<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BLIMPIE INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the approriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
4) Proposed maximum aggregate value of transaction (Set forth the amount on
which the filing fee is calculated and state how it was determined):
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset 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 date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Number:
3) Filing Party:
4) Date Filed:
<PAGE>
[BLIMPIE INTERNATIONAL, INC. LOGO]
November 1, 1996
TO OUR SHAREHOLDERS:
You are cordially invited to attend our Annual Meeting of Shareholders for
the fiscal year ending June 30, 1997 which will be held on Monday, December 9,
1996 at 9:00 A.M., local time, at the offices of Hall Dickler Kent Friedman &
Wood, LLP, 909 Third Avenue, New York, New York 10022, on the 27th Floor.
At this meeting, you will be asked to consider and vote upon the election
of six (6) directors who will serve until the annual meeting to be held in 1997,
and a proposal to increase the number of shares of common stock issuable
pursuant to the Company's Omnibus Stock Incentive Plan from 500,000 shares to
950,000 shares; and to ratify the selection of Coopers & Lybrand, LLP as the
Company's independent accountants for the fiscal year ending June 30, 1997.
The accompanying Notice of Annual Meeting and Proxy Statement set forth in
detail the business intended to be transacted. Time will be made available for a
discussion of these items as well as for other questions about the business
affairs of the Company.
If you are unable to join us at the meeting it is very important that you
be represented by proxy. Therefore, please take a moment to sign, date, and
return your proxy in the enclosed envelope. If you do not have a proxy, please
call your broker or the Company, and ask that a proxy be mailed to you. Your
cooperation in mailing your proxy promptly will not only be greatly appreciated;
it will also result in a significant benefit to the Company.
Sincerely yours,
/s/ Anthony P. Conza
ANTHONY P. CONZA
Chairman and Chief Executive Officer
<PAGE>
BLIMPIE INTERNATIONAL, INC.
740 BROADWAY
NEW YORK, NEW YORK 10003
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, DECEMBER 9, 1996
------------------------
TO THE HOLDERS OF COMMON STOCK OF
BLIMPIE INTERNATIONAL, INC.
The Annual Meeting of the holders of the Common Stock of Blimpie
International, Inc. (the 'Company') will be held at the offices of Hall Dickler
Kent Friedman & Wood, LLP, 909 Third Avenue, New York, New York 10022, on the
27th Floor, on Monday, December 9, 1996 at 9:00 A.M., local time, for the
following purposes:
1. To elect six (6) persons to serve as directors of the Company until
the Annual Meeting to be held in 1997;
2. To consider and vote upon a proposal to increase the number of
shares of common stock issuable pursuant to the Company's Omnibus Stock
Incentive Plan from 500,000 shares to 950,000 shares;
3. To ratify the selection of Coopers & Lybrand, LLP as the Company's
independent accountants for the fiscal year ending June 30, 1997; and
4. To transact such other business as may properly come before the
meeting.
Only holders of record of the Company's Common Stock at the close of
business on October 28, 1996, are entitled to notice of or to vote at this
meeting and any adjournment or adjournments thereof. Shareholders are entitled
to vote upon all business as may properly be presented for consideration at the
meeting.
By Order of the Board of Directors
/s/ Charles G. Leaness
CHARLES G. LEANESS,
Secretary
New York, New York
November 1, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. THIS IS IMPORTANT
FOR THE PURPOSE OF ENSURING A QUORUM AT THE MEETING.
<PAGE>
PROXY STATEMENT
BLIMPIE INTERNATIONAL, INC.
740 BROADWAY
NEW YORK, NEW YORK 10003
------------------------
ANNUAL MEETING OF SHAREHOLDERS
FOR THE FISCAL YEAR ENDING JUNE 30, 1997
------------------------
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Blimpie
International, Inc. (the 'Company') for use at the Annual Meeting of
Shareholders to be held December 9, 1996, and at any adjournment or adjournments
thereof (the 'Annual Meeting'). A proxy may be revoked by notice in writing to
the President at any time prior to the exercise thereof. Each valid proxy
received in time will be voted at the Annual meeting, and, if a choice is
specified on the proxy, it will be voted in accordance with such specifications.
If no such specification is made, the persons named in the accompanying proxy
have advised the Company of their intention to vote the shares represented by
the proxies received by them (i) in favor of the election as directors, the
persons named in the proxy as nominees for directors; (ii) in favor of a
proposal to increase the number of shares of common stock issuable pursuant to
the Company's Omnibus Stock Incentive Plan from 500,000 shares to 950,000
shares; (iii) in favor of ratifying the selection of Coopers & Lybrand, LLP, as
the Company's independent accountants for the fiscal year ending June 30, 1997;
and (iv) in accordance with their best judgment on any other matters that may
come before the meeting.
The cost of solicitation of proxies, including the reimbursement to banks
and brokers for reasonable expenses in sending proxy material to their
principals, will be borne by the Company. The Company's transfer agent, Chemical
Mellon Shareholder Services, is assisting the Company in the solicitation of
proxies from brokers, banks, institutions and other fiduciaries by mail, and
will charge the Company its customary fee therefor plus out-of-pocket expenses
which, in the aggregate, are estimated to be less than $2,000. In addition,
proxies may be solicited by officers of the Company by mail, in person or by
telephone, telegraph or telex. It is anticipated that on or about November 1,
1996 this proxy statement and the enclosed form of proxy will be mailed to
shareholders.
The outstanding voting securities of the Company on October 28, 1996 (the
'Record Date') consisted of 9,521,876 shares of common stock, $.01 par value
(the 'Common Stock'). Only shareholders of record at the close of business on
the Record Date are entitled to notice of or to vote at the Annual Meeting.
Each share of Common Stock is entitled to one vote with respect to each
proposal which shall properly come before the Annual Meeting for consideration
by the shareholders. The holders of a majority of the outstanding shares
entitled to vote must be present at the Annual Meeting in person or by proxy to
constitute a quorum.
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
Six directors are to be elected at the meeting to hold office until the
Annual Meeting to be held in 1997, and until their respective successors have
been elected and qualified.
The persons named as proxies intend (unless authority is withheld) to vote
for the election of the persons hereinafter named as directors for terms
expiring in 1997 upon their nomination for such office at the Annual Meeting.
The affirmative vote of the holders of a plurality of the outstanding shares of
Common Stock represented in person or by proxy at the Annual Meeting is required
for election of each director.
If any nominee should become unavailable to serve, the proxy may be voted
for the election of another person designated by the Board. The Board has no
reason to believe any of the nominees will be unable to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
ELECTION AS DIRECTORS.
<PAGE>
Pertinent information concerning the nominees for directors follows:
NOMINEES FOR ELECTION AS DIRECTORS
Anthony P. Conza, Age 56
Mr. Anthony P. Conza, together with two individuals who are not affiliated
with the Company, originally created the Blimpie concept in 1964. He is one of
the original founders of the Blimpie outlet chain, and is a
co-founder of the Company. He has been Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since the Company commenced
business operations in 1977. Mr. Conza during the past five years also served as
Vice President of the Border Cafe, Inc. and the Border 100, Inc. (each was a
wholly owned direct subsidiary of the Company). In 1992, 'the Entrepreneur of
the Year' for New York, an award sponsored by Ernst & Young, Merrill Lynch and
Inc. Magazine, was presented to Mr. Conza. In the same year, he was also named
Chain Operator of the Year by the New York State Restaurant Association. He is
Chairman of the Board of the Jose Limon Dance Company and is a member of the
Board of Governors of The Boys & Girls Clubs of America. Mr. Conza is the
brother of Joseph A. Conza, the brother-in-law of Patrick Pompeo and the
father-in-law of Joseph Morgan. See 'Certain Relationships and Related
Transactions.'
David L. Siegel, Age 52
Mr. Siegel, one of the co-founders of the Company, served as the Company's
Executive Vice President and General Counsel and as a member of its Board of
Directors since its formation in 1977. In September 1995, he was appointed as
the Company's Vice Chairman of the Board, Chief Operating Officer and General
Counsel. He also served as the Company's Treasurer from 1977 until January,
1991. He is also a practicing attorney in the City of New York. Mr. Siegel
received a Bachelor of Arts degree in 1965 from Marietta College, a Juris Doctor
Degree in 1968 from New York University School of Law and a Master of Laws
Degree in 1970 from New York University School of Law. During the past five
years, Mr. Siegel has also served as Vice President of The Border Cafe, Inc. and
Border 100, Inc., and as an officer of each of the Company's leasing
subsidiaries. Mr. Siegel along with Mr. Anthony P. Conza and MBI are the owners
of the Blimpie Trademarks and Blimpie Marketing System, nationally and
internationally.
Patrick J. Pompeo, Age 57
Mr. Pompeo has served as a director and Senior Vice President in charge of
operations since the time of commencement of the Company's business operations
in 1977. In September 1995, he was became an Executive Vice President. Mr.
Pompeo was employed for 16 years as a floor supervisor by E.F. Hutton & Co., the
former New York Stock Exchange member firm. Mr. Pompeo is also a principal
shareholder, officer and director of Georgia Enterprises, Inc., the Company's
Subfranchisor for the State of Georgia. Mr. Pompeo is the brother-in-law of
Anthony Conza. See 'Certain Relationships and Related Transactions.'
Charles G. Leaness, Age 46
Mr. Leaness has been a member of the Company's Board of Directors since the
Company commenced business operations, and served as the Company's Senior Vice
President-Corporate Counsel for more than the past five years. In September,
1995, he was became an Executive Vice President. He has served as President of
The Border Cafe, Inc. and President of Border 100, Inc., restaurants owned by
the Company and subsequently sold. Mr. Leaness is also a principal shareholder,
officer and director of Llewellyn Distributors, Inc., the Company's
Subfranchisor for a part of New Jersey. Mr. Leaness received a Bachelor of Arts
degree from Tulane University in 1972 and a Juris Doctor degree from New York
Law School in 1982. Mr. Leaness is a practicing attorney in New York State. He
currently serves as Director of the New York State Restaurant Association and is
President of the New York City Chapter. Mr. Leaness also serves on the Board of
Directors of both the International Franchise Association (IFA) and the
Franchise Emergency Action Team (FEAT). See 'Certain Relationships and Related
Transactions.'
2
<PAGE>
Alvin Katz, Age 66
Mr. Katz was appointed to the Board of Directors of the Company on November
23, 1993. Mr. Katz has been a member since September 1993 of the Board of
Directors of Nastech Pharmaceutical Company, Inc., a company engaged in the
development of pharmaceuticals. Since 1981, he has served as an adjunct
professor of business management at Florida Atlantic University. In 1991, Mr.
Katz was appointed Chief Executive Officer of Odessa Engineering Corp., a
company engaged in the manufacturing of pollution monitoring equipment. He held
this position until that company was sold in September 1992. Mr. Katz also
serves on the Board of Directors of Amtech Systems Inc. which is engaged in the
manufacture of capital equipment in the chip manufacturing business; BCT
International, Inc., a franchisor of thermo graphic printing plants; and
Foremost Industries, which is engaged in the distribution and repair of
commercial refrigeration. Mr. Katz holds a B.S. in Business Administration
degree from New York University and has done graduate work at C.U.N.Y.--Baruch
School.
Harry G. Chernoff, Age 50
Dr. Chernoff was appointed to the Board of Directors of the Company on
November 23, 1993. For more than the past five years, Dr. Chernoff has been a
principal of HMS Properties, Inc., a real estate investment, development and
management firm. Dr. Chernoff has an active financial and operational consulting
practice with major financial institutions, and food and hospitality firms as
his clients. Dr. Chernoff received a Ph.D. in Operations Management from the New
York University Leonard N. Stern School of Business in 1985, and has been a
member of the faculty of New York University for 20 years. He also received a
B.S. degree from New York University in 1968 and an M.S. degree from that
institution in 1975.
THE BOARD OF DIRECTORS; COMMITTEES AND ATTENDANCE
The Board of Directors held four meetings during the fiscal year ended June
30, 1996. All of the directors attended each of such meetings, except Messrs.
Katz and Chernoff absented themselves from one meeting which was called for the
purpose of discussing issues of compensation non-employee directors. The Board
of Directors acted three times by unanimous written consent in lieu of a
meeting. The Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee, among other things, makes
recommendations to the Board, for approval by the shareholders, regarding the
appointment of independent accountants to audit the financial accounts, books
and records of the Company, meets jointly and/or separately with the chief
financial officer of the Company and such accountants before commencement and
after conclusion of the audit to discuss the evaluation by the accountants of
the adequacy and effectiveness of the accounting procedures and internal
controls of the Company and its subsidiaries, to approve the overall scope of
the audit to be made and the fees to be charged, to review the audited financial
statements of the Company, to discuss the results of the audit, and to discuss
any significant recommendations by the accountants of improvement of accounting
systems and controls of the Company. The Audit Committee met on two occasions
during fiscal year 1996. The Compensation Committee is responsible for the
administration of the Company's Omnibus Stock Incentive Plan (the 'Plan'). The
Compensation Committee has the discretion to determine the individuals to whom
awards shall be made under the Plan, the time or times when they shall receive
them and the terms and conditions thereof, all as more fully set forth and
described in the Plan. Messrs. Katz and Chernoff serve on both of such
Committees. In accordance with recent amendments to the insider trading
regulations promulgated by the Securities and Exchange Commission (the
'Commission'), the Plan has been modified to permit the Board of Directors to
exercise the same rights accorded to the Compensation Committee with respect to
the granting of awards under the Plan. The Compensation Committee met on two
occasions during fiscal year 1996.
EXECUTIVE COMPENSATION
The following table sets forth compensation awarded to, earned by or paid
to the Chief Executive Officer and all other officers of the Company earning a
salary and bonus of more than $100,000. Information with respect to salary,
bonus, other annual compensation, restricted stock and options is included for
the fiscal years ended June 30, 1996, 1995 and 1994. The Company has not paid
any compensation that would qualify as 'All Other Compensation,' nor has the
Company made payments to any Executive Officer earning an annual salary or bonus
in excess of $100,000, which may be categorized as 'LTIP Payouts.'
3
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SECURITIES
OTHER RESTRICTED UNDERLYING
NAME AND ANNUAL STOCK OPTIONS/
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) SARS(#)
- -------------------------- ---- --------- -------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Conza, CEO.............. 1996 $ 206,718 $ 46,500 $ 3,267(2) --
1995 172,941 27,520 -- --
1994 116,586 41,280 --
David L. Siegel, Exec. VP & COO.... 1996 $ 148,839 $ 23,250 $ 3,267(2) -- --
1995 145,378 13,760 -- -- --
1994 98,204 20,640 --
Dennis G. Fuller, Sr. VP........... 1996 $ 42,134 $ 7,800 $ 159,326(1) $11,160 $ 1,500(3)
1995 40,000 4,600 116,925(1) 9,750 1,500(3)
1994 40,000 6,880 80,692(1) 4,875 1,500(3)
Charles G. Leaness, Exec. VP....... 1996 $ 105,324 $ 15,500 $ 12,250(2) -- --
1995 89,204 9,200 -- -- --
1994 83,106 13,760 -- -- --
Patrick J. Pompeo, Exec. VP........ 1996 $ 102,181 $ 15,500 $ 3,267(2) -- --
1995 87,245 9,200 -- -- --
1994 83,106 13,760 -- -- --
</TABLE>
- ---------------
(1) Represents commissions paid with respect to franchise, subfranchise and
master license sales consummated.
(2) Represents commissions paid with respect to master license sales
consummated.
(3) In July 1993, Mr. Fuller received a five year option under the Company's
1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan) to purchase
5,000 shares which vested at the rate of 1,000 shares per year. The unvested
and vested portions of the option were increased to 7,500 and 1,500 shares,
respectively, in connection with the 1994 Stock Split.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth options awarded to all officers of the
Company earning a salary and bonus of more than $100,000 during the fiscal year
ended June 30, 1996. No options were awarded to the Company's Chief Executive
Officer, and no stock appreciation rights were awarded to any executive, during
the fiscal year.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE
- ------------ ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
Dennis G. Fuller, Sr. VP.... 1,500(1) 4.9%(2) $3.25(3) 7/99
</TABLE>
- ---------------
(1) In July 1993, Mr. Fuller received a five year option under the Company's
1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan) to purchase
5,000 shares which vested at the rate of 1,000 shares per year. The unvested
and vested portions of the option were increased to 7,500 and 6,000 shares,
respectively, in connection with the 1994 Stock Split.
(2) Based upon a comparison of the number of vested options granted to Mr.
Fuller to the number of vested options granted to all employees during the
fiscal year.
(3) Adjusted in connection with the 1994 Stock Split.
FISCAL YEAR END OPTION VALUES
The following table sets forth the number of unexercised options held by
all officers of the Company earning a salary and bonus of more than $100,000
during the fiscal year ended June 30, 1996. The Company's Chief Executive
Officer does not hold any options to purchase shares of the Company's Common
Stock. No options were exercised during such period.
4
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------ --------------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Dennis G. Fuller.... -- -- 4,500/3,000 $65,813/43,875
</TABLE>
OMNIBUS STOCK INCENTIVE PLAN
The Company has adopted the Omnibus Stock Incentive Plan (the 'Plan') to
permit the grant of awards to employees of the Company (including officers and
directors who are employees of the Company or a subsidiary of the Company) of
restricted shares of the Company's common stock, performance shares of the
Company's common stock, stock appreciation rights relative to the Company's
common stock and both incentive stock options and non-qualified options to
purchase shares of the Company's common stock. A maximum of 500,000 shares may
be issued under the Plan. As of June 30, 1996, options to purchase 155,550
shares had been granted under the Plan of which 2,300 have been exercised
(70,950 of the remaining options vested as of said date). Also as of said date,
82,700 shares of restricted stock had been granted under the Plan (45,800 of
such shares had vested as of said date). The aggregate value of the vested
shares and of the shares issuable pursuant to vested options under to the Plan
was $1,371,813, based on the fair market value of the Company's Common Stock (as
defined under the Plan) on October 21, 1996. The Plan was adopted in order that
the participants in the Plan will have financial incentives to contribute to the
Company's growth and profitability, and to enhance the ability of the Company to
attract and retain in its employ individuals of outstanding ability.
WARRANTS ISSUED TO NON-EMPLOYEE DIRECTORS
On November 24, 1993, the Company issued to each of Harry Chernoff and
Alvin Katz, two non-employee directors of the Company, warrants to purchase up
to 7,500 shares of the Company's Common Stock at the purchase price of $6.00 per
share at any time prior to November 24, 1998. On August 15, 1995, the Company
issued to each of Messrs. Katz and Chernoff additional warrants to purchase up
to 4,000 shares of the Company's Common Stock at the purchase price of $8.875
per share at any time prior to August 15, 2000. In order to maintain the
independence of Messrs. Katz and Chernoff, so that they would qualify as
disinterested directors for purposes of administering the Plan (and its
predecessor), neither of them had been permitted to participate in the Plan.
Therefore, the foregoing warrants were not issued under the Plan (or its
predecessor). Accordingly, prior to the recent amendments made by the Commission
to its insider trading regulations, Messrs. Katz and Chernoff would have had to
exercise their warrants, and then hold the underlying shares of Common Stock for
the requisite holding period required under the Commission's Rule 144 before
either of them could sell such shares. Pursuant to said recent insider trading
regulation amendments, Messrs. Katz and Chernoff may participate in the Plan and
still serve as the Compensation Committee administering the Plan, provided that
the entire Board of Directors authorizes any grant made to them thereunder. In
accordance with recent amendments made to the Plan to provide for such action by
the Board, the warrants heretofore granted to Messrs. Katz and Chernoff have
been replaced with Plan options providing for the purchase of the same number of
shares at the same exercise prices and subject to the same expiration dates
which heretofore applied to the warrants replaced thereby.
DIRECTORS' COMPENSATION
The Board has adopted a compensation policy to help the Company to attract
and maintain the services of qualified outside directors. Such compensation
consists of (a) payment of a directors fee of $6,000 per annum; (b) issuance of
Plan options to purchase 5,000 shares of the Company's Common Stock at an
exercise price equal to the fair market value of such stock on the date of his
or her appointment or election to the Board; (c) issuance of additional options,
at the discretion of the Board, periodically during the tenure of an outside
director; and
5
<PAGE>
(d) reimbursement of the reasonable travel and lodging expenses incurred by each
outside director in attending Board meetings which are not held within a 75 mile
radius of his or her residence or principal place of business.
The following table sets forth the holdings of the Common Stock of the
Company as of September 30, 1996 by (1) each person or entity known to the
Company to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock of the Company; (2) each director and
executive officer; and (3) all directors and executive officers as a group. All
of the holders of the Company's Common Stock are entitled to one vote per share.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNED(2)
- --------------------------- --------------------- --------
<S> <C> <C>
Anthony P. Conza(3)................. 3,086,885(4) 32.5%
David L. Siegel(3).................. 1,507,830 15.9%
Charles G. Leaness(3)............... 441,908 4.7%
Patrick J. Pompeo(3)................ 394,137(5) 4.2%
Dennis G. Fuller(3)................. 24,410(6) *
Robert S. Sitkoff(3)................ 42,200(7) *
Joseph Conza(3)..................... 42,913(8) *
Bruce A. Kolbinsky(3)............... 12,157(9) *
Alvin Katz(10)...................... 11,500(11) *
Harry Chernoff(12).................. 13,768(13) *
Joseph Morgan(3).................... 24,250(14) *
Arthur Mancino(3)................... 6,750(15) *
Rebecca Killarney(3)................ 12,393(16) *
All Directors and Executive Officers
as a Group (13 Persons)........... 5,621,101(17) 59%
</TABLE>
- ---------------
* Represents less than 1%.
(1) Includes shares actually and beneficially owned.
(2) Based on 9,496,276 shares of the Company's Common Stock outstanding on
September 30, 1996.
(3) The address of Messrs. A. Conza, Siegel, Leaness, Pompeo, Fuller, Sitkoff,
J. Conza, Kolbinsky, Morgan, Mancino and Ms. Killarney is 740 Broadway, New
York, New York 10003.
(4) Does not include (a) 36,250 shares owned by Mr. Conza's daughter, (b)7,000
shares owned by Mr. Morgan (Mr. Conza's son-in-law), (c)15,000 shares owned
jointly by Mr. Conza's daughter and Mr. Morgan over which Mr. Morgan has
sole voting power, (d)4,150 shares owned by Mr. Conza's parents, (e) 42,913
shares owned by Joseph Conza, the brother of Mr. Conza, and (f) 54,000
shares held by Mr. Conza's daughter as Trustee for the Anthony P. Conza
Charitable Remainder Trust, as to all of which Mr. Conza disclaims
beneficial ownership.
(5) Does not include 6,300 shares held by Mr. Pompeo's sister and
brother-in-law, as to which Mr. Pompeo disclaims beneficial ownership.
(6) Includes 6,000 shares of Common Stock which Mr. Fuller has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him and 30 shares held by Mr. Fuller as custodian for his daughter
under the Georgia Transfers to Minors Act. Does not include 5,355 shares
held by Mr. Fuller's mother, 1,900 shares held by Mr. Fuller's father-in-law
and 750 shares held by Mr. Fuller's mother as custodian for his daughter
under the Georgia Transfers to Minors Act, as to all of which Mr. Fuller
disclaims beneficial ownership.
(Footnotes continued on following page)
6
<PAGE>
(Footnotes continued from preceding page)
(7) Includes 36,000 shares of Common Stock which Mr. Sitkoff has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him.
(8) Includes 6,000 shares of Common Stock which Mr. Joseph Conza has the right
to acquire within 60 days from the date hereof upon the exercise of options
held by him.
(9) Includes 6,000 shares of Common Stock which Mr. Kolbinsky has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him. Excludes 3,303 shares owned by Mr. Kolbinsky's father, as to
which Mr. Kolbinsky disclaims beneficial ownership.
(10) The address of Mr. Katz is 301 N. Birch Road, Ft. Lauderdale, Florida
33304.
(11) Includes 11,500 shares of Common Stock which Mr. Katz has the right to
acquire within 60 days from the date hereof upon the exercise of warrants
held by him. See 'Executive Compensation--Warrants Issued to Non-Employee
Directors.'
(12) The address of Mr. Chernoff is 286 Spring Street, Suite 401, New York, New
York.
(13) Includes 11,500 shares of Common Stock which Mr. Chernoff has the right to
acquire within 60 days from the date hereof upon the exercise of warrants
held by him. See 'Executive Compensation--Warrants Issued to Non-Employee
Directors.'
(14) Includes 2,250 shares of Common Stock which Mr. Morgan has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him. Does not include (a) 36,250 shares held by Mr. Morgan's wife
(Mr. A. Conza's daughter), (b) 700 shares held by Mr. Morgan's son, and (c)
54,000 shares held by Mr. Morgan's wife as Trustee for the Anthony P. Conza
Charitable Remainder Trust, as to all of which Mr. Morgan disclaims
beneficial ownership.
(15) Includes 600 shares of Common Stock which Mr. Mancino has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him. Does not include 400 shares held by Mr. Mancino's
father-in-law and 100 shares held by his sister, as to which Mr. Mancino
disclaims beneficial ownership.
(16) Includes 6,000 shares of Common Stock which Ms. Killarney has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by her.
(17) Includes 85,850 shares of Common Stock which the holders thereof have the
right to acquire within 60 days from the date hereof upon the exercise of
options and warrants held by them. Does not include: (a) 36,250 shares
owned by Mr. Anthony Conza's daughter, 4,150 shares owned by Mr. Conza's
parents, and 54,000 shares held by Mr. Conza's daughter as Trustee for the
Anthony P. Conza Charitable Remainder Trust, as to all of which Mr. Conza
disclaims beneficial ownership; (b) 6,300 shares held by Mr. Pompeo's
sister and brother-in-law, as to which Mr. Pompeo disclaims beneficial
ownership; (c) 5,355 shares held by Mr. Fuller's mother, 1,900 shares held
by Mr. Fuller's father-in-law and 750 shares held by Mr. Fuller's mother as
custodian for his daughter under the Georgia Transfer to Minors Act, as to
all of which Mr. Fuller disclaims beneficial ownership; (d) 3,303 shares
owned by Mr. Kolbinsky's father, as to which Mr. Kolbinsky disclaims
beneficial ownership; (e) 36,250 shares held by Mr. Morgan's wife, 700
shares held by Mr. Morgan's son, and 54,000 shares held by Mr. Morgan's
wife as Trustee for the Anthony P. Conza Charitable Remainder Trust, as to
all of which Mr. Morgan disclaims beneficial ownership; and (f) 400 shares
held by Mr. Mancino's father-in-law and 100 shares held by his sister, as
to all of which Mr. Mancino disclaims beneficial ownership.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal years ended June 30, 1996 and 1995, the Company paid
$893,000 and $781,000 respectively, to Georgia Enterprises, Inc., a corporation
partially owned by Patrick Pompeo, an Executive Vice President and Director of
the Company, and Joseph Conza, a Senior Vice President of the Company, in
payment of said corporation's share of the fees that it earned as the
Subfranchisor for the Georgia market. During the same two fiscal years the
Company paid $339,000 and $318,000, respectively, to Llewellyn Distributors,
Inc. ('Llewellyn'), a corporation partially owned by Charles G. Leaness, a
Director and Executive Vice President of the Company, in payment of said
corporation's share of the fees that it earned as the Subfranchisor for the
northern New Jersey market. The Company also paid $165,000 and $120,000,
respectively, to International Southwest Blimpie, Inc. ('Southwest'), a
corporation principally owned and controlled by Joseph Conza, in payment of said
corporation's share of the fees that it earned as the Subfranchisor for the
Houston market.
Each of the aforementioned transactions was effected pursuant to written
agreements between the Company and the parties thereto. Such agreements are
substantially identical to the standard form of Subfranchise agreement that the
Company enters into with unaffiliated Subfranchisors. In the opinion of the
Company's management, each such agreement is on terms as favorable to the
Company as would be available from an unrelated third party.
During the fiscal years ended June 30, 1996 and 1995, the Company received
$245,000 and $163,000 respectively, in management fees from Georgia Enterprises,
Inc., the Company's Subfranchisor for the State of Georgia, of which Mr. Pompeo
is a principal shareholder, officer and director. Such fees were received
pursuant to a written agreement which provides that in consideration of the
Company's provision of operational and administrative support functions to
Georgia Enterprises, Inc., the Company shall be reimbursed with respect to the
expenses incurred by the Company in connection therewith pursuant to a payment
scale set forth in the agreement. The agreement also provides that in the event
the costs of such support services shall rise, then the fees paid pursuant to
the agreement shall rise accordingly. In the opinion of the Company's
management, the agreement is on terms as favorable to the Company as would be
available from an unrelated third party.
During the fiscal years ended June 30, 1996 and 1995, the Company received
$85,000 and $61,000, respectively, in management fees from Llewellyn, the
Company's Subfranchisor for New Jersey, of which Mr. Leaness is a principal
shareholder, officer and director. Such fees were paid pursuant to a written
agreement which provides that the Company shall be reimbursed by Llewellyn for
costs incurred by the Company in providing operational support services to
Llewellyn. The agreement also provides that in the event the costs of such
support services shall rise, then the fees paid pursuant to the agreement shall
rise accordingly. In the opinion of the Company's management, the agreement is
on terms as favorable to the Company as would be available from an unrelated
third party.
During the fiscal years ended June 30, 1996 and 1995, the Company received
$61,000 and $67,000, respectively, in management fees from Southwest. The
management fees were paid pursuant to a written agreement which provides that
the Company shall be reimbursed by Southwest for costs incurred by the Company
in providing operational support services to Southwest. The agreement also
provides that in the event the costs of such support services shall rise, then
the fees paid pursuant to the agreement shall rise accordingly. In the opinion
of the Company's management, the agreement is on terms as favorable to the
Company as would be available from an unrelated third party.
In April 1994, Mr. Leaness borrowed the sum of $20,000 from the Company,
and collateralized the payment thereof with the same 120,000 shares of Common
Stock which he pledged in connection with his above-mentioned $60,000 option
exercise and loan transaction. Said $20,000 loan is payable upon demand and
bears interest at the rate of 5% per annum.
In March 1995, Joseph Conza borrowed the principal amount of $55,500 from
the Company. Said indebtedness is payable in constant bi-monthly payments of
principal and interest computed at the rate of 8% per annum on the basis of a 20
year amortization schedule, and the unpaid balance of principal and accrued but
unpaid interest shall become due and payable on April 16, 2000, provided,
however, that, Mr. Conza may extend the term of the loan through April 15, 2015
as long as no default exists with regard to said loan when it originally
matures. Mr. Conza pledged 10,000 unregistered shares of the Company's Common
Stock as collateral security
8
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for the payment of all sums due under said loan. As of the end of the fiscal
year, Mr. Conza was current with respect to his payment obligations and the
outstanding principal balance had been reduced to $54,021.
The Company has acquired the rights possessed by Anthony P. Conza and David
L. Siegel regarding the licensing of the Blimpie Trademarks and the Blimpie
Marketing System for all non-U.S. territories, pursuant to a 99 year license
Agreement. Said agreement provides for payment of certain income-based fees to
Messrs. Conza and Siegel, and further provides for cancellation by Messrs. Conza
and Siegel if the Company fails to pay them a minimum annual fee aggregating
$350,000 during the first five years of the term, and a minimum aggregate fee of
$150,000 per year (subject to an annual cost of living adjustment) during the
balance of such term. The payments made to Messrs. Conza and Siegel under this
agreement were $230,713 during the most recent fiscal year.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the 'Exchange Act')
requires the Company's Directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Commission initial reports of ownership and reports of changes
in ownership of the Company's Common Stock. Officers, Directors and greater than
ten-percent shareholders are required by S.E.C. regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1996, the Company's
officers, directors and greater than ten-percent beneficial owners complied with
all applicable Section 16(a) filing requirements.
PROPOSAL NUMBER 2: INCREASE IN NUMBER OF SHARES
ISSUABLE UNDER THE OMNIBUS STOCK INCENTIVE PLAN
At the annual meeting of shareholders held last year, the shareholders
authorized the adoption of the Omnibus Stock Incentive Plan which provides the
Company with a wider array of incentive compensation tools to offer, and which
provides the Compensation Committee with a total of 500,000 shares, subject to
increase as hereinbelow described, with which to provide such incentives for
existing and future employees who contribute to the Company's continued growth
and expansion. As of the date of this Proxy Statement, a total of 92,000 shares
of Common Stock (of which 64,100 shares have vested) and options entitling the
holders thereof to purchase 179,150 shares (of which options to purchase 106,350
shares have vested) have been issued under the Plan (and the 1993 Incentive
Stock Ownership Plan (the '1993 Plan') which were incorporated into the Plan).
Accordingly, as of the date of this Proxy Statement, 228,850 additional shares
of Common Stock may be issued under the Plan through its expiration on June 30,
2000.
The maximum aggregate number of shares of Common Stock that may be issued
pursuant to the exercise of Options and SARs and the award of Restricted Shares
and the settlement of Performance Shares under the Plan is 500,000, subject to
increases and adjustments as provided in the Omnibus Plan and for stock
dividends, stock split-ups and other recapitalization transactions. The maximum
number of shares authorized for issuance under the Plan may also be increased
each year by 8% (the Replenishment Percentage) of the amount, if any, by which
the total number of shares of Common Stock outstanding as of the last day of the
Company's fiscal year exceeds the total number of shares of Common Stock
outstanding as of the first day of such fiscal year. Provided, however, that in
no event shall the total number of shares authorized for issuance under the Plan
exceed 8% of the issued and outstanding shares of Common Stock as of the time of
any replenishment adjustment.
Based upon a comparison of the present level of the Company's employees and
other participants in the Plan to the number of Plan shares and options to
purchase same which have been thus far issued, to management's assessment of the
number of persons who are likely to be added to the list of potential Plan
participants through June 30, 2000, management recommended to the Board that the
number of shares of Common Stock which are subject to the Plan be increased to
950,000 shares, subject to the above-described increases, adjustments and
limitations. The Board has accepted management's assessment, and has adopted
resolutions authorizing such increase, subject to approval thereof by the
Company's shareholders.
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<PAGE>
As of the date of this Proxy Statement, 9,521,876 shares of Common Stock
are outstanding and 207,050 shares have been reserved for issuance pursuant to
unvested Restricted Share awards and vested and unvested, but unexercised,
options heretofore granted under the Plan. In the event that the shareholders
approve the proposed increase in the number of shares issuable under the Plan,
the total number of shares of Common Stock which would be outstanding, assuming
(a) issuance of all shares and options issuable under the Plan; (b) complete
exercise of all of such options; (c) no issuance of additional shares of Common
Stock, other than Plan shares; and (d) no stock dividends, stock split-ups,
other recapitalization transactions or replenishment adjustments, a total of
10,407,776 shares of Common Stock would be outstanding.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock represented in person or by proxy at the
Annual Meeting is required for approval of an increase in the number of shares
of Common Stock issuable pursuant to the Company's Omnibus Stock Incentive Plan
to 950,000 shares, subject to increase as hereinabove described.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH APPROVAL.
The principal features of the Plan are summarized below.
GENERAL
The Plan is intended to assist the Company in recruiting and retaining
employees with ability and initiative by enabling employees to participate in
its future success and to associate their interests with those of the Company
and its shareholders.
ADMINISTRATION
The Plan is administered by the Compensation Committee which has full
authority to make grants and awards upon such terms (not inconsistent with the
provisions of the Plan) as it may consider appropriate; to prescribe the forms
of agreements and instruments relating to such grants and awards; to adopt,
amend, and rescind rules and regulations pertaining to the administration of the
Plan; and to make all other determinations necessary or advisable for the
administration of the Plan. Pursuant to recent amendments made to the Plan by
the Board, the Compensation Committee must consist of not less than two
non-employee directors.
In addition to, and not in substitution or replacement of, the powers and
authority conferred upon the Committee pursuant to the Plan, the Board is also
entitled to award Restricted Shares or Performance Shares and/or to grant one or
more Options, SARs, or Options and SARs to any eligible Participant. The Board
also has, and is entitled to exercise, all of the powers and authority conferred
upon the Committee when making, amending, modifying canceling, settling or
rescinding any of such awards and/or grants.
GRANTS AND AWARDS TO BE MADE UNDER THE PLAN
The Compensation Committee is authorized:
(a) to make grants of incentive stock options ('Incentive Options')
meeting the requirements of Section 422 of the Internal Revenue Code of
1986 (the 'Code') and options not meeting such requirements ('Nonstatutory
Options' which, together with Incentive Options and Reload Options, as
described below, are hereinafter collectively referred to as 'Options')
which shall entitle participants in the Plan to purchase shares of the
Company's Common Stock at exercise prices to be determined by the
Compensation Committee, subject to the condition that the exercise price of
an Option must be equal to the fair market value of the Common Stock on the
date of grant(1);
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(1) Fair market value, for purposes of the Plan, will generally be the mean
between the publicly reported high and low sale prices per share of Common
Stock on the date as of which such value is to be determined. On October 21,
1996, the fair market value of a share of the Company's Common Stock, as so
computed, was $11.75.
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<PAGE>
(b) to make grants of SARs, either in tandem with an option grant, or
as a separate grant, which will entitle a participant to receive with
respect to each share of Common Stock as to which an SAR is exercised,
either (i) the amount specified by the Compensation Committee in the
agreement evidencing the grant of the SAR; or (ii) if no such amount is
specified, the difference between the fair market value of the underlying
share of Common Stock on the date of exercise of the SAR and the fair
market value thereof on the date of grant;
(c) to make awards of shares of Common Stock, subject to such vesting
conditions and other restrictions regarding forfeiture as the Compensation
Committee may specify at the time of the award ('Restricted Shares'); and
(d) to make awards of 'Performance Shares,' i.e., awards to be earned
by a participant based on the level of performance of the Company, a
subsidiary or subsidiaries, a branch, department or other unit thereof or
the participant individually over a specified period of not less than one
year.
A Nonstatutory Option may contain, if the Compensation Committee so
determines, a 'Reload Option Feature' providing that, if a participant exercises
all or part of such Option (the 'Original Option') by surrendering already owned
shares of Common Stock in full or partial payment of the exercise price under
such Original Option, he shall be automatically granted on the date of such
exercise a new Nonstatutory Option (a 'Reload Option'), subject to the
availability of shares of Common Stock under the Plan at the time of exercise.
Each Reload Option shall cover a number of shares of Common Stock equal to the
number of shares of Common Stock surrendered in payment of the exercise price,
shall have an exercise price per share of Common Stock equal to the fair market
value of the Common Stock on the date of grant of such Reload Option and shall
expire on the stated expiration date of the original Option. A Reload Option
shall be generally exercisable at any time and from and after the date of grant
of such Reload Option (or, as the Committee, in its sole discretion, shall
determine at the time of grant, at such time or times as shall be specified in
the Reload Option). The first such Reload Option may provide for the grant, when
exercised, of one subsequent Reload Option to the extent and upon such terms and
conditions, as the Committee, in its sole discretion, shall specify at or after
the time of grant of such Reload Option.
The Compensation Committee may grant Incentive Options and Non-statutory
Options to the same participant, but not in tandem. Each Option must expire no
later than ten years from the date of grant; provided, however, that except as
provided in the Plan or as otherwise provided by the Compensation Committee, no
participant may exercise an Option unless at the time of exercise he or she has
been continuously in the employ of the Company or a subsidiary since the date of
grant thereof. If a participant voluntarily terminates his or her employment
with the consent of the Company, retires, becomes totally disabled, or dies
during employment, the Plan provides for limited periods following termination
of employment during which Options held by the participant at the time of his or
her termination may be exercised by the participant or by his or her estate. The
exercise price of an Option must be paid in full upon each exercise thereof in
cash or, if authorized by the Compensation Committee, by delivering to the
Company or its transfer agent shares of Common Stock having a fair market value
on the date of such delivery equal to the exercise price, or by a combination of
payment cash and Common Stock or as otherwise provided for in the Plan. No
Option may be transferable other than by Will or by the laws of descent and
distribution. An Option may be exercised during the lifetime of the recipient
thereof only by such recipient. Subject to the foregoing, and the other
provisions of the Plan, Options granted thereunder may be exercised at such
times, and in such amounts, and may be subject to such restrictions and other
terms and conditions, if any, as shall be determined, in the discretion of the
Compensation Committee.
Restricted shares of Common Stock awarded by the Compensation Committee
will be subject to such restrictions (which may include restrictions on the
right to transfer or encumber the shares while subject to restriction) as the
Compensation Committee may impose thereon and will be subject to forfeiture if
certain events (which may, in the discretion of the Compensation Committee,
include termination of employment and/or performance-based events) specified by
the Compensation Committee occur prior to the lapse of the restrictions. The
restricted share agreement between the Company and the participant will set
forth the number of restricted shares awarded to the participant, the
restrictions imposed thereon, the duration of such restrictions, the events the
occurrence of which would cause a forfeiture of the restricted shares and such
other terms and conditions as the Compensation Committee in its discretion deems
appropriate.
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Following a restricted share award and prior to the lapse or termination of
the applicable restrictions, share certificates for the restricted shares will
be held in escrow. Upon the lapse or termination of the restrictions (and not
before), the share certificates will be delivered to the participant. From the
date a restricted share award is effective, however, the participant will be a
shareholder with respect to the restricted shares and will have all the rights
of a shareholder with respect to such shares, including the right to vote the
shares and to receive all dividends and other distributions paid with respect to
the shares, subject only to the restrictions imposed by the Compensation
Committee.
The Compensation Committee may award Performance Shares (expressed in
dollars or shares) to be earned by a participant based on the level of
performance of the Company, a subsidiary or subsidiaries, a branch, department
or other unit thereof or the participant individually over a specified period of
not less than one year ('Performance Period'). For each Performance Period the
Compensation Committee will establish a Performance Target and a Minimum Target,
which may be the same or less than the Performance Target. Targets may be
expressed in terms of earnings per share, return on assets, return on equity,
asset growth, ratio of capital to assets or such other level or levels of
performance by the Company, a subsidiary or subsidiaries, a branch, department
or other unit thereof or the awardee individually as the Compensation Committee
may establish.
A participant awardee will earn the Performance Shares in full by meeting
the Performance Target for the Performance Period. If the Minimum Target has not
been attained at the end of the Performance Period, no part of the Performance
Shares will have been earned by the participant. If the Minimum Target is
attained but the Performance Target is not attained, the portion of the
Performance Shares earned by the participant will be determined on the basis of
a formula established by the Compensation Committee.
At any time prior to the end of a Performance Period, the Compensation
Committee may adjust downward (but not upward) the Performance Target and/or the
Minimum Target as a result of major events unforeseen at the time of the
Performance Share award, such as changes in the economy, the industry, laws
affecting the operations of the Company or a subsidiary or any other event the
Compensation Committee determines would have a significant impact upon the
probability of attaining the previously established Performance Target.
Payment in respect of earned Performance Shares, whether expressed in
dollars or shares, may be made in cash, in shares of Common Stock, or partly in
cash and partly in shares of Common Stock, as determined by the Compensation
Committee at the time of payment. For this purpose, Performance Shares expressed
in dollars will be converted to shares, and Performance Shares expressed in
shares will be converted to dollars, based on the fair market value of the
Common Stock as of the date the amount payable is determined by the Compensation
Committee.
Performance Share awards may have such other terms and conditions as the
Compensation Committee in its discretion deems appropriate.
ELIGIBLE PARTICIPANTS
All employees of the Company and its various majority-owned subsidiaries,
including officers and employee directors, as well as the non-employee directors
of the Company and such subsidiaries, are eligible to receive grants and awards
under the Plan.
TERM OF THE PLAN
The Plan was authorized by the shareholders at the annual meeting held on
December 7, 1995, and became effective on that date. It shall remain in effect
until June 30, 2000, provided that Restricted Share and Performance Share awards
and Options and SARs granted before that date shall remain valid in accordance
with their terms.
AMENDMENT; TERMINATION
The Board of Directors may amend or terminate the Plan from time to time;
provided, however, that no amendment may become effective until shareholder
approval is obtained if (i) the amendment increases the aggregate number of
shares of Common Stock that may be issued under thereunder or (ii) the amendment
changes the class of individuals eligible to become participants. No amendment
shall, without a participant's
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<PAGE>
consent, adversely affect any rights of such participant under any outstanding
Restricted Share or Performance Share award or under any Option or SAR
outstanding at the time such amendment is made.
FEDERAL INCOME TAX MATTERS
The following is a brief summary of the principal Federal income tax
consequences of the grant and exercise of Plan awards under present law.
Incentive Options. An optionee will not recognize any taxable income for
Federal income tax purposes upon receipt of an Incentive Option or, generally,
at the time of exercise of an Incentive Option. The exercise of an Incentive
Option generally will result in an increase in an optionee's taxable income for
alternative minimum tax purposes.
If an optionee exercises an Incentive Option and does not dispose of the
shares received in a subsequent 'disqualifying disposition' (a sale, gift or
other transfer within two years after the date of grant of the Incentive Option
or within one year after the shares are transferred to the optionee), upon
disposition of the shares any amount realized in excess of the optionee's tax
basis in the shares disposed of will be treated as a long-term capital gain, and
any loss will be treated as a long-term capital loss. In the event of a
'disqualifying disposition,' the difference between the fair market value of the
shares received on the date of exercise and the exercise price (limited, in the
case of a taxable sale or exchange, to the excess of the amount realized upon
disposition over the optionee's tax basis in the shares) will be treated as
compensation received by the optionee in the year of disposition. Any additional
gain will be taxable as a capital gain and any loss as a capital loss, which
will be long-term or short-term depending on whether the shares were held for
more than one year. If shares of Common Stock received upon the prior exercise
of an Incentive Option are transferred to the Company in payment of the exercise
price of an Incentive Option within either of the periods referred to above, the
transfer will be considered a 'disqualifying disposition' of the shares
transferred.
Neither the Company nor any of its subsidiaries will be entitled to a
deduction with respect to shares received by an optionee upon exercise of an
Incentive Option and not disposed of in a 'disqualifying disposition.' If an
amount is treated as compensation received by an optionee because of a
'disqualifying disposition,' the Company or one of its subsidiaries generally
will be entitled to a corresponding deduction in the same amount for
compensation paid.
Nonstatutory Options. An optionee will not recognize any taxable income
for Federal income tax purposes upon receipt of a Nonstatutory Option. Upon the
exercise of a Nonstatutory Option the amount by which the fair market value of
the shares received, determined as of the date of exercise, exceeds the exercise
price will be treated as compensation received by the optionee in the year of
the exercise. If the exercise price of a Nonstatutory Option is paid in whole or
in part with shares of Common Stock, no income, gain or loss will be recognized
by the optionee on the receipt of shares equal in value on the date of exercise
to the shares delivered in payment of the exercise price. The fair market value
of the remainder of the shares received upon exercise of the Nonstatutory
Option, determined as of the date of exercise, less the amount of cash, if any,
paid upon exercise will be treated as compensation income received by the
optionee on the date of exercise of the stock option.
The Company or one of its subsidiaries generally will be entitled to a
deduction for compensation paid in the same amount treated as compensation
received by the optionee.
Reload Option Rights. An optionee should not recognize any taxable income
for Federal income tax purposes upon receipt of reload option rights and a
Reload Option should be treated as a Nonstatutory Option. See 'Nonstatutory
Options' above.
Restricted Shares. A recipient of Restricted Shares will not recognize any
taxable income for Federal income tax purposes in the year of the award,
provided the shares are subject to restrictions (that is, they are
nontransferable and subject to a substantial risk of forfeiture). If a recipient
is subject to Section 16(b) of the Exchange Act on the date of the award, the
shares generally will be deemed to be subject to restrictions (in addition to
the restrictions imposed by the award) for at least six months following the
date of the award. However, the recipient may elect under Section 83(b) of the
Code to recognize compensation income in the year of the award in an amount
equal to the fair market value of the shares on the date of the award,
determined without regard to the restrictions. If the recipient does not make a
Section 83(b) election, the fair market value of
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<PAGE>
the shares on the date the restrictions lapse will be treated as compensation
income to the recipient and will be taxable in the year the restrictions lapse.
The Company or one of its subsidiaries generally will be entitled to a deduction
for compensation in the same amount treated as compensation income to the
grantee.
Stock Appreciation Rights. A participant who is granted an SAR recognizes
no income upon the grant thereof. At the time of exercise, the participant will
recognize compensation income equal to any cash received and the fair market
value of any Common Stock received. A participant who receives shares of Common
Stock, and who is subject to the provisions of Section 16(b) of the Exchange Act
will recognize income based upon the fair market value of the Common Stock six
months after the date of receipt thereof, unless he or she makes an election
under Section 83(b) of the Code. This income is subject to income and employment
tax withholding. The Company is entitled to an income tax deduction
corresponding to the ordinary income recognized by the participant.
Performance Shares. An awardee of Performance Shares will not recognize
any taxable income for Federal income tax purposes upon receipt of the award.
Any cash or shares of Common Stock received pursuant to the award will be
treated as compensation income received by the awardee generally in the year in
which the awardee receives such cash or shares of Common Stock. If Performance
Shares are expressed in dollars but paid in whole or in part in shares of Common
Stock and the awardee is subject to Section 16(b) of the Exchange Act on the
date of receipt of such shares, the awardee generally will not recognize
compensation income until the expiration of six months from the date of receipt,
unless the awardee makes an election under Section 83(b) of the Code to
recognize compensation income on the date of receipt. In each case, the amount
of compensation income will equal the amount of cash and the fair market value
of the shares of Common Stock on the date compensation income is recognized. The
Company or one of its subsidiaries generally will be entitled to a deduction for
compensation paid in the same amount treated as compensation income to the
awardee.
NEW PLAN BENEFITS
Since the December 7, 1995 effective date of the Plan, the Committee has
awarded 7,500 Restricted Shares (of which 1,900 shares have vested as of the
date of this Proxy Statement) and has granted 7,000 Nonstatutory Options (of
which 1,400 options have vested as of the date of this Proxy Statement). The
Company has not determined when, or to what extent, it will make further grants
or awards under the Plan. The following table sets forth the benefits which
would have been received by or allocated to the persons or groups of persons
identified below during the Company's fiscal year ended June 30, 1996 based upon
awards and grants heretofore made to them under the Plan and under the 1993
Plan.(2) Only grants of Nonstatutory Options and awards of Restricted Shares
have been made under the Plan and the 1993 Plan. None of such grants or awards
was made to Anthony P. Conza, the Chairman and Chief Executive of the Company,
or to any of the Company's employee-directors.
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(2) All grants and awards made under the 1993 Plan have been incorporated into,
and are treated for all purposes as though they had been made under, the
Plan.
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BLIMPIE INTERNATIONAL INC. OMNIBUS STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
RESTRICTED SHARES NONSTATUTORY OPTIONS
---------------------------------------- ----------------------------------------
VESTED UNVESTED VESTED UNVESTED
------------------ ------------------ ------------------ ------------------
NAME AND POSITION VALUE($) NUMBER VALUE($) NUMBER VALUE($) NUMBER VALUE($) NUMBER
- ------------------------- -------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis G. Fuller,
Sr. VP..................... $ 70,500(1) 6,000 $ 17,625(1) 1,500 $ 51,000(2) 6,000 $ 12,750(2) 1,500
Alvin Katz,
Non-employee director...... -- -- -- -- $ 54,625(3) 11,500 -- --
Harry Chernoff,
Non-employee director...... -- -- -- -- $ 54,625(3) 11,500 -- --
All Non-employee Directors as
a Group.................... -- -- -- -- $109,250(3) 23,000 -- --
All Current Executive
Officers as a Group........ $211,500(1) 18,000 $ 52,875(1) 4,500 $288,000(4) 48,000 $240,755(5) 49,500
All Employees, including all
current officers who are
not executive officers, as
a group.................... $541,675(1) 46,100 $274,950(1) 23,400 $251,581(6) 35,350 $103,888(7) 23,400
</TABLE>
- ---------------
(1) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996.
(2) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $3.25.
(3) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $6.00 with respect to Options to
purchase 7,500 shares, and an exercise price of $8.875 with respect to
Options to purchase 4,000 shares.
(4) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $3.25 with respect to Options to
purchase 18,000 shares, and an exercise price of $7.25 with respect to
Options to purchase 30,000 shares.
(5) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $3.25 with respect to Options to
purchase 4,500 shares, and an exercise price of $7.25 with respect to
Options to purchase 45,000 shares.
(6) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $3.25 with respect to Options to
purchase 24,000 shares, an exercise price of $6.00 with respect to Options
to purchase 2,250 shares, an exercise price of $6.375 with respect to
Options to purchase 3,700 shares, an exercise price of $7.25 with respect to
Options to purchase 2,200 shares, an exercise price of $9.125 with respect
to Options to purchase 1,800 shares, an exercise price of $11.3125 with
respect to Options to purchase 300 shares, and an exercise price of $14.75
with respect to Options to purchase 1,100 shares.
(7) Based upon the $11.75 fair market value of the Common Stock calculated as of
October 21, 1996 and an exercise price of $3.25 with respect to Options to
purchase 6,000 shares, an exercise price of $6.00 with respect to Options to
purchase 1,500 shares, an exercise price of $6.375 with respect to Options
to purchase 2,800 shares, an exercise price of $7.25 with respect to Options
to purchase 4,800 shares, an exercise price of $9.125 with respect to
Options to purchase 2,700 shares, an exercise price of $11.3125 with respect
to Options to purchase 1,200 shares, and an exercise price of $14.75 with
respect to Options to purchase 4,400 shares.
15
<PAGE>
PROPOSAL NUMBER 3: SELECTION OF AUDITORS
At the Annual Meeting, the Company's shareholders will be asked to ratify
the Board of Directors' selection of the firm of Coopers & Lybrand, LLP, as the
Company's independent accountants for the fiscal year ending June 30, 1997. Said
firm has served as the Company's independent accountants since 1994. It is not
expected that a representative of Coopers & Lybrand, LLP will be present at the
meeting.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock represented in person or by proxy at the
Annual Meeting is required for approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH PROPOSAL.
16
<PAGE>
OTHER MATTERS
DISCRETIONARY AUTHORITY TO VOTE PROXY
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters do properly come before the Annual Meeting,
the proxy will be voted in respect thereof in accordance with the best judgement
of the persons authorized therein, and the discretionary authority to do so is
included in the proxy.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended June 30, 1996,
including financial statements, accompanies this proxy statement. However no
action is proposed to be taken at the Annual Meeting with respect to the Annual
Report, and it is not to be considered as constituting any part of the proxy
soliciting materials.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at the Annual Meeting of
shareholders to be held in 1997 for inclusion in the Proxy Statement and form of
proxy relating to that meeting is advised that the proposal must be received by
the Company at its principal executive offices no later than July 1, 1997. The
Company will not be required to include in its proxy statement or form of proxy
a shareholder's proposal which is received after that date or which otherwise
fails to meet requirements for shareholder proposals established by regulations
of the Securities and Exchange Commission.
SHAREHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-KSB FOR THE YEAR ENDED JUNE 30, 1995 BY SENDING A REQUEST TO: INVESTOR
RELATIONS DEPARTMENT, BLIMPIE INTERNATIONAL, INC., 1775 THE EXCHANGE, SUITE 600,
ATLANTA, GA 30339
New York, New York
Dated: November 1, 1996
17
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
99.A Omnibus Stock Incentive Plan
99.B Proxy Card
<PAGE>
Exhibit 99.A
BLIMPIE INTERNATIONAL, INC.
OMNIBUS STOCK INCENTIVE PLAN(1)
ARTICLE I
DEFINITIONS
1.01. Agreement means a written agreement between the Company and a Participant
or any written instrument issued by the Company to a Participant (including any
amendment or supplement thereto) specifying the terms and conditions of an award
of Restricted Shares or Performance Shares or a grant of an Option or SAR made
to such Participant.
1.02. Board means the Board of Directors of the Company.
1.03. Code means the Internal Revenue Code of 1986, as amended.
1.04. Committee means the Compensation Committee of the Board, consisting
solely of not less than two non-employee directors who have been appointed to
administer the Plan.
1.05. Common Stock means the Company's common stock, $.01 par value.
1.06. Company means Blimpie International, Inc.
1.07. Corresponding SAR means a SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.
1.08. Date of Exercise means (i) with respect to an Option, the date that the
Option price is received by, and (ii) with respect to a SAR, the date that the
notice of exercise is received by, the Company.
1.09. Fair Market Value of the Common Stock shall be the mean between the
following prices, as applicable, for the date as of which fair market value is
to be determined, as quoted in The Wall Street Journal (or in such other
reliable publication as the Committee, in its discretion, may determine to rely
upon): (a) if the Common Stock is listed on the New York Stock Exchange, the
highest and lowest sales prices per share of the Common Stock as quoted in the
NYSE-Composite Transactions listing for such date, (b) if the Common Stock is
not listed on such exchange, the highest and lowest sales prices per share of
Common Stock
_____________
(1) As amended by the Board of Directors on October 7, 1996.
<PAGE>
for such date on (or on any composite index including) the
principal United States securities exchange registered under the Exchange Act
on which the Common Stock is listed, or (c) if the Common Stock is not listed
on any such exchange, the highest and lowest sales prices per share of the
Common Stock for such date on the Nasdaq Stock Market or any successor thereto
("Nasdaq"). If there are no such sale price quotations for the date as of which
fair market value is to be determined, but there are such sale price quotations
within a reasonable period both before and after such date, then fair market
value shall be determined by taking a weighted average of the means between the
highest and lowest sales prices per share of the Common Stock as so quoted on
the nearest date before and the nearest date after the date as of which fair
market value is to be determined. The average should be weighted inversely by
the respective numbers of trading days between the selling dates and the date
as of which fair market value is to be determined. If there are no such sale
price quotations on or within a reasonable period both before and after the
date as of which fair market value is to be determined, then fair market value
of the Common Stock shall be the mean between the bona fide bid and asked
prices per share of Common Stock as so quoted for such date on Nasdaq, or if
none, the weighted average of the means between such bona fide bid and asked
prices on the nearest trading date before and the nearest trading date after
the date as of which fair market value is to be determined, if both such dates
are within a reasonable period. The average is to be determined in the manner
described above in this paragraph. If the fair market value of the Common Stock
cannot be determined on the basis previously set forth in this paragraph on the
date as of which fair market value is to be determined, the Committee shall in
good faith determine the fair market value of the Common Stock on such date.
Fair market value shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse.
1.10 Incentive Stock Option shall have the meaning given to it by Section 422
of the Code.
1.11. Initial Value means, with respect to a SAR, the Fair Market Value of one
share of Common Stock on the date of grant, as set forth in an Agreement.
1.12 Involuntary Termination means a Termination of Employment for a reason
other than death, Retirement, Total Disability or voluntary resignation.
1.13 Nonstatutory Option means any Option granted by the Company pursuant to
this Plan which is not an Incentive Stock Option.
1.14. Option means any stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
1.15. Participant means an employee of the Company, or of a Subsidiary,
including
2
<PAGE>
an employee who is a member of the Board, or a non-employee director, and any
other person who satisfies the requirements of Article IV and is selected by the
Committee or by the Board to receive a Restricted Share or Performance Share
award, an Option, a SAR, or a combination thereof.
1.16 Performance Period means an accounting period of the Company or a
Subsidiary of not less than one year, as determined by the Committee in its
discretion.
1.17. Performance Share means an award, expressed in dollars or shares of
Common Stock, granted to a Participant with respect to a Performance Period.
Awards of Performace Shares expressed in dollars may be established as fixed
dollar amounts, as a percentage of salary, as a percentage of a pool based on
earnings of the Company, a Subsidiary or Subsidiaries or any branch, department
or other portion thereof or in any other manner determined by the Committee in
its discretion, provided that the amount thereof shall be capable of being
determined as a fixed dollar amount as of the close of the Performance Period.
1.18 Performance Target means that level of performance established by the
Committee which must be met in order for an award of Performance Shares to be
fully earned. The Performance Target may be expressed in terms of earnings per
share, return on assets, asset growth, ratio of capital to assets or such other
level or levels of accomplishment by the Company, a Subsidiary or Subsidiaries,
any branch, department or other portion thereof or the Participant individually
as may be established or revised from time to time by the Committee.
1.19. Plan means the Blimpie International, Inc. Omnibus Stock Incentive Plan.
1.20. Restricted Shares means shares of Common Stock awarded to a Participant
under Article VII. Shares of Common Stock shall cease to be Restricted Shares
when, in accordance with the terms of the applicable Agreement, they become
transferable and free of substantial risks of forfeiture.
1.21. Retirement means a Termination of Employment by reason of a Participant's
cessation of employment (or, in the case of a non-employee director, the
cessation of his or her tenure as such), other than by reason of a Total
Disability or Termination for Cause.
1.22. SAR means a stock appreciation right that entitles the holder to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the amount determined by the Committee and specified in an Agreement. In
the absence of such a determination, the holder shall be entitled to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the excess of the Fair Market Value on the Date of Exercise over the
Initial Value. References
3
<PAGE>
to "SARs" include both Corresponding SARs and SARs granted independently of
Options, unless the context requires otherwise.
1.23. Subsidiary means any "subsidiary corporation" as such term is defined in
Code section 424.
1.24 Termination of Employment means with respect to (a) Participants who are
employees of the Company or a Subsidiary, the time when the employee-employer
relationship between the Participant and the Company ceases to exist for any
reason including, but not limited to termination by resignation, discharge,
death, Total Disability or Retirement; and (b) Participants who are
non-employee directors, the time when the Participant ceases to be a director
by reason of his or her resignation, failure to stand for re-election or
dismissal.
1.25 Termination for Cause means an Involuntary Termination of a Participant:
(a) if the Participant has a written employment agreement with the Company or
any Subsidiary, "for cause" as that or a similar term is defined in the
employment agreement; or (b) if the Participant does not have a written
employment agreement with the Company or any Subsidiary, by reason of (i) the
Participant's dishonesty or misconduct (including substance abuse) in the
performance of his or her duties; or (ii) a wilful failure by the Participant
to perform his or her assigned duties which adversely affects the Company; of
(iii) the conviction of the Participant of a felony or other criminal act. All
determinations of whether or not a Termination for Employment is "for cause"
will be made by the Committee in its sole and absolute discretion.
1.26 Total Disability means the inability of a Participant to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
All determinations as to the date and extent of disability of a Participant
will be made by the Committee in its sole and absolute discretion.
1.27 Non-Employee Director means a director who:
(a) is not currently an officer of the Company or a parent or subsidiary of
the Company, or otherwise currently employed by the Company or a parent or
subsidiary of the Company;
(b) does not receive compensation, either directly or indirectly, for
services rendered as a consultant or in any capacity other than as a director,
except for an amount which does not exceed the dollar amount for which
disclosure would be required pursuant to any provision of Regulations S-K
promulgated by the Commission;
4
<PAGE>
(c) does not possess an interest in any other transaction for which
disclosure would be required by any provision of said Regulation S-K; and
(d) is not engaged in a business relationship for which disclosure would be
required by any provision of said Regulation S-K.
ARTICLE II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
employees and directors with ability and initiative by enabling them to
participate in its future success and to associate their interests with those
of the Company and its shareholders. The Plan is intended to permit the award
of Restricted Shares, the award of Performance Shares, the grant of SARs, and
the grant of both Incentive Stock Options and Nonstatutory Options. The
proceeds received by the Company from the sale of Common Stock pursuant to this
Plan shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
Except as provided in this Article III, the Plan shall be administered by
the Committee. The Committee shall have authority to award Restricted Shares
and Performance Shares and to grant Options and SARs upon such terms (not
inconsistent with the provisions of this Plan) as the Committee may consider
appropriate. Such terms may include conditions (in addition to those contained
in this Plan) on the exercisability of all or any part of an Option or SAR or
on the transferability or forfeitability of Restricted Shares. Notwithstanding
any such conditions, the Committee may, in its discretion, accelerate the time
at which any Option or SAR may be exercised or the time at which Restricted
Shares may become transferable or nonforfeitable. In addition the Committee
shall have complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee or in connection with the
administration of this Plan shall be final and conclusive. No member of the
Committee shall be liable for any act done in good faith with respect to this
Plan or any Agreement, or Option, SAR, Restricted Share award or
5
<PAGE>
Performance Share award. All expenses of administering this Plan shall be borne
by the Company.
The Committee, in its discretion, may delegate to one or more officers
of the Company all or part of the Committee's authority and duties with respect
to Participants who are not subject to the reporting and other provisions of
Section 16 of the Securities Exchange Act of 1934, as in effect from time to
time (the "Exchange Act"). In the event of such delegation, and as to matters
encompassed by the delegation, references in the Plan to the Committee shall be
interpreted as a reference to the Committee's delegate or delegates. The
Committee may revoke or amend the terms of a delegation at any time, but such
action shall not invalidate any prior actions of the Committee's delegate or
delegates that were consistent with the terms of the Plan.
In addition to, and not in substitution or replacement of, the powers
and authority conferred upon the Committee pursuant to this Plan, the Board
shall also be entitled to award Restricted Shares or Performance Shares and/or
to grant one or more Options, SARs, or Options and SARs to any eligible
Participant, and when it makes such awards and/or grants, all of the provisions
of this Plan which pertain to the Committee shall be construed as though the
word "Board" appeared in place of the word "Committee," and the Board shall
have, and shall be entitled to exercise, all of the powers and authority
conferred upon the Committee when making, amending, modifying canceling,
settling or rescinding any of such awards and/or grants.
ARTICLE IV
ELIGIBILITY
4.01. General. Any employee of the Company or of any Subsidiary (including any
corporation that becomes a Subsidiary after the adoption of this Plan) is
eligible to participate in this Plan if the Committee, in its sole discretion,
determines that such person has contributed or can be expected to contribute to
the profits or growth of the Company or a Subsidiary. Any such employee may be
awarded Restricted Shares or Performance Shares or may be granted one or more
Options, SARs, or Options and SARs. A director of the Company who is an
employee of the Company or a Subsidiary, and a non-employee director of the
Company or a Subsidiary, may be awarded Restricted Shares and Performance
Shares and may be granted Options or SARs under this Plan. Further, the
Committee may from time to time in its sole discretion award Restricted Shares
and Performance Shares and may grant Options or SARs to non-employees or
non-key employees in conjunction with mergers and acquisition transactions.
4.02. Grants. The Committee will designate individuals to whom Restricted
6
<PAGE>
Shares and Performance Shares are to be awarded and to whom Options and SARs
are to be granted and will specify the number of shares of Common Stock subject
to each award or grant. An Option may be granted with or without a related SAR.
The Committee may grant Incentive Stock Options and Nonstatutory Options to the
same Participant, but not in tandem. A SAR may be granted with or without a
related Option. All Restricted Shares and Performance Shares awarded, and all
Options and SARs granted, under this Plan shall be evidenced by Agreements
which shall be subject to the applicable provisions of this Plan and to such
other provisions as the Committee may adopt. No Participant may be granted
Incentive Stock Options or related SARs (under all Incentive Stock Option plans
of the Company and its Subsidiaries) which are first exercisable in any year
for Common Stock having an aggregate Fair Market Value (determined as of the
date an Option is granted) exceeding $100,000.
ARTICLE V
COMMON STOCK SUBJECT TO PLAN
5.01. Source of Shares. Upon the award of Restricted Shares and when a
Performance Share is earned, the Company may issue authorized but unissued
shares of Common Stock. Upon the exercise of an Option or SAR, the Company may
deliver to the Participant (or the Participant's broker if the Participant so
directs), authorized but unissued Common Stock.
5.02. Maximum Number of Shares. The maximum aggregate number of shares of
Common Stock that may be issued pursuant to the exercise of Options and SARs
and the award of Restricted Shares and the settlement of Performance Shares
under this Plan is 500,000, subject to increases and adjustments as provided in
this Article V and Article IX.
5.03. Replenishment. The maximum number of shares authorized for issuance under
this Plan pursuant to Section 5.02 shall be increased each year by 8% (the
"Replenishment Percentage") of the amount, if any, by which the total number of
shares of Common Stock outstanding as of the last day of the Company's fiscal
year exceeds the total number of shares of Common Stock outstanding as of the
first day of such fiscal year. Provided, however, that in no event shall the
total number of shares authorized for issuance under this Plan exceed 8% of the
authorized and outstanding shares of Common Stock as of the time of any
replenishment adjustment. The issuance of shares of Common Stock under this
Plan and the application of Article IX shall be disregarded for purposes of
applying the preceding sentence. This Section 5.03 shall first apply with
respect to the fiscal year of the Company beginning on July 1, 1996.
5.04 Forfeitures, etc. If an Option or SAR is terminated, in whole or in part
for any
7
<PAGE>
reason other than its exercise, the number of shares of Common Stock allocated
to the Option or SAR or portion thereof may be reallocated to other Options,
SARs granted, or Restricted Shares and Performance Share awards to be granted
under this Plan. Any Restricted Shares that are forfeited or Performance Shares
that are unearned may be reallocated to other Options or SARs granted, or
Restricted Shares awarded, under this Plan.
ARTICLE VI
OPTIONS AND STOCK APPRECIATION RIGHTS
6.01 Nonstatutory Options. The Committee may grant Nonstatutory Options under
this Plan. Such Nonstatutory Stock Options must comply with all applicable
requirements of this Plan except for those which pertain solely to Incentive
Stock Options.
6.02 Incentive Stock Options. The Committee may grant Incentive Stock Options
under this Plan which shall comply with all of the restrictions and limitations
set forth in Section 422 of the Code. To the extent that any Option does not
qualify as an Incentive Stock Option, it shall constitute
a Nonstatutory Stock Option.
6.03 Vesting of Options. The Participant's Agreement shall specify the date or
dates on which the Participant may begin to exercise all or a portion of his
Option. Subsequent to such dates or dates, the Option shall be deemed "vested."
Notwithstanding the terms of any Agreement, the Committee at
any time may accelerate such date or dates and otherwise waive or amend any
conditions of the grant.
6.04 Grant and Exercise of SARs. SARs may be granted to Participants by the
Committee independently of any Option granted pursuant to this Article or as a
Corresponding SAR. In the case of a Corresponding SAR granted in tandem with a
Nonstatutory Option, such SAR may be exercised either at or after the time of
the exercise of such Nonstatutory Option. In the case of a Corresponding SAR
granted in tandem with an Incentive Stock Option, such SAR may be exercised
only at the time of the exercise of such Incentive Stock Option.
A Corresponding SAR, shall terminate and no longer be exercisable upon the
termination or exercise of related Option. However, if a Corresponding SAR is
granted with respect to less than the full number of shares covered by a
related Option, such SAR shall terminate only if and to the extent that the
number of shares covered by the exercise or termination of the related Option
exceeds the number of shares not covered by such SAR.
8
<PAGE>
6.05 Exercise of Options and SARs Conditioned on Continuous Employment. Except
as otherwise provided in this Plan or by the Compensation Committee, no
Participant may exercise an Option or SAR unless at the time of exercise he or
she has been continuously in the employ of the Company or a Subsidiary since the
date of grant thereof.
6.06 Terms and Conditions of Stock Appreciation Rights. SARs shall be subject
to such terms and conditions as shall be determined from time to time by the
Committee and embodied in the Agreements and in procedures established by the
Committee. The Committee at any time may accelerate the
exercisability of any SAR and
otherwise waive or amend any conditions of the grant of a SAR.
6.07. Maximum Option or Stock Appreciation Right Period. The maximum period in
which an Option or SAR may be exercised shall be determined by the Committee on
the date of grant except that no Option that is an Incentive Stock Option and
any Corresponding SAR that relates to such Option shall be exercisable after
the expiration of ten years from the date the Option or SAR was granted. The
terms of any Option or SAR may provide that it is exercisable for a period less
than such maximum period.
6.08 Option Exercise Price. The price per share for Common Stock purchased on
the exercise of an Option shall not be less than 100% of the Fair Market Value
of the Common Stock on the date the Option is granted.
6.09. Payment of Option Exercise Price. Unless otherwise provided by the
Agreement, payment of the Option exercise price shall be made in cash or a cash
equivalent acceptable to the Committee. If the Agreement so provides, payment
of all or part of the exercise price may be made by surrendering shares of
Common Stock to the Company. If Common Stock is used to pay all or part of the
exercise price, the shares surrendered must have a Fair Market Value
(determined as of the day preceding the Date of Exercise) that is not less than
such price or part thereof.
6.10. Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR.
At the Committee's discretion, the amount payable as a result of the exercise of
a SAR may be settled in cash, Common Stock, or a combination of cash and common
Stock. A Fractional share shall not be deliverable upon the exercise of a SAR
but a cash payment will be made in lieu thereof.
6.11 Reload Options. The Committee shall have the authority to specify at the
time of grant that a Participant shall be granted another Option (a "Reload
Option") in the event such Participant exercises all or part of a Nonstatutory
Option (an "Original Option") by surrendering in accordance with Section 6.08
hereof already owned shares of Common Stock in full or partial payment of the
exercise price under such Original Option, subject to the availability of shares
of Common Stock
9
<PAGE>
under the Plan at the time of exercise. Each Reload Option shall cover a number
of shares of Common Stock equal to the number of shares of Common Stock
surrendered in payment of the exercise price, shall have an exercise price per
share of Common Stock equal to the Fair Market Value of the Common Stock on the
date of grant of such Reload Option and shall expire on the stated expiration
date of the Original Option. A Reload Option shall be exercisable at any time
and from time to time from and after the date of grant of such Reload Option
(or, as the Committee, in its sole discretion, shall determine at the time of
grant, at such time or times as shall be specified in the Reload Option);
provided, however, that a Reload Option granted to a Participant subject to the
provisions of Section 16(b) of the Exchange Act shall not be exercisable during
the first six months from the date of grant of such Reload Option. The first
such Reload Option may provide for the grant, when exercised, of one subsequent
Reload Option to the extent and upon such terms and conditions, consistent with
this Section 6.11, as the Committee, in its sole discretion, shall specify at or
after the time of grant of such Reload Option. A Reload Option shall contain
such other terms and conditions which may include a restriction on the
transferability of the number of shares of Common Stock received upon exercise
of the Original Option reduced by a number of shares equal in value to the tax
liability incurred upon exercise as the Committee, in its sole discretion, may
deem desirable which may be set forth in the Agreement evidencing the Reload
Option.
6.12. Nontransferability. Any Option or SAR granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer, the Option and any Corresponding SAR that
relates to such Option must be transferred to the same person or persons or
entity or entities. During the lifetime of a Participant to whom an Option or
SAR is granted, the Option or SAR may be exercised only by the Participant. No
right or interest of a Participant in any Option or SAR shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.
6.13 Cancellation and New Grant of Options. The Committee shall have the
authority to effect, at any time, and from time to time, with the consent of
the affected Participants, the cancellation of any or all outstanding Options
under the Plan and the grant in substitution therefor of new Options under the
Plan covering the same or different numbers of shares of Common Stock having an
Option exercise price per share which may be lower or higher than the exercise
price per share of the canceled Options.
6.14. Shareholder Rights. No Participant shall have any rights as a shareholder
with respect to shares subject to an Option or SAR until the Date of Exercise
of such Option or SAR.
6.15 Retirement of Holder of Options or Stock Appreciation Rights. If there is
a Termination of Employment of a Participant to whom an Option and/or SAR has
10
<PAGE>
been granted due to Retirement, each Incentive Stock Option held by the retired
Participant, whether or not then vested, may be exercised until the earlier of
(a)the end of the three month period immediately following the date of such
Termination of Employment; or (b)the expiration of the term specified in the
Option or SAR. In the case of a Nonstatutory Option, there shall be substituted
the words, "the end of the twelve month period" for the words "the end of the
three month period" in the immediately preceding sentence.
6.16 Total Disability of Holder of Options or Stock Appreciation Rights. If
there is a Termination of Employment of a Participant to whom an Option and/or
a SAR has been granted by reason of his or her Total Disability, each Option
and/or SAR held by the Participant, whether or not then vested, may be
exercised until the earlier of: (a)the end of the twelve month period
immediately following the date of such Termination of Employment; or (b)the
expiration of the term specified in the Option or SAR.
6.17 Death of Holder of Options or Stock Appreciation Rights. If there is a
Termination of Employment of a Participant to whom an Option or SAR has been
granted by reason of his or her death, or (b)the death of a former employee
within three months following the date of his or her Retirement (or, in the
case of a Non-statutory Option, within twelve months following the date of his
or her Retirement), or (c) the death of a former employee within twelve months
following the date of his or her Termination of Employment by reason of Total
Disability, then each Option and SAR held by the person at the time of his or
her death, whether or not then vested, may be exercised by the person or
persons to whom the Option or SAR shall pass by will or by the laws of descent
and distribution (but by no other persons) until the earlier of (i)the end of
the twelve month period immediately following the date of death (or such longer
period as is permitted by the Committee); and (ii)the expiration of the term
specified in the Option or SAR.
6.18 Termination of Employment for Cause: Voluntary Termination Prior to
Retirement. If there is a Termination of Employment for Cause of a Participant
to whom an Option or SAR has been granted under this Plan, or if a Participant
voluntarily terminates his or her employment prior to Retirement (other than by
reason of Total Disability), then all Options and SARs held by such
Participant, whether or not then vested, shall automatically be canceled at the
time of such Termination of Employment and shall be of no further force or
effect thereafter. This section shall not affect any Common Stock acquired by
the Participant upon exercise of Options or SARs prior to such Termination of
Employment by the Participant.
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ARTICLE VII
RESTRICTED SHARE AWARDS
7.01. Award. In accordance with the provisions of this Article VII, the
Committee will designate each individual to whom an award of Restricted Shares
is to be made and will specify the number of shares of Common Stock covered by
the award.
7.02. Vesting. The Committee, on the date of the award, may prescribe that a
Participant's rights in the Restricted Shares shall be forfeitable or otherwise
restricted for a period of time set forth in the Agreement. By way of example
and not of limitation, the restrictions may postpone transferability of the
shares or may provide that the shares will be forfeited if the Participant
separates from the service of the Company and its Subsidiaries before the
expiration of a stated term or if the Company and its Subsidiaries or the
Participant fail to achieve stated objectives.
7.03. Shareholder Rights; Escrow. Prior to their forfeiture in accordance with
the terms as the Agreement and while the shares are Restricted Shares, a
Participant will have all rights of a shareholder with respect to Restricted
Shares, including the right to receive dividends and vote the shares; provided,
however, that (a) a Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of Restricted Shares, (b)the Company shall
retain custody of the certificates evidencing Restricted Shares and (c) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each award of Restricted Shares. The limitations set forth in the
preceding sentence shall not apply after the shares cease to be Restricted
Shares.
7.04 Restricted Share Agreement. Restricted Share awards shall be evidenced by
an Agreement in the form prescribed by the Committee which shall set forth such
terms, conditions and restrictions as the Committee in its discretion deems
appropriate. Restricted Share awards shall be effective only upon execution of
the applicable Agreement on behalf of the Company by the Chief Executive
Officer (if other than the President), the President or any Vice President, and
by the Participant.
ARTICLE VIII
PERFORMANCE SHARE AWARDS
8.01 Award. The Committee may award Performance Shares which shall be earned by
a Participant based on the level of performance over a specified period of time
by the Company, a Subsidiary or Subsidiaries, any branch, department or other
portion thereof or the Participant individually, as determined by the
Committee.
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8.02 Procedure for Earning Award. A Participant shall earn awarded Performance
Shares in full by meeting the Performance Target for the Performance Period. If
the Minimum Target has not been attained at the end of the Performance Period,
no part of the Performance Share shall have been earned by the Participant. If
the Minimum Target is attained but the Performance Target is not attained, the
portion of the Performance Share award earned by the Participant shall be
determined on the basis of a formula established by the Committee.
8.03 Adjustments to Awards. At any time prior to the end of a Performance
Period, the Committee may adjust downward (but not upward) the Performance
Target and/or the Minimum Target as a result of major events unforeseen at the
time of the Performance Share award, such as changes in the economy, the
industry, laws affecting the operations of the Company or a Subsidiary or any
other event the Committee determines would have a significant impact upon the
probability of attaining the previously established Performance Target.
8.04 Payment of Awards. Payment of earned Performance Shares shall be made to
Participants following the close of the Performance Period as soon as
practicable after the time the amount payable is determined by the Committee.
Payment in respect of earned Performance Shares, whether expressed in dollars
or shares, may be made in cash, in shares of Common Stock, or partly in cash
and partly in shares of Common Stock, as determined by the Committee at the
time of payment. For this purpose, Performance Shares expressed in dollars
shall be converted to shares, and Performance Shares expressed in shares shall
be converted to dollars, based on the Fair Market Value of the Common Stock as
of the date the amount payable is determined by the Committee.
8.04 Effects of Termination of Employment. If prior to the close of the
Performance Period the employment of a Participant who received an award of
Performance Shares is voluntarily terminated with the consent of the Company or
a Subsidiary or the Participant retires, or if the Participant dies during
employment, the Committee may in its absolute discretion determine to pay all
or any part of the Performance Share award based upon the extent to which the
Committee determines the Performance Target or Minimum Target has been achieved
as of the date of termination of employment, retirement or death, the period of
time remaining until the close of the Performance Period and/or such other
factors as the Committee may deem relevant. If the Committee in its discretion
determines that all or any part of the Performance Share award shall be paid,
payment shall be made to the Participant or his or her estate as promptly as
practicable following such determination and may be made in cash, in shares of
Common Stock, or partly in cash and partly in shares of Common Stock, as
determined by the Committee at the time of the payment. For this purpose,
Performance Shares expressed in dollars shall be converted to shares, and
Performance Shares expressed in shares shall be converted to dollars, based on
the Fair Market Value of the Common Stock as of the
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date the amount payable is determined by the Committee.
If, prior to the close of a Performance Period, a Termination of
Employment of a Participant who received an award of Performance Shares occurs
for any reason other than voluntary termination with the consent of the Company
or a Subsidiary, Retirement or death, the Performance Shares of the Participant
shall be deemed not to have been earned, and no portion of such Performance
Shares may be paid. Whether Termination of Employment is a voluntary
termination with the consent of the Company or a Subsidiary shall be
determined, in its discretion, by the Committee. Any determination by the
Committee on any matter with respect to Performance Shares shall be final and
binding on both the Company and the awardee.
8.05 Performance Share Agreement. Performance Share awards shall be evidenced
by an Agreement in the form prescribed by the Committee which shall set forth
the amount or manner of determining the amount of the Performance Shares, the
Performance Period, the Performance Target and any Minimum Target and such
other terms and conditions as the Committee in its discretion deems
appropriate. Performance Share awards shall be effective only upon execution of
the applicable Performance Share Agreement on behalf of the Company by the
Chief Executive Officer (if other than the President), the President or any
Vice President, and by the Participant.
ARTICLE IX
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares that may be issued pursuant to the
exercise of Options and SARs and the award of Restricted Shares and the
settlement of Performance Shares under this Plan and the Replenishment
Percentage in Section 5.03 shall be proportionately adjusted, and the terms of
outstanding Restricted Share awards, Performance Share Awards, Options, and
SARs shall be adjusted, as the Committee shall determine to be equitably
required in the event that (a) the Company (i)effects one or more stock
dividends, stock split-ups, subdivisions or consolidations of shares or (ii)
engages in a transaction to which Code section 424 applies or (b) there occurs
any other event which, in the judgment of the Committee necessitates such
action. Any determination made under this Article IX by the Committee shall be
final and conclusive.
The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company
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convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, outstanding awards
of Restricted Shares, Performance Shares, Options or SARs.
The Committee may award Restricted Shares and Performance Shares, may
grant Options, and may grant SARs in substitution for stock awards, stock
options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or a Subsidiary in connection with a
transaction described in the first paragraph of this Article IX.
Notwithstanding any provision of the Plan (other than the limitations of
Article V), the terms of such substituted Restricted Share and Performance
Share awards and Option or SAR grants shall be as the Committee, in its
discretion, determines is appropriate.
ARTICLE X
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall be
issued, no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all applicable
federal and state laws and regulations (including, without limitation,
withholding tax requirements) and the rules of all domestic stock exchanges on
which shares may be listed. The Company shall have the right to rely on an
opinion of its counsel as to such compliance. Any share certificate issued to
evidence Common Stock for which Restricted Shares are awarded, Performance
Shares were earned or for which an Option or SAR is exercised may bear such
legends and statements as the Committee may deem advisable to assure compliance
with federal and state laws and regulations. No Option or SAR shall be
exercisable, no Common Stock shall be issued, no certificate for shares shall
be delivered, and no payment shall be made under this Plan until the Company
has obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
ARTICLE XI
GENERAL PROVISIONS
11.01. Effect on Employment. Neither the adoption of this Plan, its operation,
nor any documents describing or referring to this Plan (or any part thereof)
shall confer upon any employee any right to continue in the employ of the
Company or a Subsidiary or in any way affect any right and power of the Company
or a Subsidiary to terminate the employment of any employee at any time with or
without assigning a reason therefor.
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11.02. Unfunded Plan. The Plan, insofar as it provides for grants and awards,
shall be unfunded, and the Company shall not be required to segregate any
assets that may at any time be represented by grants or awards under this Plan.
Any liability of the Company to any person with respect to any grant under this
Plan shall be based solely upon any contractual obligations that may be created
pursuant to this Plan. No such obligation of the Company shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of the Company
or any Subsidiary
11.03. Rules of Construction. Headings are given to the articles and sections
of this Plan solely as a convenience to facilitate reference. The reference to
any statute, regulation, or other provision of law shall be construed to refer
to any amendment to or successor of such provision of law.
11.04. Employee Status. For purposes of determining the applicability of Code
section 422 (relating to Incentive Stock Options), or in the event that the
terms of any Option or SAR provide that it may be exercised or that awards of
Restricted Shares or Performance Shares may become vested or earned only during
employment or within a specified period of time after Termination of
Employment, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability, or other
reasons shall not be deemed interruptions of continuous employment.
11.05 Tax Withholding. Each Participant shall, no later than the date as of
which the value of a grant of an Option or SAR, or an award of any Restricted
Shares or Performance Shares or other amount received thereunder first becomes
includable in the gross income of the Participant for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of any Federal, state, or local taxes of any kind
required by law to be withheld with respect to such income. The Committee may
permit payment of such taxes to be made through the tender of cash or Common
Stock, the withholding of Common Stock or cash to be received through grants or
awards of any other arrangement satisfactory to the Committee. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
Participant.
11.06 Indemnification. No member of the Board or the Committee shall be liable
for any action or determination taken or made in good faith with respect to
this Plan nor shall any member of the Board or the Committee be liable for any
Agreement issued pursuant to this Plan or any grants or awards made under it.
Each member of the Board and the Committee shall be indemnified by the Company
against any losses incurred in such administration of the Plan, unless his or
her action constitutes serious and willful misconduct.
11.07 Other Compensation Plans. The adoption of the Plan shall not affect any
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other existing or future incentive or compensation plans for directors,
officers or employees of the Company or its Subsidiaries. Moreover, the
adoption of this Plan shall not preclude the Company or its Subsidiaries from:
(a) establishing any other forms for incentive or other compensation for
directors, officers or employees of the Company or its Subsidiaries; or (b)
assuming any forms of incentives or other compensation of any person or entity
in connection with the acquisition or the business or assets, in whole or in
part, of any person or entity.
11.08 Non-Contravention of Securities Laws. Notwithstanding anything to the
contrary expressed in this Plan, any provisions hereof that vary from or
conflict with any applicable Federal or State securities laws (including any
regulations promulgated thereunder) shall be deemed to be modified
to conform to and comply with such laws.
11.09 Unenforceability of a Particular Provision. The unenforceability of any
particular provision of this document shall not affect the other provisions,
and the document shall be construed in all respects as if such unenforceable
provision were omitted.
ARTICLE XII
AMENDMENT
The Board may amend or terminate this Plan from time to time;
provided, however, that no amendment may become effective until shareholder
approval is obtained if (i) the amendment increases the aggregate number of
shares of Common Stock that may be issued under the Plan or (ii) the amendment
changes the class of individuals eligible to become Participants. No amendment
shall, without a Participant's consent, adversely affect any rights of such
Participant under any outstanding Restricted Share or Performance Share award
or under any Option or SAR outstanding at the time such amendment is made.
ARTICLE XIII
DURATION OF PLAN
No Restricted Shares or Performance Shares may be awarded and no Option or SAR
may be granted under this Plan after June 30, 2000. Restricted Share and
Performance Share awards and Option and SAR grants made before that date shall
remain valid in accordance with their terms.
Restricted Shares and Performance Shares may be awarded and Options
and SARs may be granted under this Plan upon its adoption by the Board,
provided that
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no Restricted Share or Performance Share award, or Option or SAR grant will be
effective unless this Plan is approved by a majority of the Company's
shareholders voting either in person or by proxy at a duly held shareholders'
meeting within twelve months of such adoption.
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Exhibit 99.B
BLIMPIE INTERNATIONAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors of Blimpie
International, Inc.
The undersigned holder of the $.01 par value common stock of Blimpie
International, Inc. (the "Company"), hereby acknowledges receipt of the Notice
of Annual Meeting of the Company and Proxy Statement attached thereto, all
relating to the Company's Annual Meeting of Shareholders (the "Annual
Meeting"), and does appoint Anthony P. Conza, David L. Siegel, Charles G.
Leaness and Patrick J. Pompeo, and each of them, the true and lawful attorney
or attorneys of the undersigned, with power of substitution, for and in the
name of the undersigned, to vote as proxies for the undersigned according to
the number of Common Shares the undersigned would be entitled to vote if then
personally present at the Annual Meeting to be held at the offices of Hall
Dickler Kent Friedman & Wood, LLP, 909 Third Avenue, 27th Floor, on Monday,
December 9, 1996, at 9:00 A.M., or at any adjournment or adjournments thereof,
and thereat to vote all Common Shares of the Company held by the undersigned
and entitled to be voted thereat upon the following matters:
1. To elect as Directors to serve until the Annual Meeting for the
fiscal year ending June 30, 1998, the Nominees listed below:
Anthony P. Conza (Chairman), David L. Siegel (Vice-Chairman), Charles
G. Leaness, Patrick J. Pompeo, Harry G. Chernoff and Alvin Katz.
FOR ____ all the foregoing Nominees
WITHHOLD AUTHORITY ____ to vote for the foregoing Nominees
NOTE: To withhold authority to vote for any individual nominee, strike
a line through that nominee's name. Unless authority to vote for all of the
foregoing nominees is withheld, this Proxy will be deemed to confer authority
to vote for every nominee whose name is not struck.
2. To increase the number of shares of Common Stock issuable pursuant
to the Company's Omnibus Stock Incentive Plan to 950,000 shares, subject to
adjustment in the manner provided in such plan.
FOR / / AGAINST / / ABSTAIN / /
3. To ratify the selection of Coopers & Lybrand, LLP as the Company's
independent accountants for the fiscal year ending June 30, 1997.
FOR / / AGAINST / / ABSTAIN / /
4. To transact such other business as may properly come before the
meeting.
This Proxy confers authority to vote "FOR" each of propositions 1, 2
and 3 listed above unless otherwise indicated. If any other business is
transacted at said meeting, this proxy shall be voted in accordance with the
best judgement of the proxies. The Board of Directors recommends a vote of
"FOR" for each of the listed propositions. This proxy is solicited on behalf of
the Board of Directors of Blimpie International, Inc. and may be revoked prior
to its exercise.
NOTE: Signature(s) should follow exactly the name(s) on the stock
certificate. Executor, administrator, trustee or guardian should sign as such.
If more than one trustee, all should sign. ALL JOINT OWNERS MUST SIGN.
Dated: ______________________________
_____________________________________
Signature of Shareholder
_____________________________________
Signature of Shareholder
