<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[X]Filed by the Registrant
[ ]Filed by a Party other than the Registrant
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ] Confidential, for use of the
Commission Only
(as permitted by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-11(e) or Section
240.14a-12
Family Golf Centers, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Family Golf Centers, Inc.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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>
FAMILY GOLF CENTERS, INC.
538 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Family Golf Centers, Inc.:
The Annual Meeting of Stockholders of Family Golf Centers, Inc. (the
"Company") will be held at Sports Plus, 110 New Moriches Road, Lake Grove, New
York 11755 at 10:00 a.m., Eastern Daylight Savings Time, on July 9, 1999 for
the following purposes:
1. To elect the Board of Directors for the ensuing year.
2. To ratify the appointment of Richard A. Eisner & Company, LLP as the
independent auditors and accountants for the Company for the year
ending December 31, 1999.
3. To transact such other business as may properly come before the
meeting.
All stockholders are invited to attend the meeting. Stockholders of record
at the close of business on May 17, 1999, the record date fixed by the Board of
Directors, are entitled to notice of and to vote at the meeting. A complete
list of stockholders entitled to notice of and vote at the meeting will be open
to examination by stockholders beginning ten days prior to the meeting for any
purpose germane to the meeting during normal business hours at the office of
the Secretary of the Company at 538 Broadhollow Road, Melville, New York 11747.
Whether or not you intend to be present at the meeting, please sign and
date the enclosed proxy and return it in the enclosed envelope.
By Order of the Board of Directors
/s/ Pamela S. Charles
---------------------
PAMELA S. CHARLES
Secretary
Melville, New York
June 3, 1999
<PAGE>
FAMILY GOLF CENTERS, INC.
538 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
(516) 694-1666
----------------
PROXY STATEMENT
----------------
The accompanying proxy is solicited by the Board of Directors of Family
Golf Centers, Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., Eastern Daylight
Savings New York time, on July 9, 1999 at Sports Plus, 110 New Moriches Road,
Lake Grove, New York 11755 and any adjournment thereof.
VOTING SECURITIES; PROXIES
The Company will bear the cost of solicitation of proxies. In addition to
the solicitation of proxies by mail, certain officers and employees of the
Company, without extra remuneration, may also solicit proxies personally by
telefax and by telephone. In addition to mailing copies of this material to
stockholders, the Company may request persons, and reimburse them for their
expenses in connection therewith, who hold stock in their names or custody or
in the names of nominees for others to forward such material to those persons
for whom they hold stock of the Company and to request their authority for
execution of the proxies.
The holders of a majority of the outstanding shares of Common Stock, par
value $.01 per share (the "Common Stock"), present in person or represented by
proxy shall constitute a quorum at the Annual Meeting. The approval of a
plurality of the outstanding shares of Common Stock present in person or
represented by proxy at the Annual Meeting is required for election of the
nominees as directors. In all matters other than the election of directors, the
affirmative vote of the majority of the outstanding shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required for
the adoption of such matters.
The form of proxy solicited by the Board of Directors affords stockholders
the ability to specify a choice among approval of, disapproval of, or
abstention with respect to each matter to be acted upon at the Annual Meeting.
Shares of Common Stock represented by the proxy will be voted, except as to
matters with respect to which authority to vote is specifically withheld. Where
the solicited stockholder indicates a choice on the form of proxy with respect
to any matter to be acted upon, the shares will be voted as specified.
Abstentions and broker non-votes will not have the effect of votes in
opposition to a director or "against" any other proposal to be considered at
the Annual Meeting.
All shares of Common Stock represented by properly executed proxies which
are returned and not revoked will be voted in accordance with the instructions,
if any, given therein. If no instructions are provided in a proxy, the shares
of Common Stock represented by such proxy will be voted FOR the Board's
nominees for director, FOR the approval of Proposal 2 and in accordance with
the proxy-holder's best judgment as to any other matters raised at the Annual
Meeting. Under Delaware law, stockholders are not entitled to dissenter's
rights of appraisal with respect to Proposals 1 or 2.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise by giving written notice of such revocation to the Secretary of the
Company, executing and delivering to the Company a later dated proxy reflecting
contrary instructions or appearing at the Annual Meeting and taking appropriate
steps to vote in person.
At the close of business on May 17, 1999, 25,979,085 shares of Common
Stock were outstanding and eligible for voting at the meeting. Each stockholder
of record is entitled to one vote for each share of Common Stock held on all
matters that come before the Annual Meeting. Only stockholders of record at the
close of business on May 17, 1999 are entitled to notice of, and to vote at,
the Annual Meeting. All share and per share numbers included herein have been
retroactively adjusted to give effect to a three-for-two stock split in the
form of a stock dividend paid on May 4, 1998 to holders of record as of April
20, 1998 (the "1998 Stock Split").
This proxy material is first being mailed to stockholders commencing on or
about June 3, 1999.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
The number of directors of the Company is set by a resolution adopted by a
majority of the entire Board of Directors. The number of directors is currently
fixed at six. The number of directors to be elected at the Annual Meeting to
constitute the Board of Directors has also been fixed at six. The Board of
Directors currently consists of the six directors listed below. Each of these
six has agreed to stand for re-election at the Annual Meeting to hold office
for a period of one year until the next annual meeting, and in any event until
a successor is elected and qualified. It is intended that the accompanying
proxy will be voted in favor of the following persons to serve as directors,
unless the stockholder indicates to the contrary on the proxy.
The persons named in the accompanying proxy intend to vote for the
election as director of the nominees listed herein. Each nominee has consented
to serve if elected. The Board of Directors has no reason to believe that any
nominee will not serve if elected, but if any of them should become unavailable
to serve as a director, and if the Board of Directors designates a substitute
nominee or nominees, the persons named as proxies will vote for the substitute
nominee or nominees designated by the Board of Directors.
The following table sets forth certain information with respect to each
person who is currently a director of the Company and the individuals nominated
and recommended to be elected by the Board of Directors of the Company and is
based on the records of the Company and information furnished to it by such
persons. Reference is made to "Security Ownership of Certain Beneficial Owners
and Management" for information pertaining to stock ownership by each director
and executive officer of the Company and the nominees.
NOMINEES FOR ELECTION AS A DIRECTOR
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- ----- --------
<S> <C> <C>
Dominic Chang ............... 49 Chairman of the Board and Chief Executive Officer
James Ganley ................ 62 Director
Jimmy C.M. Hsu .............. 49 Director
Donald R. Monks ............. 51 Director
Krishnan P. Thampi .......... 50 President, Chief Operating Officer, Assistant Secretary, Treasurer
and Director
Yupin Wang .................. 66 Director
</TABLE>
DOMINIC CHANG has been the Chairman of the Board and Chief Executive
officer of the Company and its predecessors since 1991. Prior to March 1998,
Mr. Chang also held the title of President. Mr. Chang is currently serving as a
director of the National Golf Foundation and Stonybrook University Foundation.
He is also a member of the Metropolitan Regional Advisory Board of The Chase
Manhattan Corporation. From 1989 to 1992, Mr. Chang was a Senior Vice President
and Sector Executive for Corporate Real Estate and General Services for The
Bank of New York. He was responsible for the acquisition, management and
disposition of The Bank of New York's properties worldwide, facilities design
and construction, security and centralized administrative services. Mr. Chang
previously had over 15 years banking experience with Bankers Trust and Irving
Trust Company. He has a Masters Degree in Industrial Engineering from New York
University and a Bachelors Degree from the State University of New York at
Stonybrook.
JAMES GANLEY has been a director of the Company since 1994. From October
1998 until his retirement in 1990, Mr. Ganley was a Senior Executive Vice
President of The Bank of New York. Mr. Ganley was a member of the Senior
Management Steering Committee at The Bank of New York and was directly
responsible for the mergers of the systems, products and operations of The Bank
of New York with Irving Trust Company. Prior to 1988, Mr. Ganley had held
various executive positions at Irving Trust Company and was Group Executive
responsible for Banking Operations activities, which comprised 13 divisions. He
was also a member of Irving Trust Company's Senior Executive Management
Committee.
2
<PAGE>
Mr. Ganley received a Bachelors Degree in Economics from New York University
and was a participant in Harvard University's program for management
development.
JIMMY C.M. HSU has been a director of the Company since 1994. From 1995
until 1996, Mr. Hsu was the Vice Chairman of Russ Berrie and Company, Inc.
("Russ Berrie"), a New York Stock Exchange listed company which manufactures
and distributes toys and gifts to retail stores. Mr. Hsu joined Russ Berrie in
1979 as Vice President, Far East Operations. In 1987, he was appointed Senior
Vice President and Director of World-Wide Marketing of Russ Berrie. In 1991, he
was elected to the board of Russ Berrie and was appointed the position of
Executive Vice President. In 1995, Mr. Hsu became Vice Chairman of Russ Berrie.
Mr. Hsu is currently an independent investor.
DONALD R. MONKS has been a director of the Company since April 1999. Mr.
Monks is currently the Senior Vice President of The Bank of New York where he
is a manager of the Banking Operations and Technology Sector as well as a
member of the bank's Senior Policy Committee. Mr. Monks also serves on the
Board of Directors of the Depository Trust Company and as a member, and past
chairman, of the New York Clearing House Steering Committee and the CHIPCo
Operating Committee. He is also Chairman of the Federal Reserve Bank's Payments
Risk Advisory Committee. Mr. Monks holds a Masters Degree in Economics from the
University of Delaware and a Bachelors Degree in Business Administration from
Rider University.
KRISHNAN P. THAMPI has been the President, Chief Operating Officer,
Assistant Secretary, Treasurer and a director of the Company since March 1998.
Prior to March 1998 and since 1992, Mr. Thampi was the Chief Financial Officer,
Chief Operating Officer, Executive Vice President, Assistant Secretary and
Treasurer of the Company and its predecessors. He became a director of the
Company in 1994. From 1989 to 1992, he was a Senior Vice President for
Administrative Services at The Bank of New York. From 1988 to 1989, he was a
Senior Vice President for Systems Services at Irving Trust Company. He also
performed controller and personnel management functions while at Irving Trust
Company. Mr. Thampi has a Masters Degree in Business Administration from
Columba University and a Bachelors Degree in Engineering from McGill
University.
YUPIN WANG has been a director of the Company since 1994. Mr. Wang is
currently the President of W W International, a worldwide management consulting
firm. Prior to establishing W W International in 1992, Mr. Wang was a member of
the executive management team of International Business Machines Corp. ("IBM")
from 1962 to 1992. He had held various positions at IBM, including Director of
Marketing Operations, Director of Marketing Strategy and Director of Customer
Satisfaction. As Director of Customer Satisfaction, he established IBM's
Customer Satisfaction Management System, which contributed to IBM Rochester
winning the Malcolm Baldrige Award. Mr. Wang received a Bachelors Degree in
Economics from National Taiwan University and Masters Degrees from Oklahoma
State University and New York University.
Vacancies and newly-created directorships resulting from any increase in
the number of authorized directors may be filled by a majority vote of the
directors then in office. Officers are elected by, and serve at the pleasure
of, the Board of Directors.
STOCKHOLDER VOTE REQUIRED
Election of each director requires a plurality of the votes of the shares
of Common Stock present in person or represented by proxy at the Annual Meeting
and entitled to vote on the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY.
COMMITTEES OF THE BOARD--BOARD MEETINGS
The Board of Directors has established an audit, a compensation and a
stock option and award committee to assist it in the discharge of its
responsibilities. The principal responsibilities of each committee and the
members of each committee are described in succeeding paragraphs. Actions taken
by any committee of the Board of Directors are reported to the Board of
Directors, usually at its next meeting or by written report.
3
<PAGE>
The Audit Committee of the Board of Directors currently consists of
Dominic Chang, James Ganley and Yupin Wang. The Audit Committee held one
meeting during the fiscal year ended December 31, 1998. The Audit Committee is
responsible for recommending the appointment of a firm of independent public
accountants to examine the financial statements of the Company and its
subsidiaries for the coming year. In making this recommendation, it reviews the
nature of audit services rendered, or to be rendered, to the Company and its
subsidiaries. It reviews with representatives of the independent public
accountants the auditing arrangements and scope of the independent public
accountants' examination of the financial statements, results of those audits,
their fees and any problems identified by the independent public accountants
regarding internal accounting controls, together with their recommendations. It
also meets with the Company's Chief Financial Officer to review reports on the
functioning of the Company's programs for compliance with its policies and
procedures regarding financial controls and internal auditing. This includes an
assessment of internal controls within the Company and its subsidiaries based
upon the activities of the Company's internal auditing personnel as well as an
evaluation of the performance. The Audit Committee is also prepared to meet at
any time upon request of the independent public accountants or the Chief
Financial Officer to review any special situation arising in relation to any of
the foregoing subjects.
The Compensation Committee of the Board of Directors currently consists of
Dominic Chang, James Ganley and Yupin Wang. The Compensation Committee held one
meeting during the fiscal year ended December 31, 1998. Generally, this
Committee is to make recommendations to the Board of Directors as to the
remuneration arrangements for directors and executive officers and other
similar matters with respect to employees of the Company. It is intended to
review guidelines for the administration of the Company's incentive programs.
It also is intended to review and approve or make recommendations to the Board
of Directors on any proposed plan or program which would benefit primarily the
senior executive group.
The Stock Option and Award Committee of the Board of Directors currently
consists of James Ganley and Yupin Wang. The Stock Option and Award Committee
held three meetings during the fiscal year ended December 31, 1998. The Stock
Option and Award Committee is responsible for administering the Company's stock
option plans and has such power and authority as is granted to it under such
stock option plans. Specifically, the Stock Option and Award Committee
determines the persons to be granted options as well as the exercise price and
term of such options. The members of the Stock Option and Award Committee are
not eligible to participate in any stock option plan they administer, except
that they receive annual grants of non-qualified stock options to purchase
15,000 shares of Common Stock. The Stock Option and Award Committee administers
the Company's 1994 Stock Option Plan, 1996 Stock Incentive Plan, 1997 Stock
Incentive Plan and the 1998 Stock Option and Award Plan.
The Board of Directors does not have a nominating committee. This function
is performed by the Board as a whole. The Board of Directors met or acted by
unanimous written consent on 13 occasions during the fiscal year ended December
31, 1998. All directors attended at least 75% of the meetings held by the Board
and committees of which they are members.
There are no family relationships among any of the directors or executive
officers of the Company. The Company's executive officers serve in such
capacity at the pleasure of the Board of Directors.
4
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for
services in all capacities paid to Dominic Chang, the Company's Chairman of the
Board and Chief Executive Officer, Krishnan P. Thampi, the Company's President,
Chief Operating Officer, Assistant Secretary, Treasurer and Director, Jeffrey
C. Key, the Chief Financial Officer, Pamela S. Charles, a Vice President,
Secretary and General Counsel and William A. Schickler, III, a Senior Vice
President (the "Named Executives") during 1996, 1997 and 1998. Other than the
Named Executives, no other executive officer received compensation exceeding
$100,000 during 1996, 1997 or 1998. The chart below reflects the positions held
by the Named Executives during the relevant periods.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ------ ----------- ------- ------------
<S> <C> <C> <C> <C>
Dominic Chang, 1998 $175,000 -- $ 12,000(1)
Chairman of the Board 1997 $140,000 -- $ 9,000(1)
and Chief Executive 1996 $120,000 -- $ 9,000(1)(2)
Officer
Krishnan P. Thampi, 1998 $150,000 -- $ 7,200(1)
President, Chief 1997 $120,000 -- $ 7,200(1)
Operating Officer, 1996 $100,000 -- $ 7,200(1)
Assistant Secretary,
Treasurer and Director
Jeffrey C. Key, 1998 $130,000 -- --
Chief Financial Officer 1997 -- -- --
1996 -- -- --
Pamela S. Charles 1998 $110,000 -- $ 4,800(1)
Vice President, 1997 $ 95,000 -- $ 4,800(1)
Secretary and 1996 -- -- --
General Counsel
William A. Schickler, III 1998 $100,000 -- $ 4,800(1)
Senior Vice President 1997 $ 99,000 -- $ 4,800(1)
1996 $ 99,000 -- $ 4,800(1)
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
LONG-TERM
RESTRICTED SECURITIES INCENTIVE
NAME AND STOCK UNDERLYING PLAN ALL OTHER
PRINCIPAL POSITION AWARDS OPTIONS PAYOUTS COMPENSATION
- --------------------------- ---------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Dominic Chang, -- -- -- --
Chairman of the Board -- -- -- --
and Chief Executive -- -- -- --
Officer
Krishnan P. Thampi, --(3) 30,000 --
President, Chief -- 90,132 -- --
Operating Officer, -- 127,500 -- --
Assistant Secretary,
Treasurer and Director
Jeffrey C. Key, $ 534,375(4) 110,000 -- --
Chief Financial Officer -- -- -- --
-- -- -- --
Pamela S. Charles $ 36,986(5) 15,000 -- --
Vice President, -- 22,500 -- --
Secretary and -- 30,000 -- --
General Counsel
William A. Schickler, III $ 73,971(6) 15,000 -- --
Senior Vice President -- 20,250 -- --
-- 67,500 -- --
</TABLE>
- ----------
(1) Includes amounts paid to lease an automobile.
(2) Does not include $650,000 earned by Mr. Chang as a contingent purchase
price relating to the purchase by the Company in November 1995 of the
Practice Tee, Inc.
(3) A restricted stock award of 170,250 shares of Common Stock was granted in
December 1998 which award was terminated in February 1999.
(4) Represents a restricted stock award of 22,500 shares of Common Stock
granted in March 1998 which award vests in three equal installments in
March 1999, 2000 and 2001. A restricted stock award of 25,000 shares of
Common Stock was granted in December 1998 which award was terminated in
February 1999.
(5) Represents a restricted stock award of 2,250 shares of Common Stock
granted in December 1998 of which 1,500 shares vest in January 1999 and
750 shares vest in January 2000.
(6) Represents a restricted stock award of 4,500 shares of Common Stock
granted in December 1998 which award vests in three equal installments in
January 1999, 2000 and 2001.
5
<PAGE>
The following table sets forth certain information concerning options
granted to the Named Executives during the fiscal year ended December 31, 1998.
No options were granted to Mr. Chang during the fiscal year ended December 31,
1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATED
INDIVIDUAL GRANTS (1) FOR OPTION TERM
--------------------------------------------------------------- -----------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE
NAME GRANTED (1) FISCAL YEAR ($/SHARE) EXPIRATION DATE 5%($) 10%($)
- --------------------------- ------------- ----------------- ------------ ------------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Krishnan P. Thampi 30,000 4% $ 12.125 October 12, 2008 $258,360 $288,000
Jeffrey C. Key 90,000 12% $ 23.750 March 16, 2008 0 0
20,000 3% $ 12.125 October 12, 2008 $172,240 $192,000
Pamela S. Charles 15,000 2% $ 12.125 October 12, 2008 $129,180 $144,000
William A. Schickler, III 15,000 2% $ 12.125 October 12, 2008 $129,180 $144,000
</TABLE>
- ----------
(1) All options were granted pursuant to the 1998 Stock Option and Award Plan
with the exception of the 90,000 options granted to Mr. Key which were
granted under the Company's 1997 Stock Incentive Plan.
AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED DECEMBER 31, 1998 AND
FISCAL YEAR END OPTION VALUES.
The following table sets forth certain information concerning each
exercise of stock options during the last completed fiscal year by each Named
Executive and the number and value of securities underlying exercisable and
unexercisable stock options as of the fiscal year ended December 31, 1998 held
by each Named Executive.
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
----------------------------- ----------------------------
SHARES ACQUIRED VALUE REALIZED
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------------- --------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Dominic Chang 0 -- 15,000 -- $ 228,760 --
Krishnan P. Thampi 0 -- 212,544 132,588 $1,965,684 $699,769
Jeffrey C. Key 0 -- 6,000 110,000 $ 37,500 0
Pamela S. Charles 10,000 $81,679 17,500 40,000 $ 30,625 $267,225
William A. Schickler, III 0 -- 89,250 51,000 $ 656,148 $266,420
</TABLE>
6
<PAGE>
The following table sets forth certain information concerning the grant of
restricted stock to each of the Named Executives during the fiscal year ended
December 31, 1998. No restricted stock was granted to Mr. Chang during the
fiscal year ended December 31, 1998.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR
NUMBER OF SHARES OTHER PERIOD UNTIL
NAME UNITS OR OTHER RIGHTS (#) MATURATION OR PAYOUT
- ---- --------------------------- ---------------------
<S> <C> <C>
Krishnan P. Thampi ................ -- (1) -- (1)
Jeffrey C. Key .................... 22,500(2)(3) March 2001
Pamela S. Charles ................. 2,250(4) January 2000
William A. Schickler, III ......... 4,500(5) January 2001
</TABLE>
- ----------
(1) A restricted stock award of 170,250 shares of Common Stock was granted in
December 1998 which award was terminated in February 1999.
(2) A restricted stock award of 22,500 shares of Common Stock was granted in
March 1998 which award vests in three equal installments in March 1999,
2000 and 2001. Such award is subject to forfeiture in the event the Named
Executive's employment relationship with the Company terminates prior to
vesting.
(3) A restricted stock award of 25,000 shares of Common Stock was granted in
December 1998 which award was terminated in February 1999.
(4) A restricted stock award of 2,250 shares of Common Stock was granted in
December 1998 of which 1,500 shares vest in January 1999 and 750 shares
vest in January 2000. Such award is subject to forfeiture in the event
the Named Executive's employment relationship with the Company terminates
prior to vesting.
(5) A restricted stock award of 4,500 shares of Common Stock was granted in
December 1998 which award vests in three equal installments in January
1999, 2000 and 2001. Such award is subject to forfeiture in the event the
Named Executive's employment relationship with the Company terminates
prior to vesting.
STOCK OPTION AND AWARD PLANS
On July 19, 1994, the Board of Directors of the Company and stockholders
of the Company adopted the Company's 1994 Stock Option Plan (the "1994 Plan").
The 1994 Plan provides for the grant of options to purchase up to 450,000
shares of Common Stock to employees, officers, directors and consultants of the
Company. Options may be either "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
non-qualified options. Incentive stock options may be granted only to employees
of the Company, while non-qualified options may be issued to non-employees
directors, consultants and others, as well as to employees of the Company. On
March 6, 1996 the Board of Directors of the Company adopted, and on June 7,
1996, the stockholders approved, the Company's 1996 Stock Incentive Plan (the
"1996 Plan"). The 1996 Plan is identical to the 1994 Plan, except that the 1996
Plan provided (i) for the grant of options to purchase up to 750,000 shares of
Common Stock and (ii) an automatic grant of non-qualified stock options to
purchase 15,000 shares to each non-employee director upon his election or
appointment to the Board of Directors and annual grants (commencing on the date
the 1996 Plan was approved by stockholders) to each non-employee director of
non-qualified stock options to purchase 15,000 shares of Common Stock at the
fair market value of the Common Stock on the date of the grant. On April 25,
1997, the Board of Directors of the Company adopted, and on June 24, 1997 the
stockholders approved, the Company's 1997 Stock Incentive Plan (the "1997
Plan"). The 1997 Plan is identical to the 1996 Plan. On April 23, 1998, the
Board of Directors of the Company adopted, and on June 26, 1998 the
stockholders approved, the Company's 1998 Stock
7
<PAGE>
Option and Award Plan (the "1998 Plan"). The 1998 Plan is identical to the 1997
Plan except that (i) it provides for the grant of stock awards (either outright
or for a price determined) as well as options, (ii) it provides for grants of
stock awards and options for up to 1,5000,000 shares of Common Stock to those
employees, officers, directors, consultants or other individuals or entities
eligible under the 1998 Plan to receive stock awards or options (each, a "Plan
Participant") and (iii) no Plan Participant may receive more than an aggregate
of 500,000 shares of Common Stock by grant of options and/or stock awards
during the term of the 1998 Plan.
The 1994 Plan, the 1996 Plan, the 1997 Plan and the 1998 Plan
(collectively, the "Plans") are administered by the Plan Administrator, which
is the Stock Option and Award Committee or the Board of Directors, which
determines, among other things, those individuals who receive options, the time
period during which the options may be partially or fully exercised, the number
of shares of Common Stock issuable upon the exercise of each option and the
option exercise price. Non-employee directors currently receive an automatic
grant of non-qualified stock options to purchase 15,000 shares of Common Stock
upon election or appointment to the Board of Directors and annual grants of
non-qualified stock options to purchase 15,000 shares of Common Stock at the
fair market value on the date of such grant.
The exercise price per share of Common Stock subject to an incentive stock
option may not be less than the fair market value per share of Common Stock on
the date the option is granted. The per share exercise price of the Common
Stock subject to a non-qualified option may be established by the Board of
Directors. The aggregate fair market value (determined as of the date the
option is granted) of Common Stock for which any person may be granted
incentive stock options which first become exercisable in any calendar year may
not exceed $100,000. No person who owns, directly or indirectly, at the time of
the granting of an incentive stock option to such person, 10% or more of the
total combined voting power of all classes of stock of the Company (a "10%
Stockholder") shall be eligible to receive any incentive stock options under
the Plans, unless the exercise price is at least 110% of the fair market value
of the shares of Common Stock subject to the option, determined on the date of
grant. Non-qualified options are not subject to such limitation.
No stock option may be transferred by a Plan Participant other than by
will or the laws of descent and distribution, and, during the lifetime of a
Plan Participant, the option will be exercisable only by the Plan Participant.
In the event of termination of employment other than by death or disability,
the Plan Participant will have no more than three months after such termination
during which the Plan Participant shall be entitled to exercise the option,
unless otherwise determined by the Stock Option and Award Committee. Upon
termination of employment of a Plan Participant by reason of death or permanent
disability, such Plan Participant's options remain exercisable for one year
thereafter to the extent such options were exercisable on the date of such
termination.
Options under the Plans must be issued within 10 years from their
respective effective dates. Incentive stock options granted under the Plans,
cannot be exercised more than 10 years from the date of the grant. Incentive
stock options issued to a 10% Stockholder are limited to five-year terms. All
options granted under the Plans provide for the payment of the exercise price
in cash or by delivery to the Company of shares of Common Stock having a fair
market value equal to the exercise price of the options being exercised, or by
a combination of such methods. Therefore, a Plan Participant may be able to
tender shares of Common Stock to purchase additional shares of Common Stock and
may theoretically exercise all of such Plan Participant's stock options with no
investment.
Any unexercised options that expire or that terminate upon an employee's
ceasing to be employed by the Company become available again for issuance.
As of December 31, 1998, options to purchase an aggregate of 2,248,500
shares of Common Stock have been granted under the Plans, of which options to
purchase 280,648 shares have been exercised. In addition, on March 8, 1995,
Messrs. Chang and Thampi were each granted options outside of the 1994 Plan to
purchase 15,000 shares of Common Stock at $4.50 per share (the fair market
value of the Common Stock on the date of such grant) in connection with an
amendment to their respective employment agreements. These options became
exercisable in March 1996 and are still outstanding. In addition, on March 7,
1996, various employees of the Company were granted options outside the Plans
to purchase an
8
<PAGE>
aggregate of 80,250 shares of Common Stock at $13.25 (the fair market value of
the Common Stock on the date of such grant), which options vest ratably over
three years. On September 22, 1997, 18,750 options were granted outside of the
Plans to a consultant at an exercise price of $15.083. On March 16, 1998 the
Company made an award outside the 1998 Plan of 22,500 shares of restricted
stock to Jeffrey Key, which award vests over three years.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements, each expiring on
December 31, 2001, with each of Mr. Chang and Mr. Thampi, pursuant to which
each will devote at least 95% of his business time to the affairs of the
Company. Pursuant to his employment agreement, Mr. Chang received a base salary
of $120,000, $140,000 and $175,000 in 1996, 1997 and 1998, respectively, and
will receive a base salary of $190,000, $205,000 and $220,000 in 1999, 2000,
and 2001, respectively. Such base salaries are subject to additional increase
within the discretion of the Board of Directors which will take into account,
among other things, the performance of the Company and the performance, duties
and responsibilities of Mr. Chang. Mr. Chang also receives use of a
Company-leased automobile and will receive such bonuses as may be determined by
the Board of Directors throughout the term of his employment agreement. The
employment agreement also provides that Mr. Chang will not compete with the
Company for two years after the termination of his employment.
Pursuant to his employment Mr. Thampi received a base salary of $100,000,
$120,000 and $150,000 in 1996, 1997 and 1998, respectively, and will receive a
base salary of $165,000, $180,000 and $195,000 in 1999, 2000 and 2001,
respectively. Such base salaries are subject to additional increases within the
discretion of the Board of Directors which will take into account, among other
things, the performance of the Company and the performance, duties and
responsibilities of Mr. Thampi. Mr. Thampi also receives use of a
Company-leased automobile and will receive such bonuses as may be determined by
the Board of Directors throughout the term of his employment agreement. The
employment agreement also provides that Mr. Thampi will not compete with the
Company for two years after the termination of his employment.
In March 1998, the Company entered into a three-year employment agreement
with Jeffrey C. Key pursuant to which Mr. Key serves as Chief Financial Officer
of the Company and receives an annual base salary of $130,000, $140,000 and
$150,000 during each year of the three-year term, respectively. Such base
salary is subject to additional increase within the discretion of the Board of
Directors which will take into account, among other things, the performance of
the Company and the performance, duties and responsibilities of Mr. Key. Mr.
Key also received 90,000 stock options under the Company's 1997 Plan and 22,500
restricted shares of the Company's Common Stock, all of which are subject to a
three-year vesting schedule. Such restricted shares are forfeited if Mr. Key is
not employed by the Company on the date such shares are scheduled to vest. The
employment agreement also provides that Mr. Key will not compete with the
Company for one year after the termination of his employment. In addition, the
employment agreement provides that if following a change in control of the
Company (as defined in the employment agreement), Mr. Key terminates his
employment for good reason, he will be entitled to receive a lump sum payment
equal to his base salary for the remaining term of the employment agreement,
all previously earned and accrued benefits, continued full benefit coverage
under all of the Company's benefit plans and fully vested benefits under all
plans, including stock option plans.
The Company does not have written employment agreements with any of its
directors or executive officers other than Messrs. Chang, Thampi and Key.
SEVERANCE AGREEMENTS
In April 1999 the Board of Directors authorized the Company to enter into
Severance Agreements with each of the following Named Executives: Dominic
Chang, Chief Executive Officer; Krishnan P. Thampi, President, Chief Operating
Officer, Assistant Secretary and Treasurer; Jeffrey C. Key, Chief Financial
Officers; Pamela S. Charles, Vice President, Secretary and General Counsel; and
William Schickler, III, Senior Vice President.
9
<PAGE>
In general, the Severance Agreements provide that, upon termination of
employment or other specified adverse change in the employment of any Named
Executive following a Change of Control (as defined therein), the Company shall
provide to each such Named Executive certain rights and benefits, including (i)
a lump sum payment in cash in an amount equal to three time such Named
Executive's yearly earnings, (ii) acceleration of all unvested stock options
and restricted stock awards, and (iii) certain additional retirement and
welfare benefits.
DIRECTOR'S COMPENSATION
The Company's employee directors do not receive any additional
compensation for their services as directors. Non-employee directors do not
receive a fee for serving as such, but are reimbursed for expenses. In
addition, non-employee directors participate in the Company's Plans. The Plans
currently provide for the automatic grant of non-qualified stock options to
purchase 15,000 shares of Common Stock to each non-employee director upon his
or her election or appointment to the Board of Directors and annual grants of
non-qualified stock options to purchase 15,000 shares of Common Stock at the
fair market value of the Common Stock on the date of such grant.
REPORT ON REPRICING OF STOCK OPTIONS
The Company did not adjust or amend the exercise price of stock options
previously awarded to the Named Executives during the last fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Dominic Chang, James
Ganley and Yupin Wang, each of whom is a non-employee member of the Company's
Board of Directors, with the exception of Mr. Chang, who is also the Company's
Chief Executive Officer and Chairman of the Board.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors is responsible for
determining the compensation of executive officers of the Company, other than
compensation awarded pursuant to the Company's Plans which are administered by
the Stock Option and Award Committee of the Board of Directors. Mr. Chang
abstains from any vote regarding his compensation.
The Stock Option and Award Committee is responsible for granting and
setting the terms of stock option and awards under the Plans. Ganley and Wang
serve on the Stock Option and Award Committee.
GENERAL POLICIES REGARDING COMPENSATION OF EXECUTIVE OFFICERS
The Company's executive compensation policies are intended (1) to attract
and retain high quality managerial and executive talent and to motivate these
individuals to maximize stockholder returns, (2) to afford appropriate
incentives for executives to produce sustained superior performance, and (3) to
reward executives for superior individual contributions to the achievement of
the Company's business objectives. The Company's compensation structure
typically consists of base salary and stock options or awards. Together, these
components link each executive's compensation directly to individual and
Company performance.
Salary. Base salary levels reflect individual positions, responsibilities,
experience, leadership and potential contribution to the success of the
Company. Actual salaries vary based on the Compensation Committee's assessment
of the individuals executive's performance and the Company's performance.
Stock Option and Stock Awards. Stock options, which are granted at the
fair market value of the Common Stock on the date of grant, and stock awards,
which typically vest over time, are currently the Company's sole long-term
compensation vehicle. Such stock options and awards are intended to provide
employees with sufficient incentive to manage from the perspective of an owner
with an equity stake in the business.
10
<PAGE>
In determining the size of individual options or stock grants, the Stock
Option and Award Committee considers the aggregate number of shares available
for grant, the number of individuals to be considered for an award, and the
range of potential compensation levels that the options and stock awards may
yield. The number and timing of grants to executive officers are decided by the
Stock Option and Award Committee based on its subjective assessment of the
performance of each grantee. In determining the size and timing of options and
stock awards, the Stock Option and Award Committee weighs any factors it
considers relevant and gives such factors the relative weight it considers
appropriate under the circumstances then prevailing. While an ancillary goal of
the Stock Option and Award Committee in awarding stock options and stock awards
is to increase the stock ownership of the Company's management, the Stock
Option and Award Committee does not, when determining the amount of awards,
consider the amount of stock already owned by an officer (except as required by
the terms of the 1998 Plan). The Stock Option and Award Committee believes that
to do so could have the effect of inappropriately or inequitably penalizing or
rewarding executives based upon their personal decision as to stock ownership
and option exercises.
In 1993, the Internal Revenue Code was amended to limit the deductibility
of compensation paid to certain executives in excess of $1 million.
Compensation not subject to the limitation includes certain compensation
payable solely because an executive attains performance goals
("performance-based compensation"). The Company intends that stock options
granted under the Plans with an exercise price equal to or greater than the
fair market value of the shares at the time of the grant will qualify as
performance-based compensation. Stock awards will not qualify as
performance-based compensation.
The Company's compensation deduction for a particular executive's total
compensation, including compensation realized with respect to stock awards,
will be limited to $1 million. The Compensation Committee's philosophy with
respect to the $1 million cap on the tax deductibility of executive
compensation is to maximize the benefit of tax laws by seeking
performance-based exemptions and related stockholder approval where consistent
with the Company's compensation policies and practices.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Chang's base salary for the fiscal year ended December 31, 1998 was
determined by the terms of his employment agreement with the Company which is
described elsewhere in this report. The members of the Compensation and Stock
Option and Award Committees of the Company believe that Mr. Chang's base salary
level and stock option grants are modest in comparison to the outstanding
contributions Mr. Chang has made to the Company's growth and financial position
during the last fiscal year.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE STOCK OPTION AND AWARD COMMITTEE
- ------------------------ ---------------------------------
<S> <C>
Dominic Chang James Ganley
James Ganley Yupin Wang
Yupin Wang
</TABLE>
11
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Common Stock for the last 49 months with the cumulative total return on the
NASDAQ Stock Market (U.S.) Index and the Dow Jones Other Recreational Products
Index over the same period (assuming the investment of $100 in the Common
Stock, the NASDAQ Stock Market-(U.S.) Index and the Dow Jones Other
Recreational Products Index on November 17, 1994, and the reinvestment of all
dividends).
COMPARISON OF 49 MONTH CUMULATIVE TOTAL RETURN
AMONG FAMILY GOLF CENTERS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE DOW JONES OTHER RECREATIONAL PRODUCTS INDEX
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------------
11/17/94 12/94 12/95 12/96 12/97 12/98
<S> <C> <C> <C> <C> <C> <C>
FAMILY GOLF CENTERS, INC 100 98 298 492 512 484
NASDAQ STOCK MARKET (U.S.) 100 98 139 171 210 295
DOW JONES OTHER RECREATIONAL
PRODUCTS 100 104 137 164 203 223
</TABLE>
* $100 INVESTED ON 11/17/94 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 26, 1999
regarding the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each director of the Company, including Messrs. Chang and
Thampi, and (iii) all directors and executive officers of the Company as a
group. Except as otherwise indicated and subject to community property laws
where applicable, the persons named in the table below have sole voting and
dispositive power with respect to the shares of Common Stock shown as
beneficially owned by them. Information as to SAFECO Corporation, Warburg,
Pincus Asset Management, Inc., West Highland Capital, Inc., and Scudder Kemper
Investments, Inc. was derived from the Schedule 13G filed by each such
stockholder, and, except for the percentage of ownership, reflects the
information contained in the Schedule 13G as of the date such Schedule 13G was
filed.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING SHARES
- ------------------------------------ ------------------ ------------------
<S> <C> <C>
Dominic Chang (1) ................................. 3,749,001(3) 14.4%
SAFECO Corporation (2) ............................ 3,654,150 14.1%
Warburg Pincus Asset Management, Inc. (4) ......... 2,159,500 8.3%
West Highland Capital, Inc. (5) ................... 1,500,000 5.8%
Scudder Kemper Investments, Inc. (6) .............. 1,372,320 5.3%
Krishnan P. Thampi (1) ............................ 363,013(7) 1.4%
Jimmy C. M. Hsu (1) ............................... 174,375(8) *
James Ganley (1) .................................. 53,250(9) *
Yupin Wang (1) .................................... 15,000(10) *
Donald R. Monks (1) ............................... 62,845(11) *
Jeffrey C. Key (1) ................................ 58,500(12) *
Pamela S. Charles (1) ............................. 22,250(13) *
William A. Schickler, III (1) ..................... 102,700(14) *
All directors and executive officer of the
Company as a group (14 persons) .................. 4,749,817(3)(7)(8) 18.3%
(9)(10)(11)
(12)(13)(14)(15)
</TABLE>
- ----------
* Less than 1%
(1) The address of the stockholder is: c/o Family Golf Centers, Inc., 538
Broadhollow Road, Melville, New York 11747.
(2) The address of SAFECO Corporation ("SAFECO") is SAFECO Plaza, Seattle,
Washington 98185. Includes an aggregate of 2,183,250 shares of Common
Stock beneficially owned by registered investment companies for which a
subsidiary of SAFECO serves as an adviser and by employee benefit plans
for which SAFECO is a plan sponsor. SAFECO disclaims beneficial ownership
of these shares.
(3) Includes 1,000 shares of Common Stock owned by Mr. Chang's children.
Includes 15,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable. Includes an aggregate of 800,000 shares
pledged to banks to secure personal loans to Mr. Chang.
(4) The address of Warburg Pincus Asset Management, Inc. ("WPAM") is 466
Lexington Avenue, New York, New York 10017. WPAM is an Investment Advisor
registered with the Securities and Exchange Commission (the "SEC") under
Section 208 of the Investment Advisors Act of 1940, as amended (the
"Investment Advisors Act"). WPAM serves as investment advisor to many
accounts including various registered investment companies. WPAM's
accounts own 2,159,500 share of Common Stock listed above.
(5) The address of West Highland Capital, LLC ("WHC") is 300 Drakes Landing
Road, Suite 290, Greenbrae, CA 94904. WHC is a registered investment
advisor whose clients have the right to receive, or the power to direct
the receipt of dividends from, or the proceeds from the sale of the shares
of Common Stock.
13
<PAGE>
(6) The address of Scudder Kemper Investments, Inc. ("SKI") is 345 Park
Avenue, New York, NY 10154. SKI is an Investment Advisor registered with
the SEC under Section 208 of the Investment Advisors Act. SKI provides
investment advice to individuals, institutional clients and investment
companies registered under Section 8 of the Investment Company Act of 1940
("Managed Portfolios"). As a result of its role of advisor to such
entities, SKI may be deemed to be the beneficial owner of the 1,372,320
shares of Common Stock, and has neither the right to receive dividends
from nor the proceeds from the sale of any such shares by the Managed
Portfolios. SKI Managed Portfolios have the right to receive all dividends
and proceeds from the sale of such shares of Common Stock. SKI disclaims
beneficial ownership of such shares.
(7) Includes 225,088 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(8) Does not include 66,250 shares of Common Stock beneficially owned by Mr.
Hsu's brother. Mr. Hsu disclaims beneficial ownership of his brother's
shares. Includes 18,000 shares of Common Stock issuable upon exercise of
options which are currently exercisable.
(9) Includes 25,500 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(10) Includes 15,000 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(11) Includes 2,999 shares owned by Mr. Monks' daughter.
(12) Includes 36,000 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(13) Includes 20,000 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(14) Includes 91,000 shares of Common Stock issuable upon the exercise of
options which are currently exercisable.
(15) Includes (i) 236,999 shares of Common Stock issuable upon the exercise of
options which are currently exercisable, (ii) 39,750 restricted shares of
Common Stock awarded under the 1998 Plan, and (iii) 833 shares of Common
Stock beneficially owned by the spouse of an officer of the Company.
Excludes 195,250 restricted shares of Common Stock which were awarded
under the 1998 Plan and which were terminated in February 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Chang is a guarantor of $3 million principal amount loaned to the
Company by ORIX USA Corporation in May 1995. Such loan matures in May 2000.
The Company paid $280,000 during fiscal year 1998 to Executive Fliteways,
Inc., a company which manages, maintains and charters aircrafts, including an
aircraft owned by OAI Air, L.L.C., a company of which Mr. Chang is a principal.
Amounts paid to Executive Fliteways, Inc. were in consideration for use of OAI
Air's aircraft by the Company's executives for business purposes.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who beneficially own more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and the other equity securities of the Company. Officers,
directors, and persons who beneficially own more than ten percent of a
registered class of the Company's equities are required by the regulations of
the Securities and Exchange Commission to furnish the Company with copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
14
<PAGE>
representations that no other reports were required, during the fiscal year
ended December 31, 1998, all Section 16(a) filing requirements applicable to
its officers, directors, and greater than ten percent beneficial owners were
complied with; except two reports were filed late, one each by Messrs. Wang and
Key.
PROPOSAL 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Richard A. Eisner & Company, LLP has served as independent accountants for
the Company since its inception in 1994.
The Board of Directors of the Company has appointed Richard A. Eisner &
Company, LLP as independent accountants for the 1999 fiscal year and to render
other professional services as required.
The appointment of Richard A. Eisner & Company, LLP is being submitted to
stockholders for ratification.
Representatives of Richard A. Eisner & Company, LLP will be present at the
Annual Meeting, where they will have the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to
appropriate questions.
STOCKHOLDER VOTE REQUIRED
The affirmative vote of a majority of the shares of the Company's voting
Common Stock present in person or represented by proxy at the Annual Meeting
and entitled to vote with respect thereto is required to ratify the appointment
of public accountants.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31,
1998 is being mailed to stockholders with this proxy statement.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered for inclusion in the proxy
statement for presentation at the Company's 1999 Annual Meeting of Stockholders
must be received at the Company's offices at 538 Broadhollow Road, Melville,
New York 11747 no later than February 3, 2000, for inclusion in the Company's
proxy statement and form of proxy relating to such meeting. All proposals must
comply with applicable Commission rules and regulations.
With respect to stockholder proposals or other business to be considered
at the annual meeting of stockholders, the Company's By-laws provide that a
stockholder of record must give written notice to the Secretary of the Company
not less than 60 nor more than 90 days before the meeting. The notice must set
forth: (i) a brief description of the business to be brought before the
meeting, the text of the proposal or business, the reasons for conducting such
business and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made and (ii) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the proposal is made, (a) the name and address of such stockholder, as
they appear on the Company's books, and of such beneficial owner, (b) the class
and number of shares of the Company which are owned beneficially and of record
by such stockholder and such beneficial owner, (c) a description of all
arrangements or understandings between such stockholder and any other person
relating to the proposal, and (d) a representation that such stockholder
intends to appear in person or by proxy at the meeting to propose the items of
business and whether such stockholder will solicit proxies from stockholders.
The By-laws further provide that, notwithstanding the foregoing provisions,
stockholders wishing to have a proposal included in the Company's proxy
statement shall comply with the applicable requirements of the Exchange Act,
and the rules and regulations thereunder and shall have the rights provided by
Rule 14a-8 under such Act.
15
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any other matter other than those
set forth in this proxy statement that will be presented for action at the
Annual Meeting. If other matters properly come before the Annual Meeting, the
persons named as proxies intend to vote the shares they represent in accordance
with their best judgment in the interest of the Company.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1998 is incorporated herein by reference.
THE COMPANY UNDERTAKES TO PROVIDE ITS STOCKHOLDERS WITHOUT CHARGE A COPY
OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS FOR SUCH REPORT SHOULD BE
ADDRESSED TO THE OFFICE OF THE SECRETARY, FAMILY GOLF CENTERS, INC., 538
BROADHOLLOW ROAD, MELVILLE, NEW YORK 11747.
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