<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / 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 Section 240.14a-12
Santa Barbara Restaurant Group, 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:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[SANTA BARBARA RESTAURANT GROUP LOGO]
SANTA BARBARA RESTAURANT GROUP, INC.
3839 STATE STREET, SUITE 200
SANTA BARBARA, CALIFORNIA 93105
September 13, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Santa Barbara Restaurant Group, Inc. The Meeting will be held on
October 12, 2000 at 10:00 a.m., Pacific Standard Time, at Fess Parker's
Doubletree Resort, Santa Barbara, 633 East Cabrillo Blvd., Santa Barbara, CA
93103.
The Notice of the Meeting and the Proxy Statement on the following
pages cover the formal business of the Meeting. We will also report on the
progress of the Company and comment on matters of current interest.
It is important that your shares be represented at the Meeting. We ask
that you promptly sign, date and return the enclosed proxy card in the envelope
provided, even if you plan to attend the Meeting. Returning your proxy card to
us will not prevent you from voting in person at the Meeting if you are present
and choose to do so.
If your shares are held in street name by a brokerage firm, your broker
will supply you with a proxy to be returned to the brokerage firm. It is
important that you return the form to the brokerage firm as quickly as possible
so that the brokerage firm may vote your shares. You may not vote your shares in
person at the Meeting unless you obtain a power of attorney or legal proxy from
your broker authorizing you to vote the shares, and you present this power of
attorney or proxy at the Meeting.
The Company's management team looks forward to greeting you personally
at the Meeting.
Sincerely,
/s/ Andrew D. Simons
Andrew D. Simons
Secretary
<PAGE>
SANTA BARBARA RESTAURANT GROUP, INC.
3938 STATE STREET, SUITE 200
SANTA BARBARA, CALIFORNIA 93105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 12, 2000
TO THE STOCKHOLDERS OF SANTA BARBARA RESTAURANT GROUP, INC.:
The Annual Meeting of Stockholders of Santa Barbara Restaurant Group,
Inc. (the "Company") will be held at Fess Parker's Doubletree Resort, 633 East
Cabrillo Boulevard, Santa Barbara, California, on October 12, 2000, at 10:00
A.M., for the following purposes as more fully described in the accompanying
Proxy Statement:
(1) To elect five (5) nominees to serve as directors
until the next annual meeting of stockholders or
until their successors are duly elected and
qualified;
(2) To approve and ratify the Company's Employee Stock
Purchase Plan, which authorizes the Company to issue
up to 1,500,000 shares of common stock of the Company
for purchases through payroll deductions by
participating employees of the Company;
(3) To ratify the appointment of KPMG Peat Marwick, LLP
as independent auditors of the Company for the fiscal
year ending December 28, 2000; and
(4) To transact such other business as may properly come
before the meeting or any adjournment or postponement
thereof.
Your attention is directed to the Proxy Statement accompanying this
Notice for a more complete description of the matters to be acted upon at the
Meeting. The 1999 Annual Report of the Company and a copy of our Form 10-Q for
the second quarter of 2000 are also enclosed. Stockholders are encouraged to
review the 10-Q in conjunction with their review of the Annual Report.
Stockholders of record at the close of business on September 5, 2000 are
entitled to receive notice of and to vote at the Meeting and any adjournment
thereof. A list of such stockholders will be available for examination by any
stockholder, for any purpose germane to the Meeting, during ordinary business
hours, at Santa Barbara Restaurant Group, Inc., 3938 State Street, Suite 200,
Santa Barbara, CA 93105, for a period of ten days prior to the Meeting date.
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 September 5, 2000 will be entitled to vote at the meeting or any
adjournment or postponement thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Andrew D. Simons
SECRETARY
September 13, 2000
YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING YOU SHOULD COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY. Any
stockholder present at the meeting may withdraw his or her proxy and vote
personally on each matter brought before the meeting. Stockholders attending the
meeting whose shares are held in the name of a broker or other nominee who
desire to vote their shares at the meeting should bring with them a proxy or
letter from that firm confirming their ownership of shares.
<PAGE>
SANTA BARBARA RESTAURANT GROUP, INC.
3938 STATE STREET, SUITE 200
SANTA BARBARA, CALIFORNIA 93105
---------------
PROXY STATEMENT
---------------
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Santa
Barbara Restaurant Group, Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Meeting") to be held on October 12, 2000 at 10:00 a.m., local
time, or at any adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Meeting will be
held at Fess Parker's Doubletree Resort, 633 East Cabrillo Blvd., Santa Barbara,
California. It is anticipated that such proxy, together with this Proxy
Statement, will be first mailed on or about September 13, 2000, to all
stockholders entitled to vote at the Meeting. The Company's corporate offices
are located at 3938 State Street, Suite 200, Santa Barbara, California 93105 and
its telephone number at that address is (805) 563-3644.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company's
Secretary a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Meeting and voting in person.
VOTING AND SOLICITATION
Each share has one vote on each matter properly submitted for a vote at
the Meeting. The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone or telegram. Votes cast by
proxy or in person at the Meeting will be counted by the persons appointed by
the Company to act as election inspectors for the Meeting. The election
inspectors will treat shares represented by properly signed and returned proxies
that reflect abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum on all matters. The election
inspectors will treat shares referred to as "broker non-votes" (i.e., shares
held by brokers or nominees as to which instructions have not been received from
the beneficial owners or persons entitled to vote that the broker or nominee
does not have discretionary power to vote on a particular matter) as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions and "broker non-votes" will not affect the outcome of the
director elections. As to other votes, an abstention will have the same effect
as a negative vote and a "broker non-vote" will have no effect on the vote.
RECORD DATE AND STOCK OWNERSHIP
Stockholders of record at the close of business on September 5, 2000,
are entitled to notice of and to vote at the Meeting. As of September 5, 2000,
17,320,292 shares of the Company's Common Stock (the "Common Stock"), $.08 par
value, were issued and outstanding. On that date, there were 300 stockholders of
record.
1
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Under the Bylaws, the Company may have up to ten directors. The five
(5) directors set forth below are standing for re-election to hold office until
the next annual meeting of stockholders or their successors are duly elected and
qualified. C. Thomas Thompson and Dermot Rowland are currently members of the
board of Directors but are not running for another term.
William P. Foley, II
Andrew F. Puzder
Charles Rolles
Burt Sugarman
Frank Willey
If any nominee becomes unavailable for any reason before the election,
the enclosed proxy will be voted for the election of such substitute nominee or
nominees, if any, as shall be designated by the Board of Directors. The Board of
Directors has no reason to believe that any of the nominees will be unavailable
to serve.
Any stockholder entitled to vote for the election of directors at a
meeting may nominate persons for election as directors only if written notice
of the stockholder's intent to make such nomination is given, either by
personal delivery or by United States mail, postage prepaid and addressed to:
Secretary, Santa Barbara Restaurant Group, Inc., 3938 State Street, Suite
200, Santa Barbara, California 93105, not later than 30 days nor more than 60
days prior to the meeting, provided, however, that in the event that less
than 40 days notice or prior public disclosure of the meeting date is given,
notice by the stockholders to be timely must be received not later than the
close of business on the 10th day following the date on which notice of such
meeting is first given to stockholders. Each such notice must set forth: (a)
the name and address of the stockholder who intends to make the nomination
and of the person or persons to be nominated; (b) a representation that such
stockholder is a holder of record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between such stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by such stockholder; (d)
such other information regarding each nominee proposed by such stockholder as
would have been required to be included in a Proxy Statement filed pursuant
to the proxy rules of the Securities and Exchange Commission if such nominee
had been nominated or intended to be nominated by the Board of Directors; and
(e) the consent of each nominee to serve as a director of the Company, if
elected. The Chairman of a stockholders' meeting may refuse to acknowledge
the nomination of any person not made in compliance with the foregoing
procedure.
The names and certain information concerning the five (5) nominees for
election as directors are set forth below. THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
William P. Foley, II 55 Chairman and Director
Andrew F. Puzder 49 Director
Charles Rolles 65 Director
Burt Sugarman 61 Director
Frank P. Willey 46 Director
</TABLE>
WILLIAM P. FOLEY, II became Chairman of the Board and a Director of the
Company in July 1997. Mr. Foley is also Chairman of the Board and Chief
Executive Officer of Fidelity National Financial, Inc., a company engaged in
title insurance and related services. Mr. Foley is also the Chairman of the
Board of CKE Restaurants, Inc., a company engaged in the quick service
restaurant business. He is also Chairman of the Board of Checkers Drive-In
Restaurants, Inc. and a member of the Boards of Directors of American National
Financial, Inc., Micro General Corporation, Fresh Foods, Inc., and Miravant
Medical Technologies, Inc.
2
<PAGE>
ANDREW F. PUZDER became a Director of the Company in July 1997 and
served as Chief Executive Officer and President from July 1997 to June 2000. Mr.
Puzder has been Chief Executive Officer and President of Hardee's Food Systems,
Inc. since June 2000. He also served as Executive Vice President and General
Counsel of CKE Restaurants, Inc. from February 1997 to June 2000. From March
1994 to December 1994, he was a partner with the law firm of Stradling, Yocca,
Carlson & Rauth. Prior to that, he was a partner with the law firm of Lewis,
D'Amato, Brisbois & Bisgard, from September 1991 through March 1994, and he was
a partner with the Stolar Partnership from February 1984 through September 1991.
Mr. Puzder also served as Executive Vice President and other capacities for
Fidelity National Financial, Inc. from January 1995 to April 1997. Mr. Puzder is
also a director of Fresh Foods, Inc., Checkers Drive-In Restaurants and Aspeon,
Inc.
CHARLES ROLLES became a Director of the Company in 1999. Mr. Rolles has
been engaged in the business of real estate development for the past 30 years.
In addition, Mr. Rolles was the founder of the 50 unit Chuck's Steakhouse chain.
Mr. Rolles also served as a director of Liberty Bank from 1978 to 1990.
DERMOT F. ROWLAND became a Director of the Company in 1998. Mr. Rowland
was the founder of Timber Lodge Steakhouse, Inc. (acquired by the Company on
September 1, 1998) and has served as Chairman of the Board, Chief Executive
Officer, Secretary and as a Director of Timber Lodge since 1989. Prior to
establishing Timber Lodge, Mr. Rowland was involved in the formation and
management of Homestyle Buffet, Inc., which subsequently changed its name to
Staceys Buffet Inc. ("Staceys"). Staceys, based in Largo, Florida, develops and
operates buffet restaurants. He co-founded Staceys in 1986 and served as its
President and Chief Executive Officer from 1986 to 1987. In 1987, he became its
Chairman of the Board and continued as a consultant and Director until 1991.
BURT SUGARMAN became a Director of the Company in 1999. Mr. Sugarman
has been the Chairman of the Board, President and Chief Executive Officer of
GIANT GROUP, Ltd. for the past five years and served as the Chief Executive
Officer of Rally's Hamburgers, Inc. from 1990 and as the Chairman of the Board
of Directors of Rally's from 1991, resigning from these offices in February
1994. Mr. Sugarman resumed the position of Chairman of the Board of Directors of
Rally's Hamburgers, Inc. in November 1994 and resigned such office in October
1997. Mr. Sugarman is a Director of GIANT Group, Ltd. and Checkers Drive-In
Restaurants, Inc.
C. THOMAS THOMPSON became a Director of the Company in 1998. Mr.
Thompson is also the Chief Executive Officer, President and Chief Operating
Officer of CKE Restaurants, Inc. Mr. Thompson has been a Carl's Jr. franchisee
since 1984, and currently operates 17 Carl's Jr. restaurants in the San
Francisco Bay Area. Mr. Thompson also serves as a member of the Board of
Directors of Checkers Drive-In Restaurants, Inc. Mr. Thompson has more than 20
years of experience in the restaurant industry.
FRANK P. WILLEY became a Director of the Company in July 1997. He is
also the Vice Chairman of Fidelity National Financial, Inc. and has been a
director since February 1984. He was the President of Fidelity National
Financial, Inc. from January 1995 through March 2000, General Counsel of
Fidelity National Financial, Inc. from 1984 to January 1995. Mr. Willey also
serves on the Boards of Directors of CKE Restaurants, Inc., Southern Pacific
Funding Corporation, and Ugly Duckling Holdings, Inc.
OTHER EXECUTIVE OFFICERS
THEODORE ABAJIAN, 36, was appointed Executive Vice President, Chief
Financial Officer in May 1998. In addition, since January 1, 2000 Mr. Abajian
holds the position of Senior Vice President and Chief Financial Officer for
Checkers Drive-In Restaurants, Inc. Prior to joining Santa Barbara Restaurant
Group, Inc. Mr. Abajian served as the Chief Financial Officer of Star Buffet,
Inc, since its formation in July 1997. Mr. Abajian also served as a director of
Stacey's Buffet, Inc. from October 31, 1997, to February 4, 1998. Mr. Abajian
has been the Vice President and Controller of Summit Family Restaurants Inc.
since 1994. From 1983 to 1994, he held several positions with Family
Restaurants, Inc., including Director of Financial Analysis, Planning and
Reporting for the family restaurant division, which included approximately 350
Carrows and Coco's restaurants.
PETER BEDZYK, 49, has served as Executive Vice President of Operations
of the Company's subsidiary Timber Lodge Steakhouse, Inc. since September 1,
1998, the date Timber Lodge was acquired by Santa Barbara Restaurant Group.
Prior to the merger, Mr. Bedzyk was President and Chief Operating Officer of
Timber Lodge
3
<PAGE>
from February 1997 and a director since May 1996. From June 1995 to February
1997 he served as Executive Vice President of Operations and from 1991 to June
1995 Mr. Bedzyk was operations manager for Timber Lodge.
KEVIN OSBORN, 44, was appointed President and Chief Executive Officer
of both the Company's La Salsa and Green Burrito subsidiaries in July 1999. From
August 1982 to July 1999, Mr. Osborn was employed by Taco Bueno in Carollton,
Texas, spending 11 years as Regional Vice President of Operations.
ANNETTE DELLA FLORA, 38, was appointed Senior Vice President of
Marketing of the Company in September 1999. In addition, Ms. Della Flora holds
the position of Senior Vice President of Marketing of Checkers Drive-In
Restaurants, Inc. From December 1998 to September 1999, she was Vice President
of Marketing for Del Taco, Inc. in Laguna Hills, California. Ms. Della Flora
worked for HomeBase/Home Improvement Warehouse in Anaheim, California from June
1994 to November 1998 in various marketing and advertising positions.
ANDREW D. SIMONS, 39, was appointed Senior Vice President, General
Counsel and Secretary of the Company in July 1999. In addition, Mr. Simons holds
the position of Senior Vice President, General Counsel and Secretary of Checkers
Drive-In Restaurants, Inc. From April 1996 to June 1999 Mr. Simons served as
Vice President, General Counsel and Secretary of Circon Corporation. From July
1992 through April 1996 Mr. Simons worked for Tokos Medical Corporation in
various capacities including Vice President, General Counsel and Secretary.
Prior to 1992, Mr. Simons was an associate at the law firm of Gibson, Dunn &
Crutcher.
LYNN WHITEFORD, 48, has been Executive Vice President and Chief
Operating Officer of the Company's subsidiary JB's Family Restaurants, Inc.
since April 1996. In addition, Mr. Whiteford assumed the role of Chief Operating
Officer for Timber Lodge Steakhouse upon the formation of Santa Barbara
Restaurant Group in September 1998. Additionally, Mr. Whiteford is Senior Vice
President of Santa Barbara Restaurant Group. Mr. Whiteford was Vice President of
Operations and Senior Vice President of Operations for Summit Family Restaurants
(the predecessor of JB's) since August 1994. Prior to joining Summit, he was
Director of Operations for the Ruby Restaurant Group from February 1992 until
September 1994, and held various operations positions with Family Restaurants,
Inc. and its predecessors (Restaurant Enterprises Group, Grace Restaurant
Company and Far West Services) from July 1977 through February 1992. He was a
Regional Vice President from September 1987 through February 1992.
BOARD MEETINGS AND ATTENDANCE
During fiscal 1999, the Board of Directors of the Company held four
meetings and acted by unanimous written consent twice. Mr. Foley missed one
meeting and Mr. Sugarman missed two meetings during 1999. All committee meetings
were fully attended. There are no family relationships among any of the
directors or executive officers of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee is presently comprised of three directors
selected by the Board of Directors of the Company. The members of the Audit
Committee are Frank Willey (Chairman), Burt Sugarman and Charles Rolles. The
Audit Committee is authorized to handle all matters which it deems
appropriate regarding the Company's independent accountants and to otherwise
communicate and act upon matters relating to the review and audit of the
Company's books and records, including the scope of the annual audit and the
accounting methods and systems to be utilized by the Company. In addition,
the Audit Committee makes recommendations to the Board of Directors with
respect to the selection of the Company's independent accountants. During
fiscal 1999, the Audit Committee held one meeting.
The Compensation Committee is presently comprised of two directors
selected by the Board of Directors of the Company. The members of the
Compensation Committee are Frank P. Willey (Chairman) and C. Thomas Thompson.
The Compensation Committee considers the salary, bonus, and incentive benefits
for officers and directors and administers the Company's stock option plan.
During fiscal 1999, the Compensation Committee held two meetings.
4
<PAGE>
The Board of Directors does not have a nominating committee. Instead,
the Board of Directors, as a whole, identifies and screens candidates for
membership on the Company's Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the fiscal
year ended December 30, 1999 by the Company's Chief Executive Officer and its
named executive officers (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL ------------------- UNDERLYING ALL OTHER
POSITION(S) YEAR SALARY($) BONUS(1)($) OTHER($) OPTIONS (#) COMPENSATION($)(2)
----------- ---- --------- ----------- -------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Andrew F. Puzder (3) 1999 25,000 0 0 150,000 0
Chief Executive 1998 0 0 0 210,000 0
Officer
1997 0 0 0 100,000 0
Theodore Abajian (4) 1999 125,000 40,000 9,000 10,000 515
Chief Financial 1998 83,333 34,000 6,000 50,000 410
Officer
Lynn Whiteford (5) 1999 117,500 40,000 7,800 25,000 510
1998 39,167 20,333 2,600 40,000 150
Peter K. Bedzyk (5) 1999 115,000 52,806 6,000 15,000 490
1998 38,333 6,500 2,000 40,000 150
Kevin Osborn (6) 1999 91,667 20,000 2,732 100,000 0
</TABLE>
(1) Bonus amounts were earned during fiscal 1999 and were paid shortly
thereafter.
(2) All other compensation includes amounts paid on behalf of the executive for
term life insurance.
(3) Mr. Puzder became a Director in July 1997 and Chief Executive Officer in
August 1997.
(4) Mr. Abajian began his employment with the Company on May 1, 1998.
(5) Mr. Whiteford & Mr. Bedzyk began their employment with the Company on
September 1, 1998.
(6) Mr. Osborn began his employment with the Company on July 12, 2000.
5
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM (1)
OPTIONS IN FISCAL PRICE PER EXPIRATION ----------------------------
GRANTED YEAR SHARE DATE 5% 10%
--------------- -------------- ------------ -------------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Andrew F. Puzder 150,000 17.0 $ 2.94 5/13/2009 $ 277,153 $ 702,362
Theodore Abajian 10,000 1.1 $ 2.94 5/13/2009 $ 18,477 $ 46,824
Lynn Whiteford 25,000 2.8 $ 2.94 5/13/2009 $ 46,192 $ 117,060
Peter Bedzyk 15,000 1.2 $ 2.94 5/13/2009 $ 27,715 $ 70,236
Kevin Osborn 100,000 11.4 $ 2.44 7/12/2009 $ 153,325 $ 388,554
</TABLE>
(1) In accordance with the rules and regulations of the Securities and
Exchange Commission, such gains are based on assumed rates of annual
compound stock appreciation of 5% and 10% from the date on which the
options were granted over the full term of the options. The rates do
not represent the Company's estimate or projection of future Common
Stock prices, and no assurance can be given that the rates of annual
compound stock appreciation assumed will be achieved.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT DECEMBER 30, 1999 IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE DECEMBER 30, 1999 (1)
EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew F. Puzder 0 0 460,000 0 $ 0 $ 0
Theodore Abajian 0 0 60,000 0 0 0
Lynn Whiteford 0 0 65,000 0 0 0
Peter Bedzyk 0 0 112,259 0 0 0
Kevin Osborn 0 0 33,334 66,666 0 0
</TABLE>
(1) Market value of underlying securities at year-end minus the exercise price
of "in-the-money" options. The closing sale price for the Company's Common Stock
as of December 30, 1999 on the Nasdaq National Market was $1.64.
DIRECTOR'S FEES
During fiscal 1999, the Company's non-employee directors received
cash compensation in the amount of $1,000 for their attendance in person at
Board meetings and $500 for their participation at a Board meeting
telephonically. Members of the Board of Directors receive nonstatutory stock
options from time to time in recognition of their service as members of the
Board of Directors. In May 1999, the Board awarded Mr. Foley nonstatutory
stock options to purchase 300,000 shares of the Company's stock for his
service as Chairman of the Board.
EMPLOYMENT CONTRACTS
The Company has not entered into any employment agreements.
6
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
GENERAL
The company believes that the transactions hereunder were the result of
arm's-length negotiations, and the terms of each such transaction was no less
favorable to the Company as would have been available from an unaffiliated third
party. The transactions discussed below were negotiated either (i) before the
parties became affiliates; (ii) after the parties ceased to be affiliates; or
(iii) with a majority of the disinterested members of the Company's Board of
Directors. Furthermore, it is the policy of the Company that a majority of the
disinterested members of the Company's Board of Directors must approve
related-party transactions.
CKE RESTAURANTS, INC.
The Company and CKE share certain officers and directors. The Company
is a party to an agreement with CKE pursuant to which CKE provides the Company
with certain general and administrative support. In 1999, the Company incurred
$500,000 for such services.
As of December 30, 1999, there were 210 Carl's Jr./Green Burrito
restaurants in operation in California, Arizona, Oregon, Nevada, Oklahoma,
Kansas and Mexico. For the fiscal year ended December 30, 1999, the Company
recognized franchise revenues generated from CKE dual-concept franchise stores
of approximately $837,000 and had receivable balances of $123,000 related to
royalty and franchise fee payments due from CKE.
FIDELITY NATIONAL FINANCIAL, INC.
The Company and Fidelity share certain officers and directors. In
conjunction with the La Salsa acquisition on July 15, 1999, 500,000 of SBRG
warrants held by Fidelity were cancelled and reissued by the Company to the
selling shareholders of La Salsa Holding, Inc. Fidelity presently owns
approximately 4.7 million shares or 27.3% of the Company's common stock and
holds warrants to acquire an additional 1,970,000 shares of the Company's
common stock.
CHECKERS DRIVE-IN RESTAURANTS, INC.
The Company and Checkers share certain officers and directors. During
1999, the Company received $104,408 from Checkers for salary payments made by
the Company to certain officers on behalf of Checkers. The Company presently
owns 48,002 shares or less than one percent of Checkers common stock.
GRANITE FINANCIAL, INC.
On October 1, 1999 the Company entered into an equipment lease
financing transaction with Granite Financial, Inc., a wholly owned subsidiary of
Fidelity National Financial, Inc. for certain point of sale equipment for JB's
Family Restaurants, Inc., costing $1.3 million. Under the agreement between the
parties, the Company makes monthly payments of $41,000.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Rules adopted by the Securities and Exchange Commission ("SEC") under
Section 16(a) of the Exchange Act require the Company's officers and directors,
and persons who own more than 10% of the issued and outstanding shares of the
Company's common stock, to file reports of their ownership, and changes in
ownership, of such securities with the SEC on SEC Forms 3, 4 or 5, as
appropriate. Officers, directors and greater-than-ten-percent stockholders are
required by the SEC's regulations to furnish the Company with copies of all
forms they file pursuant to Section 16(a).
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during its most recent fiscal year end, and any written
representations provided to it, the Company is advised that all filings were
timely and correctly made.
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Set forth below is certain information as of the Record Date regarding
the beneficial ownership of the Company's Common Stock by (i) any person who was
known by the Company to own more than five percent (5%) of the voting securities
of the Company, (ii) all directors and nominees, (iii) each of the Named
Executive Officers identified in the Summary Compensation Table, and (iv) all
current directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OF SHARES
BENEFICIAL OWNER(1)(2)(3) BENEFICIALLY OWNED(1) OUTSTANDING(4)
<S> <C> <C>
Fidelity National Financial, Inc.(5) 6,696,859 34.7%
17911 Von Karman Avenue, Suite 300
Irvine, CA 92614
William P. Foley, II (6) 2,676,700 14.6%
CKE Restaurants, Inc. 1,656,453 9.6%
Andrew F. Puzder (7) 614,000 3.4%
Dermot Rowland (8) 593,805 3.4%
Burt Sugarman (9) 55,000 *
Kevin Osborn (11) 33,334 *
Lynn Whiteford (12) 68,000 *
Peter Bedzyk (13) 115,599 *
Theodore Abajian (14) 60,000 *
C. Thomas Thompson (15) 66,000 *
Frank P. Willey (16) 125,000 *
Charles Rolles (17) 55,000 *
Andrew D. Simons (18) 10,000 *
All officers and directors as a
group (15 persons)(19) 4,472,438 22.8%
</TABLE>
* Represents less than 1% of the outstanding common stock of the Company.
(1) Unless otherwise noted, the Company believes that all shares are
beneficially owned and that all persons named in the table have sole
voting and investment power with respect to all shares of Company common
stock owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from September 5, 2000 upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and which are
exercisable within 60 days from September 5, 2000 have been exercised.
(3) Unless otherwise indicated, the address of each stockholder listed is 3938
State Street Street, Suite 200, Santa Barbara, California 93105.
(4) Percentage calculation assumes owners derivative securities exercisable
within 60 days have been exercised.
(5) Includes 1,970,000 shares issuable upon the exercise of presently
exercisable warrants.
(6) Excludes the 6,696,859 shares held by Fidelity National Financial, Inc.,
of which Mr. Foley is Chairman of the Board and Chief Executive Officer,
and 1,656,453 shares held by CKE Restaurants, Inc., of which Mr. Foley is
the Chairman of the Board. Includes 1,010,000 shares issuable upon the
exercise of presently exercisable nonstatutory stock options
(7) Includes 610,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(8) Includes 136,116 shares issuable upon the exercise of stock options
exercisable within 60 days.
8
<PAGE>
(9) Includes 55,000 shares issuable upon the exercise of presently exercisable
nonstatutory stock options.
(10) Includes 47,500 shares issuable upon the exercise of stock options
exercisable within 60 days.
(11) Includes 33,334 shares issuable upon the exercise of stock options
exercisable within 60 days.
(12) Includes 65,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(13) Includes 112,259 shares issuable upon the exercise of stock options
exercisable within 60 days.
(14) Includes 60,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(15) Includes 65,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(16) Includes 125,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(17) Includes 55,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(18) Includes 10,000 shares issuable upon the exercise of stock options
exercisable within 60 days.
(19) Includes an aggregate of 2,336,709 shares issuable upon the exercise of
stock options exercisable within 60 days held by officers and directors of
the Company.
REPORT OF THE COMPENSATION COMMITTEE
The following report is submitted by the Compensation Committee of the
Board of Directors with respect to the executive compensation policies
established by the Compensation Committee and recommended to the Board of
Directors and compensation paid or awarded to executive officers for the fiscal
year ended December 30, 1999.
COMPENSATION POLICIES AND OBJECTIVES
The Company's executive compensation policy is designed to attract and
retain exceptional executives by offering compensation for superior performance
that is competitive with other well-managed organizations in the industry. The
Compensation Committee measures executive performance on an individual and
corporate basis.
- COMPENSATION POLICIES TOWARDS EXECUTIVE OFFICERS. The Committee
believes that the most effective executive compensation program is
one that provides incentives to achieve both current and long-term
strategic management goals, with the ultimate objective of enhancing
stockholder value. The Company's compensation program for executive
officers consists primarily of base salary, bonus and long term
incentives in the form of stock options. Base salaries for Executive
Officers are established relative to the Company's financial
performance and comparable positions in similarly sized companies.
The Committee may rely on reports prepared by the Company or on the
knowledge and experience of its members to determine competitive pay
levels. The bonus program is designed to reward individual
performance based on the Company's financial results as well as
achievement of personal and corporate objectives that contribute to
the long-term success of the Company in building stockholder value.
With respect to equity-based compensation, the Committee believes
that an integral part of the Company's compensation program is the
ownership and retention of the Company's Common Stock by its
Executive Officers. By providing Executive Officers with a
meaningful stake in the Company, the value of which is dependent on
the Company's long-term success, a commonality of interests between
the Company's Executive Officers and its stockholders is fostered.
- STOCK OPTIONS. Stock option grants motivate Executive Officers to
manage the business to improve long-term Company performance and
align the interests of Executive Officers with stockholder value.
Customarily, option grants are made with exercise prices equal to
the fair market value of the shares on the grant date and will be of
no value unless the market price of the Company's shares of Common
9
<PAGE>
Stock appreciates, thereby aligning a substantial part of the
Executive Officer's compensation package with the return realized by
the stockholders. Options generally vest in equal installments over
a period of time, contingent upon the Executive Officer's continued
employment with the Company. Accordingly, an option will provide a
return to the Executive Officer only if the Executive Officer
remains employed by the Company and the market price of the
underlying shares appreciates over the option term. The size of an
option grant is designed to create a meaningful opportunity for
stock ownership and is based upon the individual's current position
with the Company, internal comparability with option grants made to
other Company executives and the individual's potential for future
responsibility and promotion over the option term.
FISCAL YEAR 1999 COMPENSATION
Andrew F. Puzder served as the Chief Executive Officer of the Company
until June 2000, at which time he resigned. In January 1999, applying the
principles identified above, the Committee granted Mr. Puzder options to
purchase 150,000 shares of the Company's stock. In addition, the Company paid
Mr. Puzder $25,000 as compensation for his services through his date of
resignation.
CORPORATE DEDUCTION FOR COMPENSATION
The Company is required to disclose its policy regarding qualifying
executive compensation deductibility under Section 162(m) of the Internal
Revenue Code of 1986, as amended, which provides that, for purposes of the
regular income tax and the alternative minimum tax, the otherwise allowable
deduction for compensation paid or accrued with respect to a covered employee of
a public corporation is limited to no more than $1 million per year. It is not
expected that the compensation to be paid to the Company's executive officers
for fiscal 1999 will exceed the $1 million limit per officer. The Company's 1998
Stock Option Plan is structured so that any compensation deemed paid to an
executive officer when he exercises an outstanding option under the plan, with
an exercise price equal to the fair market value of the option shares on the
grant date, will qualify as performance-based compensation that will not be
subject to the $1 million limitation.
THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Frank Willey
C. Thomas Thompson
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOREGOING REPORT AND
THE PERFORMANCE GRAPH ON PAGE 11 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY
SUCH FILINGS.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the members of the Compensation Committee of the
Company's Board of Directors were Messrs. Willey and Thompson. None of the
Compensation Committee members were officers, former officers or employees of
the Company during fiscal 1999.
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative stockholder
return on the Company's Common Stock with the cumulative total return on the S&P
500 Index and against the cumulative total return of a peer group index, the
Restaurants 500 Index for the five-year period ending December 31, 1999. The
peer group comparison
10
<PAGE>
has been weighted based on the Company's stock market capitalization. The graph
assumes an initial investment of $100.00 on January 1, 1995, with dividends
reinvested over the periods indicated.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG SANTA BARBARA RESTAURANT GROUP, INC.,
THE S&P 500 INDEX
AND RESTAURANTS 500 INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
DEC 94 DEC 95 DEC 96 DEC 97 DEC 98 DEC 99
--------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Santa Barbara Restaurant Group 100.00 125.81 95.16 140.32 49.19 20.15
S&P 500 Index 100.00 137.58 169.17 225.60 290.08 351.12
Restaurants 500 100.00 149.98 148.18 159.11 249.35 253.66
</TABLE>
PROPOSAL TWO
APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The Company's board has proposed that the Company's stockholders
approve a new stock purchase plan (the "Stock Purchase Plan"). The Stock
Purchase Plan will offer eligible employees the opportunity to purchase common
shares of the Company through regular payroll deductions. The purpose of the
Stock Purchase Plan is to encourage and facilitate the acquisition of an
ownership interest in the Company by its employees. The Company believes that
employees who decide to participate in the Company's Stock Purchase Plan have a
close identification with, and greater motivation to work for, the Company's
success because of their ability as stockholders to participate in the growth
and earnings of their employer.
TERMS OF THE EMPLOYEE STOCK PURCHASE PLAN
The following is a summary of the principal features of the Company's Stock
Purchase Plan.
GENERAL. The Stock Purchase Plan provides for voluntary contributions
by eligible employees of the Company through payroll deductions. The
contributions will be matched by the Company to the extent described below under
the section entitled "Matching Contributions." The contributions of
participating employees, together with any matching contributions, are sent to
the broker under the Stock Purchase Plan and the broker opens
11
<PAGE>
individual accounts for the participants. The broker will purchase shares of the
Company's common stock at prevailing market rates.
ADMINISTRATION. The Stock Purchase Plan will be administered by the
Company's Board of Directors or a committee appointed by the board. An aggregate
of 1,500,000 shares of common stock shall be subject to the Plan. All questions
about the Stock Purchase Plan are determined by the administrators.
Administrators who are eligible employees are permitted to participate in the
Stock Purchase Plan. Administrators receive no additional compensation for their
services in connection with the administration of the Stock Purchase Plan.
ELIGIBILITY. Participation in the Stock Purchase Plan is completely
voluntary. Any person who has reached the age of majority and who is currently
employed by the Company may begin participating in the Stock Purchase Plan on
the first day of the month following the date of hire.
OFFERING DATEs. Shares are offered pursuant to the Stock Purchase Plan
in periods coinciding with the Company' fiscal quarters.
MATCHING CONTRIBUTION. Upon the one year anniversary date of the end of
an offering period, the Company will make a matching contribution equal to
one-third of a participant's contribution less any withholding taxes for those
participants that are neither officers nor directors. On that date, the Company
will make a matching contribution equal to one-half of the participant's
contributions less any withholding taxes for participants that are either
officers or directors.
PURCHASE PRICE. The purchase price per share is either: the reported
closing price of the common stock on the NASDAQ National Market System or other
established stock exchange on the purchase date, or if no sale shall have been
made on such date, on the preceding date on which there was a sale; or, if the
common stock is not then listed on an exchange, the average of the closing bid
and asked prices per share for the common stock on the over-the-counter market
as quoted on the NASDAQ National Market System, an amount determined in good
faith by the administrators of the plans.
PURCHASE OF STOCK AND DELIVERY OF SHARES. The administrator shall
designate a brokerage firm to act as broker under the Stock Purchase Plan to
open and maintain an account in the name of each participant and to purchase
shares of common stock on behalf of the participant. From time to time, the
broker as agent for the participants, shall purchase as many full shares or
fractional shares of common stock as the participant's contributions will
permit. The shares to be purchased shall be purchased at the then current
fair market value on the open market. The amount of common stock purchased by
the broker shall be allocated to the respective brokerage account of each
participant on the basis of the average cost of the common stock so
purchased, in proportion to the amount allocable to each participant. Unless
otherwise requested by the participant, all full shares and fractional shares
so purchased shall be registered in the name of the broker and will remain so
registered until delivery is requested by the participant in accordance with
the Stock Purchase Plan.
NONASSIGNABILITY. Payroll deductions credited to a participant's
account and rights of a participant under the Stock Purchase Plan may not be
pledged, assigned or transferred for any reason except by will or the laws of
descent and distribution. Any attempt at such pledge, assignment or transfer may
be treated by the Company as an election to withdraw from the Stock Purchase
Plan.
AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Company may at
any time terminate, suspend or amend the Stock Purchase Plan. If the Stock
Purchase Plan is terminated, participants shall be entitled to receive the funds
in the account but shall not be entitled to any matching contribution.
TAX CONSEQUENCES. The Company's Stock Purchase Plan is not intended to
qualify as an employee stock purchase plan under Section 423 of the Internal
Revenue Code of 1986. To the extent a participant receives shares of the common
stock for a price less than its fair market value, the participant will
recognize income equal to such difference. The Stock Purchase Plan will provide
for the purchase of shares to be made at fair market value. As such, there
should be no income to the participant upon the purchase of shares of the common
stock. Participants will receive long-term capital gain or loss treatment on the
disposition of shares acquired under the Stock Purchase
12
<PAGE>
Plan if the shares have been held for more than one year and short-term capital
gain or loss treatment if the shares have been held for one year or less.
The Company will be required to withhold federal income tax with
respect to its matching contributions. Such amount will be withheld from the
matching contributions and the remaining amount will be used for the purchase of
shares.
VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION OF THE BOARD
Approval of this Proposal Two to adopt the Stock Purchase Plan requires
the affirmative vote of the holders of a majority of the shares of Common Stock
of the Company present or represented by proxy and entitled to vote at the
Annual Meeting (voting together as a single class). Proxies solicited by
management for which no specific direction is included will be voted "FOR" the
adoption of the Stock Purchase Plan. THE BOARD DEEMS PROPOSAL TWO TO BE IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL OF THE ADOPTION OF THE STOCK PURCHASE PLAN.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending December 28, 2000, and recommends that stockholders vote for ratification
of such appointment. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection.
KPMG Peat Marwick LLP has audited the Company's financial statements
annually since 1998. Its representatives are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
The Company must receive stockholder proposals that are intended to
be presented by such stockholders at the annual meeting of stockholders of
the Company to be held during calendar 2001 no later than May 16, 2001 in
order to be included in the proxy statement and form of proxy relating to
such meeting. Pursuant to rules under the Exchange Act, the Company intends
to retain discretionary authority to vote proxies with respect to stockholder
proposals for which the proponent does not seek to have the Company include
the proposed matter in the proxy statement for the annual meeting to be held
during calendar 2001, except in circumstances where (a) the Company receives
notice of the proposed matter no later than July 30, 2001 and (b) the
proponent complies with the other requirements set forth in the Exchange Act.
OTHER MATTERS
Management is not aware of any other matters to come before the
meeting. If any other matter not mentioned in this Proxy Statement is brought
before the meeting, the proxy holders named in the enclosed Proxy will have
discretionary authority to vote all proxies with respect thereto in accordance
with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Andrew D. Simons
SECRETARY
September 13, 2000
13
<PAGE>
The Annual Report to Stockholders of the Company for the fiscal year ended
December 30, 1999 as well as the Form 10-Q for the period ending July 13, 2000
are being mailed concurrently with this Proxy Statement to all stockholders of
record as of September 5, 2000. The Annual Report and Form 10-Q are not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
THE COMPANY FILES ANNUAL REPORTS ON FORM 10-K WITH THE SECURITIES AND EXCHANGE
COMMISSION. A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 30, 1999 (EXCEPT FOR CERTAIN EXHIBITS THERETO), MAY BE OBTAINED, FREE
OF CHARGE, UPON WRITTEN REQUEST BY ANY STOCKHOLDER TO SANTA BARBARA RESTAURANT
GROUP, INC., 3938 STATE STREET, SUITE 200, SANTA BARBARA, CALIFORNIA 93105,
ATTENTION: INVESTOR RELATIONS. COPIES OF ALL EXHIBITS TO THE ANNUAL REPORT ON
FORM 10-K ARE AVAILABLE UPON A SIMILAR REQUEST, SUBJECT TO PAYMENT OF A $.15 PER
PAGE CHARGE TO REIMBURSE THE COMPANY FOR ITS EXPENSES IN SUPPLYING ANY EXHIBIT.
14
<PAGE>
PROXY
SANTA BARBARA RESTAURANT GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS - OCTOBER 12, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints William P. Foley, II and Andrew D. Simons, severally, as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all of the shares of Common
Stock of SANTA BARBARA RESTAURANT GROUP, INC. of record in the name of the
undersigned at the close of business on September 5, 2000 which the undersigned
is entitled to vote at the 2000 Annual Meeting of Stockholders of the Company
and at any and all adjournments thereof, with respect to the matters set forth
below and described in the Notice of Annual Meeting and Proxy Statement dated
September 13, 2000, receipt of which is acknowledged.
1. ELECTION OF DIRECTORS.
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
<TABLE>
<S> <C>
William P. Foley, II Charles Rolles
Andrew F. Puzder Burt Sugarman
Frank Willey
</TABLE>
2. APPROVAL AND RATIFICATION OF THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN
WHICH AUTHORIZES ISSUANCE OF UP TO 1,500,000 SHARES OF COMMON STOCK FOR
PURCHASE BY EMPLOYEES.
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF SELECTION OF KPMG PEAT MARWICK, LLP AS INDEPENDENT AUDITORS FOR
THE COMPANY
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may lawfully come before the meeting, hereby revoking any
Proxies as to said shares heretofore given by the undersigned and ratifying
and confirming all that said attorneys and proxies may lawfully do by virtue
hereof.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). UNLESS OTHERWISE INSTRUCTED ABOVE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING FOR ELECTION OF
THE NOMINEES FOR DIRECTOR AS SELECTED BY THE BOARD OF DIRECTORS, AND IN FAVOR OF
PROPOSALS (2) AND (3).
It is understood that this Proxy confers discretionary authority in respect
of matters not known or determined at the time of the mailing of the Notice of
Annual Meeting of Stockholders to the undersigned.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the Proxy Statement furnished therewith.
Dated and Signed: ___________, 2000
-----------------------------------
-----------------------------------
Signature(s) of Stockholder(s)
Signature(s) should agree with the
name(s) stenciled hereon.
Executors, administrators,
trustees, guardians and attorneys
should so indicate when signing.
Attorneys should submit powers of
attorney.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE PRE- PAID ENVELOPE.
