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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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-12
Main Street and Main Incorporated
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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MAIN STREET
AND MAIN INCORPORATED
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 2000
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The Annual Meeting of Stockholders of Main Street and Main Incorporated, a
Delaware corporation, will be held at 11:00 a.m., on Friday, May 19, 2000, at
Hermosa Inn, 5532 North Palo Cristi Road, Paradise Valley, Arizona, for the
following purposes:
1. To elect directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as the independent
auditors of our company for the fiscal year ending December 25, 2000.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
Only stockholders of record at the close of business on April 12, 2000 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person. To
assure your representation at the meeting, however, we urge you to mark, sign,
date, and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she previously has returned a
proxy.
Sincerely,
/s/ James Yeager
James Yeager
Secretary
Phoenix, Arizona
April 18, 2000
<PAGE>
MAIN STREET AND MAIN INCORPORATED
5050 NORTH 40TH STREET, SUITE 200
PHOENIX, ARIZONA 85018
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PROXY STATEMENT
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VOTING AND OTHER MATTERS
GENERAL
The enclosed proxy is solicited on behalf of Main Street and Main
Incorporated, a Delaware corporation, by our Board of Directors for use at our
Annual Meeting of Stockholders to be held at 11:00 a.m. on Friday, May 19, 2000,
or at any adjournment or adjournments thereof, for the purposes set forth in
this proxy statement and in the accompanying notice of Annual Meeting of
Stockholders. The meeting will be held at Hermosa Inn, 5532 North Palo Cristi
Road, Paradise Valley, Arizona.
These proxy solicitation materials are being mailed on or about April 18,
2000, to all stockholders entitled to vote at the meeting.
VOTING SECURITIES AND VOTING RIGHTS
Stockholders of record at the close of business on April 12, 2000 are
entitled to notice of and to vote at the meeting. On the record date, there were
issued and outstanding 10,029,126 shares of our common stock.
The presence, in person or by proxy, of the holders of a majority of the
total number of shares of our outstanding common stock constitutes a quorum for
the transaction of business at the meeting. Each stockholder voting at the
meeting, either in person or by proxy, may cast one vote per share of common
stock held on all matters to be voted on at the meeting. Assuming that a quorum
is present, (a) the affirmative vote of a plurality of the shares of our common
stock present in person or represented by proxy at the meeting and entitled to
vote is required for the election of directors; and (b) the affirmative vote of
a majority of the outstanding shares of our common stock present in person or
represented by proxy at the meeting and entitled to vote is required for the
ratification of the appointment of Arthur Andersen LLP as the independent
auditors of our company for our fiscal year ending December 25, 2000.
Votes cast by proxy or in person at the meeting will be tabulated by the
election inspectors appointed for the meeting and will determine whether a
quorum is present. The election inspectors will treat abstentions as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
VOTING OF PROXIES
When a proxy is properly executed and returned, the shares it represents
will be voted at the meeting as directed. If no specification is indicated, the
shares will be voted (a) "for" the election of the nominees set forth in this
proxy statement, and (b) "for" the ratification of the appointment of Arthur
Andersen LLP as the independent auditors of our company for our fiscal year
ending December 25, 2000.
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REVOCABILITY OF PROXIES
You may revoke a proxy at any time before its use by
* delivering to us written notice of revocation, or
* delivering to us a duly executed proxy bearing a later date, or
* attending the meeting and voting in person.
SOLICITATION
We will pay for this solicitation. In addition, we may reimburse brokerage
firms and other persons representing beneficial owners of shares for expenses
incurred in forwarding solicitation materials to those beneficial owners.
Certain of our directors and officers also may solicit proxies, personally or by
telephone or e-mail, without additional compensation.
ANNUAL REPORT AND OTHER MATTERS
Our 1999 Annual Report to Stockholders, which we mailed to stockholders
with or preceding this proxy statement, contains financial and other information
about the activities of our company but is not incorporated into this proxy
statement and is not to be considered a part of these proxy soliciting materials
or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the
Securities Exchange Act of 1934. The information contained in the "Compensation
Committee's Report on Executive Compensation" below and "Performance Graph"
below shall not be deemed "filed" with the Securities and Exchange Commission or
subject to Regulations 14A or 14C or to the liabilities of Section 18 of the
Exchange Act.
UPON WRITTEN REQUEST, WE WILL PROVIDE A COPY OF OUR ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED DECEMBER 27, 1999 AS FILED WITH THE SEC WITHOUT CHARGE
TO EACH STOCKHOLDER OF RECORD AS OF THE RECORD DATE. WE ALSO WILL FURNISH ANY
EXHIBITS LISTED IN THE FORM 10-K REPORT UPON REQUEST AT THE ACTUAL EXPENSE WE
INCUR IN FURNISHING SUCH EXHIBIT. YOU SHOULD DIRECT ANY SUCH REQUESTS TO OUR
SECRETARY AT OUR EXECUTIVE OFFICES AT 5050 NORTH 40TH STREET, SUITE 200,
PHOENIX, ARIZONA 85018.
ELECTION OF CORPORATE DIRECTORS
NOMINEES
Our Bylaws provide that the number of directors shall be fixed from time to
time by resolution of the Board of Directors or stockholders. All directors are
elected at each annual meeting of our stockholders for a term of one year and
hold office until their successors are elected and qualified, or until their
earlier resignation or removal.
A board of five directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for each of
the nominees named below. All of the nominees currently are directors of our
company. In the event that any nominee is unable or declines to serve as a
director at the time of the meeting, the proxies will be voted for any nominee
designated by the current Board of Directors to fill the vacancy. We do not
expect that any nominee will be unable or will decline to serve as a director.
The term of the office of each person elected as a director will continue until
the next annual meeting of stockholders or until a successor has been elected
and qualified.
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The following table sets forth certain information regarding the nominees
for directors of our company:
POSITIONS AND OFFICES
NAME AGE PRESENTLY HELD WITH THE COMPANY
- ---- --- -------------------------------
John F. Antioco(1)........ 50 Chairman of the Board
Bart A. Brown, Jr......... 68 President, Chief Executive Officer, and
Director
William G. Shrader........ 52 Executive Vice President, Chief Operating
Officer, and Director
Jane Evans(1)............. 55 Director
John C. Metz(1)........... 60 Director
- ----------
(1) Member of the Audit and Compensation Committees.
JOHN F. ANTIOCO has served as Chairman of the Board of Directors since
August 9, 1996 and as a director of our company since January 8, 1996. Mr.
Antioco has served as the Chairman of the Board and Chief Executive Officer of
Blockbuster Inc. since July 1997. Mr. Antioco previously served as President and
Chief Executive Officer of Taco Bell Corp. Mr. Antioco served as the Chairman of
The Circle K Corporation, from August 1995 until May 1996 and as President and
Chief Executive Officer of Circle K from July 1993 until May 1996. Mr. Antioco
joined Circle K as Chief Operating Officer in September 1991. Mr. Antioco was
Chief Operating Officer of Pearle Vision Centers, Inc. from June 1990 to August
1991. From 1970 to 1990, Mr. Antioco held various positions with The Southland
Corporation.
BART A. BROWN, JR. has served as our President and Chief Executive Officer
and as a director of our company since December 1996. Mr. Brown was affiliated
with Investcorp International, N.A., an international investment banking firm,
from April 1996 until December 1996. Mr. Brown served as the Chairman and Chief
Executive Officer of Color Tile, Inc. at the request of Investcorp
International, Inc., which owned all of that company's common stock, from
September 1995, which was shortly after Color Tile, Inc. filed under Chapter 11
of the United States Bankruptcy Code, until March 1996. Mr. Brown served as
Chairman of the Board of The Circle K Corporation from June 1990, shortly after
that company filed for reorganization under Chapter 11 of the United States
Bankruptcy Code, until September 1995. From September 1994 until September 1996,
Mr. Brown also served as the Chairman and Chief Executive Officer of Spreckels
Industries, Inc. Mr. Brown engaged in the private practice of law from 1963
through 1990 after seven years of employment with the Internal Revenue Service.
WILLIAM G. (BILL) SHRADER has served as our Executive Vice President and
Chief Operating Officer and as a director of our company since March 1999. Prior
to joining our company, Mr. Shrader was Senior Vice President of Marketing for
Tosco Marketing Company from February 1997 to March 1999. From August 1992 to
February 1997, Mr. Shrader served in several capacities at Circle K Stores,
Inc., including President of the Arizona Region, President of the Petroleum
Products/Services Division, Vice President of Gasoline Operations, and Vice
President of Gasoline Marketing. Mr. Shrader began his career in 1976 at The
Southland Corporation and departed in 1992 as National Director of Gasoline
Marketing.
JANE EVANS has served as a director of our company since March 1997. Ms.
Evans has served as President and Chief Executive Officer of Smart TV since
April 1995. Ms. Evans served as Vice President and General Manager of U.S. West
Communications, Home and Personal Services from February 1991 until March 1995;
as President and Chief Executive Officer of Interpacific Retail Group from March
1989 until January 1991; as a General Partner of Montgomery Securities from
January 1987 until February 1989; as President and Chief Executive Officer of
Monet Jewelers from May 1984 until December 1987; as Executive Vice President -
Fashion Group of General Mills, Inc. from October 1979 until April 1984; as Vice
President - Corporate Development of Fingerhut from November 1977 until
September 1979; as President of Butterick Fashions from May 1974 until October
1977; and as President of the I. Miller Division of Genesco, Inc. from May 1970
until May 1973. Ms. Evans serves on the Boards of Directors of the Philip Morris
Companies, Inc., Georgia-Pacific Corp., Kaufman & Broad Home Corp., and
Petsmart, Inc.
JOHN C. METZ has served as a director of our company since April 1996. Mr.
Metz has served as Chairman and Chief Executive Officer of Metz Enterprises,
Inc., a contract food management and retail restaurant company, since 1987. Metz
Enterprises is a T.G.I. Friday's franchisee in the northeastern United States.
Mr. Metz previously
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served as President and Chief Executive Officer of Custom Management
Corporation, a contract food management corporation from 1967 until 1987.
There are no family relationships among any of our directors and executive
officers.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Our Bylaws authorize the Board of Directors to appoint among its members
one or more committees consisting of one or more directors. The Board of
Directors has appointed two committees. The Audit Committee reviews the annual
financial statements, any significant accounting issues, and the scope of the
audit with our independent auditors and is available to discuss with the
auditors any other audit-related matters that may arise during the year. The
Compensation Committee makes recommendations to the Board of Directors
concerning remuneration arrangements for senior management and directors. The
Board of Directors has not appointed any other committees.
Our Board of Directors held a total of three meetings during the fiscal
year ended December 27, 1999. Our Audit Committee met separately at two formal
meetings during the fiscal year ended December 27, 1999, and our Compensation
Committee met separately at one formal meeting during the fiscal year ended
December 27, 1999. No director attended fewer than 75% of the aggregate of (i)
the total number of meetings of the Board of Directors, and (ii) the total
number of meetings held by all committees of the Board of Directors on which
such director was a member.
DIRECTOR COMPENSATION
Employees of our company do not receive additional compensation for serving
as members of our Board of Directors. We have an employment agreement with Bart
A. Brown, our President and Chief Executive Officer and a director of our
company. See "Executive Compensation - Employment Agreements."
During 1999, our non-employee directors received $15,000 in annual
compensation plus $1,000 for each Board of Directors meeting attended in person
and $500 for each telephonic Board of Directors meeting. We reimburse our
directors' costs and expenses for attending meetings of the Board of Directors.
Directors of our company are eligible to receive stock options and other awards
under our 1999 Incentive Stock Plan. See "Executive Compensation - 1999
Incentive Stock Plan."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, officers, and
persons who own more than 10% of a registered class of our equity securities to
file reports of ownership and changes in ownership with the SEC. SEC regulations
require directors, officers, and greater than 10% stockholders to furnish us
with copies of all Section 16(a) forms they file.
During 1999, certain of our directors, officers, and 10% stockholders of
our company became aware that they had not reported certain transactions that
are required to be disclosed under Section 16(a). Accordingly, during 1999 the
following persons filed late Forms 5 to disclose the transactions indicated: (1)
Bart A. Brown, Jr. (Form 3 beneficial ownership disclosure and a total of five
exempt option grants during 1997 and 1998); (2) James Yeager (Form 3 beneficial
ownership disclosure and a total of three exempt option grants during 1998); (3)
Jane Evans (Form 3 beneficial ownership disclosure and a total of three exempt
option grants during 1997 and 1998); and (4) John C. Metz (Form 3 beneficial
ownership disclosure and a total of two exempt option grants during 1997 and
1998).
Based solely upon our review of the copies of such forms that we received
during fiscal 1999 and written representations that no other reports were
required, we believe that each person who at any time during the fiscal year was
a director, executive officer, or beneficial owner of 10% or more of our common
stock complied with all Section 16(a) filing requirements during such fiscal
year except that (a) John F. Antioco filed one late report on Form 4 to report
three transactions and one late report on Form 5 to report one transaction; (b)
Bart A. Brown filed
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one late report on Form 4 to report one transaction and a late report on Form 5
to report two exempt option grants during 1999; (c) William G. Shrader filed a
late report on Form 3 to disclose his beneficial ownership of our stock as of
the date he became a director and officer of our company, four late reports on
Form 4 to disclose a total of 11 transactions, and a late report on Form 5 to
report two exempt option grants during 1999; (d) James Yeager filed a late
report on Form 5 to report one exempt option grant during 1999; (e) John C. Metz
filed a late report on Form 5 to report one exempt option grant during 1999; and
(f) Jane Evans filed a late report on Form 5 to report one exempt option grant
during 1999.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table sets forth, for the periods indicated, the compensation
received by our Chief Executive Officer and our other executive officers whose
annual salary and bonus exceeded $100,000 for the fiscal year ended December 27,
1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) COMPENSATION
- --------------------------- ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Bart A. Brown, Jr., 1999 $250,000 $50,000 200,000 $ 900(2)
President and Chief 1998 250,000 50,000 200,000(3) --
Executive Officer 1997 250,000 -- 350,000(3) --
William G. Shrader, 1999 $166,365(4) $75,000 250,000 $ --
Executive Vice President
and Chief Operating Officer
James Yeager, 1999 $ 90,000 $15,000 20,000 $ --
Vice President - Finance, 1998 66,000 20,000 25,000(5) --
Secretary, and Treasurer 1997 42,500(6) 6,000 7,500 --
</TABLE>
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(1) Except as otherwise indicated, the exercise prices of the options granted
were the fair market value of our common stock on the date of grant.
(2) Represents matching contributions we made to our 401(k) plan.
(3) The options granted to Mr. Brown in 1997 consist of 250,000 fully vested
options granted at an exercise price of $2.50 per share and 100,000 options
at exercise prices of $3.00 and $5.00, which were regranted after being
surrendered by Mr. Antioco. The options granted to Mr. Brown in 1998
consist of 50,000 fully vested options at an exercise price of $3.25 per
share, 75,000 options at an exercise price of $3.25 per share that vested
on December 31, 1999, and 75,000 options at exercise prices of $3.00 and
$5.00, which were regranted after being surrendered by Mr. Antioco.
(4) Represents amounts paid beginning on March 1, 1999, the date on which Mr.
Shrader joined our company.
(5) The options granted to Mr. Yeager in 1998 consist of 15,000 options at
exercise prices of $3.00 and $5.00, which were regranted after being
surrendered by Mr. Antioco.
(6) Represents amounts paid beginning on June 16, 1997, the date on which Mr.
Yeager joined our company.
Officers and key personnel of our company are eligible to receive stock
options and awards under our 1990 Stock Option Plan, 1995 Stock Option Plan, and
1999 Incentive Stock Plan. Our executive officers participate in medical
insurance benefits that are generally available to all of our employees.
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OPTION GRANTS
The following table provides information on stock options granted to the
named officers during our fiscal year ended December 27, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED EXERCISE FOR OPTION TERM(2)
OPTIONS TO EMPLOYEES PRICE EXPIRATION ---------------------------
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH) DATE 5% 10%
- ---- ------------- -------------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Bart A. Brown, Jr......... 50,000 6.8% $3.3125 6/11/09 $ 104,161 $ 263,964
150,000 20.5% $3.1875 12/27/09 $ 300,690 $ 762,008
William G. Shrader........ 150,000 20.5% $3.4380 3/1/09 $ 324,321 $ 821,893
50,000 6.8% $3.3125 6/11/09 $ 104,161 $ 263,964
50,000 6.8% $3.1875 12/27/09 $ 100,230 $ 254,003
James Yeager.............. 20,000 2.7% $3.3125 6/11/09 $ 41,664 $ 105,585
</TABLE>
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(1) The options were granted at the fair value of the shares on the date of
grant and have 10-year terms.
(2) Potential gains are net of the exercise price, but before taxes associated
with the exercise. Amounts represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. The assumed 5% and 10% rates of stock price appreciation are provided
in accordance with SEC rules and do not represent our estimate or
projection of the future price of our common stock. Actual gains, if any,
on stock option exercises will depend upon the future market prices of our
common stock.
FISCAL YEAR-END OPTION HOLDINGS
None of the named officers exercised any options during fiscal 1999. The
following table provides information on the value of unexercised options held by
the named officers at December 27, 1999.
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END ($)(1)
----------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Bart A. Brown, Jr................ 1,000,000 0 $ 316,406 $ 0
William G. Shrader............... 50,000 200,000 $ 0 $ 0
James Yeager..................... 16,458 36,042 $ 5,273 $ 1,289
</TABLE>
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(1) Calculated based upon the closing price of our common stock on the Nasdaq
National Market on December 27, 1999, of $3.19 per share. The exercise
prices of certain of the options held by our executive officers on December
27, 1999 were equal to or greater than $3.19 per share.
STOCK OPTION PLANS
We have three stock option plans: the 1990 Stock Option Plan, the 1995
Stock Option Plan, and the 1999 Incentive Stock Plan. Each of these plans permit
us to grant options that are intended to qualify as incentive stock options
under the Internal Revenue Code, as well as nonqualified stock options. These
plans also permit us to make other stock-based awards, including grants of
shares of common stock and stock appreciation rights, or SARs.
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We may grant options and awards under our stock option plans to employees,
directors, and independent contractors who provide services to our company. We
may grant options that are incentive stock options only to key personnel of our
company or our subsidiaries who are also employees of our company or our
subsidiaries. The terms and conditions of incentive stock options must be
consistent with the qualification requirements set forth in the Internal Revenue
Code. The exercise price of all incentive stock options must be at least equal
to the fair market value of our common stock on the date of the grant or, in the
case of incentive stock options granted to a person who holds 10% or more of the
voting power of our stock, at least 110% of the fair market value of our common
stock on the date of the grant. The maximum exercise period for which incentive
stock options may be granted is ten years (five years in the case of incentive
stock options granted to a person who holds 10% or more of the voting power of
our stock).
To exercise an option, the optionholder will be required to deliver to us
full payment of the exercise price for the shares as to which the option is
being exercised. Generally, options can be exercised by delivery of cash, check,
or shares of our common stock.
SARs will entitle the recipient to receive a payment equal to the
appreciation in market value of a stated number of shares of common stock from
the price on the date the SAR was granted or became effective to the market
value of the common stock on the date first exercised or surrendered. Stock
awards will entitle the recipient to receive shares of our common stock
directly. Cash awards will entitle the recipient to receive direct payments of
cash depending on the market value or the appreciation of our common stock or
other securities of our company.
The Board of Directors administers our option plans. The Board of Directors
may delegate all or any portion of its authority and duties under our option
plans to one or more committees appointed by the Board of Directors under such
conditions and limitations as the Board of Directors may from time to time
establish. The Board of Directors and/or any committee that administers our
plans has the authority, in its discretion, to determine all matters relating to
awards, including the selection of the individuals to be granted awards, the
type of awards, the number of shares of common stock subject to an award,
vesting conditions, and any and all other terms, conditions, restrictions, and
limitations, if any, of an award.
A maximum of 250,000 shares of common stock may be issued under the 1990
Plan. As of April 12, 2000, 5,000 shares of common stock have been issued upon
exercise of options granted pursuant to the 1990 Plan and there were outstanding
options to purchase 170,500 shares of common stock under the 1990 Plan. An
additional 15,175 shares of common stock remain reserved for issuance under the
1990 Plan. No incentive awards other than stock options have been granted under
the 1990 Plan. The 1990 Plan expires on July 24, 2000. Any options granted under
the 1990 Plan will remain outstanding until their respective expiration dates or
earlier termination in accordance with their respective terms.
A maximum of 325,000 shares of common stock may be issued under the 1995
Plan. As of April 12, 2000, 8,209 shares of common stock have been issued upon
exercise of options granted under the 1995 Plan and there were outstanding
options to acquire 281,500 shares of common stock under the 1995 Plan.
Accordingly, only an additional 35,291 shares remain available for grants under
the 1995 Plan. The 1995 Plan will remain in effect until January 8, 2006. The
1995 Plan included an automatic program that provided for the automatic grant of
options to non-employee directors of our company. Because there currently is not
a sufficient number of shares remaining authorized under the 1995 Plan to permit
grants under the automatic program, our Board of Directors discontinued the
automatic program in 1999.
A maximum of 1,000,000 shares of common stock may be issued under the 1999
Plan. The maximum number of shares covered by awards granted to any individual
in any year may not exceed 15% of the total number of shares that may be issued
under the 1999 Plan. As of April 12, 2000, no shares of common stock have been
issued upon exercise of options granted under the 1999 Plan and there were
outstanding options to acquire 377,000 shares of common stock under the 1999
Plan. An additional 623,000 shares remain available for grant under the 1999
Plan. The 1999 Plan will remain in force until February 19, 2009, unless sooner
terminated by the Board of Directors.
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401(K) PROFIT SHARING PLAN
Our qualified 401(k) Profit Sharing Plan was adopted by the Board of
Directors on January 14, 1991, effective as of January 1, 1991, and covers
corporate management and restaurant employees. The 401(k) Plan currently
provides for a matching contribution equal to 50% of the first 4% of the salary
deduction a participant elects to defer as a contribution to the 401(k) Plan.
The 401(k) Plan further provides for a special discretionary contribution equal
to a percentage of a participant's salary to be determined each year by our
company. We also may contribute a discretionary amount in addition to the
special discretionary contribution. Contributions to the 401(k) Plan by our
company for fiscal 1999 totaled approximately $122,000.
EMPLOYMENT AGREEMENTS
We are a party to an employment agreement with Bart A. Brown, Jr. with a
term through December 31, 2000. The agreement automatically renews for
successive one-year terms unless either party terminates by giving the other
party at least 60 days' written notice. Mr. Brown's employment agreement
provides for him to serve as the President and Chief Executive Officer of our
company. The employment agreement provides for Mr. Brown to receive a salary of
$250,000 per annum. In addition, the employment agreement provides that Mr.
Brown will be eligible to receive discretionary bonuses in amounts determined by
our Board of Directors. The employment agreement contains provisions regarding
non-competition, non-solicitation of employees, and non-disclosure of
confidential information.
The employment agreement provides for Mr. Brown to receive his fixed
compensation to the date of the termination of his employment by reason of
resignation or as a result of termination of employment "for cause," as defined
in the agreement. In the event of the termination of employment by reason of
death or disability, the employment agreement provides for the payment of fixed
compensation to Mr. Brown for a period of one year from the date of death or
disability. If we terminate Mr. Brown's employment other than "for cause" or in
the event of any termination of employment following any "change in control" of
our company, as defined in the agreement, the employment agreement also provides
for Mr. Brown to receive his fixed compensation as if his employment had not
been terminated. Section 280G of the Internal Revenue Code may limit the
deductibility of such payments for federal income tax purposes. If these
payments are not deductible and if we have income at least equal to such
payments, an amount of income equal to the amount of such payments could not be
offset. As a result, the income that was not offset would be "phantom income"
(i.e., income without cash) to our company. A change in control would include a
merger or consolidation of our company, a sale of all or substantially all of
our assets, changes in the identity of a majority of the members of our Board of
Directors, or acquisitions of more than 15% of our common stock, subject to
certain limitations.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Our Certificate of Incorporation and Bylaws provide that our company will
indemnify and advance expenses, to the fullest extent permitted by the Delaware
General Corporation Law, to each person who is or was a director, officer, or
agent of our company or who serves or served any other enterprise or
organization at the request of our company. Under Delaware law, to the extent
that an indemnitee is successful on the merits of a suit or proceeding brought
against him or her by reason of the fact that he or she is or was a director,
officer, or agent of our company, or serves or served any other enterprise or
organization at the request of our company, we will indemnify him or her against
expenses (including attorneys' fees) actually and reasonably incurred in
connection with such action. If unsuccessful in defense of a third-party civil
suit or a criminal suit, or if such suit is settled, an Indemnitee may be
indemnified under Delaware law against both (a) expenses, including attorneys'
fees, and (b) judgments, fines, and amounts paid in settlement if he or she
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of our company, and, with respect to any
criminal action, had no reasonable cause to believe his or her conduct was
unlawful. If unsuccessful in defense of a suit brought by or in the right of our
company, where the suit is settled, an indemnitee may be indemnified under
Delaware law only against expenses (including attorneys' fees) actually and
reasonably incurred in the defense or settlement of the suit if he or she acted
in good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of our company, except that if the indemnitee is
adjudged to be liable for negligence or misconduct in the performance of his or
her duty to our company, he or she cannot be made whole even for expenses unless
a court determines that he or she is fully and reasonably entitled to
indemnification for such expenses. Also under Delaware law, expenses
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incurred by an officer or director in defending a civil or criminal action,
suit, or proceeding may be paid by our company in advance of the final
disposition of the suit, action, or proceeding upon receipt of an undertaking by
or on behalf of the officer or director to repay such amount if it is ultimately
determined that he or she is not entitled to be indemnified by our company. We
also may advance expenses incurred by other employees and agents of our company
upon such terms and conditions, if any, that our Board of Directors deems
appropriate. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling our company pursuant to the foregoing provisions, we have been
informed that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
Decisions on compensation of our executives are made by the Compensation
Committee, consisting of independent members of our Board of Directors appointed
by our Board of Directors. The Board of Directors and the Compensation Committee
make every effort to ensure that the compensation plan is consistent with our
values and is aligned with our business strategy and goals.
Our compensation program for executive officers consists primarily of base
salary, bonus, and long-term incentives in the form of stock options. Executives
also participate in various other benefit plans, including medical and
retirement plans, which generally are available to all employees of our company.
Our philosophy is to pay base salaries to executives at levels that enable
us to attract, motivate, and retain highly qualified executives. The bonus
program is designed to reward individuals for performance based on our company's
financial results as well as the achievement of personal and corporate
objectives that will contribute to the long-term success of our company in
building stockholder value. Stock option grants are intended to result in
minimal or no rewards if stock price does not appreciate, but may provide
substantial rewards to executives as all of our company's stockholders benefit
from stock price appreciation.
We follow a subjective and flexible approach rather than an objective or
formula approach to compensation. Various factors receive consideration without
any particular weighting or emphasis on any one factor. In establishing
compensation for the year ended December 27, 1999, the committee took into
account, among other things, our financial results, compensation paid in prior
years, and compensation of executive officers employed by companies of similar
size in the restaurant industry.
BASE SALARY AND ANNUAL INCENTIVES
Base salaries for executive positions are established relative to our
financial performance and comparable positions in similarly sized companies. The
committee from time to time may use competitive surveys and outside consultants
to help determine the relevant competitive pay levels. We target base pay at the
level required to attract and retain highly qualified executives. In determining
salaries, the committee also takes into account individual experience and
performance, salary levels relative to other positions with our company, and
specific needs particular to our company.
Annual incentive awards are based on our financial performance and the
efforts of our executives. Performance is measured based on profitability and
revenue and the successful achievement of functional and personal goals. We
awarded bonuses to William G. Shrader, our Executive Vice President and Chief
Operating Officer, and James Yeager, our Vice President - Finance, Secretary,
and Treasurer, for their performance during the fiscal year ended December 27,
1999.
STOCK OPTION GRANTS
We believe in tying executive rewards directly to the long-term success of
our company and increases in stockholder value through grants of executive stock
options. Stock option grants also will enable executives to
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develop and maintain a significant stock ownership position in our common stock.
The amount of options granted takes into account options previously granted to
an individual. We granted options to our executive officers during fiscal 1999.
See "Executive Compensation - Option Grants."
OTHER BENEFITS
Executive officers are eligible to participate in benefit programs designed
for all full-time employees of our company. These programs include medical
insurance, a qualified retirement program allowed under Section 401(k) of the
Internal Revenue Code, and life insurance coverage equal to one times base
salary to a maximum of $50,000.
CHIEF EXECUTIVE OFFICER COMPENSATION
Bart A. Brown has served as our President and Chief Executive Officer since
December 16, 1996. Effective January 1, 1999, we entered into a new employment
agreement with Mr. Brown. See "Executive Compensation - Employment Agreement."
The Board of Directors determined Mr. Brown's salary based on a number of
factors, including our company's performance, Mr. Brown's individual
performance, and salaries paid by comparable companies. Mr. Brown received a
bonus of $50,000 in fiscal 1999. We also granted Mr. Brown options during 1999.
See "Executive Compensation - Option Grants."
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code currently limits the
deductibility for federal income tax purposes of compensation paid to our Chief
Executive Officer and to each of our other four most highly compensated
executive officers. We may deduct certain types of compensation paid to any of
these individuals only to the extent that such compensation during any fiscal
year does not exceed $1.0 million. We do not believe that our compensation
arrangements with any of our executive officers will exceed the limits on
deductibility during our current fiscal year.
This report has been furnished by members of the Compensation Committee of
our Board of Directors.
John F. Antioco
Jane Evans
John C. Metz
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 27, 1999, our Compensation Committee
consisted of John F. Antioco, Jane Evans, John C. Metz, and Steven A. Sherman, a
former director of our company. Except for our lease of our corporate office
space in a building in which Mr. Sherman owns a majority interests, none of the
members of the Compensation Committee had any contractual or other relationships
with our company during fiscal 1999 except as directors. We made rental payments
for our corporate offices totaling approximately $256,000 during 1999.
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PERFORMANCE GRAPH
The following line graph compares cumulative total stockholder returns for
(a) our common stock; (b) the Nasdaq Stock Market (U.S.) Index; and (c) a peer
group consisting of the following five companies in the restaurant industry:
Avado Brands, Inc. (formerly AppleSouth, Inc.); Eateries, Inc.; Cheesecake
Factory, Inc.; O'Charley's, Inc.; and Cooker Restaurant Corp.
The graph assumes an investment of $100 in each of our common stock, the
peer group, and the index on December 26, 1994. The calculation of cumulative
stockholder return on the peer group and the index include reinvestment of
dividends, but the calculation of cumulative stockholder return on our common
stock does not include reinvestment of dividends because we did not pay
dividends during the measurement period. The stock price and index performance
shown in the graph are not necessarily indicative of future results.
CUMULATIVE TOTAL RETURN
----------------------------------------------------------
12/26/94 12/25/95 12/30/96 12/29/97 12/28/98 12/27/99
-------- -------- -------- -------- -------- --------
MAIN STREET AND MAIN
INCORPORATED 100.00 31.41 17.31 29.81 33.01 32.70
PEER GROUP 100.00 148.04 111.79 127.81 127.32 114.80
NASDAQ STOCK MARKET
(U.S.) 100.00 142.61 175.85 211.50 302.94 551.45
DOW JONES RESTAURANTS 100.00 142.11 149.52 147.11 222.92 229.12
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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, AND OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of April 12, 2000 by (a) each of our directors,
(b) each of our named executive officers, and (c) all directors and executive
officers as a group. We are not aware of any other person that beneficially owns
more than 5% of our common stock as of April 12, 2000.
NAME AND ADDRESS OF SHARES APPROXIMATE PERCENTAGE
BENEFICIAL OWNER(1) BENEFICIALLY OWNED OF OUTSTANDING SHARES(2)
- ------------------- ------------------ ------------------------
DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
John F. Antioco.................. 2,663,100(3) 25.5%
Bart A. Brown.................... 1,932,709(4) 17.5%
William G. Shrader............... 124,015(5) 1.2%
Jane Evans....................... 22,500(6) *
John C. Metz..................... 40,500(7) *
James Yeager..................... 23,958(8) *
All directors and officers
as a group (six persons)....... 4,806,782 41.4%
- ----------
* Less than 1.0%.
(1) Each of such persons may be reached through our company at 5050 North 40th
Street, Suite 200, Phoenix, Arizona 85018.
(2) Based on 10,029,126 shares of common stock outstanding on April 12, 2000.
The percentages shown include the shares of common stock actually owned as
of April 12, 2000 and the shares of common stock that the person or group
had the right to acquire within 60 days of such date. In calculating the
percentage of ownership, all shares of common stock that the identified
person or group had the right to acquire within 60 days of April 12, 2000
upon the exercise of options are deemed to be outstanding for the purpose
of computing the percentage of the shares of common stock owned by such
person or group, but are not deemed to be outstanding for the purpose of
computing the percentage of the shares of common stock owned by any other
person.
(3) Represents 1,245,600 shares of common stock held by Mr. Antioco, vested
options to acquire 417,500 shares of common stock held by Mr. Antioco, and
1,000,000 shares of common stock held by Antioco Limited Partnership. Mr.
Antioco is the sole managing member of Antioco Management LLC, which is the
sole general partner of Antioco Limited Partnership. A trust for the
benefit of descendants of Mr. Antioco and his spouse is the sole limited
partner of the partnership. As managing member of the partnership's general
partner, Mr. Antioco has sole power to vote or dispose of shares held by
the partnership and therefore may be deemed to be the beneficial owner of
shares held by Antioco Limited Partnership. Mr. Antioco disclaims
beneficial ownership of shares held by Antioco Limited Partnership except
to the extent that his individual interest in such shares arises from his
interest in the partnership, and this proxy statement shall not be deemed
to be an admission that Mr. Antioco is the beneficial owner of these shares
for any purpose.
(4) Includes vested options to purchase 1,000,000 shares of common stock held
by Mr. Brown.
(5) Includes vested options to purchase 116,666 shares of common stock held by
Mr. Shrader.
(6) Represents vested options to purchase 22,500 shares of common stock held by
Ms. Evans.
(7) Includes vested options to purchase 25,000 shares of common stock held by
Mr. Metz.
(8) Represents vested options to purchase 23,958 shares of common stock held by
Mr. Yeager. Mr. Yeager serves as our Vice President - Finance, Secretary,
and Treasurer.
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CERTAIN TRANSACTIONS
We have adopted a policy that we will not enter into any transactions with
directors, officers, or holders of more than 5% of our common stock on terms
that are less favorable to our company than we could obtain from independent
third parties and that any loans to directors, officers, or 5% stockholders will
be approved by a majority of the disinterested directors.
In December 1993, we entered into a five-year lease for space to serve as
our corporate offices. Steven A. Sherman, a former director of our company, owns
a majority interest in the building housing our offices. The lease was approved
by the disinterested directors of our company. During 1998, the lease was
amended to extend the original term through January 31, 2004. Rental payments
under this agreement were approximately $256,000 during 1999. We believe that
the foregoing transaction was no less favorable to us than could be obtained
from non-affiliated parties. Mr. Sherman resigned as a director of our company
in February 2000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
public accountants, to audit the consolidated financial statements of our
company for the fiscal year ending December 25, 2000 and recommends that
stockholders vote in favor of the ratification of such appointment. In the event
of a negative vote on such ratification, the Board of Directors will reconsider
its selection. The Board of Directors anticipates that representatives of Arthur
Andersen LLP will be present at the meeting, will have the opportunity to make a
statement if they desire, and will be available to respond to appropriate
questions.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
We must receive stockholder proposals that are intended to be presented by
such stockholders at the annual meeting of stockholders of our company to be
held during calendar 2001 no later than December 19, 2000 in order to be
included in the proxy statement and form of proxy relating to such meeting.
Pursuant to Rule 14a-4 under the Exchange Act, we intend to retain discretionary
authority to vote proxies with respect to stockholder proposals for which the
proponent does not seek to have us include the proposed matter in the proxy
statement for the annual meeting to be held during calendar 2001, except in
circumstances where (a) we receive notice of the proposed matter no later than
March 4, 2001 and (b) the proponent complies with the other requirements set
forth in Rule 14a-4.
OTHER MATTERS
We know of no other matters to be submitted to the meeting. If any other
matters properly come before the meeting, the persons named in the enclosed
proxy card intend to vote the shares they represent as the Board of Directors
may recommend.
Dated: April 18, 2000
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PROXY CARD
MAIN STREET AND MAIN INCORPORATED
2000 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of MAIN STREET AND MAIN INCORPORATED, a
Delaware corporation (the "Company"), hereby acknowledges receipt of the Notice
of Annual Meeting of Stockholders and Proxy Statement of the Company, each dated
April 18, 2000, and hereby appoints Bart A. Brown and James Yeager, and each of
them, proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
2000 Annual Meeting of Stockholders of the Company, to be held on Friday, May
19, 2000, at 11:00 a.m., local time, at the Hermosa Inn, 5532 North Palo Cristi
Road, Paradise Valley, Arizona, and at any adjournment or adjournments thereof,
and to vote all shares of the Company's Common Stock that the undersigned would
be entitled to vote if then and there personally present, on the matters set
forth on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS; FOR THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT AUDITORS OF THE
COMPANY; AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
A majority of such proxies or substitutes as shall be present and shall act
at said meeting or any adjournment or adjournments thereof (or if only one shall
be present and act, then that one) shall have and may exercise all of the powers
of said proxies hereunder.
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE.)
<PAGE>
(CONTINUED FROM OTHER SIDE.)
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below. for all nominees listed below.
</TABLE>
Nominees: John F. Antioco, Bart A. Brown, Jr., William G. Shrader, Jane
Evans, and John C. Metz.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions ____________________________________________________________________
2. Proposal to ratify the appointment of Arthur Andersen LLP as the independent
auditors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
and upon such matters which may properly come before the meeting or any
adjournment or adjournments thereof.
Change of Address and/ or Comments Mark Here [ ]
(This Proxy should be dated, signed by the stockholder(s)
exactly as his or her name appears hereon, and returned
promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate. If shares are held by
joint tenants or as community property, both stockholders
should sign.)
Dated:______________________________________, 2000
--------------------------------------------------
Signature
--------------------------------------------------
Signature if held jointly
SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Votes must be indicated (x) in Black or Blue ink.
