SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ' 240.14a-11(c) or ' 240.14a-12
RESTAURANT TEAMS INTERNATIONAL, INC.
(Name of Registrant As Specified in Charter)
..............................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 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:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.......................................................................
2) Form, Schedule or Registration Statement No.:
.......................................................................
3) Filing Party:
.......................................................................
4) Date Filed:
.......................................................................
<PAGE>
RESTAURANT TEAMS INTERNATIONAL, INC.
1705 E. Whaley
Longview, Texas 75601
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 29, 1999
Dear Stockholders of Restaurant Teams International, Inc.:
You are cordially invited to attend the annual meeting of stockholders of
Restaurant Teams International, Inc. to be held at 10:00 a.m., local time on May
29, 1999, at The Mirage Hotel, 3400 Las Vegas Blvd. South, Las Vegas, Nevada
89109, to consider and vote upon the following matters:
Proposal 1. Election of five directors to hold office in accordance
with the Articles of Incorporation and Bylaws of the company; and
Proposal 2. Ratification of the selection of Ernst & Young LLP as the
company's auditors.
Only stockholders of record at the close of business on April 30, 1999 can
vote at the meeting.
You are cordially invited to attend the annual meeting in person. Even if
you plan to attend the meeting, you are still requested to sign, date and return
the accompanying proxy in the enclosed addressed envelope. If you attend, you
may vote in person if you wish, even though you have sent your proxy.
By Order of the Board of Directors
Carole Swanson, Secretary
April 30, 1999
<PAGE>
RESTAURANT TEAMS INTERNATIONAL, INC.
1705 E. Whaley
Longview, Texas 75601
(903) 758-2811
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 29, 1999
The company is sending this Proxy Statement and the accompanying proxy
card to the holders of common stock, of Restaurant Teams International, Inc., in
connection with a solicitation of proxies by the board of directors of the
company from the stockholders for use at the annual meeting of stockholders of
the company. We are mailing this proxy statement and the enclosed form of proxy
beginning on or about April 30, 1999.
VOTING AND PROXY INFORMATION
Who May Vote
Holders of record of common stock at the close of business on April 30,
1999 are entitled to receive notice of and to vote at the annual meeting. At the
close of business on the record date, there were outstanding 7,936,966 shares of
common stock, the only outstanding securities of the company entitled to vote at
the annual meeting. The common stock is held by approximately 280 stockholders
of record.
Required Votes
Each stockholder is entitled to one vote per share on all matters
properly brought before the stockholders at the annual meeting. Such votes may
be cast in person or by proxy. Abstentions may be specified as to the approval
of any of the Proposals and will have the effect of a vote against the
Proposals. Under the rules of the Nasdaq Stock Market, brokers holding shares
for customers have authority to vote on certain matters when they have not
received instructions from the beneficial owners, and do not have such authority
as to certain other matters. The Nasdaq rules allow firms traded on Nasdaq to
vote on both Proposals without specific instructions from beneficial owners.
The directors will be elected by a plurality of the votes cast in
person or by proxy. The Proposal to ratify the selection of independent
accountants will require the affirmative vote of the holders of the majority of
the voters present at the meeting and entitled to vote.
How to Vote
Votes may be cast in person at the annual meeting or by proxy using the
enclosed proxy card. A facsimile of the proxy will be accepted. All shares of
common stock that are represented at the annual meeting by properly executed
proxies received by the company prior to or at the annual meeting and not
revoked will be voted at the annual meeting in accordance with the instructions
indicated in such proxies. Unless instructions to the contrary are specified in
the proxy, each such proxy will be voted FOR the election as a director of the
nominees listed herein and for approval of the other Proposal.
Proxies Can Be Revoked
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<PAGE>
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by
filing with the Secretary of the company, before the vote is taken at the annual
meeting, a written notice of revocation bearing a date later than the date of
the proxy, duly executing and delivering a subsequent proxy relating to the same
shares, or attending the annual meeting and voting in person (although
attendance at the annual meeting will not in and of itself constitute a
revocation of a proxy). Any written notice of revocation should be sent to:
Corporate Secretary, Restaurant Teams International, Inc., 1705 E. Whaley,
Longview, Texas 75601.
Expenses of Solicitation
The company will bear the expense of this solicitation, including the
reasonable costs incurred by custodians, nominees, fiduciaries and other agents
in forwarding the proxy material to you. The company will also reimburse
brokerage firms and other custodians and nominees for their expenses in
distributing proxy material to you. In addition to the solicitation made by this
proxy statement, certain directors, officers and employees of the company may
solicit proxies by telephone and personal contact.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
At the annual meeting, five directors (comprising the full board of
directors) will be elected to hold office until the next annual meeting of
stockholders in 2000.
It is intended that the accompanying proxy, unless contrary
instructions are set forth therein, will be voted for the election of the
nominees for election as directors as set forth in the following table. If the
nominees become unavailable for election to the board of directors, the persons
named in the proxy may act with discretionary authority to vote the proxy for
such other persons as may be designated by the board of directors. However, the
board is not aware of any circumstances likely to render the nominees
unavailable for election. The withholding of authority or abstention will have
no effect upon the election of directors by holders of common stock because
under Texas law directors are elected by a plurality of the votes cast, assuming
a quorum is present. The presence of a majority of the outstanding shares of
common stock, voting as one class, will constitute a quorum. The shares held by
each holder of common stock who signs and returns the enclosed form of proxy
will be counted for purposes of determining the presence of a quorum at the
meeting.
The following table sets forth certain information with respect to the
persons who will be the nominees for election at the annual meeting and the
other incumbent directors and executive officers of the company. Included within
the information below is information concerning the business experience of each
such person during the past five years. The number of shares of common stock
beneficially owned by each of the directors as of March 31, 1999 is set forth
below in "Securities Ownership of Certain Beneficial Owners."
Nominees and Business Experience
Stanley L. Swanson, a founder of the Company, has served as President,
Chief Executive Officer, and Chairman of the Board since its inception in May,
1990.
Curtis A. Swanson has been Chief Financial Officer, Executive Vice
President, and Treasurer of the Company since its inception in May, 1990.
Robert (Bob) Lilly has been a director of the Company since March,
1995. Mr. Lilly is currently the owner of Professional Imaging & Promotions,
Inc., a photography and graphics imaging company located in Graham, Texas.
Edward Dmytryk has bee a director of the Company since 1992.
Mr. Dmytryk is currently the Chief Executive Officer and principal owner of
Benchmark, Inc., a metal fabricating company located in Ft. Worth, Texas. From
1988 through 1995, Mr. Dmytryk was the Chief Operating Officer for Bollinger
Industries International, located in Irving, Texas.
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<PAGE>
Lee Cohn, a nominee for the board, co-founded Big 4 Restaurants, Inc.
in 1973 and has served as chief executive officer since Big 4's founding. Mr.
Cohn currently serves on the Board of Directors of Morton's Restaurant Group
(NYSE -MRG ) and Luthers Bar B Q (Houston, TX).
Other Executive Officers and Business Experience
Jean M. Hedges has been Corporate Controller for the Company since
September 1993. Ms. Hedges has had extensive CPA firm experience and brings a
10-year record as a controller and business manager to the Company. Prior to her
employment with the Company, Ms. Hedges was the controller of Stainback Casting,
a manufacturer based out of Tyler, Texas, from 1992 to 1993.
Carole A. Swanson, a co-founder of Fresh?n Lite, Inc., has served as
Secretary of the Company since its inception in May, 1990.
Henry Leonard has been President and Chief Operating Officer of the
Company since December 1997. Prior to joining the Company in 1997, Mr. Leonard
was President of Casa Ole' ALM, L.L.C., a franchise market partner joint venture
with Casa Ole' Restaurants, Inc. From 1995 to 1996, Mr. Leonard was Director of
New Concept Development for Papa Gino's of American, Inc. From 1974 to 1994, Mr.
Leonard served in a variety of posts for Pizza Systems / Summit Concepts (d.b.a
Mazzio's and Ken's Pizza) including President and Chief Operating Officer.
Family relationships among officers and directors: Mr. Stan Swanson
and Carole A. Swanson are husband and wife. Mr. Curtis Swanson is the son of Mr.
Stan and Ms. Carole Swanson.
Securities Ownership of Certain Beneficial Owners
The following table sets forth as of March 31, 1999, certain
information with respect to all stockholders known by the company to own
beneficially more than 5% of the outstanding common stock, as well as
information with respect to the company's common stock owned beneficially by
each director, director nominee, and current executive officer whose
compensation from the company in 1998 exceeded $100,000, and by all directors
and executive officers as a group. Unless otherwise indicated, each of such
stockholders has sole voting and investment power with respect to the shares
beneficially owned.
Name & Address Number of Percent of
Title of Class of Owner(1) Shares Class
Common Stock Stan & Carole Swanson 1,203,921 17.62
3216 Page Road
Longview, Texas 76505
Common Stock Curtis & Kim Swanson 507,024 7.42
3218 Page Road
Longview, Texas 75605
Henry Leonard
Common Stock 1682 Old Oak Dr. 45,000 .01
Tyler, Texas 75703
Common Stock Officers and Directors as 1,777,945 26.02
a Group (6 members)
(1) Mr. Lilly is not listed as an owner of Common Stock, since as of December
31, 1998 he only had options to purchase Common Stock. Refer to the table
set forth below for information on these options.
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<PAGE>
Executive Compensation
The following tables set forth the compensation paid by the company for
services rendered during the fiscal years ended December 31, 1998, 1997, and
1996 to the Chief Executive Officer of the company and to the other executive
officers of the company whose total annual salary in 1998 exceeded $100,000, the
number of options granted to any of such persons during 1998, and the value of
the unexercised options held by any of such persons on December 31, 1998.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation-
Number of
Shares of
Name and Annual Common Stock All
Principal Compensation- Underlying Other
Position Year Salary Options Compensation(1)
-------- ---- ------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Stanley L. Swanson, 1998 $52,000 100,000 -
Chairman and Chief 1997 24,700 100,000 -
Executive Officer 1996 24,700 - -
Henry Leonard, 1998 75,000 50,000 $95,625
President 1997 2,885 - -
1996 - - -
</TABLE>
(1) Represents 45,000 shares of
common stock at a $2.125 per
share as pursuant to Mr.
Leonard employment agreement
Employment Agreement
The Company has entered into a five-year employment agreement with Mr.
Leonard. Mr. Leonard received 25,000 shares of Common Stock as a signing bonus.
The employment agreement provides Mr. Leonard with an annual salary of $75,000
per year with $25,000 a year increases for the five-year term of the employment
agreement. The employment agreement also provides, as part of Mr. Leonard's base
compensation, an option to purchase 250,000 shares of Common Stock exercisable
over a five-year period in increments of 50,000 per year with the first exercise
date set at December 15, 1998. Pursuant to the employment agreement, Mr. Leonard
may receive additional incentive compensation based on the Company's achievement
of projected net cash flow. The incentive would allow Mr. Leonard to receive
20,000 shares of Common Stock per year and up to a 50% cash bonus as a percent
of his base salary each year. The first 20,000 shares were issued during 1998.
The employment agreement also provides other typical employment benefits and a
two-year non-compete restriction upon termination.
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<PAGE>
Director Compensation
No remuneration is paid to the Board of Directors for their service in
that office, except that Mr. Lilly is paid $500 for each meeting, plus expenses,
and he has been granted an option to acquire 50,000 shares, and Mr. Cohn, when
elected will be paid $1,000 for each meeting attended in person, plus expenses,
and will be granted an option to acquire 50,000 shares. Mr. Cohn will receive an
option to purchase an additional 25,000 shares for each additional year of
service on the Board of Directors.
On December 1, 1995, the Company entered into an agreement with a
director, Mr. Lilly, whereby Mr. Lilly receives $1,500 plus the grant of an
option to acquire Common Stock of the Company at not less than 100% of the fair
market value as of the grant date, for each promotional appearance made by Mr.
Lilly on behalf of the Company. This agreement suerseded a previous agreement
between Mr. Lilly and the Company through which Mr. Lilly acquired options to
purchase 3,752 shares of Common Stock at $.10 per share.
Pursuant to the superseded agreement, Mr. Lilly was granted an option
to acquire stock at $.10 per share in a manner so that the difference between
the price of $.10 per share and the fair market value of the stock at the time
of the issuance of the grant multiplied by the number of shares equaled $2,500
for each day of promotional appearances that Mr. Lilly made before december 1,
1995 on behalf of the company. Options covering 3,572 shares were granted for
personal appearances made by mr. Lilly on behalf of the Company before December
1, 1995.
<TABLE>
<CAPTION>
Option Grants Table
(Option Grants in Last Fiscal Year)
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year Per Share Date
- ----------------- ---------- -------------- ------------ -----------
<S> <C> <C> <C> <C>
Stanley L. Swanson 100,000 67% $3.00 12/31/02-03
Henry Leonard 50,000 33% 2.125 12/31/03
Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options at 1998
Options at 1998 FY-End FY-End
Shares Acquired Value ---------------------- ---------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------- --------------- --------- ----------- ------------- ----------- -------------
None
</TABLE>
Stock Option Plan
5
<PAGE>
Under the 1995 Incentive Stock Option Plan (the "1995 Plan"), an option
for 50,000 shares has been granted to Mr. Lilly for service as a member of the
Board of Directors with a purchase price of $1.50 per share. This option extends
until March 1, 2000. Also under the 1995 Plan, Roland R. Jehl and Douglas K.
Tabor, who served as directors for one-year terms expiring during 1997, have
been granted an option for 25,000 shares each for service as members of the
Board of Directors, with a purchase price of $1.50 per share. These options
extend until October 19, 2000.
Additionally, Mr. Lilly was granted an option to acquire stock at $. 10
per share in a manner so that the difference between the price of $. 10 per
share and the fair market value of the stock at the time of the issuance of the
grant multiplied by the number of shares equaled $2,500 for each day of
promotional appearances that Mr. Lilly made before December 1, 1995 on behalf of
the Company. Options covering 3,572 shares were granted for personal appearances
made by Mr. Lilly on behalf of the Company before December 1, 1995.
A new agreement has been entered into between the Company and Mr. Lilly
regarding personal appearances made by Mr. Lilly after December 1, 1995. For
each promotional appearance, Mr. Lilly will receive $1,500, plus the grant of an
option to acquire Common Stock of the Company at not less than 100% of the fair
market value as of the grant date. The grant of the option will be for stock
having a fair market value of $3,000 at the time of the grant with an option
term of 5 years.
Certain Relationships and Related Transactions
As of December 31, 1998, the Company has notes receivable from related parties
as follows:
A note for $500,000 is from a sister corporation and is related to the
sale of certain real property. The note is a fifteen-year note due August
3 1, 2013, bears interest at 10%, and is secured by the same real
property.
A note for $468,796 is from the same sister corporation. The note is due
January 1, 2000, bears interest at 10%, and is secured by inventory,
receivables, and property and equipment of the sister corporation.
A note for $103,447 is from an entity owned by two stockholders. The note
is due January 1, 2000, bears interest at 9%, and is secured by all assets
of the entity including land, building, and equipment.
A note for $15,000 is from a stockholder. The note was due June 30, 1998,
but has not been collected. The note bears interest at 9% and is
unsecured.
In the current year, the Company sold two pieces of property to a sister
corporation for a combined gain of approximately $386,000, of which
approximately $194,000 is deferred as of December 31, 1998.
The Company leases office and retail space in one of its facilities to
a sister corporation under a long-term operating lease for approximately $8,000
per month. The Company waived all rental fees due under this agreement in 1998
and 1997.
In the first quarter of 1999, three of the Company's officers, Stanley
L. Swanson, Curtis A. Swanson, and Henry Leonard, sold shares pursuant to rule
144. The officers loaned the proceeds from these sales to the Company in order
to facilitate the acquisition of Fatburger Corporation. The notes to the
officers were secured by restricted shares of the Company's common stock. The
notes mature on July 1, 1999 and carry a 9% annual percentage rate of interest.
6
<PAGE>
<TABLE>
<CAPTION>
Organization of the Board of directors
The board of directors has the following committees:
Committee Members
---------- --------
<S> <C> <C> <C>
Executive Curtis A. Swanson, Stanley L. Swanson, Ed Dmytryk
Audit Robert (Bob) Lilly, Ed Dmytryk, Curtis Swanson
Compensation Committee Robert (Bob) Lilly, Ed Dmytryk, Stanley L. Swanson
Conflicts of Interest Robert (Bob) Lilly, Ed Dmytryk, Stanley L. Swanson
</TABLE>
The executive committee conducts the normal business operations of the
company and acts as nominating committee. The audit committee recommends an
independent auditor for the company, consults with such independent auditor and
reviews the company's financial statements. The compensation committee fixes the
compensation of officers and key employees of the company and administers the
company's stock option plans. The conflicts of interest committee receives and
investigates any reports of or perceived conflicts of interest in any activities
undertaken by the company.
Any stockholder who wishes to recommend a prospective nominee for the
board of directors for consideration by the executive committee may write Carole
Swanson, Secretary, 1705 E. Whaley, Longview, Texas 75601.
The board of directors had six meetings during 1998. The executive
committee met twice, the audit committee met twice and, the compensation
committee met once.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3, 4 and 5 furnished to the
company pursuant to Rule 16a-3(e) promulgated under the Securities Exchange Act
of 1934 (the "Exchange Act"), or upon written representations received by the
company, the company is not aware of any failure by any director, officer or
beneficial owner of more than 10% of the company's common stock to timely file
with the Securities and Exchange Commission any Form 3, 4 or 5 relating to 1998.
PROPOSAL 2
RATIFICATION OF AUDITORS
The board of directors has selected Ernst & Young LLP to serve as the
company's independent auditors for the year ending December 31, 1999. The
stockholders are being asked to ratify the board's selection. Representatives of
Ernst & Young LLP will be present at the annual meeting and will have the
opportunity to make a statement and will be available to answer appropriate
questions.
Ratification of the appointment of Ernst & Young LLP as the company's
independent auditors for the fiscal year ending December 31, 1999 requires the
approval by a majority vote of the outstanding shares of common stock attending
the annual meeting, either in person or by proxy.
The Board of Directors recommends a vote FOR the above Proposal 2.
---
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<PAGE>
ANNUAL REPORT
The annual report to stockholders, including consolidated financial
statements, for the year ended December 31, 1998, accompanies the proxy material
being mailed to all stockholders. The annual report is not a part of the proxy
solicitation material.
OTHER MATTERS
The board of directors does not intend to bring any other matters
before the annual meeting and has not been informed that any other matters are
to be presented to the annual meeting by others. In the event that other matters
properly come before the annual meeting or any adjournments thereof it is
intended that the persons named in the accompanying proxy and acting thereunder
will vote in accordance with their best judgment.
DEADLINE FOR SUBMISSION
OF PROPOSALS TO BE PRESENTED
AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who intends to present a proposal at the 2000 annual
meeting of stockholders must file such proposal with the company by March 1,
2000 for possible inclusion in the company's proxy statement and form of proxy
relating to the meeting.
By Order of the Board of Directors
/s/ Carole Swanson
----------------------------------
Carole Swanson, Secretary
8
<PAGE>
Restaurant Teams International, Inc.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby acknowledges receipt of the notice of annual
meeting of stockholders of Restaurant Teams International, Inc., to be held at
the Mirage Hotel 3400 Las Vegas Blvd, Las Vegas, Nevada 89109 on May 29, 1999,
beginning at 10:00 a.m., and the proxy statement in connection therewith and
appoints Stanley L. Swanson and Curtis Swanson, and each of them, the
undersigned's proxies with full power of substitution for and in the name, place
and stead of the undersigned, to vote upon and act with respect to all of the
shares of common stock of the company standing in the name of the undersigned,
or with respect to which the undersigned is entitled to vote and act, at the
meeting and at any adjournment thereof.
<TABLE>
The undersigned directs that the undersigned's proxy be voted as follows:
<S> <C> <C> <C> <C>
1. ELECTION OF [ ] FOR the nominees [ ] WITHHOLD AUTHORITY
DIRECTORS listed below to vote for
nominees (except as marked to the listed below
contrary below)
Nominees: Stanley L. Swanson, Curtis A. Swanson, Robert Lilly, Lee Cohn, Edward Dmytryk
(Instruction: To withhold authority to vote any individual nominee, right that
nominee's name on the line provided below.)
- -----------------------------------------------------------------------------------------------------------
2. RATIFY SELECTION OF [ ] FOR ratification [ ] AGAINST ratification [ ] ABSTAIN from
ERNST& YOUNG LLP voting
AS THE COMPANY'S
AUDITORS
3. IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE
THE MEETING.
</TABLE>
This proxy will be voted as specified above. If no specification is
made, this proxy will be voted for the election of the director nominees in item
1 above and for the ratification and approval in item 2 above.
The undersigned hereby revokes any proxy heretofore given to vote or
act with respect to the common stock of the company and hereby ratifies and
confirms all that the proxies, their substitutes, or any of them may lawfully do
by virtue hereof.
If more than one of the proxies named shall be present in person or by
substitute at the meeting or at any adjournment thereof, the majority of the
proxies so present and voting, either in person or by substitute, shall exercise
all of the powers hereby given.
Please date, sign and mail this proxy in the enclosed envelope. No
postage is required.
Date _______________ ____, 1999
---------------------------------------
Signature of Stockholder
---------------------------------------
Signature of Stockholder
Please date this proxy and sign your name exactly as it
appears hereon. Where there is more than one owner, each
should sign. When signing as an attorney, administrator,
executor, guardian or trustee, please add your title as
9
