SCHEDULE 14A
(Rule 14a - 101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by registrant [x]
Filed by a party other than the registrant [ ] Check the appropriate box: [ ]
Preliminary proxy statement [x ] Definitive proxy statement [ ] Definitive
additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Benihana Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Benihana 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) (1) 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 0-11:1
- -------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
[ ] 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:
- -------------------------------------------------------------------------------
- -------------------
1 Set forth the amount on which the filing fee is
calculated and state how it was determined.
<PAGE>
BENIHANA INC.
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
The Annual Meeting of the Stockholders of BENIHANA INC. (the
"Corporation") will be held at the Doral Hotel & Country Club, 4400 N.W. 87th
Avenue, Miami, Florida 33178, on July 31, 1997, at 10:00 a.m. for the
following purposes:
1. For the election of Directors as follows (Proposal 1):
For the holders of the Corporation's Class A Common Stock, to elect one Class II
director for a term of three years;
For the holders of the Corporation's Common Stock, to elect one Class II
director for a term of three years.
2. For the holders of the Corporation's Common Stock and Class A Common
Stock, voting together as a single class, to ratify the appointment of Deloitte
& Touche LLP as the independent accountants of the Corporation for the fiscal
year ending March 29, 1998 (Proposal 2).
3. To transact such other business as may properly be brought
before the Annual Meeting.
Stockholders of record at the close of business on Tuesday, June 3,
1997 shall be entitled to notice of, and to vote at, the Annual Meeting as
provided above. A copy of the Annual Report to Stockholders for the fiscal year
ended March 30, 1997 is enclosed herewith.
You are cordially invited to attend the Annual Meeting. Whether or not
you plan to be present, kindly complete, date and sign the enclosed forms of
proxy with respect to all shares of Common Stock and Class A Common Stock which
you may own and mail them promptly in the enclosed return envelope to assure
that your shares of Common Stock and Class A Common Stock are represented. This
may save the Corporation the expense of further proxy solicitation. If you own
shares of both the Common Stock and Class A Common Stock, you will receive two
proxies, each of which must dated, signed and returned as described above. If
you do attend the Annual Meeting, you may revoke your prior proxy and vote your
shares in person if you wish.
Dated: June 19, 1997 By Order of the Board of Directors
Darwin C. Dornbush
Secretary
<PAGE>
BENIHANA INC.
8685 Northwest 53rd Terrace
Miami, Florida 33166
PROXY STATEMENT
for
Annual Meeting of Stockholders
To Be Held on July 31, 1997
Your proxies are solicited by the Board of Directors of Benihana Inc.
(the "Corporation") for use at the Annual Meeting of Stockholders (the
"Meeting") to be held at Doral Hotel & Country Club, 4400 N.W. 87th Avenue,
Miami, Florida, 33178 at 10:00 a.m. on Thursday, July 31, 1997 and at any
adjournment or adjournments thereof for the purposes set forth in the attached
Notice of Meeting. This Proxy Statement and the forms of proxy are being mailed
to stockholders on or about June 19, 1997.
The record date for determining the holders of the Corporation's Common
Stock, par value $.10 per share ("Common Stock"), and Class A Common Stock, par
value $.10 per share ("Class A Stock"), entitled to notice of and to vote at the
Meeting is the close of business on June 3, 1997.
At the Meeting, two Class II Directors are to be elected, each to serve
for a term of three years, and until their respective successors have been duly
elected and qualified. (Proposal 1). The holders of the Corporation's Common
Stock are to vote separately as a class (with each share of Common Stock having
one vote per share) to elect one Class II Director. The holders of the
Corporation's Class A Stock are to vote separately as a class (with each share
of Class A Stock having one vote per share) to elect the other Class II
director.
Holders of the Common Stock and Class A Stock are also being asked to
ratify the appointment of Deloitte & Touche LLP as the independent accountants
of the Corporation for the fiscal year ending March 29, 1998 (Proposal 2).
The Board of Directors recommends that the holders of the Common Stock
and Class A Stock vote FOR the election of the nominees for Class II Director
named herein (Proposal 1), and FOR the ratification of Deloitte & Touche LLP as
the independent public accountants of the Corporation (Proposal 2).
Any proxy given pursuant to this solicitation may be revoked at any
time by the stockholder giving it, insofar as it has not been exercised, by
delivery to the Assistant Secretary of the Corporation of a written notice of
revocation bearing a date later than the proxy, by submission of a later dated
and properly executed proxy. Any written notice revoking a proxy should be sent
to Benihana Inc., 8685 Northwest 53rd Terrace, Miami, Florida 33166, Attention:
Juan Garcia, Assistant Secretary.
The voting securities of the Corporation consist solely of the Common
Stock and Class A Stock, of which 3,557,366 shares and 2,516,300 shares,
respective, were issued and outstanding on June 3, 1997, the record date for
determining the stockholders entitled to a vote at the Meeting.
Shares represented at the Meeting by properly executed proxies will be
voted in accordance with the instructions indicated in such proxies unless such
proxies have previously been revoked. If no instructions are indicated such
shares will be voted (I) FOR the election of the two nominees of the Board of
Directors for the position of Class II Directors and (ii) FOR the ratification
of Deloitte & Touche LLP as the independent public accountants of the
Corporation (Proposal 2).
1
<PAGE>
The Board of Directors is not aware of any other matters to be brought
before the Meeting. If, however, other matters are properly presented, proxies
representing shares of Common Stock and Class A Stock will be voted on such
matters in accordance with the best judgment of the proxy holders.
Votes at the meeting will be tabulated by two independent inspectors of
election appointed by the Corporation or the Corporation's transfer agent. As a
plurality of votes cast is required for the election of directors, abstentions
and broker non-votes will have no effect on the outcome of such election. As the
affirmative vote of a majority of votes represented by the Common Stock and
Class A Stock (voting together as a class, with each share of Common Stock
having one vote and each share of Class A Stock having 1/10 vote) in person or
represented by proxy is necessary for the approval of Proposal 2 (the
ratification of the Corporation's auditors), an abstention will have the same
effect as a negative vote but "broker non-votes" will have no effect on the
outcome of the vote.
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may vote those shares in their
discretion, depending on the type of proposal involved. The Corporation believes
that, in accordance with New York Stock Exchange rules applicable to such voting
by brokers, brokers will have discretionary authority to vote with respect to
any shares as to which no instructions are received from beneficial owners with
respect to the election of directors and Proposal 2. Shares as to which brokers
have not exercised such discretionary authority or received instructions from
beneficial owners are considered "broker non-votes."
PROPOSAL 1: ELECTION OF DIRECTORS
The Corporation's Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes with the term of office of
one class expiring each year. The current directors have been elected to the
classes set forth opposite their names below. The terms of office of Irwin K.
Chapman and John E. Abdo as Class II Directors will expire at the Meeting. Mr.
Chapman has informed the Corporation that he intends to retire effective as of
the date of the Meeting. Mr. Abdo is proposed to be re-elected as a Class II
Director. Mr. Norman Becker is proposed to be elected as a Class II Director.
Mr. Abdo and Mr. Becker will each hold office for a three-year term as set forth
in the Corporation's Certificate of Incorporation and until their
respective successors shall have been duly elected and qualified.
The Corporation's Certificate of Incorporation also provides that when
the Board of Directors is divided into at least two classes, as is presently the
case, the holders of the Class A Stock vote separately as a class to elect 25%
(or the next higher whole number) of each class of the Board; provided, however,
the number of directors so elected by the holders of the Class A Stock may not
exceed 25% (or the next higher number) of the entire Board and holders of the
Class A Stock do not vote for the election of directors at any meeting of
stockholders if the terms of office of directors so elected by such holders
representing at least 25% of the Board of Directors do not expire at such
meeting. Holders of the Common Stock vote separately as a class for the
remainder of each class of the Board. The Board of Directors currently consists
of seven members, of which two members (25% of the Board, rounded to the nearest
whole director) are Class A Directors. Messrs. Robert B. Greenberg, a Class I
Director, and John E. Abdo, a Class II Director, currently serve as Class A
Directors.
At the Meeting, holders of the Class A Stock will vote separately as a
class with respect to the election of the Class II Director designated as a
Class A Director, John E. Abdo. Holders of the Common Stock will vote separately
as a class with respect to the election of the other nominee for the position of
Class II Director, Norman Becker.
The persons named as proxies in the enclosed form of proxy have been
selected by the Board of Directors. It is intended that the shares represented
by the proxies, unless authorization is withheld, shall be voted for the
election as Directors of the nominees set forth in the following table, who have
been designated by the Board of Directors and who are presently Directors of the
Corporation. Although it is not contemplated that such nominees will be unable
to serve, should such a situation arise prior to the balloting at the Meeting,
the persons named in the proxy will vote the shares represented by the proxy for
such substitute nominee(s) as they deem advisable.
2
<PAGE>
The following table sets forth certain information with respect to the
nominees for the position of Class II Directors:
Name Age Position with the Corporation
---- --- -----------------------------
Norman Becker (1) 59 Class II Director
John E. Abdo (2) 53 Class II Director
(1) Mr. Becker is currently, and has been for more than ten years,
self-employed in the practice of public accounting. Prior thereto, Mr.
Becker was an SEC and auditing partner for Touche Ross & Co., the
predecessor of Deloitte & Touche LLP for a period in excess of 10
years. In addition, Mr. Becker is an officer and director of Vanderbilt
Square Corporation and Correction Services, Inc., two
publicly-held corporations.
(2) Mr. Abdo is currently, and has been for more than the past five years,
President of Wellington Construction & Realty, Inc., a real estate
development and construction company headquartered in South Florida.
Mr. Abdo is also Vice Chairman of the Board of Directors and Chairman
of the Executive Committee of BankAtlantic Bancorp, Inc., the holding
company for BankAtlantic. Mr. Abdo is Vice Chairman of the Executive
Committee for BankAtlantic, FSB. Mr. Abdo is Vice Chairman of the Board
of Directors of BFC Financial Corporation, the controlling stockholder
of BankAtlantic Bancorp, Inc. Additionally, Mr. Abdo is Chairman of the
Board of Coconut Code, Inc., a computer software company specializing
in the restaurant industry. Mr. Abdo has served as a director of the
Corporation since May 1995, and as a director of BNC since 1990.
The following table sets forth certain information with respect to the
remaining Class I and Class III Directors, each of whom will continue in
office, and the executive officers of the Corporation.
Name Age Position with the Corporation
---- --- -----------------------------
Rocky H. Aoki (1) 58 Class III Director,
Chairman of the Board
Joel A. Schwartz (2) 56 Class III Director, President
Robert B. Greenberg (3) 53 Class I Director
Taka Yoshimoto (4) 51 Class I Director, Executive
Vice President Operations
Darwin Dornbush (5) 67 Class III Director
Michael R. Burris (6) 47 Vice President - Finance and
Treasurer
No executive officer of the Corporation has any family relationship to any
other.
(1) Mr. Aoki has been Chairman of the Board of Directors of the
Corporation since May 1995. He has been the Chairman and Chief
Executive Officer of Benihana of Tokyo Inc. ("BOT"), since its
incorporation in 1963, and beneficially owns all of its
outstanding stock. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." Mr. Aoki has served as Chairman of the Board of
Directors of BNC since its organization in 1982.
3
<PAGE>
(2) Mr. Schwartz has been President and a Director of the Corporation since
May 1995. He has served as President and Director of BNC since 1982 and
served as the Executive Vice President of BOT from September 1980 until
May 1983.
(3) Mr. Greenberg is currently, and has been since mid-1994, the
Chief Executive Officer and a Director of Sterling Vision, Inc., and
Sterling Vision of California, Inc., the franchisor of the Sterling
Optical, Ipco Optical, Site for Sore Eyes, and other optical chains.
Mr. Greenberg is also Chief Executive Officer and Director of Insight
Laser Centers, Inc. and Sterling Vision Care of California, an optical
HMO. For the five years prior thereto, Mr. Greenberg served as
President of Natural Licensing Cosmetics, Inc., and its predecessor,the
licensor of I-Natural cosmetic products. Mr. Greenberg has served as a
director of the Corporation since May 1995 and served as a director of
BNC since 1983. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
(4) Mr. Yoshimoto has served as Executive Vice President and a Director of
the Corporation since May, 1995. He served as Executive Vice President
of BNC from 1989 to 1995 and as the Director of Operations from June
1985 until August 1989. Mr. Yoshimoto served as a director of BNC
since 1990.
(5) Mr. Dornbush is currently and has been for more than the past five
years a partner in the law firm of Dornbush Mensch Mandelstam &
Schaeffer, LLP. He has served as the Secretary and a Director of the
Corporation since 1995, as Secretary of BNC since 1983 and as Secretary
and a Director of BOT since 1980. Mr. Dornbush is also a director of
Cantel Industries, Inc.
(6) Mr. Burris has served as Vice President - Finance and Treasurer of the
Corporation since May 1995 and was appointed Vice President-Finance and
Treasurer of BNC effective January 1, 1995. Through October 1994 and
for the five years prior thereto, Mr. Burris was a partner with the
accounting firm of Deloitte & Touche LLP and its predecessor.
COMMITTEES; MEETINGS OF THE BOARD OF DIRECTORS
The Corporation has a Compensation Committee, an Audit Committee and a
Stock Option Committee. Each such committee consists of directors who are not
employed by the Corporation: Robert B. Greenberg and Irwin K. Chapman in the
case of the Audit Committee; Robert B. Greenberg, John E. Abdo and Darwin C.
Dornbush in the case of the Compensation Committee; and Irwin K. Chapman, Darwin
C. Dornbush and John E. Abdo in the case of the Stock Option Committee. The
Audit Committee reviews the arrangements and scope of the Corporation's year-end
audit, reviews the Corporation's internal accounting practices and controls and
the recommendations of the Corporation's auditors and makes recommendations to
management based on its review. The Compensation Committee reviews and approves
management compensation and the Stock Option Committee administers the
Corporation's Stock Option Plans. The Audit Committee met on 3 occasions and the
Compensation Committee and Stock Option Committees met on one occasion during
the fiscal year ended March 30, 1997.
During the fiscal year ended March 30, 1997, there were three meetings
of the Board of Directors. No director attended fewer than 75% of the meetings
of the Board.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following is information relating to the beneficial ownership of
the Corporation's Common Stock and Class A Stock by all persons known by the
Corporation to own beneficially more than 5% of the Corporation's Common Stock
and Class A Stock issued and outstanding as at June 3, 1997 and by all executive
officers and directors of the Corporation. Except as otherwise noted, the named
person owns directly and exercises sole voting power and investment discretion
over the shares listed as beneficially owned by such person.
4
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
Name (and address if applicable) of Position with Amount and Nature of
Beneficial Owners, Officers and Directors the Corporation Beneficial Ownership Percent of Class
- ----------------------------------------- --------------- -------------------- ----------------
<S> <C> <C> <C>
Benihana of Tokyo, Inc. Stockholder 1,830,355 (1) 51.5%
8685 Northwest 53rd Terrace
Miami, Florida 33166
Trust U/W Vincent Terranova Stockholder 569,436 16.0%
33 South Park Terrace
Congers, New York 10920
Carl J. Terranova Stockholder 292,650 8.2%
159 Chrystie Street
New York, NY 10002
Rocky H. Aoki Chairman of the 7,500 (1) *
Board/Director
Joel A. Schwartz President/Director 38,333 (2) 1.1%
Irwin K. Chapman Director 19,500 (3) *
Robert B. Greenberg Director 7,940 (4) *
Taka Yoshimoto Executive Vice 7,000 (5) *
President-Restaurant
Operations/Director
John E. Abdo Director 23,750 (6) *
Michael Burris Vice President - 25,000 (7) *
Finance
Darwin C. Dornbush Secretary 14,750 (1,8) *
All (8) directors and 1,974,128 (1,9) 54.2%
officers as a group
5
<PAGE>
<CAPTION>
CLASS A COMMON STOCK
Name (and address if applicable of Position with Amount and Nature of
Beneficial Owners, Officers and Directors the Corporation Beneficial Ownership Percent of Class
- ----------------------------------------- --------------- -------------------- ----------------
<S> <C> <C> <C>
Benihana of Tokyo, Inc. Stockholder 300,000 (1, 10) 10.7%
8685 Northwest 53rd Terrace
Miami, Florida 33166
Trust U/W Vincent Terranova Stockholder 627,500 24.9%
33 South Park Terrace
Congers, New York 10920
Car J. Terranova Stockholder 389,800 15.5%
159 Chrystie Street
New York, NY 10002
Rocky H. Aoki Chairman of the 59,766 (1) 2.3%
Board /Director
Joel A. Schwartz President/Director 26,666 (11) 1.0%
Taka Yoshimoto Executive Vice 16,666 (12) *
President-Restaurant
Operations/Director
Michael Burris Vice President - 16,166 (13) *
Finance
John E. Abdo Director 242,500 (14) 9.6%
Norman Becker Nominee for Director 500 *
All (8) officers and directors
as a group 618,432 (15) 21.6%
</TABLE>
* less than 1%
(1) Rocky H. Aoki, who is Chairman of the Board and a director of BOT and
the Corporation, is the beneficial owner of all of the outstanding
shares of the capital stock of BOT (the "BOT Stock"). The BOT Stock is
held in a voting trust of which Messrs. Aoki, Darwin C. Dornbush, the
Secretary and a Director of the Corporation, and Katsu Aoki, Mr. Aoki's
mother, are the trustees. By reason of such position such individuals
may be deemed to share beneficial ownership of the BOT Stock and the
shares of the Corporation owned by BOT. Includes 36,666 shares subject
to options owned by Mr. Aoki which are exercisable within 60 days; does
not include 38,334 shares subject to stock options not exercisable
within 60 days.
(2) Includes 10 shares owned by Mr.Schwartz's son, as to which Mr.Schwartz
disclaims beneficial interest. Includes options to acquire 7,500 shares
which Mr. Schwartz currently has the right to exercise.
(3) Includes 13,750 shares subject to stock options owned by Mr. Chapman
which are exercisable within 60 days; does not include 1,250 shares
subject to stock options not exercisable within 60 days.
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<PAGE>
(4) Includes 640 shares owned by Mr. Greenberg's wife and 6,250 shares
subject to options owned by Mr. Greenberg which are exercisable within
60 days; does not include 1,250 shares subject to stock options not
exercisable within 60 days.
(5) Includes 5,000 shares subject to options owned by Mr. Yoshimoto which
are currently exercisable.
(6) Includes 13,750 shares subject to options owned by Mr. Abdo which are
exercisable within 60 days; does not include 1,250 shares subject to
stock options not exercisable within 60 days.
(7) Includes 25,000 shares subject to options owned by Mr. Burris which are
currently exercisable.
(8) Includes 13,750 shares subject to options owned by Mr. Dornbush which
are exercisable within 60 days; does not include 1,250 shares subject
to stock options not exercisable within 60 days.
(9) Includes an aggregate of 85,000 shares of Common Stock subject to
options owned by such directors and officers which are exercisable
within 60 days; does not include 5,000 shares subject to stock options
not exercisable within 60 days.
(10) Comprised of 300,000 shares receivable upon conversion of 2,000 shares
of the Corporation's Convertible Preferred Stock owned by BOT.
(11) Includes 26,666 shares subject to options owned by Mr. Schwartz which
are exercisable within 60 days; does not include 28,334 shares subject
to options not exercisable within 60 days.
(12) Includes 16,666 shares subject to options owned by Mr. Yoshimoto which
are exercisable within 60 days; does not include 18,334 shares subject
to options not exercisable within 60 days.
(13) Includes 11,666 shares subject to options owned by Mr. Burris which are
exercisable within 60 days; does not include 13,334 shares which are
not exercisable within 60 days.
(14) Includes 200,000 shares owned by a trust, of which Mr. Abdo is the sole
trustee and beneficiary.
(15) Includes an aggregate of 91,664 shares of Class A Common Stock subject
to options owned by such directors and officers which are exercisable
within 60 days; does not include 98,336 shares subject to options not
exercisable within 60 days.
Rules promulgated by the Securities and Exchange Commission (the "SEC")
govern the reporting of securities transactions by directors, executive officers
and holders of 10% or more of the Corporation's Common Stock or Class A Stock.
Based solely upon its review of copies of reports filed with the SEC and
received by the Corporation, the Corporation believes that its directors and
executive officers have filed all required reports on a timely basis.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended March 30,
1997, March 31, 1996 and March 26, 1995, compensation paid by the Corporation
and its predecessors (including salaries attributed to the restaurants acquired
from BOT in 1995; See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS") to the
Chief Executive Officer and to the other executive officers of the Corporation
who received more than $100,000 in salary and bonus during fiscal year 1997,
including salary, bonuses, stock options and certain other compensation:
7
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
<CAPTION>
Long-Term Compensation(1)
Name and Principal Position Year Salary Bonus Payouts(1) Options
- --------------------------- ---- ------ ----- ---------- -------
<S> <C> <C> <C> <C> <C>
$ $ $ #
Rocky H. Aoki, Chairman of 1997 350,000 86,666 35,000
the Board (2) 1996 350,000 10,000
1995 350,000 7,500
Joel A. Schwartz, President(3) 1997 247,692 63,334 25,000
1996 247,884 8,500
1995 188,462 7,500
Taka Yoshimoto, Executive 1997 134,615 40,000 15,000
Vice President(4) 1996 127,404 7,000
1995 91,538 5,000
Michael R. Burris, Vice 1997 125,000 33,334 10,000
President - Finance and 1996 127,404 3,500 10,000
Treasurer (5) 1995 50,481(5) 15,000
</TABLE>
(1) The Corporation has a long term Administrative Incentive Compensation
Plan and Employee Stock Option Plans described herein. No awards were
made prior to March 31, 1996 under the Administrative Incentive
Compensation Plan. The Corporation does not award stock appreciation
rights or restricted stock awards.
(2) Pursuant to the terms of an employment agreement with the Corporation
executed on March 18, 1986 and amended as of February 9, 1990, Mr.
Aoki, the Chairman of the Board of the Corporation, was employed by BNC
at an annual salary of $200,000. That agreement, as amended, expired on
March 31, 1995. Effective May 15, 1995, the Corporation entered into a
new five-year employment agreement that calls for annual compensation
of $350,000. The Corporation is the beneficiary of a $5,000,000 key-man
life insurance policy on Mr. Aoki's life. Proceeds of any such
insurance may not entirely eliminate the adverse effect to the
Corporation from the loss of Mr. Aoki's services. The agreement
provides for annual salary increases based on cost-of-living
adjustments and bonuses and additional salary increases as may be
determined by the Board from time to time. The agreement also provides
that if the Corporation should experience a "change-incontrol" (as
defined), Mr. Aoki will have the right to terminate his employment and
receive a severance pay equal to his base compensation for the
remainder of the term of the agreement. Mr. Aoki is prohibited from
competing with the Corporation for a period of three years after any
termination of his employment with the Corporation.
(3) Joel Schwartz, the President of the Corporation, is employed by the
Corporation on a full-time basis at an annual salary of $230,000,
pursuant to the terms of a five year employment agreement with the
Corporation entered into effective May 15, 1995. The agreement provides
for annual salary increases based on cost-of-living adjustments and
bonuses and additional salary increases as may be determined by the
Board from time to time. Mr. Schwartz is prohibited from competing with
the Corporation for a period of one year after any termination of his
employment with the Corporation.
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<PAGE>
(4) Pursuant to the terms of an Employment Agreement entered into as of
April 1, 1995, Mr. Yoshimoto, Executive Vice President of the
Corporation, is employed at an annual salary of $125,000. Mr. Yoshimoto
is prohibited from competing with the Corporation for a period of one
year after certain termination of employment with the Corporation.
(5) Pursuant to the terms of an Employment Agreement entered into as of
January 1, 1995, Mr. Burris, Vice President of Finance and Treasurer of
the Corporation, is employed at an annual salary of $125,000. Mr.
Burris' employment with the Corporation commenced January 1, 1995. Mr.
Burris is prohibited from competing with the Corporation for a period
of one year after certain termination of employment with the
Corporation.
Stock Options
The Corporation maintains the 1994 Employees' Stock Option Plan (the
"1994 Plan") and the 1996 Class A Stock Option Plan (the "1996 Plan") for
employees, and a plan for directors, the Directors' Stock Option Plan (the
"Directors' Plan), see "Directors' Compensation." The 1994 Plan makes available
for grant, options to purchase 500,000 shares of Common Stock; of such options,
options to purchase 10,000 shares have been granted and options to purchase
490,000 shares are available for grant. The 1996 Plan makes available for grant,
options to purchase 300,000 shares of Class A Common Stock; of such options to
purchase 123,507 shares have been granted and options to purchase 176,493 shares
are available for grant. As of March 30, 1997, options to purchase 36,400 shares
of Common Stock were outstanding under previous employee stock option plans of
the Corporation.
The purpose of the 1994 Plan and the 1996 Plan is to enable the
Corporation to attract, retain and motivate key employees and directors by
providing them an equity participation in the Corporation. Employees of BOT are
also eligible to participate in the 1994 Plan and 1996 Plan. The 1994 Plan and
1996 Plan provide for incentive stock options (ISO's) under Section 422A of the
Internal Revenue Code of 1986, as amended, and for options which are not ISO's.
Options granted under the 1994 Plan and 1996 Plan may not have terms exceeding
ten years, and in the case of the options which are ISO's, may not provide for
an option exercise price of less than 100% of the fair market value of the
Corporation's Common Stock on the day of the grant. In the 1995 merger of BNC
into a subsidiary of the Corporation (the "Reorganization"), each option to
purchase shares of BNC stock under BNC's stock option plans automatically became
an outstanding option to purchase an equal number of shares of Common Stock of
the Corporation at the price provided by such options.
Options Granted in Fiscal 1997
The following information is furnished for the fiscal year ended March
30, 1997 with respect to the executive officer of the Corporation who were
granted stock options during the fiscal year ended 1997 that received more than
$100,000 in salary and bonuses during the fiscal year ended 1997. Each of such
options was granted under the 1996 Plan on July 9, 1996.
<TABLE>
<CAPTION>
% of Total
Options Potential Realized Value at
Number Granted to Assumed Annual Rates of
Of Employees in Option Expiration Stock Appreciation for
Options Fiscal Year Price Date Option Term
------- ------------ ------- ----------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
5% 10%
-- ---
Rocky H. Aoki 29,673 24.0% $10.11 July 9, 2006 $189,000 $478,000
5,327 4.3% $ 9.19 July 9, 2006 $ 31,000 $ 78,000
Joel A. Schwartz 25,000 20.2% $ 9.19 July 9, 2006 $144,500 $366,000
Taka Yoshimoto 15,000 12.1% $ 9.19 July 9, 2006 $ 87,000 $220,000
Michael Burris 10,000 8.1% $ 9.19 July 9, 2006 $ 58,000 $146,000
</TABLE>
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Aggregate Option Exercise in Fiscal 1997 and Fiscal Year End Option Values
The following information is furnished for the fiscal year ended March
30, 1997 for stock option exercises during such fiscal year and the value
realized upon exercise by the named executive officers during the fiscal year
ended March 30, 1997 and the value of outstanding options held by such executive
officer as of March 30, 1997.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in the
Options at 3/30/97 Money Options at 3/30/97
Shares ---------------------------------- ----------------------------------
Acquired on Value Non- Non-
Name Exercise (#) Realized($) Exercisable (#) Exercisable (#) Exercisable ($) Exercisable ($)
- ---- ------------- ----------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK:
Joel A. Schwartz 25,000 159,375 7,500 -0- 35,625 -0-
Taka Yoshimoto -0- -0- 5,000 -0- 23,750 -0-
Michael R. Burris -0- -0- 25,000 -0- 18,750 -0-
CLASS A COMMON
STOCK:
Rocky H. Aoki -0- -0- 23,333 11,667 -0- -0-
Joel A. Schwartz -0- -0- 16,666 8,334 -0- -0-
Taka Yoshimoto -0- -0- 10,000 5,000 -0- -0-
Michael R. Burris -0- -0- 6,666 3,334 -0- -0-
</TABLE>
Deferred Compensation Plans
In fiscal 1996 the Corporation implemented a deferred compensation plan
whereby certain key executives may elect to defer up to 20% of their salary and
up to 100% of their bonus until retirement or age 55, whichever is later,
disability or death. Employees may select from various investment options from
their account balances. Investment earnings are credited to their accounts.
Incentive Plan
Restaurant Incentive Plan. The Corporation maintains an incentive bonus
program under which certain of its administrative and restaurant employees,
based on their performance, may be eligible for cash rewards.
Under the restaurant incentive program, the awards are divided among
restaurant management personnel and chefs who have been determined to have
contributed significantly to the Corporation's operating goals. In addition,
incentive bonuses of small numbers of shares of Common Stock are also offered to
selected restaurant employees.
Administrative Incentive Compensation Plan. Under the Administrative
Incentive Compensation Plan, awards are allocated to employees in its Miami
headquarters, including executive officers, if the Corporation exceeds a certain
targeted return on equity. The purpose of the plan is to align the interests of
management and the Corporation's stockholders by providing incentives, which are
directly related to identified operating objectives, to the officers and
administrative employees of the Corporation and its subsidiaries upon whose
judgment, initiative and efforts the Corporation largely depends for the
successful conduct of its business. Awards are made by the Compensation
Committee of the Board of Directors and the senior management of the Corporation
out of a bonus pool which is a predetermined percentage of the amount by which
the Corporation's Net Income After Taxes exceeds the amount required for the
targeted return on equity. For awards in excess of $1,000, one-third of the
amount awarded is paid immediately to the employee and the remaining two-thirds
is payable ratably over the succeeding two years. Amounts allocated under the
plan may be taken in cash, deferred in a non-qualified deferred compensation
plan, or be used to purchase the Corporation's Common Stock at 85% of its then
market value. The amount of award for any individual is capped at 50% of the
employee's eligible salary, which is defined as the amount of ordinary salary
less 40% of the FICA salary base.
10
<PAGE>
For the purposes of this Plan, the return on equity is computed by
dividing after tax income (computed before allocations to the Incentive
Compensation Plan) by the amount of stockholders' equity as of the beginning of
the year. The target rate of return on equity, which is approved annually by the
Compensation Committee of the Board of Directors was 20% for the fiscal year
ended March 30, 1997, which rate represented a Net Income After Taxes of
$3,466,000. For the fiscal year ended March 30, 1997, $450,000 was accrued under
the plan for payment of bonuses to employees, including executive officers. As
of the date hereof, no allocation of this bonus pool to participants has been
made.
Directors' Compensation
Non-employee directors of the Corporation receive directors' fees of
$7,500 a year plus $650 for each meeting attended and $500 for each committee
meeting attended. All directors are reimbursed for expenses incurred on behalf
of the Corporation.
In addition, each director who is not an employee of the Corporation
participates in the Directors' Plan pursuant to which options to purchase 2,500
shares of Common Stock have been granted in each year since 1994, and pursuant
to which options to purchase an additional 2,500 shares of Common Stock will be
automatically granted annually to each such non-employee director on the date of
the Corporation's Annual Meeting of Stockholders. Each option granted under the
Director's Plan has an exercise price equal to the fair market value of the
Common Stock on the date of grant for a term of 10 years and becomes exercisable
as to 50% of the number of shares covered thereby on each of the first two
anniversaries of the date of grant. The Directors' Plan authorizes the grant of
options to purchase an aggregate of 50,000 shares of Common Stock; as of March
30, 1997, options to purchase an aggregate of 25,000 shares of Common Stock have
been granted under the Directors' Plan.
Compensation Committee Interlocks
and Insider Participation
The Corporation's Compensation Committee consists of each of John E.
Abdo, Robert B. Greenberg and Darwin C. Dornbush, each of whom is a non-employee
member of the Corporation's Board of Directors.
None of such committee members was an officer or employee of the
corporation or had any relationship with the corporation requiring disclosure
under the heading "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS", except for
Darwin C. Dornbush, who serves as the Secretary of the Corporation.
REPORT ON EXECUTIVE COMPENSATION BY THE
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
Compensation Policy. The Corporation's Compensation Committee is
responsible for setting and administering the policies which govern annual
executive salaries, raises and bonuses. In addition, the Corporation's Stock
Option Committee is responsible for administering the Corporation's Employee
Stock Option Plans. The Compensation Committee consists of each of John E. Abdo,
Robert B. Greenberg and Darwin C. Dornbush, each of whom is a non-employee
member of the Corporation's Board of Directors. The Stock Option Committee
consists of Irwin K. Chapman, Darwin C. Dornbush and John E. Abdo.
The policy of the Compensation Committee is to recommend compensation
for the Corporation's Chief Executive Officer and the Corporation's other
executive officers, reflecting the contribution of such executives to the
Corporation's growth in sales and earnings, and the implementation of the
Corporation's strategic plans for growth. In addition, in order to assure the
Corporation's ability to attract and retain managerial talent, an attempt is
made to keep compensation competitive with compensation offered by other
restaurant companies of comparable quality, size and performance.
Long-term incentive compensation policy consists of the award of stock
options under the Corporation's stock option plans, which serve to identify the
reward for executive performance with increases in value for stockholders and
bonuses under the Corporation's Administrative Incentive Compensation Plan.
11
<PAGE>
Corporation's Performance and Chief Executive Officer Compensation.
Executive compensation for the fiscal year ended March 30, 1997 consisted of
base salary and bonus. The Compensation Committee met on one occasion during
such fiscal year. All salary compensation paid to the Chief Executive Officer
and to the Corporation's other executive officers during the fiscal year ended
March 30, 1997 was in accordance with the terms of written employment agreements
with such officers.
In addition, the Chief Executive Officer and each of the Corporation's
other executive officers received awards during the fiscal year ended March 30,
1997 under the Corporation's Administrative Incentive Compensation Plan. Under
this Plan, the aggregate amount available for awards to all executive officers
is determined by a formula based on the amount by which return on the
Corporation's stockholder's equity exceeds preset targets; allocation of this
amount among the Chief Executive Officer and the other executive officers is
made by the Compensation Committee (in the case of the Chief Executive Officer)
and by the Chief Executive Officer (in the cases of the other executive
officers) based upon the level of management responsibility of the various
executive officers and the relative contributions of each to the long-term
success and increase in profitability of the Corporation. Each of these factors
was equally considered.
The Stock Option Committee awarded stock options under the 1996 Plan to
the Chief Executive Officer and each of the Corporation's other executive
officers during the fiscal year ended March 30, 1997, as described in the table
above entitled "Options Granted in Fiscal 1997" in the amounts described
therein. The Stock Option Committee determined to continue the Corporation's
longstanding policy of using the award of stock options (which provide value to
the executive over time as growth in the market price in the Corporation's stock
reflects the successful achievement of the Corporation's business objectives) to
identify the success of the corporation's executives with the growth in equity
value to the Corporation's stockholders. The size of the awards made were
determined based upon the level of management responsibility of various
executive officers, their respective contribution to the achievement of the
performance objectives of the Corporation and the Committee's view of an
appropriate equity position to be maintained by the Corporation's executive
officers in light of the Corporation's market capitalization. Each of these
factors was equally considered.
Compensation Committee
John E. Abdo
Robert B. Greenberg
Darwin C. Dornbush
Stock Option Committee
John E. Abdo
Irwin K. Chapman
Darwin C. Dornbush
12
<PAGE>
PERFORMANCE GRAPH
Comparison of five year cumulative return among Benihana Inc., the NASDAQ stock
market-US index and peer group.
MAR-92 MAR-93 MAR-94 MAR-95 MAR-96 MAR-97
Benihana Inc. 100 136 171 414 664 457
New Peer Group 100 119 134 139 183 174
Old Peer Group 100 74 87 60 42 38
NASDAQ stock market-US 100 115 124 138 187 208
For purposes of comparison, the Corporation has determined to use a
restaurant industry peer group comprised of all restaurant companies included in
published census data (SIC Code 5812), as compared to using individually
selected restaurant companies. The Corporation believes that the broad based
index will provide a more consistent basis to compare the return on the
Corporation's equity with the returns on equity in the restaurant industry
generally.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
BOT and Mr. Rocky H. Aoki, collectively, own shares which have
approximately 52% of the votes represented by the Corporation's Common Stock,
which class elects 75% of the directors and, therefore, BOT and Mr. Aoki are
able to control the Corporation through the election of a majority of its
directors.
Rocky H. Aoki, the Chairman of the Board of Directors of the Corporation,
beneficially owns all of the outstanding stock of BOT. Mr. Aoki's shares in BOT
are subject to a voting trust agreement. The trustees (any two of whom have the
power to vote the shares) are Mr. Aoki, Katsu Aoki (Mr. Aoki's mother), and
Darwin C. Dornbush, the Secretary and Director of the Corporation.
The Corporation originally acquired a substantial portion of its assets
(including 11 Benihana restaurants) from BOT in 1983. On May 15, 1995 the
Corporation, pursuant to the terms of an Agreement and Plan of Reorganization
dated as of December 27, 1994 and amended as of March 17, 1995 (the
"Reorganization Agreement") by and among the Corporation, BNC Merger Corp., a
Delaware corporation and the Corporation's wholly-owned subsidiary ("Mergerco"),
BNC, and BOT, acquired 17 company-owned and 4 licensed Benihana restaurants (the
"BOT Restaurants") from BOT and all rights to the Benihana name and BOT's trade
names, service marks and proprietary systems in the United States (except for
rights related to the State of Hawaii described below) and Central and South
America and the islands in the Caribbean Sea (the "Territory") for consideration
consisting of (i) $3,000,000 in cash, (ii) 2,000 shares of the Corporation's
Series A Convertible Preferred Stock which have an aggregate liquidation
preference of $2,000,000 and are convertible into 300,000 shares of the
Corporation's Class A Stock, (iii) 76,905 shares of the Corporation's Common
Stock and (iv) a 7 1/2% , 5-year, unsecured promissory note of the Corporation
in the principal amount of $650,000. In addition the Corporation assumed the
ordinary course of business liabilities of BOT relating to the BOT Restaurants
of approximately $6,307,000 (including capitalized lease obligations) at May 15,
1995. Simultaneously therewith and also pursuant to the Reorganization
Agreement, Mergerco was merged into BNC and BNC became a wholly-owned subsidiary
of the Corporation. Under the terms of the Reorganization Agreement, each BNC
stockholder became entitled to receive one share of the Common Stock of the
Corporation for each share of BNC Common Stock owned and one share of the Class
A Stock of the Corporation for each share of BNC Class A Common Stock owned and
each option or warrant to acquire shares of BNC stock became an identical option
or warrant to purchase the same number of shares of the same class of the
Corporation's stock at the same price.
Under the Reorganization Agreement, BOT retained its ownership of a
Benihana restaurant in Honolulu, Hawaii (the "Honolulu Restaurant") and all
rights to the Marks and related intellectual property outside the Territory. The
Corporation also granted to BOT a perpetual license to operate the Honolulu
Restaurant and an exclusive license to own and operate Benihana restaurants in
Hawaii (the "Hawaiian Restaurants"). This license is royalty free with respect
to any Hawaiian restaurant beneficially owned by Mr. Aoki. The Corporation has a
right of first refusal to purchase any Hawaiian restaurant or any joint venture
or sublicensing thereof proposed to be made by BOT with an unaffiliated third
party; and, in the event any Hawaiian restaurant is sold, sublicensed or
13
<PAGE>
transferred to a third party not affiliated with Mr. Aoki, the Corporation will
be entitled to receive royalties from such restaurant equal to 6% of gross
revenues.
At the time of the Reorganization, the Corporation entered into
employment agreements with each of Rocky H. Aoki and Joel Schwartz providing for
their services as the Corporation's Chairman of the Board and President,
respectively. Each employment agreement has an initial term of five years and
the base salary of Messrs. Aoki and Schwartz shall be $350,000 and $230,000, per
annum, respectively. See "Executive Compensation."
BNC and an affiliate of BOT were parties to a management agreement
pursuant to which BNC provided certain managerial services with respect to a
Benihana restaurant owned by such subsidiary in London, England. BNC and such
subsidiary terminated this management agreement as of January 5, 1992, as of
which date approximately $410,000 was due and payable to the Corporation
pursuant to the terms of the agreement. BNC has received a note from BOT
providing for the payment of this amount over a 10-year period in equal monthly
installments, together with interest thereon at the rate of 8% per annum. As of
March 30, 1997 approximately $232,000 of the principal balance remained
outstanding under such note.
PROPOSAL 2: RATIFICATION OF DELOITTE & TOUCHE LLP AS ACCOUNTANTS
The firm of Deloitte & Touche LLP, or its predecessor Touche Ross &
Co., has audited the financial statements of the Corporation and its predecessor
since its formation in 1982 and the Board of Directors desires to continue the
services of that firm for the current fiscal year ending March 29, 1998. The
affirmative vote of a majority of the votes cast on the proposal at the Meeting
is required to ratify such appointment. This vote is not required by the
Corporation's Certificate of Incorporation or By-Laws. However, the Board of
Directors will appoint other independent public accountants if the appointment
of Deloitte & Touche LLP is not approved by a majority of the votes of the
shares represented and voting thereon at the Meeting. A representative of
Deloitte & Touche LLP is expected to be present at the Meeting and will have the
opportunity to make a statement if he or she wishes and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
IN FAVOR OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP
14
<PAGE>
ANNUAL REPORT
The Corporation's 1997 Annual Report is being mailed to stockholders
contemporaneously herewith.
STOCKHOLDER PROPOSALS
Stockholder proposals which are intended for inclusion in the
Corporation's Proxy Statement for the Meeting to be held in 1998 should be
addressed to the Assistant Secretary of the Corporation at 8685 Northwest 53rd
Terrace, Miami, Florida 33166, and must be received no later than February 12,
1998.
PROXY STATEMENT EXPENSES
Proxies will be solicited by mail. Certain officers and regular
employees of the Corporation may solicit the return of proxies by telephone,
telegraph or personal interview. No such officers and regular employees of the
Corporation will receive additional compensation for their soliciting efforts.
Brokerage houses will be requested to forward the soliciting materials to
beneficial owners. The expenses in connection with the solicitation of the
accompanying forms of proxy, including the cost of preparing, printing and
mailing the Notice of Meeting, Proxy Statement and forms of proxy either have
been or will be borne by the Corporation.
FORM 10-K
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH STOCKHOLDER, UPON WRITTEN
REQUEST DIRECTED TO JUAN C. GARCIA, ASSISTANT SECRETARY, AT 8685 NORTHWEST 53RD
TERRACE, MIAMI, FLORIDA 33166, A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM
10-K (INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO) FOR THE FISCAL
YEAR ENDED MARCH 30, 1997.
Date: June 19, 1997 Order of the Board of Directors
By: Darwin C. Dornbush, Secretary
15
<PAGE>
BENIHANA INC.
Class A Common Stock
Proxy - For the Annual Meeting of Stockholders - July 31, 1997.
This Proxy is solicited on behalf of the Board of Directors.
The undersigned stockholder of BENIHANA INC., revoking any previous
proxy for such stock, hereby appoints Rocky H. Aoki, Joel A. Schwartz and Darwin
C. Dornbush, or any one of them, the attorneys and proxies of the undersigned,
with full power of substitution, and hereby authorizes them to vote all shares
of Class A Common Stock of BENIHANA INC. which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held on July 31, 1997 at 10:00
a.m at Doral Hotel & Country Club, 4400 N.W. 87th Avenue, Miami, Florida 33178,
and any adjournments thereof on all matters coming before said meeting.
In the event no contrary instructions are indicated by the undersigned
stockholder, the proxies designated hereby are authorized to vote the shares as
to which the proxy is in accordance with the recommendation of the Board of
Directors set forth on this card.
The Board of Directors Recommends a Vote FOR the election of the nominee of the
Board of Directors (Proposal 1) and Proposal 2.
For each proposal, mark one box |-| in blue or black ink.
Proposal 1. Election of Directors.
FOR THE NOMINEE WITHHOLD AUTHORITY
John E. Abdo
Class II Director
|-| |-|
Proposal 2. Ratification of Deloitte & Touche LLP as Accountants.
FOR AGAINST ABSTAIN
|-| |-| |-|
16
<PAGE>
Please sign here exactly as your name(s) appear(s) on this Proxy.
- -----------------------------
(Signature)
- -----------------------------
(Signature)
----------------------
Dated:
If signing for an estate, trust or corporation, title or capacity should be
stated. If shares are held jointly, each holder should sign. If a partnership,
sign in partnership name by authorized person.
17
<PAGE>
BENIHANA INC.
Common Stock
Proxy - For the Annual Meeting of Stockholders - July 31, 1997.
This Proxy is solicited on behalf of the Board of Directors.
The undersigned stockholder of BENIHANA INC., revoking any previous
proxy for such stock, hereby appoints Rocky H. Aoki, Joel A. Schwartz and Darwin
C. Dornbush, or any one of them, the attorneys and proxies of the undersigned,
with full power of substitution, and hereby authorizes them to vote all shares
of Common Stock of BENIHANA INC. which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held on July 31, 1997 at 10:00 a.m at
Doral Hotel & Country Club, 4400 N.W. 87th Avenue, Miami, Florida 33178, and any
adjournments thereof on all matters coming before said meeting.
In the event no contrary instructions are indicated by the undersigned
stockholder, the proxies designated hereby are authorized to vote the shares as
to which the proxy is in accordance with the recommendation of the Board of
Directors set forth on this card.
The Board of Directors Recommends a Vote FOR the election of the nominee of the
Board of Directors (Proposal 1) and Proposal 2.
For each proposal, mark one box |-| in blue or black ink.
Proposal 1. Election of Directors.
FOR THE NOMINEE WITHHOLD AUTHORITY
Norman Becker
Class II Director
|-| |-|
Proposal 2. Ratification of Deloitte & Touche LLP as Accountants.
FOR AGAINST ABSTAIN
|-| |-| |-|
18
<PAGE>
Please sign here exactly as your name(s) appear(s) on this Proxy.
- -------------------------------
(Signature)
- -------------------------------
(Signature)
---------------------
Dated:
If signing for an estate, trust or corporation, title or capacity should be
stated. If shares are held jointly, each holder should sign. If a partnership,
sign in partnership name by authorized person.
19
<PAGE>
