<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
AMENDMENT NO. 1 TO
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[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
</TABLE>
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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-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:
<PAGE> 2
FAMILY STEAK HOUSES LETTERHEAD
DEAR SHAREHOLDERS:
It is time once again for our Annual Meeting. Although there is only
one item of business on the Agenda, this Annual Meeting will, in many ways, be
the most significant Annual Meeting in our Company's history.
As discussed in more detail in the enclosed Proxy Statement, at this
year's Annual Meeting, you will be asked to elect a Board of Directors and adopt
a vision for our Company's future. As you know, the Board of Directors sets
strategy for our Company and, with the assistance of our officers, implements
that strategy. Your current Board of Directors is in the midst of implementing a
long term strategy which is on its way to returning the Company to growth and
profitability. That plan has seen us undertake the tasks of closing unprofitable
restaurants, remodeling existing restaurants, and building new restaurants in
high growth locations with higher profit potential. As indicated by 1998's
$700,000 improvement over the loss suffered in 1997 and the substantial increase
in net income in the first quarter of 1999, this plan is working. At the same
time, your Board has actively been engaged in discussions with various parties
regarding strategic alternatives designed to enhance shareholder value. We are
asking you to re-elect your current Board of Directors for another year so that
we can continue to implement our strategic plan.
The Company has also been advised by one of its Directors, Mr. Glen
Ceiley, that he and his company, Bisco Industries, Inc., intend to solicit
proxies for the election of an alternate slate of Directors. If you were a
shareholder of our Company two years ago, you remember Mr. Ceiley and Bisco. In
1997, they engaged in a takeover attempt that included a tender offer and proxy
contest. They attacked the Company's management and Board of Directors but were
unable to articulate any strategic plan of their own. The shareholders of the
Company at that time rejected Bisco's takeover efforts and supported the
Company and its Board of Directors. And we sincerely appreciated your vote of
confidence. Now, Bisco is back again and seeking to take control of the Company
by election of their own Board.
We don't believe anything has changed with Bisco, and we urge you to
reject their proposed slate of Directors. Bisco still does not have any
strategic plan which they would submit as a better alternative to what the
Company is already doing. In fact, as part of an effort to resolve the takeover
attempt in 1997, the Board of Directors appointed Glen Ceiley and his nominee,
Jay Conzen, to the Board of Directors under a Standstill and Settlement
Agreement (now expired). They have now served on the Board of Directors for more
than one year. During that time, we believe we have been able to work together
in the best interest of our Company and you, its shareholders. They have
supported management's efforts to close older, unprofitable restaurants and
replace them with new restaurants. However, Mr. Ceiley and Mr. Conzen have
failed to put before the Board any proposals which would improve the performance
of the Company's operations or offer better long term value than those already
put in place by the Board of Directors prior to their joining. In fact, the only
proposal advanced by Mr. Ceiley is a sale of the Company's restaurant operations
and a reinvestment of the proceeds of that sale in the distribution industry,
the industry in which Mr. Ceiley says he has worked for 35 years.
<PAGE> 3
As the Company has previously disclosed, we are actively considering
strategic alternatives that will enhance shareholder value. However, if and when
those considerations lead to a sale of the Company's restaurant operations or a
merger with another company, then it is the intention of the present Board of
Directors to distribute the proceeds to you, the shareholders. We believe that
our stock is severely undervalued at its current trading prices. We believe that
any ultimate transaction will produce a significant return over an investment at
our current stock price. We believe our investors are deserving of that return
and intend to put the money in your hands. We do not agree with Bisco's proposal
to retain the proceeds of any such sale in the Company and reinvest it in the
distribution industry or possibly some other unnamed industry as Bisco says they
will do. We believe that our shareholders are capable of making their own
investment decisions, and we would not presume to make those decisions for you.
Those are the alternatives facing you at this year's Annual Meeting.
Re-elect the current Board of Directors which has a well articulated plan for
the Company, is successfully implementing that plan and has the announced
intention of distributing the proceeds of any sale of the Company's assets to
you, its rightful owners OR elect Bisco's Board of Directors with their unknown
strategy for operating the Company and announced strategy of retaining and
reinvesting the proceeds of any sale or merger. I urge you to re-elect your
current Board of Directors. Please sign and return the enclosed WHITE proxy card
today.
As always, thank you for your support.
Very truly yours,
/s/ Lewis E. Christman, Jr.
Lewis E. Christman, Jr.
President and Chief Executive Officer
<PAGE> 4
FAMILY STEAK HOUSES OF FLORIDA, INC.
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the Annual Shareholders' Meeting to
be held at the Sea Turtle Inn, One Ocean Boulevard, Atlantic Beach, Florida
32233, on Wednesday, July 21, 1999 at 10:00 a.m. for the purpose of:
1. Electing Directors; and
2. Transacting such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on June 4, 1999
as the record date for determining shareholders entitled to vote at the Meeting.
Only shareholders of record at the close of business on that date will be
entitled to vote at the Meeting.
THE COMPANY'S BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND RETURN
TODAY THE WHITE PROXY CARD IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
DO NOT RETURN THE GOLD PROXY CARD SENT TO YOU BY BISCO.
If you have already signed Bisco's proxy card, you can revoke it by
signing, dating and mailing the enclosed WHITE proxy card in the enclosed
envelope. The latest dated proxy card is the one that counts. Regardless of the
number of shares that you own, your vote is very important.
If your shares are held through a bank, broker, nominee or other
representative, only that entity may execute a proxy. Please contact the
representative for your account and request the representative to execute the
WHITE proxy card on your behalf.
If you require any assistance, please call _______________ at (800)
_______.
Lewis E. Christman, Jr.
President & CEO
Date: June 11, 1999
<PAGE> 5
FAMILY STEAK HOUSES OF FLORIDA, INC.
2113 Florida Boulevard
Neptune Beach, Florida 32266
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
The solicitation of the enclosed proxy is made by and on behalf of the
Board of Directors of Family Steak Houses of Florida, Inc. (the "Company") to be
used at the 1999 Annual Meeting of Shareholders, which will be held at the Sea
Turtle Inn, One Ocean Boulevard, Atlantic Beach, Florida, at 10:00 a.m. on
Wednesday, July 21, 1999. 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 June 11, 1999.
The proxy may be revoked at any time before it is exercised by giving
notice of revocation to the Secretary of the Company, by submitting a signed
proxy bearing a later date or by attending the Annual Meeting of Shareholders
and voting in person. The shares represented by proxies in the form solicited by
the Board of Directors will be voted at the meeting. Where a choice is specified
with respect to a matter to be voted upon, the shares represented by the proxy
will be voted in accordance with such specification. If no choice is specified,
such shares will be voted "FOR" Proposals 1 and 2.
PROPOSAL 1: ELECTION OF DIRECTORS
The Company has nominated for re-election those seven (7) Directors
currently serving on the Company's Board of Directors. The Company is currently
engaged in the implementation of a long term strategic plan designed to return
the Company to growth and profitability and enhance shareholder value. One of
the Company's Directors, Mr. Glen Ceiley, is seeking proxies for an alternative
slate of Directors. Mr. Ceiley's proxy statement describes his vision for the
Company and states why he believes you should vote for his nominees. The Company
believes that it offers the best choice for the reasons set forth below.
First, the Company is actively taking steps to enhance shareholder
value. The Company's current Board of Directors recognizes that the Company's
stock price has been trading at severely undervalued prices in recent years.
Therefore, as the Company has previously disclosed, last year it retained J.H.
Chapman & Company, LLC, an investment banking firm specializing in the
restaurant industry, to assist the Board in identifying and evaluating strategic
opportunities to enhance shareholder value. Those efforts are ongoing. The
Company's current management and Board believe that there are strategic
opportunities which, if realized upon, would significantly reward our
shareholders. Mr. Ceiley and his company, Bisco Industries, Inc. ("Bisco"),
share this belief.
However, there is a fundamental difference between the Company's
position and Bisco's position with respect to strategic alternatives: if the
current Board is re-elected, it is the Board's intention to distribute the
proceeds of any strategic sale of assets or merger directly to you, the
shareholders. On the other hand, if Bisco's slate of Directors is elected, it is
their stated intention to
-2-
<PAGE> 6
dispose of the Company's restaurant assets and reinvest the proceeds of that
sale in acquiring companies similar to Bisco's business.
Your Company's Board of Directors believes that its shareholders are
entitled to the rewards of any disposition of assets or merger. Therefore, we
believe that the strategic plan of the current Board offers you, the
shareholder, the best opportunity for a return on your investment.
Second, the current Board of Directors is engaged in the implementation
of an operational plan designed to return the Company to growth and
profitability. There can be no assurance that the current Board's efforts to
consummate a strategic transaction will meet with success in any given time
frame. Therefore, the Company must continue to actively manage its business
operations. You will recall that the Company announced two years ago its plan to
close unprofitable restaurants, remodel existing restaurants and build new ones.
It is in the middle of that plan. 1998 financial performance, while not as
strong as we had hoped, represented a $7000,000 improvement over the loss in
1997. That is the proof that our plan is working.
The Company continues to proceed on the path it has laid out. In
January of this year, we closed two restaurants that cost our Company money in
1998. In addition, we are monitoring four underperforming restaurants which do
not lose money on a cash basis but demand an inordinate amount of time and
divert scarce management resources from more profitable restaurants. The two
closed restaurants and the four underperforming restaurants are all listed for
sale. The closure of these restaurants and listing of units for sale is part of
a plan to redeploy our capital and utilize financing opportunities to open new
restaurants. The Company opened one new restaurant in Deland, Florida in April
1999. The Company believes this new restaurant has tremendous profit potential.
The Company has also signed a lease on a new restaurant in Tampa, Florida and
anticipates opening it in August 1999. With the franchisor's support and
assistance, the Company is engaged in a search for two additional sites for new
restaurants. The Company plans to purchase those two additional restaurant sites
in 1999 and open at least two new restaurants in 2000.
The Company's plan to improve operations while it strives to consummate
a strategic transaction also includes efforts to improve results at existing
restaurants. Total sales at the Company's restaurants were up 3.9% in 1998.
While a large portion of that increase was attributable to the success of our
new restaurant in Leesburg, Florida, same store sales increased by 1.1%. This
represents the first same store sales increase over a previous year since 1987.
This same store sales increase comes at a time when the Company's restaurants
continue to face increasing competitive pressures in the Florida restaurant
market with competitors' new or remodeled restaurants frequently opening in
areas close to the Company's outlets.
The Company has been able to improve its operations and results due, in
large part, to the qualified and experienced team that manages the Company.
Effective management is critical to the Company's continuing efforts to improve
operating results. Bisco has not disclosed its plan for managing the Company if
the current management team is not retained. The Company believes that election
of the Bisco slate may significantly disrupt ongoing operations through the
possible loss of the institutional knowledge and years of restaurant industry
experience of the Company's senior management as well as potential turnover
among the Company's restaurant managers.
The Company's management also believes that Bisco's strategy and other
actions will result in higher costs to the Company. For instance, if Bisco's
slate of directors is elected, a Change in Control will be deemed to have
occurred under the Company's employment agreements, and the Company will become
obligated to pay over $800,000 in severance to Company executives. These
payments may also be triggered if the Company engages in a strategic
transaction; however, there can be no assurance that either the Company's
current management or Mr. Ceiley's proposed slate will be able to implement a
strategic transaction. On the other hand, election of the Bisco slate will
definitely result in the Company's obligation to pay $800,000 in severance
whereas election of the Company's slate will not.
The Bisco strategy to retain and reinvest proceeds from any strategic
transaction is also likely to result in the Company paying higher taxes than
would be due if the proceeds from any strategic transaction were distributed to
the shareholders. In order to retain the proceeds from any strategic
transaction, Mr. Ceiley would have to structure the transaction as a sale of
the Company's assets. To the extent that the sale price for the assets exceeds
the book value of the assets, the Company would have to pay tax on this gain.
This tax payment would reduce the proceeds available for distribution to the
shareholders or for investment in an acquisition program. Since management's
plan would result in the sale of the Company's shares with the acquirer paying
shareholders for their shares directly, there would be no tax at the Company
level and the shareholders would receive the full purchase price paid by any
acquirer.
The Company's Long Term Incentive Plan provides that options granted
thereunder will become immediately exercisable upon certain events including a
determination by the Board or a designated committee in its sole discretion
that a person (other than a person who exercised a controlling influence as of
the Long Term Incentive Plan's effective date) directly or indirectly exercises
a controlling influence over the management or policies of the Company. This
section may be triggered if the Bisco slate of directors is approved. Messrs.
Alexander and Christman hold options under this plan.
The Company believes that the path set up by the current Board of
Directors is the correct path. In contrast, Bisco seeks your proxy without
having articulated any sound alternatives to the Company's proposals. Since Mr.
Ceiley and his nominee, Jay Conzen, joined the Board of Directors
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<PAGE> 7
under the Standstill and Settlement Agreement (which expired in February 1999),
they have generally agreed with management's strategies and have failed to put
before the Board any proposals to improve the Company's operations. Moreover,
they have not ever fully described the other opportunities they have in mind for
investing the proceeds from any sale, merger or other strategic transaction.
The Company has included Messrs. Ceiley and Conzen on its proposed
slate of Directors because Mr. Ceiley and Bisco own close to 20% of the
Company's outstanding shares and it seems fitting to provide them with
representation on the Board of Directors. Management believes that Messrs.
Ceiley and Conzen will continue to support the Company's efforts to identify and
consummate a strategic transaction and, as stated in the Bisco proxy statement,
also to support management's plan of closing unprofitable restaurants and
opening new restaurants with high growth potential. As discussed previously,
they diverge from the Company's plan with respect to how the proceeds from any
transaction should be used.
The Company does not believe that Bisco and its slate of Directors can
achieve any better results than the Company's current Board of Directors. In
fact, the Company believes that placing control of the Company in a Board of
Directors controlled by Ceiley and Bisco would jeopardize shareholder value.
The current proxy solicitation by Mr. Ceiley for your Board of
Directors is just his latest attempt at gaining control of a public company. In
1997, you and the other shareholders at the time rejected Mr. Ceiley's efforts
to gain control of this Company. The Company urges you reject this latest
attempt to gain control of your Company.
THE COMPANY URGES YOU TO VOTE FOR ITS SLATE OF DIRECTORS AND RETURN THE
ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.
The Board of Directors recommends that the shareholders vote for the
election of the seven (7) nominees listed below to serve as directors for the
terms outlined below and until their successors are elected and qualified.
BIOGRAPHICAL AND OWNERSHIP INFORMATION ON NOMINEES FOR DIRECTOR
Mr. Christman was appointed in February 1993 and elected by the
shareholders at the 1993 annual meeting. Messrs. Gray and Glickstein were
appointed in June 1994 and elected by the shareholders in August 1994. Mr.
Alexander was appointed to the Board in July 1996 and elected by the
shareholders in July 1997. Mr. Howard was appointed to the Board in February
1998 and elected by the shareholders in July 1998. Mr. Ceiley and Mr. Conzen
were appointed to the Board in February 1998, pursuant to the Standstill
Agreement between the Company and Bisco and affiliates (which expired in
February 1999), and elected by the shareholders in July 1998.
Should any one or more of the nominees become unavailable to accept
nomination or election as a director, the enclosed proxy will be voted for such
other person or persons as the Board of Directors may recommend, unless the
Board reduces the number of directors.
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<PAGE> 8
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned Percent
as of of
Name Business Experience and Age April 8,1999(1) Class(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lewis E.Christman, Jr. President & CEO of the Company since 42,282 1.73%
April 1994. Purchasing consultant to the
Company from January 1994 to March 1994.
Chairman of the Board of Neptune Marketing
Inc. (food broker) from 1979 to 1989. Age 79.
Edward B. Alexander Vice President of Finance of the 34,200 1.40%
Company since December 1996.
Secretary/Treasurer of the Company
from November 1990 to December 1996;
Controller of the Company from January
1989 to April 1990. Age 40.
Joseph M. Glickstein, Jr. Partner, Glickstein & Glickstein, 27,899 1.16%
law firm since 1950. Age 72.
Richard M. Gray Partner, Gray & Kelley, CPAs, since 27,899 1.16%
1973. President & Director of
Universal Marion Corp. since 1973.
Age 67.
G. Alan Howard Senior Vice President and Senior Counsel 19,961 .8%
of Homeside Lending since March 1998.
Of Counsel to Milam, Otero, Larsen, Dawson
& Traylor, P.A. since March 1998. Attorney
at Mahoney Adams & Criser, P.A.
from March 1993 to December 1997
(Partner, January 1996 - December 1997).
Served as general counsel
to the Company from April 1994 to
February 1998. Age 37
Glen F. Ceiley President and Chief Executive Officer 471,323 19.6%
of Bisco Industries, Inc. , a
distributor of fasteners and electronic
components since 1973. Age 53.
Jay Conzen Principal of Jay Conzen Investments --- ----
(investment advisor) since October 1992.
Age 52.
</TABLE>
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<PAGE> 9
(1) Included in such beneficial ownership are shares of Common Stock
issuable upon the exercise of certain options exercisable immediately
or within sixty (60) days of April 8, 1999, as follows: Lewis E.
Christman, Jr., 40,000 shares; Edward B. Alexander, 26,700 shares.
(2) The percentages represent the total of the shares listed in the
adjacent column divided by the issued and outstanding shares of Common
Stock as of April 8, 1999, plus any stock options or warrants
exercisable by such person within 60 days following April 8, 1999.
(3) More detailed information on Mr. Ceiley's beneficial ownership is set
forth in the chart entitled "Security Ownership of Certain Beneficial
Owners and Management" on page ___ of this Proxy Statement.
There are no family relationships between any of the nominees and
executive officers of the Company.
In May 1998, Bisco, without admitting or denying any allegations,
consented to the entry by the Securities and Exchange Commission (the
"Commission") of an order requiring Bisco to cease and desist from committing
or causing violations of Rule 10b-13 of the Securities and Exchange Act of 1934.
The order resulted from an inquiry related to Bisco's purchase of certain shares
of the Company's common stock during the pendency of its tender offer.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on June 4, 1999
as the record date for determination of shareholders entitled to vote at the
meeting. Holders of the Company's common stock, par value $0.01 per share (the
"Common Stock") as of June 4, 1999 will be entitled to one vote for each share
held, with no shares having cumulative voting rights. No other class of the
Company's securities is entitled to vote at the meeting. As of June 4, 1999,
the Company had outstanding 2,408,946 shares of Common Stock.
VOTING PROCEDURES
Under Florida law and the Amended and Restated Bylaws of the Company
(the "Bylaws"), a majority of shares of the Common Stock entitled to vote,
represented by person or proxy, constitutes a quorum at a meeting of
shareholders.
Under the Florida Business Corporation Act, directors are elected by a
plurality of the affirmative votes cast by the shares entitled to vote in the
election at a meeting at which a quorum is present. Generally, other matters are
approved if a quorum exists and the votes cast by the holders of the shares
represented at the meeting at which a quorum is present and entitled to vote on
the subject matter favoring the action exceed the votes opposing the action.
Under Florida law, abstentions and broker non-votes have no effect on
the election of directors. A broker non-vote generally occurs when a broker who
holds shares in street name for a customer does not have authority to vote on
certain non-routine matters under the rules of the market on which the stock is
traded because the beneficial owner of the shares held in street name has not
provided voting instructions on the matter.
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<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OF MANAGEMENT
The table set forth below presents certain information regarding
beneficial ownership of the Company's Common Stock (the Company's only voting
security), as of April 8, 1999, by (i) 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 Common Stock outstanding and (ii) all officers and director nominees
of the Company as a group. The shares of Common Stock beneficially owned by each
director nominee are shown in the table beginning on page 4 of this Proxy
Statement. All share amounts have been adjusted to reflect the results of a
reverse stock split effective March 4, 1998.
<TABLE>
<CAPTION>
Amount of Common
Name and Address of Stock Beneficially Percent of
Beneficial Owner Owned Class
---------------------------------------------------------------------------------
<S> <C> <C>
Glen F. Ceiley 471,323(1) 19.6%
Bisco Industries, Inc.
704 W. Southern Avenue
Orange, CA 92865
Cerberus Partners, L.P. 140,000(2) 5.5%
950 Third Ave., 20th Floor
New York, New York 10022
All Officers and Director 623,563(3) 25.2%
Nominees as a Group
(7 Persons)
</TABLE>
(1) Based on information set forth in Amendment No. 11 to Schedule
13D filed with the Commission on April 26, 1999, Bisco owns
344,031 shares; Glen F. Ceiley, President and a director of
Bisco, owns 22,494 shares, individually; the Bisco Industries
Profit Sharing and Savings Plan (the "Bisco Plan") owns
104,798 shares. Mr. Ceiley has the sole power to vote and
dispose of the shares of Common Stock he owns individually and
the power to vote and to dispose of the shares owned by Bisco
and the Bisco Plan.
(2) 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 140,000 shares for
$2.00 per share. None of such shares are outstanding.
(3) Includes an aggregate of 66,700 shares of Common Stock which
certain of the Company's executive officers and directors have
the right to acquire immediately or within sixty days (60)
upon the exercise of certain options granted pursuant to the
Company's various stock option plans.
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<PAGE> 11
BOARD OF DIRECTORS AND STANDING COMMITTEES
The business of the Company is under the general management of a Board
of Directors as provided by the Florida Business Corporation Act. In accordance
with the Bylaws of the Company, which empower the Board of Directors to appoint
such committees as it deems necessary and appropriate, the Board of Directors
has appointed an Audit Committee and an Executive Compensation Committee.
The Audit Committee's basic functions are to assist the Board of
Directors in discharging its fiduciary responsibilities to the shareholders and
the investment community in the preservation of the integrity of the financial
information published by the Company, to maintain free and open means of
communication between the Company's directors, independent auditors and
financial management, and to ensure the independence of the independent
auditors. Currently, the members of the Audit Committee are Directors Conzen,
Gray and Glickstein, each of whom are non-employee Directors, and Director
Christman. The Audit Committee held one meeting during fiscal year 1998. All
members of the Audit Committee attended this meeting.
The Executive Compensation Committee administers the Company's stock
option plans and is responsible for granting stock options to officers and
managerial employees of the Company. It is also responsible for establishing the
salary paid to the Chief Executive Officer and, in consultation with the CEO,
the salaries of the other executive officers of the Company. The current members
of the Executive Compensation Committee are Directors Ceiley, Glickstein and
Gray, each of whom are non-employee Directors, and Director Christman. The
Executive Compensation Committee held two meetings during fiscal year 1998. All
members of the Committee attended these meetings.
The Board of Directors held 11 meetings during fiscal year 1998. Each
of the directors attended at least 75% of the meetings of the Board of
Directors.
The Board of Directors does not have a Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Christman, the Company's Chief Executive Officer, served as a
member of the Executive Compensation Committee in 1998. He does not participate
in any discussions or decisions regarding his own compensation.
Director Glickstein is a partner with the law firm of Glickstein &
Glickstein, P.A. which has been retained by the Company in fiscal year 1998 and
may be retained to provide legal advice to the Company from time to time in the
future.
DIRECTOR COMPENSATION
Five of the seven director nominees are not employees of the Company.
In order to attract and retain highly qualified independent directors through an
investment interest in the Company's future success, the Company enacted in l985
a non-qualified Stock Option Plan for Non-Employee Directors (the "Director's
Plan").
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<PAGE> 12
Each director eligible under the Directors Plan annually receives an
option to purchase 1,800 shares of Common Stock. Typically options are granted
on the first business day of each calendar year, at an option exercise price per
share equivalent to a price such that the aggregate fair market value on the
date of grant for all shares subject to the options exceeds the aggregate option
exercise price by the amount of $10,000. Options granted under the Director's
Plan are immediately exercisable and expire five years from the date of grant.
On January 4, 1999 options were granted to Directors Gray, Glickstein
and Howard for the purchase of 1,800 shares each at a purchase price of $.01 per
share. Since the price of the stock was $.813 on January 4, 1999, the Company
granted an additional 10,661 shares to each eligible director at a purchase
price of $.01 per share so that the market value of all options granted in 1999
exceeded the option exercise price by $10,000.
Since Mr. Ceiley and Bisco were limited by the Standstill and
Settlement Agreement and the Shareholder Rights Agreement to 19.9% ownership of
the Common Stock, Mr. Ceiley and Mr. Conzen (as an affiliate of Bisco) were paid
$10,000 each in cash for their director compensation.
Directors who are full-time employees of the Company receive $100 for
each Board of Directors meeting attended. Directors who are not employees of the
Company receive a fee of $500 for each Board of Directors meeting attended. No
fees are awarded directors for attendance at meetings of the Audit or Executive
Compensation Committees of the Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Standstill and Settlement Agreement with Bisco and its
affiliates, on February 27, 1998 the Company sold 141,340 shares of the Common
Stock to Bisco at a purchase price of $2.16, which was the average closing price
of the Common Stock for the ten trading days immediately preceding the date of
the sale. The total price paid by Bisco to the Company was $305,312. Director
Ceiley is the President of Bisco.
Mr. Howard is of counsel to the law firm of Milam, Otero, Larsen,
Dawson and Traylor, P.A. which was retained by the Company to provide legal
advice during 1998 and may be retained to provide legal advice to the Company
from time to time in the future.
STANDSTILL AND SETTLEMENT AGREEMENT
On February 24, 1998, the Company entered into a one-year Standstill
and Settlement Agreement with Bisco and its affiliates. This Standstill and
Settlement Agreement expired on February 24, 1999. In accordance with this
agreement, Bisco agreed, among other things, to (i) support the Company's
proposed reverse stock split and, for a period of one year, (ii) vote shares of
the Company's stock owned by Bisco in favor of the Company's slate of Director
nominees for the 1998 Annual Meeting of Shareholders, (iii) acquire no more than
19.9% of the total outstanding shares of the Common Stock, (iv) not initiate the
solicitation of proxies or any shareholder vote with respect to the Common Stock
in opposition to the recommendations of the Board of Directors on any matter
(except certain "anti-takeover" measures proposed by the Board of Directors), or
(v) not initiate any legal action against the Company or its Directors.
In accordance with the Standstill and Settlement Agreement, the Company
agreed for a period of one year, among other things, to (i) appoint two Bisco
nominees to the Company's Board of Directors and nominate and vote for such
nominees for election at the 1998 Annual Meeting of Shareholders, (ii) dismiss
without prejudice litigation claims previously filed against Bisco, (iii) amend
the Company's Rights Agreement (as described above) to increase from 15% to 20%
(with respect to Bisco only) the percentage of the Common Stock which would
trigger the distribution of Rights under the Rights Agreement, (iv) allow Bisco
to acquire up to 19.9% of the Common Stock through a purchase of 141,340 shares
directly from the Company at the average closing price of the Common Stock over
the ten trading days preceding the stock sale and (v) grant Bisco a limited
release from claims, damages or actions arising from certain actions by Bisco
prior to the date of the Standstill and Settlement Agreement subject to certain
limitations.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires certain officers of the Company and its directors, and
persons who beneficially own more than ten percent of any registered class of
the Company's equity securities, to file reports of ownership in such securities
and changes in ownership in such securities with the Commission and the Company.
Based solely on a review of the reports and written representations
provided to the Company by the above referenced persons, the Company believes
that during 1998 all filing requirements applicable to its reporting officers,
directors and greater than ten percent beneficial owners were timely satisfied.
-9-
<PAGE> 13
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee (the "Committee"), currently
consisting of Directors Ceiley, Christman, Glickstein and Gray, uses the
following objectives as guidelines for its executive compensation decisions: to
provide a compensation package that will attract, motivate and retain qualified
executives; to ensure a compensation mix that focuses executive behavior on the
fulfillment of annual and long-term business objectives; and to create a sense
of ownership in the Company that causes executive decisions to be aligned with
the best interests of the Company's shareholders.
The Company's compensation package in 1998 for its executive officers
consisted of base salary and stock option grants. The Committee (with Mr.
Christman abstaining) determined the salary level for the Company's Chief
Executive Officer. The Chief Executive Officer, in consultation with the
Committee, made decisions regarding salary recommendations regarding stock
option grants to other executive officers of the Company.
GENERAL COMPENSATION POLICIES
In general, base salary levels are set at the minimum levels believed
by the Company's Chief Executive Officer to be sufficient to attract and retain
qualified executives when considered with the other components of the Company's
compensation structure.
The Company's Chief Executive Officer adjusts salary levels for
executive officers based on achievement of specific annual performance goals,
including personal, departmental and overall Company goals depending upon each
officer's specific job responsibilities. The Chief Executive Officer also uses
his subjective judgment, based upon such criteria as the executive's knowledge
of and importance to the Company's business, willingness and ability to
accomplish the tasks for which he or she was responsible, professional growth
and potential, the Company's operating earnings and an evaluation of individual
performance, in making salary decisions. Compensation paid to executive officers
in prior years is also taken into account. No particular weighting is applied to
these factors.
Each of the Committee and Chief Executive Officer may determine that
the Company's financial performance and individual achievements merit the
payment of annual bonuses. In recent years, no bonuses have been awarded to any
officers of the Company.
The non-employee members of the Committee determine stock option grants
to the Chief Executive Officer. The Committee determines annual stock option
grants to other executive officers and employees based on recommendations of the
Chief Executive Officer. Stock options are intended to encourage key employees
to remain employed by the Company by providing them with a long term interest in
the Company's overall performance as reflected by the market price of the
Company's Common Stock. In making awards in 1998, the Chief Executive Officer
and the Committee considered, without assigning a particular weighting, the
number of options previously granted to the executive, the executive's salary,
the Company's performance and the need for a long term focus on improving
shareholder value.
-10-
<PAGE> 14
The Committee will consider any federal income tax limitations on the
deductibility of executive compensation in reaching compensation decisions and
will seek shareholder approval where such approval will eliminate any
limitations on deductibility.
CEO COMPENSATION
Pursuant to an Employment Agreement entered into by the Company in
January 1998, Mr. Christman received an annual salary of $130,000 in 1998. In
January 1998, the Committee revised Mr. Christman's Employment Agreement to
include a change in control payment provision and in November 1998 extended the
Agreement through January 2000. The Committee believed that the change in
control provision was necessary due to uncertainties created by the Company's
exploration of strategic options with an investment banking firm. The revised
Employment Agreement includes a provision which allows the Company's Board of
Directors to eliminate the change in control payment provision under certain
circumstances.
Respectfully Submitted,
Glen F. Ceiley
Lewis E. Christman, Jr.
Joseph M. Glickstein, Jr.
Richard M. Gray
EXECUTIVE COMPENSATION
The summary compensation table below sets forth a summary of the
compensation earned by the Company's Chief Executive Officer from 1996 to 1998.
No disclosure of compensation paid to other executive officers is required as
the total salary and bonus paid to such executive officers does not exceed the
reporting threshold of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Name and
Principal Other Annual All Other
Position Year Salary($)(1) Compensation(2) Compensation($) (3)
- -------- ---- ------------ --------------- -------------------
<S> <C> <C> <C> <C>
Lewis E. Christman, Jr 1998 $130,000 -0- $ 983
President & CEO 1997 130,000 $20,000 $1,625
1996 130,000 -0- $1,625
</TABLE>
(1) Salary: Total base salary paid during the year.
(2) Other Annual Compensation: Specific forms of cash and non-cash
compensation paid, awarded or earned not properly categorized
as salary or bonus and designated as Other Annual Compensation
under the rules and regulations of the Commission.
-11-
<PAGE> 15
The value of all personal benefits and perquisites received by
Mr. Christman was less than the required reporting threshold,
except for an automobile allowance of $20,000 paid to Mr.
Christman in 1997. This automobile allowance is paid every
other year under the terms of Mr. Christman's Employment
Agreement.
(3) All Other Compensation: All other compensation that does not
fall under any of the aforementioned categories. Amounts shown
include contributions of $983, $1,625 and $1,625 to the
Company's 401(k) Plan on behalf of Mr. Christman to match a
portion of his deferred contributions in 1998, 1997, and 1996,
respectively.
OPTION EXERCISES AND YEAR-END OPTION VALUE
The following table sets forth information concerning the number and
value of unexercised options to purchase the Company's Common Stock held by Mr.
Christman at fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR, AND YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Fiscal Options at Fiscal
Acquired Year-End (#) Year-End ($)
On Exercise Value ------------- -----------------
In 1998 Realized Exercisable/ Exercisable/
(#) ($) Unexercisable Unexercisable (1)
----------- -------- ------------- -----------------
<S> <C> <C> <C> <C>
Lewis E. Christman, Jr. - - 40,000 / - - / -
</TABLE>
1) Market value of underlying securities at year end ($.94 at December 30,
1998, the last trading day of the Company's fiscal year), minus the
exercise price of $2.00.
EMPLOYMENT AGREEMENTS
In November 1998, the Company extended until January 26, 2000 its
employment agreement with Lewis E. Christman, Jr., providing for continued base
compensation of $130,000 per year, in addition to medical, disability and other
benefits in accordance with Company policy, such stock options as may be granted
by the Board of Directors from time to time and a bi-annual automobile
allowance. The agreement further provides that Mr. Christman will be entitled to
receive, in a lump sum, the salary due for the remaining term of the agreement
upon the Company's termination of his employment "without cause" (as defined in
such agreement).
The Employment Agreement also contains a change in control provision
enabling Mr. Christman to resign from the Company upon a Change in Control of
the Company (as defined in the Employment Agreement) and receive termination
payments equal to 2.5 times his annual salary and highest bonus amount, if any,
received during the last three fiscal years as well as a prorated bonus amount
based on such highest bonus earned, if any, in last three fiscal years. This
right to resign and receive termination payments extends for six (6) months
after the date of the Change in Control (the "Trigger Date"). If the CEO does
not elect to resign, the Employment Agreement provides that (a)
-12-
<PAGE> 16
the Company will continue to employ the CEO for two years after the Trigger
Date, (b) his incentive opportunities and benefits will be the greater of those
(i) in effect immediately prior to the Trigger Date or (ii) provided by the
Company to executives with comparable duties, and (c) his position, authority
and duties will not be adversely affected during the term of his post-Trigger
Date employment. The election of the Bisco slate of Directors would constitute a
Change in Control under this Employment Agreement.
In November 1998, the Company extended until January 26, 2000 its
employment agreement with its Chief Financial Officer, Edward B. Alexander and
increased his base compensation of $100,000 per year. Mr. Alexander is also
eligible for medical, disability and other benefits in accordance with company
policy and such stock options as may be granted by the Board of Directors from
time to time. The agreement further provides that Mr. Alexander will be entitled
to receive, in a lump sum, the salary due for the remaining term of the
agreement upon the Company's termination of his employment "without cause" (as
defined in such agreement).
This employment agreement also contains a change in control provision
enabling Mr. Alexander to resign from the Company upon a Change in Control of
the Company (as defined in such agreement) and receive termination payments
equal to 2.5 times his annual salary and highest bonus amount, if any, received
during the last three fiscal years as well as a prorated bonus amount based on
such highest bonus earned, if any, in last three fiscal years. This right to
resign and receive termination payments extends for six (6) months after the
date of any Change in Control (the "Trigger Date"). If Mr. Alexander does not
elect to resign, the agreement provides that (a) the Company will continue to
employ Mr. Alexander for two years after the Trigger Date, (b) his incentive
opportunities and benefits will be the greater of those (i) in effect
immediately prior to the Trigger Date or (ii) provided by the Company to
executives with comparable duties, and (c) his position, authority and duties
will not be adversely affected during the term of his post-Trigger Date
employment.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The Commission requires a five-year comparison of stock price
performance of the Company with both a broad equity market index and a published
industry index or peer group. The Company's total return compared with the
NASDAQ market index and the Media General Restaurant Index is shown on the
following graph. The Media General Restaurant Index includes 243 publicly held
restaurant companies.
This graph assumes that $100 was invested on January 1, 1994 and all
dividends were reinvested in the Company's Common Stock and the other indices.
Each of the indexes is weighted on a market capitalization basis at the time of
each reported data point.
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Company $100 $ 56.26 $ 156.26 $ 125.00 $ 118.76 $ 37.50
Media General Restaurant Index 100 87.80 123.49 124.92 128.51 174.99
NASDAQ Market Index 100 104.99 136.18 169.23 207.00 291.96
</TABLE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee has not yet recommended to the Board of Directors
an accounting firm to be engaged as independent auditor for the Company for
1999. The firm of Deloitte & Touche, LLP, served as the independent accountants
for the Company for the fiscal year ending December 30, 1998. That firm has
served as the auditor for the Company since 1991. Representatives of Deloitte &
Touche are expected to be present at the annual meeting of shareholders to
respond to appropriate questions.
PROPOSAL 2: OTHER MATTERS
The Board of Directors is not aware of any other matters to come before
the meeting. If any other business should come before the meeting, the persons
named on 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 2000 Annual Meeting of
Shareholders must be received by the Company (addressed to the attention of the
Secretary) not later than February 11, 2000 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
-13-
<PAGE> 17
shareholder is required to comply with the Company's Bylaws with respect to any
proposal to be brought before an annual meeting. The 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 Bylaws.
SOLICITATION OF PROXIES
This proxy is solicited by the Board of Directors of the Company. The
cost of soliciting proxies will be borne by the Company. Following the original
mailing of the proxy solicitation material, directors, officers, and certain
employees regularly employed by the Company (who will receive no compensation in
addition to their regular compensation for these services) may solicit proxies
by mail, telephone, facsimile and other electronic means.
The Company has also retained _____________, at an estimated fee of
$10,000 plus reasonable disbursements, postage, filing fees, courier charges,
data transmissions and other expenses approved by the Company, to assist in the
solicitation of proxies.
The Company is endeavoring to limit its expenditures in connection with
this proxy contest. Total amount estimated to be spent in connection with this
solicitation is $20,000, of which approximately $1,500 has been spent to date.
This amount includes expenditures for legal services, solicitors, postage,
printing and related expenses but excludes amounts normally expended in
soliciting for an election of directors in the absence of a contest and costs
represented by salaries and wages of regular employees and officers. The total
amount to be spent will vary depending upon, among other things, any
developments that may occur in the proxy contest described in this Proxy
Statement.
The Company may request brokerage houses, banks, custodians and other
nominees or fiduciaries to forward copies of its proxy material and Annual
Report to beneficial owners of stock held in their names, and the Company will
reimburse them for reasonable out-of-pocket expenses incurred with respect to
such action.
-14-
<PAGE> 18
CERTAIN INFORMATION CONCERNING PARTICIPANTS
The directors of the Company may be deemed to be participants in the
solicitation of proxies on behalf of the Company. Certain information with
respect to such participants is set forth in Annex A to this Proxy Statement.
Information regarding each director's present principal occupation or
employment, beneficial and record ownership of the Company's securities, certain
transactions with the Company and future employment arrangements with the
Company, is set forth under the captions "Biographical and Ownership Information
on Nominees for Director", "Securities Ownership of Certain Beneficial Owners
and of Management", "Compensation Committee Interlocks and Insider
Participation", "Certain Relationships and Related Transactions" and "Employment
Agreements".
Except for the employment agreements with Messrs. Christman and
Alexander described under the caption "Employment Agreements", no director or
their associates has any understanding or arrangement with any person with
respect to any future employment by the Company or its affiliates or with
respect to any future transaction to which the Company or any of its affiliates
will or may be a party.
Except for the Standstill and Settlement Agreement described under the
caption "Standstill and Settlement Agreement", options granted to directors
described under the caption "Director Compensation" and options granted under
the Long Term Incentive Plan described above, none of the foregoing persons is,
or was within the past year, a party to any contract, arrangement or
understanding with any person with respect to securities of the Company.
IMPORTANT
THE COMPANY'S BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND RETURN
TODAY THE WHITE PROXY CARD IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. DO NOT
RETURN THE GOLD PROXY CARD SENT TO YOU BY BISCO.
If you have already signed Bisco's proxy card, you can revoke it by
signing, dating and mailing the enclosed WHITE proxy card in the enclosed
envelope. The latest dated proxy card is the one that counts. Regardless of the
number of shares that you own, your vote is very important.
If your shares are held through a bank, broker, nominee or other
representative, only that entity may execute a proxy. Please contact the
representative for your account and request the representative to execute the
WHITE proxy card on your behalf.
If you require any assistance, please call ______________________ at
(800)
By Order of the Board of Directors
Lewis E. Christman, Jr.
President and CEO
Dated: June 11, 1999
-15-
<PAGE> 19
ANNEX A
TRADING INFORMATION REGARDING PARTICIPANTS
The following table sets forth information with respect to all
purchases and sales of shares by the Company's directors during the past two
years:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES
NAME TRADE DATE BOUGHT SOLD
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward B. Alexander December 30, 1998 1,000
- -------------------------------------------------------------------------------------------------------------
December 31, 1998 1,500
- -------------------------------------------------------------------------------------------------------------
Glen F. Ceiley May 19, 1997 66,160 (2)
- -------------------------------------------------------------------------------------------------------------
May 21, 1997 1,200 (1)
- -------------------------------------------------------------------------------------------------------------
June 10, 1997 930 (1)
- -------------------------------------------------------------------------------------------------------------
June 12, 1997 2,000 (1)
- -------------------------------------------------------------------------------------------------------------
July 1, 1997 500 (1)
- -------------------------------------------------------------------------------------------------------------
October 3, 1997 900 (1)
- -------------------------------------------------------------------------------------------------------------
October 8, 1997 2,400 (2)
- -------------------------------------------------------------------------------------------------------------
October 14, 1997 657 (2)
- -------------------------------------------------------------------------------------------------------------
October 14, 1997 500 (2)
- -------------------------------------------------------------------------------------------------------------
October 15, 1997 4,000 (2)
- -------------------------------------------------------------------------------------------------------------
October 16, 1997 2,550 (2)
- -------------------------------------------------------------------------------------------------------------
October 17, 1997 1,300 (2)
- -------------------------------------------------------------------------------------------------------------
October 20, 1997 1,200 (2) 10,000 (1)
- -------------------------------------------------------------------------------------------------------------
October 21, 1997 1,740 (2)
- -------------------------------------------------------------------------------------------------------------
October 22, 1997 3,560 (2)
- -------------------------------------------------------------------------------------------------------------
October 27, 1997 1,929 (2)
- -------------------------------------------------------------------------------------------------------------
October 28, 1997 1,171 (2)
- -------------------------------------------------------------------------------------------------------------
November 3, 1997 140 (2)
- -------------------------------------------------------------------------------------------------------------
November 4, 1997 5,400 (2)
- -------------------------------------------------------------------------------------------------------------
November 6, 1997 2,000 (2)
- -------------------------------------------------------------------------------------------------------------
November 7, 1997 3,200 (2)
- -------------------------------------------------------------------------------------------------------------
November 12, 1997 2,800 (2)
- -------------------------------------------------------------------------------------------------------------
November 12, 1997 3,600 (2)
- -------------------------------------------------------------------------------------------------------------
November 13, 1997 200 (1)
- -------------------------------------------------------------------------------------------------------------
November 14, 1997 4,400 (1)
- -------------------------------------------------------------------------------------------------------------
November 14, 1997 2,000 (2)
- -------------------------------------------------------------------------------------------------------------
November 17, 1997 200 (2)
- -------------------------------------------------------------------------------------------------------------
November 20, 1997 440 (2)
- -------------------------------------------------------------------------------------------------------------
November 21, 1997 4,360 (2)
- -------------------------------------------------------------------------------------------------------------
November 24, 1997 500 (2)
- -------------------------------------------------------------------------------------------------------------
December 5, 1997 5,560 (2)
- -------------------------------------------------------------------------------------------------------------
December 10, 1997 3,440 (2)
- -------------------------------------------------------------------------------------------------------------
December 11, 1997 900 (2)
- -------------------------------------------------------------------------------------------------------------
December 12, 1997 600 (2)
- -------------------------------------------------------------------------------------------------------------
December 16, 1997 1,744 (2)
- -------------------------------------------------------------------------------------------------------------
December 17, 1997 1,145 (2)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES
NAME TRADE DATE BOUGHT SOLD
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
December 18, 1997 6,660 (2)
- -------------------------------------------------------------------------------------------------------------
December 19, 1997 4,340 (2)
- -------------------------------------------------------------------------------------------------------------
December 19, 1997 360 (3)
- -------------------------------------------------------------------------------------------------------------
December 22, 1997 5,300 (2)
- -------------------------------------------------------------------------------------------------------------
December 23, 1997 181 (2)
- -------------------------------------------------------------------------------------------------------------
December 24, 1997 562 (2)
- -------------------------------------------------------------------------------------------------------------
December 29, 1997 2,590 (2)
- -------------------------------------------------------------------------------------------------------------
December 30, 1997 4,325 (2)
- -------------------------------------------------------------------------------------------------------------
December 31, 1997 1,220 (2)
- -------------------------------------------------------------------------------------------------------------
January 5, 1998 1,500 (2)
- -------------------------------------------------------------------------------------------------------------
January 7, 1998 1,460 (2)
- -------------------------------------------------------------------------------------------------------------
January 8, 1998 1,100 (2)
- -------------------------------------------------------------------------------------------------------------
January 12, 1998 1,211 (2)
- -------------------------------------------------------------------------------------------------------------
January 15, 1998 2,100 (2)
- -------------------------------------------------------------------------------------------------------------
January 16, 1998 620 (2)
- -------------------------------------------------------------------------------------------------------------
January 21, 1998 2,140 (2)
- -------------------------------------------------------------------------------------------------------------
January 22, 1998 4,400 (2)
- -------------------------------------------------------------------------------------------------------------
January 23, 1998 800 (1)
- -------------------------------------------------------------------------------------------------------------
January 23, 1998 3,400 (2)
- -------------------------------------------------------------------------------------------------------------
January 26, 1998 200 (3)
- -------------------------------------------------------------------------------------------------------------
January 27, 1998 2,000 (2)
- -------------------------------------------------------------------------------------------------------------
January 27, 1998 600 (3)
- -------------------------------------------------------------------------------------------------------------
January 29, 1998 40 (2)
- -------------------------------------------------------------------------------------------------------------
January 30, 1998 3,288 (2)
- -------------------------------------------------------------------------------------------------------------
February 3, 1998 1,500 (2)
- -------------------------------------------------------------------------------------------------------------
February 5, 1998 400 (2)
- -------------------------------------------------------------------------------------------------------------
February 11, 1998 2,000 (2)
- -------------------------------------------------------------------------------------------------------------
February 13, 1998 400 (2)
- -------------------------------------------------------------------------------------------------------------
February 26, 1998 141,340 (2)
- -------------------------------------------------------------------------------------------------------------
Lewis E. Christman, Jr. None None
- -------------------------------------------------------------------------------------------------------------
Jay Conzen None None
- -------------------------------------------------------------------------------------------------------------
Joseph M. Glickstein, Jr. January 21, 1998 3,426
- -------------------------------------------------------------------------------------------------------------
January 26, 1999 1,800
- -------------------------------------------------------------------------------------------------------------
March 8, 1999 10,661 (4)
- -------------------------------------------------------------------------------------------------------------
Richard M. Gray January 21, 1998 3,426
- -------------------------------------------------------------------------------------------------------------
February 2, 1999 1,800
- -------------------------------------------------------------------------------------------------------------
February 20, 1999 10,661 (4)
- -------------------------------------------------------------------------------------------------------------
G. Alan Howard December 11, 1998 7,500
- -------------------------------------------------------------------------------------------------------------
February 24, 1999 12,461 (4)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------
(1) Transactions by Glen F. Ceiley.
(2) Transactions by Bisco Industries, Inc.
(3) Transactions by Bisco Industries, Inc. Profit Sharing and Savings Plan.
(4) Exercise of stock options.
<PAGE> 21
ADDITIONAL INFORMATION REGARDING PARTICIPANTS
The following table sets forth the name and principal business address
of each director which is also the address of the corporation or other
organization employing the director. (Their principal occupations and the name
and principal business of their employer are set forth in the Proxy Statement.)
EDWARD B. ALEXANDER -- Family Steak Houses of Florida, Inc., 2113 Florida
Boulevard, Neptune Beach, Florida 32266.
GLEN F. CEILEY -- Bisco Industries, Inc., 704 West Southern Ave, Orange,
California 92865
LEWIS E. CHRISTMAN, JR. -- Family Steak Houses of Florida, Inc., 2113 Florida
Boulevard, Neptune Beach, Florida 32266.
JAY CONZEN -- Jay Conzen Investments, 704 West Southern Ave, Orange, California
92865
JOSEPH M. GLICKSTEIN, JR. -- Glickstein & Glickstein, P.A., 444 Third Street,
Neptune Beach, Florida 32266
RICHARD M. GRAY -- Gray & Kelley, CPAs, 1829 Selva Grande Drive, Atlantic Beach
32233
G. ALAN HOWARD -- Homeside Lending, 7301 Baymeadows Way, Jacksonville, Florida
32256
<PAGE> 22
Appendix A
FAMILY STEAK HOUSES OF FLORIDA, INC.
2113 Florida Boulevard, Neptune Beach, Florida 32266
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William A. Garrett and Patrick Fekula (the
"Proxy Agents"), and each of them individually, the attorneys, agents, and
proxies of the undersigned with full power of substitution, to vote all of the
shares of stock of Family Steak Houses of Florida, Inc. (the "Company"), owned
by the undersigned on June 4, 1999, at the 1999 Annual Meeting of Shareholders
of the Company, to be held at 10:00 a.m. on July 21, 1999, and any adjournment
thereof, with all powers that the undersigned would possess if personally
present, pursuant to the following directions:
(Continued and to be signed on the reverse side)
FOLD AND DETACH HERE
<PAGE> 23
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Please mark your votes as indicated in this example [X]
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the to vote for all
contrary below) nominees listed below
[ ] [ ]
Edward B. Alexander, Glen F. Ceiley, Lewis E. Christman, Jr., Jay Conzen, Joseph
M. Glickstein, Jr., Richard M. Gray and G. Alan Howard
(To withhold authority to vote for any individual nominee, strike out that
nominee's name.)
2. OTHER MATTERS
FOR Proxy Agents to vote in their discretion as to such other matters as may
properly come before the meeting.
WITHHOLD AUTHORITY for proxy holders to vote in their discretion as to such
other matters as may properly come before the meeting.
FOR WITHHOLD AUTHORITY
[ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. PLEASE MARK THE
"FOR" BOX, SIGN, DATE AND MAIL THIS WHITE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
The undersigned hereby revokes any proxy heretofore given with respect to its
Stock and acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated June 11, 1999.
- -------------------------------------------------------------------------------
Signature(s)
- -------------------------------------------------------------------------------
Signature(s)
- -------------------------------------------------------------------------------
Title or Capacity
DATED: , 1999
IMPORTANT: Please date this proxy and sign exactly as your name or names
appear(s) hereon. If the shares are held jointly, signatures should include both
names. If a corporation, please sign in the full corporate name by a duly
authorized officer stating his or her title. If a partnership, please sign in
the partnership name by an authorized person. Personal representatives,
executors, guardians and others signing in a representative capacity should give
full title. This proxy shall vote all shares to which the signatory is entitled.
PLEASE RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE.
FOLD AND DETACH HERE
