Schedule 14A (Revised)
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement [ ] Confidential - For Use of the
Commission
Only (as permitted by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Name of Registrant as Specified in its Charter)
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14-6(i)(1) 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 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
[Letterhead of Family Steak Houses of Florida, Inc.]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
December 24, 1997
DEAR SHAREHOLDERS:
The Board of Directors of Family Steak Houses of Florida, Inc.
has called a special meeting of shareholders to be held at the Sea
Turtle Inn, One Ocean Boulevard, Atlantic Beach, Florida 32233, on
Tuesday, February 24, 1997 at 11:00 a.m., for the limited purpose
of:
Amending the Company's Articles of Incorporation to
effect a one-for-five reverse stock split of the
Company's common stock.
The Board of Directors has fixed the close of business on
December 26, 1997 as the record date for determining shareholders
entitled to vote at this special meeting. Only shareholders of
record at the close of business on that date are entitled to vote
at this special meeting.
Whether or not you plan to attend the special meeting, please
complete the enclosed proxy and return it promptly so that your
shares will be represented. Sending in your proxy will not prevent
you from voting in person at the special meeting.
By order of the Board of Directors,
Lewis E. Christman, Jr.
President and Chief Executive Officer
December 24, 1997
FAMILY STEAK HOUSES OF FLORIDA, INC.
2113 Florida Boulevard
Neptune Beach, Florida 32233
(904) 249-4197
PROXY STATEMENT
for
FEBRUARY 1998 SPECIAL MEETING OF SHAREHOLDERS
This Proxy Statement (this "Statement") and the enclosed proxy
are being furnished by the Board of Directors (the "Board") of
Family Steak Houses of Florida, Inc., a Florida corporation (the
"Company") to the holders of outstanding shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), in
connection with the solicitation of proxies to be voted at a
special meeting of shareholders of the Company to be held Tuesday,
February 24, 1998 (the "Special Meeting") and any adjournments
thereof. This Statement and the accompanying proxy are being
distributed to shareholders on or about January 15, 1998.
The sole purpose of the Special Meeting is to obtain a
shareholder vote on the following proposal:
To approve a one-for-five reverse split of the Common Stock
and amend the Company's Articles of Incorporation to implement
such a reverse split.
The Board unanimously supports this proposal and recommends that
the shareholders vote in favor of the proposal either in person or
by proxy.
PROPOSAL TO EFFECT A REVERSE SPLIT AND
AMEND THE COMPANY'S ARTICLES OF INCORPORATION
General
The Board of Directors has determined that it would be
advisable to amend the Company's Articles of Incorporation to
effect a one-for-five reverse stock split of the Company's issued
and outstanding Common Stock, at par value of $0.01 (the "Reverse
Split").
Subject to shareholder approval, the Board of Directors has
approved an amendment to the Company's Articles of Incorporation
which would restate Article IV of the Articles of Incorporation and
result in one post-split share of Common Stock ("Post-Split Shares
of Common Stock") being issued in exchange for every five shares of
Common Stock issued and outstanding on the effective date of the
Reverse Split ("Pre-Split Shares of Common Stock"). The text of
such amendment is set forth in Appendix A hereto. The Reverse Split
will not affect the number or par value of the authorized shares of
the Company's preferred stock, which will remain at 10,000,000
shares of Preferred stock, $0.01 par value per share.
The Reverse Split will become effective on the date of filing
Articles of Amendment to the Articles of Incorporation of the
Company (the "Amendment") with the Secretary of State of Florida,
Division of Corporations (the "Effective Date"). Each share of
Common Stock then issued and outstanding would automatically,
without any action on the part of the holders of such Common Stock,
become and be converted into one-fifth of a share of Common Stock.
If the Amendment is approved and management determines to proceed
with the Reverse Split, management will use its discretion to
determine when to file the Amendment. Management expects to file
the Amendment immediately following the Special Meeting, provided
the Amendment is approved by the shareholders. See "Purposes of
the Reverse Split."
Principal Effects of Reverse Split
Based upon the 11,081,000 shares of Common Stock outstanding
as of December 26, 1997, the Reverse Split would decrease the
outstanding shares of Common Stock by approximately 80%, and, once
effective, the Reverse Split would result in approximately
2,216,200 Post-Split Shares of Common Stock outstanding. Fractional
shares will be settled by rounding up to the next whole share.
Similarly, the aggregate number of shares of Common Stock reserved
for issuance upon exercise of warrants and options would decrease
from approximately 1,425,947 shares to approximately 285,189.
Each outstanding option or warrant will automatically become
an option or warrant, as the case may be, to purchase 20% of the
number of shares subject to the option or warrant immediately prior
to the Reverse Split at an exercise price which is five times the
exercise price of the option or warrant immediately prior to the
Reverse Split. In addition, the shares available for issuance
under the Company's Incentive Stock Option Plan and Director Stock
Option Plan will be reduced by approximately 80% to reflect the
Reverse Split, and the other relevant terms and provisions of the
Company's stock option plans will be appropriately adjusted to
reflect the Reverse Split. The Company will obtain a new CUSIP
number for the Common Stock effective at the time of the Reverse
Split. Following the effectiveness of the Reverse Split, the
Company will provide each record holder of Common Stock information
to enable such holder to obtain replacement stock certificates.
The Reverse Split will not affect the par value of the
authorized Common Stock. The number of authorized shares of Common
Stock will be reduced by 80% to 4,000,000 shares. The Reverse
Split will not affect the number or par value of the authorized
shares of preferred stock. The terms of the Post-Split Shares of
Common Stock will be the same as the terms of the Pre-Split Shares
of Common Stock, and subject to the provisions for the settlement
of fractional shares, as described below, consummation of the
Reverse Split will not result in a change in the relative equity
interest in the Company or the voting power or the rights,
preferences or privileges of the holders of Common Stock.
Under the Rights Agreement dated as of March 18, 1997 (the
"Rights Agreement") between the Company and ChaseMellon Shareholder
Services, LLC, as rights agent (the "Rights Agent"), each share of
Common Stock also evidences a Right (as defined in the Rights
Agreement) until the occurrence of certain events as specified in
the Rights Agreement. If the shareholders approve the Amendment
and the Reverse Split occurs, the Rights Agreement provides that
the Rights associated with each share of Common Stock will be
proportionally adjusted so that each share of Common Stock will
then evidence five Rights under the Rights Agreement.
The following table illustrates the principal effects of the
Reverse Split discussed in the preceding paragraphs:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
BEFORE REVERSE SPLIT AFTER REVERSE SPLIT
<S> <C> <C>
Authorized 20,000,000 4,000,000
Outstanding 11,081,000 2,216,200
Subject to Outstanding
Options and Warrants 928,700 185,740
Reserved for Issuance in
Connection with Future
Grants Under Option Plans 806,947 161,389
Available for Future
Issuance by Action of
the Board (after giving
effect to the above
reservations) 7,183,353 1,436,671
</TABLE>
Assuming the Reverse Split is approved and management
determines to proceed with the Reverse Split, the Company will file
Articles of Amendment, with the Secretary of State of Florida,
Division of Corporations, effecting the Reverse Split. See
"Purposes of the Reverse Split."
Purposes of the Reverse Split
The Company is currently quoted on the NASDAQ Stock Market as
a National Market Security ("NASDAQ/NMS"). Under new requirements
for NASDAQ/NMS securities that become effective on February
23,1998, the Common Stock must maintain a minimum $1 bid price to
be eligible for continued quotation on NASDAQ/NMS. On December 22,
1997, the closing bid price of the Pre-Split Shares of Common Stock
was $.625. If the Company fails to maintain such $1 minimum bid
price, the Common Stock will be subject to delisting. In that
event, the liquidity of the Common Stock could be impaired, through
delays in the timing of transactions, reduction in the news media's
coverage of the Company, lack of investment analyst interest in
covering the Company, applicability of certain sales practice
requirements on brokers-dealers, and the price of Common Stock may
be lower than might otherwise be obtained. See Record Date and
Voting Securities - Possible Delisting from The Nasdaq National
Stock Market.
The Reverse Split would decrease the number of shares of
Common Stock outstanding and presumably increase the per share
market price for the Post-Split Shares of Common Stock. The Board
believes that the relatively low market price per share of the
Common Stock may impair the marketability of the Common Stock to
institutional investors and members of the investing public. In
theory, the number of shares outstanding should not, alone affect
the marketability of the Common Stock, the type of investor who
acquires them, or the Company's reputation in the financial
community. In practice, however, this is often not the case,
because many investors look upon low-priced shares as speculative
in nature, and as a matter of policy, avoid investment in such
stocks. These factors may not only affect the liquidity of the
Common Stock, but may also impair the Company's ability to raise
additional capital through the sale of equity securities.
The Board also recognizes that many leading brokerage firms
are reluctant to recommend lower-priced securities to their
clients. In addition, a variety of brokerage house policies and
practices currently tend to discourage individual brokers within
firms from dealing in lower-priced stocks. Some of those policies
and practices relate to the payment of broker's commissions,
regulations regarding sell to certain types of investors and time-
consuming procedures that make the handling of lower priced stocks
economically unattractive to brokers. The structure of brokerage
commission tends to adversely impact holders of lower-priced stocks
because brokerage commissions on a sale of a lower-priced stock
generally represent a higher percentage of the sales price than the
commissions on higher-priced stocks.
The Board of Directors hopes that the decrease in the number
of shares of Common Stock outstanding resulting from the Reverse
Split and the anticipated corresponding increased price per share
will stimulate interest in the Common Stock, promote greater
liquidity for the Company's shareholders and result in a price
level for the Post-Split Shares of Common Stock that will better
assure that the Company will maintain its NASDAQ/NMS listing. The
Board also hopes that the Reverse Split will result in a price
level for the Post-Split Shares of Common Stock that will mitigate
the present reluctance, policies and practices of brokerage firms,
and diminish the adverse impact of trading commissions, on the
potential market for the Common Stock.
However, there is no assurance that the Reverse Split will
achieve the desired results, that the price per Post-Split Share of
Common Stock will increase proportionately with the decrease in the
number of shares, or that any price increase can be sustained for a
prolonged period of time. The market often "discounts" a stock
after a reverse split so that the price per share post-reverse
split is less than the proportionate decrease in the number of
shares. In addition, it is possible that the liquidity of the
Post-Split Shares of Common Stock may be adversely affected by the
reduced number of shares outstanding if the proposed Reverse Split
is effected. Further, the Reverse Split might leave some
shareholders with one or more "odd-lots" of the Common Stock (stock
in amounts less than 100 shares). These shares may become more
difficult to sell, or require a greater commission per share to
sell, than shares in even multiples of 100.
The Board of Directors believes that the Reverse Split is in
the best interest of the Company and its shareholders.
Exchange of Certificates and Elimination of Fractional Share
Interests
On the Effective Date, each five Pre-Split Shares of Common
Stock will automatically be combined and changed into one Post-
Split share of Common Stock. No additional action on the part of
the Company or any shareholder will be required in order to effect
the Reverse Split and, beginning on the Effective Date, each
certificate representing Pre-Split Shares of Common Stock will
represent for all purposes one fifth of that number of Post-Split
Shares of Common Stock. Shareholders will be requested to exchange
their certificates representing shares of Common Stock held prior
to the Reverse Split for new certificates representing Shares of
Common Stock issued as a result of the Reverse Split. The
Company's Transfer Agent will act as the Company's exchange agent
in implementing the exchange of stock certificates.
Shareholders will be furnished the necessary materials and
instructions to effect such exchange promptly following the
Effective Date. Certificates representing Pre-Split Shares of
Common Stock subsequently presented for transfer will not be
transferred on the books and records of the Company but either will
be returned to the tendering person for exchange or processed as a
transfer of Post-Split shares of Common Stock. SHAREHOLDERS
SHOULD NOT SUBMIT ANY CERTIFICATE UNTIL REQUESTED TO DO SO.
No scrip or fractional Post-Split Shares of Common Stock will
be issued to any shareholder in connection with the Reverse Split.
In lieu of issuance of any fractional shares that would otherwise
result from the Reverse Split, the Company will issue to any
shareholder that would otherwise receive fractional shares one (1)
additional share of Common Stock.
Shareholders are encouraged to surrender their certificates
for certificates evidencing whole Post-Split Shares of Common Stock
as promptly as possible after receipt of instructions.
Federal Income Tax Consequences of the Reverse Split
The following general description of the federal income tax
consequences is based on the Internal Revenue Code of 1986, as
amended, the applicable treasury regulations promulgated
thereunder, judicial authority and current administrative rulings
and practices as in effect on the date of this Statement, all of
which are subject to change and any such change could apply
retroactively.
This discussion is for general information only and does not
purport to deal with all aspects of federal income taxation that
may be relevant to the holders of Common Stock and does not discuss
the consequences which may apply to special classes of taxpayers
(e.g., non-resident aliens, broker-dealers, tax exempt
organizations, banks or insurance companies). Shareholders are
urged to consult their own tax advisors to determine the particular
federal, state, local and foreign tax consequences to them.
The combination and change of each five Pre-Split Shares of
Common Stock into one Post-Split share of Common stock should be a
tax-free transaction, and no gain or loss will be recognized to the
Company or its shareholders as a result of the Reverse Split. The
holding period of the Pre-Split Shares of Common Stock will be
transferred to the Post-Split Shares of Common Stock received in
exchange therefor, provided that the shareholder held the Pre-Split
Shares of Common Stock as a capital asset at the time of the
exchange.
This discussion should not be considered as tax or investment
advice, and the tax consequences of the Reverse Split may not be
the same for all shareholders. Shareholders should consult their
own tax advisors to ascertain their individual federal, state,
local and foreign tax consequences.
Recommendation of the Board
The Board believes that it is in the best interest of the
Company and its shareholders, that the Common Stock continue to be
listed for trading on the NASDAQ National Market System. Failure
to approve the proposed Amendment will likely subject the Common
Stock to de-listing by NASDAQ for failure to comply with the
recently revised listing requirements.
YOUR BOARD OF DIRECTORS UNANIMOUSLY SUPPORTS THE
PROPOSAL AND RECOMMENDS A VOTE "FOR" APPROVAL OF THE
REVERSE SPLIT AND THE RELATED AMENDMENT.
Proxies solicited by the Board of Directors will be voted for
approval of the amendment unless shareholders specify to the
contrary in their proxies or specifically abstain from voting on
this matter.
The Board of Directors reserves the right to abandon the
proposed Amendment and Reverse Split without further action by the
shareholders at any time before the filing of the Amendment with
the Secretary of State of Florida, Division of Corporations,
notwithstanding authorization of the proposed Amendment and Reverse
Split by the shareholders.
RIGHTS OF DISSENTING SHAREHOLDERS
The proposed Amendment does not create dissenters' rights
under the Florida Business Corporation Act.
RECORD DATE AND VOTING SECURITIES
Record Date. The Board has fixed the close of business on
December 26, 1997 as the record Date for the Special Meeting. As
of December 26, 1997, the Company had outstanding 11,081,000 shares
of Common Stock. Each share of Common Stock 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.
Possible Delisting of Securities from The Nasdaq
Stock Market. The Common Stock is currently quoted on the Nasdaq
National Market.
On November 23, 1997, the Nasdaq National Market and the
Securities and Exchange Commission (the "Commission") approved
changes to the listing and maintenance requirements. Under the
revised maintenance requirements, the Company's qualification for
continued listing on the Nasdaq National Market after February 23,
1998 requires that (i) the Company maintain at least $4.0 million
in net tangible assets, (ii) the minimum bid price of the Common
Stock be $1.00 or more per share, (iii) there be at least 750,000
shares in the public float, valued at a minimum $5.0 million or
more, (iv) the Common Stock have at least two active market makers
and (v) the Common Stock be held by at least 400 holders.
If the Company is unable to satisfy the Nasdaq National
Market's maintenance requirements, the Company's securities may be
delisted from the Nasdaq National Market. In such event, trading,
if any, in the Common Stock would thereafter be conducted in the
over-the-counter markets in the so-called "pink sheets" or the
National Association of Securities Dealers, Inc.'s "Electronic
Bulletin Board." Consequently, the liquidity of the Company's
securities could be impaired, not only in the number of shares that
could be bought and sold, but also through delays in the timing of
the transactions and a reduction in the number and quality of
security analysts' and the news media's coverage of the Company.
In addition, if the Company's securities were to be delisted
from the Nasdaq National Market, the Company's securities could
become subject to Rule 15g-9 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") relating to penny stocks,
which imposes additional sales practice requirements on
broker-dealers which sell such securities to persons other than
established customers and "accredited investors" (generally,
individuals with net worth in excess of $1,000,000 or annual
incomes exceeding $200,000, or $300,000 together with their
spouses). Commission regulations define a "penny stock" to be any
equity security that is not listed on The Nasdaq Stock Market or a
national securities exchange and that has a market price (as
therein defined) of less than $5.00 per share or with an exercise
price of less than $5.00 per share, subject to certain exceptions.
If the Company's securities were subject to the rules on penny
stocks, the market liquidity for the Company's securities could be
adversely affected.
The Company also faces a greater risk of delisting as a result
of increased ownership of its Common Stock by certain shareholders.
Glen F. Ceiley, Bisco Industries, Inc. and the Bisco Industries,
Inc. Profit Sharing and Savings Plan collectively own 11.8% of the
Company's outstanding shares of Common Stock. For purposes of
calculating the Company's compliance with the public float
requirement, described above, shareholders beneficially owning 10%
or more of the Company's Common Stock are considered insiders and
their holdings are excluded from the calculation of public float.
As a consequence, if the market discounts the Company's Common
Stock following the reverse split by approximately 17% from recent
trading prices, then the Company may fail to comply with the
minimum public float requirement and be subject to delisting for
that reason. The Company would not face delisting for these
reasons if the level of ownership by Ceiley and the Bisco entities
were reduced by two percent, to a level of ownership less than 10%.
There is a possibility that the Company's Common Stock will
fail to meet the revised maintenance requirements for the Nasdaq
National Market, but could continue to be listed and traded on the
Nasdaq's SmallCap Market. Although Nasdaq has not issued any final
rules which would permit such a transition, when Nasdaq has revised
its maintenance requirements in the past, it has permitted
companies which fail to meet continued listing requirements for the
Nasdaq National Market to drop down to the Nasdaq SmallCap Market.
There are certain disadvantages to trading on the SmallCap
Market as opposed to the National Market. Many local newspapers do
not carry listings of SmallCap issues, which is where the majority
of the Company's shareholders follow the stock. The Company would
lose the automatic Blue Sky exemption it currently enjoys from
being on a national market, which would result in additional
expenses to the Company for future stock offerings of any kind,
including distributions of the Rights. The stock would no longer
be automatically marginable for most shareholders. Also, the
Company would still be required to meet certain initial
requirements for membership on the SmallCap Market, including
payment of an entrance fee.
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 quorum exists at the Special
Meeting, the Amendment will be approved if a majority of the
outstanding shares of Common Stock vote in favor of the Amendment.
Under Florida law, abstentions and shares referred to as "broker
or nominee non-votes" (i.e., 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 authority to vote on a particular matter)
are treated as shares of Common Stock 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
of the Common Stock 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below presents certain information regarding
beneficial ownership of the Shares (the Company's only voting
security) as of December 18, 1997, by each shareholder known to the
Company to own, or have the right to acquire within sixty (60)
days, more than five percent (5%) of the outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
Name and Address of Amount of Common Stock
Beneficial Owner Beneficially Owned Percent of Class
<S> <C> <C>
Glen F. Ceiley 1,308,995 11.8%
C/o Bisco Industries, Inc.
704 West Southern Avenue
Orange, CA 92865
Heartland Advisors, Inc. 900,000 (1) 8.1%
790 North Milwaukee Street
Milwaukee, WI 53202
Cerberus Partners, L.P. 700,000 (3) 5.9%
950 Third Avenue, 20th Floor
New York, New York 10022
</TABLE>
(1) Based on information set forth in Form 4 dated December 8,
1997, Bisco Industries, Inc. ("Bisco") owns at least 682,335
Shares; Glen F. Ceiley, President and a director of Bisco,
owns 108,470 Shares, individually; and the Bisco Industries,
Inc. Profit Sharing and Savings Plan (the "Bisco Plan") owns
518,190 Shares. The amount does not include 15,000 Shares
owned individually by Stephen Catanzaro, an executive officer
of Bisco. According to the Schedule 13D of Ceiley as amended
on November 12, 1997, Ceiley has the sole power to vote and
dispose of the Shares he owns individually and the power to
vote and to dispose of the Shares owned by Bisco and the Bisco
Plan.
(2) Based on information contained in a Schedule 13G filed with
the Commission as of February 12, 1997, Heartland Advisors,
Inc. claimed sole voting and dispositive power with respect to
all 900,000 Shares and shared voting and dispositive power
with respect to none of the Shares.
(3) Represents shares of Common Stock issuable upon the exercise
of certain stock purchase warrants issued October 1, 1988, and
March 14, 1995, pursuant to which the holders thereof have the
right to purchase an aggregate of up to 700,000 Shares for
$.40 per share. None of shares of Common Stock issuable under
are outstanding.
SECURITY OWNERSHIP OF MANAGEMENT
The table below presents certain information regarding
beneficial ownership of the Shares as of December 18, 1997, by
each executive officer and director of the Company and all
executive officers and directors as a group.
<TABLE>
<CAPTION>
Number of
Shares Which
May Be
Name Number of Acquired Total Shares
Shares within Beneficially Percent
Owned 60 Days(1) Owned of Class
<S> <C> <C> <C> <C>
Lewis E. Christman, Jr. 11,409 150,000 161,409 1.44%
Joseph M. Glickstein, Jr. 60,059 ------- 60,059 .54%
Richard M. Gray 60,059 ------- 60,059 .54%
Robert J. Martin 52,614(2) 74,500 127,114 1.14%
Edward B. Alexander 12,500 103,500 116,000 1.04%
All officers and directors
as a group (6 persons) 196,641 362,750 559,391 4.89%
</TABLE>
(1) Does not include options to purchase shares not currently
exercisable within sixty (60) days of December 18, 1997,
including 50,000 shares subject to an option granted to Mr.
Christman, 30,500 shares subject to options granted to Mr.
Alexander, 30,500 Shares subject to options granted to Mr.
Martin and 15,250 shares subject to options granted to another
executive officer of the Company.
(2) Includes 5,800 shares owned by the spouse of Mr. Martin.
SOLICITATION OF PROXIES; REVOCATION
The cost of the solicitation of proxies will be borne by the
Company. In addition to solicitation by mail, directors, officers
and other employees of the Company may, without additional
compensation, solicit proxies by mail, in person, by telephone and
facsimile or by other electronic means.
The Company plans to retain CIC, at an estimated fee of $5,000
plus reasonable disbursements, postage, filing reports, courier
charges, data transmissions and other expenses approved by the
Company, to assist in the solicitation of proxies. The Company
will reimburse brokerage houses, banks, custodians and other
nominees and fiduciaries for out-of-pocket expenses incurred in
forwarding the Company's proxy materials to, and obtaining
instructions relating to such materials from, beneficial owners of
the Common Stock.
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 may 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 office 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.
OTHER MATTERS
The Company is not aware of any other matters to come before
the Special Meeting. If any other business should come before the
Special Meeting, the persons named in the enclosed proxy will have
discretionary authority to vote such proxy in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company (addressed
to the attention of the Secretary) not later than January 23, 1998,
to be considered for inclusion in the Company's proxy materials
relating to that meeting. To be submitted at the meeting, any such
proposal must be a proper subject for shareholder action under the
laws of the State of Florida, and must otherwise conform to
applicable regulations of the Commission. Excluding shareholder
proposals to be included in the Company's proxy materials, a
shareholder is required to comply with the Company's Bylaws with
respect to any proposal to be brought before an annual meeting.
The Amended and Restated Bylaws generally require that each written
proposal be delivered to or mailed and received by the Secretary of
the Company at its principal executive office not less than sixty
(60) days nor more than ninety (90) days prior to the anniversary
date of the prior year's annual meeting, among other conditions.
The notice must include certain additional information as specified
in the Amended and Restated Bylaws.
We appreciate your support and encouragement.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FAMILY STEAK HOUSES OF FLORIDA, INC.,
TO BE VOTED AT THE FEBRUARY 24, 1998 SPECIAL MEETING OF SHAREHOLDERS
The undersigned, a holder of shares of common stock, par value $.01 per
share (the "Shares"), of Family Steak Houses of Florida, Inc. (the
"Company"), acting with respect to all of the Shares held by the undersigned
at the close of business on the Record Date, hereby acts as follows
concerning the proposal set forth below:
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") RECOMMENDS A
VOTE FOR THE FOLLOWING PROPOSAL:
PROPOSAL TO APPROVE THE REVERSE SPLIT AND AMEND THE ARTICLES OF
INCORPORATION Resolution that the Articles of Incorporation of the Company be
amended to effect a one-for-five reverse split of the Company's issued and
outstanding Common Stock.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
(IMPORTANT INSTRUCTIONS -- PLEASE READ CAREFULLY)
Please indicate your support of the proposal by marking the box beside "FOR"
and signing, dating and mailing this proxy card promptly, using the enclosed,
postage paid envelope. If you need additional proxy cards or assistance,
call CIC toll free at (800) 932-8498.
UNLESS OTHERWISE INDICATED ABOVE, THIS PROXY CARD REVOKES ALL PRIOR PROXIES
GIVEN WITH RESPECT TO THE PROPOSAL SET FORTH HEREIN.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF
THE COMPANY, DATED ___________, 1997, IN CONNECTION WITH THE FEBRUARY 24, 1998
SPECIALMEETING OF SHAREHOLDERS. UNLESS YOU SPECIFY OTHERWISE, BY SIGNING AND
DELIVERING THIS PROXY CARD TO THE COMPANY, YOU WILL BE DEEMED TO HAVE VOTED
FOR THE PROPOSAL.
Date:
Signature (title, if any)
Signature (if held jointly)
Please sign your name above exactly as it appears hereon and date your card.
When shares are registered in the name of more than one person, the proxy card
should be signed by all named holders. When signing as attorney,
executor, administrator, trustee or guardian, please given full title as
such. If a corporation, please sign in full corporate name by president or
authorized officer. If a partnership, please sign in partnership name by
authorized person.
APPENDIX A
The full text of the proposed Amendment to Company's Articles
of Incorporation is set forth below:
A. Common Stock. Four Million (4,000,000) shares of Common
Stock having a par value of one cent ($.01) per share.
The whole or any part of the Common Stock of this
corporation shall be payable in lawful money of the
United States of America, or in property, labor or
services at a just valuation to be fixed by the Board of
Directors.
