SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FAMOUS DAVE'S OF AMERICA, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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FAMOUS DAVE'S OF AMERICA, INC.
8091 Wallace Road
Eden Prairie, Minnesota 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 12, 2003
TO THE SHAREHOLDERS OF FAMOUS DAVE'S OF AMERICA, INC.:
Please take notice that the Annual Meeting of Shareholders of Famous Dave's
of America, Inc. will be held, pursuant to due call by the Board of Directors of
the Company, at the Famous Dave's Calhoun Blues Club, 3001 Hennepin Avenue,
Calhoun Square, Minneapolis, Minnesota, on Thursday, June 12, 2003, at 9:00
a.m., or at any adjournment or adjournments thereof, for the purpose of
considering and taking appropriate action with respect to the following:
1. To elect six directors.
2. To transact any other business as may properly come before the meeting
or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of record on
April 21, 2003 (the "Record Date") will be entitled to vote at the meeting or
any adjournments thereof. Adoption of each proposal requires the affirmative
vote of the holders of a majority of the shares of the Company's common stock
present in person or represented by proxy at the Annual Meeting.
A PROXY FOR THIS MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL IN
AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
/s/ Martin J. O'Dowd
Martin J. O'Dowd
President, Chief Executive Officer &
Secretary
May 5, 2003
FAMOUS DAVE'S OF AMERICA, INC.
8091 WALLACE ROAD
EDEN PRAIRIE, MINNESOTA 55344
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 12, 2003
VOTING AND REVOCATION OF PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Famous Dave's of America, Inc. (as
periodically referred to herein as "Famous Dave's" and the "Company") to be used
at the Annual Meeting of Shareholders of the Company to be held on Thursday,
June 12, 2003, at 9:00 a.m. at the Famous Dave's Calhoun Blues Club, 3001
Hennepin Avenue, Calhoun Square, Minneapolis, Minnesota, for the purposes set
forth in the accompanying notice of annual meeting.
The approximate date on which this Proxy Statement and the accompanying
proxy were first sent or given to shareholders was May 5, 2003. Each shareholder
who signs and returns a proxy in the form enclosed with this Proxy Statement may
revoke the same at any time prior to its use by giving notice of such revocation
to the Company in writing, in open meeting or by executing and delivering a new
proxy to the Secretary of the Company. Unless so revoked, the shares represented
by each proxy will be voted at the meeting and at any adjournments thereof.
Presence at the meeting of a shareholder who has signed a proxy does not alone
revoke that proxy. Only shareholders of record at the close of business on April
21, 2003 (the "Record Date") will be entitled to vote at the meeting or any
adjournments thereof.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Company has outstanding one class of voting securities, Common Stock,
$0.01 par value, of which 11,400,795 shares were outstanding as of the close of
business on the Record Date. Each share of Common Stock is entitled to one vote
on all matters put to a vote of shareholders.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the Record Date, by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director, (iii) each executive officer named
in the Summary Compensation Table, and (iv) all executive officers and directors
as a group. Unless otherwise indicated, the address of each of the following
persons is 8091 Wallace Road, Eden Prairie, Minnesota 55344,
and each such person has sole voting and investment power with respect to the
shares of Common Stock set forth opposite each of their respective names.
SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OF TOTAL
------------------------------------ ------------ ----------
David W. Anderson........................................... 1,631,500(1)(2) 14.3
Christopher O'Donnell....................................... 48,000(3) *
Martin J. O'Dowd............................................ 732,467(4) 6.1
Kenneth Stanecki............................................ 100,000(5) *
Michael Hoffer (15)......................................... 0 *
Thomas J. Brosig............................................ 105,000(6) *
Dean Riesen................................................. 0 *
K. Jeffrey Dahlberg......................................... 228,634(7) 2.0
Richard L. Monfort.......................................... 80,000(8) *
Jundt Associates, Inc. ..................................... 806,500(9) 7.1
1550 Utica Avenue South, Suite 950
Minneapolis, MN 55416
Jess S. Morgan & Company, Inc. ............................. 607,450(10) 5.3
5750 Wilshire Blvd., Suite 590
Los Angeles, CA 90036
Wellington Trust Company, NA................................ 580,000(11) 5.1
75 State Street
Boston, MA 02109
Wellington Management Company, LLP.......................... 1,365,000(12) 12.0
75 State Street
Boston, MA 02109
Gilder, Gagnon, Howe & Co. LLC.............................. 574,421(13) 5.0
1775 Broadway, 26th Street
New York, NY 10019
All Directors and Officers as a group (8 people)............ 2,925,601(14) 20.4
---------------
* less than 1%
(1) Includes 1,559,500 that such person holds jointly with his spouse.
(2) Includes 72,000 shares owned by Grand Pines Resorts, Inc., a corporation
wholly-owned by Mr. Anderson. Mr. Anderson disclaims beneficial ownership
of such shares.
(3) Includes 48,000 shares that such person has the right to acquire within 60
days.
(4) Includes 701,667 shares that such person has the right to acquire within 60
days.
(5) Includes 100,000 shares that such person has the right to acquire within 60
days.
(6) Includes 80,000 shares that such person has the right to acquire within 60
days.
(7) Includes 38,334 shares that such person has the right to acquire within 60
days.
(8) Includes 80,000 shares that such person has the right to acquire within 60
days.
(9) Based on the most recent Schedule 13G filed on February 11, 2003 with the
Securities and Exchange Commission.
(10) Based on the most recent Schedule 13G filed on January 29, 2002 with the
Securities and Exchange Commission.
(11) Based on the most recent Schedule 13G filed on February 12, 2003 with the
Securities and Exchange Commission.
(12) Based on the most recent Schedule 13G filed on February 12, 2003 with the
Securities and Exchange Commission. Includes 580,000 shares beneficially
owned by Wellington Trust Company, NA.
(13) Based on the most recent Schedule 13G filed on November 10, 2002 with the
Securities and Exchange Commission.
(14) Includes 1,048,001 shares that such persons have the right to acquire
within 60 days.
(15) Michael Hoffer became Chief Operating Officer on January 3, 2002 and his
employment with the Company terminated as of July 19, 2002.
2
ELECTION OF DIRECTORS
(PROPOSAL ONE)
The Board of Directors currently consists of six (6) directors, each of
which has been nominated for re-election by the Board of Directors. If
re-elected, each nominee has consented to serve as a director of the Company, to
hold office until the next Annual Meeting of the Shareholders, or until his
successor is elected and shall have qualified.
The names and ages of the nominees, and their principal occupations and
tenure as directors are set forth below based upon information furnished to the
Company by such nominees.
NAME AND AGE OF PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE DIRECTOR
DIRECTOR AND NOMINEE FOR THE PAST FIVE YEARS AND DIRECTORSHIPS OF PUBLIC COMPANIES SINCE
--------------------- ------------------------------------------------------------- --------
David W. Anderson Founded the Company in 1994 and has been served as Chairman 1994
Age 49 1994 of the Board of the Company since its formation. In
October 1990, Mr. Anderson co-founded Grand Casinos, Inc.
(now a wholly-owned subsidiary of Park Place Entertainment
Corp.), and through March 1996 served as Executive Vice
President of that company.
Thomas J. Brosig From January 1999 through October 1999, Mr. Brosig served as 1996
Age 53 President of Lakes Gaming, Inc. Mr. Brosig served as
President of Grand Casinos, Inc. from September 1996 to
December 1998 and served as its Chief Executive Officer from
March 1998 to December 1998. Prior to that time and from
August 1994, he served as its Executive Vice President --
Investor Relations and Special Projects. Mr. Brosig is also a
Director of G-III Apparel Group Ltd., a manufacturer and
distributor of leather apparel, and Wilsons The Leather
Experts Inc., a leather goods retailer.
Dean A. Riesen Appointed as a director in March 2003, Mr. Riesen founded an 2003
Age 46 investment firm, Riesen & Company, which he has served as
Managing Partner since 2001. Prior to that, Mr. Riesen served
as Chief Financial Officer of Carlson Holdings, Inc. (parent
of Carlson Companies, Inc. and T.G.I. Friday's, Inc.) from
1999-2001. Mr. Riesen was also President & CEO of Tonkawa,
Inc. from 1999-2001 and President, CEO, and General Partner
of Carlson Real Estate Company from 1985-2001. Mr. Riesen
served on Carlson Companies' Investment Committee from
1989-1999. Mr. Riesen was a member of Thomas Cook Holdings
LTD (U.K.) Board of Directors and a member of its Audit
Committee.
K. Jeffrey Dahlberg Mr. Dahlberg is president of Sugarloaf Ventures, Inc. a 2001
Age 49 business development and investment firm. In 1990, Mr.
Dahlberg co-founded Grow Biz International, Inc., and served
as its Chairman from inception until March 2000 and served as
Chief Executive Officer of such company from 1999 until March
2000.
Richard L. Monfort From 1990 to 1995, Mr. Monfort served as the President of the 1996
Age 48 red meats division of Conagra, which division had $8 billion
in sales of beef and pork annually. From September 1995 to
the present, Mr. Monfort has been engaged in the management
of various private business and investment interests,
including acting as managing partner of the Hyatt Grand
Champion Hotel (Palm Springs, California), owner of the
Hilltop Steakhouse (Boston, Massachusetts), and partner in
the Montera Cattle Company. Mr. Monfort is also a director of
Suntron Corporation (Phoenix, AZ), a producer of circuit
boards and other components for computer manufacturers and is
Vice Chairman of the Colorado Rockies, a professional
baseball team.
3
NAME AND AGE OF PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE DIRECTOR
DIRECTOR AND NOMINEE FOR THE PAST FIVE YEARS AND DIRECTORSHIPS OF PUBLIC COMPANIES SINCE
--------------------- ------------------------------------------------------------- --------
Martin J. O'Dowd Became the President, Chief Executive Officer, Chief 1996
Age 55 Operating Officer and Secretary of the Company in August,
1999. Prior to joining the Company as an executive officer,
Mr. O'Dowd served as the President and Chief Executive
Officer of Elephant & Castle Group, Inc. He was Chief
Operating Officer for United States operations of that
company from April 1997 to March 1998. From May 1995 to April
1997, Mr. O'Dowd served as President and Chief Operating
Officer of Rainforest Cafe, Inc. From July 1987 to May 1995,
Mr. O'Dowd was Corporate Director, Food and Beverage Services
for Holiday Inn Worldwide.
PROXIES AND VOTING -- PROPOSAL ONE
Only holders of record of the Company's Common Stock at the close of
business on April 21, 2003, the record date for the Annual Meeting, are entitled
to notice of and to vote at the Annual Meeting. On the Record Date, there were
11,400,795 shares of Common Stock outstanding. Each share of Common Stock
entitles the holder thereof to one vote upon each matter to be presented at the
Annual Meeting. A quorum, consisting of a majority of the outstanding shares of
the Common Stock entitled to vote at the Annual Meeting, must be present in
person or represented by proxy before action may be taken at the Annual Meeting.
Each proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. Adoption of each proposal requires the
affirmative vote of the holders of a majority of the shares of the Company's
common stock present in person or represented by proxy at the Annual Meeting.
All shares represented by proxies will be voted for the election of the
nominees for the Board of Directors named in this Proxy Statement unless a
contrary choice is specified. If any nominee should withdraw or otherwise become
unavailable for reasons not presently known, the proxies which would have
otherwise been voted for such nominee will be voted for such substitute nominee
as may be selected by the Board of Directors. A shareholder who abstains with
respect to the election of directors is considered to be present and entitled to
vote on the election of directors at the meeting, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, on the election of
directors, shall not be considered present and entitled to vote on the election
of directors.
While the Board of Directors knows of no other matters to be presented at
the Annual Meeting or any adjournment thereof, all proxies returned to the
Company will be voted on any such matter in accordance with the judgment of the
proxy holders.
EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years awarded to or earned by (i) each individual
serving as Chief Executive Officer of the Company during the fiscal year ended
December 29, 2002; and (ii) each individual that served as an executive officer
of the Company during the fiscal year ended December 29, 2002, whose salary and
bonus during such fiscal year exceeded $100,000 (the "Named Executives").
4
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)
--------------------------- ------ ---------- --------- ---------------- ------------
David W. Anderson........................ 2002 -0- -0- -0- -0-
Chairman of the Board 2001 -0- -0- -0- -0-
2000 -0- -0- -0- -0-
Martin J. O'Dowd......................... 2002 458,308 -0- -0- 100,000
Chief Executive Officer and 2001 412,500 125,000(2) -0- 100,000(2)
Secretary 2000 330,289 100,000(3) -0- 100,000
Kenneth Stanecki(1)...................... 2002 203,692 -0- -0- 60,000
Chief Financial Officer 2001 191,346 60,000(2) 327,250(4) 50,000
2000 114,423 38,500 27,000(5) 150,000
Christopher O'Donnell(7)................. 2002 151,385 -0- -0- 30,000
Sr. Vice President Operations 2001 139,500 28,800(2) 177,345(6) 20,000(2)
2000 134,700 22,000 -0- 20,000
Michael Hoffer(8)........................ 2002 158,334 -0- -0- -0-
Chief Operating Officer
-------------------------
(1) Mr. Stanecki joined the Company as of May 1, 2000.
(2) Includes bonuses paid and options granted in February 2002 for Fiscal 2001
performance.
(3) Includes bonuses paid in February 2001 for Fiscal 2000 performance.
(4) Includes exercise of 50,000 stock options.
(5) Moving expenses.
(6) Includes exercise of 26,000 stock options.
(7) Mr. O'Donnell became Sr. Vice President Operations on June 19, 2002. Prior
to such time, he served as Vice President of Human Resources.
(8) Mr. Hoffer became Chief Operating Officer on January 3, 2002 and his
employment with the Company terminated as of July 19, 2002.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the number of individual grants of stock
options made during fiscal year 2002 to the Named Executives.
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF PERCENTAGE OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATE OF STOCK
UNDERLYING GRANTED TO EXERCISE OR PRICE APPRECIATION
OPTION EMPLOYEES BASE PRICE EXPIRATION ---------------------
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ---------- -------- ----------
David W. Anderson....... -0- -0- -- N/A -0- -0-
Martin J. O'Dowd........ 100,000(1) 25.3 $6.60 7/19/2012 $415,070 $1,051,870
Kenneth Stanecki........ 60,000(1) 15.2 $6.60 7/19/2012 $249,042 $ 631,122
Christopher O'Donnell... 30,000(1) 7.6 $6.60 7/19/2012 $124,042 $ 315,561
Michael Hoffer.......... 75,000(2) 18.99 7.40 1/02/2012 $349,037 $ 884,527
-------------------------
(1) Options vest and become exercisable in five equal annual installments
commencing on July 19, 2003.
(2) Options expired prior to the end of fiscal 2002.
5
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table summarizes information with respect to options held by
the Named Executives, and the value of the options held by such persons at the
end of fiscal 2002.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END(1)($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
David M. Anderson........ -0- -0- -0- -0- -0- -0-
Martin J. O'Dowd......... -0- -0- 701,667 158,333 340,825 14,875
Kenneth Stanecki......... -0- -0- 100,000 60,000 11,750 11,750
Christopher O'Donnell.... -0- -0- 40,000 54,000 14,770 14,770
Michael Hoffer........... -0- -0- -0- -0- -0- -0-
-------------------------
(1) Based upon the difference between the option exercise price and the closing
sale price of the Common Stock on December 27, 2002 (the last trading day
prior to the end of the Company's 2002 fiscal year), which was $2.97.
EMPLOYMENT AGREEMENTS
Effective August 1, 1999, the Company entered into a three-year employment
agreement with Martin J. O'Dowd, President, Chief Executive Officer and
Secretary, subject to early termination for a variety of reasons. Effective
September 1, 2001, the Company and Mr. O'Dowd agreed to amend the agreement to
extend its term for an additional two years. As a result, the current expiration
date of Mr. O'Dowd's employment agreement is August 1, 2004. Mr. O'Dowd received
an annualized base salary of $450,000 from the beginning of fiscal 2002 until
July 2002, at which time his salary was increased to $468,000. Based on these
amounts, Mr. O'Dowd received a salary of $458,308 during fiscal 2002. Pursuant
to the employment agreement, Mr. O'Dowd is entitled to receive an annual bonus
of up to 40% of his base salary, based on performance criteria to be established
by the Company. Mr. O'Dowd did not receive a performance based incentive award
for fiscal 2002. Mr. O'Dowd also receives medical, dental and other customary
benefits. The employment agreement provides that Mr. O'Dowd will receive
$200,000 if terminated by the Company for a reason other than "cause" or if Mr.
O'Dowd resigns for "good reason", each as defined in the employment agreement.
The agreement also provides that Mr. O'Dowd will continue to receive his base
salary and bonus if he terminates his employment following a "change of control"
of the Company, as defined therein. The employment agreement provides that Mr.
O'Dowd will not compete with the Company for two years after the termination of
his employment with the Company. On July 19, 2002, the Company granted Mr.
O'Dowd options to purchase 100,000 shares of the Company's common stock at a per
share exercise price of $6.60, which represented the closing price of the
Company's common stock on the date of the grant. These options vest on a
pro-rata basis over a five-year period beginning July 19, 2003.
Effective as of May 1, 2000, the Company commenced an employment
arrangement with Kenneth Stanecki, pursuant to which Mr. Stanecki is serving as
Chief Financial Officer. Mr. Stanecki received an annualized base salary of
$200,000 from the beginning of fiscal 2002 until July 2002, at which time his
salary was increased to $208,000. Based on these amounts, Mr. Stanecki received
a salary of $203,692 during fiscal 2002. Pursuant to the employment arrangement,
Mr. Stanecki is entitled to receive a bonus of up to 35% of his base salary
based upon performance criteria to be established by the Company. Mr. Stanecki
did not receive a performance based incentive award for fiscal 2002. Mr.
Stanecki also receives medical, dental and other customary benefits. On July 19,
2002, Mr. Stanecki was granted options to purchase 60,000 shares of the
Company's common stock at a per share exercise price equal to $6.60, which
represented the closing sale price of the Company's common stock on the date of
the grant. These options vest on a pro-rata basis over a five-year period
beginning July 19, 2003.
6
Christopher O'Donnell has been an employee of the Company since 1998. He
became Sr. Vice President of Operations and was designated an Executive Officer
of the Company on June 19, 2002. Pursuant to his employment arrangement with the
Company, Mr. O'Donnell receives an annualized salary of $164,000. Mr. O'Donnell
is entitled to receive a bonus of up to 35% of his base salary based upon
performance criteria to be established by the Company. Mr. O'Donnell did not
receive a performance based incentive award for fiscal 2002. Mr. O'Donnell also
receives medical, dental and other customary benefits. On July 19, 2002, Mr.
O'Donnell was granted options to purchase 30,000 shares of the Company's common
stock at a per share exercise price equal to $6.60, which represented the
closing sale price of the Company's common stock on the date of the grant. These
options vest on a pro-rata basis over a five-year period beginning July 19,
2003.
DIRECTOR COMPENSATION
Prior to March 1, 2002, directors received no monetary fees for serving as
directors. Commencing March 1, 2002, each non-employee director of the Company
receives $5,000 for each meeting of the Board of Directors attended in person,
or $2,500 for each such meeting attended by telephone. Also commencing as of
March 1, 2002, on the day after each annual shareholders' meeting, the Company
will grant its non-employee directors options to purchase 5,000 shares of the
Company's common stock at an exercise price equal to the fair market value of
such common stock on the date of grant.
In addition, non-employee directors may be granted, at the discretion of
the Board, additional options to purchase shares of the Company's common stock.
Such options shall contain such terms and provisions as the Board determines at
the time of grant. On May 23, 2002, Messrs. Brosig, Monfort and Dahlberg each
received ten-year options to purchase 5,000 shares of the Company's common stock
for their service as directors. All of these options vest on May 23, 2003 and
have a per share exercise price equal to $8.07, which represented the closing
sale price of the Company's common stock on the date of the grant.
Members of the Board who are also employees of the Company receive no
options for their services as directors.
EXECUTIVE OFFICERS OF THE COMPANY
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE
NAME AGE FOR THE PAST FIVE YEARS AND DIRECTORSHIPS OF PUBLIC COMPANIES
---- --- -------------------------------------------------------------
David W. Anderson.................... 49 See "Election of Directors (Proposal One)" -- above.
Martin J. O'Dowd..................... 55 See "Election of Directors (Proposal One)" -- above.
Kenneth J. Stanecki.................. 41 Chief Financial Officer of the Company since May 1, 2000.
From October 1997 until April 2000, Mr. Stanecki was
Vice-President of Finance for AmeriKing Corporation. For the
ten-year period preceding his employment in such position,
Mr. Stanecki held a progression of positions with Burger King
Corporation in finance and operations.
Christopher O'Donnell................ 43 Senior Vice President of Operations of the Company since June
19, 2002. From February 1998 to June 200, he served as the
Vice President of Human Resources for the Company. Prior to
joining the Company, Mr. O'Donnell was the Vice President of
Development for Pencom International. From 1982 to 1987 Mr.
O'Donnell was the operating partner in Premier Ventures a
high volume restaurant located in Denver, Colorado.
EQUITY COMPENSATION PLAN INFORMATION
The Company maintains the 1995 Stock Option and Compensation Plan (the
"Management Plan"), the 1997 Employee Stock Option Plan (the "Employee Plan")
and the 1998 Director Stock Option Plan (the "Director Plan"). The Management
Plan is designed to furnish a variety of economic incentives designed to
7
attract, retain and motivate employees (including management level employees) of
and consultants to the Company. The purpose of the Employee Plan is attract,
retain and motivate employees of the Company (not including officers and
directors of the Company) by furnishing opportunities to purchase or receive
shares of the Company's Common Stock. The purpose of the Director Plan is to
encourage share ownership by Company directors who are not employees of the
Company in order to promote long-term shareholder value through continuing
ownership of the Company's Common Stock.
The Management Plan and the Director Plan have each been approved by the
Company's shareholders. The Employee Plan has not been submitted for approval to
Company's shareholders.
The following table sets forth certain information as of December 29, 2002
with respect to the Management Plan, the Employee Plan and the Director Plan:
NUMBER OF SECURITIES
REMAINING AVAILABLE
NUMBER OF FOR FUTURE ISSUANCES
SECURITIES TO BE UNDER EQUITY
ISSUED UPON WEIGHTED-AVERAGE COMPENSATION PLANS
EXERCISE OF EXERCISE PRICE OF (EXCLUDING
OUTSTANDING OUTSTANDING SECURITIES REFLECTED
PLAN CATEGORY OPTIONS(A) OPTIONS(B) IN COLUMN(A))
------------- ---------------- ----------------- --------------------
Equity Compensation Plans Approved By
Security Holders:
1995 Stock Option and Compensation
Plan................................ 1,205,800 3.39 236,614
1998 Director Stock Option Plan........ 255,000 4.19 95,000
--------- ---- -------
Total:................................. 1,460,800 3.53 331,614
--------- ---- -------
Equity Compensation Plans Not Approved By
Security Holders:
1997 Employee Stock Option Plan........ 340,910 3.00 213,060
--------- ---- -------
TOTAL:................................... 1,801,710 3.56 544,674
========= ==== =======
8
STOCK PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include in
this Proxy Statement a line-graph presentation comparing cumulative, five-year
return to the Company's shareholders (based on appreciation of the market price
of the Company's common stock) on an indexed basis with (i) a broad equity
market index and (ii) an appropriate published industry or line-of-business
index, or peer group index constructed by the Company. The following
presentation compares the Company's common stock price in the period from
December 28, 1997 through December 29, 2002, to the S&P 500 Stock Index and to
the S&P Small Cap Restaurant Index.
The Company has elected to use the S&P Small Cap Restaurant Index in
compiling its stock performance graph because it believes the S&P Small Cap
Restaurant Index represents a comparison to competitors with similar market
capitalization to the Company.
The presentation assumes that the value of an investment in each of the
Company's common stock, the S&P 500 Index and the S&P Small Cap Restaurant Index
was $100 on December 28, 1997, and that any dividends paid were reinvested in
the same security.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG FAMOUS DAVE'S OF AMERICA, INC., THE S&P 500 INDEX,
AND THE S&P SMALL CAP RESTAURANT INDEX
[PERFORMANCE GRAPH]
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TOTAL RETURN ANALYSIS 12/28/97 1/3/99 1/2/00 12/31/00 12/30/01 12/30/02
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Famous Dave's of America $100.00 $ 31.46 $ 22.73 $ 33.56 $ 81.78 $ 35.19
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S&P Small Cap Restaurants $100.00 $109.45 $107.66 $131.51 $154.77 $158.29
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S&P 500 $100.00 $133.30 $161.35 $146.65 $128.34 $100.02
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Source: CTA Public Relations www.ctapr.com (303) 665-4200. Data from BRIDGE
Information Systems, Inc.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES
Board of Directors
The Board of Directors held three meetings during 2002 and took action by
written action in lieu of a meeting five times. The Company has an Audit
Committee and a Compensation Committee.
9
Audit Committee of the Board of Directors
The Company has established a four-member Audit Committee within the Board
of Directors that currently consists of Messrs. Thomas J. Brosig, K. Jeffrey
Dahlberg, Richard L. Monfort and Dean Riesen. During 2002, the Audit Committee
was a three-member committee consisting of Messrs. Dahlberg, Monfort and James
W. Cox, a former member of the Company's Board of Directors who resigned as of
March 10, 2003. Mr. Brosig was appointed to replace Mr. Cox as a member of the
Audit Committee upon Mr. Cox's resignation. On March 10, 2003, Mr. Riesen was
appointed to serve as the fourth member of the Audit Committee. The Audit
Committee recommends to the full Board the engagement of the Company's
independent accountants, reviews the audit plan and results of the audit
engagement, reviews the independence of the auditors and reviews the adequacy of
the Company's system of internal accounting controls. The Audit Committee held
one formal meeting and three informal quarterly telephonic meetings during the
fiscal year ended December 29, 2002
The Audit Committee operates under a written charter adopted by the Board
of Directors. A copy of the written charter was attached as an appendix to the
proxy statement for the Company's 2001 Annual Meeting of Shareholders. The audit
committee has established a policy of reviewing and pre-approving the
performance of all audit and non-audit accounting services to be performed by
the Company's independent public accountant, other than certain de minimus
exceptions.
The Board of Directors has determined that each of the four Audit Committee
members is an "independent director", as such term is defined by Section
4200(a)(13) of the National Association of Securities Dealers' listing
standards. The Board of Directors has also determined that each of the Audit
Committee members is able to read and understand fundamental financial
statements and that at least one member of the Audit Committee has past
employment experience in finance or accounting.
Compensation Committee of the Board of Directors
The Company's Compensation Committee currently consists of Mr. Thomas J.
Brosig. During fiscal 2002, the Company's Compensation Committee consisted of
Messrs. Brosig and James W. Cox. The Compensation Committee reviews the
Company's remuneration policies and practices, makes recommendations to the full
Board in connection with all compensation matters affecting the Company and
administers the Company's incentive compensation plans. The Compensation
Committee held no formal meetings during 2002 and took action by written action
in lieu of a meeting one time.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the directors who served as a member of the Compensation Committee
during fiscal 2002 have served as an officer or employee of the Company.
REPORT OF THE AUDIT COMMITTEE
The primary functions of the Audit Committee are (i) to serve an as
independent and objective party to monitor the Company's financial reporting
process and internal control system, (ii) to review and appraise the audit
efforts of the Company's independent accountants and internal audit department,
and (iii) to provide an open avenue of communication among the independent
accountants, financial and senior management, the internal audit department, and
the Board of Directors.
The Audit Committee has reviewed the Company's audited consolidated
financial statements for the last fiscal year and discussed them with
management.
The Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
The Audit Committee has received and reviewed the written disclosures and
the letter from the independent auditors required by Independence Standard No.
1, Independence Discussions with Audit
10
Committees, as amended, promulgated by the Independence Standards Board, and has
discussed with the auditors the auditors' independence.
The Audit Committee, based on the review and discussions described above,
has recommended to the Board of Directors that the audited financial statements
be included in the Company's Annual Report on Form 10-K for the last fiscal
year.
THOMAS J. BROSIG
K. JEFFREY DAHLBERG
RICHARD L. MONFORT
DEAN RIESEN
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives generally have been
made by a two-member Compensation Committee of the Board of Directors. Each
member of the Compensation Committee is a non-employee director. All decisions
by the Compensation Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board of Directors. During fiscal
2002, the members of the Compensation Committee were Messrs. Thomas J. Brosig
and James W. Cox. Pursuant to rules designed to enhance disclosure of the
Company's policies toward executive compensation, set forth below is a report
prepared by the Compensation Committee addressing the compensation policies for
the Company and its subsidiaries for the fiscal year ended December 29, 2002 as
they affected the Company's executive officers.
The Compensation Committee's executive compensation policies are designed
to provide competitive levels of compensation that integrate pay with the
Company's annual objectives and long-term goals, reward above-average corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. Executive compensation
is set at levels that the Compensation Committee believes to be consistent with
others in the Company's industry.
There are three elements in the Company's executive compensation program,
all determined by individual and corporate performance.
- Base salary compensation
- Annual incentive compensation
- Stock options
Total compensation opportunities are competitive with those offered by
employers of comparable size, growth and profitability in the Company's
industry.
Base salary compensation is determined by the potential impact the
individual has on the Company, the skills and experiences required by the job,
and the performance and potential of the incumbent in the job.
Annual incentive compensation for executives of the Company is based
primarily on corporate operating earnings and revenue growth and the Company's
positioning for future results, but also includes an overall assessment by the
Compensation Committee of executive management's performance, as well as market
conditions.
Awards of stock grants under the 1995 Stock Option and Compensation Plan
(the "Management Plan") are designed to promote the identity of long-term
interests between the Company's executives and its shareholders and assist in
the retention of executives. The Management Plan also permits the Committee to
grant stock options to key personnel. Options become exercisable based upon
criteria established by the Company. During 2002, the Compensation Committee
issued an aggregate of 356,932 options pursuant to the Management Plan, which
included 100,000 shares granted on July 19, 2002 to Martin J. O'Dowd, Chief
Executive Officer of the Company. The option granted to Mr. O'Dowd is
exercisable at $6.60 per share, the closing saleprice of the Company's common
stock on the date of the grant.
11
Mr. O'Dowd received an annualized base salary of $450,000 until July 2002,
at which time the Compensation Committee increased Mr. O'Dowd's base salary to
$468,000 for the remainder of the fiscal year. This increase resulted from the
Committee's assessment of the growth in the Company's operations and prospects
since Mr. O'Dowd's prior base salary was established in July 2001. The Committee
also increased Mr. O'Dowd's salary to make it more competitive with executives
in other industry-related companies. Mr. O'Dowd did not receive an incentive
compensation award for fiscal 2002.
The Compensation Committee surveys employee stock option programs of
companies with similar capitalization to the Company prior to recommending the
grant of options to executives. While the value realizable from exercisable
options is dependent upon the extent to which the Company's performance is
reflected in the market price of the Company's common stock at any particular
point in time, the decision as to whether such value will be realized in any
particular year is determined by each individual executive and not by the
Compensation Committee. Accordingly, when the Compensation Committee recommends
that an option be granted to an executive, that recommendation does not take
into account any gains realized that year by that executive as a result of his
or her individual decision to exercise an option granted in a previous year.
THOMAS J. BROSIG
INDEPENDENT PUBLIC ACCOUNTANTS
GRANT THORNTON LLP
The Audit Committee of the Company's Board of Directors has appointed Grant
Thornton LLP as the Company's independent public accountants for the 2003 fiscal
year. A representative of Grant Thornton LLP is expected to attend this year's
Annual Meeting of Shareholders and be available to respond to appropriate
questions from shareholders, and will have the opportunity to make a statement
if such representative so desires.
CHANGE IN INDEPENDENT AUDITORS
On September 26, 2002, the Company dismissed Virchow, Krause & Company,
LLP, which had previously served as the Company's independent accountants.
The report of Virchow, Krause & Company on the consolidated financial
statements of the Company for the past two fiscal years contained no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
The Company's Audit Committee and Board of Directors participated in and
approved the decision to change independent accountants on September 26, 2002.
In connection with its audit of the consolidated financial statements for
the 2001 and 2000 fiscal years ending December 30, 2001 and December 31, 2000,
respectively, and through September 26, 2002, there were no disagreements with
Virchow, Krause & Company on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Virchow, Krause & Company,
would have caused Virchow, Krause & Company to make reference to such
disagreements in their report on the financial statements for such years.
During the 2001 and 2000 fiscal years and through September 26, 2002, there
were no "reportable events" as that term is defined in Item 304(a)(1)(v) of
Regulation S-K.
The Company requested that Virchow, Krause & Company furnish it with a
letter addressed to the Securities and Exchange Commission stating whether or
not it agreed with the above statements. A copy of such letter, dated September
27, 2002, was filed as Exhibit 16.1 to our Current Report on Form 8-K filed with
the Securities Exchange Commission on September 27, 2002.
On September 26, 2002, the Company engaged Grant Thornton, LLP as its new
independent accountants. Such engagement was approved by the Company's Audit
Committee and Board of Directors on
12
September 26, 2002. In the Company's two most recent fiscal years and any
subsequent interim period prior to the date of the engagement, the Company had
not consulted with Grant Thornton regarding either (i) the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Company's financial
statements, and neither a written report was provided to the Company nor oral
advice was provided that Grant Thornton concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issue; or (ii) any matter that was either the subject of
a "disagreement," as that term is defined in Item 304(a)(1)(iv)of Regulation S-K
and the related instructions to Item 304 of Regulation S-K, or a "reportable
event," as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
FEES BILLED TO COMPANY BY ITS INDEPENDENT AUDITORS
The following table presents fees for professional audit services rendered
by Grant Thornton LLP and Virchow, Krause & Company, LLP, as applicable, during
fiscal 2002 and 2001, as well as fees for other services rendered by Grant
Thornton LLP and Virchow, Krause & Company, LLP to the Company during fiscal
2002 and 2001.
2002 2001
---- ----
Audit Fees.................................................. $ 51,550 $ 36,520
Audit-Related Fees(1)....................................... $ 19,057 $ 16,512
Tax Fees(2)................................................. $ 33,365 $ 19,007
All Other Fees(3)........................................... $ 19,162 $ 28,397
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Total Fees............................................. $123,132 $100,436
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(1) Audit-Related Fees consist principally of assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's financial statements but not reported under the caption Audit Fees
above.
(2) Tax Fees consist of fees for tax compliance, tax advice, and tax planning.
(3) All Other Fees in fiscal 2001 consist of fees for products and services
provided other than the audit, audit related and tax services reported
above.
The Audit Committee of the Board of Directors has reviewed the fees billed
by Grant Thornton LLP during fiscal year 2002 and, after consideration, has
determined that the receipt of these fees by Grant Thornton LLP is compatible
with Grant Thornton LLP's maintaining its independence.
CERTAIN TRANSACTIONS
During January 2002, the Company paid off and terminated a revolving line
of credit with Associated Commercial Financing, Inc. (formerly known as BNC
Financial Corporation), of which outstanding amounts were secured by certain of
the Company's assets and were personally guaranteed (and partially secured) by
Mr. David W. Anderson, the Chairman of the Company.
During fiscal year 2002, the Company rented various properties from S&D
Land Holdings, Inc. ("S&D"), a Minnesota corporation that is wholly owned by Mr.
David W. Anderson, the Chairman of the Company. The Company paid S&D rent of
$301,381 during the fiscal year ended December 29, 2002. The Company owed S&D
$365,000 at December 30, 2001 that was paid in full in January 2002. In
addition, in February 2002, the Company paid off a $750,000 note issued to S&D
in connection with the Company's January 2000 purchase of a restaurant site in
Minnetonka, Minnesota.
On October 5, 2001, the Company granted Martin J. O'Dowd a two-year
exclusive option to develop franchise units in North Carolina beginning in
October 2004, which option generally precludes the Company's development of
owned or franchised restaurants in North Carolina before the expiration of the
option. The option permits Mr. O'Dowd to develop the franchise units in exchange
for a 4% royalty fee, which fee may be less than the aggregate amount the
Company may have charged an unaffiliated third party. In addition, the
13
customary Franchise Area Development and Franchise Fees the Company would have
charged an unaffiliated third party are waived.
Except as otherwise set forth above, management believes all of the
above-described transactions were conducted on terms no less favorable to the
Company than could be obtained from unrelated third parties.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission and NASDAQ. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Information regarding Christopher O'Donnell required to be filed on Form 3
in June 2002, was instead filed in August 2002. Except as set forth above, based
solely on review of the copies of such forms furnished to the Company, or
written representations that no Forms 5 were required, the Company believes that
its officers, directors and greater than ten percent beneficial owners complied
with all applicable Section 16(a) filing requirements during the fiscal year
ended December 29, 2002.
PROPOSALS OF SHAREHOLDERS
Any shareholder who desires to submit a proposal for action by the
stockholders at the next annual meeting must submit such proposal in writing to
Martin J. O'Dowd, Secretary, Famous Dave's of America, Inc., 8091 Wallace Road,
Eden Prairie, Minnesota 55344 by January 6, 2004. Due to the complexity of the
respective rights of the shareholders and the Company in this area, any
shareholder desiring to propose such an action is advised to consult with his or
her legal counsel with respect to such rights. The Company suggests that any
such proposal be submitted by certified mail, return receipt requested.
DISCRETIONARY PROXY VOTING AUTHORITY/
UNTIMELY STOCKHOLDER PROPOSALS
Rule 14a-4(c) promulgated under the Securities and Exchange Act of 1934
governs the Company's use of its discretionary proxy voting authority with
respect to a shareholder proposal that the stockholder has not sought to include
in the Company's proxy statement. The Rule provides that if a proponent of a
proposal fails to notify the Company of the proposal at least 45 days before the
date of mailing of the prior year's proxy statement, then the management proxies
will be allowed to use their discretionary voting authority when the proposal is
raised at the meeting, without any discussion of the matter in the proxy
statement.
With respect to the Company's 2004 Annual Meeting of Shareholders, if the
Company is not provided notice of a stockholder proposal, which the stockholder
has not previously sought to include in the Company's proxy statement, by March
21, 2004, the management proxies will be allowed to use their discretionary
authority as outlined above.
SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
Proxy, Proxy Statement, Annual Report and other material which may be sent to
the shareholders in connection with this solicitation. Brokerage houses and
other custodians, nominees and fiduciaries may be requested to forward
soliciting material to the beneficial owners of stock, in which case they will
be reimbursed by the Company for their expenses in doing so. Proxies are being
solicited personally, by telephone, by telegram or by special letter.
The Board of Directors does not intend to present to the meeting any other
matter not referred to above and does not presently know of any matters that may
be presented to the meeting by others. However, if other
14
matters come before the meeting, it is the intent of the persons named in the
enclosed proxy to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ Martin J. O'Dowd
Martin J. O'Dowd
President, Chief Executive Officer &
Secretary
15
FAMOUS DAVE'S OF AMERICA, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- JUNE 12, 2003
The undersigned, a shareholder of Famous Dave's of America, Inc.,
hereby appoints David W. Anderson and Martin J. O'Dowd, and each of them, as
proxies, with full power of substitution, to vote on behalf of the undersigned
the number of shares which the undersigned is then entitled to vote, at the
Annual Meeting of Shareholders of Famous Dave's of America, Inc. to be held at
the Calhoun Blues Club, 3001 Hennepin Avenue, Calhoun Square, Minneapolis,
Minnesota, on Thursday, June 12, 2003, at 9:00 a.m., and at any and all
adjournments thereof, with all the powers which the undersigned would possess if
personally present, upon:
(1) ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
AUTHORITY to vote for (except as marked to the contrary below) all nominees
listed below:
David W. Anderson
Thomas J. Brosig
K. Jeffrey Dahlberg
Richard L. Monfort
Martin J. O'Dowd
Dean Riesen
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below:
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(2) UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS THEREOF.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
---
(Continued, and TO BE COMPLETED AND SIGNED, on the reverse side)
(Continued from other side)
The undersigned hereby revokes all previous proxies relating to the
shares covered hereby and acknowledges receipt of the Notice and Proxy Statement
relating to the Annual Meeting of Shareholders.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When
properly executed, this proxy will be voted on the proposals set forth herein as
directed by the shareholder, but if no direction is made in the space provided,
this proxy will be voted FOR the election of all nominees for director.
Dated , 2003
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x
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x
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(Shareholder must sign exactly as the name appears at
left. When signed as a corporate officer, executor,
administrator, trustee, guardian, etc., please give
full title as such. Both joint tenants must sign.)