<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Rainforest Cafe, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[RAINFOREST CAFE, INC. LOGO]
720 SOUTH FIFTH STREET
HOPKINS, MINNESOTA 55343
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
TO THE SHAREHOLDERS OF RAINFOREST CAFE, INC.:
Please take notice that the Annual Meeting of Shareholders of Rainforest
Cafe, Inc. (the "Company") will be held, pursuant to due call by the Board of
Directors of the Company, at the Radisson Plaza Hotel, 35 South Seventh Street,
Minneapolis, Minnesota on May 22, 1997 at 8:45 a.m., or at any adjournment or
adjournments thereof, for the purpose of considering and taking appropriate
action with respect to the following:
1. To elect eight directors.
2. To transact any other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of record
on March 27, 1997, will be entitled to vote at the meeting or any adjournments
thereof.
A PROXY FOR THE MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL
IN AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
RAINFOREST CAFE, INC.
Martin J. O'Dowd, Secretary
April 10, 1997
<PAGE> 3
RAINFOREST CAFE, INC.
720 SOUTH FIFTH STREET
HOPKINS, MINNESOTA 55343
_________________________
PROXY STATEMENT
_________________________
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 22, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Rainforest Cafe, Inc. (the "Company") to
be used at the Annual Meeting of Shareholders of the Company to be held May 22,
1997. The approximate date on which this Proxy Statement and the accompanying
proxy were first sent or given to shareholders was April 10, 1997. Each
shareholder who signs and returns a proxy in the form enclosed with this Proxy
Statement may revoke the same at any time prior to its use by giving notice of
such revocation to the Company in writing, in open meeting or by executing and
delivering a new proxy to the Secretary of the Company. Unless so revoked, the
shares represented by each proxy will be voted at the meeting and at any
adjournments thereof. Presence at the meeting of a shareholder who has signed
a proxy does not alone revoke that proxy. Only shareholders of record at the
close of business on March 27, 1997 (the "Record Date") will be entitled to
vote at the meeting or any adjournments thereof.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Company has outstanding one class of voting securities, Common Stock,
no par value, of which 17,265,889 shares were outstanding as of the close of
business on the Record Date. Each share of Common Stock is entitled to one
vote on all matters put to a vote of shareholders.
The following table sets forth as of April 1, 1997 certain information
regarding the beneficial ownership of shares of Common Stock by each director
of the Company, each of the executive officers listed in the Summary
Compensation Table, each person known to the Company to be the beneficial owner
of more than 5% of the outstanding shares and all directors and executive
officers as a group. Except as otherwise indicated, each shareholder has sole
voting and investment power with respect to the shares beneficially owned.
Unless otherwise indicated, the address of the directors and executive officers
is 720 South Fifth Street, Hopkins, Minnesota 55343.
1
<PAGE> 4
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ------------------------- --------- ----------
<S> <C> <C>
Lyle Berman(1) . . . . . . . . . . . . . . . . . . . . . . . 1,016,500 5.9
Martin J. O'Dowd(2). . . . . . . . . . . . . . . . . . . . . 148,089 *
Steven W. Schussler(3) . . . . . . . . . . . . . . . . . . . 671,214 3.9
Ercu Ucan(4) . . . . . . . . . . . . . . . . . . . . . . . . 287,714 1.6
Mark S. Robinow(5) . . . . . . . . . . . . . . . . . . . . . 36,180 *
David W. Anderson . . . . . . . . . . . . . . . . . . . . . 243,750 1.4
Kenneth W. Brimmer . . . . . . . . . . . . . . . . . . . . . 35,000 *
David L. Rogers(6) . . . . . . . . . . . . . . . . . . . . . 55,000 *
Joel N. Waller(7) . . . . . . . . . . . . . . . . . . . . . 68,125 *
Putnam Investments, Inc.(8). . . . . . . . . . . . . . . . . 2,171,496 12.6
Fidelity Management & Research Company (9) . . . . . . . . . 948,600 5.5
All directors and executive officers as a group
(eleven persons) . . . . . . . . . . . . . . . . . . . . . . 2,594,272 14.6
</TABLE>
*Less than 1%.
(1) The address of such reporting person is 13705 First Avenue North,
Plymouth, Minnesota 55441.
(2) Includes 148,000 shares not outstanding but deemed beneficially owned by
virtue of Mr. O'Dowd's right to acquire such shares within 60 days.
(3) Includes 26,000 shares not outstanding but deemed beneficially owned by
virtue of Mr. Schussler's right to acquire such shares within 60 days.
(4) Includes 287,500 shares not outstanding but deemed beneficially owned by
virtue of Mr. Ucan's right to acquire such shares within 60 days.
(5) Includes 36,000 shares not outstanding but deemed beneficially owned by
virtue of Mr. Robinow's right to acquire such shares within 60 days.
(6) Includes 25,000 shares not outstanding but deemed beneficially owned by
virtue of Mr. Rogers' right to acquire such shares within 60 days.
(7) Includes 25,000 shares not standing but deemed beneficially owned by
virtue of Mr. Waller's right to acquire such shares within 60 days.
(8) Based on the most recent Schedule 13G filed on February 4, 1997 with the
Securities and Exchange Commission. The address of Putnam Investments, Inc.
is One Post Office Square, Boston, Massachusetts 02109.
(9) Based on the most recent Schedule 13G filed on February 14, 1997 with
the Securities and Exchange Commission. The address of Fidelity Management
& Research Company is 82 Devonshire Street, Boston, Massachusetts 02109.
2
<PAGE> 5
ELECTION OF DIRECTORS
Eight directors are to be elected at the meeting, each director to hold office
until the next Annual Meeting of Shareholders, or until his successor is
elected and qualified. All of the persons listed below are now serving as
directors of the Company. All of the persons listed below have consented to
serve as a director, if elected. The Board of Directors proposes for election
the nominees listed below:
LYLE BERMAN, age 55, has been Chairman of the Board and Chief Executive Officer
of the Company since its inception in February 1994. Mr. Berman has been Chief
Executive Officer and Chairman of the Board of Grand Casinos, Inc. and its
predecessor since October 1990. Mr. Berman has been Chief Executive Officer of
Stratosphere Corporation since July 1994 and Chairman of Stratosphere
Corporation since July 1996. Stratosphere Corporation filed for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in January 1997. Mr. Berman is
also a director of G-III Apparel Group Ltd., Innovative Gaming Corporation of
America, New Horizon Kids Quest, Inc. and Wilsons The Leather Experts, Inc.
("Wilsons")
MARTIN J. O'DOWD, age 49, has been President and Chief Operating Officer since
May 1995 and has served as a director and Secretary since June 1995. From July
1987 to May 1995, Mr. O'Dowd was Corporate Director, Food & Beverage Services
for Holiday Inn Worldwide. From August 1985 to July 1987, Mr. O'Dowd was Vice
President and General Operations Manager for the Hard Rock Cafe in New York.
Mr. O'Dowd is also a director of Elephant & Castle Group, Inc. and Famous
Dave's of America, Inc., two companies involved in the restaurant business.
STEVEN W. SCHUSSLER, age 41, has been Executive Vice President-Development of
the Company since its inception and a director of the Company since January
1995. From 1983 to February 1992, Mr. Schussler was an officer of Juke Box
Saturday Night in Minneapolis, Inc. ("JBSN"), a 1950's and 1960's theme
restaurant and nightclub. JBSN filed for bankruptcy under Chapter 7 of the U.S.
Bankruptcy Code in January 1992.
ERCU UCAN, age 41, has been Executive Vice President-Retail of the Company
since its inception and a director of the Company since January 1995. From
September 1992 until December 1993, Mr. Ucan served as President of the Orjin
Textile Group in Istanbul, Turkey, a garment factory employing approximately
150 persons. From January 1989 until August 1992, Mr. Ucan served as Director
of Trend Merchandising and Director of Product Development for Wilsons.
DAVID W. ANDERSON, age 43, has been a director of the Company since
September 1995. Mr. Anderson has been a director and Executive Vice President
of Grand Casinos, Inc. and its predecessor since October 1990. Mr. Anderson is
also Chairman and Chief Executive Officer of Famous Dave's of America, Inc., a
Minneapolis-based barbeque restaurant company.
KENNETH W. BRIMMER, age 41, has been a director of the Company since
August 1996. Mr. Brimmer has been employed by Grand Casinos, Inc. and its
predecessor since October 1990 as Special Assistant to the Chairman and Chief
Executive Officer, Lyle Berman. In addition, Mr. Brimmer has served as
Treasurer of the Company since September 5, 1995.
3
<PAGE> 6
DAVID L. ROGERS, age 54, has been a director of the Company since January
1995. From November 1988 through March 1992, Mr. Rogers was Executive Vice
President and Chief Operating Officer of Wilsons. Since April 1992 Mr. Rogers
has been President and Chief Operating Officer of Wilsons. Mr. Rogers is also
a director of Grand Casinos, Inc.
JOEL N. WALLER, age 57, has been a director of the Company since January
1995. Mr. Waller was President of Wilsons from 1983 through March 1992 when he
was promoted to Chairman and Chief Executive Officer. Mr. Waller is also a
director of Grand Casinos, Inc. and of Damark International, Inc.
PROXIES AND VOTING
The affirmative vote of the holders of the greater of (a) a majority of
the outstanding shares of Common Stock of the Company present and entitled to
vote on the election of directors or (b) a majority of the voting power of the
minimum number of shares entitled to vote that would constitute a quorum for
transaction of business at the meeting, is required for election to the Board
of each of the eight nominees named above. A shareholder who abstains with
respect to the election of directors is considered to be present and entitled
to vote on the election of directors at the meeting, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a Proxy to vote, or withholds authority to vote, on the election
of directors, shall not be considered present and entitled to vote on the
election of directors.
All shares represented by proxies will be voted FOR the election of the
foregoing nominees unless a contrary choice is specified. If any nominee
should withdraw or otherwise become unavailable for reasons not presently
known, the proxies which would have otherwise been voted for such nominee will
be voted for such substitute nominee as may be selected by the Board of
Directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation from
February 3, 1994 (inception) through December 29, 1996 awarded to or earned by
the Chief Executive Officer and the four most highly compensated executive
officers other than the Chief Executive Officer:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ------------
SECURITIES
FISCAL SALARY OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR $ COMPENSATION $ OPTIONS (#)
- ------------------------------------------------- ------- --------- -------------- ------------
<S> <C> <C> <C> <C>
Lyle Berman 1996 $ 0 $ 0 0
Chairman of the Board and Chief Executive Officer 1995 0 0 0
1994 0 0 0
Martin J. O'Dowd
President/ Chief Operating Officer 1996 166,923 35,000 0
1995 95,385 (1) 19,077 300,000
Steven W. Schussler 1996 129,231 28,000 0
Executive Vice President - Development 1995 110,769 22,514 75,000
1994 21,153 66,308 (2) 0
Ercu Ucan 1996 129,231 28,000 0
Executive Vice President - Retail 1995 115,000 23,000 75,000
1994 41,857 59,231(2) 262,500
Mark S. Robinow
Chief Financial Officer 1996 113,692 23,600 0
1995 6,346(3) 4,231 90,000
</TABLE>
(1) Mr. O'Dowd began his employment with the Company on May 15, 1995.
(2) Includes amounts paid to Messrs. Schussler and Ucan pursuant to consulting
arrangements prior to each becoming employees of the Company.
(3) Mr. Robinow began his employment with the Company on November 27, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
There were no grants of stock options to the Company's executive officers
named in the Summary Compensation Table during the last fiscal year.
5
<PAGE> 8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table summarizes information with respect to options held by
the executive officers named in the Summary Compensation Table and the value of
the options held by such persons at the end of fiscal 1996.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-Money Options
Options at FY-End (#) FY-End ($)
Shares Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lyle Berman --- --- --- --- --- ---
Martin J. O'Dowd 12,000 307,200 108,000 180,000 2,170,800 3,618,000
Steven W. Schussler 24,000 518,400 1,000 50,000 20,100 1,005,000
Ercu Ucan --- --- 200,000 137,500 4,613,250 3,060,375
Mark S. Robinow --- --- 36,000 54,000 356,400 534,600
</TABLE>
DIRECTOR COMPENSATION
Directors receive no fees for serving as directors. The Company granted
options in February 1995 to each of Messrs. Rogers and Waller to acquire 37,500
shares of Common Stock at an exercise price of $3.40 per share. The Company
granted options in August 1996 to acquire 25,000 shares of Common Stock at an
exercise price of $24.65 per share to Mr. Brimmer and 37,500 shares of Common
Stock at an exercise price of $24.65 per share to Mr. Anderson. All director
options vest on a pro-rata basis on the first, second and third anniversaries
of the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Stock Option and Compensation Committee (the "Compensation
Committee") consists of David L. Rogers and Joel N. Waller. Messrs. Rogers and
Waller are directors and executive officers of Wilsons. Lyle Berman, Chairman
of the Board and Chief Executive Officer of the Company is a director of
Wilsons.
EMPLOYMENT AGREEMENTS
In February 1995, the Company entered into a three-year employment
agreement with Steven W. Schussler pursuant to which Mr. Schussler serves the
Company as Executive Vice President-Development. Pursuant to such agreement,
Mr. Schussler currently receives an annual
6
<PAGE> 9
salary of $140,000 and has the opportunity to earn performance-related bonuses.
Pursuant to such agreement, Mr. Schussler may not disclose confidential
information about the Company and has agreed not to compete with the Company
for a one-year period after any termination of employment. Mr. Schussler may
terminate his employment upon 30 days' written notice to the Board of
Directors. If Mr. Schussler is terminated by the Company without "good cause,"
Mr. Schussler is entitled to receive his base salary and benefits for 12 months.
In April 1995, the Company entered into a two-year employment agreement
with Martin J. O'Dowd pursuant to which Mr. O'Dowd serves as President and
Chief Operating Officer of the Company. Pursuant to such agreement, Mr. O'Dowd
receives an annual base salary of $175,000, with a discretionary bonus of up to
20% of such annual salary with a guaranteed minimum bonus of $15,000. Pursuant
to such agreement, Mr. O'Dowd may not disclose any confidential information
about the Company and has agreed not to compete with the Company for a one-year
period after termination of employment. Mr. O'Dowd may terminate his
employment upon 30 days' written notice to the Board of Directors. If Mr.
O'Dowd is terminated by the Company without "good cause," Mr. O'Dowd is
entitled to receive his base salary for six months.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives generally have been
made by the Compensation Committee of the Board. Each member of the
Compensation Committee is a non-employee director. All decisions by the
Compensation Committee relating to the compensation of the Company's executive
officers are reviewed by the full Board. Pursuant to rules designed to enhance
disclosure of the Company's policies toward executive compensation, set forth
below is a report prepared by the Compensation Committee addressing the
compensation policies for the Company for the year ended December 29, 1996 as
they affected the Company's executive officers.
The Compensation Committee's executive compensation policies are designed
to provide competitive levels of compensation that integrate pay with the
Company's annual objectives and long-term goals, reward above-average corporate
performance, recognize individual achievements, and assist the Company in
attracting and retaining qualified executives. Executive compensation is set
at levels that the Compensation Committee believes to be consistent with others
in the Company's industry.
There are three elements in the Company's executive compensation program,
all determined by individual and corporate performance.
-Base salary compensation
-Annual incentive compensation
-Stock options
Total compensation opportunities are competitive with those offered by
employers of comparable size, growth and profitability in the Company's
industry.
7
<PAGE> 10
Base salary compensation is determined by the potential impact the
individual has on the Company, the skills and experiences required by the job,
and the performance and potential of the incumbent in the job.
Annual incentive compensation for executives of the Company is based
primarily on corporate operating earnings and revenue growth and the Company's
positioning for future results, but also includes an overall assessment by the
Compensation Committee of executive management's performance, as well as market
conditions.
Awards of stock grants under the Stock Option and Compensation Plan (the
"Plan") are designed to promote the identity of long-term interests between the
Company's executives and its shareholders and assist in the retention of
executives and other key employees. The Plan also permits the Committee to
grant stock options to key personnel. In October 1996, the Compensation
Committee adopted a policy whereby the Company's President is authorized to
make grants to non-executive employees, subject to established criteria by the
Compensation Committee and subject to the Compensation Committee's
ratification. Options become exercisable based upon criteria established by
the Company.
The Compensation Committee surveys employee stock option programs of
companies with similar capitalization to the Company prior to recommending the
grant of options to executives. While the value realizable from exercisable
options is dependent upon the extent to which the Company's performance is
reflected in the market price of the Company's common stock at any particular
point in time, the decision as to whether such value will be realized in any
particular year is determined by each individual executive and not by the
Compensation Committee. Accordingly, when the Committee recommends that an
option be granted to an executive, that recommendation does not take into
account any gains realized that year by that executive as a result of his or
her individual decision to exercise an option granted in a previous year.
To date, no executive officer of the Company has received compensation
that exceeds $1 million per year.
DAVID L. ROGERS
JOEL N. WALLER
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include
in this Proxy Statement a line-graph presentation comparing cumulative,
five-year return to the Company's shareholders (based on appreciation of the
market price of the Company's Common Stock) on an indexed basis with (i) a
broad equity market index and (ii) an appropriate published industry or
line-of-business index, or peer group index constructed by the Company. The
following presentation compares the Company's Common Stock price in the period
from April 7, 1995 (the date of the Company's initial public offering) to
December 29, 1996, to the S&P 500 Stock Index and to a "peer group" index
created by the Company over the same period. The "peer group" index consists
of the common stock of: Applebee's International, The Cheesecake Factory,
Brinker International, Cracker Barrel, Dave & Buster's, Landry's Seafood
Restaurant, Lone Star Steakhouse & Saloon, Rock Bottom Restaurants, Show Biz
Pizza Time and Uno Restaurant Corp. These corporations are involved in various
aspects of the restaurant industry. The presentation assumes that the value of
an investment in each of the Company's Common Stock, the S&P 500 Index, and the
peer group index was $100 on April 7, 1995, and that any dividends paid were
reinvested in the same security.
[LINE GRAPH]
<TABLE>
<CAPTION>
TOTAL RETURN ANALYSIS
RAINFOREST
CAFE INC. PEER GROUP S&P 500
---------- ---------- -------
<S> <C> <C> <C>
4/7/95 $100.00 $100.00 $100.00
6/30/95 $245.45 $107.73 $108.22
12/12/95 $547.73 $ 99.54 $123.84
6/28/96 $909.09 $131.80 $136.34
12/31/96 $640.99 $116.67 $152.26
</TABLE>
<PAGE> 12
CERTAIN TRANSACTIONS
From January 1, 1996 (Inception) through December 29, 1996, the Company
paid an aggregate of approximately $365,000 to Grand Media and Electronics
Distributing, Inc. ("Grand Media") for consulting fees and purchases of certain
media and computer equipment. Grand Media is a Minnesota corporation wholly
owned by Grand Casinos, Inc., of which Mr. Berman is Chairman and Chief
Executive Officer. There is no written agreement between the Company and Grand
Media.
During 1996, the Company executed a lease to develop a Rainforest Cafe at
Stratosphere in Las Vegas, Nevada. Lyle Berman, Chairman and Chief Executive
Officer of the Company, is Chief Executive Officer and a director of
Stratosphere Corporation and Chairman and Chief Executive Officer of Grand
Casinos, Inc., which owns a controlling interest in Stratosphere Corporation.
In March 1997, the Company announced that it did not expect that it would open
a Unit at Stratosphere because the contracted space is unlikely to be delivered
within the terms of the lease, and that such lease would be terminated.
In January 1997, the Company entered into a Joint Venture and License
Agreement with Elephant & Castle Group, Inc.("Elephant & Castle"), a
Vancouver-based operator of restaurants and pubs. Pursuant to the joint
venture agreement, Elephant & Castle and the Company will each own 50% of a
joint venture that will open 5 Units over a 7 year period. Pursuant to this
agreement, the Company will receive a non-refundable development fee and a five
year option to purchase up to 600,000 shares of Elephant & Castle Common Stock
at $8.00 per share. The first Canadian Unit is scheduled to open during the
first quarter of 1998. Martin J. O'Dowd, President and Chief Operating Officer
of the Company, is a director of Elephant & Castle.
INDEPENDENT PUBLIC ACCOUNTANTS
On November 10, 1995, the Company dismissed Lund Koehler Cox & Company,
PLLP, as its independent public accountants and engaged Arthur Andersen LLP as
its new independent public accountants. The reports of Lund Koehler Cox &
Company, PLLP on the financial statements for the periods from February 31,
1994 (inception) through October 2, 1994 and January 1, 1995 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principle. The Company's Board of
Directors participated in and approved the decision to change independent
public accountants. In connection with its audits for the periods from
February 31, 1994 (inception) through October 2, 1994 and January 1, 1995 and
through November 10, 1995, there were no disagreements with Lund Koehler Cox &
Company, PLLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Lund Koehler Cox & Company, PLLP would have
caused them to make reference thereto in their report on the financial
statements for such periods. During the periods from February 31, 1994
(inception) through October 2, 1994 and January 1, 1995 and through November
10, 1995, the Company has not consulted with Arthur Andersen LLP on items which
(1) were or should have been subject to SAS 50 or (2) concerned the subject
matter of a disagreement or reportable event with the former independent public
accountant.
10
<PAGE> 13
The Board of Directors, upon the recommendation of the Audit Committee,
has selected Arthur Andersen LLP as independent public accountants for fiscal
1997. Arthur Andersen LLP has been the independent public accountants for the
Company since November 10, 1995. A representative of Arthur Andersen LLP is
expected to attend the meeting and to have an opportunity to make a statement
and respond to appropriate questions from shareholders.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented at the 1997 Annual
Meeting of Shareholders of the Company must be received by the Company at its
executive offices on or before December 19, 1997.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held four meetings during the fiscal year ended
December 29, 1996. The Company has an audit committee and a compensation
committee, but does not have a nominating committee of the Board of Directors.
The Company's audit committee, which consists of Messrs. David L. Rogers
and Joel N. Waller, held one meeting and took action pursuant to written
actions during the fiscal year ended December 29, 1996. The audit committee
recommends to the full Board the engagement of the independent accountants,
reviews the audit plan and results of the audit engagement, reviews the
independence of the auditors, and reviews the adequacy of the Company's system
of internal accounting controls.
The Company's compensation committee, which consists of Messrs. David L.
Rogers and Joel N. Waller, held one meeting and took action pursuant to written
actions during the fiscal year ended December 29, 1996. The compensation
committee reviews the Company's remuneration policies and practices, makes
recommendations to the Board in connection with all compensation matters
affecting the Company and administers the Company's 1995 Stock Option and
Compensation Plan and the Company's Employee Stock Purchase Plan.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC") and the Nasdaq National Market. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on
review of the copies of such forms furnished to the Company, or written
representations that no Forms 5 were required, the Company believes that during
the fiscal year ended December 29, 1996, all Section 16(a) filing requirements
11
<PAGE> 14
applicable to its officers, directors and greater than ten-percent beneficial
owners were complied with.
SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
proxy, Proxy Statement, Annual Report and other material which may be sent to
the shareholders in connection with this solicitation. Brokerage houses and
other custodians, nominees and fiduciaries may be requested to forward
soliciting material to the beneficial owners of stock, in which case they will
be reimbursed by the Company for their expenses in doing so. Proxies are being
solicited primarily by mail, but, in addition, officers and regular employees
of the Company may solicit proxies personally, by telephone, by telegram or by
special letter.
The Board of Directors does not intend to present to the meeting any other
matter not referred to above and does not presently know of any matters that
may be presented to the meeting by others. However, if other matters come
before the meeting, it is the intent of the persons named in the enclosed proxy
to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
RAINFOREST CAFE, INC.
Martin J. O'Dowd,
Secretary
12
<PAGE> 15
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RAINFOREST CAFE, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 22, 1997
The undersigned, a shareholder of Rainforest Cafe, Inc., hereby
appoints Martin J. O'Dowd and Mark S. Robinow, and each of them, as
proxies, with full power of substitution, to vote on behalf of the
undersigned the number of shares which the undersigned is then entitled to
vote, at the Annual Meeting of Shareholders of Rainforest Cafe, Inc. to be
held at the Radisson Plaza Hotel, 35 South Seventh Street, Minneapolis,
Minnesota, on May 22, 1997, at 8:45 a.m., and at any and all adjournments
thereof, with all the powers which the undersigned would possess if
personally present, upon:
<TABLE>
<S> <C> <C> <C> <C>
1. Election of Directors:
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as marked to vote for all
nominees to the contrary listed
below)
David W. Anderson, Lyle Berman, Kenneth W. Brimmer, Martin J. O'Dowd,
David L. Rogers, Steven W. Schussler, Ercu Ucan, Joel N. Waller.
INSTRUCTION: To withhold authority to vote for any individual nominee write the nominee's
name on the space provided below.
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2. Upon such other business as may properly come before the meeting or any adjournments
thereof.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
The undersigned hereby revokes all previous proxies relating to
the shares covered hereby and acknowledges receipt of the Notice and Proxy
Statement relating to the Annual Meeting of Shareholders.
(continued, and TO BE COMPLETED AND SIGNED on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When properly
executed, this proxy will be voted on the proposals set forth herein as
directed by the shareholder, but if no direction is made in the space
provided, this proxy will be voted FOR the election of all nominees for
director.
(Shareholder must sign exactly as
the name appears at left. When
signed as a corporate officer,
executor, administrator, trustee,
guardian, etc., please give full
title as such. Both joint tenants
must sign.)
Dated _____________________ , 1997
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Signature
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Signature if held jointly
