SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.1a-11(c) or 240.1a-12
Taco Cabana, 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)(4) and
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statement number, or the Form or Schedule and the date of its filing.
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Taco Cabana, Inc.
8918 Tesoro Dr., Suite 200
San Antonio, Texas 78217
Notice of Annual Meeting of Stockholders
August 18, 1998
TO THE STOCKHOLDERS OF
TACO CABANA, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of Taco
Cabana, Inc., a Delaware corporation (the "Company"), will be held at the
Omni Hotel, 9821 Colonnade Boulevard, San Antonio, Texas, on Tuesday, August
18, 1998, at 10:00 a.m., Central Daylight Time for the following purposes:
1.) To elect six directors.
2.) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on Tuesday, June
30, 1998 as the record date for the determination of stockholders entitled
to vote at the meeting.
We hope that you will be able to attend the meeting in person, but if
you are unable to do so, please fill in, sign and promptly mail back the
enclosed proxy form, using the return envelope provided. If for any reason
you should subsequently change your plans, you can of course revoke the
proxy at any time before it is actually voted.
BY ORDER OF THE BOARD OF DIRECTORS
David G. Lloyd
Secretary
San Antonio, Texas
July 13, 1998
TACO CABANA, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 18, 1998
THE MEETING
This Proxy Statement is furnished to the stockholders of Taco Cabana,
Inc., a Delaware corporation, in connection with the solicitation of proxies
by the Board of Directors of the Company for use at the Annual Meeting of
Stockholders to be held Tuesday, August 18, 1998 (the "Meeting"). This Proxy
Statement, the accompanying proxy, and the Company's Annual Report are being
sent or given to the stockholders of the Company on or about July 13, 1998.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of the Company's Common Stock is necessary to
constitute a quorum at the Meeting. Pursuant to applicable Delaware law,
only votes cast "for" a matter constitute affirmative votes. Votes
"withheld" or abstaining from voting are counted for quorum purposes, but
since they are not cast "for" a particular matter, they will have the same
effect as negative votes or votes "against" a particular matter. In deciding
all questions, a holder of Common Stock is entitled to one vote, in person
or by proxy, for each share held on the record date.
Proxies in the form enclosed will be voted at the Meeting, if properly
executed, returned to the Company prior to the Meeting and not revoked. A
proxy may be revoked at any time before it is voted by giving written notice
of revocation to the Secretary of the Company prior to the convening of the
Meeting, or by presenting another proxy card with a later date. If you
attend the Meeting and desire to vote in person, you may request that your
previously submitted proxy card not be used.
The record date for stockholders entitled to vote at the Meeting is
June 30, 1998. At the close of business on June 30, 1998, the Company had
issued and outstanding and entitled to vote at the Meeting 14,521,200 shares
of Common Stock (excluding 1,254,937 shares of treasury stock). As of June
30, 1998, the directors and executive officers of the Company owned a total
of 134,430 shares of the Company's Common Stock, or approximately 0.9 % of
the total number of shares outstanding and entitled to vote at the Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock as of June 1, 1998, by: (i)
each person known by the Company to be the beneficial owner of more than 5% of
its Common Stock, (ii) each named executive officer of the Company, (iii) each
director of the Company, and (iv) all directors and officers as a group. Unless
otherwise indicated, each of the stockholders has sole voting and investment
power with respect to the shares beneficially owned.
Shares Beneficially Owned
Name Number Percent
Stephen V. Clark (1) 128,063 *
James A. Eliasberg (2) 228,750 1.5%
David G. Lloyd (3) 52,800 *
Douglas Gammon (4) 10,000 *
William J. Nimmo (5) 3,817 *
Richard Sherman (6) 77,003 *
Cecil Schenker (7) 97,503 *
Lionel Sosa (8) 20,000 *
Rod Sands (9) 10,000 *
Massachusetts Financial
Services Co. (10) 1,310,970 8.6%
Dimensional Fund
Advisors, Inc. (11) 1,000,764 6.6%
All directors and
officers as
a group (9 persons) (12) 627,936 4.1%
___________________________
* Less than 1%.
(1) Includes 120,000 shares subject to presently exercisable options (or those
exercisable within 60 days). Excludes 180,000 shares issuable pursuant to
options which are not currently exercisable (or exercisable within 60
days).
(2) Includes 144,000 shares subject to presently exercisable options (or those
exercisable within 60 days). Excludes 80,000 shares issuable pursuant to
options which are not currently exercisable (or exercisable within 60
days).
(3) Includes 45,000 shares issuable pursuant to presently exercisable options
(or those exercisable within 60 days). Excludes 55,000 shares issuable
pursuant to options which are not currently exercisable (or exercisable
within 60 days).
(4) Represents shares subject to presently exercisable options (or those
exercisable within 60 days). Excludes 65,000 shares issuable pursuant to
options which are not currently exercisable (or exercisable within 60
days).
(5) Excludes 23,000 shares issuable pursuant to options which are not currently
exercisable (or exercisable within 60 days).
(6) Represents shares subject to presently exercisable options (or those
exercisable within 60 days). Excludes 13,000 shares issuable pursuant to
options which are not currently exercisable (or exercisable within 60
days).
(7) Represents shares subject to presently exercisable options (or those
exercisable within 60 days). Excludes 13,000 shares issuable pursuant to
options which are not currently exercisable (or exercisable within 60
days).
(8) Excludes 23,000 shares issuable pursuant to options which are not currently
exercisable (or exercisable within 60 days).
(9) Excludes 20,000 shares issuable pursuant to options which are not currently
exercisable (or exercisable within 60 days).
(10) Based upon Schedule 13G, filed jointly in February 1996, and amended
in February 1998, indicating beneficial ownership as stated in the
table, and shared dispositive power as to all shares beneficially owned.
Included in the joint filing were Massachusetts Financial Services
Company ("MFS"), indicating beneficial ownership of 1,310,970 shares and
sole dispositive power as to 1,310,970 shares and MFS Series
Trust II - MFS Emerging Growth Fund ("MEG"), indicating 962,395 shares
beneficially owned by MFS as well as MEG. Address: 500
Boylston Street, Boston, Massachusetts 02116.
(11) Based on Schedule 13G, filed in February 1997, and amended in February
1998, indicating beneficial ownership and sole dispositive power as
stated in the table and sole voting power as to 665,464 shares.
Address: 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(12) Includes 493,506 shares subject to presently exercisable options (or
those exercisable within 60 days). Excludes 472,000 shares issuable
pursuant to options which are not currently exercisable (or exercisable
within 60 days).
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting six directors are to be elected by plurality of the
votes cast by the holders of the shares of outstanding Common Stock of the
Company. Under applicable Delaware law, in tabulating the vote, broker
nonvotes will be disregarded and have no effect on the outcome of the vote.
Each outstanding share of Common Stock entitles the holder thereof to one
vote with respect to the election of the six director positions to be filled
at this meeting. The nominees for director are Stephen V. Clark, William J.
Nimmo, Richard Sherman, Cecil Schenker, Lionel Sosa. and Rod Sands. All of
the nominees are presently directors of the Company. For information
concerning the backgrounds of such nominees, see "Directors and Executive
Officers" on page 5.
The enclosed Proxy, if properly signed and returned will be voted FOR the
election of these six nominees unless authority to vote is withheld. The
Board of Directors has no reason to believe that any of such nominees will
be unable to serve if elected. In the event any of such nominees become
unavailable for election, votes will be cast, pursuant to authority granted
by the enclosed Proxy, for such substitute nominee as may be designated by
the Board of Directors. All directors will hold office until the annual
meeting of stockholders to be held in 1999 and until their successors have
been duly elected and qualified, unless prior to such meeting a director
resigns or his directorship otherwise becomes vacant.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE DIRECTOR NOMINEES.
Directors and Executive Officers
The directors and executive officers of the Company and their respective
ages are as follows:
Name Age Position
Stephen V. Clark 44 Chief Executive Officer,
President and Director
James A. Eliasberg 40 Senior Vice President and
General Counsel
David G. Lloyd 35 Senior Vice President - Finance,
Chief Financial Officer,
Secretary and Treasurer
Douglas Gammon 51 Senior Vice President - Human
Resources and People
Development
William J. Nimmo 44 Director
Richard Sherman 54 Director
Cecil Schenker 56 Director
Lionel Sosa 59 Director
Rod Sands 50 Director
Mr. Clark has served as the Company's Chief Executive Officer since
November 1996, and as the President, Chief Operating Officer, and as a Director
since April 1995. Prior to that, Mr. Clark was with Church's Chicken, a
division of America's Favorite Chicken, for seventeen years with his final title
having been Senior Vice President and Concept General Manager. He also served
on the executive committee of America's Favorite Chicken and was on the Board of
Directors of Church's Operators Purchasing Association. In his final position
with America's Favorite Chicken, Mr. Clark was primarily responsible for the
day-to-day operations of over 1100 company-owned and franchised units with
aggregate sales volume in excess of $600 million.
Mr. Eliasberg has served as the Company's Senior Vice President and General
Counsel since January 1991. Prior to that, Mr. Eliasberg was engaged in the
private practice of law in Southern California at the law firms of Fierstein &
Sturman (March 1989 to January 1991), Hill, Wynne, Troop & Meisinger (May 1986
to February 1989) and Jones, Day, Reavis & Pogue (October 1984 to March 1986).
In addition to supervising all of the Company's legal affairs, Mr. Eliasberg's
responsibilities include real estate, construction and franchise development.
Mr. Eliasberg is a graduate of the University of Chicago law school.
Mr. Lloyd joined the Company in October 1994 as Vice President - Finance,
Chief Financial Officer, Secretary and Treasurer and was promoted to Senior Vice
President in May 1996. From August 1985 to October 1994, Mr. Lloyd served in
various capacities with Deloitte & Touche (the Company's independent auditors),
with his last position being Senior Audit Manager. Mr. Lloyd is a certified
public accountant.
Mr. Gammon joined the Company in March 1997 as Senior Vice President, Human
Resources and People Development. From December 1989 to March 1997, Mr. Gammon
served as Vice President of Human Resources at Marriott International which has
over 15,000 employees in 50 states. Mr. Gammon has over 18 years of experience
in the human resources field as well as over six years experience in restaurant
operations. He was the past President for the Council of Hotel and Restaurant
Trainers.
Mr. Nimmo has served as a director of the Company since November 1991.
Since May 1997, Mr. Nimmo has been a Partner with Halpern, Denny & Co., a
venture capital firm in Boston, Massachusetts. Prior to that, Mr. Nimmo served
as Managing Director of Cornerstone Equity Investors, Inc., and its predecessor
firm, Prudential Equity Investors, Inc., since September 1989.
Mr. Sherman has been a director of the Company since November 1991. Mr.
Sherman is a private investor and retail consultant. Mr. Sherman served as
President and Chief Executive Officer of Rally's, Inc. from September 1987 to
January 1991. From August 1989 to January 1991, he also served as Chairman of
the Board of Rally's, Inc. Mr. Sherman currently serves as a member of the
Board of Trustees of Paul Quinn College in Dallas, Texas and as a director of
Reed's Jewelers, Inc., Papa John's International, Inc., and PJ America, Inc.
Mr. Schenker has been a director of the Company since January 1992. Mr.
Schenker is a corporate securities attorney and is the managing partner of the
San Antonio, Texas office of the law firm of Akin, Gump, Strauss, Hauer & Feld,
L.L.P., of which Mr. Schenker has been a partner through his professional
corporation since January of 1984. Akin, Gump, Strauss, Hauer & Feld, L.L.P.
has regularly performed legal services for the Company. Mr. Schenker is also a
director of LOT$OFF Corporation, formerly 50-Off Stores, Inc.
Mr. Sosa has been a director of the Company since August 1997. Mr. Sosa has
served as the Chief Executive Officer of KJS Marketing Agency since January
1996. From 1994 to 1996 he served as Chairman of DMB&B/Americas, a network of
advertising agencies in the U.S. and Latin America. In 1980 Mr. Sosa founded the
agency of Sosa, Bromley, Aguilar, Noble & Associates, an advertising agency
specializing in Hispanic marketing in the U.S. Mr. Sosa sold Sosa, Bromley,
Aguilar, Noble & Associates in 1994. Mr. Sosa is currently a Director of the
Children's Television Workshop Network.
Mr. Sands has been a director of the Company since February 1998. Since
July 1997, Mr. Sands has served as the Managing Director of Silver Venture
Capital Management, a private equity investment fund. From August 1992 to July
1997, Mr. Sands served as the President and Chief Operating Officer of Pace
Foods, a food manufacturer with revenues in excess of $200 million. Mr. Sands
currently serves on the board of directors of Orval Kent Holdings , Packaged
Ice, Inc., Texas Commerce Bank/Chase-San Antonio and Benefit Planners, Inc. He
is also a member of St. Mary's University Business Advisory Board.
The Board of Directors has a compensation and stock option committee which
currently consists of William J. Nimmo, Richard Sherman, Lionel Sosa and Rod
Sands. The Board of Directors also has an audit committee which currently
consists of William J. Nimmo, Richard Sherman, Lionel Sosa, Cecil Schenker and
Rod Sands. The Board of Directors does not currently have a nominating
committee. All directors serve for a term of one year and until their
successors are duly elected. Each director who is not also an employee of the
Company receives an annual retainer of $25,000, and an attendance fee of $2,500
per Board meeting for up to four meetings each year. All non-employee directors
are reimbursed for their expenses. The Board of Directors met four times during
1997. Each incumbent director attended at least 75% of the aggregate number of
Board meetings and meetings of Board committees of which he was a member held
during 1997.
The compensation and stock option committee monitors and makes
recommendations to the Board with respect to compensation programs for officers
and directors and administers the Company's Stock Option Plan. The compensation
and stock option committee met two times during 1997.
The audit committee considers the adequacy of the internal controls of the
Company and the objectivity of financial reporting; meets with the independent
certified public accountants and appropriate Company financial personnel about
these matters; and recommends to the Board the appointment of the independent
certified public accountants. The audit committee met two times in 1997.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires each director and executive officer of the Company, and
each person who owns more than 10% of a registered class of the Company's equity
securities to file by specific dates with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of change in ownership of
Common Stock and other equity securities of the Company. Officers, directors
and 10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. The Company is required to report
in this report any failure of its directors and executive officers to file by
the relevant due date any of these reports during the Company's fiscal year.
To the Company's knowledge, all Section 16(a) filing requirements
applicable to the Company's officers, directors, and 10% stockholders were
complied with, except for one late filing as to a Form 3 for Douglas Gammon.
EXECUTIVE COMPENSATION
Executive compensation is set at levels which are sufficiently competitive
with companies of similar size and type to permit the Company to attract and
retain the best possible individuals. Compensation is structured to provide
incentives for executive officer performance that results in continuing
improvements in the Company's financial results, over both the short term
and the long term. Compensation is also designed to align the interests of
the Company's executives and its stockholders by providing for payment of a
significant portion of incentive compensation in the form of stock options.
Moreover, each executive officer's compensation is based upon both
individual and Company performance.
As may be seen from the Summary Compensation Table included on page 9, the
compensation of executive officers consists of three principal parts, each
of which is reviewed regularly by the committee.
Salaries shown in the Summary Compensation Table represent the fixed
portion of compensation for executive officers for the year. Changes in
salary depend upon Company as well as individual performance.
The bonuses shown in the Summary Compensation Table are paid in cash to
executive officers and depend upon the financial and strategic
accomplishments of the Company. The Committee also has discretion to modify
the bonus based upon individual performance, including the individual's
progress in implementing the Company's goals.
The third principal component of compensation arises from the Company's
grant of stock options to executive officers (the Company's Stock Option
Plan actually covers several levels of employees). The Committee sets the
number of options to be granted based on a variety of factors, including,
principally, salary grade, Company and individual performance and individual
levels of stock ownership. All options under the Plan are granted at fair
market value, and therefore any value which ultimately accrues to executive
officers is based entirely on the Company's performance, as perceived by
investors who establish the price for the Company's Common Stock.
A written employment agreement served as the principal basis of Mr.
Clark's compensation during 1997. During 1997 Mr. Clark's annual salary was
adjusted to reflect his responsibilities, experience, his individual
performance and important contributions to the Company. Effective May 15,
1998, Mr. Clark's employment agreement was extended and amended.
Respectfully submitted,
THE COMPENSATION AND STOCK OPTION COMMITTEE
Richard Sherman, William J. Nimmo, Lionel Sosa
Summary Compensation Table. The following table sets forth certain
information concerning the compensation earned during the Company's last three
fiscal years by the Company's Chief Executive Officer and the Company's other
executive officers (collectively the "named executive officers"):
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- ----------------------------
Awards Payouts
-------------------- -------
Other Securities All
Annual Restricted Underlying LTIP Other
Name and Compen- Stock Options/ Pay- Comen-
Principal Fiscal Salary Bonus sation Award(s) SARs outs sation
Position Year ($) ($) ($)(1) ($) (#) ($) ($)
Stephen V. 1997 255,420 - - - - - -
Clark,
Chief 1996 233,404 50,000 - - 200,000 - -
Executive
Officer, 1995 152,455(2) - - - - - -
President ,
Chief
Operating
Officer
James A. 1997 191,877 - - - - - -
Eliasberg,
Senior Vice 1996 189,235 - - - 200,000 - -
President
and General 1995 175,025 - - - - - -
Counsel
David G. 1997 143,528 - - - - - -
Lloyd,
Senior Vice 1996 135,138 - - - 75,000 - -
President,
Chief 1995 117,605 - - - - - -
Financial
Officer,
Secretary
and
Treasurer
Douglas 1997 113,820(3) - 55,135(4) - 75,000 - -
Gammon
Senior Vice
President -
Human
Resources
and
People
Development
__________________
(1) Certain of the Company's executive officers receive personal benefits in
addition to salary; however, the Company has concluded that the
aggregate amounts of such personal benefits do not exceed the lesser of
$50,000 or 10% ofannual salary and bonus reported for any named
executive officer.
(2) Mr. Clark joined the Company in April 1995.
(3) Mr. Gammon joined the Company in March 1997.
(4) Represents relocation expense reimbursements.
Employment Agreements. The Company has a written employment agreement with
Stephen Clark which expires in April 1999. Mr. Clark will receive a base salary
of $280,000 per year for the remainder of the agreement. Additionally, Mr.
Clark is eligible for a bonus based on the Company's achievement of certain
performance goals. Pursuant to such agreement, Mr. Clark has agreed not to
participate in any manner, during his term of employment and for two years
thereafter, in any business which owns a Mexican fast food restaurant or Mexican
"quick service" restaurant in the Continental United States.
Stock Option Plans and Directors' Options
Under the Taco Cabana, Inc. 1990 Stock Option Plan (the "1990 Option
Plan"), amended in August 1992, and the 1994 Stock Option Plan (the "1994 Option
Plan"), amended in August 1997, options to purchase up to 1,500,000 and
1,250,000 shares, respectively, of Common Stock may be granted to employees,
outside directors and consultants and advisers of the Company or any subsidiary
corporation or entity. The stock is intended to permit the Company to retain
and attract qualified individuals who will contribute to its overall success.
Shares that by reason of the expiration of an option (other than by reason of
exercise) or which are no longer subject to purchase pursuant to an option
granted under an Option Plan may be reoptioned thereunder. The 1990 and 1994
Option Plans are administered by a committee of outside directors (the
"Committee"). The Committee sets specific terms and conditions of options
granted under the 1990 and 1994 Option Plans and administers the 1990 and 1994
Option Plans, as well as the Company's other employee benefit plans which may be
in effect from time to time. The Committee currently consists of William J.
Nimmo, Lionel Sosa, Richard Sherman and Rod Sands.
The Company's employees are eligible to receive either incentive stock
options or nonqualified stock options or a combination of both, as the Committee
determines. Non-employee participants may be granted only nonqualified stock
options. Stock options may be granted for a term not to exceed ten years (five
years with respect to a holder of 10% or more of the Company's shares in the
case of an incentive stock option) and are not transferable other than by will
or the laws of descent and distribution. Each option may be exercised within
the term of the option pursuant to which it is granted (so long as the optionee,
if an employee, continues to be employed by the Company). In addition, an
incentive option may be exercised within 90 days after the termination of
employment of the optionee (subject to any limitations in the particular
option), within one year after termination in case of termination because of
disability, or throughout the term of the option in the event of the optionee's
death, to the extent in each case the option was exercisable at the termination
date. A nonqualified stock option may be exercised for such period, but not
later than the expiration date, after termination of employment, disability or
death, as may be specified in the particular option.
The exercise price of all incentive stock options must be at least equal to
the fair market value of the Common Stock on the date of grant, or 110% of fair
market value with respect to any incentive stock option issued to a holder of
10% or more of the Company's shares. Stock options may be exercised by payment
in cash of the exercise price with respect to each share to be purchased, by
delivering Common Stock of the Company already owned by such optionee with a
market value equal to the exercise price, or by a method in which a concurrent
sale of the acquired stock is arranged, with the exercise price payable in cash
from such sale proceeds.
The 1994 Option Plan provides that each outside director will automatically
receive a grant of 3,000 nonqualified stock options each year on the fifth
business day following the first public release of the Company's audited
earnings report on results of operations for the preceding fiscal year. Each
such option will become exercisable in whole or in part on the first anniversary
of the award through the balance of its ten-year term. Subject to availability
of shares allocated to the 1994 Option Plan and not already reserved for other
outstanding stock options, outside directors who join the Board in the future
will in addition receive an initial grant of options for 20,000 shares, which
will become exercisable in four equal increments beginning on the first
anniversary of the award and on each of the next four succeeding anniversary
dates. Such options will be exercisable for a term of ten years. Such options
will be awarded upon their appointment or election to the Board. Options, once
granted and to the extent exercisable, will remain exercisable throughout their
term, regardless of whether the holder continues as a director. The exercise
price of the options is equal to 100% of the fair market value of a share of
Common Stock at the time of grant.
The 1990 Option Plan will terminate on October 14, 2000. The 1994 Option
Plan will terminate on October 17, 2004. The Board of Directors may, however,
terminate the 1990 and 1994 Option Plans at any time prior to such respective
dates. Termination of the 1990 and 1994 Option Plans will not alter or impair,
without the consent of the optionee, any of the rights or obligations pursuant
to any option granted under the Option Plans.
As of June 1, 1998, options for 624,158 shares of common stock had been
granted under the 1990 Option Plan and were outstanding, with a weighted average
exercise price of $5.69 per share, and no additional shares were available for
issuance upon exercise of options which may be granted in the future. As of
June 1, 1998, options for 875,842 shares had been exercised.
As of June 1, 1998, options for 850,217 shares of common stock had been
granted under the 1994 Option Plan and were outstanding, with a weighted average
exercise price of $5.23 per share, and 399,783 additional shares were available
for issuance upon exercise of options which may be granted in the future. As of
June 1, 1998, no options had been exercised.
Stock Option Grant Table. The following table sets forth certain
information concerning options granted to the named executive officers during
the Company's fiscal year ended December 28, 1997:
Option Grants in Last Fiscal Year
Potential Realizable
Percent of Value at Assumed
Total Options Annual Rates of
Granted to Stock Price
Employee Excercise Appreciation
Options in or base Expir- for Option Term (2)
Granted Fiscal Price ation ---------------------
Name #(1) Year ($/Sh) Date 5% ($) 10% ($)
- -------------------------------------------------------------------------
Stephen V. - - - - - -
Clark
James A. - - - - - -
Eliasberg
David G. - - - - - -
Lloyd
Douglas 50,000 13 % $5.25 3/10/07 $165,085 $418,357
Gammon 25,000 7 % 4.50 7/17/07 74,681 189,257
- -------------------------------------------------------------------------
(1)All such stock options were granted for the number of shares indicated at an
exercise price equal to the fair market value of the Common Stock on the
date of grant as determined by the Company's Board of Directors. All
such stock options noted above were granted 10 years prior to the noted
expiration date. The options become exercisable beginning one year after
the date of grant in five equal annual installments. The Company's current
Option Plans do not make provision for the award of stock appreciation
rights ("SARs") and the Company has no SARs currently outstanding.
(2)As required by rules of the Securities and Exchange Commission ("SEC"),
potential values stated are based on the assumption that the Company's
Common Stock will appreciate in value from the date of grant to the end of
the option term (ten years from the date of grant) at annualized rates of
5% and 10% (total appreciation of approximately 63% and 159%),
respectively, and therefore are not intended to forecast possible future
appreciation, if any, in the price of the Common Stock.
Stock Option Exercises and Holdings Table. The following table
provides information concerning the exercise of options and value of
unexercised options held by the named executive officers at December 28, 1997:
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Shares
Aquired Value
on Real- Number of Unexercised Value ofUnexercised
Exercise ized Options In-the-Money Options
Name (#) ($) at Fiscal Year End (#) at Fiscal Year End ($)(1)
- --------------------------------------------------------------------------------
Exercis- Unexercis- Exercis- Unexercis-
able able able able
- --------------------------------------------------------------------------------
Stephen V. - - 80,000 120,000 - -
Clark
James A. - - 104,000 120,000 $35,640 -
Eliasberg
David G. - - 45,000 55,000 - -
Lloyd
Douglas - - - 75,000 - -
Gammon
(1)Values stated are based on the last sale price of $4.63 per share of the
Company's Common Stock on the NASDAQ National Market System on December
26, 1997, the last trading day of the fiscal year, and equal the aggregate
amount by which the market value of the option shares exceeds the exercise
price of such options at the end of the fiscal year.
Compensation Committee Interlocks and Insider Participation
None.
STOCK PERFORMANCE GRAPH
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
Taco Cabana, Inc.
(GRAPH APPEARS HERE)
Measurement
Period NASDAQ
(Fiscal Stock NASDAQ Stocks
Year Taco Cabana, Market (SIC 5800-5899 US Companies)
Covered) Inc. (US Companies) Eating and drinking places
- ----------- -------- --------------- ---------------------------
12/31/93 134.0 114.8 101.4
12/30/94 67.9 112.2 73.2
12/29/95 37.7 158.7 89.1
12/27/96 55.2 195.4 86.6
12/26/97 34.9 230.6 73.7
Notes:
A. The lines represent monthly index levels derived form compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/92.
INDEPENDENT ACCOUNTANTS
The financial statements and schedules of the Company as of December
28, 1997 and for the year then ended were audited by Deloitte & Touche LLP.
It is anticipated that if the nominees are elected as directors, the new
Board of Directors will reappoint such firm as independent certified public
accountants for the current fiscal year. A representative of Deloitte &
Touche LLP will be present at the 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.
ANNUAL REPORT
The Company's Annual Report for the year ended December 28, 1997, which
includes the Company's financial statements, accompanies this proxy
statement, but is not incorporated as part of the proxy statement and is not
to be regarded as part of the proxy solicitation material.
OTHER MATTERS
The Company's management knows of no other matters that may properly
be, or which are likely to be, brought before the meeting. However, if any
other matters are properly brought before the meeting, the persons named in
the enclosed proxy, or their substitutes, will vote in accordance with their
best judgment on such matters.
STOCKHOLDER PROPOSALS
The Company intends to conduct the next annual meeting of stockholders
in approximately August 1999. Proposals by stockholders intended to be
presented at the annual meeting to be held in 1999 must be received by the
Company by May 1, 1999 to be included in the Company's proxy statement and
form of proxy relating to that meeting. Such proposals should be addressed
to the Secretary of the Company at the address indicated in this notice.
COST AND METHOD OF PROXY SOLICITATION
The accompanying Proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing
the form of Proxy and the material used in the solicitation thereof will be
borne by the Company. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone and telegram by directors,
officers and employees of the Company. Arrangements may also be made with
brokerage houses and other custodians, nominees and fiduciaries for
forwarding of solicitation materials to the beneficial owners of stock held
by such persons, and the Company may reimburse them for reasonable out-of-
pocket expenses incurred by them in connection therewith.
By Order of the Board of Directors
David G. Lloyd
Secretary
TACO CABANA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS ON TUESDAY, AUGUST 18, 1998
The undersigned hereby appoints STEPHEN CLARK and JAMES A. ELIASBERG, and each
of them, proxies, with the powers the undersigned would possess if personally
present, and with full power of substitution, to vote, at the annual meeting and
at any adjournment thereof, all shares of Common stock of the undersigned in
Taco Cabana, Inc. held of record on the record date, upon all subjects that may
properly come before the meeting, including the matters described in the proxy
statement furnished herewith, subject to any directions indicated on this card.
If no directions are given and the signed card is returned, the proxies will
vote FOR item 1 and at their direction on any other matter that may properly
come before the meeting any adjournment thereof.
Instruction (change of address)
To withhold authority to vote for any
individual nominee, strike __________________________
a line through the nominee's __________________________
name in the list below: __________________________
__________________________
Stephen V.Clark William Nimmo (If you have written in
Richard Sherman Cecil Schenker the above space, please
Lionel Sosa Rod Sands mark the corresponding box
on the reverse side of
this card)
No. SEE REVERSE SIDE
TACO CABANA, INC.
PLEASE MARK IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
The Board of Directors recommends a vote FOR item 1 WITHHELD
FOR AUTHORITY
1. Election of Directors
(see reverse)
Note: Please sign exactly as name appears on the certificate. When shares are
held by joint tenants, both should sign, if a corporation , please sign in full
corporate name by president or other authorized officer, if a partnership please
sign in partnership name by authorized person. When signing as attorney,
trustee, guardian, officer or partner, please give full title as such.
________________________________
Signature Date
________________________________
Signature Date
