<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] 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, 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 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 OF FLORIDA, INC. LOGO)
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 Tuesday, June 13, 2000 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 April 25, 2000 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 vote of every shareholder is important. Whether or not you plan to
attend the 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 Meeting.
/s/ GLEN F. CEILEY
Glen F. Ceiley
Chairman of the Board
Date: April 26, 2000
<PAGE> 3
(Ryan's Family Steak Houses of Florida, Inc. Logo)
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
---------------------
PROXY STATEMENT
FOR
2000 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 2000 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
Tuesday, June 13, 2000. 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 April 26, 2000.
The proxy may be revoked at any time before it is exercised by giving
notice of revocation to the Secretary of the Company. 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 as
hereinafter stated in this Proxy Statement.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on April 25, 2000 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 April 25, 2000 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 April 1, 2000,
the Company had outstanding 2,414,507 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.
<PAGE> 4
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 1, 2000, 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) named executive officers of the Company, and
(iii) 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 PERCENT
NAME AND ADDRESS OF COMMON STOCK OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- ------------------- ------------------ -------
<S> <C> <C>
Glen F. Ceiley.............................................. 734,273(1) 30.4%
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
Lewis E. Christman, Jr...................................... 40,000(3) 1.6%
Edward B. Alexander......................................... 27,600(3) 1.1%
Jay Conzen.................................................. 26,800(3) 1.1%
Kevin Pickett............................................... 10,650(3) .4%
All Officers and Director
Nominees as a Group (6 Persons)........................... 805,923(4) 32.5%
</TABLE>
- ---------------
(1) Based on information set forth in Amendment No. 20 to Schedule 13D filed
with the Securities and Exchange Commission (the "Commission") on March 23,
2000, Bisco Industries, Inc. ("Bisco") owns 561,581 shares; Glen F. Ceiley,
President and a director of Bisco, owns 24,294 shares, individually; Zachary
Ceiley, Mr. Ceiley's son, owns 1,300 shares; and the Bisco Industries Profit
Sharing and Savings Plan (the "Bisco Plan") owns 147,098 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 his
son, 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) Included in such beneficial ownership are shares of Common Stock issuable
upon the exercise of certain options exercisable within sixty (60) days of
April 1, 2000 as follows: Lewis E. Christman, Jr., 40,000 shares; Edward B.
Alexander, 27,600 shares; Jay Conzen, 25,000 shares; Kevin Pickett, 10,650
shares.
(4) Includes an aggregate 63,250 of shares of Common Stock which certain of the
Company's executive officers and directors have the right to acquire
immediately or within sixty (60) days upon the exercise of certain options
granted pursuant to the Company's various stock option plans.
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 Catanzaro,
Conzen
2
<PAGE> 5
and Means. The Audit Committee held one meeting during fiscal year 1999, prior
to the election of current Board of Directors. All members of the Audit
Committee (at that time) 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 and
annual bonuses paid to executive officers of the Company. The current members of
the Executive Compensation Committee are Directors Ceiley and Means. The
Executive Compensation Committee held one meeting during fiscal year 1999. All
members of the Committee attended this meeting.
The Board of Directors held six meetings during fiscal year 1999. Mr.
Ceiley and Mr. Conzen attended all six meetings. Mr. Catanzaro and Mr. Means
attended the two meetings of the Board which were held after their election as
directors in July 1999.
The Board of Directors does not have a Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to his retirement from the Company in October 1999, Mr. Christman,
the Company's Chief Executive Officer, served as a member of the Executive
Compensation Committee. He did not participate in any discussions or decisions
regarding his own compensation.
DIRECTOR COMPENSATION
None of the director nominees are employees of the Company. Mr. Conzen is a
full time paid consultant to 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 "Directors' Plan").
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 $l0,000. In the event the market price of the
Company's stock is insufficient to provide a benefit of $10,000, the Company has
historically granted additional options outside the Directors' Plan in an amount
sufficient to confer a net benefit of $10,000 per director. Options granted
under the Director's Plan are immediately exercisable and expire five years from
the date of grant.
On January 3, 2000 options were granted to each of the four Directors for
the purchase of 1,800 shares at a purchase price of $.01 per share. The price of
the stock was $.94 on January 3, 2000. Believing that the Company's stock is
currently undervalued by the market, the Company elected not to grant additional
options to the directors. Instead, the Company paid each director $8,312 in cash
so that the total value of cash and options granted in 2000 was $10,000.
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
Mr. Conzen is a member of the Company's Office of the President, which is
the three-person body responsible for management of the Company. He has been a
full-time consultant to the Company since August 1999 and is paid $12,500 per
month for these services. In addition, in November 1999 the Board of Directors
granted Mr. Conzen an option to purchase 25,000 shares of the Company's common
stock at an exercise price of $2.00 per share as an incentive to maximize the
Company's profitability. The price of the Company's stock on the date of this
grant was $1.13.
3
<PAGE> 6
Matters to be Acted Upon
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors recommends that the shareholders vote for the
election of the four (4) nominees listed below to serve as directors for the
terms outlined below and until their successors are elected and qualified. Mr.
Catanzaro and Mr. Means were elected by the shareholders at the 1999 annual
meeting. Mr. Ceiley and Mr. Conzen were appointed to the Board in February 1998
and elected by the shareholders at the 1998 annual meeting. 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.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF PERCENT OF
NAME BUSINESS EXPERIENCE AND AGE APRIL 1, 2000(1) CLASS(2)
- ---- --------------------------- ---------------- ----------
<S> <C> <C> <C>
Stephen Catanzaro................. Chief Financial Officer of Bisco 4,800 .2%
Industries, Inc. since September
1995. Age 47.
Glen F. Ceiley.................... President and Chief Executive 734,273 30.4%
Officer of Bisco Industries, Inc.,
a distributor of fasteners and
electronic components since
1973. Mr. Ceiley is also a
director of Data I/O
Corporation, a publicly held
company engaged in the
manufacturing of electronic
equipment. Age 53.
Jay Conzen........................ Principal of Jay Conzen 26,800 1.1%
Investments (investment advisor)
since October 1992. Consultant
to the Company since August
1999. Age 53.
William L. Means.................. Vice President of Corporate 1,800 .1%
Development Of Bisco Industries,
Inc. since November 1997.
Director of Management
Information Systems at Bisco
from 1989 to 1997. Age 57.
</TABLE>
- ---------------
(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 1, 2000, as follows: Jay Conzen, 25,000 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 1, 2000, plus any stock options or warrants exercisable by such person
within sixty (60) days following April 1, 2000.
(3) More detailed information on Mr. Ceiley's beneficial ownership is set forth
in the chart entitled "Security Ownership of Certain Beneficial Owners and
of Management" on page 2 of this Proxy Statement.
There are no family relationships between any of the nominees and executive
officers of the Company.
4
<PAGE> 7
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 1999 all filing requirements applicable to its reporting officers,
directors and greater than ten percent beneficial owners were timely satisfied,
with the exception of Messrs. Catanzaro and Means, each of whom were late filing
upon their election as directors in July 1999.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee (the "Committee"), currently
consisting of Directors Ceiley and Means, 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 1999 for its executive officers
consisted of base salary and stock option grants. The Committee determined stock
option awards and salary levels for the Company's executive officers.
General Compensation Policies
In general, base salary levels are set at the minimum levels believed by
the Company's executive officers to be sufficient to attract and retain
qualified executives when considered with the other components of the Company's
compensation structure.
The Committee 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 Committee also uses its 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.
The Committee 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 Committee determines stock option grants to the executive officers. The
Committee determines annual stock option grants to other employees based on
recommendations of the Office of the President. 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 1999, the Office
of the President 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.
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 December
1998, Mr. Christman received an annual salary of $130,000 in 1999 until his
retirement in October 1999. After Mr. Christman's retirement, the Board then
replaced the CEO position in the Company with an Office of the President, made
5
<PAGE> 8
up of executive officers Edward B. Alexander and Kevin Pickett, and director
Conzen, who serves as a full-time paid consultant to the Company.
Change in Control Payments
Pursuant to the terms of employment agreements between the Company and four
of its key executives, the Company made one-time payments of $907,500 in July
1999 upon the election of the current slate of Directors, which represented a
"change in control" as defined in the employment agreements. Payments were made
to Mr. Christman, Mr. Alexander and Mr. Pickett, who were executive officers of
the Company, and to William Garrett, Secretary and Director of Purchasing of the
Company.
Respectfully Submitted,
Glen F. Ceiley
William Means
EXECUTIVE PAY
The summary compensation table below sets forth a summary of the
compensation earned by the Company's named executive officers from 1997 to 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION -----------------------------
-------------------------------------- SECURITIES ALL OTHER
OTHER ANNUAL UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) COMPENSATION(2) OPTIONS(3) ($)(4)
--------------------------- ---- ------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Lewis E. Christman, Jr............. 1999 $108,500 $20,000 -0- $325,000
President & CEO 1998 130,000 -0- -0- -0-
1997 130,000 20,000 -0- 1,625
Jay Conzen......................... 1999 -0- 62,500 25,000 -0-
Office of President
Kevin Pickett...................... 1999 85,400 -0- 3,500 168,500
Vice President of Operations
Office of President
Edward B. Alexander................ 1999 101,730 -0- 3,500 251,937
Executive Vice President
Chief Financial Officer
Office of President
</TABLE>
- ---------------
Explanation of Columns:
(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. The value of all personal benefits and perquisites received
by the named executives was less than the required reporting threshold,
except for automobile allowances of $20,000 paid to Mr. Christman in 1997
and 1999. This automobile allowance was paid every other year under the
terms of Mr. Christman's Employment Agreement. The amount shown for Mr.
Conzen represents consulting fees paid by the Company.
(3) Securities Underlying Options: Number of shares of Common Stock underlying
grants of options made during the year.
6
<PAGE> 9
(4) All Other Compensation: All other compensation that does not fall under any
of the aforementioned categories. Amounts shown include Change in Control
payments of $325,000 to Mr. Christman, $250,000 to Mr. Alexander and
$168,500 to Mr. Pickett in 1999, and contributions to the Company's 401(k)
Plan on behalf of Mr. Christman and Mr. Alexander to match a portion of
their deferred contributions.
OPTION GRANTS
The following table sets forth information concerning the number of options
to purchase the Company's common stock granted to the named executive officers
in 1999.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
(B) (C)
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO (D) (E) GRANT DATE
(A) OPTIONS EMPLOYEES IN EXERCISE OR BASE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE VALUE(2)
- ---- ----------- ---------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Edward B. Alexander................ 3,500 8.6% $1.50 11-09 $ 4,400
Kevin Pickett...................... 3,500 8.6% 1.50 11-09 4,400
Jay Conzen......................... 25,000 N/A(1) 2.00 11-09 21,900
</TABLE>
- ---------------
(1) Not applicable -- Mr. Conzen is not an employee of the Company. The stock
option grant to Mr. Conzen was for restricted shares, not made pursuant to
the Company's Employee stock option plan.
(2) In accordance with Securities and Exchange Commission ("SEC") rules, the
Company calculated the dollar amounts under this column using the
Black-Scholes based option valuation model. The Company's use of this model
should not be construed as an endorsement of its accuracy at valuing
options. All stock option models require a prediction about the future
movement of stock price. The valuation assumes an expected volatility of
.76, a 0% dividend yield, a 10-year holding term prior to exercise, and a
risk-free rate of return of 6.4%, reflecting the yield on a zero coupon U.S.
Treasury security for the holding term prior to exercise of the option. The
Company made no adjustment for non-transferability or risk of forfeiture.
The actual value of the options, if any, will depend on the extent to which
the market value of the Common Stock exceeds the exercise price of the
option on the date of exercise.
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 the named
executives 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 ($)
ON EXERCISE VALUE -------------------- -----------------
IN 1999 REALIZED EXERCISABLE/ EXERCISABLE/
(#) ($) UNEXERCISABLE UNEXERCISABLE(1)
----------- -------- -------------------- -----------------
<S> <C> <C> <C> <C>
Lewis E. Christman, Jr..................... -- -- 40,000/0 $0/0
Edward B. Alexander........................ -- -- 27,600/3,500 $0/0
Jay Conzen................................. -- -- 25,000/0 $0/0
Kevin Pickett.............................. -- -- 10,650/3,500 $0/0
</TABLE>
- ---------------
(1) Market value of underlying securities at year end ($1.00 at December 29,
1999, the last trading day of the Company's fiscal year), minus the various
exercise prices.
7
<PAGE> 10
CHANGE IN CONTROL
Upon the election of the current board of directors on July 21, 1999, a
change in control took place. The persons acquiring control of the Company were
Glen F. Ceiley and his affiliates: Bisco Industries, Inc. and the Bisco
Industries Profit Sharing and Savings Plan (collectively, "Bisco"). The source
of the consideration for acquiring such control were personal and Bisco
investment funds. According to Bisco, the aggregate amount of the investment
used to acquire control was $1,413,141, representing the amount of shares held
by Mr. Ceiley and Bisco as of the date of the 1999 Annual Meeting of
Shareholders and the acquisition cost of those shares. The basis of the change
in control was the election of the Ceiley and Bisco slate of directors at the
1999 Annual Meeting of Shareholders. The percentage of voting securities of the
Company now beneficially owned by Ceiley and Bisco is 30.4%. No funds were
borrowed from a bank by Ceiley or Bisco for use in connection with the
acquisition of control of the Company.
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 employment agreement also contained a change in control provision which
enabled Mr. Christman 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 the last three fiscal years.
In January 1998, the Company entered into a two-year employment agreement
with its Chief Financial Officer, Edward B. Alexander and in November 1998
increased his base compensation to $100,000 per year. The agreement also
provided Mr. Alexander 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.
This employment agreement also contained 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.
In January 1998, the Company entered into a two-year employment agreement
with its Director of Operations, Kevin Pickett and in November 1998 increased
his base compensation to $84,250 per year. The agreement also provided Mr.
Pickett 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.
This employment agreement also contained a change in control provision
enabling Mr. Pickett 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 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.
Upon the election of the current Board of Directors by the Company's
shareholders at the 1999 annual meeting, a change in control as defined in each
employment agreement did occur, and the change in control payments were made to
Mr. Alexander, Mr. Christman and Mr. Pickett. The new Board elected to rehire
Mr. Christman, who served until his retirement in October 1999, and Mr.
Alexander and Mr. Pickett, who continue to serve as officers of the Company. The
employment agreements also provided that the Company continue to provide certain
other benefits provided under the employment agreements to the executive
officers for a period of two years following the Change in Control.
8
<PAGE> 11
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 100 publicly-held restaurant
companies.
This graph assumes that $100 was invested on December 28, 1994 and all
dividends were reinvested in the Company's Common Stock and the other indices.
Each of the indices is weighted on a market capitalization basis at the time of
each reported data point.
<TABLE>
<CAPTION>
FAMILY STEAK HOUSE MG RESTAURANT INDEX NASDAQ MARKET INDEX
------------------ ------------------- -------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1996 277.75 140.64 129.71
1996 222.18 142.27 161.18
1997 211.09 146.36 197.16
1998 66.65 199.30 278.08
1999 71.10 189.64 490.46
</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 2000.
The firm of Deloitte & Touche LLP, served as the independent accountants for the
Company for the fiscal year ending December 29, 1999. That firm has served as
the auditor for the Company since 1991. Representatives of Deloitte & Touche LLP
are expected to be present at the annual meeting of shareholders where they will
have an opportunity to make a statement if they desire to do so and will be
available 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.
9
<PAGE> 12
SHAREHOLDER PROPOSALS
Proposals of shareholders to be presented at the 2001 Annual Meeting of
Shareholders must be received by the Company (addressed to the attention of the
Secretary) not later than December 28, 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 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, regular employees of the Company may
solicit proxies by mail, telephone, facsimile and other electronic means. The
Company may request brokerage houses 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.
By Order of the Board of Directors
/s/ GLEN F. CEILEY
Glen F. Ceiley
Chairman of the Board
Date: April 26, 2000
10
<PAGE> 13
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN Please mark
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF your vote as [X]
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED indicated in
FOR PROPOSALS 1 AND 2. this example
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the to vote for all
contrary below) nominees listed below
[ ] [ ]
Stephen Catanzaro, Glen F. Ceiley, Jay Conzen, and William L. Means
(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 this 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
--------------------
The undersigned hereby revokes any proxy heretofore given with respect to said
Stock and acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated April 26, 2000.
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
Title of Capacity
Dated ____________________________________________________________________, 2000
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. Personal representatives, executors, guardians and others signing in
a representative capacity should give full title. PLEASE RETURN PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
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 appointed William A. Garrett, and Edward B.
Alexander (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 April 25, 2000 at the 2000 Annual
Meeting of Shareholders of the Company, to be held at 10:00 a.m. on June 13,
2000 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
