill Agreement defines an "Adverse
Person" as a person who alone or together with its associates and
affiliates has become the beneficial owner of 10% of the
outstanding Shares or voting securities representing 10% of the
total voting power and the Board has determined, after reasonable
inquiry and investigation, that (i) such beneficial ownership is
intended to cause the Company to repurchase the Shares or voting
securities beneficially owned by such person or to cause pressure
on the Company to take action or enter into a transaction or series
of transactions intended to provide the person with short-term
financial gain not serving the interests of the shareholders or
(ii) the beneficial ownership is causing or reasonably likely to
cause a material adverse impact on the business or prospects of the
Company to the detriment of the Company's shareholders. According
to materials distributed by the Company in connection with Bisco's
consent solicitation, the Distribution Date will be the date of
Bisco's public announcement that it has consummated the Offer or
otherwise acquired sufficient Shares to meet the definition of an
Acquiring Person.
After the Distribution Date, the rights begin trading
separately from the Shares, and each right becomes exercisable for
one-hundredth of one share of Junior Participating Preferred Stock
of the Company at a price of $5.00 per one-hundredth of a share,
subject to adjustment. If (i) a person becomes the beneficial
owner of 15% or more of the then outstanding Shares or voting power
(except pursuant to certain business combinations discussed below
or an offer for all outstanding Shares and all other voting
securities which the independent and disinterested directors of the
Company determine to be fair to and otherwise in the best interests
of the Company and its shareholders) or (ii) any person is
determined to be an Adverse Person (either (i) or (ii) being a
"Flip-in Event"), each holder of a right (with the exception of an
Adverse or Acquiring Person) will thereafter have the right to
receive, upon exercise, Shares having a value equal to no less than
two times the exercise price of the right. Rights are not
exercisable following the occurrence of a Flip-in Event until such
time as the rights are no longer redeemable by the Company. In the
event of certain business combinations involving the Company, each
holder of a right may receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise
price of the right.
The Company may redeem each right for $0.001 at any time
before the earliest of (i) the tenth day after a person or group
becomes an Acquiring Person, (ii) the tenth day following the
Board's determination that a person is an Adverse Person or (iii)
March 17, 2007.
BISCO'S NEGOTIATIONS WITH MANAGEMENT
After the Board finally responded to the Offer on March 19,
1997, Glen F. Ceiley, Bisco's President and sole shareholder, held
several discussions with Lewis E. Christman, Jr. and Edward B.
Alexander, the Company's President and Chief Executive Officer and
its Chief Financial Officer, respectively, and the Company's
counsel. Bisco's purpose in engaging in these discussions was to
attempt to negotiate a "standstill" or similar agreement that would
permit Bisco to acquire Shares pursuant to the Offer free from the
restrictions of the Control Share Act and the defensive anti-
takeover measures adopted by the Board.
In a March 25, 1997 telephone conference, the Company's
counsel informed Mr. Ceiley that although the Board believed it had
put in place sufficient measures to "thwart" the Offer, management
was willing to engage in discussions with Bisco because it was
concerned about the cost and uncertainties should Bisco proceed
with the Offer despite these measures. Messrs. Christman and
Alexander and the Company's counsel then asked Mr. Ceiley numerous
questions concerning his intentions in acquiring Shares. As he had
previously responded when asked the same questions at the Board's
February 11, 1997 meeting, and as disclosed in the Offer, Mr.
Ceiley responded that he had been acquiring Shares because he felt
that the Shares were a good investment, and that he was interested
in acquiring additional Shares and playing a more active role in
the management of the Company. Mr. Ceiley assured management that
he had formulated no plans or proposals for the Company, including
for any merger, sale of assets or other business combination
transaction involving the Company, or any change in the Company's
management. Mr. Ceiley affirmed, however, that he did intend, as
indicated in the Offer, to review various possible business
strategies for the Company, which might include, assets sales or
other changes in the Company's business, corporate structure,
capitalization, operation or management. Mr. Ceiley also confirmed
his disclosures in the Offer that Bisco has no present intention to
seek to acquire the entire equity interest in the Company or to
consummate a merger or other business combination transaction
between the Company and Bisco or any of its affiliates.
During the same telephone conference, the Company's counsel
told Mr. Ceiley that management wanted to know "what will it take
to convince [Bisco] to go away." Mr. Ceiley did not directly
respond to this inquiry, as he took the question to suggest that if
Bisco stated a price, the Company might be willing to pay Bisco to
withdraw the Offer, which he was not interest in doing. The Board
never formally offered Bisco a cash payment to withdraw the Offer;
however, in later discussions, the Board did offer to grant Bisco
long-term warrants to purchase Shares as an inducement for Bisco to
not pursue the Offer or solicit shareholder consents. Mr. Ceiley
and Bisco's counsel instead reiterated that it was Bisco's desire
to acquire a more significant equity interest in the Company,
obtain Board representation commensurate with its increased equity
interest and explore strategies to maximize shareholder value. Mr.
Ceiley and management agreed to explore possible terms of an
agreement that might allow Bisco to increase its stake in the
Company and obtain Board representation in a manner that would be
acceptable to the Board. The Company's counsel suggested that one
element of such an agreement that might be attractive to the Board
would be for Bisco to agree to "vote with the Board" on matters
submitted to the shareholders.
The next telephone conference between Bisco and management
took place on March 26, 1997. The Company's counsel presented a
preliminary management proposal whereby the Company would issue to
Bisco warrants to purchase a number of Shares that, together with
its current ownership, would result in Bisco owning 20% of the
outstanding Shares, and the Board would appoint a Bisco
representative as a director. In exchange, Bisco would withdraw
the Offer, enter into a three-year "standstill" agreement with the
Company and agree to vote with the majority of the Board on any
business combination transaction. The Company's counsel indicated
that the proposal had not yet been considered by the Board and,
therefore, the precise terms and conditions of the warrants and the
"standstill" agreement would have to be the subject of further
discussion and agreement. Since Bisco had not previously
considered purchasing Shares directly from the Company, neither Mr.
Ceiley nor Bisco's counsel responded directly to management's
preliminary proposal. However, Mr. Ceiley indicated a willingness
to entertain the proposal, subject to a significantly shorter
"standstill" agreement. Bisco's counsel suggested that Bisco would
agree to any reasonable restrictions on its ability to vote its
Shares or influence control over the Board or the Company, but
would insist that any "standstill" agreement include the Board
"opting out" of the Control Share Act for purposes of the Offer and
rescinding the Poison Pill.
Management indicated that the Board continued to be concerned
about Bisco's intentions and plans for the Company, particularly in
light of a rumor Mr. Alexander had heard, to the effect that Mr.
Ceiley had a new management team lined up to replace current
management. Mr. Ceiley assured Messrs. Christman and Alexander
that he had no desire to run the Company himself and that he had
taken no actions, including identifying replacements for
management, with respect to the Company other than those that had
been disclosed in the Offer.
On April 2, 1997, Bisco and management held another telephone
conference. The Company's counsel stated that the Board was
comfortable with Bisco owning up to 20% of the outstanding Shares,
but would prefer that Bisco acquire such shares by investing in the
Company through the issuance of a warrant at current Share price
levels, rather than through the Offer. The parties discussed the
possible terms of "standstill" agreement, including the length of
the period Bisco would be restricted from taking certain types of
actions, the types of restrictions that Bisco would agree to abide
by during the restriction period. Mr. Ceiley understood from these
conversations that management had agreed in principal that Bisco
would be free following the end of any restriction period to
acquire additional Shares with full voting and other rights. As
such, Mr. Ceiley perceived that he and management were in agreement
on all significant terms of a "standstill" agreement. The
Company's counsel invited Bisco to send a written document
incorporating the terms discussed during the telephone conference.
Bisco delivered to the Company that same afternoon a written
summary of a proposed standstill agreement, the material terms of
which were as follows:
. The Company would issue to Bisco five-year warrants (the
"Warrants") to purchase 20% of the Shares (on a fully
diluted basis), at an exercise price equal to the average
of the closing prices for the Shares during the ten
trading days prior to issuance. The Warrants would not
be exercisable for 15 months (the "Restriction Period"),
unless the Board or a shareholder not affiliated with
Bisco (an "Independent Shareholder") submitted a proposal
for consideration by the shareholders.
. Bisco would withdraw the Offer, limit its further
purchase of Shares during the Restriction Period to open
market or privately negotiated purchases and limit its
Share ownership during the Restriction Period to no more
than 25% (including the Warrants) of the Shares (on a
fully diluted basis).
. Designees of Bisco would be appointed to constitute at
least 20% of the entire Board.
. The Board would "opt out" of the Control Share Act with
respect to Shares acquired by Bisco or its affiliates,
whether pursuant to the Warrants or otherwise.
. Bisco would withdraw its shareholder proposal to adopt a
bylaws amendment making the Control Share Act
inapplicable to the Shares generally, and would agree
that, during the Restriction Period, it would not (A)
commence a tender offer for Shares, (ii) engage in any
"affiliated transactions" with the Company, (iii)
commence any proxy or consent solicitation, except if in
response to a proposal by the Board or an Independent
Shareholder, or (iv) introduce proposals for inclusion in
the Company's proxy materials for the 1997 and 1998
annual meetings.
. The Board would take immediate action to remove or
rescind the recently adopted anti-takeover measures
(including, if necessary, to redeem any rights issued
pursuant to the Poison Pill Agreement), and would agree
not to adopt or propose for adoption by the shareholders
other anti-takeover measures (including articles or
bylaws amendments, change in control agreements with
officers, directors or third parties). The Company would
also agree not to adopt new management compensation plans
or benefits (including change in control agreements)
during the Restriction Period.
On April 4, 1997, the Company's counsel notified Bisco's
counsel that the Board had unanimously rejected Bisco's proposal.
In particular, the Company's counsel indicated that the Board was
unwilling to allow Bisco to acquire more than 20% of the
outstanding Shares and would not agree to "opt out" of the Control
Share Act with respect to Bisco's acquisitions of Shares or rescind
the various anti-takeover measure it had recently adopted. The
Company's counsel also indicated that the Board did not believe
that a significant number of shareholders would tender their Shares
in the Offer or support Bisco in its proposed consent solicitation.
MANAGEMENT NOT ONLY WANTS TO RESTRICT BISCO'S SHARE OWNERSHIP TODAY
BUT ALSO WANTS BISCO TO NEGOTIATE WITH THE BOARD AGAIN IN SEVERAL
YEARS IF IT WANTS TO ACQUIRE ADDITIONAL SHARES.
At 5:00 p.m., New York City time, on April 4, 1997, the
original expiration date of the Offer, 1,048,466 Shares had been
tendered pursuant to the Offer. On April 7, 1997, Bisco issued a
press release announcing that it had extended the expiration date
of the Offer until 5:00 p.m., New York City time, on April 11,
1997. Following that announcement, Mr. Ceiley called Mr. Christman
to inform him that Bisco intended to proceed with the Offer, and to
solicit consents from the shareholders to amend the Company's
bylaws to "opt out" of the Control Share Act. Messrs. Ceiley and
Alexander agreed to maintain an open dialogue between them and to
continue to seek common grounds for a settlement agreement.
On April 8, 1997, Mr. Ceiley informed Mr. Christman that Bisco
would be willing to address the Board's concern by limiting Bisco's
Share ownership over the next fifteen months to 20% and its ability
to vote its Shares during that period. Mr. Ceiley also suggested
that he continued to be willing to have other reasonable
restrictions imposed on Bisco's Share ownership during that period,
but that he felt that Bisco should be free of all restrictions,
including the Control Share Act and the Poison Pill, at the end of
any restriction period. Mr. Christman informed Mr. Ceiley on April
9, 1997 that the Board was not prepared to exempt Bisco from the
operation of the Poison Pill and had unanimously rejected Bisco's
settlement offer.
BISCO BELIEVES THAT MANAGEMENT AND THE BOARD HAVE FAILED TO
NEGOTIATE IN GOOD FAITH. DESPITE BISCO'S WILLINGNESS TO MEET
MANAGEMENT'S CONCERNS OVER THE LEVEL OF BISCO'S SHARE OWNERSHIP AND
DESPITE BISCO'S WILLINGNESS TO ENTER INTO REASONABLE RESTRICTIONS
ON ITS SHARE OWNERSHIP, THE BOARD REFUSES TO ALLOW BISCO TO ACQUIRE
SHARES OR EXERCISE ITS SHAREHOLDER RIGHTS.
THE CONSENT SOLICITATION AND THE COMPANY'S ANNUAL MEETING
On April 30, 1997, Bisco commenced a solicitation of written
consents from the holders of the Shares (the "Consent
Solicitation") to take the following actions: (i) to repeal the
Amended and Restated Bylaws adopted by the Board and any other
bylaws or amendments to bylaws adopted without shareholder
approval, (ii) to amend the Company's bylaws to provide that the
Control Share Act shall not apply to control share acquisitions of
Shares, (iii) to amend the Company's bylaws to require the Company
to redeem the Poison Pill and require prior shareholder approval
for adoption of any "poison pill" or similar anti-takeover measure
in the future, and (iv) to amend the Company's bylaws to provide
that the bylaws shall not be subject to amendment or repeal by the
Board. At the conclusion of the Consent Solicitation, Bisco had
received written consents from the holders of approximately 45% of
the outstanding Shares. Because Florida law requires that action
taken by written consent be approved by a majority of the
outstanding Shares, Bisco's proposals were not adopted pursuant to
the Consent Solicitation.
The Company held its annual meeting on July 2, 1997. At the
annual meeting, in addition to the election of directors, the
shareholders voted on two proposals. The Board submitted to the
shareholders a proposal to amend the Company's Articles of
Incorporation to increase to 20,000,000 the number of authorized
Shares. This increase was required to be adopted to fully
implement the provisions of the Poison Pill that give the Board the
option of exchanging one share of Common Stock for each right or
issuing additional shares of Common Stock upon the exercise of the
Rights upon the occurrence of certain events. The Board also
submitted to the shareholders a proposal by Bisco to amend the
Company's Articles of Incorporation to "opt out" of the Control
Share Act. Both proposals required approval by the affirmative
vote of a majority of the outstanding Shares. Bisco did not
solicit proxies in opposition to management's proposal or for its
own proposal. However, even without Bisco conducting any
solicitation efforts, more Shares were voted against management's
proposal than for it, and Bisco's proposal received more votes in
favor than against.
After the annual meeting, Messrs. Christman and Ceiley met
privately and discussed the events of the previous several months.
Mr. Ceiley indicated that he felt the results of the Consent
Solicitation and the shareholder vote at the annual meeting
evidenced significant shareholder support for Bisco's Offer and its
proposals. During that meeting, Mr. Christman extended to Mr.
Ceiley an offer to join the Board. Although the offer was extended
without conditions, the Company's counsel indicated to Bisco's
counsel that the Board did not intend to amend or redeem the Poison
Pill, "opt out" of the Control Share Act or otherwise take action
to permit the Offer to be consummated.
REASON FOR THE SPECIAL MEETING
Bisco's purpose in calling the Special Meeting is the same as
its purpose in conducting the Consent Solicitation: to adopt
proposals to allow it to consummate the Offer, but also so that if
any other substantial offer is made to acquire Shares, the
shareholders will have the ultimate decision on whether to accept
the offer, not the Board. The Board's recent actions have limited
your options as a shareholder and have done nothing to enhance
shareholder value.
BISCO URGES ALL SHAREHOLDERS TO AFFIRM THEIR RIGHT TO DECIDE THE
COMPANY'S FATE BY VOTING FOR EACH OF BISCO'S PROPOSALS.
Bisco believes that the Board's recent actions are a "knee
jerk" response to the Offer, do not consider or further the
interests of the shareholders and have been adopted solely to
create impediments to the Offer. The Poison Pill was unilaterally
adopted by the Board and effectively prevents the acquisition of
more than 10% of the outstanding Shares without the approval of the
Board. According to the Company's March 19, 1997 press release,
the Poison Pill was designed "to deter coercive and unfair takeover
tactics (emphasis added)." Similarly, the Schedule 14D-9 describes
the Board's purpose for adopting the Amended and Restated Bylaws as
being "to help protect the Company and its shareholders from
coercive tactics proposed by [Bisco] or other persons seeking to
exert control over the Company (emphasis added)."
BISCO HAS NOT ENGAGED IN ANY "COERCIVE" OR "UNFAIR" TACTICS. YOU
ARE NOT BEING FORCED TO DO ANYTHING BY BISCO. BISCO'S OFFER IS
OPEN TO ANY SHAREHOLDER WHO VOLUNTARILY DESIRES TO SELL THEIR
SHARES.
Bisco believes anti-takeover defenses like "poison pills," the
Control Share Act and classified boards reduce shareholder value
over the long run by entrenching management and by reducing the
probability that someone, like Bisco, will make a bid for Shares at
a price above market value. Bisco further believes that when an
offer is made to acquire Shares, the shareholders should have the
final word on whether the offer is accepted, not the Board. Absent
a "poison pill," a bidder such as Bisco could make an offer to all
shareholders to buy their Shares at a fixed price above the market
value without prior approval of the Board. Shareholders have the
option to accept the offer and tender their Shares or reject the
offer if they believe the premium offered is insufficient. With a
"poison pill" in place, a bidder must de facto receive Board
approval prior to making an offer to shareholders. Absent that
approval, the Board can declare the bidder unfriendly and trigger
the "poison pill."
Bisco believes that it is the shareholders (who are the true
owners of the Company) who should have the right to decide what is
or is not a fair price for their Shares and whether to accept or
reject an offer for their Shares, not the directors (who merely act
as agents for the owners). The Board's recently adopted anti-
takeover measures and its actions in response to the Offer have
taken these decisions away from the shareholders. Moreover, the
Board's recent actions, including adoption of a "poison pill" and
its refusal to "opt out" of the Control Share Act, enable the Board
to block a shareholder such as Bisco from offering to acquire
additional Shares even if a substantial number of shareholders
desire to accept such an offer. Bisco believes that the Board's
recent actions are clear evidence of the Board's desire to entrench
itself to the detriment of all shareholders. Bisco urges all
shareholders to vote for the Proposals, which will allow the
shareholders to decide for themselves whether the Offer is in their
best interests.
Bisco also believes that all public company shareholders,
including the Company's shareholders, should have equal voting
rights, regardless of the number of shares owned. Bisco further
believes that the Control Share Act decreases the attractiveness of
the Shares in the public market and may limit the ability of a
shareholder to receive a premium for his Shares, because it is
unlikely that any investor will purchase a significant number of
Shares unless it is certain to be able to exercise full voting
rights for such Shares. The Control Share Act therefore makes it
likely that the shareholders will never have the opportunity to
sell their Shares to an investor, such as Bisco, who is willing to
purchase a significant number of Shares at a premium over the
recent historical market prices for the Shares, unless management
wants the investor as a significant shareholder. If management
does not want the investor as a significant shareholder and refuses
to grant such shareholder voting rights, the shareholders can
overrule management by a majority vote of the disinterested
shareholders (i.e., the shareholders who are not affiliated with
the significant shareholder or with management), thus obviating the
need to obtain Board approval for the significant shareholder to
have voting rights. However, Bisco believes that even though the
Company's disinterested shareholders can grant voting rights for
Shares otherwise subject to voting restrictions under the Control
Share Act, no significant investor is likely to offer to purchase
Shares or offer a premium for the Shares unless it is certain to be
able to exercise full voting rights, and that the best way to
provide that certainty is for the Company to "opt out" of the
Control Share Act.
Shareholders should be aware that the adoption of the
Proposals will result in the repeal of all of the Poison Pill and
other anti-takeover measures recently adopted by the Board and
that, without such anti-takeover measures, it is possible that the
Board and the shareholders would be unable to prevent acquisitions
of a significant number of Shares by persons whose ownership or
intentions they believe are not in the best interests of the
Company or its shareholders. This could also result in change in
control of the Company without the approval of the Board or other
shareholders. Bisco believes, however, that even without the
Poison Pill and other anti-takeover measures or the provisions of
the Control Share Act, the shareholders are adequately protected
from unfair takeover tactics or affiliated transactions by existing
provisions of Florida law and the Company's Articles of
Incorporation. The Company is subject to the provisions of Section
607.0901 of the FBCA which requires, subject to certain exceptions,
that all "affiliated transactions" be approved by the holders of
two-thirds of the Shares, other than Shares beneficially owned by
an "interested shareholder" (i.e., a holder of 10% or more of the
Shares who also has an interest in the affiliated transaction) or
by a majority of disinterested directors. The Company's Articles
of Incorporation contain a similar provision that generally
requires the approval of the holders of 75% of the Shares for a
merger or other business combination transactions with an entity
affiliated with a holder of more than 10% of the Shares.
For the Offer to proceed, Bisco needs the cooperation of the
Company's Board to redeem the Rights or amend the Poison Pill to
make it inapplicable to the Offer and the approval of the Board or
the shareholders to approve Bisco's acquisition of Shares for
purposes of the Control Share Act. The Bisco Nominees are
committed, subject to the fulfillment of the fiduciary duties they
would have as directors of the Company, to take such steps as are
necessary to permit the Offer to proceed, and to work with
management to maximize shareholder value.
DON'T LET MANAGEMENT LIMIT YOUR OPTIONS AS A SHAREHOLDER. BISCO
URGES YOU TO EXECUTE A BLUE PROXY CARD AND VOTE FOR EACH OF THE
PROPOSALS, WHETHER OR NOT YOU INTEND TO TENDER YOUR SHARES.
THE PROPOSAL TO REVOKE THE POISON PILL
EFFECT OF THE PROPOSAL
The Proposal to Revoke the Poison Pill adopts a new bylaw that
requires the Board to redeem the rights distributed pursuant to the
recently adopted Poison Pill, and any other similar rights (if any)
granted by the Company prior to the date of adoption of the
proposal. Bisco believes that the shareholders should have the
ultimate decision on whether to accept the Offer or any future
offer to acquire Shares. The Board should not have the power to
take this decision away from the shareholders.
The new bylaw also requires the Board to obtain shareholder
approval to adopt or maintain future "poison pills," shareholder
rights plans, rights agreements or other plans, agreements, bylaws
or provisions that are designed to or have the effect of making
acquisitions of Shares more difficult or expensive. If the Board
proposes to adopt or continue any "poison pill" or similar
defensive measure and a majority of the shareholders consider the
measure to be appropriate and in their best interests, the Board
will be able to win shareholder approval to adopt or continue the
plan or other defensive measure. If, on the other hand, the Board
fails to obtain shareholder approval for a "poison pill" or similar
defensive measure, the shareholders' failure to grant such approval
would be evidence of their belief that such defensive measure was
inappropriate or disadvantageous to them and therefore not in the
shareholders' best interests. The new bylaw would not affect the
ability of the Board or the shareholders to approve or disapprove
of a proposed merger, sale of assets or other business combination
transaction involving the Company.
Under Florida law, all corporate powers are to be exercised by
or under the authority of, and the business and affairs of a
corporation managed under the direction of, its board of directors.
The board of directors' grant of authority includes the power to
make major corporate decisions, subject to the individual
directors' fiduciary obligations to the corporation and its
shareholders. Section 607.0206 of the FBCA states that "[t]he
bylaws of a corporation may contain any provision for managing the
business or regulating the affairs of the corporation that is not
inconsistent with law or the articles of incorporation." Bisco
believes that Section 607.0206 is a broad grant of authority for
shareholders to adopt bylaws relating to the powers of directors
and officers, and that it is inherent in the Florida scheme of
corporate law that the shareholders can exercise ultimate authority
over the actions of the board of directors and management. Bisco
is not aware of any provision of law or the Company's Articles of
Incorporation that bar the shareholders from adopting the Proposal
to Revoke the Poison Pill and, therefore, believes that Section
607.0206 authorizes the enactment of such Proposal. Bisco further
believes that while the Board is entitled to exercise its judgment
in responding to a tender offer or other takeover bid, its judgment
must be exercised within the framework of statutes, charter
provisions and bylaws which in certain instances can limit the
actions that directors may take even when the directors believe
that their chosen course of action is in the best interests of
Shareholders.
Because of the foregoing, Bisco believes that the proposed
bylaw amendment is valid. However, the Florida courts have not
considered the validity of the proposed bylaw or any similar bylaw
and, therefore, have not considered or resolved the extent to which
shareholder-adopted bylaws may limit the authority of a board of
directors to oppose, or to adopt or employ defensive measures
against, takeover bids. Accordingly, it is uncertain whether the
proposed bylaw would survive a court challenge. Bisco believes,
however, that a recent Oklahoma federal court decision, in
International Brotherhood of Teamsters General Fund v. Fleming
Companies, Inc.(No. Civ-96-1650-A (1997), supports the validity of
the proposed bylaw amendment. In that action, the court required an
Oklahoma corporation to include in its proxy statement for its
annual meeting of shareholders a shareholder proposal to adopt a
bylaw requiring the board of directors to redeem an existing poison
pill and to submit any successor poison pill to a shareholder vote.
Although the decision in the foregoing action would not be binding
on a Florida court, Bisco believes that the decision supports its
belief that the proposed bylaw is valid.
TEXT OF THE PROPOSAL TO REVOKE THE POISON PILL
Shareholders who vote for the Proposal to Revoke the Poison
Pill will be voting for the adoption of the following resolutions:
WHEREAS, the shareholders believe that
the Shareholder Rights Plan unilaterally
adopted by the Board of Directors is not in
the best interests of the Company and,
accordingly, want the Board of Directors to
immediately redeem the rights issued pursuant
to such plan and to restrict the Company from
adopting or maintaining in the future a
"poison pill," shareholder rights plan, rights
agreement or any other plan, agreement, bylaw
or other provision that is designed to or has
the effect of making acquisition of the
Company's shares more difficult or expensive
unless such plan, agreement, bylaw or
provision has first been approved by the
holders of a majority of the outstanding
common stock; now, therefore, be it
"RESOLVED, that the shareholders want the
Board of Directors to redeem the recently
adopted "poison pill" and also want to prevent
the Board of Directors from adopting new
"poison pills" in the future, and, in
furtherance of the foregoing, hereby amend the
Company's bylaws to add the following
provision:
'POISON PILLS. This corporation shall not
adopt or maintain a "poison pill," shareholder
rights plan, rights agreement or any other
plan, agreement, bylaw or other provision that
is designed to or has the effect of making
acquisition of large holdings of the
corporation's common stock more difficult or
expensive (including, without limitation the
"poison pill" evidenced by the March 18, 1997
Rights Agreement (the "Rights Agreement")
between the corporation and ChaseMellon
Shareholder Services, Inc.), unless such plan,
agreement, bylaw or other provision is first
approved by the holders of a majority of the
corporation's outstanding common stock. The
corporation shall redeem any such rights
(including, without limitation, rights issued
under the Rights Agreement) in effect as of
the date of adoption of this bylaw. This
section shall be effective immediately and
automatically as of the date it is approved by
the shareholders.'"
REQUIREMENTS TO ADOPT THE PROPOSAL TO REVOKE THE POISON PILL
To be adopted, the Proposal to Revoke the Poison Pill requires
the approval of the holders of a majority of the Shares represented
in person or by proxy at the Special Meeting. See "General
Information-Voting at the Special Meeting." DEMAND THAT THE BOARD
ALLOW YOU TO DECIDE WHAT TO DO WITH YOUR SHARES BY VOTING FOR THE
PROPOSAL TO REVOKE THE POISON PILL. SEND THE BOARD A CLEAR MESSAGE
THAT YOU DON'T WANT MANAGEMENT TO "PROTECT" YOU FROM INVESTORS
INTERESTED IN ACQUIRING YOUR SHARES BY VOTING FOR THE PROPOSAL TO
REVOKE THE POISON PILL. BISCO URGES YOU TO VOTE FOR THE PROPOSAL
TO REVOKE THE POISON PILL BY SIGNING, DATING AND RETURNING THE
ACCOMPANYING BLUE PROXY CARD TODAY.
THE CONTROL SHARE PROPOSAL
THE CONTROL SHARE ACT
Pursuant to the Control Share Act, an "acquiring person" who
makes a "control share acquisition" of shares of an "issuing public
corporation" may not exercise voting rights for any "control
shares" unless such voting rights are conferred by the issuing
public corporation's board of directors or by the affirmative vote
of a majority of the issuing public corporation's disinterested
shareholders at a meeting of such shareholders. If control shares
are accorded full voting rights and the acquiring person has
acquired control shares with a majority or more of all voting
power, shareholders (other than the acquiring person) who do not
vote in favor of authorizing voting rights for the control shares
are entitled to exercise dissenters' rights and demand payment of
the fair value of their shares.
A "control share acquisition" is the acquisition, directly or
indirectly, by any person of ownership of, or the power to direct
the exercise of voting power with respect to, issued and
outstanding control shares. "Control shares" are shares that,
except for the Control Share Act, would have voting power with
respect to shares of an issuing public corporation that, when added
to all other shares of the issuing public corporation owned by a
person or in respect to which that person may exercise or direct
the exercise of voting power, would entitle that person,
immediately after acquisition of the shares, directly or
indirectly, to exercise or direct the exercise of the voting power
of the issuing public corporation in the election of directors
within any of the following ranges of voting power: (i) one-fifth
or more but less than one-third of all voting power, (ii) one-third
or more but less than a majority of all voting power, and (iii) a
majority or more of all voting power. All shares, the beneficial
ownership of which is acquired within 90 days before or after the
date of the acquisition of beneficial ownership of shares which
result in a control share acquisition, and all shares the
beneficial ownership of which is acquired pursuant to a plan to
make a control share acquisition, are deemed to have been acquired
in the same acquisition. An "issuing public corporation" means a
corporation that has (i) 100 or more shareholders, (ii) its
principal place of business, principal office or substantial assets
in Florida and (iii) either (a) more than 10% of its shareholders
resident in Florida, (b) more than 10% of its shares owned by
residents of Florida or (c) 1,000 shareholders resident in Florida.
The above provisions do not apply to a control share
acquisition of shares of a corporation whose articles of
incorporation or bylaws in effect before such control share
acquisition provide that the Control Share Act does not apply to
control share acquisitions of its shares. Neither the Company's
Articles of Incorporation nor its bylaws exclude the Company from
the restrictions imposed by the Control Share Act. If the Control
Share Proposal is adopted, the Control Share Act will no longer
apply to control share acquisitions of the Shares.
Effect of the Control Share Proposal
The Control Share Proposal adopts a bylaw to "opt out" of the
Control Share Act, so that all shareholders have the right to vote
their Shares, regardless of the number of Shares they own or how
such Shares were acquired. To the extent that an investor, such as
Bisco, is willing to purchase a significant number of Shares at a
premium over market prices, the Control Share Proposal will enable
those shareholders who desire to do so to take advantage of the
opportunity to sell their Shares without requiring Board approval
of the offer and, if the Board refuses to approve of the control
share acquisition, without being required to seek approval by a
majority vote of the disinterested shareholders.
TEXT OF THE CONTROL SHARE PROPOSAL
The Control Share Proposal will amend the Company's bylaws by
adding the following bylaw provision:
"CONTROL SHARE ACT. The provisions of
Section 607.0902 of the Florida Business
Corporation Act shall not apply to control
share acquisitions of shares of this
corporation."
REQUIREMENTS TO ADOPT THE CONTROL SHARE PROPOSAL
To be adopted, the Control Share Proposal requires the
approval of the holders of a majority of the Shares represented in
person or by proxy at the Special Meeting. See "General
Information-Voting at the Special Meeting." DEMAND THAT THE BOARD
ALLOW EVERY SHAREHOLDER EQUAL RIGHTS TO VOTE THEIR SHARES BY VOTING
FOR THE CONTROL SHARE PROPOSAL. BISCO URGES YOU TO VOTE FOR THE
CONTROL SHARE PROPOSAL BY SIGNING, DATING AND RETURNING THE
ACCOMPANYING BLUE PROXY CARD TODAY.
THE DIRECTOR PROPOSALS
THE PROPOSALS
Removal of Current Directors. To create vacancies on the
Board for the election of the Bisco Nominees, Bisco proposes to
remove Messrs. Joseph M. Glickstein, Jr., Richard M. Gray and
Robert J. Martin as directors of the Company. Under Florida law,
the shareholders may remove one or more directors with or without
cause, unless the articles of incorporation provide that directors
may be removed only for cause. The Company's Articles of
Incorporation contain no limitation on the shareholders' right to
remove directors without cause. Assuming a quorum is present a
director may be removed only if the number of votes cast to remove
him is exceeds the number of votes cast not to remove him. The
proposal to remove directors would also remove as a director any
person elected or designated by the Board to fill any vacancy on
the Board or any newly created directorships.
Election of Bisco's Nominees. Bisco proposes to elect the
Bisco Nominees to fill the vacancies created by the removal of
three of the current directors. Under Florida law, a vacancy on
the board of directors may be filled by either the affirmative vote
of the remaining directors, though less than a quorum of the board
of directors, or by the shareholders, unless the articles of
incorporation provide otherwise. The Company's Articles of
Incorporation contain no provisions concerning vacancies on the
Board. The term of office of a director elected to fill a vacancy
expires at the next shareholders meeting at which directors are
elected. Accordingly, the Bisco Nominees, if elected, will serve
as directors until the Company's 1998 annual meeting of
shareholders or until their successors are duly elected and
qualified. For information concerning Bisco's Nominees, see "-
Bisco's Nominees."
EFFECT OF THE DIRECTOR PROPOSALS
According to publicly available information, the Company
currently has five directors. The Director Proposals will remove
three of the Company's current directors any person elected or
designated by the Board to fill any vacancy on the Board or any
newly created directorships and elect as directors of the Company
three Bisco Nominees. If the Director Proposals are approved and
all of Bisco's Nominees are elected, the Bisco Nominees will
constitute a majority of the five member Board. Under the
Company's Articles of Incorporation and Amended and Restated
Bylaws, a majority of the entire Board constitutes a quorum, and
action may be taken by the vote of a majority of the directors when
a quorum is present. If elected, the Bisco Nominees, subject to
the fulfillment of the fiduciary duties they would have as
directors of the Company, would be able to take action to satisfy
the conditions to the Offer for the purpose of expediting prompt
consummation of the Offer.
If the three of the current directors are removed and some,
but not all, of the Bisco Nominees are elected, Bisco's Nominees
will constitute a minority of the Board and, accordingly, would
not, without the support of other members of the Board, be able to
take action to expedite prompt consummation of the Offer.
Nonetheless, if elected, the Bisco Nominees will, subject to the
fulfillment of the fiduciary duties they would have as directors of
the Company, seek to convince other members of the Board to vote
with them to take such steps as are necessary to permit the Offer
to proceed. If all of the Bisco Nominees are not elected, even if
the other Proposals are approved there can be no assurance that the
Board will redeem the Poison Pill or take such other action as may
be necessary to allow the Offer to proceed.
BISCO'S NOMINEES
Bisco's nominees for election to the Board are Glen F. Ceiley,
Stephen Catanzaro and ____________. Each of the Bisco Nominees has
consented to serve as a director of the Company and, if elected,
intends to discharge his duties as director of the Company in
compliance with all applicable legal requirements, including the
general fiduciary obligations imposed upon corporate directors.
Bisco has no reason to believe that any of the Bisco Nominees will
be unable to serve as directors, but, in such event, the shares
represented by the enclosed BLUE proxy card will be voted for the
election of a substitute candidate or candidates selected by Bisco.
Should the Board purport to increase the number of directors to be
elected at the Special Meeting, it is the current intention of
Bisco to propose additional nominees for such directorships. If
elected, the Bisco Nominees will hold office as a director of the
Company until the next annual meeting of shareholders or until
their successors have been duly elected or qualified.
The following sets forth the name, age and certain
biographical information of each of the Bisco Nominees:
GLEN F. CEILEY is 51 and has been President and a director of
Bisco, a distributor of fasteners and electronic components, since
1973. As of the Record Date, Mr. Ceiley beneficially owned
[1,066,260] Shares, [90,970] of which are owned directly by Mr.
Ceiley, [457,100] of which are owned by Bisco, 100% of the voting
common stock of which is owned by Mr. Ceiley, and [518,190] of
which are owned by the Bisco Industries, Inc. Profit Sharing and
Savings Plan, of which Mr. Ceiley is the sole trustee (the "Bisco
Plan"). Mr. Ceiley's business address is 704 W. Southern Avenue,
Orange, California 92865. For information regarding Mr. Ceiley's
beneficial purchases and sales of Shares during the past two years,
see Appendix A.
STEPHEN CATANZARO is 44 and has been employed by Bisco since
August 1992 and has served as Bisco's Chief Financial Officer since
September 1995 and as a director of Bisco since February 1997.
Prior to joining Bisco, Mr. Catanzaro was Accounting Manager of
Proficient Food Company, a food distribution division of Denny's,
Inc., from June 1986 to August 1992 and Senior Field Accountant of
Taco Bell Corporation, a division of Pepsico, Inc., from September
1982 to May 1986. As of the Record Date, Mr. Catanzaro
beneficially owned 15,000 Shares, all of which are owned directly.
Mr. Catanzaro's business address is 704 W. Southern Avenue, Orange,
California 92685. For information regarding Mr. Catanzaro's
beneficial purchases and sales of Shares during the past two years,
see Appendix A.
[DIRECTOR NOMINEE] is ___ and has been [five year employment
history] As of the Record Date, Mr. ___________ beneficially owned
_________ Shares, [describe ownership]. Mr. ___________'s business
address is ___________________________________. For information
regarding Mr. __________'s beneficial purchases and sales of Shares
during the past two years, see Appendix A.
The Bisco Nominees will receive no compensation from Bisco for
agreeing to stand for election as directors of the Company. Bisco
has agreed to indemnify each of the Bisco Nominees, to the fullest
extent permitted by applicable law, against any and all losses,
claims, damages, judgments, liabilities and expenses of any kind
which may be incurred arising out of or relating to his service as
a Bisco Nominee. None of the Bisco Nominees is an officer,
director or employee of the Company or has any arrangements or
understandings with the Company with respect to the Offer, other
than the Bisco Nominees' stated intention to redeem the Poison Pill
(or amend the Rights Agreement to make the rights inapplicable to
the Offer), approve the Offer under the Control Share Act and take
such other actions and seek or grant such other consents or
approvals as may be desirable or necessary to expedite prompt
consummation of the Offer, in each case subject to fulfillment of
the fiduciary duties that they would have as directors of the
Company. Upon their election as directors of the Company, the
Bisco Nominees will be entitled to receive director's fees
consistent with the Company's past practice.
Except as disclosed in this Proxy Statement (including
Appendix A hereto), none of Bisco nor, to the best of Bisco's
knowledge, any of its directors or executive officers or the Bisco
Nominees (i) is the, beneficial or record owner of any securities
of the Company or any parent or subsidiary thereof or owns such
securities beneficially and not of record, (ii) has purchased or
sold any of such securities within the past two years, (iii) has
any substantial interest, direct or indirect, by security holdings
or otherwise, in any matter to be acted upon at the Special
Meeting, (iv) has been within the past year a party to any
contract, arrangement or understanding with any person with respect
to any securities of the Company, including, but not limited to,
joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses
or profits, or the giving or withholding of proxies, (v) has
engaged in or has a direct or indirect material interest in any
transaction or series of similar transactions since the beginning
of the Company's last fiscal year or any currently proposed
transaction to which the Company or any of its subsidiaries is a
party in which the amount involved exceeds $60,000, or (vi) has any
arrangements or understandings with any person with respect to any
future employment by the Company or its affiliates or with respect
to any future transactions to which the Company will or may be a
party.
VOTE REQUIRED TO ADOPT DIRECTOR PROPOSALS
To be adopted, the Director Proposals for the removal of the
company's current directors requires the approval of the holders of
a majority of the Shares represented in person or by proxy at the
Special Meeting. The election of each of Bisco's Nominees requires
the approval of a plurality of the votes cast by the holders of the
Shares represented in person or by proxy at the Special Meeting and
entitled to vote in the election of directors. See "General
Information-Voting at the Special Meeting." THE BISCO NOMINEES ARE
COMMITTED, SUBJECT TO THE FULFILLMENT OF THE FIDUCIARY DUTIES THEY
WOULD HAVE AS DIRECTORS OF THE COMPANY, TO TAKE SUCH STEPS AS ARE
NECESSARY TO PERMIT THE OFFER TO PROCEED. BISCO BELIEVES THAT IT
IS IN THE BEST INTEREST OF THE SHAREHOLDERS TO ELECT THE BISCO
NOMINEES AT THE SPECIAL MEETING, AND RECOMMENDS A VOTE FOR EACH OF
THE DIRECTOR PROPOSALS.
OTHER MATTERS
Bisco is not aware of any other matters to come before the
Special Meeting. If any other business should come before the
meeting, the persons named in the enclosed BLUE proxy will have
discretionary authority to vote such proxy in accordance with their
best judgment.
_______________, 1997
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Set forth below is information regarding Shares owned by (i)
those persons owning more than 5% of the outstanding Shares and
(ii) the directors and executive officers of the Company as a
group.
[CAPTION]
<TABLE>
<S> <C> <C>
Name and Address of Number of Percentage of
Beneficial Owner Shares Owned Common Stock(1)
Glen F. Ceiley (3) 1,066,260 9.7%
c/o Bisco Industries, Inc.
704 W. Southern Avenue
Orange, California 92685
Heartland Advisors, Inc. (2) 900,000 8.2%
709 North Milwaukee Street
Milwaukee, WI 53202
Cerberus Partners, L.P. 700,000 6.0%
950 Third Ave., 20th Floor
New York, New York 10022
All directors and executive
officers as a group
(6 persons) (4) 458,891 4.1%
</TABLE>
_______________
(1) Based on 11,030,000 Shares outstanding as of May 7, 1997, as
indicated in the Company's Quarterly Report on Form 10-Q for
the Quarter Ended April 2, 1997.
(2) Heartland Advisors, Inc., a registered investment adviser, has
reported in a Schedule 13G dated February 12, 1997 and filed
with the Commission that it has sole voting and dispositive
power with respect to all such Shares.
(3) As of July 15, 1997. Includes (i) 90,970 shares owned
directly, (ii) 457,100 shares owned by Bisco, of which Mr.
Ceiley is the President and sole stockholder and (iii) 518,190
shares owned by the Bisco Plan, of which Mr. Ceiley is sole
trustee. Does not include 15,000 Shares owned by Stephen
Catanzaro, an executive officer of Bisco and a Bisco Nominee.
See "The Director Proposals-Bisco's Nominees."
(4) As of May 8, 1997. According to the Company's Proxy Materials
for the 1997 annual meeting, the Company's directors and
executive officers collectively own only 196,641 of the Shares
reported as being beneficially owned by them (representing
1.8% of the outstanding Shares). The balance of the Shares
reported as being beneficially owned by the directors and
executive officers are Shares subject to options exercisable
within 60 days after May 8, 1997.
APPENDIX A
Transactions in the Securities
of the Company Within the Past Two Years
The following table sets forth information with respect to all
beneficial purchases and sales of Shares during the past two years
by each of the Bisco Nominees. All transactions involved open
market purchases or sales of Shares, except where otherwise noted.
GLEN F. CEILEY (includes transactions of Bisco and the Bisco Plan)
[CAPTION]
<TABLE>
<S> <C> <C> <C>
Transaction Number of Price Per
Date Shares Share* Purchaser/Seller
Purchases
11/2/95 3,000 $0.9687 Mr. Ceiley
11/20/95 12,000 $0.75 Mr. Ceiley
11/20/95 13,000 $0.8125 Bisco Plan
12/13/95 500 $0.7187 Mr. Ceiley
12/14/95 7,400 $0.7187 Mr. Ceiley
12/15/95 4,000 $0.7187 Mr. Ceiley
12/18/95 10,000 $0.7187 Mr. Ceiley
12/19/95 1,500 $0.6875 Bisco
12/21/95 12,000 $0.71875 Bisco
1/3/96 1,500 $0.78125 Bisco Plan
1/4/96 1,200 $0.78125 Bisco Plan
6/14/96 200 $0.65625 Mr. Ceiley
6/17/96 1,000 $0.65625 Mr. Ceiley
6/27/96 5,000 $0.6875 Mr. Ceiley
6/28/96 5,000 $0.6875 Mr. Ceiley
6/28/96 6,000 $0.6562 Bisco Plan
7/1/96 6,000 $0.6562 Bisco Plan
7/1/96 7,000 $0.625 Bisco
7/1/96 5,000 $0.6875 Mr. Ceiley
7/2/96 1,200 $0.6562 Mr. Ceiley
7/3/96 5,000 $0.6562 Mr. Ceiley
7/3/96 5,000 $0.625 Bisco Plan
7/8/96 5,000 $0.6875 Mr. Ceiley
7/8/96 1,100 $0.6562 Mr. Ceiley
7/9/96 6,000 $0.625 Bisco Plan
7/9/96 5,000 $0.625 Bisco
7/9/96 8,000 $0.5937 Bisco
7/10/96 300 $0.6562 Mr. Ceiley
7/11/96 100 $0.6562 Mr. Ceiley
7/16/96 4,500 $0.625 Bisco
GLEN F. CEILEY (continued)
7/16/96 3,500 $0.6562 Mr. Ceiley
7/17/96 1,000 $0.6562 Mr. Ceiley
7/22/96 10,000 $0.6562 Mr. Ceiley
7/24/96 200 $0.5937 Bisco
7/30/96 100 $0.5937 Bisco
7/30/96 4,000 $0.6562 Mr. Ceiley
7/30/96 6,900 $0.625 Bisco Plan
7/31/96 2,000 $0.5937 Bisco
8/2/96 2,000 $0.5937 Bisco
8/9/96 8,000 $0.6562 Mr. Ceiley
8/13/96 5,000 $0.6562 Bisco
8/14/96 4,000 $0.6562 Bisco
8/14/96 10,000 $0.625 Bisco Plan
8/16/96 2,000 $0.625 Mr. Ceiley
8/19/96 200 $0.5937 Bisco
8/26/96 1,500 $0.5937 Bisco
8/29/96 5,000 $0.625 Mr. Ceiley
8/30/96 3,600 $0.5937 Bisco Plan
8/30/96 3,800 $0.5625 Bisco
9/3/96 300 $0.5937 Bisco Plan
9/6/96 1,000 $0.5625 Bisco
9/9/96 2,000 $0.5625 Bisco
9/10/96 3,000 $0.5625 Bisco
9/12/96 2,000 $0.5625 Bisco
9/13/96 500 $0.5625 Bisco
9/17/96 100 $0.5937 Bisco Plan
9/20/96 700 $0.5625 Bisco
9/24/96 3,400 $0.5625 Bisco Plan
9/25/96 2,000 $0.5625 Bisco Plan
10/1/96 200 $0.5312 Bisco
10/18/86 25,000 $0.5312 Bisco Plan
10/23/96 1,100 $0.50 Bisco Plan
10/24/96 50,000 $0.50 Bisco Plan
10/29/96 3,200 $0.50 Bisco
11/1/96 25,000 $0.5312 Bisco Plan
11/5/96 500 $0.5312 Bisco
11/8/96 43,900 $0.5625 Bisco
11/18/96 60,000 $0.5312 Bisco Plan
11/26/96 68,500 $0.5937 Bisco Plan
12/6/96 50,000 $0.5625 Bisco Plan
12/16/96 4,500 $0.5625 Bisco
12/17/96 2,000 $0.59375 Bisco Plan
12/18/96 30,000 $0.65625 Bisco Plan
12/24/96 20,000 $0.65625 Bisco Plan
12/26/96 20,000 $0.59375 Bisco Plan
12/30/96 19,000 $0.65625 Bisco Plan
12/31/96 1,000 $0.5625 Bisco
1/16/97 30,000 $0.59375 Bisco Plan
1/17/97 36,100 $0.5625 Bisco Plan
1/20/97 2,000 $0.5625 Bisco
1/20/97 5,000 $0.5625 Bisco
GLEN F. CEILEY (continued)
1/22/97 35,000 $0.59375 Bisco Plan
3/11/97 9,000 $0.875 Mr. Ceiley
3/12/97 3,000 $0.875 Mr. Ceiley
3/13/97 5,000 $0.875 Mr. Ceiley
3/17/97 6,000 $0.875 Mr. Ceiley
3/19/97 10,000 $0.875 Bisco Plan
4/7/97 5,000 $0.75 Mr. Ceiley
4/9/97 2,500 $0.78125 Bisco Plan
4/9/97 300 $0.75 Mr. Ceiley
5/19/97 330,800 ** $0.90 Bisco
Sales
2/19/97 10,000 $0.71875 Mr. Ceiley
2/19/97 10,000 $0.65625 Bisco Plan
2/19/97 1,600 $0.71875 Bisco Plan
2/19/97 8,400 $0.6875 Bisco Plan
2/20/97 10,000 $0.9375 Bisco Plan
2/20/97 10,000 $0.90625 Mr. Ceiley
2/21/97 10,000 $0.96875 Bisco Plan
2/24/97 4,910 $0.96875 Bisco Plan
2/25/97 8,600 $1.00 Bisco Plan
2/26/97 2,000 $0.96875 Mr. Ceiley
3/20/97 2,500 $0.875 Mr. Ceiley
3/21/97 7,500 $0.875 Mr. Ceiley
3/21/97 1,200 $0.875 Mr. Ceiley
6/10/97 930 $0.78125 Mr. Ceiley
6/12/97 2,000 $0.78125 Mr. Ceiley
7/1/97 500 $0.78125 Mr. Ceiley
</TABLE>
______________________
* Excluding commissions
** Private purchase
STEPHEN CATANZARO
[CAPTION]
<TABLE>
<S> <C> <C> <C>
Transaction Number of Price Per
Date Shares Share* Purchased/Sold
12/4/96 3,000 $0.5625 Purchased
12/13/96 1,700 $0.5625 Purchased
2/3/97 5,000 $0.6562 Purchased
2/20/97 5,300 $1.00 Purchased
</TABLE>
______________________
*Excluding commissions
IMPORTANT
1. If your shares are kept at your brokerage firm or bank, and
they are registered in your brokerage firm's or your bank's
name, please send back only the Bisco enclosed BLUE proxy card
in the special envelope provided by the brokerage firm or
bank.
2. If your shares are registered in your own name(s), please
sign, date and return the enclosed BLUE proxy card to Garland
& Associates, Inc. at the address set forth below.
3. Time is critically short. If you have previously signed and
returned a proxy card to the Company, for whatever reason, you
have every legal right to change your mind. Only your latest
dated proxy card will count. You may revoke any earlier proxy
card returned to the Company by signing, marking, dating and
returning the enclosed BLUE proxy card provided by Bisco.
4. After signing the enclosed BLUE proxy card, please do not sign
any further cards sent to you by the Company.
5. If your Family Steak Houses of Florida, Inc. shares are held
in the name of a brokerage firm, bank nominee or other
institution, only it can sign a BLUE proxy card with respect
to your shares. Accordingly, please contact the person
responsible for your account and give instructions for a BLUE
proxy card to be signed representing your Family Steak Houses
of Florida, Inc. shares.
If you have any questions about giving your proxy or require
assistance in voting your Family Steak Houses of Florida, Inc.
shares, please call:
Garland Associates, Inc.
P.O. Box 3355
Grand Central Station
New York, New York 10163
Toll-Free (800) 455-6034
or
Collect (212)866-0095
FAMILY STEAK HOUSES OF FLORIDA, INC.
SPECIAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of
Bisco Industries, Inc.
The undersigned holder of Common Stock of Family Steak Houses
of Florida, Inc., a Florida corporation (the "Company"), hereby
appoints Glen F. Ceiley and Stephen Catanzaro, and each of them, as
proxies for the undersigned, each with full power of substitution,
for and in the name of the undersigned, to act for the undersigned
and to vote, as designated below, all of the shares of Common Stock
of the Company which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held on ___________, 1997,
and at any adjournment(s) or postponement(s) thereof. The
undersigned hereby revokes any proxy heretofore given with respect
to the aforesaid Special Meeting of Shareholders and acknowledges
receipt of Bisco Industries, Inc.'s Proxy Statement dated
, 1997.
1. PROPOSAL TO REVOKE THE POISON PILL. To amend the
Company's bylaws to require the Company to redeem the
recently adopted "poison pill" and to require prior
shareholder approval for adoption of any "poison pill" or
similar plan, agreement, bylaw or other provision in the
future.
/__/ FOR /__/ AGAINST /__/ ABSTAIN
2. CONTROL SHARE PROPOSAL. To amend the Company's bylaws to
provide that Florida's Control Share Act will no longer
apply to control share acquisitions of the Company's
common stock.
/__/ FOR /__/ AGAINST /__/ABSTAIN
3. REMOVAL OF DIRECTORS. To remove as directors, without
cause, Messrs. Joseph M. Glickstein, Jr., Richard M. Gray
and Robert J. Martin and any person elected or designated
by the Board to fill any vacancy or any newly created
directorships.
/__/ FOR /__/ AGAINST /__/ABSTAIN
4. ELECTION OF DIRECTORS:
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote
listed below for all nominees listed
below
Glen F. Ceiley, Stephen Catanzaro and
_____________________
(INSTRUCTION: To withhold authority to vote for any
individual nominee, mark "[ ] FOR all nominees listed
below" and strike a line through that nominee's name in
the list above.)
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY BE PROPERLY PRESENTED TO
THE SPECIAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2, 3, 4, 5 AND 6.
BISCO INDUSTRIES, INC. STRONGLY RECOMMENDS THAT YOU VOTE FOR THE
FOREGOING PROPOSALS. PLEASE DATE, SIGN AND MAIL THIS BLUE PROXY
PROMPTLY, USING THE ENCLOSED ENVELOPE.
Dated: _________________________, 1997
______________________________________
(Signature)
______________________________________
(Title or authority, if applicable)
______________________________________
(Signature if held jointly)
Please sign exactly as name appears
on this proxy. If shares are
registered in more than one name,
the signatures of all such persons
are required. A corporation should
sign in its full corporate name by a
duly authorized officer, stating
his/her title. Trustees, guardians,
executors and administrators should
sign in their official capacity,
giving their full title as such. If
a partnership, please sign in the
partnership name by authorized
person. This proxy shall vote all
shares to which the signatory is
entitled.
PLEASE MARK, SIGN, DATE AND MAIL YOUR BLUE PROXY TODAY.
