<PAGE>
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 14(a)-12
BOSTON RESTAURANT ASSOCIATES, 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
BOSTON RESTAURANT ASSOCIATES, INC.
TO BE HELD ON 13 SEPTEMBER, 1999
---------------
The Annual Meeting of Stockholders of Boston Restaurant Associates,
Inc., a Delaware corporation (the "Company"), will be held on Monday, 13
September, 1999 at 10:00 a.m., local time, at the offices of Brown, Rudnick,
Freed & Gesmer, 18th Floor, One Financial Center, Boston, Massachusetts 02111,
for the following purposes:
1. To elect seven directors to serve for the ensuing year and
until their successors are duly elected and qualified.
2. To consider and act upon a proposal to ratify the appointment
of BDO Seidman LLP as auditors for fiscal year 2000.
3. To consider and act upon any matters incidental to the
foregoing purposes and any other matters which may properly
come before the meeting or any adjourned session thereof.
The foregoing items are more fully described in the Proxy Statement
accompanying this Notice.
The Board of Directors has fixed the close of business on 3 August,
1999 as the record date for determining the stockholders entitled to notice of,
and to vote at, the meeting and any continuation or adjournment thereof. Any
stockholder attending the meeting may vote in person even if he or she returned
a proxy.
By Order of the Board of Directors
GORDON R. PENMAN, Secretary
Boston, Massachusetts
13 August, 1999
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD, SO THAT
IF YOU ARE UNABLE TO ATTEND THE MEETING YOUR SHARES MAY NEVERTHELESS BE VOTED.
EVEN IF YOU HAVE GIVEN YOUR PROXY, THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION, BY
EXECUTING A PROXY WITH A LATER DATE, OR BY ATTENDING AND VOTING AT THE MEETING.
<PAGE>
BOSTON RESTAURANT ASSOCIATES, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON 13 SEPTEMBER, 1999
This proxy statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Boston Restaurant Associates,
Inc., a Delaware corporation (the "Company") with its principal executive
offices at 999 Broadway, Saugus, Massachusetts 01906, for use at the Annual
Meeting of Stockholders to be held on Monday, 13 September, 1999 at 10:00 a.m.,
local time, or at any continuation or adjournment thereof (the "Meeting"), for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The Meeting will be held at the offices of Brown, Rudnick, Freed &
Gesmer, 18th Floor, One Financial Center, Boston, Massachusetts 02111. Proxies
are being solicited on behalf of the Board of Directors of the Company and the
cost of such solicitation will be borne by the Company. Certain of the
directors, officers and employees of the Company may solicit proxies by
correspondence, telephone or in person, without extra compensation. The Company
may also pay to banks, brokers, nominees and certain other fiduciaries their
reasonable expenses incurred in forwarding proxy material to the beneficial
owners of the securities held by them. It is expected that this proxy statement
and the accompanying proxy will be first mailed to stockholders on or about
13 August, 1999.
Only stockholders of record at the close of business on 3 August, 1999
will be entitled to receive notice of, and to vote at, the Meeting. As of that
date, there were outstanding and entitled to vote 7,060,170 shares of Common
Stock, $.01 par value per share (the "Common Stock"), of the Company. Each such
stockholder is entitled to one vote for each share of Common Stock held on that
date and may vote such shares either in person or by proxy.
The enclosed proxy card, if executed and returned, will be voted as
directed on the proxy card or, in the absence of such direction, for the
election of the nominees as directors and in favor of Proposal No. 2. The
Company knows of no other matters to be submitted to the Meeting. If any other
matters properly come before the Meeting, the persons named on the enclosed
proxy card will vote the shares represented thereby on such matters in
accordance with their best judgment. The proxy may be revoked at any time prior
to exercise by filing with the Secretary of the Company a written revocation, by
executing a proxy with a later date, or by attending and voting at the Meeting.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, seven directors are to be elected to serve until the
2000 Annual Meeting of Stockholders and until their respective successors have
been duly elected and qualified. The persons listed in the table below have been
nominated by the Board of Directors for election as directors.
Each of the nominees is currently serving as a director of the Company.
In the unanticipated event that any nominee should be unable or declines to
stand for election at the Meeting, the proxies will be voted for such substitute
nominees, if any, as the present Board of Directors may designate. The nominees
have not been nominated pursuant to any arrangement or understanding with any
person.
The following table sets forth certain information with respect to the
nominees.
<TABLE>
<CAPTION>
Director
Name Age Position Since
- ---- --- -------- -----
<S> <C> <C> <C>
George R. Chapdelaine 54 Chief Executive Officer, 1994
President and Director
Joseph J. Caruso (1)(2) 56 Director 1994
Roger Lipton 58 Director 1996
Kathleen Mason(1)(2) 50 Director 1998
John P. Polcari, Jr. 68 Director 1994
Lucille Salhany 52 Director 1996
Terrance Smith (1) 53 Director 1990
</TABLE>
- -------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Mr. Chapdelaine was elected President, Chief Executive Officer and a
director of the Company in April 1994. Mr. Chapdelaine joined a predecessor of
the Company in 1982 and served as its President, Chief Executive Officer and a
director until it was acquired by the Company in April 1994. Prior to 1982, Mr.
Chapdelaine worked in the food service industry in
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<PAGE>
various capacities, including as an independent marketing consultant, a general
manager of the Food Service division for H.P. Hood, Inc. and a sales manager for
Chiquita Brands, a subsidiary of United Brands. Mr. Chapdelaine holds an MBA
from Clark University and graduated with a B.S. in Hotel and Restaurant
Management from Oklahoma State University.
Mr. Caruso has been the President of Bantam Group, Inc., a business
advisory firm he founded, since its inception in 1986. Mr. Caruso is presently a
member of the boards of directors of Audiofile, Inc., Corion Corporation,
Holometrix, Inc. and Tytronics, Inc. and served on the board of directors of
Coffee Connection, Inc. from 1991 to 1994. Mr. Caruso is a graduate of
Northeastern University and the Harvard Business School.
Mr. Lipton has been Managing Director of Axiom Capital Management,
Inc., an investment banking firm specializing in the restaurant, franchising and
retailing industries, and a NASD broker/dealer, since February 1995. From 1981
until February 1995 he was Managing Director of Ladenburg, Thalmann & Co., Inc.,
also an investment banking firm.
Ms. Mason was Chairman, President, and CEO of Cherry & Webb from 1992
through 1997. Ms. Mason was President of HomeGoods, Inc., a subsidiary of TJ
Maxx Companies until June 1, 1999. Presently, Ms. Mason is Chief Merchandising
Officer of the Filene's Basement Corp. and President of the Filene's Basement
division.
Mr. Polcari was a founder of Pizzeria Regina, Inc. He is a recipient of
the National Restaurant Association's state restaurateur of the year award for
the Commonwealth of Massachusetts. Mr. Polcari is the spouse of Ms. Salhany.
Ms. Salhany is the former President and CEO of United Paramount
Network. She is currently engaged in the consulting business. Ms. Salhany is the
spouse of Mr. Polcari.
Mr. Smith has been President of Chi Chi's International Operations,
Inc., since 1998. Currently, Mr. Smith is also President and a director of
Tumbleweeds International, LLC, and a director of Oldenberg, Inc.
The term of office of each director of the Company ends at the next
annual meeting of the Company's stockholders or when his successor is duly
elected and qualified.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during the fiscal year ended
April 25, 1999. The Board of Directors also acted on several occasions by
unanimous written consent in lieu of special meetings. Each current director
attended at least 75% of the aggregate number of all meetings of the Board of
Directors and committees of which he or she was a member during such fiscal
year.
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<PAGE>
The Board of Directors has an Audit Committee, currently composed of
Ms. Mason and Messrs. Smith and Caruso. The functions performed by this
Committee include recommending to the Board of Directors the engagement of the
independent auditors, reviewing the scope of internal controls and reviewing the
implementation by management of recommendations made by the independent
auditors.
The Board of Directors has a Compensation Committee, currently composed
of Ms. Mason and Mr. Caruso. The functions of the Compensation Committee include
determining salaries, incentive plans, benefits and overall compensation.
The Audit and Compensation Committees were established in June 1994.
Each of those committees held one meeting during the fiscal year ended April 25,
1999.
The Board of Directors does not have a nominating committee.
Nominations of directors are considered by the whole Board of Directors.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash compensation for their
services as directors. The Company provides health insurance benefits to its
directors and reimburses them for their out-of-pocket expenses in attending
Board meetings. In addition, nonemployee directors are eligible for the grant of
stock options under the 1994 Nonemployee Directors Stock Option Plan. Messrs.
Caruso, Smith and Richard Reeves (a current director who has chosen not to stand
for re-election) and Ms. Mason each received options to purchase 20,000 shares
of common stock in fiscal 1999 under the Nonemployee Directors Stock Option
Plan. The Company also enters into indemnification agreements with each of its
directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of 15 July, 1999 by (i)
each person who is known by the Company to own beneficially more than five
percent of the outstanding shares of Common Stock, (ii) each director and
nominee for director of the Company, (iii) each person named in the Summary
Compensation Table below, and (iv) all current executive officers and directors
of the Company, as a group. This information is based upon information provided
by the named person. Unless otherwise indicated below, to the knowledge of the
Company all persons listed below have sole voting and investment power with
respect to their shares of Common Stock, except to the extent shared by spouses
under applicable law.
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<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF OUTSTANDING
BENEFICIALLY OWNED SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
George R. Chapdelaine (1) (2)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906
1,097,063 14.8%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Joseph J. Caruso (3)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906
83,000 1.2%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Roger Lipton (4)
983 Park Avenue
New York, NY 10028 1,424,377 19.2%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Kathleen Mason (5)
c/o Boston Restaurant
Associates, Inc.
999 Broadway
Saugus, MA 01906 24,000 *
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
John P. Polcari, Jr. (1)(6)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906
1,133,503 15.6%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Richard Reeves (7)
c/o Blue Door Enterprises
1230 Liberty Bank Lane
Suite 220
Louisville, KY 40223 178,500 2.5%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF OUTSTANDING
BENEFICIALLY OWNED SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lucille Salhany (1)(8)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906
137,984 2.0%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Terrance A. Smith (9)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906
93,200 1.31%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Anthony Buccieri (10)
c/o Boston Restaurant Associates, Inc.
999 Broadway
Saugus, MA 01906 45,000 *
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Dolphin Management, Inc. (11)
129 East 17th Street
New York, NY 10003 1,025,000 14.5%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Jordan American Holdings, Inc. (12)
1875 Ski Time Square Dr., Suite 1
Steamboat, Springs, CO 80487 1,451,721 19.3%
- ---------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
All current directors and Named
Executive Officers as a group
(9 persons) (13) 4,216,627 45.2%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Less than one percent
(1) Mr. Chapdelaine and Mr. Polcari were the Voting Trustees of a
Voting Trust that held 1,265,150 shares pursuant to a certain
Amended and Restated Voting Trust Agreement dated 28 April, 1994
(the "Voting Trust Agreement"). On 13 July, 1998, the Voting
Trust was dissolved and its assets were distributed to the
beneficiaries of the Voting Trust. Mr. Chapdelaine and Mr.
Polcari were each issued 522,390 shares of the Company's Common
Stock. Ms. Lucille Salhany, spouse of Mr. Polcari, received
54,988 shares and Anthony and Mary Polcari, jointly with right of
survivorship, received 165,382 shares.
(2) Includes options to purchase 366,673 shares issuable pursuant
to currently exercisable stock options.
(3) Includes 10,000 shares held by Bantam Group, Inc., a business
advisory firm controlled by Mr. Caruso, and options to
purchase 55,000 shares issuable pursuant to
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<PAGE>
currently exercisable stock options.
(4) Based upon a Schedule 13D provided to the Company and
information provided by Mr. Lipton. Includes 383,860 shares
issuable pursuant to currently exercisable warrants.
(5) Includes options to purchase 20,000 shares issuable pursuant to
currently exercisable stock options.
(6) Includes 125,243 shares issued to Ms. Salhany and Mr. Polcari,
jointly with rights of survivorship, and 12,741 shares held by
Ms. Salhany for the benefit of certain family members. Include
options to purchase 264,173 shares issuable pursuant to currently
exercisable stock options.
(7) Includes options to purchase 55,000 shares issuable pursuant
to currently exercisable stock options.
(8) Consists of 125,243 shares held by Ms. Salhany and Mr.
Polcari, jointly with rights of survivorship, and 12,741 shares
held by Ms. Salhany for the benefit of certain family members.
(9) Includes options to purchase 61,000 shares issuable pursuant
to currently exercisable stock options.
(10) Includes options to purchase 39,900 shares issuable pursuant
to currently exercisable stock options.
(11) Based upon information provided to the Company. Includes
30,000 shares issuable pursuant to currently exercisable
warrants.
(12) Based upon information provided to the Company. Includes
500,000 shares issuable pursuant to currently exercisable
warrants.
(13) Includes options to purchase 1,200,606 shares issuable
pursuant to currently exercisable stock options and warrants.
MANAGEMENT
The names of the Company's executive officers who are not directors of
the Company, and certain biographical information furnished by them, are set
forth below:
Anthony A. Buccieri, 44, was appointed Vice President of Operations for
the Pizzeria Regina operations in April 1994. Mr. Buccieri joined a predecessor
of the Company in 1974 and has served in various capacities since that date,
including as operations supervisor, assisting in the opening of all Pizzeria
Regina outlets since 1983. Mr. Buccieri attended the University of
Massachusetts.
Fran Ross, 52, was appointed the Company's Vice President of Corporate
Marketing in February 1995 and Vice President of Corporate Administration in
October 1996. Ms. Ross was Vice President of Marketing for Back Bay Restaurant
Group from December 1993 until December 1994 and for Legal Seafood, a restaurant
chain, from November 1992 until December 1993. Ms. Ross holds a B.S. in
Biochemistry, a degree from the Culinary Institute of America, and attended
graduate school at Cornell University.
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<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation
during the last three fiscal years of the Chief Executive Officer and the Vice
President of Operations (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------- ------------------------------------- -------------------------------------- -----------
Annual Compensation Long-Term Compensation
----------------------------------------------------------------------------
Awards Payouts
--------------------------------------
Name and Fiscal Salary Bonus Other Restricted Securities LTIP All other
Principal Year Annual Stock Under- Payouts Compen-
Position Ended Compen- Awards Lying sation
sation Options
($) ($) ($) ($) (#) ($) ($)
- ---------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ -----------
- ---------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George R. 4/25/99 165,000 35,000
Chapdelaine 4/26/98 132,795 0 50,000
President and 4/27/97 116,000 35,000
CEO
- ---------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ -----------
- ---------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ -----------
Anthony 4/25/99 100,400 1,300
Buccieri 4/29/98 93,400 0
4/27/97 93,400 0
- ---------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ -----------
</TABLE>
EMPLOYMENT CONTRACT
The Board of Directors of the Company has approved the terms of
employment to be included in a new, one-year automatically renewable
employment agreement with Mr. Chapdelaine, the Chief Executive Officer and
President of the Company, to be effective 1 July, 1999. Under the terms of his
employment, Mr. Chapdelaine receives an annual base salary of $185,000 and an
annual performance bonus based upon yearly sales and profits goals. In
addition, Mr. Chapdelaine is entitled to a minimum of 12 months' severance
pay.
BONUS PROGRAM
The Company has adopted an incentive program under which key
contributors, selected by the Compensation Committee, will be paid cash bonuses.
The aggregate amount of these bonuses will be based upon a formula related to
the financial performance of the Company. Bonuses, if any, will be allocated by
the Compensation Committee among the individual employees based upon their
performance during the year.
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<PAGE>
STOCK OPTIONS
The following table sets forth certain information with respect to the
grants, exercises and fiscal year-end values of stock options to purchase shares
of the Company's Common Stock for the Named Executive Officers during the last
fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Name Number of Securities Percent of Total
Underlying Options Options Granted to
Granted Employees in Fiscal Exercise or Base
Year Price Expiration Date
(#) ($/Sh)
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George R. 0 N/A N/A N/A
Chapdelaine, CEO
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Anthony Buccieri 15,000 42.9% 0.97 9 September, 2008
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Name Shares Acquired on Value Realized Number of Shares of Value of Unexercised
Exercise (#) ($) Common Stock In-the-Money Options
Underlying at April 25, 1999 ($)
Unexercised Options Exercisable/
At April 25, 1999 Unexercisable
(#)
Exercisable /
Unexercisable
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George R. Chapdelaine,
CEO 0 0 366,673/0 N/A
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Anthony Buccieri 0 0 26,900/43,000 N/A
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
selection of BDO Seidman, LLP as independent public accountants to examine the
consolidated financial statements of the Company and its subsidiaries for the
fiscal year ending 25 April, 1999 and for the current fiscal year 2000. BDO
Seidman, LLP has audited the Company's financial
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<PAGE>
statements annually since 1994. BDO Seidman, LLP and its predecessor have served
either the Company or its predecessor as independent public accountants for more
than 14 years. The Board of Directors believes it is desirable and in the best
interest of the Company to continue employment of that firm. The affirmative
vote of a majority of the Company's Common Stock present in person or
represented by proxy is required to ratify the appointment of BDO Seidman, LLP
as the Company's independent public accountants. Action by stockholders is not
required by law in the appointment of independent public accountants, but their
appointment is submitted by the Board of Directors in order to give the
stockholders a voice in the designation of accountants. If the appointment is
not ratified by the stockholders, the Board of Directors will reconsider its
choice of BDO Seidman, LLP as the Company's independent public accounts.
A representative of BDO Seidman, LLP will be at the Meeting and will
have an opportunity to make a statement, if so desired. The representative will
be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CONVERTIBLE SUBORDINATED DEBENTURES
During fiscal 1998, the Company completed the placement of $1,500,000
of convertible subordinated debentures. Subordinated debentures outstanding at
April 25, 1999 consisted of convertible debentures bearing interest at 8%
through 31 December, 1997; 10% through 31 December, 1998; 12% through 31
December 1999; and 14% through 2011 equivalent to a blended rate of at 13.2%
annually, payable semi-annually and convertible into the Company's common stock
at a conversion rate of $1.25 per share. The Company can redeem the convertible
debentures under certain conditions. The debentures are due December 2011. A
member of the board of directors of the Company received a fee equal to 5% of
the proceeds as compensation for services in connection with this transaction.
FRANCHISING AND JOINT VENTURE FOR NEW RESTAURANT CONCEPT
In 1997, the Company formed Boston Restaurant Associates International,
Inc. ("BRAII"), a wholly owned subsidiary, for the purpose of offering Pizzeria
Regina franchise opportunities both domestically and internationally. BRAII has
filed a Uniform Franchise Offering Circular and is actively seeking franchisees
with operational experience.
In January 1998, the Company entered into an international development
agreement with Regina International, Ltd. ("Regina International") to pursue and
develop franchise territories outside the Americas, anticipated to be
principally in Europe, the Far East and the Pacific Rim. Terrance Smith, a
Company director with experience in international franchising, has a
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<PAGE>
controlling interest in Regina International, the international master
franchisee under the development agreement. The agreement provides for payment
of certain development fees and royalties to Regina International after certain
events to the extent of positive cash flow. The agreement sets forth a
development and operation schedule pursuant to which Regina International is
obligated to meet milestones regarding certain minimum numbers of operational
restaurants. Regina International has failed to meet the first such milestone,
and the development agreement provides that as a result the Company may choose
to redefine Regina International's exclusive franchise development territory to
make such territory nonexclusive and limited to the area in which it has already
sold franchises.
In December 1998, BRAII entered into a twenty-year joint venture
development agreement with Italian Ventures, LLC, a Kentucky corporation
("Italian Ventures"), for the purpose of developing and introducing a new type
of full service bistro-type restaurant in the Continental United States. The
joint venture entity, Regina Ventures, LLC ("Regina Ventures"), currently has
one franchise territory and one Company restaurant site in Medina, Ohio under
agreement. The Company has a 51% interest in Regina Ventures and Italian
Ventures holds the remaining 49% interest. Richard Reeves and Terrance Smith,
both of whom are Company directors, each have a 30% ownership interest in
Italian Ventures. Under certain circumstances, Italian Ventures may put its 49%
equity interest together with certain of its and its affiliates assets to the
Company, and under certain circumstances the Company has a call on Italian
Ventures' equity interest and the related assets. In both cases, the purchase
price is based upon the earnings and net assets of Regina Ventures, and is
payable in cash, Company stock or a combination of both at the discretion of the
Company. As a result of certain issues which have arisen over the direction of
the joint venture, the Company is currently in negotiations with Italian
Ventures over the possible restructuring of the joint venture relationship.
OTHER MATTERS
VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at
the Meeting will be tabulated by an inspector of elections appointed by the
Company. The seven (7) nominees for the Board of Directors of the Company who
receive the greatest number of votes cast at the Meeting will be elected
directors of the Company. Abstentions, including broker non-votes, will have no
effect on the outcome of the vote for the election of directors. The affirmative
vote of a majority of the shares of common stock represented in person or by
proxy at the Meeting is required for approval of Proposal No. 2. Abstentions
will have the effect of a vote against Proposal No. 2, but a broker non-vote
will have no effect.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors
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<PAGE>
and executive officers, and persons who beneficially own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission and National
Association of Securities Dealers. Such reporting persons are also required to
furnish the Company with copies of all Forms 3, 4, and 5 they file.
Based solely on the Company's review of the copies of such Forms which
it has received and written representations from certain reporting persons that
they were not required to file Forms 5 for specified fiscal years, the Company
believes that all of its directors, executive officers, and greater than 10%
stockholders complied with all Section 16(a) filing requirements applicable to
them during the Company's fiscal year ended April 25, 1999.
OTHER PROPOSED ACTION
The Board of Directors knows of no matters to be submitted at the
Meeting other than Proposals No. 1 and 2. However, if any other matters should
properly be presented at the Meeting, the persons named in the enclosed proxy
card shall have discretionary authority to vote the shares represented thereby
in accordance with their own judgment.
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to present at the Company's 2000
Annual Meeting of Stockholders pursuant to Rule 14a-8 promulgated under the
Securities Exchange Act of 1934, as amended, and wish to have included in the
Company's proxy materials must be received by the Company no later than 11 April
2000. If a proponent fails to notify the Company by June 25, 2000 of a non-Rule
14a-8 shareholder proposal which it intends to submit at the Company's 2000
Annual Meeting of Stockholders, the proxy solicited by the Board of Directors
with respect to such meeting may grant discretionary authority to the proxies
named therein to vote with respect to such matter.
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<PAGE>
INCORPORATION BY REFERENCE
THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
25 APRIL, 1999, IS BEING MAILED WITH THIS PROXY STATEMENT TO STOCKHOLDERS
ENTITLED TO NOTICE OF THE MEETING. THE CONSOLIDATED FINANCIAL STATEMENTS,
UNAUDITED SELECTED QUARTERLY DATA AND MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS INCLUDED IN THE ANNUAL REPORT ARE
INCORPORATED BY REFERENCE HEREIN.
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A COPY OF
AN ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
INVESTOR RELATIONS, BOSTON RESTAURANT ASSOCIATES, INC., 999 BROADWAY, SUITE 400,
SAUGUS, MASSACHUSETTS 01906.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED
ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
GORDON R. PENMAN, SECRETARY
BOSTON, MASSACHUSETTS
13 AUGUST, 1999
-13-
<PAGE>
PROXY BOSTON RESTAURANT ASSOCIATES, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints George R. Chapdelaine attorney and proxy
to represent the undersigned at the Annual Meeting of Stockholders (the
"Meeting") of Boston Restaurant Associates, Inc. (the "Company") to be held
on Monday, September 13, 1999, and at any adjournment or adjournments
thereof, with all power which the undersigned would possess if personally
present, and to vote all shares of stock which the undersigned may be
entitled to vote at said meeting upon the matters set forth in the Notice of
and Proxy Statement for the Meeting in accordance with the instructions on
the reverse side and with discretionary authority upon such other matters as
may come before the meeting. All previous proxies are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED
AS DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL BE
VOTED FOR THE PROPOSALS DESCRIBED IN THE NOTICE OF AND PROXY STATEMENT FOR
THE MEETINGS.
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE
(PLEASE FILL IN THE REVERSE SIDE AND MAIL IN ENCLOSED ENVELOPE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
BOSTON RESTAURANT ASSOCIATES, INC.
SEPTEMBER 13, 1999
Please Detach and Mail in the Envelope Provided
Please mark your
A /x/ votes as in this
example.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
WITHHOLD
FOR (all nominees AUTHORITY
except as marked to vote for
to contrary) all nominees FOR AGAINST ABSTAIN
1. Election of / / / / Nominees: 2. To ratify the appointment
Directors George R. Chapdelaine of BDO Seidman LLP auditors / / / / / /
Joseph J. Caruso for fiscal year 2000.
Roger Lipton
(INSTRUCTION: To withhold authority to vote Kathleen Mason
for any individual nominee, write that nominee's John P. Polcari, Jr.
name in the space provided below.) Lucille Salhany
Terrance A. Smith
- ------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Signature:____________________________ Date: __________________ Signature:____________________________ Date: __________________
NOTE: (Signatures should be the same as the name printed hereon. Executors, administrators, trustees, guardians, attorneys and
officers of corporations should add their titles when signing).
</TABLE>
