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SIXX HOLDINGS, INCORPORATED
(A DELAWARE CORPORATION)
300 CRESCENT COURT
SUITE 1630
DALLAS, TEXAS 75201
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 28, 1996
To the Stockholders of
Sixx Holdings, Incorporated:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of Sixx
Holdings, Incorporated will be held at 200 CRESCENT COURT, THIRD FLOOR (BOARD
ROOM OF KPMG PEAT MARWICK LLP), DALLAS, TEXAS, ON THE 28TH DAY OF MAY, 1996, AT
8:00 A.M. (DALLAS TIME) for the following purposes:
1. To elect two directors to hold office until the expiration of their
terms or until their successors have been duly elected and have
qualified;
2. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to reduce the total number of shares of stock that
the corporation shall have authority to issue from 12,000,000 shares
to 2,000,000 shares of Common Stock, par value $.01 per share.
3. To transact any and all other business that may properly come before
the meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 19, 1996,
as the record date (the "Record Date") for the determination of stockholders
entitled to receive notice of, and to vote at, such meeting or any
adjournment(s) thereof. Only stockholders of record at the close of business on
the Record Date are entitled to receive notice of and to vote at such meeting.
The stock transfer books will not be closed.
You are cordially invited to attend the meeting; however, proxies are not
being solicited for the meeting. If you wish to vote your shares, you or your
representative must be present in person at the meeting.
By Order of the Board of Directors
Dorothy L. Douglas, Secretary
April 30, 1996
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SIXX HOLDINGS, INCORPORATED
(A DELAWARE CORPORATION)
300 CRESCENT COURT
SUITE 1630
DALLAS, TEXAS 75201
INFORMATION STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 28, 1996
SOLICITATION AND REVOCABILITY OF PROXIES
This Information Statement is being delivered on behalf of the Board of
Directors of Sixx Holdings, Incorporated ("SIXX" or the "Company"), in
connection with the 1996 Annual Meeting of Stockholders of SIXX to be held on
May 28, 1996 (the "Annual Meeting"), at 200 Crescent Court, Third Floor (Board
Room of KPMG Peat Marwick LLP), Dallas, Texas, at 8:00 a.m. (Dallas time) for
the purposes set forth in the accompanying Notice of Annual Meeting, and at any
adjournment(s) of that meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. Stockholders are welcome to attend the Special Meeting; however, proxies
are not being solicited for the meeting. If you wish to vote your shares, you or
your representative must be present in person at the Annual Meeting.
Brokerage houses and other custodians, nominees and fiduciaries will be
requested, in connection with stock registered in their names, to forward
informational materials to the beneficial owners of such stock. All costs of
preparing, printing, assembling and mailing the Notice of Annual Meeting, this
Information Statement, and any other materials, as well as the cost of
forwarding the materials to the beneficial owners of stock, and all other costs
of the mailing, will be borne by the Company.
PURPOSES OF THE MEETING
At the Annual Meeting, SIXX's stockholders will be asked to consider and
act upon the following matters:
1. The election of two directors to hold office until the expiration of
their terms or until their successors have been duly elected and have
qualified;
2. The reduction of authorized shares of Common Stock from 12,000,000 to
2,000,000 by amendment to the Company's Certificate of Incorporation;
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
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QUORUM AND VOTING
The identity of stockholders entitled to receive notice of and to vote at
the Annual Meeting was determined as of the close of business on April 19, 1996
(the "Record Date"). On the Record Date, there were issued and outstanding
1,360,169 shares of common stock, par value $0.01 per share (the "Common
Stock").
Each stockholder of record as of the Record Date will be entitled to one
vote per share on each matter acted upon at the Annual Meeting. Cumulative
voting will not be permitted. The presence, in person or by proxy, of holders of
the majority of the issued and outstanding shares of Common Stock is necessary
to constitute a quorum at the Annual Meeting. Proxies that are returned but are
marked to abstain from voting on any matter will be counted as present for
purposes of determining a quorum. Assuming the presence of a quorum, the two
directors receiving the highest number of total votes will be elected and the
proposal to reduce the Company's authorized shares must be approved by the
holders of a majority of the outstanding shres. Because Mr. Knox owns 80% of the
outstanding shares and has indicated his intention to vote for the election of
the two nominees and for the proposal to reduce the Company's authorized shares,
the election of the nominees and approval of the proposal is assured.
Abstentions and proxies directing that the shares are not to be voted will not
be counted as a vote in favor of a matter called for a vote.
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of the Record Date, with
respect to (i) any person known to the Company to be the beneficial owner of
more than 5% of the Common Stock, (ii) the number of shares of Common Stock
beneficially owned by each director and nominee for director, (iii) the number
of shares of Common Stock beneficially owned by each executive officer named in
the Summary Compensation Table presented below under the heading "Compensation
of Directors and Executive Officers," and (iv) the number of shares of Common
Stock owned by all directors, and officers of the Company as a group.
AMOUNT PERCENT
NAME & ADDRESS OF BENEFICIALLY OF
BENEFICIAL OWNER OWNED (1) CLASS
----------------- ------------ -------
Jack D. Knox 1,095,898 80%
300 Crescent Court, #1630
Dallas, Texas
G. Michael Boswell 10,750(2) less than 1%
Danbury, Texas
Robert Ted Enloe III 10,750(2) less than 1%
Dallas, Texas
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Richard T. Mullen 10,750(2) less than 1%
Dallas, Texas
All Directors and
Officers as a Group
(5 persons) 1,128,268(2) 83%
__________________
(1) Each person has sole voting and dispositive power over the shares
indicated.
(2) Includes 4,375 shares each of Common Stock issuable upon exercise of stock
options granted to Messrs. Boswell, Enloe and Mullen that are exercisable
within 60 days of the date hereof.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10-percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that during
1995 all filing requirements applicable to its officers, directors, and greater
than 10-percent beneficial owners were complied with.
DIRECTORS AND EXECUTIVE OFFICERS
The Bylaws of SIXX provide that the Board of Directors shall consist of not
fewer than two nor more than 15 members and that the number of the directors,
within such limits, shall be determined by resolution of the Board of Directors
at any meeting. The Certificate of Incorporation and the Bylaws of SIXX provide
for the division of the Board of Directors into three classes, with each class
having a three-year term of office expiring in different years. Currently, the
Board of Directors of the Company is composed of four directors, with the terms
of Jack D. Knox and Richard T. Mullen expiring at the Annual Meeting, the term
of G. Michael Boswell expiring at the Company's annual meeting of stockholders
to be held in May of 1997 and the term of Robert Ted Enloe III expiring at the
Company's annual meeting of stockholders to be held in May of 1998.
NOMINEES FOR DIRECTOR
The Board of Directors has nominated Jack D. Knox and Richard T. Mullen for
the office of director of the Company, each to serve as director for a three
year (3) term to expire May 11, 1999, or until his successor shall has been duly
elected and have qualified. Information with respect to such nominees is set
forth below under the caption "Directors and Executive Officers."
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DIRECTORS AND EXECUTIVE OFFICERS
Name Age Position
----- --- --------
Jack D. Knox* 58 Chairman of the Board,
President and Director
Dorothy L. Douglas 51 Secretary/Treasurer
G. Michael Boswell 55 Director
Robert Ted Enloe III 57 Director
Richard T. Mullen* 56 Director
*Nominees for director
The following is a brief account of the business experience, during
the past five years, of each director and executive officer of the Company.
Each of the directors and the officers is a citizen of the United States.
Jack D. Knox has been Chairman of the Board and President of the
Company since January 1988. Mr. Knox served as President of Summit Energy,
Inc., Dallas, Texas, an American Stock Exchange listed oil and gas company,
from its inception in 1970 through April 1989, and as a director through
January 1990. Mr. Knox is also a director of El Chico Restaurants, Inc., a
restaurant company listed on the NASDAQ.
Dorothy L. Douglas was elected Treasurer of the Company in April
1988 and Secretary in May 1990. Ms. Douglas also served as Secretary of
Caspen Oil, Inc. from December 1987 until May 1990. Prior to joining Caspen
Oil, Inc. in February 1986 as Administrative Assistant to Jack D. Knox, Ms.
Douglas was employed by May Petroleum Inc. from May 1965 until January 1986,
serving as Administrative Vice President from 1975 to 1980 and Secretary from
1974 until 1986.
G. Michael Boswell has been a director of the Company since April
1988. He served as Secretary of the Company from January 1988 to May 1990.
Mr. Boswell is presently involved in private investments and the practice of
law. He served as the Chairman of the Board and President of Sunshine Mining
Co., Dallas, Texas, a New York Stock Exchange listed silver mining, precious
metals, and oil and gas producing company, from October 1977 to November 1992.
Mr. Boswell is also a director of a wholly-owned special purpose subsidiary of
Mesa, Inc., a New York Stock Exchange listed company.
Robert Ted Enloe III has been a director of the Company since
February 1993. He is presently President, Chief Executive Officer and Trustee
of Liberte' Investors, Dallas, Texas, a New York Stock Exchange listed
mortgage investment company ("Liberte' "). In connection with a previously
planned and announced restructuring of its debt, Liberte' filed a petition
for protection under Chapter 11 of the Federal bankruptcy laws in October of
1993. Mr. Enloe held the position of President of Lomas Financial Corporation
("Lomas") from 1975 through September of 1991. Lomas filed for protection
under Chapter 11 of the Federal bankruptcy laws in September of 1989 and
emerged from bankruptcy in January of 1992. Mr. Enloe is also a director of
Compaq Computer Corporation, a New York Stock Exchange listed
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manufacturer and seller of computers, Leggett & Platt, Inc., a New York Stock
Exchange listed manufacturer of furniture and bedding components, and LNH
REIT, Inc., a New York Stock Exchange listed real estate investment trust and
mortgage company.
Richard T. Mullen has been a director of the Company since February
1993. He is President of The Mullen Company, Dallas, Texas, a real estate
brokerage, development, and management company, and has served in this
position for more than five years.
The Company has standing audit, nominating, and compensation
committees, each of which is composed of the three outside directors, being
G. Michael Boswell, Robert Ted Enloe III, and Richard T. Mullen. Each of
these committees was formed in February 1993 and from the merger to date,
there has been one Audit Committee meeting. Pursuant to the Company's
Bylaws, notice of a stockholder's intent to make a nomination for the Board
of Directors or present matters to be voted on at the annual meeting must be
received by the Secretary of the Company not more than 120 nor less than 90
days in advance of the annual meeting of stockholders or by the close of
business on the seventh day following the date on which notice of a special
meeting of stockholders is first given to stockholders and must contain
certain specified information.
During 1995, the Board of Directors took action pursuant to either
special meeting or unanimous written consent of its members on four
occasions. All directors participated in all actions by the Board of
Directors during 1995.
There is no family relationship among the nominees or present
directors and any executive officer of the Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The total compensation paid during 1995, fiscal 1994, the
five-month transition period ending December 31, 1993 reflecting the change
of fiscal year, and fiscal 1993 to the Chief Executive Officer of the Company,
Jack D. Knox, is set forth below in the following Summary Compensation Table:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------------- -------------------
SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS/ ALL OTHER
NAME YEAR* SALARY BONUS COMP. SARS(#) COMPENSATION
---- ----- ------ ----- -------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Knox 1995 $ 600(1) $-- $2,127(2) -- $1,750(3)
Chairman of the Board Fiscal
and President (Chief 1994 $26,500(1) $-- $3,227(2) -- $1,740(3)
Executive Officer) 5-mo.
1993 $34,250(1) $-- $1,383(2) -- $ 725(3)
Fiscal
1993 $40,500(1) $-- $6,279(2) 400,000 $1,740(3)
</TABLE>
(1) Includes $600 and $1,500 for the 12 months ended December 31, 1995 and
December 31, 1994, respectively, $3,000 for the 5 months ended December 31,
1993, and $3,000 for the year ended July 31,
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1993 in fees paid to Mr. Knox as a director of the Company. He has not
received a salary from the Company since April 30, 1994, the effective
date of the Merger Agreement. However, Mr. Knox and affiliates receive
payments from, and certain services provided by, the Company pursuant to
agreements entered into in connection with the Merger. See "Certain
Relationships and Related Transactions."
(2) Consists of payment by the Company with respect to Mr. Knox's percentage
of personal use of a company car.
(3) Reflects the Company-paid premium of $1,750 and $1,740 for fiscal years
ended December 31, 1995 and December 31, 1994, respectively, $1,740 for
fiscal years ended December 31, 1994 and July 31, 1993 and $725 for the 5
months ended December 31, 1993 for a life insurance policy on the life of
Mr. Knox, the beneficiary of which is Mr. Knox's estate.
*The Company changed its fiscal year-end from July 31 to December 31 effective
December 31, 1993.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR
Jack Knox owns no options to purchase common stock and exercised no options
during the last fiscal year.
COMPENSATION OF DIRECTORS
Directors are reimbursed by the Company for all of their reasonable
expenses incurred in connection with meetings of the Board of Directors or any
committees thereof. Each director (excluding Mr. Knox) receives an annual
retainer of $6,000 per year, payable $500 each month, while serving as a
director and each director (including Mr. Knox) receives $600 for each meeting
of the Board of Directors which they attend and $300 for each committee meeting
which they attend.
The Board of Directors has granted to each non-officer director options to
purchase an aggregate of 14,375 shares of common stock, subject to vesting as
described below. Options with respect to 3,125 shares were granted at an
exercise price of $4.00 per share on December 24, 1992. Options with respect to
3,750 shares were granted October 6, 1994, with an effective vesting date of
September 30, 1994, at an exercise price of $6.24 per share (the mean price
between the bid and ask on the close on September 30, 1994) and options with
respect to 7,500 shares were granted on March 6, 1995, at an exercise price of
$4.25 per share (the mean price between the bid and ask on the close of business
on March 3, 1995) to vest 3,750 shares on September 30, 1995 and 3,750 shares on
September 30, 1996, but only if the holder is still serving as a director at
that time. Each set of 3,750 options must be exercised within 10 years of the
vesting and becomes exercisable with respect to one-third of the total number of
option shares in each set on each successive anniversary of the date of vesting.
Upon termination of any holder's position as a director, any portions of that
holder's options that are not then exercisable are to be cancelled. The terms of
all the above options have taken into account the one-for-eight reverse split
which was effective March 15, 1996.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
On April 25, 1994, a subsidiary of the Company merged with Patrizio
Restaurant, Inc. ("Patrizio I") and Patrizio North, Inc. ("Patrizio II"), as a
result of which the Company acquired substantially all of the assets of the two
companies, which consisted of two existing upscale Italian food restaurants, the
restaurant concept, design and motif and the other assets used in the day-to-day
operation of the restaurants.
Prior to the merger, Jack D. Knox, the Chairman, President, and a Director
of the Company, owned 100% of the outstanding capital stock of the two Patrizio
companies. Pursuant to the terms of the Merger, Mr. Knox exchanged the
outstanding shares of capital stock of the two companies for, in the aggregate,
approximately $3.0 million in cash and 6,163,934 shares of the Company's common
stock. Of the $3.0 million, approximately $2,365,600 of the amount was paid to
Mr. Knox to reimburse him for advances he had made personally to fund the
construction of Patrizio II. The consideration received by Mr. Knox pursuant to
the Merger Agreement was determined by negotiations between the parties, and is
supported by appraisals prepared by three separate independent business
valuation companies and a fairness opinion prepared by one of the valuation
companies. The cash portion of the purchase price paid to Mr. Knox in the merger
was funded from existing cash balances.
In connection with the Merger, the Company and Mr. Knox or other entities
affiliated with Mr. Knox entered into three additional agreements effective
April 25, 1994. Under a five-year Consulting Agreement among the Company, Mr.
Knox and a company owned by Mr. Knox, Mr. Knox agreed to serve without pay as
an officer and Chairman of the Board of the Company (if elected) and to
provide, through the separate company owned by him, continued services to the
Company with respect to site selection, market analysis, design, construction,
motif, menu design, menu items, marketing and public relations relating to the
Patrizio concept and any additional concepts developed by Mr. Knox for the
Company in exchange for one and one-half percent of the gross restaurant
revenues of the Company. The gross revenues of the Company subject to the one
and one-half percent consulting fee are limited in the future to those generated
by a maximum of 32 restaurants, as defined. Pursuant to this agreement, Mr.
Knox, through the separate company, was entitled to receive approximately
$86,900 and $57,900 during 1995 and 1994, respectively, which amounts are
included in general and administrative expenses. Payment of the $86,900
consulting fees earned in 1995 was forgiven by Mr. Knox so that the Company
could retain 100% of all cash flows generated by restaurant operations. Such
amount was treated as an equity contribution in 1995. The Consulting Agreement
is for an initial five-year term and may be extended by either party for an
additional five years.
Mr. Knox developed and refined the Patrizio concept, design, and motif
over a five-year period. The second agreement provides a developer's royalty
starting at 1/2 of 1% of gross revenues of the Company and escalates 1/2 of
1% when six restaurants are opened, when twelve restaurants are opened, and
when eighteen restaurants are opened for a total potential royalty of 2%. The
royalty paid on gross revenues is capped at 32 restaurants total and no further
royalty is paid on any restaurants numbering greater than 32. Pursuant to this
agreement, Mr. Knox earned a royalty of approximately $29,000 and
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$19,300 in 1995 and 1994, respectively, included in general and administrative
expenses, from the Company for its use of the Patrizio concept. Payment of the
developer's royalty earned in 1995 was forgiven by Mr. Knox so that the Company
could retain 100% of all cash flows from restaurant operations in the Company.
Such amount was treated as an equity contribution by Mr. Knox in 1995.
The third agreement, entered into at the time of the merger, and terminable
by either party upon 30 days notice, provides for a continuation of the laundry
services to the Patrizio restaurants by an affiliated company upon the same
terms and conditions that were in effect prior to the merger. In return, the
Company agreed to provide Mr. Knox and the affiliated company in-house
accounting services of the same type that are required by the two Patrizio
restaurants. Effective January 1996, this mutual services agreement was
cancelled and the Patrizio restaurants no longer receive laundry services from
an affiliated company. Under the terms of the cancellation, the Company will
receive $30,000 each year it continues to provide in-house accounting services
to Mr. Knox and the affiliated company.
Prior to the Merger date, the Company shared corporate administrative
functions, primarily accounting, with certain of the Company's affiliates. The
cost of these administrative functions were allocated to the companies based on
estimated employee time expended. Such costs consist primarily of salaries and
occupancy expenses.
The notes payable to Mr. Knox are unsecured and payable on demand. The
notes bear interest at 6% per annum. Interest expense for such notes aggregated
approximately $12,600 and $6,800 in 1995 and 1994, respectively, with the
corresponding amount of accrued interest reflected in payable to affiliates at
December 31, 1995 and 1994.
REDUCTION OF AUTHORIZED SHARES
GENERAL
The stockholders will also be asked to consider and vote upon a proposal
providing for the reduction of authorized shares of Common Stock from 12,000,000
to 2,000,000. The Reduction of Authorized Shares will be effected by an
amendment to Article Four, Section I of the Company's Certificate of
Incorporation, which will be revised to read in its entirety as follows:
I. The total number of shares of stock that the
Corporation shall have authority to issue is 2,000,000
shares of common stock, par value $0.01 per share (the
"Common Stock").
The Reduction of Authorized Shares will become effective upon the filing of
a certificate of amendment with the Secretary of State of Delaware.
VOTE NEEDED FOR APPROVAL
The proposed Reduction of Authorized Shares and the related amendment to
the Company's Restated Certificate of Incorporation must be approved by the
holders of at least a majority of the outstanding shares of Common Stock.
Because Mr. Knox owns 80% of the outstanding shares and has
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informed the Company that he intends to vote for the proposed amendment,
approval of the amendment is assured.
REASONS FOR REDUCTION OF AUTHORIZED SHARES
Reducing the number of authorized shares will reduce the franchise tax to
be paid in the future by the Company to the State of Delaware, where the Company
is incorporated. Assuming the Company's outstanding shares and stockholders'
equity at December 31, 1996 is the same as at December 31, 1995, the Company
would pay $820 in franchise tax for 1996 if the Reduction of Authorized Shares
is approved, compared to $5,020 if the Reduction of Authorized Shares is not
approved.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP served as SIXX's principal accountant for 1995 and
will continue as SIXX's independent accountant for the current year. It is
expected that representatives of KPMG Peat Marwick LLP will be present at the
1996 Annual Meeting of Stockholders with the opportunity to make a statement if
that is their desire to do so and will be available to respond to appropriate
questions from stockholders.
OTHER BUSINESS
The Management knows of no business other than that previously disclosed
herein that will be brought before the Annual Meeting.
PROPOSALS OF STOCKHOLDERS
All proposals of stockholders intended to be presented at the 1996 Annual
Meeting of Stockholders of SIXX must be received by SIXX at its principal
executive offices on or before December 18, 1996, for inclusion in SIXX's Proxy
Statement and Form of Proxy relating to that meeting.
ANNUAL REPORT
The Annual Report for the year ended December 31, 1995, is being mailed to
stockholders with this Proxy Statement. The Annual Report is not to be regarded
as proxy soliciting material.
By Order of the Board of Directors
Dorothy L. Douglas,
Secretary
April 30, 1996
Dallas, Texas
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