<PAGE> 1
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:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Back Yard Burgers, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
BACK YARD BURGERS, INC
2768 Colony Park Drive
Memphis, Tennessee 38118
(901) 367-0888
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
N/A
---------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
N/A
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
N/A
---------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
N/A
---------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form of Schedule and the date of its filing.
1) Amount Previously Paid:
----------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------
3) Filing Party:
--------------------------------------------------
(4) Date Filed:
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- --------------------------------
(1)Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
[LOGO]
BACK YARD BURGERS, INC.
2768 COLONY PARK DRIVE
MEMPHIS, TENNESSEE 38118
April 15, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
at 10:00 a.m., central time, on May 22, 1997, at Country Suites by Carlson,
4300 American Way, Memphis, Tennessee 38118 (The Memphis Room).
A Proxy Card is enclosed with the Notice of Annual Meeting and Proxy
Statement. Whether or not you now plan to attend the Annual Meeting, we urge
you to sign, date and mail the enclosed card and return it in the enclosed
envelope at your earliest convenience. Regardless of the size of your holding
in the Company, it is important that your shares be represented. If you attend
the Annual Meeting, you may withdraw your proxy and vote in person.
We look forward to the pleasure of seeing you on May 22, 1997.
Sincerely,
Lattimore M. Michael
Chairman and Chief Executive Officer
Joseph L. Weiss
President and Chief Operating Officer
<PAGE> 3
BACK YARD BURGERS, INC.
2768 COLONY PARK DRIVE
MEMPHIS, TENNESSEE 38118
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
To the Stockholders of
BACK YARD BURGERS, INC.
Notice is hereby given that the Annual Meeting of the Stockholders
(the "Meeting") of Back Yard Burgers, Inc., a Delaware corporation (the
"Company"), will be held at Country Suites by Carlson, 4300 American Way,
Memphis, Tennessee 38118 (The Memphis Room) on May 22, 1997, at 10:00 a.m.,
central time, for the following purposes:
1. To elect three Class III directors, to hold office until their
successors are elected and qualified.
2. To ratify the selection of the accounting firm of Price
Waterhouse LLP as independent public accountants for the
Company for 1997.
3. To approve the Company's delisting its Common Stock from the
Chicago Stock Exchange.
4. To transact such other business as may properly come before
the Meeting or any postponements, continuations or adjournments
thereof.
Only holders of record of shares of the Company's $.01 par value
common stock (the "Common Stock") and the Company's $.01 par value preferred
stock (the "Preferred Stock) at the close of business on April 4, 1997, are
entitled to notice of and to vote at the Meeting and at any and all
postponements, continuations or adjournments thereof.
By Order of the Board of Directors
WILLIAM N. GRIFFITH
SECRETARY/TREASURER
Memphis, Tennessee
April 15, 1997
================================================================================
YOUR VOTE IS IMPORTANT. YOU ARE REQUESTED TO COMPLETE, SIGN, DATE
AND RETURN THE PROXY CARD SUBMITTED HEREWITH IN THE RETURN ENVELOPE PROVIDED
FOR YOUR USE. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE
THE PROXY OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE
MEETING.
================================================================================
<PAGE> 4
BACK YARD BURGERS, INC.
2768 COLONY PARK DRIVE
MEMPHIS, TENNESSEE 38118
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Back Yard Burgers, Inc., a Delaware
corporation (the "Company"), to be used in voting at the Annual Meeting of
Stockholders of the Company to be held May 22, 1997 (the "Meeting"), and at any
and all postponements, continuations or adjournments thereof. This Proxy
Statement, the accompanying Form of Proxy and the Notice of Annual Meeting are
first being mailed or given to Stockholders of the Company on or about April
15, 1997. The principal executive offices of the Company are located at 2768
Colony Park Drive, Memphis, Tennessee 38118.
Stockholders of the Company's common stock and preferred stock
(collectively, the "Stockholders"), whose names appeared of record on the books
of the Company at the close of business on April 4, 1997 (the "Record Date"),
will be entitled to vote at the Meeting and any postponements, continuations or
adjournments thereof. On the Record Date, there were 4,246,158 shares of the
Company's $.01 par value common stock (the "Common Stock") and 308,115 shares
of the Company's $.01 par value preferred stock (the "Preferred Stock") issued,
outstanding and entitled to vote respectively. Since April 5, 1995, 891,864
shares of the Company's Preferred Stock have been converted into Common Stock
at the option of the Stockholders in accordance with their rights. The Common
Stock and the Preferred Stock shall be counted as a single class for purposes
of calculating votes with respect to each matter submitted at the Meeting.
Each share of Common Stock and Preferred Stock is entitled to one vote on each
matter submitted at the Meeting.
The presence at the Meeting, in person or by proxy, of the holders of
a majority of the shares of the Company entitled to vote at the Meeting will
constitute a quorum. Votes cast by proxy or in person will be tabulated by the
inspectors of election appointed by the Board of Directors of the Company (the
"Board of Directors" or, the "Board") for the Meeting. The affirmative vote of
a majority of the shares of Common Stock and Preferred Stock cast at the
Meeting by the holders of the shares entitled to vote thereon, voting as a
single class, is required to approve the proposals to be considered at the
Meeting. Abstentions and votes withheld in the absence of instructions from
street name holders (broker non-votes) are included in the determination of
those shares present and voting as to "routine" matters and may be voted in the
discretion of brokers with respect to such "routine" matters. Abstentions are
also counted in voting as to "non-routine" matters and thus, have the effect of
a negative vote on "non-routine" matters. Broker non-votes are not counted in
voting as to "non-routine" matters.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders on the proxy card will vote for the approval of all
of the proposals to be considered at the Meeting, and as recommended by the
Board of Directors with regard to all other matters or, if no such
recommendation is given, in their own discretion. Each Stockholder may revoke
a previously granted proxy at any time before it is exercised by filing with
the Secretary of the Company a revoking instrument or a duly executed proxy
bearing a later date. The powers of the proxy holders will be suspended if the
person executing the proxy attends the Annual Meeting in person and so
requests. Attendance at the Annual Meeting will not, in itself, constitute a
revocation of a previously granted proxy.
<PAGE> 5
ELECTION OF DIRECTORS
Under the Company's Second Amended and Restated Certificate of
Incorporation, members of the Board of Directors are to be elected by classes
with staggered terms of three years each. The Board of Directors presently
consists of seven persons divided into three approximately equal classes. The
Board of Directors may consist of not less than five or more than twelve
directors, whose membership shall be spread as evenly as practicable among the
three classes. At the 1997 Annual Meeting of Stockholders, three Class III
directors will be elected to a term expiring in 2000.
The Board of Directors has the authority under the by-laws of the
Company to elect additional directors during the year to fill any vacant
positions until the next annual meeting of Stockholders. The directors will
serve a term as indicated below, and until their successors are duly elected
and qualified.
Management has nominated the following individuals to serve as
directors in the indicated class:
CLASS III TERM EXPIRES 2000
---------------------------
Lattimore M. Michael
Joseph L. Weiss
William N. Griffith
Proxies will be voted FOR the nominees listed above, unless otherwise
instructed. The affirmative vote of a plurality of the shares of Common Stock
and Preferred Stock cast at the Meeting by the holders of the shares entitled
to vote thereon is required to elect the directors. It is expected that the
nominees will serve, if elected, but if for any unforeseen reason any such
nominees should decline or be unable to serve, the proxies will be voted to
fill any such vacancy in accordance with the discretionary authority of the
persons named in the proxies.
The following table sets forth the name, age, position with the
Company and/or principal occupation, and term of office as director for each
current director and each nominee:
<TABLE>
<CAPTION>
Director Year Term
Name Age Principal Occupation During Past 5 Years Since Will Expire
---- --- ---------------------------------------- ----- -----------
<S> <C> <C> <C> <C>
CLASS I DIRECTORS:
William B. Raiford, III 36 Attorney at Law, Merkel & Cocke, P.A. 1993 1998
Stephen J. King 45 Chief Financial Officer and Principal 1995 1998
Accounting Officer since July 1993; from
1988 to 1993, Mr. King was the Comptroller
for Southland Racing Corporation, a
greyhound racing facility in West Memphis,
Arkansas. Prior to 1988, Mr. King
practiced accounting at Price Waterhouse.
CLASS II DIRECTORS:
W. Kurt Henke 38 Attorney at Law, Henke, Heaton & Bufkin 1993 1999
since 1992; From 1986 to 1991, Mr. Henke
was an Attorney at Law, Holcomb, Dunbar,
Connell, Chaffin and Willard.
Joe Colonnetta (1) 36 Vice Chairman and Chief Executive Officer 1996 1999
of Del Monte - Latin America since 1996.
General Partner of The RMP Group, Inc., an
investment and management firm specializing
in the foodservice and retail industries
since 1994. Chairman of the Board of
Triangle FoodService Corporation ("Triangle"),
a Dallas-based cafeteria chain since 1994.
From 1990 to 1994, Mr. Colonnetta was Chief
Financing Officer of The Restaurant Company,
a Chicago-based holding company of Perkins and
Friendly's Family Restaurants.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
CLASS III DIRECTORS:
Lattimore M. Michael 53 Chairman and Chief Executive Officer since 1987 2000*
1993; From 1987 to 1992, Mr. Michael was
the Company's President and Chief Executive
Officer.
Joseph L. Weiss 37 President and Chief Operating Officer since 1989 2000*
1993; From 1989 to 1993, Mr. Weiss was the
Company's Secretary/Treasurer; From 1989 to
1993, Mr. Weiss was also the President of
Double S Development, Inc., a Mississippi
corporation, which owned and operated
franchised Company restaurants in the Memphis
metropolitan area.
William N. Griffith 34 Executive Vice President and Secretary/ 1989 2000*
Treasurer of the Company since 1993; From
1989 to 1992, Mr. Griffith was the Company's
Senior Vice President - Operations.
</TABLE>
* Assumes election at the 1997 Annual Meeting of Stockholders with
respect to Class III Directors.
(1) Triangle received court approval on November 30, 1995 for a consensual
Plan of Reorganization pursuant to Chapter 11 of the United States
Bankruptcy Code. This matter was addressed by the United States
Bankruptcy Court for the North District of Texas, Dallas Division, and
was styled as: In Re: Triangle FoodService Corporation, Debtor, Case
No. 395-33790-RCM-11. Mr. Colonnetta joined Triangle as President on
November 1, 1994, primarily for the purpose of developing and
implementing a restructuring of Triangle's business.
BOARD OF DIRECTORS
Since the beginning of the Company's fiscal year on December 31, 1995,
the Board of Directors has held 6 meetings. Each member of the Board of
Directors, with the exception of Mr. Hanke attended 75% or more of the total
number of meetings of the Board held during the period that he served.
The Board of Directors has an Audit Committee whose members are
Messrs. Colonnetta, Raiford and Griffith. The Audit Committee makes
recommendations regarding the selection of independent public accountants,
reviews the scope and results of the audit conducted by the independent public
accountants, reviews the adequacy of the Company's accounting, financial and
operating controls, and supervises special investigations, if any. Mr.
Griffith attended both meetings held by the Audit Committee during 1996 and
Messrs. Colonnetta and Raiford attended one each.
The Board of Directors has a Compensation Committee whose members are
Messrs. Henke, Raiford and Weiss. The Compensation Committee reviews and
approves annual salaries and bonuses for all corporate officers and management
personnel and reviews and recommends to the Board of Directors the terms and
conditions of the employee benefit plans and/or changes thereto. There were no
meetings held by the Compensation Committee during 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Common Stock, to file
reports of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission and to furnish copies of all filed Section
16(a) forms to the Company.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Form 5
filings were required for those persons, the Company believes that all such
filings required under the Exchange Act in 1996 were filed in a timely fashion.
3
<PAGE> 7
PRINCIPAL STOCKHOLDERS
The following information sets forth certain information with respect
to the beneficial ownership of the Company's voting shares (i.e., both Common
Stock and Preferred Stock) as of February 28, 1997 by (i) each person or entity
known to the Company to be the beneficial owner of more than 5% of each class
of the Company's voting shares, (ii) each of the Company's Directors and
executive officers and (iii) all of the Company's Directors and executive
officers as a group.
<TABLE>
<CAPTION>
Amount & Nature Amount & Nature
of Beneficial of Beneficial
Ownership Percent Ownership Percent
of Common of of Preferred of
Name and Address(4) Stock(1)(2) Class Stock(1)(2)(3) Class
- ---------------- ----------- ----- -------------- -----
<S> <C> <C> <C> <C>
Lattimore M. Michael 454,933 10.71% - -
Joseph L. Weiss 531,437 (5) 12.52% - -
William N. Griffith 60,459 (6) 1.42% - -
Michael C. McDermott 10,000 (6) .24% - -
Stephen J. King 12,534 (6) .30% - -
John C. Arnold 32,112 (6) .76% - -
Stephen C. Reid 27,444 (6) .65% - -
Joe Colonnetta 1,000 (6) - - -
William B. Raiford, III 2,000 (6) - - -
W. Kurt Henke 2,000 (6) - - -
Barnett Chiz 125,428 (7) 2.95% 124,522 40.41%
Lawrence Chiz 125,428 (7) 2.95% 124,522 40.41%
ICA Establishment 174,000 (8) 4.10% - -
Riverlux Trust Reg. 185,000 (8) 4.36% - -
All Officers & Directors
as a group (10 persons) 1,134,098 26.71% 0 0%
</TABLE>
- --------------------------------------
(1) Unless otherwise noted the Company believes that all persons named in
the table have sole voting and investment power with respect to the
shares of Common Stock and Preferred Stock.
(2) A person is deemed to be the beneficial owner of securities that can
be acquired by such person within 60 days upon the exercise of
warrants or options. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days from March 1, 1997 have been exercised
(includes shares exercisable pursuant to incentive stock options that
have been granted to certain executive officers of the Company as of
March 1, 1997).
(3) In accordance with the provisions of the Company's Certificate of
Incorporation regarding Preferred Stock, as a result of the Company's
having attained after tax net income in excess of $600,000 during
1994, each share of Preferred Stock is convertible into one share of
Common Stock, at the option of the holder. The Company has notified
preferred stockholders of their right to convert Preferred Stock to
Common Stock, and anticipates that substantially all shares of
Preferred Stock will be converted. Such conversion began on April 5,
1995 at which time there were 1,199,979 shares of Preferred Stock
outstanding. As of February 28, 1997, 891,864 shares of Preferred
Stock had been converted into Common Stock.
(4) The address of Mr. Michael (currently the Company's Chairman and Chief
Executive Officer and a Director), Mr. Weiss (currently the Company's
President and Chief Operating Officer and a Director), Mr. Griffith
(currently the Company's Executive Vice President, Secretary-Treasurer
and a Director), Mr. King (currently the Company's Chief Financial
Officer and Principal Accounting Officer and a Director), John C.
Arnold (currently the Company's Vice President-Company Operations),
Stephen C. Reid (currently the Company's Vice President-Research and
Development), and H. Ray Jones (currently the Company's Vice President
Human Development), respectively, is c/o the Company at 2768 Colony
Park Drive, Memphis, Tennessee 38118. The address of Mr. Raiford is
30 Delta Avenue, Clarksdale, Mississippi 38614. The address of Mr.
Henke is 408 Hopson Street, Lyon, Mississippi 38645. The address of
Mr. Barnett Chiz and Mr. Lawrence Chiz is P. O. Box 466, Shaw,
Mississippi 38773. The address of ICA Establishment and Riverlux
Trust Reg. is c/o Experta Treahand AG, Baarerstrasse 10, CH 6300, ZUG,
Switzerland.
(5) Mr. Weiss' wife owns 16,660 shares of Common Stock, each of Mr. Weiss'
two minor children own 9,640 shares of Common Stock, and Mr. Weiss'
father owns 20,000 of the 531,437 shares of Common Stock reflected in
the table.
4
<PAGE> 8
(6) The number shown reflects that portion of stock options granted
pursuant to the Company's Incentive Stock Plan of 1993 (the "1993
Stock Option Plan") and the 1995 Incentive Award Plan which are
exercisable as of and within 60 days after March 1, 1997, except that
(i) with respect to Mr. Griffith, such amount includes 17,147 shares
of Common Stock held directly by Mr. Griffith, (ii) with respect to
Mr. Arnold such amount includes 5,406 shares of Common Stock held
directly by Mr. Arnold and 200 shares of Common Stock held directly by
Mr. Arnold's wife, (iii) with respect to Mr. King such amount includes
1,914 shares of Common Stock held directly by Mr. King.
(7) Mr. Barnett Chiz and Mr. Lawrence Chiz are brothers.
(8) To the knowledge of the Company, ICA Establishment and Riverlux Trust
Reg. beneficially own the share amounts reflected in the table. ICA
Establishment and Riverlux Trust Reg. are Liechtenstein Trust
Companies.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive a $500 fee for
each Board meeting attended.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation for each of the last three
years of the Company's Chief Executive Officer and President (the Company did
not have any other executive officers whose compensation exceeded $100,000):
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
-------------------
Other Annual
Name Year Salary ($)(1) Bonus ($) Compensation ($)
---- ---- ------------- --------- ----------------
<S> <C> <C> <C> <C>
Lattimore M. Michael, Chairman 1996 111,674 18,000 --
and Chief Executive Officer 1995 111,087 21,535 --
1994 41,250 3,535 --
Joseph L. Weiss, President and 1996 117,180 18,000 --
Chief Operating Officer 1995 116,665 21,535 --
1994 47,200 3,535 --
</TABLE>
(1) The amounts indicated include indirect compensation to Mr. Michael for
use of a Company automobile, and direct compensation to Mr. Weiss in
the form of an automobile allowance, although such amounts are less
than $50,000 or 10% of their respective total annual salaries for each
respective year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Weiss, the Company's President and Chief Operating Officer, was a
member of the Company's Compensation Committee during 1996. As a member of the
Compensation Committee, Mr. Weiss participated in deliberations with other
committee members concerning compensation of officers and non-management
personnel.
EMPLOYMENT AGREEMENTS
Michael Employment Agreement. The Company entered into a five-year
employment agreement dated April 15, 1993 with Lattimore M. Michael. The
agreement is automatically extended for an additional one-year period at the
end of each year under the agreement, unless terminated pursuant to its
provisions. Pursuant to the employment agreement, Mr. Michael is employed as
the Chairman and Chief Executive Officer of the Company. Pursuant to the terms
of Mr. Michael's employment agreement his annual base salary is $110,000.
In addition to the base salary payments to Mr. Michael, the agreement
provides for certain fixed bonuses to Mr. Michael. On December 31 of each
calendar year beginning December 31, 1994, Mr. Michael received $18,000 per
year over a maximum of three years. Mr. Michael is also eligible to receive a
fixed cash bonus of $43,500 per year for the third, fourth and fifth fiscal
years of the employment agreement, payable in a lump sum at the end of each
applicable fiscal year period.
In the event of the termination of Mr. Michael's employment by the
Company during the term of the employment agreement, Mr. Michael shall be
entitled to (i) his base salary through the last day of the month in which the
date of termination occurs, at the annual rate in effect at the date of
termination, to the extent unpaid prior to such date of termination; and (ii)
any
5
<PAGE> 9
fixed bonus described above which shall have been earned prior to the date of
termination to the extent unpaid prior to such date, except no such bonus
payment shall be made if Mr. Michael is terminated for cause. The employment
agreement contains a non-competition provision which prohibits Mr. Michael,
during the period of his employment and for a period of one year after
termination of employment, from engaging in any business, directly or
indirectly, in competition with the Company anywhere within a 150 mile radius
of the City of Memphis, Tennessee and anywhere within a 50 mile radius of any
Company-operated or franchised restaurant located in the United States.
Weiss Employment Agreement. On June 25, 1993, the Company entered
into a five-year employment agreement with Joseph L. Weiss. The agreement
would be automatically extended for an additional one-year period at the end of
each year under the agreement, unless terminated pursuant to its provisions.
Pursuant to the employment agreement, Mr. Weiss is employed as the President
and Chief Operating Officer of the Company. Pursuant to the terms of Mr.
Weiss' employment agreement, his annual base salary is $110,000.
In addition to the base salary payments to Mr. Weiss, the agreement
would provide for certain fixed bonuses to Mr. Weiss. On December 31 of each
calendar year beginning December 31, 1994, Mr. Weiss received $18,000 per year
over a maximum of three years.
In the event of the termination of Mr. Weiss' employment by the
Company during the term of the employment agreement, Mr. Weiss would be
entitled to (i) his base salary through the last day of the month in which the
date of termination occurs, at the annual rate in effect at the date of
termination, to the extent unpaid prior to such date of termination; and (ii)
any fixed bonus described above which has been earned prior to the date of
termination to the extent unpaid prior to such date, except no such bonus
payment would be made if Mr. Weiss was terminated for cause. The employment
agreement contains a non-competition provision which prohibits Mr. Weiss,
during the period of his employment and for a period of one year after
termination of employment, from engaging in any business, directly or
indirectly, in competition with the Company anywhere within a 150 mile radius
of the City of Memphis, Tennessee and anywhere within a 50 mile radius of any
Company-operated or franchised restaurant located in the United States.
COMPENSATION PURSUANT TO PLANS
STOCK PURCHASE PLAN. The Board of Directors of the Company and its
Stockholders adopted the Company's Stock Purchase Plan in May, 1995. As of
March 15, 1997, 19,241 shares had been purchased under the Stock Purchase Plan.
A description of the Stock Purchase Plan is set forth below.
Terms and Conditions. Each Eligible Employee on each Offering Date
(as such terms are defined in the Stock Purchase Plan), as determined in
accordance with the Stock Purchase Plan, shall be entitled to purchase, in the
manner and on the terms herein provided, whole shares of the Company's Common
Stock at a purchase price determined in accordance with the Stock Purchase
Plan. Notwithstanding any provision in the Stock Purchase Plan to the
contrary, if any person entitled to purchase shares in any offering under the
Stock Purchase Plan would be deemed, for purposes of Section 423(b)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"), to own more than 5% of
the total combined voting power of the Company, the maximum number of shares
which such person shall be able to purchase pursuant to the Stock Purchase Plan
shall be reduced to that amount which, when added to all other shares of the
Company which such person is deemed to own, is less than 5% of the total
combined voting power of the Company.
Entry into the Stock Purchase Plan. Any Eligible Employee may become
a participant in the Stock Purchase Plan by filing with the Company a stock
purchase agreement, a form of which is provided in the Stock Purchase Plan,
prior to any offering date on which an offering under the Stock Purchase Plan
commences. Once an Eligible Employee has filed a stock purchase agreement with
the Company, such Eligible Employee shall remain as a participant in the Stock
Purchase Plan until withdrawing therefrom.
Payment for Shares. Payment for shares of Company common stock
purchased under the Stock Purchase Plan shall be made by authorized payroll
deductions from a participant's compensation or by supplemental payments made
in accordance with the terms of the Stock Purchase Plan.
Option Price. The purchase price of each Share issued pursuant to the
Stock Purchase Plan shall be 85% of the average of the reported highest and
lowest bid price of the Company's Common Stock on NASDAQ on the applicable
exercise date. Should no sale of Company common stock occur on any exercise
date, the purchase price will be determined on the basis of sales of Company
common stock on the next preceding day on which sales were made. Anything in
the Stock Purchase Plan notwithstanding, the purchase price per share shall not
be less than the par value of a share of Company common stock.
Purchase of Shares. If, on any exercise date under the Stock Purchase
Plan, there is credited to the stock purchase account of a participant an
amount at least equal to the purchase price per share of the Company's common
stock on an exercise date, the participant shall buy and the Company shall sell
to the participant at the purchase price as determined under the Stock Purchase
Plan, the largest number of whole shares of the Company's common stock which
can be purchased with the amount in the participant's stock purchase account.
Issuance of Shares. The shares of the Company's common stock
purchased by the participant on any exercise date shall for all purposes be
deemed to have been issued and sold at the close of business on such exercise
date.
Withdrawal from the Stock Purchase Plan. A participant may withdraw
from the Stock Purchase Plan at any time by filing a notice of withdrawal.
Upon a participant's withdrawal, the entire amount credited to such
participant's stock purchase account shall be refunded. Any participant who
withdraws from the Stock Purchase Plan may again become a participant by
complying with the terms and provisions of the Stock Purchase Plan.
6
<PAGE> 10
Termination of Continuous Service. In the event of a termination of a
participant's continuous service for any reason, the entire amount of such
participant's stock purchase account as of the effective date of such
termination shall be used to purchase shares of the Company's common stock on
the next succeeding exercise date and any remaining balance shall be refunded,
provided, however, that if a participant's continuous service is terminated for
any reason at least three months prior to the next exercise date, the entire
amount in such participant's stock purchase account shall be refunded to him.
Insufficient Shares. In the event that on any exercise date the
aggregate funds available for the purchase of shares of the Company's common
stock would purchase a number of shares which would exceed the number of shares
available for purchase under the Stock Purchase Plan, the administrator of the
Stock Purchase Plan shall proportionately reduce the number of shares which
would be otherwise purchased by each participant on such exercise date in order
to eliminate such excess, and the Stock Purchase Plan would then immediately
terminate after such exercise date and any remaining balances credited to the
stock purchase account of each participant shall be refunded.
Rights not Transferable. Rights to purchase shares of the Company's
common stock under the Stock Purchase Plan are exercisable only by a
participant during such participant's lifetime and are not transferable by such
participant other than by will or the laws of decent and distribution. If a
participant attempts to transfer its rights to purchase shares of the Company's
common stock under the Stock Purchase Plan other than by will, such participant
shall be deemed to have requested withdrawal from the Stock Purchase Plan.
Administration of the Stock Purchase Plan. Subject to the general
control of, and superseding action by, the Board, the Secretary of the Company
shall have full power to administer the Stock Purchase Plan, including to adopt
rules not inconsistent with the provisions of the Stock Purchase Plan for its
administration and shall adopt the form of stock purchase agreement, all
notices required under the Stock Purchase Plan and restrictions, if any, on the
registration of certificates for shares purchased under the Stock Purchase
Plan.
Amendments. The Board may from time to time, insofar as permitted by
law, revise or amend the Stock Purchase Plan in any way, except that no
amendments may be made without the approval of the Stockholders if such
amendments (i) increase the maximum number of shares which may be issued under
the Stock Purchase Plan, except as otherwise provided therein, (ii) change the
manner of determination of the purchase price, (iii) extend the maximum period
during which stock may be purchased, (iv) materially modify the requirements as
to eligibility for participation in the Stock Purchase Plan, or (v) materially
increase the benefits accruing to participants under the Stock Purchase Plan.
Expiration and Termination. The Stock Purchase Plan shall continue in
effect through December 31, 2005, unless terminated prior thereto in accordance
with the terms of the Stock Purchase Plan. The Board shall have the right to
terminate the Stock Purchase Plan or any offering thereunder at any time. In
the event of the expiration of the Stock Purchase Plan or its termination or
the termination of any offering thereunder, the entire amount credited to the
stock purchase account of each participant shall be refunded.
1995 INCENTIVE AWARD PLAN. The Board of Directors of the Company and
its Stockholders adopted the 1995 Incentive Award Plan in May, 1995. As of
March 15, 1997, 80,800 options had been granted under the 1995 Incentive Award
Plan. A description of the 1995 Incentive Award Plan is set forth below.
Terms and Conditions of Options; Payment. Incentive stock options
granted under the 1995 Incentive Award Plan are exercisable for a period of not
more than ten (10) years from the date of the grant. Any non-qualified options
granted under the 1995 Incentive Award Plan are exercisable at such times, in
such amounts and during such periods as the Compensation Committee determines
at the date of the grant. If the optionee exercises the options, payment may
be made either in cash, certified check or other immediately available funds
and Shares or any other consideration permitted under applicable law. The
Compensation Committee may allow a delay in payment up to thirty days from the
date the option is exercised, however, the Company will not issue stock
certificates until it has received full payment for the Shares.
Option Price. The purchase price of each Share issued pursuant to the
exercise of an incentive stock option granted under the 1995 Incentive Award
Plan may not be less than 100% of the fair market value per share on the date
of the grant. The purchase price of each Share issued pursuant to the exercise
of a non-qualified stock option granted under the 1995 Incentive Award Plan
shall be determined by the Compensation Committee.
Adjustments; Mergers and Consolidations. The 1995 Incentive Award
Plan provides that in the event of any change in the outstanding Shares through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or other like change in capital structure of the Company, an adjustment
will be made to each outstanding option or performance awards granted under the
1995 Incentive Award Plan such that each such option shall thereafter be
exercisable for such securities, cash and/or other property as would have been
received with respect to the shares subject to such option had the option been
exercised in full immediately prior to such change.
Vesting. The period during which the right to exercise an option in
whole or in part vests shall be set by the Compensation Committee. Generally,
no portion of an option which is unexercisable at termination of employment
shall thereafter become exercisable. While an option is generally only
exercisable by the optionee while he is an employee, the Compensation Committee
may allow exercise subsequent to an optionee's termination of employment,
subject to certain additional limitations.
Acceleration of Vesting Provisions. The 1995 Incentive Award Plan
authorizes the Compensation Committee to accelerate the vesting of an
outstanding option upon written notice to the optionholder. An acceleration of
the vesting period in accordance with such authority would not affect the
expiration date of the option.
Reduction of Vesting Period. The 1995 Incentive Award Plan provides
that outstanding options or performance awards will become immediately
exercisable in the event of a change of control of the Company. For purposes
of the 1995 Incentive
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<PAGE> 11
Award Plan unless otherwise defined in any applicable agreement, a change in
control would severally be deemed to have occurred when (a) any person becomes
the beneficial owner of 80% or more of the total number of the shares of the
Company then outstanding; (b) the Board or stockholders approve the sale of all
or substantially all of the assets of the Company or any merger, consolidation,
issuance of securities, the result of which would be the occurrence of an event
described in clause (a) above; (c) as a result of, or in connection with, any
cash tender offer, exchange offer, merger or other business combination, sale
of assets or contested election, or any combination of the foregoing.
Cancellation and Regrant of Options. The 1995 Incentive Award Plan
allows the Compensation Committee to modify, extend or renew outstanding
options granted under the 1995 Incentive Award Plan, or accept the surrender of
options outstanding under the 1995 Incentive Award Plan (to the extent not
theretofore exercised), and authorize the granting of a like number of new
options under the 1995 Incentive Award Plan in substitution for the original
options, regardless of whether the vesting schedules or exercise prices are the
same or different from the original options being surrendered. The grant of
new options would be subject to the terms and conditions of and within the
limitations of the 1995 Incentive Award Plan, and any modification which would
alter or impair any rights or obligations of the optionholder under an option
would be prohibited in the absence of such holder's consent.
Amendments. The Board may from time to time, insofar as permitted by
law, revise or amend the 1995 Incentive Award Plan in any way, except that no
amendments may be made without the approval of the stockholders if such
amendments (i) increase the maximum number of shares which may be issued under
the 1995 Incentive Award Plan, except as otherwise provided therein, (ii)
change the manner of determination of exercise price, (iii) extend the maximum
period during which options may be granted or exercised, (iv) materially modify
the requirements as to eligibility for participation in the 1995 Incentive
Award Plan, or (v) materially increase the benefits accruing to participants
under the 1995 Incentive Award Plan. In addition, the provisions in the
Incentive Award Plan providing for non-discretionary formula grants to
non-employee directors may not be amended more than once every six months,
other than to comport with the Code, the Employee Retirement Income Security
Act of 1974, as amended, or any rules promulgated thereunder.
Non-qualified Stock Options. The Compensation Committee may grant
non-qualified stock options to employee directors, officers, employees and
other persons and such options may provide for the right to purchase Shares at
a specified price which may be less than fair market value on the date of grant
(but not less than par value), and usually will become exercisable in
installments after the grant date. Non-qualified stock options may be granted
to employee directors, officers and employees for any reasonable term.
Incentive Stock Options. Incentive Stock Options will be designed to
comply with the provisions of the Code, and will be subject to restrictions
contained in the Code, including a requirement that exercise prices are equal
to at least 100% of the fair market value of the Shares on the grant date and a
ten-year restriction on the option term, but may be subsequently modified to
disqualify them from treatment as incentive stock options. To the extent the
aggregate fair market value of stock with respect to which incentive stock
options are exercisable for the first time by the optionee during any calendar
year under the 1995 Incentive Award Plan exceeds $100,000, such options shall
be treated as non-qualified options to the extent required by the Code.
Restricted Stock. Restricted stock may be sold to participants at
various prices (but not below par value) and made subject to such restrictions
as may be determined by the Compensation Committee. Restricted stock may
typically be repurchased by the Company at the original purchase price if
certain conditions or restrictions are not met. In general, restricted stock
may not be sold, or otherwise transferred or hypothecated, until restrictions
are removed or expire. Purchasers of restricted stock, unlike recipients of
options, will have voting rights and will receive dividends prior to the time
when the restrictions lapse.
Performance Awards. The value of performance awards may be limited to
the market value, book value or other measure of the Company's common stock or
other specific performance criteria determined to be appropriate by the
Compensation Committee. In making such determinations, the Compensation
Committee considers, among other factors it deems relevant, the contributions,
responsibilities and other compensation of the key employee at issue. The
manner of exercise, payment of consideration and term of the performance awards
are severally the same as those applying to stock options granted under the
1995 Incentive Award Plan.
Options for Nonemployee Directors. The 1995 Incentive Award Plan also
provides that a non-qualified option will be granted automatically to each
nonemployee director 10 days after each annual meeting of Stockholders with the
first such option granted on May 28, 1995. Each option will cover 1,000 shares
of Common Stock and will have an exercise price equal to the fair market value
of the Common Stock on the date of grant. The exercise period of each option
will commence six months after the date of grant of the option and end five
years after such grant date, provided that an option will terminate upon the
termination of the holder's service as a director of the Company, subject to
certain grace periods if such termination of service occurs after the option
has vested. The Compensation Committee shall have no authority, discretion or
power with respect to participants, exercise price, number of shares or option
period or to alter any terms or conditions insofar as such nonemployee director
options are concerned.
Board Policy. Notwithstanding the summary description above, the
Board has unanimously adopted a policy which provides that the Compensation
Committee shall not be authorized to grant any non-qualified stock option
awards, sell any restricted stock, or otherwise provide for any other types of
awards under the 1995 Incentive Award Plan that would attribute any value to
the Shares less than (i) 100% of the fair market value of the Shares on the
grant date without first making a good faith determination that the specific
grant in question is materially important to the Company's ability to attract
and/or retain a "well-qualified person" as an employee of the Company
(provided that, except as otherwise set forth below, such awards shall not be
granted at less than 85% of the fair market value of the Shares on the date of
grant) or (ii) 85% of the fair market value of the Shares on the grant date
without first making a good faith determination that the specific grant in
question is materially
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<PAGE> 12
important to the Company's ability to attract and/or retain a "key employee"
and having further obtained not less than a two-thirds majority approval of the
disinterested members of the Board.
Federal Income Tax Consequences. Under current federal income tax
laws, neither the grant nor the exercise of an option that qualifies for
treatment as an incentive stock option will result in the recognition of income
by the optionee. To qualify for the foregoing treatment, the optionee must
hold Shares acquired through the exercise of an incentive stock option for at
least two years from the date of the grant of the option and at least one year
from the date of its exercise. If an optionee satisfies the holding period
requirements, the sale of the shares acquired through the exercise of the
incentive stock option will result in long-term capital gain (or loss) to the
optionee. If an optionee does not satisfy the holding period requirements, the
optionee will recognize, at the time of the disposition of the shares, ordinary
income equal to the amount by which the lesser of (i) the fair market value of
the shares on the date of the exercise and (ii) the fair market value of the
shares on the date of disposition exceeds the exercise price of the incentive
stock option. Any gain realized in excess of such ordinary income will be
either long-term or short-term capital gain depending on the optionee's
holding period for the shares.
As a general matter, no deduction is permitted to the optionor as a
result of the grant or exercise of an incentive option. However, in the event
an optionee recognizes ordinary income for federal tax purposes in connection
with the disposition of shares acquired though exercise of an incentive stock
option under the circumstances discussed above, the Company will generally be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income recognized by the optionee.
A grantee of a non-qualified stock option will not recognize taxable
income and the Company will not receive a deduction upon the grant of such
option. Upon an optionee's exercise of a non-qualified stock option, (i) the
optionee will recognize ordinary income in an amount equal to the difference
between the fair market value on the exercise date and the exercise price of
the shares; and (ii) if certain conditions are satisfied, the Company will be
entitled to a tax deduction in an amount equal to the amount of income realized
by the optionee. Following exercise, the optionee will realize gain or loss at
disposition in an amount equal to the difference between the disposition price
and the basis of the shares.
The federal tax law is subject to changes in the Code and in the
regulations promulgated by the Internal Revenue Service, as well as in court
and administrative interpretations thereof.
Section 162 of the Code was recently amended by adding Section 162(m).
Section 162(m) places limitations on the deductibility of compensation paid to
employees to the extent such compensation exceeds $1,000,000 for any employee
during any taxable year. An exception to such treatment exists where certain
requirements are met which qualify compensation by the attainment of certain
performance-based criteria. The Company is currently not subject to the
limitations imposed by Section 162(m). However, in the future, the Company
intends to take all necessary steps in consideration of the provisions of
Section 162(m).
ISOP. The Board of Directors of the Company and its Stockholders
adopted the 1993 Stock Option Plan in April 1993. Under the 1993 Stock Option
Plan, the Company may grant to eligible salaried individuals, incentive stock
options, as defined in Section 422(b) of the Code. As of March 15, 1997, the
Company had granted to certain executive officers and employees incentive stock
options to purchase 151,618 of the 176,969 shares available for issuance under
the 1993 Stock Option Plan.
The purpose of the 1993 Stock Option Plan is to encourage stock
ownership by key employees, including executive officers of the Company. The
1993 Stock Option Plan is administered by the Company's Compensation Committee.
Subject to the provisions of the 1993 Stock Option Plan, the Compensation
Committee has the authority, among other things, to determine the individuals
to whom options will be granted, including the number of shares to be covered
by each option. An aggregate of 176,969 shares of Common Stock may be issued
under the 1993 Stock Option Plan. No stock options may be granted under the
1993 Stock Option Plan subsequent to April 1, 2003. Each option entitles the
optionee to purchase one share of Common Stock.
Options granted under the 1993 Stock Option Plan may not be granted at
a price less than the fair market value of the Common Stock on the date of
grant (or 110% of fair market value in the case of persons holding 10% or more
of the voting stock of the Company). The aggregate fair market value of shares
for which options are granted to any employee during any calendar year may not
exceed $100,000. Options granted under the 1993 Stock Option Plan are not
transferable during an optionee's lifetime, but are transferable at death by
will or by the laws of descent and distribution.
All options under the 1993 Stock Option Plan, including those
described above, are subject to a five-year level vesting schedule, at the rate
of 20% per year. Optionees are given credit toward vesting of granted options
at the rate of 20% of the vesting schedule for each year of service to the
Company, including years of service prior to the date of grant.
CERTAIN TRANSACTIONS
The information set forth herein briefly describes certain
transactions between the Company and certain affiliated parties. Management of
the Company believes that such transactions have been on terms no less
favorable to the Company than those that could have been obtained from
unaffiliated parties.
In 1993, an entity previously acquired by the Company made a $100,000
unsecured loan to American Modular Industries, Inc. ("AMI"), a company that
manufactures modular buildings. The loan was evidenced by a 33-month note
bearing interest at 7%, payable annually. The principal of $100,000 was due on
or before March 31, 1996. During 1994 and 1995, certain stockholders and
directors of the Company had a beneficial ownership interest in AMI. For the
year ended December 30, 1995, the Company purchased one complete modular
building structure. For the year ended December 31, 1995, the Company
purchased five complete modular building structures and had an order in process
for one additional building. Total
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payments to AMI in 1995 and 1994 for modular buildings aggregated approximately
$70,000 and $541,000 respectively. AMI declared bankruptcy during the fourth
quarter of 1995 and the Company has written off the aforementioned note
receivable.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of Price
Waterhouse LLP, certified public accountants, as independent accountants for
the Company for 1997 subject to ratification by the Stockholders. Price
Waterhouse LLP, which has served as independent accountants for the Company
since it consummated its initial public offering in July 1993, has advised the
Company that neither the accounting firm nor any of its members or associates
has any direct financial interest in or any connection with the Company or any
of its subsidiaries other than as independent public accountants.
Representatives of Price Waterhouse LLP are expected to be present at the
meeting and will be given the opportunity to make a statement if they desire to
do so and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY
THE SELECTION OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
FOR 1997.
APPROVAL OF THE COMPANY'S DELISTING ITS COMMON STOCK
FROM THE CHICAGO STOCK EXCHANGE
Subject to the vote of the Company's Stockholders at the Annual
Meeting, the Company intends to formally apply to the Chicago Stock Exchange
and the Securities and Exchange Commission to withdraw the Company's Common
Stock from listing on the Chicago Stock Exchange. The Company's Common Stock
is currently listed and traded on both the Chicago Stock Exchange and on The
Nasdaq SmallCap Market tier of The Nasdaq Stock Market.
Applicable rules of the Securities and Exchange Commission do not
directly require a vote of the Stockholders, but do require that the Company
demonstrate its efforts to comply with the rules of the Chicago Stock Exchange.
Under the rules of the Chicago Stock Exchange, the Exchange may require that a
proposed withdrawal from listing be submitted to a vote of the Stockholders.
The Company originally pursued delisting in July 1995, but was advised by the
Exchange on March 11, 1997 that it must receive Stockholder approval prior to
the Exchange removing the Company from listing.
The Board of Directors of the Company believes that the maintenance of
the dual listings on both the Chicago Stock Exchange and the Nasdaq SmallCap
Market is not in the best interests of the Company's Stockholders. During 1996
and 1995, the aggregate volume of trading of the Company's Common Stock was
2,556,190 and 2,342,800 shares, respectively. Of this, 2,515,700 shares, or
98.4%, for 1996, and 2,342,800 shares, or 98.2%, for 1995, of the trading
activity was conducted via the Nasdaq SmallCap Market. Accordingly, the Board
of Directors believes that the costs of maintaining a listing on the Chicago
Stock Exchange (in excess of $10,000 in light of past due amounts and $1,250
annually) do not justify the Company's continued listing on such exchange given
the lack of trading.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
OF THE COMPANY'S DELISTING ITS COMMON STOCK FROM THE CHICAGO STOCK EXCHANGE.
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<PAGE> 14
PROXY SOLICITATION
The expense of the Board's solicitation of proxies will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, by telephone or telegraph. Banks, brokerage houses, and
other institutions, nominees and fiduciaries will be requested to forward the
soliciting materials to beneficial owners of the Common Stock and the Preferred
Stock and to obtain authorizations for the execution of proxies; and if they in
turn so request, the Company will reimburse such banks, brokerage houses and
other institutions, nominees and fiduciaries for their expenses in forwarding
such materials. Directors, officers and regular employees of the Company and
its subsidiaries may also solicit proxies without additional remuneration
therefor.
Stockholders are urged to sign the accompanying proxy, solicited on
behalf of the Board of Directors of the Company, and return it at once in the
envelope provided for that purpose. Proxies will be voted in accordance with
the Stockholders' directions. If no directions are given, the proxies will be
voted FOR all proposals. A Stockholder giving a proxy has the power to revoke
it any time prior to its exercise by executing another proxy bearing a later
date, by written notice to the Company's Secretary or by oral or written
statement at the Meeting.
STOCKHOLDER PROPOSALS
Proposals by Stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of the Company must be received by the Company no later
than December 16, 1997 in order to be included in the proxy statement and proxy
relating to such annual meeting.
OTHER MATTERS
The Board of Directors does not know of any matters which may be
presented at the Meeting other than those specifically set forth in the Notice
of Annual Meeting. If any other matter should come properly before the Meeting
or any postponements, continuations or adjournments thereof, the holders of the
proxies will vote in accordance with their best judgment with respect to such
matter.
ADDITIONAL INFORMATION AVAILABLE
The Company will provide, without charge, to any person receiving a
copy of this Proxy Statement, upon written request of such person, a copy of
the Company's Annual Report on Form 10-KSB for the fiscal year ended December
28, 1996, including the financial statements thereto. Such requests should be
addressed to Stephen J. King, Chief Financial Officer, Back Yard Burgers, Inc.,
2768 Colony Park Drive, Memphis, Tennessee 38118.
BY ORDER OF THE BOARD OF DIRECTORS,
WILLIAM N. GRIFFITH
SECRETARY/TREASURER
April 15, 1997
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<PAGE> 15
APPENDIX A
PROXY BACK YARD BURGERS, INC.
The undersigned hereby appoints Lattimore M. Michael and Joseph L.
Weiss, and each of them, as proxies for the undersigned, each with full power of
appointment and substitution, and hereby authorizes them to represent and to
vote, as designated below, all shares of the $.01 par value common stock and/or
the $.01 par value preferred stock of Back Yard Burgers, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held at 10:00 a.m., central time, on May 22, 1997 at County Suites by
Carlson, 4300 American Way, Memphis, Tennessee 38118 (The Memphis Room)(the
"Meeting"), or at any and all postponements, continuations or adjournments
thereof. This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned Stockholder.
1. Proposal to elect three Class III directors, to hold office until their
successors are elected and qualified.
<TABLE>
<S> <C>
FOR all nominees listed below (except as marked Withhold authority to vote for the nominees listed
to the contrary below). [ ] below. [ ]
WITHHOLD
FOR AUTHORITY
Lattimore M. Michael [ ] [ ]
Joseph L. Weiss [ ] [ ]
William N. Griffith [ ] [ ]
</TABLE>
2. Proposal to ratify the selection of the accounting firm of Price
Waterhouse LLP as independent public accountants for the Company for 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the Company's delisting its Common Stock from the
Chicago Stock Exchange.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In the discretion of such proxy holders, upon such other business as may
properly come before the Meeting or at any and all postponements, continuations
or adjournments thereof.
THIS PROXY WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BYB, WILL
BE VOTED FOR THE ABOVE PROPOSALS, UNLESS A CONTRARY DIRECTION IS INDICATED IN
WHICH CASE IT WILL BE VOTED AS DIRECTED.
NOTE: Please date Proxy and sign as name appears below. When shares are held by
joint tenants, both should sign. If signer is a corporation, please sign full
corporate name by authorized officer.
Dated: Sign here:
----------------------------- ------------------------------
(Please sign exactly as name
appears hereon. Administrators,
trustees, etc. should so
indicate when signing.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY THIS PROXY.
