SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
October 10, 1995
Filed by the registrant __x___
Filed by a party other than the registrant _______
Check the appropriate box:
____ Preliminary proxy statement
__X_ Definitive proxy statement
____ Definitive additional materials
____ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Ciatti's, Inc.
(Name of Registrant as specified in its Charter)
Barney U. Uhlig, Secretary
(Name of Person Filing Proxy Statement)
Payment of filing fee:
_X___ $125 per Exchange Act Rule 0-11(c)(1)(ii),14a-6(i)(1), or 14a-6(j)(2).
____ $500 per each party to controversy pursuant to Rule 14a-6(i)(3).
____ Fee computed on table below per Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or undrlying value of transaction computed pursuant to
Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
- ---- Check box if any part of the fee is offset by Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously
by registration number or 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:
_____________________________________________________________________________
CIATTI'S, INC.
5555 West 78th Street
Edina, Minnesota 55439-2702
(612) 941-0108
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 16, 1995
To the Shareholders of Ciatti's, Inc.:
Notice is hereby given that the Annual Meeting of the Shareholders of Ciatti's,
Inc. will be held on Thursday, November 16, 1995, at 4:30 p.m., local time, at
Ciatti's Italian Restaurant(R), 1625 Queens Drive, Woodbury, Minnesota, for the
following purposes:
1. To elect three (3) directors to serve until the next annual meeting of
shareholders;
2. To ratify the selection by the Board of Directors of Grant Thornton LLP as
the Company's independent auditors for the fiscal year ending June 30, 1996;
and
3. To act upon any other matters that may properly be presented at the meeting.
Accompanying this Notice of Annual Meeting are a Proxy Statement, a Proxy Form,
and the Company's Annual Report to Shareholders for the fiscal year ended
July 2, 1995.
The Board of Directors has fixed the close of business on September 28, 1995, as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the meeting.
By Order of the Board of Directors:
Barney U. Uhlig
Secretary
Dated: October 9, 1995
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE VOTED
AT THE MEETING. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES
AND VOTE IN PERSON IF THEY DESIRE.
CIATTI'S, INC.
5555 West 78th Street
Edina, Minnesota 55439
(612) 941-0108
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 16, 1995
GENERAL MATTERS
This Proxy Statement is furnished to the shareholders of Ciatti's, Inc. (the
"Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the Annual Meeting of Shareholders on
Thursday, November 16, 1995 at 4:30 p.m., local time, and any adjournment
thereof.
Any proxy may be revoked at any time before it is voted by receipt of a proxy
properly signed and dated subsequent to an earlier proxy, or by revocation of a
written proxy by request in person at the Annual Meeting. If not so revoked,
the shares represented by such proxy will be voted. The mailing of this Proxy
Statement to shareholders of the Company commenced on or about October 9, 1995.
Shareholders of record as of the close of business on September 28, 1995 will be
entitled to vote at the meeting. On that date, the Company had outstanding
732,486 shares of common stock, the only class of stock outstanding, $0.01
par value, each of which is entitled to one vote per share on each matter to
be voted upon at the meeting. There is no cumulative voting for directors.
The presence at the Annual Meeting in person or by proxy of the holders of a
majority of the outstanding shares of the Company's common stock entitled to
vote shall constitute a quorum for the transaction of business. If a broker
returns a "non-vote" proxy, indicating a lack of authority to vote on such
matter, then the shares covered by such non-vote shall be deemed present at the
meeting for purposes of determining a quorum, but shall not be deemed to be
represented at the meeting for purposes of calculating the vote on such matter.
If a shareholder abstains from voting on any matter, then the shares held by
such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote on such matter,
but shall not be deemed to have been voted in favor of such matter. Proxies
which are signed, but lack any such specification will be voted in favor of the
proposals set forth in the Notice of Annual Meeting and in favor of the number
and slate of directors proposed by the Board of Directors as listed herein.
PROPOSAL No. 1
ELECTION OF DIRECTORS
Three directors will be elected at the Annual Meeting to serve until the next
Annual Meeting of Shareholders or until a successor is elected. The Board of
Directors has nominated for election the three persons named below and the
Company recommends that the shareholders vote "FOR" these nominees. All the
nominees are currently directors. Phillip R. Danford and L.E. "Dan" Danford,
Jr. are brothers. It is intended that proxies will be voted "FOR" the named
nominees. The Board of Directors believes that each nominee named will be
able to serve, but should any nominee be unable to serve as a director, the
persons named in the proxies have advised the Company that they will vote for
the election of such substitute nominee as the Board of Directors may propose.
To be elected as a director, a nominee must receive the affirmative vote of a
majority of the voting power of all shares entitled to vote and present in
person or by proxy at the meeting.
The names of the nominees, their principal occupations and other information is
set forth below, based upon information furnished to the Company by the
nominees.
Ownership of the Company's common stock by these nominees is shown in the table
on page 3.
Director
Name and Age Principal Occupation Since
L. E. Dan Danford, Jr. Chairman of the Board since 1981
(52) 1981 (except from May 1990
until May 1992); Vice
President for Institutional
Sales of Piper Jaffray, Inc.
since 1988; President of the
Company from 1981 to 1988;
co-founder of the Company.
Phillip R. Danford President since May 1992; 1981
(46) Vice President from 1983 until
May 1992; co-founder of
the Company.
Thomas A. Kelm President of North State 1981
(65) Advisors, Inc., (except for
a Minnesota political 1987/88)
consulting group) since 1980.
Meetings. The Board of Directors met six times during fiscal year 1995. Each
director attended 75% or more of the meetings of the Board of Directors and any
Board committees on which he served.
Board Committees. The Audit Committee, currently comprised of Mssrs. Dan
Danford, Kelm, and Christopher L. Collier reviews and evaluates significant
matters relating to the annual audit and internal controls of the Company,
determines the scope, and reviews the results of audits by, and the
recommendations of, the Company's independent auditors and approves
additional services to be provided by the auditors. The Audit Committee met
once in fiscal year 1995.
The Salary and Stock Option Committee administers the Company's Stock Option
Plan (as described below under "Stock Options"). It is currently comprised of
Mssrs. Dan Danford and Kelm. This committee determines the employees to whom
options are to be granted, the type of option to be granted, and the number of
shares and purchase price of common stock covered by each option. The
committee also determines the terms and provisions of the respective option
agreements, and construes and interprets the Company's Plan. The Committee also
determines the salaries of all of the Company's officers. The Committee met
twice in fiscal year 1995.
Remuneration of Directors. Non-employee directors, currently consisting of
Mssrs. Dan Danford and Kelm, are paid a fee of $1,000 per month for all of
their services.
No additional compensation for serving as a director is paid to Mr. Phillip
Danford. Directors may also be reimbursed for out-of-pocket expenses, if any,
incurred in connection with attending meetings of the Board of Directors. Each
director also receives a food charge allowance of $220 per month at the
Company's restaurants. As provided in Ciatti's 1993 Stock Option Plan, on the
date of the Company's 1995 Annual Shareholder Meeting, each elected non-employee
director will receive options to purchase the Company's common stock at a price
equal to its fair market value on that date. Options to purchase a total of
1,500 shares will be issued. Accordingly, if two non-employee directors are
elected, each non-employee director will receive options to purchase 750
shares. During fiscal year 1995, each of the two non-employee directors
received options to purchase 750 shares.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table provides information as of September 5, 1995 concerning the
beneficial ownership of common stock of the Company by the only shareholders
known to the Company to hold more than five percent (5%) of the common stock of
the Company, and by all officers and directors of the Company as a group.
Unless otherwise indicated, all beneficial owners have sole voting and
investment power over the shares held.
Name and Address Exercisable Percent
of Beneficial Owner Shares Owned Stock Options(1) of Class
L. E. Dan Danford, Jr. 161,994 (2) 2,445 22.4
4401 Browndale Avenue
Edina, MN 55318
Phillip R. Danford 153,824 (3) 9,297 22.0
775 Midwest Trail
Lake Elmo, MN 55042
Thomas A. Kelm 94,305 (4) 1,245 13.0
858 Oriole Lane
Chaska, MN 55318
Leslie E. Danford, Sr. 74,725 (5) 0 10.2
as trustee of the Leslie
E. Danford, Sr. Trust
1484 Deverly Dr.
Lakeland, FL 33801
All officers, directors 432,456 25,941 60.4
as a group (5 persons)
- --------------------------------------
(1) Number of shares subject to stock options exercisable within 60 days of
September 1, 1995.
(2) Includes 2,125 shares held by Mr. L.E. Danford's wife to which Mr. Danford
disclaims beneficial ownership.
(3) Includes 2,125 shares held by Mr. P.R. Danford's wife to which Mr. Danford
disclaims beneficial ownership. Also includes 42,900 shares held by the L.E.
Danford, Sr. & Phillip R. Danford Trust, over which Mr. Phillip Danford shares
dispositive and voting power (see also footnote (5) below).
(4) Includes 7,000 shares held by Kelm & Associates, Inc., which is wholly
owned by Mr. Kelm.
(5) Includes 42,900 shares (see also footnote (3) above) held by the L.E.
Danford, Sr. & Phillip R. Danford Trust, over which Mr. Leslie E. Danford, Sr.
shares dispositive and voting power.
EXECUTIVE COMPENSATION
The following table depicts the compensation paid to the Company's President,
the sole officer qualifying for such reporting requirements under the rules of
the Securities and Exchange Commission, for services rendered to the Company in
all capacities during each of the past three fiscal years:
Summary Compensation Table
Long Term
______Annual Compensation______ Compensation
Name and Other Annual Stock
principal position Year Salary Bonus Compensation Options
Phillip R. Danford, 1995 $92,880 $15,060 - (1) 2,500 shares
President 1994 $92,880 $15,248 - (1) 9,339 shares(2)
1993 $87,620 $ 1,488 - (1) 7,500 shares
- --------------------
(1) Amount is less than reportable under the rules of the Securities and
Exchange Commission.
(2) Includes 3,099 previously granted options which were repriced as described
in the Company's 1994 Proxy Statement under "Repricing of Stock Options".
Stock Options
Under Ciatti's 1984 Stock Option Plan (the "'84 Plan"), which was closed for new
option grants on November 9, 1993, a total of 62,737 options were, at the end of
fiscal year 1995, outstanding to current employees and non-employee directors of
the Company at prices ranging from $1.50 to $18.00 per share. In addition,
29,403 options had, at the end of the fiscal year, been exercised by current and
past employees under the '84 Plan. Shares of options granted under the '84
Plan, when cancelled for any reason, are no longer available for subsequent
option grants.
Under the Company's current 1993 Stock Option Plan (the "'93 Plan"), a total of
14,500 options were outstanding at the end of fiscal year 1995 to current
employees and to non-employee directors of the Company at prices ranging from
$2.00 to $3.30 per share.
Under the '93 Plan, incentive stock options may be granted to key full-time,
salaried employees of the Company, including officers, to encourage their
continued association with the Company and to enhance their economic interest in
the Company. In addition, under the terms of the '93 Plan, each year on the date
of the Company's annual Shareholder Meeting, non-statutory options to purchase a
total of 1,500 shares are issued to the Company's non-employee directors (see
"Election of Directors - Remuneration of Directors").
The '93 Plan is administered by two non-employee directors of the Company who
together serve as the Plan Administrator through the Salary and Stock Option
Committee. The Committee has complete discretion to select employee optionees
and to establish the terms and conditions of each option to an employee, subject
in all cases to the applicable provisions of the Internal Revenue Code.
The '93 Plan provides a total of 100,000 shares of the Company's common stock be
made subject to options granted thereunder (subject, however, to the provisions
of Minnesota Statutes which currently limit the total number of shares available
for stock option grants to 20% of the total number of outstanding shares; the '
84 and the '93 Plans are therefore, as of September 28, 1995, collectively
limited to a maximum of 146,497 shares subject to stock option grants). The '93
Plan provides further that the exercise price of each option granted is fixed by
the Committee; provided, however, that the option price of each incentive stock
option granted may not be less than 100% of the fair market value of the
Company's common stock on the date the option is granted (110% if granted to
a person owning 10% or more of the Company's outstanding stock) and that the
term of an incentive stock option may not exceed ten years (five years if
granted to a shareholder owning 10% or more of the
Company's outstanding stock). Options granted under the '93 Plan are not
transferable and are subject to various other conditions and restrictions.
Shares of cancelled options are available for subsequent option grants under the
'93 Plan.
The Committee also may grant options on terms and conditions inconsistent with
those of the Internal Revenue Code applicable to incentive stock options.
However, such grants will be identified as "non-statutory" stock options and are
treated differently for tax purposes than incentive stock options.
Option Grants in Last Fiscal Year
The following table describes certain information regarding stock options
granted to the President of the Company during the fiscal year ended
July 2, 1995:
Individual Grants
_________________________________________________________________
Percent of
Total Options
Granted to
Options Employees in Exercise Expiration
Name Granted Fiscal Year Price ($/sh) Date
Phillip R. Danford 2,500 22.7% $3.30 05/31/00
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table reflects certain information regarding stock options
exercised by the President of the Company during the fiscal year ended
July 2, 1995, and unexercised options held as of the end of that fiscal year:
Number of Un-
exercised Value of Unexer-
Options at cised in-the-money
Fiscal options at
___Year-End______ Fiscal_Year-End(2)
Shares
Acquired Value (1) Exer- Unexer- Exer- Unexer-
Name on Exerc. Realized cisable cisable cisable cisable
Ph. R. Danford 2,500 $2,000 5,862 10,977 $6,579 $10,387
- --------------------
(1) Market value of underlying securities on date of exercise minus exercise
price.
(2) Market value of underlying securities at year end minus exercise price.
PROPOSAL No. 2
INDEPENDENT AUDITORS
The Company's Board of Directors appointed Grant Thornton LLP as independent
accountants to audit the Company's financial statements for the fiscal year
ending June 30, 1996, subject to ratification of that appointment by the
shareholders.
A representative of Grant Thornton LLP is expected to be present at the Annual
Meeting of the Shareholders and will be given the opportunity to make a
statement and will also be available to answer appropriate questions.
The Board of Directors recommends that the shareholders vote "FOR" the proposal
to approve the engagement of Grant Thornton LLP, and the enclosed proxy will be
so voted unless a contrary vote is indicated. In the event the appointment of
Grant Thornton LLP should not be approved by the shareholders, the Board of
Directors will make another appointment to be effective at the earliest
possible time.
SHAREHOLDER PROPOSALS
The proxy rules of the Securities and Exchange Commission permit shareholders,
after timely notice to the Company, to present proposals for shareholder action
in a company's proxy statement where such proposals are consistent with
applicable law, pertain to matters appropriate for shareholder action and are
not properly omitted by corporate action in accordance with the proxy rules.
Shareholder proposals for the next Annual Meeting of Shareholders, prepared in
accordance with the proxy rules, must be received by the Company on or before
June 15, 1996.
OTHER INFORMATION
The Annual Report of the Company for the fiscal year ended July 2, 1995 is
enclosed herein, and includes the audited financial statements and other
financial information relating to the Company.
SOLICITATION
The cost of soliciting proxies, including the cost of preparing, assembling, and
mailing the proxies and soliciting material, as well as the cost of forwarding
the material to the beneficial owners of the stock, will be borne by the
Company. Directors, officers and other employees of the Company may, without
compensation other than their regular remuneration, solicit proxies
personally or by telephone.
OTHER BUSINESS
The management of the Company does not know of any other business to be
presented at the Annual Meeting of the Shareholders. If any matter properly
comes before the meeting, however, it is intended that the persons named in
the enclosed Proxy Form will vote this proxy in accordance with their best
judgement.
ALL PROXIES PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
SHAREHOLDERS. IF NO DIRECTION IS MADE, PROXIES WILL BE VOTED "FOR"
THE ELECTION OF MANAGEMENT'S NOMINEES FOR DIRECTORS AND "FOR" PROPOSAL No. 2.
By Order of the Board of Directors:
Barney U. Uhlig
Secretary
Dated: October 9, 1995
CIATTI'S, INC.
PROXY
Solicited on Behalf of the Board of Directors for the Annual Meeting of
Shareholders to be Held on November 16, 1995
The undersigned hereby constitutes and appoints Phillip R. Danford and Barney U.
Uhlig, and each of them, with power of substitution, as attorneys and proxies to
vote all of the shares standing in the name of the undersigned at the Annual
Shareholder Meeting of Ciatti's, Inc., to be held on November 16, 1995, at 4:30
p.m. local time, at Ciatti's Italian Restaurant(R) in Woodbury, MN, and at any
adjournment thereof:
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed
(except as marked
the contrary below)
[ ] WITHHOLD AUTHORITY
to vote for all
nominees listed below
(INSTRUCTIONS: To withhold authority to vote for an individual nominee, mark
the box next to the nominee's name below.)
[ ] L.E. Dan Danford, Jr.
[ ] Phillip R. Danford
[ ] Thomas A. Kelm
2. PROPOSAL TO APPROVE THE APPOINTMENT OF GRANT THORNTON LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY.
[ ] FOR [ ] WITHHELD
3. IN THEIR DISCRETION, THE PROXIES ARE DIRECTED TO VOTE UPON OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ON PROPOSALS No. 1. AND
No. 2. IN ACCORDANCE WITH THE SPECIFICATIONS MADE, AND "FOR" THESE PROPOSALS
IF THERE IS NO SPECIFICATION.
DATE: __________________ , 1995
__________________________
Signature
__________________________
Signature (if held jointly)
[ ] I plan to attend the meeting.
PLEASE RETURN PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED WITHIN THE UNITED STATES.
