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.
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(Name of Registrant as Specified in its Charter)
Benihana Inc.
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:1
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4) Proposed maximum aggregate value of transaction:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
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2) Form, schedule or registration statement No.:
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3) Filing party:
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4) Date filed:
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1 Set forth the amount on which the filing fee is
calculated and state how it was determined.
<PAGE>
BENIHANA INC.
-------------
NOTICE OF 2000 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 August 3, 2000, 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 approve the adoption
of the 2000 Employees Class A Common Stock Option Plan (Proposal 2).
3. 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 April 1, 2001 (Proposal 3).
4. For the holders of the Corporation's Common Stock and Class A
Common Stock, voting together as a single class, to consider a stockholder
proposal to recommend that the two classes of Common Stock be combined into
a single class, which proposal is opposed by the Board of Directors
(Proposal 4).
5. To transact such other business as may properly be brought
before the Annual Meeting.
Stockholders of record at the close of business on Friday, June 9,
2000 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 26, 2000 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 be 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 23, 2000 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 August 3, 2000
----------------
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, August 3, 2000 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 23, 2000. .
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 Common Stock"), entitled to notice
of and to vote at the Meeting is the close of business on June 9, 2000.
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 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 Common Stock are to
vote separately as a Class (with each share of Class A Common Stock having
one vote per share) to elect one Class II Director.
Holders of the Common Stock and Class A Common Stock are also
being asked to approve the adoption of a new Stock Option Plan called
the 2000 Employees Class A Common Stock Option Plan (the "2000 Plan")
(Proposal 2) and to ratify the appointment of Deloitte & Touche LLP as the
independent accountants of the Corporation for the fiscal year ending
April 1, 2001 (Proposal 3) and to consider a proposal submitted by a
stockholder which is opposed by the Board of Directors (Proposal 4). With
respect to such proposals, holders of the Common Stock and Class A Common
Stock will vote together as a class (with each share of Class A Common Stock
having 1/10 vote per share and with each share of Common Stock having one
vote per share).
The Board of Directors recommends that the holders of the Common
Stock vote FOR the election of the nominees for Class II Directors named
herein (Proposal 1), that the holders of the Common Stock and Class A Common
Stock vote FOR the approval of the adoption of the 2000 Plan (Proposal 2)
and FOR the ratification of Deloitte & Touche LLP as the independent public
accountants of the Corporation (Proposal 3) and AGAINST the stockholder
proposal to recommend the combination of the two classes of the Corporation's
Common Stock (Proposal 4).
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 Common Stock, of which 3,576,616 shares and
2,586,868 shares, respectively, were issued and outstanding on June 9, 2000,
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, (ii) FOR
the approval of the adoption of the 2000 Plan (Proposal 2) and (iii) FOR
the ratification of Deloitte & Touche LLP as the independent public
accountants of the Corporation (Proposal 3) and (iv) AGAINST the
stockholder proposal to recommend the combination of the two classes
of the Corporation's Common Stock (Proposal 4).
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 Common
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 an independent inspector
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 at the
meeting by the Common Stock and Class A Common Stock (voting together as a
class, with each share of Common Stock having one vote and each share of
Class A Common Stock having 1/10 vote) in person or represented by proxy is
necessary for Proposal 2 (adoption of the 2000 Plan), Proposal 3 (the
ratification of the Corporation's auditors) and Proposal 4 (the stockholder
proposal to recommend the combination of the two classes of Common Stock),
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 3, but will have no such authority with respect to Proposals 2
and 4. 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 John E. Abdo and Norman Becker as Class II Directors will
expire at the Meeting. Messrs. Abdo and Becker are proposed to be re-elected
as Class II Directors, each to 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 Common 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 Common Stock may not exceed 25% (or the next
higher number) of the entire Board and holders of the Class A Common
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 (more than 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.
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.
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
---- --- -----------------------------
John E. Abdo (1) 56 Class II Director
Norman Becker (2) 62 Class II Director
(1) Mr. Abdo is and currently has been for more than the last five
years, President of the Abdo Companies, Inc., a real estate
development and construction firm headquartered in South Florida.
Mr. Abdo is also the Vice Chairman of the Board of Directors and
Chairman of the Executive Committee of BankAtlantic Bancorp., Inc.,
the holding company for BankAtlantic, F.S.B. Mr. Abdo is the Vice
Chairman of the Board of Directors and Chairman of the Executive
Committee for BankAtlantic, FSB. Mr. Abdo is the Vice Chairman of
the Board of Directors of BFC Financial Corporation, the second-tier
holding company for BankAtlantic Bancorp, Inc. as well as the
controlling shareholder of BankAtlantic Bancorp, Inc. Mr. Abdo has
served as a Director of the Corporation and its predecessor since
1990.
(2) 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 a partner with 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 Correction
Services, Inc., a publicly held corporation. Mr. Becker has served
as a Director of the Corporation since 1997.
The following table sets forth certain information with respect to
the remaining Class I and Class II Directors, each of whom will continue in
office, and the executive officers of the Corporation.
Name Age Position with the Corporation
---- --- -----------------------------
Joel A. Schwartz (1) 59 Class III Director, President
and Chief Executive Officer
Darwin C. Dornbush (2) 70 Class III Director, Secretary
Kevin Y. Aoki (3) 32 Class III Director, Vice President
Taka Yoshimoto (4) 54 Class I Director, Executive Vice
President - Operations
Robert B. Greenberg (5) 56 Class I Director
Michael R. Burris (6) 50 Senior Vice President - Finance
and Treasurer
Juan C. Garcia (7) 36 Vice President-Controller
No executive officer of the Corporation has any family relationship to any
other.
--------------------
<PAGE>
(1) Mr. Schwartz has been President and a Director of the Corporation
and its predecessor since 1982 and has served as Chief Executive
Officer since May 18, 1998. He served as the Executive Vice
President of Benihana of Tokyo, Inc. ("BOT") from September 1980
until May 1983.
(2) 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 and its predecessor since 1983 and as Secretary
and a Director of BOT since 1980. Mr. Dornbush is also a director
of Cantel Industries, Inc.
(3) Mr. Aoki has served as Vice President - Marketing and a Director
of the Corporation since November 1998. For two years prior thereto,
he served as General Manager of BOT, the originator of the Benihana
concept and a principal shareholder of the Corporation (see "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT"). From 1993
through 1996, Mr. Aoki served as Unit Manager for the Corporation's
Chicago and Dallas restaurants, and as Manager of Sales for the
Corporation's New York region. Mr. Aoki is the son of Rocky H.
Aoki, who resigned as Chairman of the Board and Chief Executive
Officer of the Corporation on May 18, 1998.
<PAGE>
(4) Mr. Yoshimoto has served as Executive Vice President of the
Corporation and its predecessor since 1989 and as the Director
of Operations from June 1985 until August 1989. Mr. Yoshimoto
has served as a Director of the Corporation and its predecessor
since 1990.
(5) Since July 1999, Mr. Greenberg serves as the President and Chief
Executive Officer of Insight Laser Vision Centers, a leading New
York vision corrections program. From July to December 1998,
Mr. Greenberg was the Chairman and Chief Executive Officer of
Ergovision, Inc., now known as EyeCity.com, a company that markets
specialty consumer eyeglasses, sunglasses, and eyedrops, and is
currently establishing a major internet site. Until December
31, 1997, Mr. Greenberg was the Chief Executive Officer of
Sterling Vision, Inc., and Sterling Vision of California, Inc.,
the franchiser of Sterling Optical, Ipco Optical, Site for Sore
Eyes, and other optical chains. Mr. Greenberg was 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
Cosmetic Licensing, Inc., and its predecessor, the licenser of
I-Natural Cosmetic Products. Mr. Greenberg has served as a
Director of the Corporation and its predecessor since 1983.
(6) Mr. Burris has served as Senior Vice President - Finance and
Chief Financial Officer of the Corporation since January 1999.
He was appointed Vice President - Finance and Treasurer of the
Corporation effective Janaury 1, 1995. Prior to his appointment
with the Corporation, Mr. Burris was a partner with Deloitte &
Touche LLP.
(7) Mr. Garcia was appointed as Vice President-Controller effective
January 28, 1999. He served as Controller of the Corporation
and its predecessor since July 1994. Previously, Mr. Garcia served
as Assistant Controller.
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, Norman Becker
and John E. Abdo 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 Norman Becker, Darwin C. Dornbush and John E. Abdo in the case of the
Stock Option Committee. The Audit Committee reviews the Corporation's
financial statements, 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 three occasions and the
Compensation Committee and Stock Option Committees met from time to time
during the fiscal year ended March 26, 2000.
During the fiscal year ended March 26, 2000, there were five
meetings of the Board of Directors. No director attended fewer than 75%
of the meetings of the Board and committees of which he was a member.
<PAGE>
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 Common Stock by all persons
known by the Corporation to own beneficially more than 5% of the
Corporation's Common Stock and Class A Common Stock issued and outstanding
as at June 9, 2000 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.
<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 1,830,405 (1) 51.2%
8685 Northwest 53rd Terrace
Miami, Florida 33166
Trust U/W Vincent Terranova Stockholder 289,800 8.1%
33 South Park Terrace
Congers, New York 10920
Carl J. Terranova Stockholder 356,600 10.0%
159 Chrystie Street
New York, NY 10002
FMR Corp. Stockholder 347,400 9.7%
82 Devonshire Street
Boston, MA 02109
Joel A. Schwartz President and 38,333 (2) 1.1%
Chief Executive
Officer/Director
Robert B. Greenberg Director 10,000 (3) *
Taka Yoshimoto Executive Vice 8,000 *
President-Restaurant
Operations/Director
John E. Abdo Director 27,500 (4) *
Norman Becker Director 2,500 (5) *
Michael R. Burris Senior Vice President- 26,000 (6) *
Finance and Treasurer
Kevin Y. Aoki Vice Pres 50 (1) *
Marketing/Director
Juan C. Garcia Vice President- 2,500 (7) *
Controller
Darwin C. Dornbush Secretary/Director 17,500 (1,8) *
All (9) directors and 1,962,788 (1,9) 53.6%
officers as a group
</TABLE>
<PAGE>
<TABLE>
<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 105,263 (1, 10) 3.9%
8685 Northwest 53rd Terrace
Miami, Florida 33166
Trust U/W Vincent Terranova Stockholder 273,700 10.6%
33 South Park Terrace
Congers, New York 10920
Commonwealth of Pennsylvania Stockholder 149,800 5.8%
Public School Employees'
Retirement System
5 North 5th Street
Harrisburg, PA 17101
FMR Corp. Stockholder 266,800 10.3%
82 Devonshire Street
Boston, MA 02109
Goldman, Sachs & Co. (10) Stockholder 881,400 (11) 34.1%
on behalf of Goldman Sachs
Asset Management
85 Broad Street
New York, NY 10004
Douglas R. Rudolph Stockholder 200,000 (12) 7.2%
212 Bal Bay Drive
Bal Harbor, FL 33154
Joel A. Schwartz President and 198,333 (13) 7.1%
Chief Executive
Officer/Director
Taka Yoshimoto Executive Vice 115,000 (14) 4.3%
President-Restaurant
Operations/Director
Kevin Y. Aoki Vice President- 7,166 (1,15) *
Marketing/Director
Michael R. Burris Vice President - Finance 87,333 (16) 3.3%
Juan C. Garcia Vice President- 38,833 (17) 1.5%
Controller
</TABLE>
<PAGE>
<TABLE>
<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>
John E. Abdo Director 255,832 (18) 9.8%
Norman Becker Director 13,832 (19) *
Darwin C. Dornbush Secretary/Director 14,132 (1,20) *
Robert Greenberg Director 13,332 (21) *
All (9) directors and 849,056 (22) 26.7%
officers as a group
-------------------
* less than 1%
</TABLE>
(1) The capital stock of BOT (the "BOT Stock") is held in a voting
trust of which Kevin Aoki, Vice President-Marketing and a
Director of the Corporation, Darwin C. Dornbush, the Secretary
and a Director of the Corporation, Grace Aoki, Kevin Aoki's sister,
and Kyle Aoki, Kevin Aoki's brother, are the trustees. In addition,
beneficial interest in the BOT Stock is held by a trust of which
Messrs. Kevin Aoki and Darwin C. Dornbush are the trustees. By
reason of such positions such individuals may be deemed to share
beneficial ownership of the BOT Stock and the shares of the
Corporation owned by BOT.
(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 10,000 shares subject to options owned by Mr. Greenberg
which are exercisable within 60 days.
(4) Includes 17,500 shares subject to options owned by Mr. Abdo
which are exercisable within 60 days.
(5) Includes 2,500 shares subject to options owned by Mr. Becker
which are exercisable within 60 days.
(6) Includes 25,000 shares subject to options owned by Mr. Burris
which are currently exercisable.
(7) Includes 2,500 shares subject to options owned by Mr. Garcia
which are currently exercisable.
(8) Includes 17,500 shares subject to options owned by Mr. Dornbush
which are exercisable within 60 days.
(9) Includes an aggregate of 82,500 shares of Common Stock subject
to options owned by such directors and officers which are
exercisable within 60 days.
(10) Comprised of 105,263 shares receivable upon conversion of 700
shares of the Corporation's Convertible Preferred Stock owned
by BOT.
(11) Based solely upon a report on Schedule 13G filed by Goldman,
Sachs & Co. on behalf of Goldman Sachs Asset Management relating
to accounts managed or advised by such persons. In such
Schedule 13G, Goldman, Sachs & Co. on behalf of Goldman Sachs
Asset Management disclaim beneficial ownership of such shares.
(12) Comprised of 200,000 shares receivable through exercise of a warrant.
<PAGE>
(13) Includes 198,333 shares subject to options owned by Mr. Schwartz
which are exercisable within 60 days; does not include 56,667
shares subject to options not exercisable within 60 days.
(14) Includes 115,000 shares subject to options owned by Mr. Yoshimoto
which are exercisable within 60 days; does not include
35,000 shares subject to options not exercisable within 60 days.
(15) Includes 6,667 shares subject to option owned by Mr. Aoki which
are exercisable within 60 days; does not include 3,333 shares
which are not exercisable within 60 days.
(16) Includes 83,333 shares subject to options owned by Mr. Burris
which are exercisable within 60 days; does not include 21,667
shares which are not exercisable within 60 days.
(17) Includes 38,833 shares subject to options owned by Mr. Garcia
which are exercisable within 60 days, does not include 16,667
shares which are not exercisable within 60 days.
(18) Includes 200,000 shares owned by a trust, of which Mr. Abdo is the
sole trustee and beneficiary. Includes 13,332 shares subject
to options owned by Mr. Abdo which are exercisable within 60 days,
does not include 6,662 shares subject to options not exercisable
within 60 days.
(19) Includes 13,332 shares subject to options owned by Mr. Becker
which are exercisable within 60 days, does not include 6,668
shares subject to options not exercisable within 60 days.
(20) Includes 6,666 shares subject to options owned by Mr. Dornbush
which are exercisable within 60 days, does not include 6,668
shares subject to options not exercisable within 60 days.
(21) Includes 13,332 shares subject to options owned by Mr. Greenberg
which are exercisable within 60 days, does not include 6,668
shares subject to options not exercisable within 60 days.
(22) Includes an aggregate of 488,828 shares of Class A Common Stock
subject to options owned by such directors and officers which are
exercisable within 60 days; does not include 160,006 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 Common 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.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended
March 26, 2000, March 28, 1999, and March 29, 1998, compensation paid by
the Corporation and its predecessors (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 2000, including salary, bonuses,
stock options and certain other compensation:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Long-Term Compensation(1)
Name and Principal Position Year Salary Bonus Payouts(1) Options
--------------------------- ---- ------ ----- ---------- -------
$ $ $ $
<S> <C> <C> <C> <C> <C>
Joel A. Schwartz, President 2000 274,615 107,333 85,000
and Chief Executive 1999 279,519 99,667 95,000
Officer (2) 1998 252,980 95,000 25,000
Taka Yoshimoto, Executive 2000 153,461 72,000 55,000
Vice President (3) 1999 150,709 61,333 50,000
1998 137,788 60,000 15,000
Michael R. Burris, Senior 2000 140,144 54,000 35,000
Vice President-Finance 1999 137,500 51,333 40,000
and Treasurer (4) 1998 127,644 50,000 10,000
Juan C. Garcia, Vice 2000 84,692 26,667 30,000
President-Controller 1999 79,750 19,000 10,000
1998 74,062 16,334 13,000
</TABLE>
(1) The Corporation has a long term Administrative Incentive
Compensation Plan and Employee Stock Option Plans described herein.
The Corporation does not award stock appreciation rights or
restricted stock awards.
(2) Joel A. Schwartz, the President and Chief Executive Officer
of the Corporation, is employed by the Corporation on a full-time
basis at an annual salary of $255,000, pursuant to the terms
of a five year employment agreement with the Corporation entered
into effective May 15, 1995 and amended December 11, 1997. The
amended agreement expires December 2002. 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.
<PAGE>
(3) Pursuant to the terms of an Employment Agreement entered
into as of April 1, 1995 and amended December 11, 1997. Mr.
Yoshimoto, Executive Vice President of the Corporation, is
employed at an annual salary of $140,000. The amended agreement
expires December 2000. Mr. Yoshimoto is prohibited from
competing with the Corporation for a period of one year after
certain termination of employment with the Corporation.
(4) Pursuant to the terms of an Employment Agreement entered into
as of January 1, 1995 and amended December 11, 1997. Mr.
Burris, Senior Vice President of Finance and Treasurer of the
Corporation, is employed at an annual salary of $137,500. The
amended agreement expires December 2000. Mr. Burris is prohibited
from competing with the Corporation for a period of one year after
certain termination of employment with the Corporation.
<PAGE>
Stock Options
The Corporation maintains the 1994 Employees' Stock Option Plan
(the "1994 Plan"); the 1996 Class A Common Stock Option Plan (the "1996
Plan") and the 1997 Employees Class A Common Stock Option Plan (the
"1997 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 288,507 shares have
been granted and options to purchase 11,493 shares are available for grant.
The 1997 Plan makes available for grant options to purchase 750,000
shares of Class A Common Stock of; such options to purchase 741,000 have
been granted and options to purchase 9,000 are available for grant. In
addition, as of March 26, 2000, options to purchase 30,500 shares of Common
Stock were outstanding under employee stock option plans of the Corporation
which have expired.
The purpose of the 1994 Plan, the 1996 Plan, 1997 Plan and
Directors' 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, 1996 Plan and 1997 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, 1996 Plan and the 1997 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 (110% of such fair market value in the case of optionees holding
10% or more of the combined voting rights of the Corporation's securities).
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 2000
The following information is furnished for the fiscal year ended
March 26, 2000 with respect to the individuals set forth in the Summary
Compensation Table who were granted stock options during the fiscal
year ended 2000 that received more than $100,000 in salary and bonuses
during the fiscal year ended 2000. Options to purchase 282,500 shares of
Class A Common Stock were granted on May 7, 1999, September 1, 1999 and
December 7, 1999 under the 1997 Plan.
<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
------- ------------ ------ ---------- --------------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Joel A. Schwartz 50,000 17.7% $11.38 May 7, 2009 $357,684 $906,441
35,000 12.4% $15.50 September 1, 2009 $341,175 $864,605
Taka Yoshimoto 35,000 12.4% $11.38 May 7, 2009 $250,379 $634,509
20,000 7.1% $15.50 September 1, 2009 $194,957 $494,060
Michael R. Burris 25,000 8.8% $11.38 May 7, 2009 $178,842 $453,221
10,000 3.5% $15.50 September 1, 2009 $ 97,479 $247,030
Juan C. Garcia 20,000 7.1% $11.38 May 7, 2009 $143,074 $362,576
10,000 3.5% $15.50 September 1, 2009 $97,479 $247,030
</TABLE>
Aggregate Option Exercise in Fiscal 2000 and Fiscal Year End Option Values
The following information is furnished for the fiscal year ended
March 26, 2000 for stock option exercises during such fiscal year and
the value realized upon exercise by the individuals set forth in the Summary
Compensation Table during the fiscal year ended March 26, 2000 and the value
of outstanding options held by such executive officers as of March 26, 2000.
<PAGE>
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in the
Options at 3/26/00 Money Options at 3/26/00
Shares --------------------- ---------------------------
Acquired on Value Non- Non-
Name Exercise Realized Exercisable Exercisable Exercisable Exercisable
---- --------------- -------- ----------- ------------ ----------- -----------
COMMON STOCK: # $ # # $ $
<S> <C> <C> <C> <C> <C> <C>
Joel A. Schwartz -0- -0- 7,500 -0- 75,000 -0-
Taka Yoshimoto 5,000 52,500 -0- -0- -0- -0-
Michael R. Burris -0- -0- 25,000 -0- 127,500 -0-
Juan C. Garcia -0- -0- 2,500 -0- 18,813 -0-
CLASS A COMMON
STOCK:
Joel A. Schwartz -0- -0- 198,333 56,667 553,646 126,042
Taka Yoshimoto -0- -0- 115,000 35,000 341,354 78,333
Michael R. Burris -0- -0- 83,333 21,667 241,875 53,125
Juan C. Garcia -0- -0- 38,833 16,667 94,031 30,625
</TABLE>
Deferred Compensation Plans
The Corporation has a deferred compensation plan whereby certain
key employees may elect to defer up to 20% of their salary and up to 100%
of their bonus until retirement or termination of employment. Employees
may select from various investment options for their account. 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 awards.
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 the Corporation's headquarters, including executive
officers, if the Corporation exceeds annual targeted returns on equity
as determined by the Compensation Committee of the Board of Directors.
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 annual targeted
return on equity for such year. 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 or deferred in a
non-qualified deferred compensation plan. 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.
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 17.5 % for the fiscal year ended March 26, 2000, which rate
represented a Net Income After Taxes of $6,072,000. During fiscal
year 2000, amounts were paid with respect to performance awards
granted in 1998 and 1999. For the fiscal year ended March 26, 2000,
$500,000 was accrued under the plan for payment of bonuses to employees,
including executive officers.
<PAGE>
Directors' Compensation
Non-employee directors of the Corporation receive directors'
fees of $12,000 a year plus $1,000 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 thru 1997, and options to purchase 10,000 shares of Class
A Common Stock were granted in 1998 and 1999 and pursuant to which options
to purchase an additional 10,000 shares of Class A 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 from 1994 through 1997 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. Each option granted under the
Director's Plan in 1998 and thereafter has an exercise price equal to
the fair market value of the Class A Common Stock on the date of grant for
a term of 10 years and becomes exercisable as to one-third of the number
of shares covered thereby on the date of grant, one-third on each of the
first two anniversaries of the date of grant. As amended, the
Directors' Plan authorizes the grant of options to purchase an aggregate
of 35,000 shares of Common Stock and 200,000 shares of Class A Common
Stock; as of March 26, 2000, options to purchase an aggregate of 35,000
shares of Common Stock and options to purchase an aggregate of 80,000 shares
of Class A Common Stock, respectively, 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 Norman Becker, 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.
Corporation's Performance and Chief Executive Officer
Compensation. Executive compensation for the fiscal year ended March 26,
2000 consisted of base salary and bonus. The Compensation Committee met
from time to time during such fiscal year. All salary compensation paid
to the Chief Executive Officer and to the Corporation's other executive
officers, except for Mr. Garcia, during the fiscal year ended March 26,
2000 was in accordance with the terms of written employment agreements
with such officers.
In addition, each of the Corporation's other executive
officers received awards during the fiscal year ended March 26,
2000 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 1997
Plan to each of the Corporation's executive officers during the fiscal
year ended March 26, 2000, as described in the table above entitled
"Options Granted in Fiscal 2000" 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
Norman Becker
Darwin C. Dornbush
<PAGE>
PERFORMANCE GRAPH
Comparison of five year cumulative return among Benihana Inc., the NASDAQ
stock market-US index and a peer group.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
COMPANY 1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Benihana Inc. 100.00 165.33 113.78 177.78 184.89 206.22
SIC Code Index 100.00 130.18 123.21 152.48 198.38 156.27
NASDAQ Market Index-U.S. 100.00 135.54 154.15 226.83 303.29 620.33
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
BOT owns shares representing approximately 51.2 % of the
votes represented by the Corporation's Common Stock, which class elects
75% of the directors and, therefore, BOT is able to control the Corporation
through the election of a majority of its directors.
The BOT Stock is held in a voting trust of which Kevin Aoki,
Vice President-Marketing and a Director of the Corporation, Darwin C.
Dornbush, the Secretary and a Director of the Corporation, Grace Aoki,
Kevin Aoki's sister, and Kyle Aoki, Kevin Aoki's brother, are the trustees.
In addition, beneficial interest in the BOT Stock is held by a trust of
which Messrs. Kevin Aoki and Darwin C. Dornbush are the trustees.
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 (the "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 Common 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 Common 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 Rocky H. 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 transferred to a third party not affiliated with Rocky H. Aoki, the
Corporation will be entitled to receive royalties from such restaurant
equal to 6% of gross revenues.
<PAGE>
PROPOSAL 2: APPROVAL OF ADOPTION OF THE 2000 EMPLOYEES CLASS A COMMON
STOCK OPTION PLAN
The Corporation's Board of Directors has unanimously adopted,
submitted for stockholder approval, and recommended that the stockholders
approve, a 2000 Employees Class A Common Stock Option plan (the "2000 Plan")
for the issuance to employees and other providers of services to the
Corporation (other than non-employee directors) of options to purchase
an aggregate of 1,500,000 shares of the Corporation's Class A Common Stock.
The Board of Directors believes that the Corporation's
traditional policy of providing employees options (and thereby additional
incentive and proprietary interest in the Corporation's success) has been
a material factor in the Corporation's ability to attract, retain
and motivate managerial, professional and other personnel. The Board
of Directors believes that the adoption of the 2000 Plan will
enable the Corporation to continue the Corporation's policy of
offering a competitive compensation package that includes, as a
significant element, stock option based compensation which strongly
identifies the optionee's personal financial success with the success of
the Corporation as a whole.
In addition to the options which would be available for grant under
the 2000 Plan, at the date of this Proxy Statement options covering 490,000
shares of Common Stock remain available for grant under the Corporation's
1994 Plan; 11,493 shares of Class A Common Stock remain available for
grant under the Corporation's 1996 Plan and 9,000 shares of Class A
Common Stock remain available for grant under the Corporation's 1997
Plan, respectively. See "EXECUTIVE COMPENSATION - Stock Options".
On May 12, 2000 the Corporation's Stock Option Committee
granted options to purchase an aggregate of 226,500 shares of Class A.
Stock under the 2000 Plan. These grants were made subject to stockholder
approval of the 2000 Plan. Included in such grants were the following grants
made to persons who were directors or executive officers of the Corporation:
<TABLE>
<CAPTION>
Number
Name Position of Options Price
---- -------- ---------- -----
<S> <C> <C> <C>
Joel A. Schwartz President/Director 50,000 $13.50
Taka Yoshimoto Executive Vice President/ 40,000 $13.50
Director
Michael R. Burris Vice President - Finance 35,000 $13.50
and Treasurer
Kevin Y. Aoki Vice President - Marketing/ 25,000 $13.50
Director
Juan C. Garcia Vice President-Controller 30,000 $13.50
All Executive Officers
as a group 180,000
</TABLE>
The Corporation's Stock Option Committee has made no determination
as to the remaining options under the 2000 Plan and is reserving all such
options for future grants.
Description of the 2000 Plan
The following description of the 2000 Plan is qualified in its
entirety by reference to the 2000 Plan, a copy of which is attached
to this Proxy Statement as Exhibit A and is incorporated by reference
herein. Attention is particularly directed to the description therein of
the prices, expiration dates and other material conditions upon which
the options may be granted and exercised.
Options granted under the 2000 Plan may either be Incentive
Stock Option ("ISO's") or non-ISO's for federal income tax purposes as more
fully set forth below. The 2000 Plan provides, among other things, that
options may be granted to purchase shares of Class A Common Stock at a price
per share fixed by the Stock Option Committee of the Board of Directors and,
in the case of an ISO, at no less than the fair market value of the
applicable class of the Corporation's Class A Common Stock on the date of
option grant 110% of such fair market value in the case of optionees holding
10% or more of the combined voting rights of the Corporation's securities.
For grants to officers or directors, the price will be the minimum price
described in the preceding sentence.
The Stock Option Committee may grant options to such persons
to purchase the number of shares as the Stock Option Committee may determine.
As non-employee members of the Board, the members of the Stock Option
Committee are ineligible to receive grants of options under the 2000 Plan.
At the discretion of the Stock Option Committee, options are for a term
not to exceed 10 years. Options may be exercised by the payment in full in
cash or with approval of the Stock Option Committee, by payment of par
value in cash with a note for the balance or in exchange for previously
issued shares of the Corporation's Class A Common Stock valued, for this
purpose, at its fair market value at the time of exchange.
All shares available under the 2000 Plan are subject to
adjustments that may be made for a merger, recapitalization, stock dividend,
stock split or other similar change affecting the number of outstanding
shares of Class A Common Stock. Shares subject to an option that lapses,
terminates or is forfeited will be available for future options or awards.
The Board of Directors may at any time amend, suspend, or
discontinue the 2000 Plan; provided that certain amendments may not be made
by the Board of Directors without approval of the stockholders. Amendments
may not alter an outstanding option without the consent of the optionee.
(a) ISO's: Although an individual can receive an unlimited number
of ISO's during any calendar year, the aggregate fair market value
(determined at the time of option grant) of the stock with respect to which
ISO's first become exercisable during any calendar year (under all of the
Corporation's Plans) cannot exceed $100,000. ISO tax treatment is denied
by the Code to any options in excess of such dollar limits. For purposes of
computing an optionee's regular tax liability, an optionee will not realize
taxable income for federal income tax purposes upon the grant or exercise of
an ISO and the Corporation will not be entitled to a deduction in
connection with the grant or the exercise of the option. For purposes of
the alternative minimum tax only, stock acquired pursuant to the
exercise of an ISO will be subject to the rules applicable to non-ISO's.
Thus, in general, the amount by which the fair market value of the option
shares at the time of ISO exercise exceeds the option exercise price (the
"Option Spread") will be an item of tax preference for purposes of the
federal alternative minimum tax and thus the Option Spread may be
subject to the alternative minimum tax unless the shares are disposed of
in a non-qualifying disposition in the year of exercise. If the
optionee is subject to the alternative minimum tax in the year of the
option exercise, the shares purchased upon the exercise of the ISO will
generally have a tax basis equal to their fair market value at the time of
ISO exercise only for purposes of computing gain or loss on a subsequent
disposition of the option shares under the alternative minimum tax. If
instead the optionee is not subject to the alternative minimum tax in the
year of the disposition of his option shares, the shares purchased upon
the exercise of an ISO will have a tax basis (for purposes of calculating
gain or loss on such disposition under the regular tax) equal to their
ISO exercise price. Each optionee should consult his tax advisor as
to the application of the alternative minimum tax to the exercise of
ISO's and the disposition of shares acquired thereby.
Provided that the optionee does not dispose of the shares acquired
upon the exercise of an ISO within two years from the date of grant or
within one year from the date of exercise, the net gain realized on
the sale or other taxable disposition of the shares is subject to tax at
capital gains tax rates. If Class A Common Stock acquired pursuant to
the exercise of an ISO is disposed of within the two year or one year
periods mentioned above, any gain realized by the optionee generally will
be taxable at the time of such disposition as (i) ordinary income to the
extend of the difference between the exercise price and the lesser of (a)
the fair market value of the Class A Common Stock on the date the ISO is
exercised, or (b) the amount realized on such disposition, and (ii)
short-term, mid-term or long-term capital gain to the extent of any
excess of the amount realized on the disposition over the fair market value
of the Class A Common Stock on the date the ISO is exercised. The
Corporation will be entitled to a deduction equal to the amount of
ordinary income recognized by the optionee at the time such income is
recognized. The Corporation will be required to satisfy any applicable
withholding requirements in order to be entitled to a tax deduction.
If the optionee pays the option exercise price by transferring to
the Corporation shares of its stock, the optionee will generally not
recognize any gain or loss with respect to the transfer of such shares,
and the optionee will have a tax basis in the shares acquired equal to
the amount of cash plus the adjusted tax basis of any shares
transferred by such optionee to the Corporation. (But see the
discussion above relating to the alternative minimum tax). However, if
the transferred shares were themselves acquired by the optionee upon
the exercise of an ISO and the transfer of such shares to the Corporation
occurs within the two-year period or the one-year period referred to above,
the optionee will generally recognize gain in connection with such
transfer to the extent the fair market value of the transferred shares
exceeds the tax basis with respect to such shares.
(b) Non-ISO's: There is no limit (subject to the limit contained
in the 2000 Plan and described above with respect to the maximum number of
options that may be granted to an optionee) on the aggregate fair market
value of stock covered by options that do not qualify as ISO's that
may be granted to an individual in any year or on the aggregate fair
market value of non-ISO's that first become exercisable in any year.
Generally, no taxable income will be recognized by the employee and no
deduction will be allowed to the Corporation upon the grant of a non-ISO.
Upon the exercise of a non-ISO, the optionee will realize an amount of
ordinary income equal to the excess of the fair market value of the
shares at the time of exercise over the option price (even though the
optionee will have received no cash), and the Corporation will be entitled
to a deduction in the same amount. Any difference between the higher of
such market value or exercise price and the price at which the
optionee may subsequently sell the shares will be treated as a
short-term, mid-term or long-term capital gain or loss.
<PAGE>
(c) Limitations on the Corporation's compensation deduction:
Section 162(m) of the Code limits the deduction which the Corporation
may take for otherwise deductible compensation payable to certain executive
officers of the Corporation to the extent that compensation paid to such
officers for such year exceeds $1 million, unless such compensation is
performance-based, is approved by the Corporation's stockholders and meets
certain other criteria. Although the Corporation intends that the 2000 Plan
will satisfy the requirements that option grants thereunder be considered
performance-based for purposes of Section 162(m) of the Code, there
can be no assurance such awards will satisfy such requirements.
(d) State and local income tax consequences may, depending
on the jurisdiction, differ from the federal income tax consequences of
the granting and exercise of an option and any later sale by the
optionee of his option stock. There may also be, again depending on the
jurisdiction, transfer or other taxes imposed in connection with a
disposition, by sale, bequest or otherwise, of options and option stock.
Optionees should consult their personal tax advisors with respect to
the specific state, local and other tax effects on them of option grants,
exercises and stock dispositions.
The net capital gain realized on the resale or disposition
of the shares is subject to tax at the same rate as ordinary income,
except that an individual's net capital gains will be subject to a maximum
tax rate of 28%. If the optionee disposes of the shares within the two or
one-year periods mentioned above, the optionee will realize taxable
ordinary income in an amount equal to any excess of the fair market value
of the shares on the date of exercise (or the amount realized on
disposition, if less) over the option price, and the Corporation will
be allowed a corresponding deduction as in the case of a non-ISO.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE IN FAVOR OF THE APPROVAL OF THE ADOPTION OF THE
2000 EMPLOYEES CLASS A COMMON STOCK OPTION PLAN
PROPOSAL 3: 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
April 1, 2001. 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
PROPOSAL 4: STOCKHOLDER PROPOSAL RELATING TO RECAPITALIZATION
James K. Swofford, Box 391, Benton, Illinois 62812, a holder of
Common Stock or Class A Common Stock having a value of at least $2,000,
has stated his intention to submit the following proposal for
consideration at the Annual Meeting of Stockholders. The proposal and
supporting statement, which the Board of Directors and the Corporation
oppose, are set forth below.
"RESOLVED that the Stockholders
of the Corporation recommend that the Board of
Directors take the necessary steps to eliminate the
two classes of Common Stock in the Corporation and
combine the two classes into one."
SUPPORTING STATEMENTS:
"There is basically no difference
between the Common Stock and the Class A Common
Stock except for voting rights. In fact, the
Company's Common Stock is convertible into Class A
Common Stock on a one-for-one basis."
"The Company would save both time
and expense by having only one type of common stock.
Both stocks are $.10 par value and there should be less
record keeping, paperwork and answering questions
involved if the two were combined."
"The Company and ultimately the
shareholders gain nothing by having two classes
of Common Stock and combining them would simplify
matters for everyone."
"Combining the two classes would double
the float of the stock, without dilution, and increase
liquidity for such a low cap company as Benihana Inc.
This could increase interest in the stock of the
Company by small cap funds and the investing public."
"Combining the two classes might help
boost or jump the price of the stock which in turn would
definitely benefit all shareholders."
"Having just one class of stock would
end the perception that the Company is run by one
individual/family and show that the Board of Directors
is interested in all its shareholders."
"The Company has said in the past that
the two classes would help with acquisitions. However,
past acquisitions have been relatively small and if the
Company does want to make additional acquisitions with
stock, it could still do this by using the one class of
stock. Many, many other companies that are a lot larger
(and perhaps wiser) than Benihana Inc. acquire others all
the time using their one and only class of stock.
Acquisitions for Benihana Inc. could be made just as
easily and efficiently using one class of stock as two."
"In summary, there is no justification
for having two classes of stock as one would be
sufficient to conduct business as well as being in the
best interest of the Company's shareholders."
"If you agree, please mark your
proxy for this resolution."
BOARD OF DIRECTORS RECOMMENDATION
THE BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING
REASONS:
The common equity of the Corporation has consisted of two
classes of Common Stock since 1987. Shares of both classes represent
identical equity interests in the Corporation, except that shares of
the Class A Common Stock possess 1/10 vote with respect to most matters
as to which shares of the Common Stock and Class A Common Stock are
entitled to vote. In addition, holders of the Class A Common Stock
vote separately as a class to elect 25% of the Corporation's
Board of Directors.
The Corporation notes that no additional recordkeeping,
paperwork or responding to questions (or related time and expense) is
incurred in maintaining the Corporation's existing capital structure
and accordingly, no savings would result to the Corporation from the
elimination of this capital structure.
Further, the Board of Directors believes that the elimination
of this dual class capital structure would eliminate a valuable and flexible
financing tool possessed by the Corporation. In certain circumstances,
the dual class capitalization permits acquisitions for equity securities
(rather than for cash or indebtedness) and the raising of equity
capital, in each case without significantly affecting the existing
voting control of the Corporation or the stability of the Corporation's
plans and policies. In fact, in 1995, the Corporation completed the
combination of the United States operations of Benihana of Tokyo, Inc.
with the Corporation's predecessor, Benihana National Corp., in part
through the reservation for issuance of shares of Class A Common Stock and,
in 1997, used a warrant to purchase Class A Common Stock in the
acquisition of Rudy's Restaurant Group, Inc. In addition, the 2000 Plan
being recommended by the Board of Directors for stockholder approval at
the meeting (Proposal 2 herein) is based on the availability of Class A
Common Stock.
<PAGE>
Stockholders should note that the stockholder proposal, if
adopted, merely constitutes a recommendation to the Board of Directors
to eliminate the Corporation's existing capital structure and will not
operate, by itself, to cause such elimination. Any decision to revise
the Corporation's capital structure remains the responsibility of the
Board of Directors, subject to stockholder approval at a subsequent
meeting of stockholders, in accordance with its responsibility to
maximize the value of the Corporation in the best interests of all
stockholders.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL
<PAGE>
ANNUAL REPORT
The Corporation's 2000 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 2001
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 5, 2001.
In order to comply with applicable provision of the
Corporation's By-Laws, stockholders intending to present proposals at the
Annual Meeting to be held in 2001 must give notice thereof to the
Secretary of the Corporation no earlier than 60 days or later than 30
days prior to the date of such Annual Meeting. In addition, in
accordance with applicable rules of the Securities and Exchange Commission,
proxies submitted in connection with the 2001 Annual Meeting may confer
discretionary authority to vote in respect of any matter to come before
such meeting as to which the Corporation has not received notice by
May 1, 2001.
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 26, 2000.
Date: June 23, 2000 Order of the Board of Directors
--------------------
---------------------------------
By: Darwin C. Dornbush, Secretary
<PAGE>
Exhibit A
BENIHANA INC.
2000 EMPLOYEES CLASS A COMMON STOCK OPTION PLAN
May 11, 2000
<PAGE>
BENIHANA INC.
2000 EMPLOYEES CLASS A COMMON STOCK OPTION PLAN
1. The Plan. This 2000 Employees Class A Common
Stock Option Plan (the "Plan") is intended to encourage ownership of stock
of Benihana Inc. (the "Corporation") by specified employees of the
Corporation and its subsidiaries and to provide additional incentive for
them to promote the success of the business of the Corporation.
2. Stock Subject to the Plan. Subject to the provisions
of Paragraph 14 hereof, the total number of shares of Class A Common Stock,
par value $.10 per share, of the Corporation (the "Stock") which may be
issued pursuant to Incentive Stock Options (as hereinafter defined) and
non-incentive stock options granted under the Plan (the "Options") shall be
One Million, Five Hundred Thousand 1,500,000. Such shares of Stock may
be, in whole or in part, either authorized and unissued shares or
treasury shares as the Board of Directors of the Corporation (the "Board")
shall from time to time determine. If an Option shall expire or terminate
for any reason without having been exercised in full, the unpurchased
shares covered thereby shall (unless the Plan shall have been terminated)
again be available for Options under the Plan.
3. Administration of the Plan. The Plan shall be
administered in all respects by a committee (the "Committee") composed
of at least two non-employee members of the Board who are designated by
the Board, each of whom shall be a "Non-Employee Director" within the
meaning of Rule 16b-3 promulgated by the Securities and Exchange
Commission, as the same (or any successor regulation thereto) may be
in effect from time to time, which Committee shall have plenary authority,
in its discretion, to determine the employees of the Corporation and its
subsidiaries to whom Options shall be granted ("Optionees"), the number of
shares to be subject to each Option (subject to the provisions of Paragraph
2) and the terms of each Option. The Committee shall also have plenary
authority, subject to the express provisions of the Plan, to interpret the
Plan, to prescribe, amend and rescind any rules and regulations relating
to the Plan and to take such other action in connection with the Plan as it
deems necessary or advisable. The interpretation and construction by
the Committee of any provisions of the Plan or of any Option granted
thereunder shall be final, and no member of the Board shall be liable for
any action or determination made in good faith with respect to the Plan
or any Option granted thereunder.
4. Employees Eligible for Options. All employees of
the Corporation or its subsidiaries, including all employees who are also
directors of the Corporation, shall be eligible to receive Options under
the Plan. In making the determination as to employees to whom Options shall
be granted and as to the number of shares to be covered by such Options,
the Committee shall take into account the duties of the respective
employees, their present and potential contributions to the success of the
Corporation and such other factors as it shall deem relevant in
connection with accomplishing the purposes of the Plan.
5. Term of Plan. The Plan shall terminate on, and
no Options shall be granted after, May 11, 2010, provided that the Board
may at any time terminate the Plan prior thereto.
6. Maximum Option Grant. With respect to Options which
are intended to qualify as Incentive Stock Options, the aggregate fair
market value (determined as of the time the Option is granted) of the
Stock with respect to which ISO's granted to any employee (whether under
this Plan or under any other stock option plan of the Corporation) become
exercisable for the first time in any year may not exceed $100,000. The
number of shares of Stock for which any employee may be granted Options
under the Plan not treated as Incentive Stock Options shall be unlimited.
7. Option Price. Each Option shall state the option
price, which shall be, in the case of Incentive Stock Options, not less
than 100% of the fair market value of the Stock on the date of the
granting of the Option, nor less than 110% in the case of an Incentive
Stock Option granted to an individual who, at the time the Option
is granted, is a 10% Holder (as hereinafter defined). The fair market
value of shares of Stock shall be determined by the Committee and
shall be the mean between the high bid and low asked prices of the Stock
on the date of the granting of the Option as reported by the National
Quotation Bureau, Inc. or any similar organization.
8. Term of Options. The term of each Option shall be
for a maximum of ten years from the date of granting thereof, and a
maximum of five years in the case of an Incentive Stock Option granted to
a 10% Holder, but may be for a lesser period or be subject to earlier
termination as hereinafter provided.
9. Exercise of Options.
(a) An Option may be exercised from time to
time as to any part or all of the Stock to which the Optionee shall then
be entitled subject to any vesting schedule which may be set by the
Committee at the time such Option is granted; provided, however, that an
Option may not be exercised (A) as to less than 100 Shares at any time
(or for the remaining Shares then purchasable under the Option, if less
than 100 Shares), (B) prior to the expiration of six months from date of
grant except in the case of the death or disability of the Optionee, and
(C) unless the Optionee shall have been in the continuous employ of the
Corporation or its subsidiaries from the date of the granting of the
Option to the date of its exercise, except as provided in Paragraphs 12
and 13. The purchase price of the Stock issuable upon exercise of an Option
shall be paid in full at the time of the exercise thereof (i) in cash, (ii)
by the transfer to the Corporation of shares of its Stock with a fair market
value (as determined by the Committee) equal to the purchase price of the
Stock issuable upon exercise of such Option, or (iii) by delivery of cash
and a note as set forth in Subparagraph (b) below; provided, however,
that payment as set forth in clauses (ii) and (iii) are subject to
approval by the Committee in its sole discretion. The holder of an Option
shall not have any rights as a stockholder with respect to the Stock
issuable upon exercise of an Option until certificates for such Stock
shall have been delivered to him after the exercise of the Option.
(b) The Committee may, in its sole discretion,
determine with respect to any Option that it shall provide that the Optionee
shall be entitled to pay for the shares purchased upon exercise of the
option upon the following terms and conditions:
(i) The price per share will be payable in
cash at least equal to the par value of the Stock covered by such
Option and the remainder with a promissory note (the "Note"), in
form satisfactory to counsel to the Corporation. The Note will
mature and be payable no later than on the tenth anniversary of
the exercise date and shall bear interest and be payable at such
time or times as the Committee may determine. The Optionee will
have the right to prepay at any time the entire, and from time to
time any portion of, the unpaid principal of the Note. No
prepayment shall in any way obligate the Corporation to forgive
or accelerate the forgiveness of any portion of the Note.
(ii) As part of its compensation program, the
Corporation may forgive on each annual anniversary of the exercise
date not less than 5% of the purchase price (but not accrued
interest) by crediting such amount against the principal of the
Note (or will pay the Optionee such percentage of the purchase
price in the event of prepayment by the Optionee) if, and only if,
the Optionee is on such date, and has at all times during the
preceding twelve months been, an active or retired employee of
the Corporation or subsidiary corporation of the Corporation.
If an Optionee disposes of any of the shares acquired upon
exercise of any option granted in accordance with this Subparagraph
9(b), the amount of any forgiveness on each subsequent
anniversary shall be reduced proportionately.
(iii) Whenever in the judgment of the
Committee, the profitability and financial and other conditions of
the Corporation are such as to justify such action, the Committee
may increase or accelerate to such date as it shall determine the
forgiveness of all or any portions of the Note. Such action is
discretionary and is not required regardless of the Corporation's
financial condition or the Optionee's performance. Accrued interest
if due on any portion of the Note so forgiven shall be payable on
the date to which forgiveness is accelerated.
(iv) Upon the termination of employment of
an Optionee for any reason whatsoever, other than death,
disability, or retirement, the entire unpaid balance due on the
Note shall become and be immediately due and payable, with accrued
interest, on the sixtieth day after such termination. Upon the
termination of employment of an Optionee by reason of death,
disability, or retirement, the payment terms of the Note shall not
accelerate and the Note shall remain the obligation of the
Optionee or the Optionee's estate.
(v) The Committee may, in its discretion, require
the Optionee to pledge the Stock acquired through exercise of the
Option as security for repayment of the Note.
10. Non-transferability of Options. Except as provided in
the following sentence, an Option shall not be transferable otherwise than
by will or the laws of descent and distribution and is exercisable during
the lifetime of the employee only by him or his guardian or legal
representative. The Committee shall have discretionary authority to
grant Options which will be transferable to members of an Optionee's
immediate family, including trusts for the benefit of such family members
and partnerships in which such family members are the only partners. A
transferred Option shall be subject to all of the same terms and conditions
as if such Option had not been transferred.
11. Form of Option. Each Option granted pursuant to the
Plan shall be evidenced by an agreement (the "Option Agreement") which
shall clearly identify the status of the Options granted thereunder
(i.e., whether an Incentive Stock Option or non-incentive stock option)
and which shall be in such form as the Committee shall from time to time
approve. The Option Agreement shall comply in all respects with the terms
and conditions of the Plan and may contain such additional provisions,
including, without limitation, restrictions upon the exercise of the
Option, as the Committee shall deem advisable.
12. Termination of Employment. In the event that
the employment of an Optionee shall be terminated (otherwise than by
reason of death), such Option shall be exercisable (to the extent that
such Option was exercisable at the time of termination of his employment)
at any time prior to the expiration of a period of time not exceeding
three months after such termination, but not more than ten years (five
years in the case of an Incentive Stock Option granted to a 10% Holder)
after the date on which such Option shall have been granted. Nothing in
the Plan or in the Option Agreement shall confer upon the Optionee any
right to be continued in the employ of the Corporation or its subsidiaries
or interfere in any way with the right of the Corporation or any subsidiary
to terminate or otherwise modify the terms of Optionee's employment,
provided, however, that a change in Optionee's duties or position shall
not affect such Optionee's Option so long as such Optionee is still an
employee of the Corporation or its subsidiaries.
13. Death of Optionee. In the event of the death
of an Optionee, any unexercised portion of this Option shall be
exercisable (to the extent that such Option was exercisable at the time
of his death) at any time prior to the expiration of a period not exceeding
three months after his death (or, in the case of an Option which is not an
Incentive Stock Option, three months after the appointment and
qualification of Optionees legal representative) but not more than
ten years (five years in the case of an Incentive Stock Option granted
to a 10% Holder) after the date on which such Option shall have been
granted and only by such person or persons to whom such deceased Optionee's
rights shall pass under such Optionee's will or by the laws of descent and
distribution.
14. Adjustments Upon Changes in Capitalization. In the
event of changes in the outstanding Stock of the Corporation by reason
of stock dividends, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations or
liquidations, the number and class of shares or the amount of cash or
other assets or securities available upon the exercise of any Option
granted hereunder, the exercise price therefor, the maximum number of
Shares as to which Options may be granted to an employee and the total
number of shares which may be issued upon exercise of Options under this
Plan shall be correspondingly adjusted, to the end that the Optionee's
proportionate interest in the Corporation, any successor thereto or in the
cash, assets or other securities into which Shares are converted or
exchanged, and the cost thereof, shall be maintained to the same extent, as
near as may be practicable, as immediately before the occurrence of any
such event. All references in this Plan to "Stock" from and after the
occurrence of such event shall be deemed for all purposes of this Plan to
refer to such other class of shares or securities issuable upon the
exercise of Options granted pursuant hereto.
15. Shareholder Approval. This Plan is subject to
and no Options shall be exercisable hereunder until after the approval of
this Plan by the holders of a majority of the Common Stock and Class A
Common Stock of the Corporation voting together as a single class (with
the holders of shares of Class A Common Stock having 1/10 vote per share)
at a duly held meeting of the stockholders of the Corporation within
twelve months after the date of the adoption of the Plan by the Board.
16. Amendment of the Plan. The Board shall have complete
power and authority to modify or amend the Plan (including the form
of Option Agreement) from time to time in such respects as it shall
deem advisable; provided, however, that the Board shall not, without the
approval of the votes represented by a majority of the votes represented
by the outstanding common voting equity of the Corporation present or
represented at a meeting duly held in accordance with the applicable laws
of the Corporation's jurisdiction of incorporation and entitled to
vote at a meeting of stockholders or by the written consent of
shareholders owning stock representing a majority of the votes of the
Corporation's outstanding stock, (i) increase the maximum number of shares
which in the aggregate are subject to Options under the Plan (except as
provided by Paragraph 14), (ii) extend the term of the Plan or the period
during which Options may be granted or exercised, (iii) reduce the Option
price, in the case of Incentive Stock Options, below 100% (110% in the
case of an Incentive Stock Option granted to a 10% Holder) of the fair
market value of the Stock issuance upon exercise of Options at the time
of the granting thereof, other than to change the manner of determining
the fair market value thereof, (iv) materially increase the benefits
accruing to participants under the Plan, or (v) modify the requirements
as to eligibility for participation in the Plan. No termination or
amendment of the Plan shall, without the consent of the individual
Optionee, adversely affect the rights of such Optionee under an Option
theretofore granted to him or under such Optionee's Option Agreement.
17. Taxes. The Corporation may make such provisions as it
may deem appropriate for the withholding of any taxes which it
determines is required in connection with any Options granted under the
Plan. The Corporation may further require notification from the Optionees
upon any disposition of Stock acquired pursuant to the exercise of Options
granted hereunder.
18. Code References and Definitions. Whenever reference
is made in this Plan to a section of the Internal Revenue Code, the
reference shall be to said section as it is now in force or as it may
hereafter be amended by any amendment which is applicable to this Plan.
The term "subsidiary" shall have the meaning given to the term "subsidiary
corporation" by Section 425(f) of the Internal Revenue Code. The terms
"Incentive Stock Option" and "ISO" shall have the meanings given to them
by Section 422A of the Internal Revenue Code. The term "10% Holder"
shall mean any person who, for purpose of Section 422A of the Internal
Revenue Code owns more than 10% of the total combined voting power of all
classes of stock of the employer corporation or of any subsidiary
corporation.
<PAGE>
BENIHANA INC.
Class A Common Stock
Proxy - For the Annual Meeting of Stockholders -
August 3, 2000.
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 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 August 3, 2000 at 10:00 a.m. at Doral Hotel & Country Club,
4400 N.W. 87th Avenue, Miami, Florida 33178, and any adjournment 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 FOR Proposal 2 and Proposal 3
and AGAINST Proposal 4.
For each proposal, mark one box |_| in blue or black ink.
Proposal 1. Election of Director
FOR THE NOMINEE WITHHOLD AUTHORITY
John E. Abdo
Class II Director
|-| |-|
Proposal 2. Approval of Adoption of the 2000 Employees Class A
Common Stock Option Plan.
FOR AGAINST ABSTAIN
|-| |-| |-|
Proposal 3. Ratification of Deloitte & Touche LLP as Accountants.
FOR AGAINST ABSTAIN
|-| |-| |-|
Proposal 4. Stockholder Proposal Relating to Recapitalization.
FOR AGAINST ABSTAIN
|-| |-| |-|
<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.
<PAGE>
BENIHANA INC.
Common Stock
Proxy - For the Annual Meeting of Stockholders -
August 3, 2000.
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 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
August 3, 2000 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 FOR Proposal 2 and Proposal 3
and AGAINST Proposal 4.
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. Approval of Adoption of the 2000 Employees Class A
Common Stock Option Plan.
FOR AGAINST ABSTAIN
|-| |-| |-|
Proposal 3. Ratification of Deloitte & Touche LLP as Accountants.
FOR AGAINST ABSTAIN
|-| |-| |-|
Proposal 4. Stockholder Proposal Relating to Recapitalization.
FOR AGAINST ABSTAIN
|-| |-| |-|
<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.
