<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
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 Section240.14a-11(c) or
Section240.14a-12
AVADO BRANDS INC.
- --------------------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AVADO BRANDS, INC.
HANCOCK AT WASHINGTON
MADISON, GEORGIA 30650
(706)342-4552
--------------
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 1999
--------------
The Annual Meeting of Shareholders of AVADO BRANDS, INC. (the "Company")
will be held at the offices of the Company at Hancock at Washington, Madison,
Georgia, on May 4, 1999, at 11:00 a.m. local time, for the following purposes:
(1) To elect five members of the Board of Directors of the Company to hold
office until the next Annual Meeting of Shareholders and until their
successors are elected and have qualified;
(2) To consider and act upon a proposal to approve the Company's 1995 Stock
Incentive Plan, as amended;
(3) To consider and act upon ratification of the appointment of KPMG LLP as
the auditors of the Company for the current year; and
(4) To transact such other business as may properly come before the Meeting
or any adjournment thereof.
Holders of record of Common Stock of the Company at the close of business on
March 1, 1999 are the only shareholders entitled to notice of and to vote at the
Meeting or any adjournment thereof.
By Order of the Board of Directors,
/s/ John G. McLeod, Jr.
John G. McLeod, Jr.
SECRETARY
Madison, Georgia
March 29, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS, YOU ARE
REQUESTED TO FILL IN AND SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT IN THE
ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO ATTEND THE
MEETING AND DECIDE THAT YOU WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
<PAGE>
AVADO BRANDS, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 1999
------------------------
GENERAL INFORMATION
SHAREHOLDERS MEETING
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Avado Brands, Inc. (the "Company") of proxies to be used
at the Annual Meeting of Shareholders to be held at 11:00 a.m. local time on May
4, 1999 at the offices of the Company at Hancock at Washington, Madison,
Georgia. This Proxy Statement was mailed to shareholders on approximately March
29, 1999.
MATTERS TO BE ACTED UPON
The following matters will be acted upon at the Annual Meeting:
(1) The election of five members of the Board of Directors, each to serve a
term of one year and until his or her successor is duly elected and has
qualified;
(2) A proposal to approve the Company's 1995 Stock Incentive Plan, as
amended;
(3) Ratification of the selection of KPMG LLP as auditors of the Company for
the current year; and
(4) Such other business as may properly come before the Annual Meeting or
any adjournment thereof.
PROXIES AND VOTING
The Board of Directors solicits all holders of the Common Stock of the
Company to vote by marking, signing, dating and returning their proxies.
Submitting a signed proxy will not affect a shareholder's right to attend the
Annual Meeting and vote in person. A proxy may be revoked at any time before it
is exercised by giving written notice of such revocation to the Secretary of the
Company at the Company's principal executive office at Hancock at Washington,
Madison, Georgia 30650. If a shareholder wishes to give a proxy to someone other
than the Company's designees, he or she may cross out the names appearing on the
enclosed proxy card, insert the name of such other person, and sign and give the
card to that person for use at the meeting.
Each holder of record of Common Stock at the close of business on March 1,
1999 is entitled to one vote for each share of Common Stock then held. At the
close of business on that date, there were outstanding and entitled to vote
31,568,586 shares of Common Stock. A majority of the outstanding shares of
Common Stock entitled to vote at the Annual Meeting is a quorum.
When the enclosed proxy is properly signed and returned, the shares which it
represents will be voted at the Annual Meeting in accordance with the
instructions noted thereon. In the absence of such instruction, the shares
represented by a signed proxy will be voted in favor of the five nominees for
election to the Board of Directors, in favor of the proposed approval of
amending the Company's 1995 Stock Incentive Plan and in favor of the proposed
ratification of the selection of auditors. Votes will be counted manually and
abstentions and broker non-votes will not be counted. The Board of Directors
does not know of any other business to be brought before the Annual Meeting, but
it is intended that as to other business, if any, shares represented by a signed
proxy will be voted in accordance with the judgment of the person or persons
acting thereunder.
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
The responsibilities of certain committees of the Board of Directors are
summarized below. The Board does not have a nominating committee or other
committee serving a similar function. Action taken by any committee of the Board
is reported to the Board of Directors, usually at its next meeting.
AUDIT COMMITTEE. The Audit Committee is comprised of James W. Rowe and John
L. Moorhead, with Mr. Rowe serving as Chairperson. The Audit Committee reviews
the independence, qualifications and activities of the Company's independent
certified public accountants and the activities of the Company's accounting
staff. The Audit Committee recommends to the Board the appointment of the
independent certified public accountants and reviews and approves the Company's
annual financial statements together with other financial reports and related
matters. The Audit Committee is also responsible for the review of transactions
between the Company and other entities in which a Company officer or director
has a material interest. The Audit Committee met two times during 1998.
COMPENSATION AND HUMAN RESOURCES COMMITTEE. The Compensation and Human
Resource Committee is comprised of Dr. Ruth G. Shaw and Thomas R. Williams, with
Dr. Shaw serving as Chairperson. The Compensation Committee reviews and makes
recommendations concerning officer salaries, bonus programs, stock options,
benefits and other components of compensation. The Compensation and Human
Resources Committee met four times during 1998.
FINANCE AND PLANNING COMMITTEE. The Finance and Planning Committee is
comprised of Thomas R. Williams, James W. Rowe, Tom E. DuPree, Jr. and Erich J.
Booth, with Mr. Williams serving as Chairperson. The Finance and Planning
Committee reviews and makes recommendations to the Board concerning proposals by
management on the use of the Company's financial resources, financial management
of the Company, and the strategic plans of the Company. The Finance and Planning
Committee makes recommendations to the Board with respect to proposed mergers,
acquisitions and divestitures, the issuance and sale of Company securities, the
Company's investments, dividend and foreign exchange policies, the annual
capital plan and budget, and other financial matters as may from time to time be
determined appropriate by the Committee or the Board. The Committee also
periodically reviews the Company's strategic plans and reports to the Board
concerning results achieved as compared to the plans. The Finance and Planning
Committee met six times during 1998.
DIRECTOR COMPENSATION
Directors, who are not officers of the Company, receive an annual retainer
of $20,000, plus $1,000 for each Board meeting attended, $1,000 for each
committee meeting attended, $500 for each special meeting in which he or she
participates by telephone and reimbursement of out-of-pocket expenses. Directors
also receive an annual retainer of $3,000 for serving as chairperson of a Board
committee. Directors may elect annually to defer receipt of this cash
compensation, or any portion thereof, and receive credits of deferred stock
units, pursuant to the Company's Outside Director Deferred Stock Unit Plan. The
Company anticipates that it will pay approximately $35,000 per year to each of
its outside directors. Upon election to the Board of Directors, each
non-management director receives options to purchase 10,000 shares of Common
Stock at the market value at the date of grant. Directors who are also officers
of the Company do not receive any additional compensation for serving as
directors.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended January 3, 1999, seven regularly scheduled
meetings of the Board of Directors were held. Each director then in office
attended at least 75% of the total of all meetings of the Board and of the
Committees of the Board on which he or she served.
2
<PAGE>
PROPOSAL 1: ELECTIONS OF DIRECTORS
The Company's Board of Directors presently consists of six directors. Unless
otherwise directed, it is the intention of the persons named in the enclosed
form of proxy to vote executed proxies in favor of the election of the five
persons named below, and such proxies cannot be voted in favor of the election
of a greater number of persons. Each person elected will serve until the next
Annual Meeting of Shareholders and thereafter until his or her successor is
elected and has qualified. Should any nominee become unavailable for election,
an event which is not anticipated, the persons named in the proxy will have the
right to use their discretion to vote for a substitute or substitutes or to vote
only for the remaining nominees. Directors will be elected by a plurality of the
votes cast in person or by proxy.
James W. Rowe, who became a director of the Company in March 1992 and also
serves as Chairperson of the Audit Committee and as a member of the Finance and
Planning Committee, has elected to retire from the Board of Directors as of the
effective date of this Annual Meeting. The Company wishes to thank Mr. Rowe for
his years of commitment and dedicated service as a Board member.
NOMINEES FOR DIRECTOR
Tom E. DuPree, Jr. founded the Company and has been Chairman of the Board of
Directors and Chief Executive Officer of the Company since its formation in
1986. He also serves as a member of the Finance and Planning Committee. Mr.
DuPree has been actively involved in developing and managing restaurants since
1978. He is a graduate of the Georgia Institute of Technology and holds a
Master's degree in Accounting from Georgia State University. Mr. DuPree is 46
years old.
Erich J. Booth became a director of the Company in June 1997. He also serves
as a member of the Finance and Planning Committee. Mr. Booth has served as the
Chief Financial Officer and Treasurer of the Company since 1991. Before joining
the Company, Mr. Booth had been Vice President of Finance of Dun & Bradstreet
Software (formerly Management Science America, Inc.) since 1989. From 1984 to
1989, he served as Vice President and Chief Financial Officer of Ward White USA
Holding, Inc., a diversified, United Kingdom-based parent, specialty retailer.
Mr. Booth, a Certified Public Accountant, worked from 1973 to 1984 for Peat,
Marwick, Mitchell & Co. He is a graduate of the University of North Carolina at
Greensboro. Mr. Booth is 50 years old.
Thomas R. Williams became a director of the Company in December 1991. He
also serves as Chairman of the Finance and Planning Committee and as a member of
the Compensation and Human Resources Committee. Mr. Williams is President of The
Wales Group, Inc., a closely held corporation engaged in investments. He is a
former Chairman of the Board of First Wachovia Corporation, from which he
retired in 1987. Mr. Williams is a director of American Software, Inc., ConAgra,
Inc., and National Life Insurance Company of Vermont and a trustee of The
Fidelity Group of Mutual Funds. Mr. Williams is 70 years old.
Dr. Ruth G. Shaw became a director of the Company in May 1996. She also
serves as Chairperson of the Compensation and Human Resources Committee. Dr.
Shaw is Executive Vice President and Chief Administrative Officer for Duke
Energy Corporation. She joined Duke Energy in 1992 as Vice President of
Corporate Communications, was named Senior Vice President in 1994 and Executive
Vice President in 1997. Prior to joining Duke Energy, she was President of
Charlotte's Central Piedmont Community College from 1986 to 1992. Dr. Shaw is a
director of First Union Corporation and of TEPPCO. Dr. Shaw is 51 years old.
John L. Moorhead became a director of the Company in January 1997. He also
serves as a member of the Audit Committee. Mr. Moorhead is President of
Bestfoods Affiliates. He joined Bestfoods in 1992 as Vice President of Business
Management and Marketing. Prior to joining Bestfoods, he was with PepsiCo, Inc.
from 1979 to 1991 and last served as Vice President of Marketing Services for
the Pepsi-Cola
3
<PAGE>
Company, a division of PepsiCo, Inc. Prior to establishing Pepsi-Cola's
Marketing Services Group, Mr. Moorhead had served as Vice President of Marketing
for the Taco Bell Worldwide Division, Marketing Director at Frito Lay and within
the brand management system at General Mills. Mr. Moorhead is 56 years old.
There are no family relationships among the Company's executive officers and
directors.
EXECUTIVE OFFICERS
In addition to the executive officers named above, the following persons
also serve as executive officers of the Company.
John G. McLeod, Jr. has served as Senior Vice President of Human Resources
since 1992, Vice President of Human Resources from 1987 to 1992, and a director
and Secretary of the Company since its formation in 1986. Mr. McLeod rotated off
the Board of Directors in December 1997, but continues to serve as Corporate
Secretary and Senior Vice President of Human Resources. From 1983 to 1987, Mr.
McLeod was the Personnel Director of a predecessor of the Company. He is a
graduate of Wofford College. Mr. McLeod is 55 years old.
Margaret E. Waldrep was elected to the position of Chief Administrative
Officer of the Company in May 1997. Ms. Waldrep joined the Company in 1985. From
1978 to 1985, Ms. Waldrep was a long-range planner with the Greenville Planning
Commission in Greenville, S.C. She earned a Bachelor's degree in Political
Science in 1977 and a Master's degree in City and Regional Planning in 1979 from
Clemson University in Clemson, S.C. Ms. Waldrep is 43 years old.
Louis J. Profumo joined the Company in July 1997 as Senior Vice President of
Planning and Acquisitions and was appointed to the position of Senior Vice
President of Finance and Chief Accounting Officer in November 1998. From 1974 to
1997, Mr. Profumo worked for KPMG Peat Marwick LLP serving as an Audit Partner
since 1986 in the firm's manufacturing, retailing and distribution practice. He
received both a bachelor's of science degree in hotel administration in 1973 and
a master's of business administration in 1974 from Cornell University. Mr.
Profumo is 47 years old.
Officers of the Company serve at the pleasure of the Board of Directors. The
term of office for each director of the Company ends at the next annual meeting
of the Company's shareholders or when his or her successor is elected and has
qualified.
4
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to the Chief Executive
Officer and the four most highly compensated executive officers, other than the
Chief Executive Officer, and the Company's former President and Chief Operating
Officer. The Company did not grant any stock appreciation rights or make any
long-term incentive plan payouts during the years indicated.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------------------
RESTRICTED SECURITIES ALL OTHER
------------------------ STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) AWARDS OPTIONS (#) ($) (1)
- ------------------------------------------------- --------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tom E. DuPree, Jr. .............................. 1998 525,000 269,600 -- -- 265,762
Chairman and Chief Executive Officer 1997 425,000 -- -- -- 195,470
1996 285,577 81,750 -- -- 122,218
Erich J. Booth................................... 1998 245,000 141,000 -- -- 5,226
Chief Financial Officer and Treasurer 1997 230,000 -- -- 10,125 4,600
1996 160,000 69,525 -- 10,125 3,706
Louis J. Profumo................................. 1998 259,965 45,740 -- -- 5,226
Chief Accounting Officer 1997 111,635 -- 72,500 65,000 --
Margaret E. Waldrep.............................. 1998 220,000 82,950 -- -- 5,226
Chief Administrative Officer 1997 171,291 -- -- 6,835 3,426
1996 100,000 82,025 -- 6,835 2,440
John G. McLeod, Jr. ............................. 1998 120,000 82,950 -- -- 3,919
Senior Vice President of Human 1997 120,000 -- -- -- 2,400
Resources and Secretary 1996 100,000 64,890 -- -- 2,000
S. Kirk Kinsell.................................. 1998 405,091 148,485 -- -- --
Former President and Chief Operating 1997 281,250 50,000 -- 200,000 --
Officer
</TABLE>
- ------------------------
(1) Except for Mr. DuPree, the amounts shown in this column consist of
contributions by the Company to its 401(k) savings plan on behalf of the
named executive officers, and the fair market value of shares of Common
Stock allocated to the executive officer's account pursuant to the Company's
Employee Stock Ownership Plan and Trust ("ESOP"). Mr. DuPree does not
participate in either the ESOP or the 401(k) plan. The amount shown in this
column for Mr. DuPree includes $265,762 reflecting the current dollar value
of the benefit to Mr. DuPree of the unreimbursed portion of the premiums
paid by the Company with respect to a split-dollar insurance agreement (See
"Certain Relationships and Related Transactions" below for a description of
such agreement), which benefit was determined by calculating the time value
of money (using the Company's 1998 weighted average borrowing rate of 8.0%)
of the unreimbursed portion of the premiums paid by the Company for the
period ended January 3, 1999.
5
<PAGE>
The following table sets forth information concerning the value of
unexercised options as of January 3, 1999 held by the executives named in the
summary compensation table. No options were exercised or granted during the
fiscal year ended January 3, 1999 to the executives named in the summary
compensation table and no stock appreciation rights were outstanding during
1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES VALUE JANUARY 3, 1999 (#) JANUARY 3, 1999 ($)
ACQUIRED ON REALIZED ----------------------- -----------------------
NAME EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------ ----------------- ----------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Tom E. DuPree, Jr................... -- -- 23,152 / 176,564 -- / --
Erich J. Booth...................... -- -- 8,565 / 76,435 -- / --
Louis J. Profumo.................... -- -- -- / 65,000 -- / --
Margaret E. Waldrep................. -- -- 7,633 / 62,367 -- / --
</TABLE>
6
<PAGE>
COMPARISON OF FIVE-YEAR
CUMULATIVE SHAREHOLDER RETURN
The following graph compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total return of the Standard and
Poor's 500 Stock Index, and Nation's Restaurant News Stock Index, for a period
of five years commencing December 31, 1993 and ending January 3, 1999. The graph
assumes that $100 was invested on December 31, 1993, in Company Common Stock,
the Standard and Poor's 500 Stock Index and the Nations Restaurant News Stock
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVADO BRANDS, INC NATIONS RESTAURANT NEWS(1) S&P 500
<S> <C> <C> <C>
93 100 100 100
94 95 107 98
95 154 150 132
96 97 152 159
97 97 158 208
98 61 211 264
</TABLE>
- ------------------------
(1) Does not reflect dividend reinvestment, which management of the Company
believes to be immaterial.
7
<PAGE>
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMMITTEE RESPONSIBILITIES
The Compensation and Human Resources Committee (the "Committee") of the
Board of Directors (the "Board") is charged with the responsibility of reviewing
and making recommendations to the Board concerning the salaries, bonus programs,
stock options, benefits and other components of compensation of the Chief
Executive Officer, all other elected corporate officers with individual base
salaries of $200,000 or more, and of brand presidents. The Committee has the
additional responsibilities of reviewing, monitoring and making recommendations
to the Board concerning the Company's career development and succession planning
programs, diversity initiatives, employee relations programs and qualified
retirement plans. The Committee met four times in 1998. All of the members of
the Committee are independent, non-management directors.
COMMITTEE PHILOSOPHY
The primary components of executive compensation are base salary, annual
bonuses and long-term incentives in the form of stock options. Executives are
also eligible to participate in various benefit plans on the same basis as other
employees of the Company.
There are three primary objectives of the Committee in determining the type
and amount of executive officer compensation; to attract and retain superior
talent, to motivate executives to achieve above average performance targets, and
to align the interests of management with that of the shareholders for the long
term.
In 1998, the Committee retained the services of Watson Wyatt Worldwide as a
consultant to review and make recommendations to the Committee on the Company's
executive compensation programs. As a result of this effort, the Committee
adopted new Short and Long-Term Incentive Plans and a Supplemental Deferred
Compensation Plan for implementation in 1999.
CASH COMPENSATION
Cash compensation typically consists of base salary plus an annual
performance bonus. The Committee considers both internal and external factors as
bases for determining total cash compensation. External factors include
compensation survey data related to salary, bonus, long-term incentives and
total cash compensation programs for executives in companies of similar size,
industry and growth rate, as well as general industry surveys of executive
compensation. Internal factors affecting total compensation include Company and
individual performance and length of service. Based on these factors, weighted
subjectively by the Committee, total compensation for 1998 was set at levels the
Committee believes are competitive with that of similarly situated executives at
comparable companies.
BONUSES
Total cash compensation is divided between salary and bonus. The Committee's
objective in 1998 was to target bonus at a percentage of base salary that is
motivating to the employee and competitive within the industry. Guidelines for
determining the percentage that bonus bears to base salary were established at
60%-80% for corporate officers, 40%-60% for corporate vice-presidents and 50%
for brand presidents. To qualify for bonus, the Company's annual earnings
targets must be met. Once the earnings target is met, the bonus paid is based
60% on the earnings target and 40% on the sales goal as determined at the
beginning of the fiscal year. The program allows for partial bonus payments
below plan and additional bonus for above plan results.
The Committee also adopted a Special Transaction Bonus Plan for employees
covered by the 1997 Executive Bonus Plan. Payments under this plan are based on
the successful divestiture of the Company's Applebee's Division. In addition,
the Committee approved a special Fourth Quarter, 1998 Bonus Plan for
8
<PAGE>
employees covered by the 1998 Executive Bonus Plan and based on the Company's
operating earnings above plan in the Fourth Quarter of 1998. No payments were
made under this plan in 1998.
The Company paid bonuses pursuant to the Special Transaction Bonus Plan to
executive officers as described above in the summary compensation table under
the caption "Compensation of Executive Officers". The compensation of the Chief
Executive Officer was determined in accordance with the foregoing policy.
STOCK OPTIONS
As the long-term component of executive compensation, the Company grants
options to purchase common stock of the Company in the future at the market
value of the stock on the date of grant. Option terms are for a period of ten
years with 50% of the total grant vested in the first five year period and 50%
vested in the second five year period. The Committee believes that the Company's
executive officers should acquire substantial equity ownership, either through
the exercising of stock options or direct stock ownership, as a means of
integrating management decisions with the long-term interests of the
shareholders. To achieve that objective, in 1998 the Committee established stock
ownership guidelines for outside directors and executives of the Company. The
guidelines target minimum ownership at from one to three times the executive's
base salary, depending on position, in share value over a period of five years.
The Committee believes that compliance with these guidelines will result in
significant ownership of Company stock by executives over the specified time
period.
DIRECTOR COMPENSATION
In 1997, the Committee recommended to the Board, and the Board approved, a
new outside director compensation schedule based on a market analysis of
competitively sized companies to be effective in 1998, the effect of which was
to increase the retainers and certain meeting fees of outside directors to be
more competitive with the industry (see "Information About the Board of
Directors").
The Committee also adopted an Outside Director Deferred Stock Unit Plan
which allows outside directors to defer receipt of all or any portion of their
retainers and/or meeting fees and receive deferred stock units that are
convertible to shares of Company stock upon termination of the director's board
service.
OTHER INFORMATION
Section 162(m) of the Internal Revenue Code limits the Company's ability to
deduct certain compensation (including compensation resulting from the exercise
of nonqualified stock options) in excess of $1,000,000 for any taxable year paid
to any of its executive officers. To the extent it is reasonably able to do so
and as one of the factors considered in compensation matters, the Committee
considers the anticipated tax treatment to the Company and to the executives of
various payments and benefits. The Committee intends to retain the deductibility
of compensation pursuant to Section 162(m), but it reserves the right to provide
non-deductable compensation if it determines that such action is in the best
interest of the Company and its shareholders. For 1998, compensation to the
Chief Executive Officer exceeded the deductible limit by approximately $60,000.
No other executive officer of the Company received compensation in excess of
$1,000,000 in 1998.
Report submitted February 2, 1999.
By: Dr. Ruth G. Shaw, Chairperson
Thomas R. Williams
9
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 25, 1999 by (i) each
person known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each director and executive officer of the Company and (iii)
all executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)(2)
-----------------------
NAME NUMBER PERCENT
- ------------------------------------------------------------------------ ---------- -----------
<S> <C> <C>
Tom E. DuPree, Jr. (3).................................................. 8,090,300 25.6%
John G. McLeod, Jr. (4)................................................. 283,084 *
Erich J. Booth (5)...................................................... 58,635 *
Margaret E. Waldrep (6)................................................. 46,413 *
Thomas R. Williams (7).................................................. 54,936 *
James W. Rowe (8)....................................................... 41,625 *
Louis J. Profumo (9).................................................... 6,000 *
Dr. Ruth G. Shaw........................................................ 2,000 *
John L. Moorhead (10)................................................... 664 *
State of Wisconsin Investment Board (11)................................ 2,950,000 9.3%
Brown Investment Advisory & Trust Company (12).......................... 2,336,694 7.4%
All directors and executive officers as a group
(9 persons) (13)...................................................... 8,377,079 26.5%
</TABLE>
Mr. DuPree, the State of Wisconsin Investment Board and Brown Investment
Advisory & Trust Company are the only shareholders known by the Company to be
the beneficial owners of more than 5% of the Company's Common Stock. Mr.
DuPree's address is Hancock at Washington, Madison, Georgia 30650. The address
of the State of Wisconsin Investment Board is P.O. Box 7842, Madison, Wisconsin
53707. The address of Brown Investment Advisory & Trust Company is 19 South
Street, Baltimore, Maryland 21202.
- ------------------------
* Less than one percent.
(1) The named shareholders have sole voting and investing power with respect to
all shares shown as being beneficially owned by them except with respect to
the shares owned by the Company's Employee Stock Ownership Plan and Trust
("ESOP"). Each participant in the ESOP has the right to direct voting of all
shares allocated to his account on all matters. Power to direct the
investment of shares held by the ESOP presently rests with the Company's
Employee Benefit Committee, whose members are Messrs. DuPree and McLeod;
however, each ESOP participant, age 55 and with 10 years of service, may
elect to direct the investment of 25% of shares allocated to his account.
(2) Except as indicated below, does not include shares issuable upon exercise of
stock options.
(3) Includes 651,512 shares held by various Foundations, Partnerships and Trusts
of which Mr. Dupree's wife is the sole trustee. Includes 232,500 shares held
by DuPree Holdings, LLC. Includes 23,152 shares which Mr. DuPree has the
right to acquire within 60 days upon the exercise of stock options at an
average exercise price of $20.39. Includes 198,229 shares held by the ESOP
which are allocated to
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other employees and for which Mr. DuPree has shared investment power. See
Footnote (1) above. Mr. DuPree is the Chairman of the Board of Directors and
Chief Executive Officer of the Company.
(4) Includes 11,392 shares held by the ESOP which are vested and allocated to
Mr. McLeod and 186,837 shares held by the ESOP which are allocated to other
employees and for which Mr. McLeod has shared investment power. See Footnote
(1) above. Mr. McLeod is the Senior Vice President of Human Resources and
the Secretary of the Company.
(5) Includes 1,125 shares held by the ESOP which are vested and allocated to Mr.
Booth. Includes 8,565 shares which Mr. Booth has the right to acquire within
60 days upon the exercise of stock options at an average exercise price of
$20.02. Mr. Booth is Chief Financial Officer and Treasurer and a Director of
the Company.
(6) Includes 7,224 shares held by the ESOP which are vested and allocated to Ms.
Waldrep. Includes 7,633 shares which Ms. Waldrep has the right to acquire
within 60 days upon the exercise of stock options at an average exercise
price of $20.00. Ms. Waldrep is Chief Administrative Officer of the Company.
(7) Includes 2,793 deferred stock units credited to Mr. Williams' account in the
Company's Outside Director Deferred Stock Unit Plan, which are convertible
to shares of common stock upon termination of Board service. Mr. Williams is
a director of the Company.
(8) Includes 32,000 shares held by Rowe Family Investments, L.P. Mr. Rowe is a
director of the Company.
(9) Includes 4,000 shares held under a Restricted Stock Agreement. Does not
include 227 shares held by the ESOP which are allocated to Mr. Profumo but
are unvested. Mr. Profumo is Senior Vice President of Finance and Chief
Accounting Officer of the Company.
(10) Includes 589 deferred stock units credited to Mr. Moorhead's account in the
Company's Outside Director Deferred Stock Unit Plan, which are convertible
to shares of common stock upon termination of Board service. Mr. Moorhead is
a director of the Company.
(11) Based on a Form 13G dated February 2, 1999, filed by the State of Wisconsin
Investment Board.
(12) Based on a Form 13G dated February 17, 1999 filed by Brown Investment
Advisory & Trust Company.
(13) Includes 39,350 shares which the officers and directors have the right to
acquire within 60 days upon the exercise of stock options at an average
exercise price of $20.23 per share, 19,741 shares held by the ESOP which are
vested and allocated to directors and executive officers, and 178,488 shares
held by the ESOP which are unvested or allocated to other employees. See
Footnote (1) above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1995, the Company entered into a Split Dollar Insurance Agreement
(the "Agreement") with The DuPree Insurance Trust (the "Trust") whereby the
Company agreed to make premium payments on certain life insurance policies of
which the Trust is the owner and beneficiary. These policies provide a total of
$50 million in death proceeds payable upon death of the survivor of Tom E.
DuPree, Jr., and his wife. The devisees under the wills of Mr. DuPree and his
wife are the beneficiaries of the Trust.
The Trust has agreed to reimburse the Company on an annual basis for that
portion of the premiums which equals the current value of the economic benefit,
as defined by the Internal Revenue Service, attributable to the life insurance
protection provided. The premiums due under the policies total $850,000 per
year. Reimbursements for the current value of the economic benefit attributable
to the life insurance provided in fiscal 1998 totaled $2,308. There were no
reimbursements due to the Company from the Trust at January 3, 1999.
The Company or the Trust can cancel the Agreement at any time. Upon
cancellation, the Trust is obligated to repay the Company an amount equal to the
lesser of either the cash surrender value of the
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policies or the total amount of unreimbursed premiums paid by the Company. Upon
receipt of the death proceeds under the policies, the Trust is required to repay
the Company for all unreimbursed premium payments. The policies have been
assigned to the Company to secure the repayment obligations of the Trust.
During 1998, the Board of Directors approved loans to certain executive
officers of the Company. At January 3, 1999, the Company held three notes
receivable from Tom E. DuPree, Jr., the Chairman of the Board and Chief
Executive Officer of the Company, totaling $7,851,500. The notes are due in
November and December of 2000 or earlier upon demand of the Company and bear
interest at 7.0% with interest payment due at maturity. The Company also holds
notes receivable from Erich J. Booth, Chief Financial Officer and Treasurer,
totaling $107,000 and from Margaret E. Waldrep, Chief Administrative Officer,
totaling $41,500. The notes are due in October and November of 1999 and bear
interest at 5.06% with interest payment due at maturity.
PROPOSAL 2: APPROVAL OF THE AVADO BRANDS, INC.
1995 STOCK INCENTIVE PLAN, AS AMENDED
INTRODUCTION
On February 2, 1999, the Board of Directors approved six amendments to the
Avado Brands, Inc. 1995 Stock Incentive Plan (the "Plan"). Except for these
amendments, the Plan, as initially approved by the Board of Directors on June
26, 1995, and as approved by the shareholders on April 30, 1996, April 29, 1997
and April 28, 1998 will remain in effect. The amendments are summarized below.
The full text of the Plan, as amended, is set forth as Appendix A to this Proxy
Statement.
SUMMARY OF AMENDMENTS
The shareholders of the Company approved the Plan to advance the interests
of the Company and its shareholders by encouraging and enabling directors and
key employees of the Company to acquire or increase their financial interests in
the Company through the stock options granted under the Plan. As of March 1,
1999, the Company had 2,240,081 options outstanding and 1,359,919 remaining
options available for issuance pursuant to the Plan.
The Board of Directors of the Company believes that it is in the best
interests of the Company to amend the Plan as summarized below:
AMENDMENT NO. 1 changes the name of the Plan to the "Avado Brands, Inc. 1995
Stock Incentive Plan" to conform to the Company name change.
AMENDMENT NO. 2 changes section I(c) of the Plan to update the definition of
the "Committee" to comply with amendments to the securities laws.
AMENDMENT NO. 3 deletes section I(f) in its entirety as a result of the
amended definition of the "Committee" in Amendment No. 2, above, which no
longer requires the term "Disinterested Person".
AMENDMENT NO. 4 amends section 6.1 of the Plan to increase the maximum
number of shares of Stock subject to Options which can be granted under the
Plan during a 12-month period to an employee to 1,000,000 shares from
220,000 shares.
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") limits the
Company's ability to deduct certain compensation (including compensation
resulting from the exercise of nonqualified stock options) in excess of
$1,000,000 for any taxable year paid to its executive officers ("Section
162(m)"). There is an exception to the Section 162(m) limitation for
"performance based compensation" that is paid pursuant to a plan which has
been disclosed to and approved by shareholders prior to payment of the
compensation. To qualify, the Plan must contain a limit on the number of
shares of Stock that can be provided to an employee. The amendment to the
Plan increases
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the annual limit on the number of shares of Stock subject to options which
can be granted under the Plan to an employee. The Board believes this
increased limit will help the Company continue to attract and retain key
employees.
AMENDMENT NO. 5 amends section 6.8 to provide for the transfer of options,
if permitted by the Committee and upon such terms and conditions as the
Committee may establish, by the Optionee to immediate family members of the
Optionee or to a trust, partnership or similar vehicle for the benefit of
Permitted Transferees. The purpose of this amendment is to allow for limited
transferability of Options for estate planning purposes.
AMENDMENT NO. 6 adds a new section 6.13 to allow the Committee to make
changes to comply with Code Section 162(m).
SUMMARY OF THE PLAN
The principal features of the Plan are summarized below. The summary is
qualified by reference to the actual provisions of the Plan, a copy of which is
attached as Appendix A.
At March 1, 1999, the Company estimates that approximately 260 persons, of
which five are the executive officers, are currently eligible to participate in
the Plan, 260 of whom participate. The aggregate market value of the shares of
Common Stock underlying outstanding options under the Plan was $13,103,000 based
on a March 1, 1999 closing price of $6.50.
For information concerning stock options granted during fiscal 1998 under
the Plan to the named executive officers and all non-employee directors, see
"Compensation of Executive Officers" and "Information About the Board of
Directors."
The Plan is administered by the Company's Management Committee, which
consists of the Company's executive officers. Except for options granted to
executive officers and directors the Management Committee selects the recipients
of the options, and also determines the number of shares, exercise price, terms
and conditions of exercise, consequences of any termination of employment,
whether or not an option qualifies as an Incentive Stock Option ("ISO")
(described below), and other terms of each option. The options for executive
officers are granted by the Compensation and Human Resources Committee of the
Board, which determines the number of options to be granted and the terms and
conditions of such options. The Management Committee and the Compensation and
Human Resources Committee are referred to hereinafter as the "Committee", with
each exercising the authority with respect to the designated group of directors
and key employees.
Options may be granted to directors, officers and other employees of the
Company, as determined by the Committee. The Committee has determined that the
Company's officers, division presidents, vice-presidents, directors, and certain
other employees are currently eligible to participate in the Plan.
Options granted under the Plan represent rights to purchase shares of Common
Stock of the Company within a fixed period of time and at a specified price per
share (the "exercise price"), which will be determined by the Committee but
shall be no less than the market price of the Common Stock of the Company on the
date of grant of the option. The Company receives no monetary consideration for
the granting of stock options.
Options granted under the Plan become vested and exercisable at such times
and pursuant to such terms as determined by the Committee; provided that no
option granted to officers or directors of the Company may be exercisable prior
to six months after grant (except in the case of death or disability). In the
case of an option intended to be an ISO, the term of the option may not exceed
ten years from the date of grant and the option price may not be less than 100%
of fair market value per share of the Common Stock on the date of grant. It is
anticipated that nonvested options will expire upon termination of employment of
an optionee for any reason other than a change in control of the Company.
Pursuant to the
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Plan, in the event of a reorganization of the Company in which the Company's
existence terminates, the Committee in its discretion may declare that all
outstanding options become exercisable immediately and shall terminate if not
exercised prior to the reorganization. Options may be exercised with cash or, at
the sole discretion of the Committee, by delivery of shares of Common Stock of
the Company owned by the option holder.
The options granted under the Plan are, during the lifetime of the optionee,
exercisable only by the optionee (or by an appointed guardian or legal
representative) and are not transferable or assignable in whole or in part
except by will or by the laws of decent and distribution or, to Permitted
Transferees under limited circumstances as determined by the Committee (see
Amendment No. 5, above). In general, the unexercised portion of any option
granted under the Plan will terminate upon the earlier to occur of (i) the
expiration of the option in accordance with its terms (anticipated normally to
be ten years) or (ii) the expiration of three months from the date of
termination of the option holder's employment; provided, however, that unless
otherwise determined by the Committee, all options held by an optionee shall be
terminated if the optionee provides services to a competitor of the Company.
The Board of Directors has the right at any time to terminate or amend the
Plan, but no such action may terminate options already granted or otherwise
affect the rights of any optionee under an outstanding option without the
optionee's consent. Without shareholder approval, the Board may not amend the
Plan to (i) increase the total number of shares of stock subject to option
(except for an adjustment of shares for stock splits, stock dividends or the
like, (ii) change or modify the class of eligible participants, or (iii)
materially increase the benefits accruing to Plan participants. Unless the Plan
is terminated earlier by the Board, no options may be granted under the Plan
after June 26, 2005.
The shares of Common Stock to be issued upon exercise of the options granted
and to be granted under the Plan will be registered under the Securities Act of
1933, as amended (the "Act") prior to the time that any options become
exercisable. Therefore, shares received by optionees (other than officers,
directors and other "affiliates" of the Company as defined by the Act) upon
exercise of the options will be freely transferable.
FEDERAL INCOME TAX CONSEQUENCES
There are no federal income tax consequences to an optionee or to the
Company on the granting of options. Federal tax consequences upon exercise will
vary depending on whether the option is an ISO or a Non-ISO.
INCENTIVE STOCK OPTIONS
When an optionee exercises an incentive stock option, the optionee will not
recognize any taxable income at that time, and the Company will not be entitled
to a deduction. The optionee will recognize capital gain or loss at the time of
disposition of shares acquired through the exercise of an incentive stock option
if the shares have been held for at least two years after the option was granted
and one year after it was exercised. The Company will not be entitled to a tax
deduction if the optionee satisfies these holding-period requirements. The
Federal income tax advantage to the holder of incentive stock options who meets
the holding-period requirements is a deferral, until the acquired stock is sold,
of taxation of any increase in the stock's value from the time of grant of the
option to the time of its exercise, and taxation of such gain, at the time of
sale, as capital gain rather than ordinary income.
If the holding period requirements are not met, then upon sale of the shares
the optionee generally recognizes as ordinary income the excess of the fair
market value of the shares at the date of exercise over the option price; any
increase in the value of the option stock subsequent to exercise is long or
short-term capital gain to the optionee depending on the optionee's holding
period for the stock. However, if the sale is for a price less than the value of
the shares on the date of exercise, the optionee may recognize ordinary
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income only to the extent the sales price exceeded the option price. In either
case, the Company is entitled to a deduction to the extent of ordinary income
recognized by the optionee.
NON-QUALIFIED STOCK OPTIONS
Generally when an optionee exercises a non-qualified stock option, the
optionee recognizes income in the amount of the aggregate fair market value of
the shares received upon exercise, less the aggregate amount paid for those
shares, and the Company may deduct as an expense the amount of income so
recognized by the optionee, provided that the Company satisfies certain tax
withholding requirements. The holding period of the acquired shares begins upon
the exercise of the option, and the optionee's basis in the shares is equal to
the fair market value of the acquired shares on the date of exercise.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
Approval of the Plan, as amended requires the affirmative vote of the
holders of a majority of the Company's outstanding shares of Common Stock
present in person or by proxy and voting at the meeting. If the shareholders do
not vote a sufficient number of shares of Common Stock in favor of the Plan, as
amended, the amendment will not take effect and the Plan will continue as
initially approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PLAN, AS AMENDED.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the firm of KPMG LLP to serve as independent auditors
of the Company for the fiscal year ending January 2, 2000, subject to
ratification of this appointment by the shareholders of the Company. KPMG LLP
has served as independent auditors of the Company and a predecessor of the
Company since 1985 and is considered by management of the Company to be well
qualified. The Company has been advised by that firm that neither it nor any
member thereof has any financial interest, direct or indirect, in the Company or
any of its subsidiaries in any capacity. One or more representatives of KPMG LLP
will be present at the Annual Meeting, will have an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the shares voted on the
matter is required to ratify the selection of auditors. If the shareholders
should not ratify the appointment of KPMG LLP, the Board of Directors will
reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF SELECTION OF THE
AUDITORS.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, officers,
directors and beneficial owners of more than ten percent of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission reporting their beneficial ownership of the Common Stock at the time
that they become subject to the reporting requirements and changes in beneficial
ownership occurring thereafter. Based on a review of reports submitted to the
Company and written representations from persons known to the Company to be
subject to these reporting requirements, the Company believes that all such
reports due in 1998 were filed on a timely basis.
FORM 10-K ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY ANY
SHAREHOLDER, UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER, AVADO BRANDS,
INC., HANCOCK AT WASHINGTON, MADISON, GEORGIA 30650.
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COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Officers,
directors and employees of the Company may solicit proxies in person or by
telephone, telegraph or other means of communication, for which no special
compensation will be paid. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxy materials to the
beneficial owners of the Common Stock, and such persons will be reimbursed for
their reasonable expenses.
SHAREHOLDER PROPOSALS
No proposals by non-management shareholders have been presented for
consideration at the Annual Meeting. The Company expects that its 2000 Annual
Meeting will occur during May 2000. Any proposals by non-management shareholders
intended for presentation at the 2000 Annual Meeting must be received by the
Company at its principal executive offices, attention of the Secretary, not
later than November 25, 1999, in order to be included in the proxy material for
that Meeting. The Company must be notified not later than February 9, 2000 of
any shareholder proposal that was not submitted earlier for inclusion in the
proxy materials, but is intended to be presented for action at the meeting, or
else proxies solicited by the Company for that meeting may be voted on such
proposal at the discretion of the person or persons holding those proxies.
OTHER MATTERS
Management of the Company is not aware of any other matters that may come
before the Annual Meeting of Shareholders. However, as to any such matters, it
is the intention of the persons named in the proxy to vote thereon in accordance
with their judgement.
Madison, Georgia
March 29, 1999
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Appendix A
AVADO BRANDS, INC.
1995 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED
FEBRUARY 2, 1999
<PAGE>
AVADO BRANDS, INC.
1995 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE I DEFINITIONS........................................................................................ 1
(a) "Board"........................................................................................... 1
(b) "Code"............................................................................................ 1
(c) "Committee"....................................................................................... 1
(d) "Company"......................................................................................... 1
(e) "Director"........................................................................................ 1
(f) "Employee"........................................................................................ 1
(g) "Employer"........................................................................................ 1
(h) "Fair Market Value"............................................................................... 1
(i) "ISO"............................................................................................. 1
(j) "1934 Act"........................................................................................ 2
(k) "Officer"......................................................................................... 2
(l) "Option".......................................................................................... 2
(m) "Option Agreement"................................................................................ 2
(n) "Optionee"........................................................................................ 2
(o) "Option Price".................................................................................... 2
(p) "Parent".......................................................................................... 2
(q) "Plan"............................................................................................ 2
(r) "Purchasable"..................................................................................... 2
(s) "Qualified Domestic Relations Order".............................................................. 2
(t) "Stock"........................................................................................... 2
(u) "Subsidiary"...................................................................................... 2
ARTICLE II THE PLAN.......................................................................................... 3
Section 2.1 Name.......................................................................................... 3
Section 2.2 Purpose....................................................................................... 3
Section 2.3 Effective Date................................................................................ 3
Section 2.4 Termination Date.............................................................................. 3
ARTICLE III ELIGIBILITY...................................................................................... 3
ARTICLE IV ADMINISTRATION.................................................................................... 3
Section 4.1 Duties and Powers of the Committee............................................................ 3
Section 4.2 Interpretation; Rules......................................................................... 3
Section 4.3 No Liability.................................................................................. 3
Section 4.4 Majority Rule................................................................................. 4
Section 4.5 Company Assistance............................................................................ 4
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN.................................................................... 4
Section 5.1 Limitations................................................................................... 4
Section 5.2 Antidilution.................................................................................. 4
ARTICLE VI OPTIONS........................................................................................... 5
Section 6.1 Certain Limitations........................................................................... 5
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
Section 6.2 Option Grant and Agreement.................................................................... 5
Section 6.3 Optionee Limitations.......................................................................... 5
Section 6.4 $100,000 Limitation........................................................................... 5
Section 6.5 Option Price.................................................................................. 6
Section 6.6 Exercise Period............................................................................... 6
Section 6.7 Option Exercise............................................................................... 6
Section 6.8 Nontransferability of Option.................................................................. 6
Section 6.9 Termination of Employment..................................................................... 7
Section 6.10 Employment Rights............................................................................ 7
Section 6.11 Certain Successor Options.................................................................... 7
Section 6.12 Conditions to Issuing Option Stock........................................................... 7
Section 6.13 Compliance with Code Section 162(m).......................................................... 7
ARTICLE VII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN.................................................. 8
ARTICLE VIII MISCELLANEOUS................................................................................... 8
Section 8.1 Replacement of Amended Grants................................................................. 8
Section 8.2 Forfeiture for Competition.................................................................... 8
Section 8.3 Plan Binding on Successors.................................................................... 8
Section 8.4 Gender........................................................................................ 8
Section 8.5 Headings Not a Part of Plan................................................................... 8
</TABLE>
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AVADO BRANDS, INC.
1995 STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the meanings hereinafter set forth
unless the context clearly indicates to the contrary:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the United States Internal Revenue Code of 1986, as
amended. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
(c) "Committee" shall mean a committee of at least two Directors appointed
from time to time by the Board, having the duties and authority set forth herein
in addition to any other authority granted by the Board. To the extent necessary
or desirable, the Committee (or a designated subcommittee of the Committee)
shall consist only of Non-Employee Directors (as described in Rule 16b-3 under
the 1934 Act).
(d) "Company" shall mean Avado Brands, Inc., a Georgia corporation.
(e) "Director" shall mean a member of the Board.
(f) "Employee" shall mean any employee of the Company or any Subsidiary of
the Company.
(g) "Employer" shall mean the corporation that employs an Optionee.
(h) "Fair Market Value" of the shares of Stock on any date shall mean:
(i) the closing price, regular way, or in the absence thereof the mean of
the last reported bid and asked quotations, on such date on the exchange
having the greatest volume of trading in the shares during the thirty-day
period preceding such date (or if such exchange was not open for trading
on such date, the next preceding date on which it was open); or
(ii) if there is no price as specified in (i), the final reported sales
price, or if not reported in the following manner, the mean of the
closing high bid and low asked prices, in the over-the-counter market for
the shares as reported by the National Association of Securities Dealers
Automatic Quotation System or, if not so reported, then as reported by
the National Quotation Bureau Incorporated, or if such organization is
not in existence, by an organization providing similar services, on such
date (or if such date is not a date for which such system or organization
generally provides reports, then on the next preceding date for which it
does so); or
(iii) if there also is no price as specified in (ii), the price
determined by the Committee by reference to bid-and-asked quotations for
the shares provided by members of an association of brokers and dealers
registered pursuant to subsection 15(b) of the 1934 Act, which members
make a market in the shares, for such recent dates as the Committee shall
determine to be appropriate for fairly determining current market value;
or
(iv) if there also is no price as specified in (iii), the amount
determined in good faith by the Committee based on such relevant facts,
which may include opinions of independent experts, as may be available to
the Committee.
(i) "ISO" shall mean an Option that complies with and is subject to the
terms, limitations and conditions of Code section 422 and any regulations
promulgated with respect thereto.
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(j) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
(k) "Officer" shall mean a person who constitutes an officer of the Company
for the purposes of Section 16 of the 1934 Act, as determined by reference to
such Section 16 and to the rules, regulations, judicial decisions, and
interpretative or "no-action" positions with respect thereto of the Securities
and Exchange Commission, as the same may be in effect or set forth from time to
time.
(l) "Option" shall mean a contractual right to purchase Stock granted
pursuant to the provisions of Article VI hereof.
(m) "Option Agreement" shall mean an agreement between the Company and an
Optionee setting forth the terms of an Option.
(n) "Optionee" shall mean a person to whom an Option has been granted
hereunder.
(o) "Option Price" shall mean the price at which an Optionee may purchase a
share of Stock pursuant to an Option.
(p) "Parent" shall mean any corporation (other than the corporation with
respect to which the determination is being made) in an unbroken chain of
corporations ending with the corporation with respect to which the determination
is being made if, at the relevant time, each of the corporations other than the
corporation with respect to which the determination is being made owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(q) "Plan" shall mean the 1995 Stock Incentive Plan of the Company.
(r) "Purchasable," when used to describe Stock, shall refer to Stock that
may be purchased by an Optionee under the terms of this Plan on or after a
certain date specified in the applicable Option Agreement.
(s) "Qualified Domestic Relations Order" shall have the meaning set forth in
the Code or in the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated under the Code or such Act.
(t) "Stock" shall mean the $.01 par value common stock of the Company or, in
the event that the outstanding shares of such stock are hereafter changed into
or exchanged for shares of a different class of stock or securities of the
Company or some other corporation, such other stock or securities.
(u) "Subsidiary" shall mean any corporation (other than the corporation with
respect to which the determination is being made) in an unbroken chain of
corporations beginning with the corporation with respect to which the
determination is being made if, at the relevant time, each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
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ARTICLE II
THE PLAN
2.1 NAME. This plan shall be known as the "Avado Brands, Inc. 1995 Stock
Incentive Plan."
2.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company, its shareholders, and any Subsidiary of the Company, by offering
certain Employees and Directors an opportunity to acquire or increase their
proprietary interests in the Company. Options will promote the growth and
profitability of the Company, and any Subsidiary of the Company, because
Optionees will be provided with an additional incentive to achieve the Company's
objectives through participation in its success and growth.
2.3 EFFECTIVE DATE. The Plan shall become effective on June 26, 1995.
2.4 TERMINATION DATE. No further Options shall be granted hereunder on or
after June 26, 2005, but all Options granted prior to that time shall remain in
effect in accordance with their terms; provided, however, that the Plan shall
terminate on June 26, 1996, and all Options theretofore granted shall become
void and may not be exercised if the shareholders of the Company shall not have
approved the Plan's adoption prior to that date.
ARTICLE III
ELIGIBILITY
The persons eligible to participate in this Plan shall consist only of
Directors and those Employees whose participation the Committee determines is in
the best interests of the Company.
ARTICLE IV
ADMINISTRATION
4.1 DUTIES AND POWERS OF THE COMMITTEE. The Plan shall be administered by
the Committee. The Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and shall have the right to meet telephonically. In administering the
Plan, the Committee's actions and determinations shall be binding on all
interested parties. The Committee shall have the power to grant Options in
accordance with the provisions of the Plan. Subject to the provisions of the
Plan, the Committee shall have the discretion and authority to determine those
individuals to whom Options will be granted, the number of shares of Stock
subject to each Option, such other matters as are specified herein, and any
other terms and conditions of an Option Agreement. To the extent not
inconsistent with the provisions of the Plan, the Committee shall have the
authority to amend or modify an outstanding Option Agreement, or to waive any
provision thereof, provided that the Optionee consents to such action.
4.2 INTERPRETATION; RULES. Subject to the express provisions of the Plan,
the Committee also shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable in the administration of the
Plan, including, without limitation, the amending or altering of any Options
granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
4.3 NO LIABILITY. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option granted hereunder.
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4.4 MAJORITY RULE. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.
4.5 COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 LIMITATIONS. Subject to any antidilution adjustment pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that may
be issued hereunder shall be 3,600,000. Shares subject to an Option may be
either authorized and unissued shares or shares issued and later acquired by the
Company. The shares covered by any unexercised portion of an Option that has
terminated for any reason (except as set forth in the following paragraph), may
again be optioned under the Plan, and such shares shall not be considered as
having been optioned or issued in computing the number of shares of Stock
remaining available for option hereunder.
5.2 ANTIDILUTION.
(a) If the outstanding shares of Stock are changed into or exchanged for a
different number or kind of shares or other securities of the Company by reason
of merger, consolidation, reorganization, recapitalization, reclassification,
combination or exchange of shares, stock split or stock dividend, or if any
spin-off, spin-out or other distribution of assets materially affects the price
of the Company's stock:
(i) The aggregate number and kind of shares of Stock for which Options
may be granted hereunder shall be adjusted proportionately by the Committee;
and
(ii) The rights of Optionees (concerning the number of shares subject to
Options and the Option Price) under outstanding Options shall be adjusted
proportionately by the Committee.
(b) If the Company shall be a party to any reorganization in which it does
not survive, involving merger, consolidation, or acquisition of the stock or
substantially all the assets of the Company, the Committee, in its discretion,
may:
(i) notwithstanding other provisions hereof, declare that all Options
granted under the Plan shall become exercisable immediately notwithstanding
the provisions of the respective Option Agreements regarding exercisability,
that all such Options shall terminate a specified period of time after the
Committee gives written notice of the immediate right to exercise all such
Options and of the decision to terminate all Options not exercised within
such period; and/or
(ii) notify all Optionees that all Options granted under the Plan shall
be assumed by the successor corporation or substituted on an equitable basis
with options issued by such successor corporation.
(c) If the Company is to be liquidated or dissolved in connection with a
reorganization described in paragraph 5.2(b), the provisions of such paragraph
shall apply. In all other instances, the adoption of a plan of dissolution or
liquidation of the Company shall, notwithstanding other provisions hereof, cause
every Option outstanding under the Plan to terminate to the extent not exercised
prior to the adoption of the plan of dissolution or liquidation by the
shareholders, provided that, notwithstanding other provisions hereof, the
Committee may declare all Options granted under the Plan to be exercisable at
any time on or
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before the fifth business day following such adoption notwithstanding the
provisions of the respective Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of this Section
5.2, and the manner of their application, shall be determined solely by the
Committee, and any such adjustment may provide for the elimination of fractional
share interests. The adjustments required under this Article V shall apply to
any successors of the Company and shall be made regardless of the number or type
of successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 CERTAIN LIMITATIONS. Except as otherwise provided under this Plan, the
maximum number of shares of Stock subject to Options which can be granted under
the Plan during a 12-month period to an Employee shall be 1,000,000 shares.
6.2 OPTION GRANT AND AGREEMENT. Each Option granted or modified hereunder
shall be evidenced (a) by either minutes of a meeting or a written consent of
the Committee, and (b) by a written Option Agreement executed by the Company and
the Optionee. The terms of the Option, including the Option's duration, time or
times of exercise, exercise price and whether the Option is intended to be an
ISO, shall be stated in the Option Agreement. Separate Option Agreements shall
be used for Options intended to be ISO's and those not so intended, but any
failure to use such separate Agreements shall not invalidate, or otherwise
adversely affect the Optionee's rights under and interest in, the Options
evidenced thereby.
6.3 OPTIONEE LIMITATIONS. The Committee shall not grant an ISO to any
person who, at the time the ISO would be granted:
(a) is not an Employee; or
(b) owns or is considered to own stock possessing more than 10% of the total
combined voting power of all classes of stock of the Employer, or any Parent or
Subsidiary of the Employer; provided, however, that this limitation shall not
apply if at the time an ISO is granted the Option Price is at least 110% of the
Fair Market Value of the Stock subject to such Option and such Option by its
terms would not be exercisable after the expiration of five years from the date
on which the Option is granted. For the purpose of this paragraph (b), a person
shall be considered to own (i) the stock owned, directly or indirectly, by or
for his brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants, (ii) the stock owned, directly or indirectly,
by or for a corporation, partnership, estate, or trust in proportion to such
person's stock interest, partnership interest or beneficial interest therein,
and (iii) the stock which such person may purchase under any outstanding options
of the Employer or of any Parent or Subsidiary of the Employer.
6.4 $100,000 LIMITATION. Except as provided below, the Committee shall not
grant an ISO to, or modify the exercise provisions of outstanding ISO's held by,
any person who, at the time the ISO is granted (or modified), would thereby
receive or hold any incentive stock options (as described in Code section 422)
of the Employer and any Parent or Subsidiary of the Employer, such that the
aggregate Fair Market Value (determined as of the respective dates of grant or
modification of each option) of the stock with respect to which such incentive
stock options are exercisable for the first time during any calendar year is in
excess of $100,000; provided, that the foregoing restriction on modification of
outstanding ISO if, as a result of such modification and with the consent of the
Optionee, such Option no longer constitutes an ISO shall be treated as an ISO up
to the limitation and the excess shall be treated as an Option not qualifying as
an ISO. The preceding sentence shall be applied by taking options intended to be
ISO's into account in the order in which they were granted.
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6.5 OPTION PRICE. The Option Price under each Option shall be determined
by the Committee. However, the Option Price shall not be less than Fair Market
Value of the Stock on the date that the Option is granted (or, in the case of an
ISO that is subsequently modified, on the date of such modification).
6.6 EXERCISE PERIOD. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, but the Option Agreement with
respect to each Option intended to be an ISO shall provide that such Option
shall not be exercisable after the expiration of ten years from the date of
grant (or modification) of the Option. In addition, no Option granted to an
Employee who is also an Officer or Director shall be exercisable prior to the
expiration of six months from the date such Option is granted, other than in the
case of the death or disability of such Employee.
6.7 OPTION EXERCISE.
(a) Unless otherwise provided in the Option Agreement, an Option may be
exercised at any time or from time to time during the term of the Option as to
any or all whole shares that have become Purchasable under the provisions of the
Option, but not at any time as to less than 100 shares unless the remaining
shares that have become so Purchasable are less than 100 shares. The Committee
shall have the authority to prescribe in any option Agreement that the Option
may be exercised only in accordance with a vesting schedule during the term of
the Option.
(b) An Option shall be exercised by (i) delivery to the Secretary of the
Company at its principal office of written notice of exercise with respect to a
specified number of shares of Stock, and (ii) payment to the Company at that
office of the full amount of the Option Price for such number of shares.
(c) The Option Price shall be paid in full upon the exercise of the Option;
provided, however, that the Committee may provide in an Option Agreement that,
in lieu of cash, all or any portion of the Option Price may be paid by tendering
to the Company shares of Stock duly endorsed for transfer and owned by the
Optionee, to be credited against the Option Price at the Fair Market Value of
such shares on the date of exercise (however, no fractional shares may be so
transferred, and the Company shall not be obligated to make any cash payments in
consideration of any excess of the aggregate Fair Market Value of shares
transferred over the aggregate Option Price.)
(d) In addition to and at the time of payment of the Option Price, the
Optionee shall pay to the Company in cash the full amount of any federal, state
and local income, employment or other taxes required to be withheld from the
income of such Optionee as a result of such exercise; provided, however, that in
the discretion of the Committee any Option Agreement may provide that all or any
portion of such tax obligations, together with additional taxes not exceeding
the actual additional taxes to be owned by the Optionee as a result of such
exercise, may, upon the irrevocable election of the Optionee, be paid by
tendering to the Company whole shares of Stock duly endorsed for transfer and
owned by the Optionee, or by authorization to the Company to withhold shares of
Stock otherwise issuable upon exercise of the Option, in either case in that
number of shares having a Fair Market Value on the date of exercise equal to the
amount of such taxes thereby being paid, and subject to such restrictions as to
the approval and timing of any such election as the Committee may from time to
time determine to be necessary or appropriate to satisfy the conditions of the
exemption set forth in Rule 16b-3 under the 1934 Act.
(e) The holder of an Option shall not have any of the rights of a
shareholder with respect to the shares of Stock subject to the Option until such
shares have been issued upon the exercise of the Option.
6.8 NONTRANSFERABILILTY OF OPTION. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than (i) by will or the
laws of descent and distribution and (ii) if permitted by the Committee, and
upon such terms and conditions as the Committee may establish, to immediate
family members of the Optionee or to a trust, partnership or similar vehicle for
the benefit of such immediate family members (collectively, the "Permitted
Transferees"). An Option may be exercised during the lifetime of such Optionee
only by the Optionee or his guardian or legal representative or, if
6
<PAGE>
applicable, by Permitted Transferees. The terms of such Stock Option shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs, successors, and Permitted Transferees of the Optionee.
6.9 TERMINATION OF EMPLOYMENT. The Committee shall have the power to
specify, with respect to the Options granted to any particular Optionee, the
effect upon such Optionee's right to exercise an Option of the termination of
such Optionee's employment under various circumstances, which effect may include
immediate or deferred termination of such Optionee's rights under an Option, or
acceleration of the date at which an Option may be exercised in full.
6.10 EMPLOYMENT RIGHTS. Nothing in the Plan or in any Option Agreement
shall confer on any person any right to continue in the employ of the Company or
any Subsidiary of the Company, or shall interfere in any way with the right of
the Company or any such Subsidiary to terminate such person's employment at any
time.
6.11 CERTAIN SUCCESSOR OPTIONS. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422, and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article VI, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
6.12 CONDITIONS TO ISSUING OPTION STOCK. The Company shall not be required
to issue or deliver any Stock purchased upon the full or partial exercise of any
Option granted hereunder prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock exchanges on which
the Stock is then listed, if any;
(b) The completion of any registration or other qualification of such shares
that the Company shall determine to be necessary or advisable under any federal
or state law or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, or the Company's
determination that an exemption is available from such registration or
qualification;
(c) The obtaining of any approval or other clearance from any federal or
state governmental agency that the Company shall determine to be necessary or
advisable; and
(d) The lapse of such reasonable period of time following exercise as shall
be appropriate for reasons of administrative convenience.
Unless the shares of Stock covered by the Plan shall be the subject of an
effective registration statement under the Securities Act of 1933, as amended,
stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.
6.13 COMPLIANCE WITH CODE SECTION 162(M). At all times when the Committee
determines that compliance with Code Section 162(m) is required or desired, all
grants under this Plan shall comply with the requirements of Code Section
162(m). In addition, in the event that changes are made to Code Section 162 (m)
to permit greater flexibility with respect to any grant under the Plan, the
Committee may make any adjustments it deems appropriate.
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ARTICLE VII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, (i) cause the Committee to cease granting
Options, (ii) terminate the Plan, or (iii) in any respect amend or modify the
Plan; provided, however, that the Board (unless its actions are approved or
ratified by the shareholders of the Company within twelve months of the date the
Board amends the Plan) may not amend the Plan to:
(a) Materially increase the number of shares of Stock subject to the Plan;
(b) Materially change or modify the class of persons that may participate in
the Plan; or
(c) Otherwise materially increase the benefits accruing to participants
under the Plan.
No termination, amendment or modification of the Plan shall affect adversely
an Optionee's rights under an Option Agreement without the consent of the
Optionee or his legal representative.
ARTICLE VIII
MISCELLANEOUS
8.1 REPLACEMENT OR AMENDED GRANTS. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or accept the surrender of outstanding Options and grant new
Options in substitution for them. Provided, however, no modification of an
Option shall adversely affect an Optionee's rights under an Option Agreement
without the consent of the Optionee or his legal representative and no
modification or substitution of an outstanding option shall change or result in
a change of any option price.
8.2 FORFEITURE FOR COMPETITION. If an Optionee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Optionee while an Employee, then that
Optionee's rights under any Options outstanding hereunder shall be forfeited and
terminated, subject to a determination to the contrary by the Committee.
8.3 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors of the Company.
8.4 GENDER. Whenever used herein, the masculine pronoun shall include the
feminine gender.
8.5 HEADINGS NOT A PART OF PLAN. Headings of Articles and Sections hereof
are inserted for convenience and reference, and do not constitute a part of the
Plan.
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AVADO BRANDS, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 4, 1999.
The undersigned hereby appoints Tom E. DuPree, Jr., and John G. McLeod, Jr.,
or either of them with individual power of substitution, proxies to vote all
shares of Common Stock of Avado Brands, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held
on May 4, 1999, and at all adjournments thereof, as follows:
1. Election of Directors
(Proposed by the Company)
Tom E. DuPree, Jr., Erich J. Booth, Thomas R. Williams,
Dr. Ruth G. Shaw, John L. Moorhead.
<TABLE>
<S> <C> <C> <C>
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY FOR ALL NOMINEES LISTED ABOVE.
BELOW)
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY ONE OR MORE NOMINEES, WRITE
THEIR NAMES IN THE SPACE PROVIDED BELOW.)
________________________________________
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL THE NOMINEES.
2. Approval of the Company's 1995 Stock Incentive Plan, as Amended.
/ / FOR approval / / AGAINST approval
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE PLAN.
3. Ratification of the selection of KPMG LLP as auditors of the Company for the
fiscal year ending January 2, 2000
(Proposed by the Company).
/ / FOR ratification / / AGAINST ratification
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE RATIFICATION
4. In accordance with their best judgement upon such other matters as may
properly come before the Meeting.
<PAGE>
___________________________________
Signature of Shareholder
___________________________________
Signature of Shareholder
IMPORTANT: Please sign this Proxy
exactly as your name or names
appear hereon. If shares are held
by more than one owner, each must
sign. Executors, administrators,
trustees, guardians, and others
signing in a representative
capacity should give their full
titles.
DATED: ______________________, 1999
BE SURE TO DATE THIS PROXY
