SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
BLIMPIE INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the approriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset 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 date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Number:
3) Filing Party:
4) Date Filed:
[BLIMPIE LOGO]
November 4, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend our Annual Meeting of Shareholders for
the fiscal year ending June 30, 1998 which will be held on Thursday, December 4,
1997 at 9:00 A.M., local time, at the offices of Hall Dickler Kent Friedman &
Wood, LLP, 909 Third Avenue, New York, New York 10022, on the 27th Floor.
At this meeting, you will be asked to consider and vote upon the election
of six (6) directors who will serve until the annual meeting to be held in 1998;
and to ratify the selection of Coopers & Lybrand, LLP as the Company's
independent accountants for the fiscal year ending June 30, 1998.
The accompanying Notice of Annual Meeting and Proxy Statement set forth in
detail the business intended to be transacted. Time will be made available for a
discussion of these items as well as for other questions about the business
affairs of the Company.
If you are unable to join us at the meeting it is very important that you
be represented by proxy. Therefore, please take a moment to sign, date, and
return your proxy in the enclosed envelope. If you do not have a proxy, please
call your broker or the Company, and ask that a proxy be mailed to you. Your
cooperation in mailing your proxy promptly will not only be greatly appreciated;
it will also result in a significant benefit to the Company.
Sincerely yours,
ANTHONY P. CONZA
Chairman and Chief Executive Officer
BLIMPIE INTERNATIONAL, INC.
740 BROADWAY
NEW YORK, NEW YORK 10003
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, DECEMBER 4, 1997
------------------------
TO THE HOLDERS OF COMMON STOCK OF
BLIMPIE INTERNATIONAL, INC.
The Annual Meeting of the holders of the Common Stock of Blimpie
International, Inc. (the 'Company') will be held at the offices of Hall Dickler
Kent Friedman & Wood, LLP, 909 Third Avenue, New York, New York 10022, on the
27th Floor, on Thursday, December 4, 1997 at 9:00 A.M., local time, for the
following purposes:
1. To elect six (6) persons to serve as directors of the Company until
the Annual Meeting to be held in 1998 for the fiscal year ending June 30,
1999;
2. To ratify the selection of Coopers & Lybrand, LLP as the Company's
independent accountants for the fiscal year ending June 30, 1998; and
3. To transact such other business as may properly come before the
meeting.
Only holders of record of the Company's Common Stock at the close of
business on October 31, 1997, are entitled to notice of or to vote at this
meeting and any adjournment or adjournments thereof. Shareholders are entitled
to vote upon all business as may properly be presented for consideration at the
meeting.
By Order of the Board of Directors
CHARLES G. LEANESS,
Secretary
New York, New York
November 4, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. THIS IS IMPORTANT
FOR THE PURPOSE OF ENSURING A QUORUM AT THE MEETING.
PROXY STATEMENT
BLIMPIE INTERNATIONAL, INC.
740 BROADWAY
NEW YORK, NEW YORK 10003
------------------------
ANNUAL MEETING OF SHAREHOLDERS
FOR THE FISCAL YEAR ENDING JUNE 30, 1998
------------------------
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Blimpie
International, Inc. (the 'Company') for use at the Annual Meeting of
Shareholders to be held December 4, 1997, and at any adjournment or adjournments
thereof (the 'Annual Meeting'). A proxy may be revoked by notice in writing to
the President at any time prior to the exercise thereof. Each valid proxy
received in time will be voted at the Annual meeting, and, if a choice is
specified on the proxy, it will be voted in accordance with such specifications.
If no such specification is made, the persons named in the accompanying proxy
have advised the Company of their intention to vote the shares represented by
the proxies received by them (i) in favor of the election as directors, the
persons named in the proxy as nominees for directors; (ii) in favor of ratifying
the selection of Coopers & Lybrand, LLP, as the Company's independent
accountants for the fiscal year ending June 30, 1998; and (iii) in accordance
with their best judgment on any other matters that may come before the meeting.
The cost of solicitation of proxies, including the reimbursement to banks
and brokers for reasonable expenses in sending proxy material to their
principals, will be borne by the Company. The Company's transfer agent, Chemical
Mellon Shareholder Services, is assisting the Company in the solicitation of
proxies from brokers, banks, institutions and other fiduciaries by mail, and
will charge the Company its customary fee therefor plus out-of-pocket expenses
which, in the aggregate, are estimated to be less than $5,000. In addition,
proxies may be solicited by officers of the Company by mail, in person or by
telephone, telegraph or telex. It is anticipated that on or about November 4,
1997 this proxy statement and the enclosed form of proxy will be mailed to
shareholders.
The outstanding voting securities of the Company on October 31, 1997 (the
'Record Date') consisted of 9,545,676 shares of common stock, $.01 par value
(the 'Common Stock'). Only shareholders of record at the close of business on
the Record Date are entitled to notice of or to vote at the Annual Meeting.
Each share of Common Stock is entitled to one vote with respect to each
proposal which shall properly come before the Annual Meeting for consideration
by the shareholders. The holders of a majority of the outstanding shares
entitled to vote must be present at the Annual Meeting in person or by proxy to
constitute a quorum.
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
Six directors are to be elected at the meeting to hold office until the
Annual Meeting to be held in 1998 for the fiscal year ending June 30, 1999, and
until their respective successors have been elected and qualified.
The persons named as proxies intend (unless authority is withheld) to vote
for the election of the persons hereinafter named as directors for terms
expiring in 1998 upon their nomination for such office at the Annual Meeting.
The affirmative vote of the holders of a plurality of the outstanding shares of
Common Stock represented in person or by proxy at the Annual Meeting is required
for election of each director.
If any nominee should become unavailable to serve, the proxy may be voted
for the election of another person designated by the Board. The Board has no
reason to believe any of the nominees will be unable to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
ELECTION AS DIRECTORS.
Pertinent information concerning the nominees for directors follows:
NOMINEES FOR ELECTION AS DIRECTORS
Anthony P. Conza, Age 57
Mr. Anthony P. Conza, together with two individuals who are not affiliated
with the Company, originally created the Blimpie concept in 1964. He is one of
the original founders of the Blimpie outlet chain, and is a co-founder of the
Company. He has been Chairman of the Board of Directors, President and Chief
Executive Officer of the Company since the Company commenced business operations
in 1977. In 1992, 'the Entrepreneur of the Year' for New York, an award
sponsored by Ernst & Young, Merrill Lynch and Inc. Magazine, was presented to
Mr. Conza. In the same year, he was also named Chain Operator of the Year by the
New York State Restaurant Association. He is a member of the Board of the Jose
Limon Dance Company, a member of the Board of Governors of The Boys & Girls
Clubs of America and he serves on the Dean's Council at Harvard University's JFK
School of Government. Mr. Conza is the brother of Joseph A. Conza, the
brother-in-law of Patrick Pompeo and the father-in-law of Joseph Morgan. See
'Certain Relationships and Related Transactions.'
David L. Siegel, Age 53
Mr. Siegel, one of the co-founders of the Company, served as the Company's
Executive Vice President and General Counsel and as a member of its Board of
Directors since its formation in 1977. In September 1995, he was appointed as
the Company's Vice Chairman of the Board, Chief Operating Officer and General
Counsel. He also served as the Company's Treasurer from 1977 until January,
1991. He is also a practicing attorney in the City of New York. Mr. Siegel
received a Bachelor of Arts degree in 1965 from Marietta College, a Juris Doctor
Degree in 1968 from New York University School of Law and a Master of Laws
Degree in 1970 from New York University School of Law. During the past five
years, Mr. Siegel has also served as an officer of each of the Company's leasing
subsidiaries.
Patrick J. Pompeo, Age 58
Mr. Pompeo has served as a director and Senior Vice President in charge of
operations since the time of commencement of the Company's business operations
in 1977. In September 1995, he became Executive Vice President of Research
Development and Procurement. Mr. Pompeo was employed for 16 years as a floor
supervisor by E.F. Hutton & Co., the former New York Stock Exchange member firm.
Mr. Pompeo is also a principal shareholder, officer and director of Georgia
Enterprises, Inc., the Company's Subfranchisor for the State of Georgia. Mr.
Pompeo is the brother-in-law of Anthony Conza. See 'Certain Relationships and
Related Transactions.'
Charles G. Leaness, Age 47
Mr. Leaness has been a member of the Company's Board of Directors since the
Company commenced business operations, and served as the Company's Senior Vice
President-Corporate Counsel for more than the past five years. In September,
1995, he became an Executive Vice President. Mr. Leaness is also a principal
shareholder, officer and director of Llewellyn Distributors, Inc., the Company's
Subfranchisor for a part of New Jersey. Mr. Leaness received a Bachelor of Arts
degree from Tulane University in 1972 and a Juris Doctor degree from New York
Law School in 1982. Mr. Leaness is a practicing attorney in New York State. He
currently serves as Director of the New York State Restaurant Association and is
President of the New York City Chapter. Mr. Leaness also serves on the Board of
Directors of the International Franchise Association (IFA). See 'Certain
Relationships and Related Transactions.'
Alvin Katz, Age 67
Mr. Katz was appointed to the Board of Directors of the Company on November
23, 1993. Mr. Katz has been a member since September 1993 of the Board of
Directors of Nastech Pharmaceutical Company, Inc., a company engaged in the
development of pharmaceuticals. Since 1981, he has served as an adjunct
professor of business management at Florida Atlantic University. In 1991, Mr.
Katz was appointed Chief Executive Officer of
2
Odessa Engineering Corp., a company engaged in the manufacturing of pollution
monitoring equipment. He held this position until that company was sold in
September 1992. Mr. Katz also serves on the Board of Directors of Amtech Systems
Inc. which is engaged in the manufacture of capital equipment in the chip
manufacturing business; BCT International, Inc., a franchisor of thermo graphic
printing plants; Mikron Instruments, Inc. a manufacturer of infrared temperature
measuring instruments; and serves as Chairman of the Board of Ozo Diversified
Automation, Inc., a manufacturer of driller and depaneling machines for circuit
board manufacturers. Mr. Katz holds a B.S. in Business Administration degree
from New York University and has done graduate work at C.U.N.Y.-Baruch School.
Harry G. Chernoff, Age 51
Dr. Chernoff was appointed to the Board of Directors of the Company on
November 23, 1993. For more than the past five years, Dr. Chernoff has been a
principal of HMS Properties, Inc., a real estate investment, development and
management firm. Dr. Chernoff has an active financial and operational consulting
practice with major financial institutions, and food and hospitality firms as
his clients. Dr. Chernoff received a Ph.D. in Operations Management from the New
York University Leonard N. Stern School of Business in 1985, and has been a
member of the faculty of New York University for 20 years. He also received a
B.S. degree from New York University in 1968 and an M.S. degree from that
institution in 1975.
THE BOARD OF DIRECTORS; COMMITTEES AND ATTENDANCE
The Board of Directors held four meetings during the fiscal year ended June
30, 1997. All of the directors attended each of such meetings. The Board of
Directors has established an Audit Committee and a Compensation Committee. The
Audit Committee, among other things, makes recommendations to the Board, for
approval by the shareholders, regarding the appointment of independent
accountants to audit the financial accounts, books and records of the Company,
meets jointly and/or separately with the chief financial officer of the Company
and such accountants before commencement and after conclusion of the audit to
discuss the evaluation by the accountants of the adequacy and effectiveness of
the accounting procedures and internal controls of the Company and its
subsidiaries, to approve the overall scope of the audit to be made and the fees
to be charged, to review the audited financial statements of the Company, to
discuss the results of the audit, and to discuss any significant recommendations
by the accountants of improvement of accounting systems and controls of the
Company. The Compensation Committee develops executive compensation policies and
practices designed to enhance the Company's business plans and strategies, and
is responsible for the administration of the Company's Omnibus Stock Incentive
Plan. The Compensation Committee has full authority in its discretion to
determine the individuals to whom awards shall be made under such plan, the time
or times when they shall receive them and the terms and conditions thereof, all
as more fully set forth and described in such plans. Messrs. Katz and Chernoff
serve on both of such Committees. Mr. Conza is also a member of the Compensation
Committee. The Audit Committee met on two occasions during fiscal year 1997, and
the Compensation Committee acted once by unanimous written consent in lieu of a
meeting during such year.
EXECUTIVE COMPENSATION
The following table sets forth compensation awarded to, earned by or paid
to the Chief Executive Officer and all other officers of the Company earning a
salary and bonus of more than $100,000. Information with respect to salary,
bonus, other annual compensation, restricted stock and options is included for
the fiscal years ended June 30, 1997, 1996 and 1995. The Company has not paid
any compensation that would qualify as 'All Other Compensation,' nor has the
Company made payments to any Executive Officer earning an annual salary or bonus
in excess of $100,000, which may be categorized as 'LTIP Payouts.'
3
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION PAYOUTS -----------------------------------------------------
-------------------------------------- SECURITIES
OTHER RESTRICTED UNDERLYING
NAME AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) SARS(#) PAYOUTS COMPENSATION($)
- ---------------------- ----- --------- -------- --------------- --------- ------------- -------- ---------------
Anthony P. Conza,
CEO................. 1997 $ 214,326 $117,450 $ 3,093(2) -- 8,000(5) -- --
1996 206,718 46,500 3,267(2) -- -- -- --
1995 172,941 27,520 -- -- -- -- --
David L. Siegel, COO.. 1997 $ 149,418 $ 58,725 $ 3,093(2) -- 8,000(5) -- --
1996 148,839 23,250 3,267(2) -- -- -- --
1995 145,378 13,760 -- -- -- -- --
Charles G. Leaness,
Exec. VP............ 1997 $ 114,654 $ 39,233 $ 10,982(2) -- 4,000(6) -- --
1996 105,324 15,500 12,250(2) -- -- -- --
1995 89,204 9,200 -- -- -- -- --
Patrick J. Pompeo,
Exec. VP............ 1997 $ 102,490 $ 39,233 $ 3,093(2) -- 4,000(6) -- --
1996 102,181 15,500 3,267(2) -- -- -- --
1995 87,245 9,200 -- -- -- -- --
Robert S. Sitkoff, Sr.
VP.................. 1997 $ 94,849 $ 20,366 $ 3,093(2) $22,125 18,500(3,4,7) -- --
1996 88,072 7,800 3,267(2) 11,160 16,500(3,4) -- --
1995 84,000 4,600 -- 9,750 16,500(3,4) -- --
Dennis Fuller, Sr.
VP.................. 1997 $ 42,793 $ 19,616 $133,591(1) $22,125 3,500(3,7) -- --
1996 42,134 7,800 159,326(1) 11,160 1,500(3) -- --
1995 40,000 4,600 116,925(1) 9,750 1,500(3) -- --
Joseph A.Conza, Sr.
VP.................. 1997 $ 74,728 $ 28,416 $ 3,093(2) $22,125 8,500(3,8) -- --
1996 71,169 14,550 3,267(2) 11,160 1,500(3) -- --
1995 64,950 4,600 -- 9,750 1,500(3) -- --
Joseph W. Morgan, Sr.
VP.................. 1997 $ 92,413 $ 14,166 $ 3,093(2) $ 7,734 5,750(9,10) -- --
1996 65,708 5,400 3,267(2) 8,484 750(10) -- --
1995 57,720 2,250 -- 5,437 750(10) -- --
- ---------------
(1) Represents commissions paid with respect to franchise, subfranchise and
master license sales consummated.
(2) Represents commissions paid with respect to master license sales
consummated.
(3) In July 1993, Messrs. Fuller, Sitkoff and J. Conza received a five year
option under the Company's 1993 Stock Incentive Plan (now the Omnibus Stock
Incentive Plan) to purchase 5,000 shares each which vested at the rate of
1,000 shares per year. The unvested and vested portions of the option were
increased to 7,500 and 1,500 shares each, respectively, in connection with
the 1994 Stock Split.
(4) In January 1995, Mr. Sitkoff received a five year option under the
Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan)
to purchase 75,000 shares which vest at the rate of 15,000 shares per year.
(5) In April 1997, Messrs. A. Conza and Siegel received a five year option
under the Omnibus Stock Incentive Plan to purchase 40,000 shares each which
vest at the rate of 8,000 shares each per year.
(6) In April 1997, Messrs, Leaness and Pompeo received a five year option under
the Omnibus Stock Incentive Plan to purchase 20,000 shares each which vest
at the rate of 4,000 shares each per year.
(7) In April 1997, Messrs, Fuller and Sitkoff received a five year option under
the Omnibus Stock Incentive Plan to purchase 10,000 shares each which vest
at the rate of 2,000 shares each per year.
(8) In April 1997, Mr. J. Conza received a five year option under the Omnibus
Stock Incentive Plan to purchase 35,000 shares which vest at the rate of
7,000 shares per year.
(9) In April 1997, Mr. Morgan received a five year option under the Omnibus
Stock Incentive Plan to purchase 25,000 shares which vest at the rate of
5,000 shares per year.
(10) In December 1993, Mr. Morgan received a five year option under the
Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan)
to purchase 2,500 shares which vested at the rate of 500 shares per year.
The unvested and vested portions of the option were increased to 3,750 and
750 shares respectively, in connection with the 1994 Stock Split.
4
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth options awarded to all officers of the
Company earning a salary and bonus of more than $100,000.00 during the fiscal
year ended June 30, 1997.
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE
PERCENTAGE VALUE AT ASSUMED
NUMBER OF OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------------ ------------ ----------- ---------- ---------- ----------
Anthony P. Conza.............. 8,000(3) 9.7%(9) $6.0625 4/2002 $ 6,920 $ 78,080
David L. Siegel............... 8,000(3) 9.7%(9) $6.0625 4/2002 $ 6,920 $ 78,080
Charles G. Leaness............ 4,000(4) 4.8%(9) $6.0625 4/2002 $ 30,960 $ 39,040
Patrick J. Pompeo............. 4,000(4) 4.8%(9) $6.0625 4/2002 $ 30,960 $ 39,040
Robert S. Sitkoff............. 1,500(1) 1.8%(9) $3.25 (10) 7/1998 $ 6,225 $ 7,845
15,000(2) 18.1%(9) 7.25 1/2000 $138,750 $175,200
2,000(5) 2.4%(9) 6.0625 4/2002 $ 15,480 $ 19,520
Dennis Fuller................. 1,500(1) 1.8%(9) $3.25 (10) 7/1998 $ 6,225 $ 7,845
2,000(5) 2.4%(9) 6.0625 4/2002 $ 15,480 $ 19,520
Joseph A. Conza............... 1,500(1) 1.8%(9) $3.25 (10) 7/1998 $ 6,225 $ 7,845
7,000(6) 8.5%(9) 6.0625 4/2002 $ 54,180 $ 68,320
Joseph W. Morgan.............. 5,000(7) 6.0%(9) $6.0625 4/2002 $ 38,700 $ 48,800
750(8) 0.9%(9) 6.00 (10) 12/1998 $ 5,745 $ 7,245
- ---------------
(1) In July 1993, Messrs. Fuller, Sitkoff and J. Conza received a five year
option under the Company's 1993 Stock Incentive Plan (now the Omnibus Stock
Incentive Plan) to purchase 5,000 shares each which vested at the rate of
1,000 shares per year. The unvested and vested portions of the option were
increased to 7,500 and 1,500 shares each, respectively, in connection with
the 1994 Stock Split.
(2) In January 1995, Mr. Sitkoff received a five year option under the
Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan)
to purchase 75,000 shares which vest at the rate of 15,000 shares per year.
(3) In April 1997, Messrs. A. Conza and Siegel received a five year option
under the Company's 1993 Stock Incentive Plan (now the Omnibus Stock
Incentive Plan) to purchase 40,000 shares each which vest at the rate of
8,000 shares each per year.
(4) In April 1997, Messrs. Leaness and Pompeo received a five year option under
the Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive
Plan) to purchase 20,000 shares each which vest at the rate of 4,000 shares
each per year.
(5) In April 1997, Messrs. Fuller and Sitkoff received a five year option under
the Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive
Plan) to purchase 10,000 shares each which vest at the rate of 2,000 shares
each per year.
(6) In April 1997, Mr. J. Conza received a five year option under the Company's
1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan) to
purchase 35,000 shares which vest at the rate of 7,000 shares per year.
(7) In April 1997, Mr. Morgan received a five year option under the Company's
1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan) to
purchase 25,000 shares which vest at the rate of 5,000 shares per year.
(Footnotes continued on following page)
5
(Footnotes continued from previous page)
(8) In December 1993, Mr. Morgan received a five year option under the
Company's 1993 Stock Incentive Plan (now the Omnibus Stock Incentive Plan)
to purchase 2,500 shares which vested at the rate of 500 shares per year.
The unvested and vested portions of the option were increased to 3,750 and
750 shares respectively, in connection with the 1994 Stock Split.
(9) Based upon a comparison of the number of vested options granted to Messrs.
A. Conza, Siegel, Fuller, Leaness, Pompeo, Sitkoff, J. Conza and Morgan to
the number of vested options granted to all employees during the fiscal
year.
(10) Adjusted in connection with a 3:2 stock split effected during the year
ended June 30, 1994.
FISCAL YEAR END OPTION VALUES
The following table sets forth the number of unexercised options held by
all officers of the Company earning a salary and bonus of more than $100,000.00
during the fiscal year ended June 30, 1997. No options were exercised during
such period.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
--------------- ---------------- ------------- --------------
Anthony P. Conza.... -- -- 8,000/32,000 $ 0/0
David L. Siegel..... -- -- 8,000/32,000 $ 0/0
Charles G. Leaness.. -- -- 4,000/16,000 $ 0/0
Patrick J. Pompeo... -- -- 4,000/16,000 $ 0/0
Robert S. Sitkoff... -- -- 53,000/39,500 $33,000/$8,250
Dennis G. Fuller.... -- -- 8,000/9,500 $33,000/$8,250
Joseph A. Conza..... -- -- 13,000/29,500 $33,000/$8,250
Joseph W. Morgan.... -- -- 8,000/20,750 $ 0/0
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
OF BLIMPIE INTERNATIONAL, INC.
The primary purpose of this Committee is to develop executive compensation
policies and practices which coincide with and enhance the business plans and
strategies which the Company undertakes in connection with the pursuit of its
business objectives.
It is not unusual to find that the compensation committees of the Boards of
publicly held companies possessing share capitalizations far in excess of the
Company's share capital adopt executive compensation philosophies which are
largely based upon the view that the majority of pay for senior executive
officers should be composed of long-term, at-risk pay, and that less emphasis
should be placed on salary and annual incentives.
However, until the most recently completed fiscal year, it had been this
Committee's belief, based upon the facts that (1) the Company's Common Stock was
trading at ever increasing levels, (2) less than 4,000,000 shares of the
Company's Common Stock was in public hands, and (3) the Company's senior
management team already owned, collectively, more than 55% of all of the
Company's outstanding shares, that the shareholders of the Company, especially
the public shareholders, would not have been well-served by implementation of an
6
executive compensation policy which would place even more equity ownership in
the hands of that senior management.
Thus, until recently, this Committee's policy regarding the compensation of
its senior executives has been grounded upon the view that the senior
executives' equity positions provided them with sufficient incentives to serve
the interests of the shareholders. Thus, this Committee has followed a policy of
rewarding its senior executives with compensation packages consisting of
salaries which are determined upon the basis of the following four factors (1)
appreciation or depreciation in the Company's Common Stock during the prior
year, (2) increase or decrease in earnings during the prior year, (3) changes in
the size and industry position of the Company through expansions or contractions
in the overall size of the franchise chain, and (4) the growth of the Company's
international franchise operations. In determining the salary to be paid to the
Company's Chief Executive Officer, this Committee also considers, in addition to
the foregoing factors, the comparative salaries paid to other Chief Executives
in the restaurant industry, based upon the CEO Compensation Rankings published
annually by Restaurant Business Magazine.
The payment of bonuses to the Company's senior executives is not a matter
which falls within the jurisdiction of this Committee. Instead, during the
fiscal year ended June 30, 1991, the Board of Directors adopted a Company-wide
standard policy regarding such payments. Such policy is based upon the Company's
annual net income, as determined for financial reporting purposes. A bonus pool
is funded with 10% of the Company's annual net income. A percentage of the bonus
pool is assigned to each level of employment in the Company. The funds assigned
to each level are then divided by the number of employees on each level, and
payments are made on a quarterly basis with each payment being made two months
after the end of the quarter.
The levels and percentages assigned to each of them are as follows:
Chief Executive Officer.............................................. 18%
Chief Operating Officer.............................................. 9%
Executive Vice Presidents............................................ 12%
Senior Vice Presidents............................................... 12%
Vice Presidents...................................................... 8%
Assistant Vice President............................................. 9%
Operations Directors................................................. 10%
Managers............................................................. 8%
Mid-Managers......................................................... 4%
Staff Members........................................................ 10%
In applying the above-described factors to the determination of the
compensation to be paid to Anthony P. Conza, the Company's Chief Executive
Officer, during fiscal 1997, your Committee included in its deliberation of the
above-described factors, such matters as the Company's continued success in
achieving increased quarterly and annual revenues, income and earnings, and the
significant strides taken by the Company to expand the scope of its operations
into the international arena. As more fully discussed below, we also took into
consideration for the first time, the effects that the granting of an
incentive-based compensation component, i.e., stock options, should have on the
overall determination of Mr. Conza's annual compensation. As a result of our
consideration of all of such factors, this Committee awarded Mr. Conza a 3.6%
salary increase to $214,000 for the year ended June 30, 1997. By comparison,
during the prior fiscal year, a year in which the Company continued to achieve
record revenues, income and earnings, but during which Mr. Conza received no
incentive-based forms of compensation (other than his share of the Company-wide
bonus pool), he received a 19.5% salary increase to $207,000.
During the fiscal year ended June 30, 1997, this Committee authorized the
issuance of a modest number of stock options, granted under the Company's
Omnibus Stock Incentive Plan, as part of the compensation packages received by
the Company's Chief Executive and Chief Operating Officers, and its two
Executive Vice Presidents. Our decision to change our prior policy regarding the
non-use of incentive-based compensation for these executives was based upon our
views that the substantial depreciation of the Company's stock price during the
year in response to the relatively modest drop in comparative quarterly and
annual earnings, coupled with the challenges facing senior management in
establishing and sustaining momentum in the Company's international expansion
efforts, presented this Committee with an opportunity to make good use of a
performance-based compensation tool as an incentive to spur growth and
productivity. As a consequence of the addition of an option
7
component to the compensation packages of each of the four senior executives,
two of those executives received de minimus increases in their salaries, one
received an 8.9% increase to approximately $114,600, and, as previously noted,
the Chief Executive Officer received a 3.6% increase to approximately $214,000.
In summary, it is this Committee's belief that the compensation policies
that we have described in this report have served the best interests of the
shareholders and the Company. Such policies have been designed to provide
appropriate levels of compensation to the Company's senior executives based upon
the particular combination of factors which apply to this Company. As and when
those factors change, this Committee will make every effort to make adjustments
to its policies in a manner which will provide fair and reasonable levels of
compensation and appropriate incentives to its executives, while continuing to
be in the best interests of the shareholders and the Company.
Respectfully submitted,
The Compensation Committee
/S/ ALVIN KATZ /S/ HARRY G. CHERNOFF
- ------------------------------------ ---------------------------------------
COMPARISON OF TOTAL SHAREHOLDER RETURNS
The performance graph which follows compares the cumulative total
shareholder returns on the Company's Common Stock for the five-year period ended
June 30, 1997 with the S&P 500 Index and the S&P Restaurants Index-500 during
the same period. The graph assumes that the value of the Company's Common Stock
and the value of each Index was $100 on December 31, 1992, and that all
dividends have been reinvested. The shareholder returns shown below may not be
indicative of future performance.
Fiscal Years Ended June 30,
Base
Period
Company/Index 1992 1993 1994 1995 1996 1997
Blimpie
International, Inc. $100 $169.98 $347.02 $452.47 $864.62 $339.44
S&P 500 Index $100 $113.63 $115.23 $145.27 $183.04 $246.55
S&P Restaurants
Index-500 $100 $108.54 $125.59 $165.17 $194.35 $203.25
8
OMNIBUS STOCK INCENTIVE PLAN
The Company has adopted the Omnibus Stock Incentive Plan (the 'Plan') to
permit the grant of awards to employees of the Company (including officers and
directors who are employees of the Company or a subsidiary of the Company) of
restricted shares of the Company's common stock, performance shares of the
Company's common stock, stock appreciation rights relative to the Company's
common stock and both incentive stock options and non-qualified options to
purchase shares of the Company's common stock. A maximum of 950,000 shares may
be issued under the Plan. Through June 30, 1997, the Company granted to certain
employees, pursuant to its incentive plan: (a) options to acquire a total of
420,300 shares of common stock; and (b) stock grants of 92,400 shares of common
stock. The options are exercisable at the fair market value on the date of
grant. The options and stock grants provide for vesting at the rate of 20% per
annum. The options are exercisable at prices ranging from $3.25 to $14.75 per
share and expire five years after the date of the grant. As of June 30, 1997,
4,100 options had been exercised, 152,200 options had been vested and not
exercised, and 64,350 shares of stock had been vested. The aggregate value of
the vested shares and of the shares issuable pursuant to vested options under
the Plan was $1,069,216 based on the closing price of the Common Stock on
September 18, 1997. The Plan was adopted in order that the participants in the
Plan will have financial incentives to contribute to the Company's growth and
profitability, and to enhance the ability of the Company to attract and retain
in its employ individuals of outstanding ability.
WARRANTS ISSUED TO NON-EMPLOYEE DIRECTORS
On November 24, 1993, the Company issued to each of Harry Chernoff and
Alvin Katz, two non-employee directors of the Company, warrants to purchase up
to 7,500 shares of the Company's Common Stock at the purchase price of $6.00 per
share at any time prior to November 24, 1998. On September 1, 1995, the Company
issued to each of Messrs. Chernoff and Katz warrants to purchase up to 4,000
shares of the Company's Common Stock at the purchase price of $8.875 per share
at any time prior to September 1, 2000.
DIRECTORS' COMPENSATION
The Board has adopted a compensation policy to help the Company to attract
and maintain the services of qualified outside directors. Such compensation
consists of (a) payment of a directors fee of $6,000 per annum; (b) issuance of
five year warrants or options to purchase 5,000 shares of the Company's Common
Stock at an exercise price equal to the closing price of such stock on the date
of his or her appointment or election to the Board; (c) issuance of additional
warrants or options, at the discretion of the Board, periodically during the
tenure of an outside director; and (d) reimbursement of the reasonable travel
and lodging expenses incurred by each outside director in attending Board
meetings which are not held within a 75 mile radius of his or her residence or
principal place of business.
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the holdings of the Common Stock of the
Company as of October 31 1997 by (1) each person or entity known to the Company
to be the beneficial owner of more than five percent (5%) of the outstanding
shares of Common Stock of the Company; (2) each director and executive officer;
and (3) all directors and executive officers as a group. All of the holders of
the Company's Common Stock are entitled to one vote per share.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNED(2)
Anthony P. Conza(3)................. 2,931,525(4) 30.7%
David L. Siegel(3).................. 1,505,830(5) 15.8%
Charles G. Leaness(3)............... 435,908(6) 4.6%
Patrick J. Pompeo(3)................ 398,137(7) 4.2%
Robert S. Sitkoff(3)................ 62,200(9) *
Dennis G. Fuller(3)................. 29,410(8) *
Joseph Conza(3)..................... 55,413(10) *
Bruce A. Kolbinsky(3)............... 16,157(11) *
Alvin Katz(12)...................... 11,500(13) *
Harry Chernoff(14).................. 13,768(15) *
Joseph Morgan (3)................... 141,550(16) 1.5
Arthur Mancino(3)................... 8,150(17) *
Rebecca Killarney(3)................ 16,393(18) *
Sharon Henderson(3)................. 2,600(19) *
All Directors and Executive Officers
as a Group (14 Persons)........... 5,628,541(20) 59%
- ---------------
* Represents less than 1%.
(1) Includes shares actually and beneficially owned.
(2) Based on 9,541,926 shares of the Company's Common Stock outstanding on
September 9, 1997.
(3) The address of Messrs. A. Conza, Siegel, Leaness, Pompeo, Fuller,
Sitkoff, J. Conza, Kolbinsky, Morgan, Mancino, and Ms. Killarney and
Ms. Henderson is 740 Broadway, New York, New York 10003.
(4) Includes 8,000 shares of Common Stock which Mr. A. Conza has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him. Does not include (a) 37,050 shares owned by Mr.
Conza's daughter, (b) 8,550 shares owned by Mr. Morgan (Mr. Conza's
son-in-law), (c) 125,000 shares owned jointly by Mr. Conza's daughter and
Mr. Morgan over which Mr. Morgan has sole voting power, (d) 4,150 shares
owned by Mr. Conza's parents, (e) 55,413 shares owned by Joseph Conza,
the brother of Mr. Conza, and (f) 44,000 shares held by Mr. Conza's
daughter as Trustee for the Anthony P. Conza Charitable Remainder Trust,
as to all of which Mr. Conza disclaims beneficial ownership.
(5) Includes 8,000 shares of Common Stock which Mr. Siegel has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him.
(6) Includes 4,000 shares of Common Stock which Mr. Leaness has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him.
(7) Includes 4,000 shares of Common Stock which Mr. Pompeo has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him. Does not include 6,300 shares held by Mr. Pompeo's sister
and brother-in-law, as to which Mr. Pompeo disclaims beneficial
ownership.
(Footnotes continued on following page)
10
(Footnotes continued from previous page)
(8) Includes 9,500 shares of Common Stock which Mr. Fuller has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him and 30 shares held by Mr. Fuller as custodian for his
daughter under the Georgia Transfers to Minors Act. Does not include
5,355 shares held by Mr. Fuller's mother, 1,900 shares held by Mr.
Fuller's father-in-law and 750 shares held by Mr. Fuller's mother as
custodian for his daughter under the Georgia Transfers to Minors Act, as
to all of which Mr. Fuller disclaims beneficial ownership.
(9) Includes 54,500 shares of Common Stock which Mr. Sitkoff has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him.
(10) Includes 14,500 shares of Common Stock which Mr. J. Conza has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him.
(11) Includes 8,500 shares of Common Stock which Mr. Kolbinsky has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him.
(12) The address of Mr. Katz is 301 N. Birch Road, Ft. Lauderdale, Florida
33304.
(13) Includes 11,500 shares of Common Stock which Mr. Katz has the right to
acquire within 60 days from the date hereof upon the exercise of warrants
held by him. See 'Executive Compensation--Warrants Issued to Non-Employee
Directors.'
(14) The address of Mr. Chernoff is 286 Spring Street, Suite 401, New York,
New York 10013.
(15) Includes 11,500 shares of Common Stock which Mr. Chernoff has the right
to acquire within 60 days from the date hereof upon the exercise of
warrants held by him. See 'Executive Compensation--Warrants Issued to
Non-Employee Directors.'
(16) Includes 8,000 shares of Common Stock which Mr. Morgan has the right to
acquire within 60 days from the date hereof upon the exercise of options
held by him. Does not include (a) 37,050 shares held by Mr. Morgan's wife
(Mr. A. Conza's daughter), (b) 2,500 shares held by Mr. Morgan's son, (c)
700 shares held by Mr. Morgan's wife as custodian for his son under the
Transfers to Minors Act, and (d) 44,000 shares held by Mr. Morgan's wife
as Trustee for the Anthony P. Conza Charitable Remainder Trust, as to all
of which Mr. Morgan disclaims beneficial ownership.
(17) Includes 1,800 shares of Common Stock which Mr. Mancino has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by him. Does not include 400 shares held by Mr. Mancino's
father-in-law and 100 shares held by his sister, as to which Mr. Mancino
disclaims beneficial ownership.
(18) Includes 8,500 shares of Common Stock which Ms. Killarney has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by her.
(19) Includes 1,800 shares of Common Stock which Ms. Henderson has the right
to acquire within 60 days from the date hereof upon the exercise of
options held by her.
(20) Includes 154,100 shares of Common Stock which the holders thereof have
the right to acquire within 60 days from the date hereof upon the
exercise of options and warrants held by them. Does not include: (a)
37,050 shares owned by Mr. A. Conza's daughter, 4,150 shares owned by Mr.
Conza's parents, and 44,000 shares held by Mr. A. Conza's daughter as
Trustee for the Anthony P. Conza Charitable Remainder Trust, as to all of
which Mr. Conza disclaims beneficial ownership; (b) 6,300 shares held by
Mr. Pompeo's sister and brother-in-law, as to which Mr. Pompeo disclaims
beneficial ownership; (c) 5,355 shares held by Mr. Fuller's mother, 1,900
shares held by Mr. Fuller's father-in-law and 750 shares held by Mr.
Fuller's mother as custodian for his daughter under the Georgia Transfer
to Minors Act, as to all of which Mr. Fuller disclaims beneficial
ownership; (d) 37,050 shares held by Mr. Morgan's wife, 2,500 shares held
by Mr. Morgan's son, 700 shares held by Mr. Morgan's wife as custodian
for his son under the Transfers to Minors Act, and 44,000 shares held by
Mr. Morgan's wife as Trustee for the Anthony P. Conza Charitable
Remainder Trust, as to all of which Mr. Morgan disclaims beneficial
ownership; and (e) 400 shares held by Mr. Mancino's father-in-law and 100
shares held by his sister, as to all of which Mr. Mancino disclaims
beneficial ownership.
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal years ended June 30, 1997, 1996 and 1995, the Company
paid $983,000, $893,000 and $781,000 respectively, to Georgia Enterprises, Inc.,
a corporation partially owned by Patrick Pompeo, an Executive Vice President and
Director of the Company, and Joseph Conza, a Senior Vice President of the
Company, in payment of said corporation's share of the fees that it earned as
the Subfranchisor for the Georgia market. During the same three fiscal years the
Company paid $290,000, $339,000 and $318,000, respectively, to Llewellyn
Distributors, Inc. ('Llewellyn'), a corporation partially owned by Charles G.
Leaness, a Director and Executive Vice President of the Company, in payment of
said corporation's share of the fees that it earned as the Subfranchisor for the
northern New Jersey market. The Company also paid $150,000, $165,000 and
$120,000, respectively, to International Southwest Blimpie, Inc. ('Southwest'),
a corporation principally owned and controlled by Joseph Conza, in payment of
said corporation's share of the fees that it earned as the Subfranchisor for the
Houston market.
Each of the aforementioned transactions was effected pursuant to written
agreements between the Company and the parties thereto. Such agreements are
substantially identical to the standard form of Subfranchise agreement that the
Company enters into with unaffiliated Subfranchisors. In the opinion of the
Company's management, each such agreement is on terms as favorable to the
Company as would be available from an unrelated third party.
During the fiscal years ended June 30, 1997, 1996 and 1995, the Company
received $167,537, $245,000 and $163,000 respectively, in management fees from
Georgia Enterprises, Inc., the Company's Subfranchisor for the State of Georgia,
of which Mr. Pompeo is a principal shareholder, officer and director. Such fees
were received pursuant to a written agreement which provides that in
consideration of the Company's provision of operational and administrative
support functions to Georgia Enterprises, Inc., the Company shall be reimbursed
with respect to the expenses incurred by the Company in connection therewith
pursuant to a payment scale set forth in the agreement. The agreement also
provides that in the event the costs of such support services shall rise, then
the fees paid pursuant to the agreement shall rise accordingly. In the opinion
of the Company's management, the agreement is on terms as favorable to the
Company as would be available from an unrelated third party.
During the years ended June 30, 1997 and 1996, the Company paid $8,243 and
$7,182, respectively, to Joseph Conza as compensation for the use of his
apartment in New York City by employees of the Company's Atlanta and Houston
offices during business trips. In the Company's estimation, this practice
reducing the Company's lodging expense inasmuch as the per diem amounts paid to
Mr. Conza were below the market rates for hotel accommodations which the Company
would have been required to pay in order to house such employees during such
trips to New York.
During the fiscal years ended June 30, 1997, 1996 and 1995, the Company
received $101,112, $85,000 and $61,000, respectively, in management fees from
Llewellyn, the Company's Subfranchisor for New Jersey, of which Mr. Leaness is a
principal shareholder, officer and director. Such fees were paid pursuant to a
written agreement which provides that the Company shall be reimbursed by
Llewellyn for costs incurred by the Company in providing operational support
services to Llewellyn. The agreement also provides that in the event the costs
of such support services shall rise, then the fees paid pursuant to the
agreement shall rise accordingly. In the opinion of the Company's management,
the agreement is on terms as favorable to the Company as would be available from
an unrelated third party.
During the fiscal years ended June 30, 1997, 1996 and 1995, the Company
received $49,200, $61,000 and $67,000, respectively, in management fees from
Southwest. The management fees were paid pursuant to a written agreement which
provides that the Company shall be reimbursed by Southwest for costs incurred by
the Company in providing operational support services to Southwest. The
agreement also provides that in the event the costs of such support services
shall rise, then the fees paid pursuant to the agreement shall rise accordingly.
In the opinion of the Company's management, the agreement is on terms as
favorable to the Company as would be available from an unrelated third party.
In April 1994, Mr. Leaness borrowed the sum of $20,000 from the Company,
and collateralized the payment thereof with the same 120,000 shares of Common
Stock which he pledged in connection with a $60,000 option
12
exercise and loan transaction consummated in December 1991. Said $20,000 loan is
payable upon demand and bears interest at the rate of 5% per annum.
In March 1995, Joseph Conza borrowed the principal amount of $55,500 from
the Company. Said indebtedness is payable in constant bi-monthly payments of
principal and interest computed at the rate of 8% per annum on the basis of a 20
year amortization schedule, and the unpaid balance of principal and accrued but
unpaid interest shall become due and payable on April 16, 2000, provided,
however, that, Mr. Conza may extend the term of the loan through April 15, 2015
as long as no default exists with regard to said loan when it originally
matures. Mr. Conza pledged 10,000 unregistered shares of the Company's Common
Stock as collateral security for the payment of all sums due under said loan. As
of the end of the fiscal year, Mr. Conza was current with respect to his payment
obligations and the outstanding principal balance had been reduced to $52,727.
In 1995, the Company acquired the rights possessed by Anthony P. Conza and
David L. Siegel regarding the licensing of the Blimpie Trademarks and the
Blimpie Marketing System for all non-U.S. territories, pursuant to a 99 year
license Agreement. Said agreement provided for payment of certain income-based
fees to Messrs. Conza and Siegel, and further provided for cancellation by
Messrs. Conza and Siegel if the Company fails to pay them a minimum annual fee
aggregating $350,000 during the first five years of the term, and a minimum
aggregate fee of $150,000 per year (subject to an annual cost of living
adjustment) during the balance of such term. The payments made to Messrs. Conza
and Siegel under this agreement were $137,029 and $230,713 during the fiscal
years ended June 30, 1997 and 1996, respectively. In February 1997, the Company
acquired, pursuant to a written agreement which it executed with Messrs. Anthony
P. Conza and David L. Siegel, ownership of the undivided 60% interest in the
international rights to the Blimpie trademarks and Blimpie marketing system
owned by such individuals. In accordance with such agreement, the Company paid
$4.5 million ($3 million to Mr. Conza and $1.5 million to Mr. Siegel), and it
must pay certain income-based fees to them which take effect after international
revenues exceed $5 million.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the 'Exchange Act')
requires the Company's Directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of the Company's Common Stock. 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.
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1997, the Company's
officers, Directors and greater than ten-percent beneficial owners complied with
all applicable Section 16(a) filing requirements except that Joseph A. Conza and
Joseph Morgan, the Senior Vice President Equipment and Design Services, and the
Senior Vice President--Strategic Planning, respectively, failed to timely file
an Annual Statement on Beneficial Ownership of Securities on From 5 with respect
to gifts of the Company's Common Stock which they received during the fiscal
year.
PROPOSAL NUMBER 2: SELECTION OF AUDITORS
At the Annual Meeting, the Company's shareholders will be asked to ratify
the Board of Directors' selection of the firm of Coopers & Lybrand, LLP, as the
Company's independent accountants for the fiscal year ending June 30, 1998. Said
firm has served as the Company's independent accountants since 1994. It is not
expected that a representative of Coopers & Lybrand, LLP will be present at the
meeting.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock represented in person or by proxy at the
Annual Meeting is required for approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH PROPOSAL.
13
OTHER MATTERS
DISCRETIONARY AUTHORITY TO VOTE PROXY
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters do properly come before the Annual Meeting,
the proxy will be voted in respect thereof in accordance with the best judgement
of the persons authorized therein, and the discretionary authority to do so is
included in the proxy.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended June 30, 1997,
including financial statements, accompanies this proxy statement. However no
action is proposed to be taken at the Annual Meeting with respect to the Annual
Report, and it is not to be considered as constituting any part of the proxy
soliciting materials.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at the Annual Meeting of
shareholders to be held in 1998 for inclusion in the Proxy Statement and form of
proxy relating to that meeting is advised that the proposal must be received by
the Company at its principal executive offices no later than July 7, 1998. The
Company will not be required to include in its proxy statement or form of proxy
a shareholder's proposal which is received after that date or which otherwise
fails to meet requirements for shareholder proposals established by regulations
of the Securities and Exchange Commission.
SHAREHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JUNE 30, 1997 BY SENDING A REQUEST TO: INVESTOR
RELATIONS DEPARTMENT, BLIMPIE INTERNATIONAL, INC., 1775 THE EXCHANGE, SUITE 600,
ATLANTA, GA 30339
New York, New York
Dated: November 4, 1997
14
BLIMPIE INTERNATIONAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors of Blimpie
International, Inc.
The undersigned holder of the $.01 par value common stock (the "Common Shares")
of Blimpie International, Inc. (the "Company"), hereby acknowledges receipt of
the Notice of Annual Meeting of the Company and Proxy Statement attached
thereto, all relating to the Company's Annual Meeting of Shareholders (the
"Annual Meeting"), and does appoint Anthony P. Conza, David L. Siegel, Charles
G. Leaness and Patrick J. Pompeo, and each of them, the true and lawful attorney
or attorneys of the undersigned, with power of substitution, for and in the name
of the undersigned, to vote as proxies for the undersigned according to the
number of Common Shares the undersigned would be entitled to vote if then
personally present at the Annual Meeting to be held at the offices of Hall
Dickler Kent Friedman & Wood, LLP, 909 Third Avenue, 27th Floor, on Thursday,
December 4, 1997, at 9:00 A.M., or at any adjournment or adjournments thereof,
and thereat to vote all Common Shares of the Company held by the undersigned and
entitled to be voted thereat upon the following matters:
1. To elect as Directors to serve until the
Annual Meeting to be held in 1998 for the fiscal year ending June 30, 1999, the
Nominees listed below:
Anthony P. Conza (Chairman), David L. Siegel
(Vice-Chairman), Charles G. Leaness, Patrick J. Pompeo, Harry G. Chernoff and
Alvin Katz.
FOR all the foregoing Nominees
-------------
WITHHOLD AUTHORITY to vote for the foregoing Nominees
-------------
NOTE: To withhold authority to vote for any individual
nominee, strike a line through that nominee's name. Unless authority to vote for
all of the foregoing nominees is withheld, this Proxy will be deemed to confer
authority to vote for every nominee whose name is not struck.
2. To ratify the selection of Coopers &
Lybrand, LLP as the Company's independent accountants for the fiscal year ending
June 30, 1998.
FOR AGAINST ABSTAIN
------------- ------------- -------------
3. To transact such other business as may
properly come before the meeting.
This Proxy confers authority to vote "FOR" each of propositions 1 and 2 listed
above unless otherwise indicated. If any other business is transacted at said
meeting, this proxy shall
be voted in accordance with the best judgement of the proxies. The Board of
Directors recommends a vote of "FOR" for each of the listed propositions. This
proxy is solicited on behalf of the Board of Directors of Blimpie International,
Inc. and may be revoked prior to its exercise.
NOTE: Signature(s) should follow exactly the name(s) on the stock
certificate. Executor, administrator, trustee or guardian should sign as such.
If more than one trustee, all should sign. ALL JOINT OWNERS MUST SIGN.
Dated:
----------------------
-----------------------------
Signature of Shareholder
-----------------------------