UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under
§240.14a-12
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FIESTA RESTAURANT GROUP,
INC.
(Name of Registrant as
Specified in its Charter)
___________________________________________________________
(Name of Person(s)
Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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2018
Annual Meeting of
Shareholders
Notice and Proxy Statement
May
2, 2018
9:00 A.M. (EST)
Marriott Hotel, 255 Biscayne Boulevard Way
Miami, Florida 33131
Chairman’s
Letter
Fellow
Shareholders:
We are pleased to present you with the 2018 Proxy Statement of
Fiesta Restaurant Group, Inc. (“Fiesta”) and cordially
invite you to attend Fiesta’s 2018 annual meeting of
shareholders, which will be held at 9:00 a.m., local time, on
Wednesday, May 2, 2018 at the Marriott Hotel, 255 Biscayne Boulevard
Way, Miami, Florida 33131.
2017 was a year of significant change for Fiesta. In February, we
announced several leadership changes, including my appointment as
Chairman of the Board and the appointment of our new Chief
Executive Officer, Richard Stockinger (“Rich”), who is
an experienced operator with a strong track record of successfully
revitalizing restaurant companies. Within two months of his
appointment, Rich, the Board and the rest of the management team
worked together to establish a Strategic Renewal Plan and announced
initial steps of this plan to drive long-term value creation.
Priority initiatives include:
1.
Revitalizing our Brands in Core Markets
2.
Improving Capital Management and Financial Discipline
3.
Establishing Platforms for Long-Term Growth
4.
Optimizing our Restaurant Footprint
Over the remainder of the year, and while working through the
impact and delays of two major hurricanes, Rich and the management
team have been executing against this plan, which is their #1
priority. We still have much work to do but we are encouraged by
the progress that has been made and are optimistic that successful
execution of the Strategic Renewal Plan will drive substantial
long-term shareholder value creation.
Shareholder
Engagement:
During 2017, independent members of our Board of
Directors and members of our management team engaged with
shareholders representing more than 85% of our investor base. The
input received continues to be incorporated into our board’s
deliberations and decisions, and we took several actions that were
informed, in part, by the feedback we received. Key actions
include:
•
Corporate Governance:
After being spun-off from our former parent company, we are entering our 6
th
year as an independent publicly traded company. In line with shareholder feedback and our evolution as a company, we are
submitting at this annual meeting, and recommending that shareholders vote for, a proposal to approve an amendment to Fiesta’s
Restated Certificate of Incorporation to declassify our board of directors and provide that all directors will be elected on an
annual basis beginning at our 2019 annual meeting.
•
Board
Refreshment:
We have an active board refreshment program.
Over the past year, we have welcomed two new independent directors
to our board, in addition to our Chief Executive Officer. Our board
also recently adopted a mandatory retirement policy, which provides
that a person is not eligible for election as a director if he or
she is older than 75 years of age. Our board members, including our
two new independent board members and our Chief Executive Officer,
bring significant restaurant and retail industry operating
experience.
We appreciate the willingness
of our shareholders to engage with us on these matters. We look
forward to continuing to evolve our board, governance, compensation
and sustainability practices as part of the overall revitalization
of Fiesta.
Sincerely,
Stacey
Rauch
Chairman of the Board
Fiesta Restaurant Group, Inc.
FIESTA RESTAURANT GROUP,
INC.
14800 Landmark Boulevard, Suite 500
Dallas, Texas
75254
_________________
You are invited to attend the 2018 Annual Meeting of Shareholders,
which we refer to as the “
2018 Annual
Meeting
”, of FIESTA RESTAURANT GROUP, INC., a Delaware
corporation, which we refer to as “
we
”,
“
us
”,
“
our
”,
the “
Company
”,
“
Fiesta Restaurant
Group
”, and “
Fiesta
”.
Date and
Time:
Wednesday, May 2, 2018, at 9:00 A.M. (EST)
Place:
Marriott Hotel
255 Biscayne Boulevard Way
Miami, Florida 33131
Record Date:
March 9, 2018
Notice and
Voting:
Only shareholders of record as of the record date are entitled to
receive notice of, and to vote at, the 2018 Annual Meeting, and at
any adjournment or postponement thereof. You are entitled to one
vote per proposal for each share of common stock held by you.
To Fiesta Restaurant
Group Shareholders:
At the meeting, shareholders will be asked to consider and vote
upon the following proposals:
(1)
To elect
two directors of the Company as Class III directors to serve until
their successors have been duly elected and qualified;
(2)
To adopt,
on an advisory basis, a non-binding resolution approving the
compensation of the Company’s Named Executive Officers, as
described in the Proxy Statement under “Executive
Compensation”;
(3)
To
approve an amendment to the Company’s Restated Certificate of
Incorporation, as amended, to declassify our board of directors and
to provide for the annual election of all directors beginning with
the 2019 Annual Meeting of
Shareholders
;
(4)
To ratify
the appointment of Deloitte & Touche LLP as the independent
registered public accounting firm of the Company for the 2018
fiscal year; and
(5)
To
consider and act upon such other matters as may properly come
before the 2018 Annual Meeting.
A list of our shareholders as of the close of business on March 9,
2018 will be available for inspection during business hours for ten
days prior to the 2018 Annual Meeting at our principal executive
offices located at 14800 Landmark Boulevard, Suite 500, Dallas,
Texas 75254.
If you are a shareholder of record, the inspector of election will
have your name on a list and you will be able to gain entry to the
meeting upon presentation of some form of government-issued photo
identification such as a
driver’s license, state-issued ID card or passport. If you
are not a shareholder of record, but hold shares through a broker,
trustee or nominee, you must provide proof of beneficial ownership
as of the record date, such as an account statement or similar
evidence of ownership, along with a form of photo identification
referred to above. If you do not comply with the procedures
outlined above, you will not be admitted to the meeting.
We are taking advantage of the Securities and Exchange Commission
rule that allows us to deliver our proxy materials (which include
the Proxy Statement included with this notice, our 2018 annual
report and form of proxy card) to shareholders via the Internet. As
a result, our shareholders will receive a mailing containing only a
notice of the meeting instead of paper copies of our proxy
materials.
Your vote is important.
Whether or not you plan to attend the meeting, please review our
proxy materials and request a proxy card to sign, date and return
or submit your proxy by telephone or through the Internet. If you
attend the meeting in person, you may, if you desire, revoke your
proxy and choose to vote in person even if you had previously sent
in your proxy card or voted by telephone or the
Internet.
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Very truly yours,
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Maria C. Mayer
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Senior Vice President, General Counsel &
Secretary
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Miami, Florida
March 23, 2018
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2018 ANNUAL
MEETING TO BE HELD ON May 2, 2018: THE PROXY STATEMENT FOR THE 2018
ANNUAL MEETING AND OUR 2017 ANNUAL REPORT ARE AVAILABLE FREE OF
CHARGE AT
WWW.PROXYVOTE.COM
.
The approximate date on which the “Important Notice Regarding
the Availability of Proxy Materials” was first sent or given
to shareholders was on or about March 23, 2018.
EXECUTIVE
SUMMARY
2018 Annual Meeting
Information
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Wednesday,
May 2, 2018
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9:00 A.M.
(EST)
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Marriott Hotel,
255 Biscayne Boulevard Way
Miami, Florida 33131
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March 9,
2018
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For additional information about our Annual Meeting, see the
section titled
“
Questions
and Answers About the 2018 Annual Meeting.
”
Matters to be Voted On
at Our 2018 Annual Meeting
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Proposal 1.
Election of
two directors of the Company as Class III directors to serve until
their successors have been duly elected and qualified
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FOR
each director
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6
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Proposal 2.
Adoption, on
an advisory basis, of a non-binding resolution approving the
compensation of the Company’s Named Executive Officers, as
described in the Proxy Statement under “Executive
Compensation”
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FOR
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53
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Proposal 3.
Approval of an
amendment to the Company’s Restated Certificate of
Incorporation, as amended, to declassify our board of directors and
to provide for the annual election of all directors beginning with
the 2019 Annual Meeting of shareholders
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FOR
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54
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Proposal 4.
Ratification
of the appointment of Deloitte & Touche LLP as the independent
registered public accounting firm of the Company for the 2018
fiscal year
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FOR
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56
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Proposal 5.
To consider
and act upon such other matters as may properly come before the
2018 Annual Meeting
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How to Cast Your
Vote
Shareholders of record can vote by any of the following
methods:
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In
person
, at the
2018 Annual Meeting. If you attend the 2018 Annual Meeting, you may
deliver your completed proxy card in person or you may vote by
completing a ballot, which we will provide to you at the 2018
Annual Meeting.
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Via
telephone
by
calling 1-800-690-6903.
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Via
Internet
by
visiting www.proxyvote.com.
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Via
mail
(if you
received your proxy materials by mail), you can vote by marking,
dating, signing and returning the proxy card in the postage-paid
envelope
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•
If you hold your shares beneficially in “street name”
through a broker, bank or other nominee, you may be able to
complete your proxy and authorize your vote by proxy, by telephone
or the Internet as well as by mail. You must follow the
instructions provided by your broker or other nominee to vote your
shares.
•
If you do not provide voting instructions to your bank, broker,
trustee or other nominee holding shares of our common stock for
you, your shares will not be voted with respect to Proposals 1, 2,
and 3 as we do not believe such proposals qualify for discretionary
voting treatment by a broker.
•
If you are a beneficial owner holding your shares in “street
name” and you do not provide voting instructions to your
bank, broker, trustee or other nominee holding shares of our common
stock for you, your shares of common stock will not be voted with
respect to any proposal for which the shareholder of record does
not have “discretionary” authority to vote.
Overview of Fiesta
Restaurant Group
Overview of Fiesta and Strategic Renewal Plan
Fiesta
Restaurant Group operates and franchises two restaurant brands, Pollo Tropical
®
and Taco Cabana
®
,
which have almost 30 and 40 years, respectively, of operating history and loyal customer bases. The brands specialize in the operation
of fast-casual, ethnic restaurants that offer distinct and unique Caribbean and Mexican inspired flavors with broad appeal at
a compelling value. Our Pollo Tropical restaurants feature citrus marinated, fire-grilled chicken and other freshly prepared tropical
inspired menu items, while our Taco Cabana restaurants specialize in Mexican inspired food made fresh by hand. We believe that
both brands offer distinct and unique flavors with broad appeal at a compelling value, which differentiates them in the competitive
fast-casual and quick-service restaurant segments.
In April 2017, we announced a Strategic Renewal Plan (the
“Renewal Plan”) to drive long term shareholder value
creation. The Renewal Plan was based on our comprehensive review of
all aspects of our business to improve the guest experience and
drive our results. The Renewal Plan was designed to significantly
improve our long-term business model, consisting of the
following:
1)
Revitalizing restaurant performance in core markets;
2)
Managing capital and financial discipline;
3)
Establishing platforms for long term growth; and
4)
Optimizing each brands’ restaurant portfolio.
As part of the Renewal Plan, we relaunched the Pollo Tropical brand
in October 2017 and intend to relaunch the Taco Cabana brand in
mid-2018. Additional changes to senior management continued over
the course of the year as we built a team that will help ensure the
successful implementation of the Renewal Plan. The implementation
of the Renewal Plan negatively impacted our revenue and
profitability during 2017, but we believe this multi-year
transformation has positioned us well for the future.
Performance Highlights
2017
Company Performance Highlights
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Financial Highlights
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Total revenues decreased 6.0% to $669.1 million, driven primarily
by a decrease in comparable restaurant sales partially attributable
to Hurricanes Harvey and Irma (the “Hurricanes”),
permanent closure of a total of 56 underperforming restaurants
closed in late 2016 and in 2017 as a result of our portfolio
optimization analysis and planned reduction in advertising while we
implemented initiatives related to the Renewal Plan
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•
Comparable restaurant sales, which we refer to below as
“SRS” decreased 6.9% in 2017 on a consolidated
basis
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•
Comparable restaurant sales at Pollo Tropical and Taco Cabana
decreased 6.5% and 7.3%, respectively
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•
Adjusted EBITDA for Pollo Tropical restaurants decreased to $50.9
million in 2017 from $58.3 million in 2016 due primarily to the
impact of lower comparable restaurant sales including the impact of
the Hurricanes, and higher operating expenses related to the
Renewal Plan, partially offset by the impact of closing
unprofitable restaurants. Adjusted EBITDA for Taco Cabana
restaurants decreased to $16.5 million in 2017 from $38.3 million
in 2016 due primarily to the impact of lower comparable restaurant
sales including the impact of Hurricane Harvey and higher operating
expenses related to the Renewal Plan. Adjusted EBITDA is defined in
Note 11 to the Consolidated Financial Statements included in the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2017.
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Business
Highlights
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Nine Company-owned Pollo Tropical and six Company-owned Taco Cabana
restaurants were opened
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Nine Company-owned Pollo Tropical restaurants were reimaged
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Rationalized our restaurant portfolio with the closure of a number
of unprofitable restaurants
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Conducted extensive research, including validation of strengths and
opportunities of our brands
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Comprehensively improved recipes and food quality with higher
quality, fresh ingredients and added new menu items
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Put in place multiple operational initiatives to deliver high
quality execution with consistency
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Implemented new creative advertising and social media campaigns and
promotional strategies
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Began upgrading restaurant facilities to enhance atmosphere and
appearance and to ensure consistent execution, cleanliness and
safety
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Began developing digital capabilities that will include refining
delivery, catering, mobile apps, online ordering and new loyalty
platforms for implementation in 2018
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Corporate Governance
Highlights
Fiesta is committed to effective corporate governance. The
following highlights of our governance program provide our highly
qualified and experienced Board the structure necessary to provide
oversight, advice and counsel to our Company. See the section
titled “Corporate Governance” for additional
information.
Corporate Governance Highlights
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Board Declassification (2018 proposal)
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Mandatory Director Retirement Age (adopted in 2018)
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Independent
Chair
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Highly Independent
Board
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Majority Voting in
Uncontested Elections
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Board Refreshment
— 3 New Directors in 2017
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Shareholder Engagement Overview
The Company’s board of directors, Compensation Committee, and
management value the opinions of our shareholders. We are committed
to being transparent with shareholders on all topics, including our
business strategy, governance and compensation programs, and
responsive to shareholder feedback provided. During 2017, we
engaged with shareholders representing more than 85% of our
investor base.
As a result of these conversations, the board of directors has put
forth a proposal at this 2018 Annual Meeting to approve an
amendment to the Company’s Restated Certificate of
Incorporation, as amended, to declassify its board of directors and provide for
the annual election of all directors beginning with the 2019 Annual
Meeting of Shareholders, and the board has recommended that
shareholders vote in favor of it.
Based on feedback received during these meetings, as well as
historical voting outcomes, we believe our shareholders are
generally supportive of the Company’s governance and
compensation programs. Nevertheless, we believe these conversations
with shareholders are invaluable and will continue to seek
shareholder input on similar topics when making future board
decisions.
Board Declassification
After considering the advantages and disadvantages of
declassification, including through dialogue with our shareholders,
the Board determined it is in the best interests of the Company and
its shareholders to declassify the Board. The Board believes this
change is appropriate given the preferences of our shareholders and
our current position as a maturing public company. If approved at
the annual meeting, the Board will be fully declassified by the
2019 Annual Meeting of Shareholders.
Majority Voting
In response to strong shareholder support, in 2017, our Board, with
the approval of our shareholders, adopted a majority vote standard
in uncontested director elections. This enhancement to our
governance program is effective
for the 2018 Annual Meeting and we believe this feature will
provide shareholders with a more meaningful role in the outcome of
uncontested director elections and encourage increased director
accountability and oversight.
Board Refreshment
We
have an active board refreshment program. Over the past year, we have welcomed two new independent directors to our board, in
addition to our Chief Executive Officer. Our board also recently adopted a mandatory retirement policy, which provides that a
person is not eligible for election as a director if he or she is older than 75 years of age. Our board members, including our
two new independent board members and our Chief Executive Officer, bring significant restaurant and retail industry operating
experience.
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COMMITTEES AND ATTENDANCE
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RECENT
CORPORATE GOVERNANCE ENHANCEMENTS
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Independent Chairman of the Board
•
Following the 2018 annual meeting, 7 of the 8 Directors on our
Board will be independent
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Independent Directors meet in executive sessions
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Independent Audit, Compensation, Finance and Corporate Governance
and Nominating Committees
•
All Directors attended 100% of the Board and their respective
committee meetings
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•
During 2017, reached out to shareholders representing over 85% of
shares outstanding
•
Board’s actions responsive to shareholder feedback received;
resulting in changes to Fiesta’s corporate governance
program
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•
Board declassification (proposal in 2018 to be fully declassified
in 2019)
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Adopted mandatory retirement policy
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Adopted majority voting for uncontested director elections
•
Board refreshment
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Community Social
Impact
We are committed to being a deeply responsible company in the
communities where we do business. Our focus is on serving high
quality food to our guests and contributing positively to the
communities where our restaurants are located. This is integral to
our business strategy. Some of our recent initiatives include:
•
Introducing “No Antibiotics Ever” chicken at our Pollo
Tropical restaurants in early 2018, which will provide our guests
with higher quality food containing more natural ingredients;
•
Actively working to procure more earth-friendly serving and
packaging materials for our products in all of our restaurants;
•
Beginning a program to actively recruit military veterans to work
at our restaurants;
•
Providing thousands of hot meals to first responders, victims,
elderly residents and others in Texas and in Florida in need during
the aftermath of the Hurricanes;
•
Providing hundreds of hot meals to local police, FBI, first
responders and local residents in need after the Parkland, Florida
school shooting tragedy; and
•
Assisting, through our non-profit Fiesta Family Foundation, many of
our employees who have personally suffered losses as a result of
the Hurricanes or other hardships.
As a result of these initiatives, we believe we deliver benefits to
our stakeholders, including employees, business partners,
customers, suppliers, stockholders, community members and
others.
FIESTA RESTAURANT GROUP,
INC.
TABLE OF
CONTENTS
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Page
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QUESTIONS AND ANSWERS ABOUT THE 2018 ANNUAL
MEETING
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2
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PROPOSAL 1
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ELECTION OF DIRECTORS
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6
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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19
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CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
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21
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CORPORATE GOVERNANCE
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22
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EXECUTIVE COMPENSATION
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23
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REPORT OF THE COMPENSATION COMMITTEE
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32
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SUMMARY COMPENSATION TABLE
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33
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GRANTS OF PLAN-BASED AWARDS
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39
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OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
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40
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OPTIONS EXERCISED AND STOCK VESTED
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41
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NONQUALIFIED DEFERRED COMPENSATION
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41
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POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE-OF-CONTROL
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42
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DIRECTOR COMPENSATION
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50
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PROPOSAL 2
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ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE
COMPANY’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY
STATEMENT UNDER “EXECUTIVE COMPENSATION”
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53
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PROPOSAL 3
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APPROVAL OF AMENDMENT TO THE COMPANY’S
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO DECLASSIFY
OUR BOARD OF DIRECTORS AND TO PROVIDE FOR THE ANNUAL ELECTION OF
ALL DIRECTORS BEGINNING WITH THE 2019 ANNUAL MEETING OF
SHAREHOLDERS
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54
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PROPOSAL 4
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RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
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56
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ANNUAL MEETING PROCEDURES
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57
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OTHER INFORMATION
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60
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AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION, AS AMENDED
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62
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i
FIESTA RESTAURANT GROUP,
INC.
14800 Landmark Boulevard, Suite 500
Dallas, Texas 75254
_________________
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 2, 2018
_________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the board of directors of FIESTA
RESTAURANT GROUP, INC., a Delaware corporation, to be used at the
Annual Meeting of Shareholders, which we refer to as the
“
2018 Annual
Meeting
” or the “
meeting
”,
of the Company which will be held at the Marriott Hotel, 255 Biscayne
Boulevard Way, Miami, Florida 33131 on Wednesday, May 2, 2018, at
9:00 A.M. (EST), and at any adjournment or adjournments thereof.
Only shareholders of record at the close of business on March 9,
2018, which we refer to as the “
record
date
”, will be entitled to vote at the 2018 Annual
Meeting. The approximate date on which the “Important Notice
Regarding the Availability or Proxy Materials” was first sent
or given to shareholders was on or about March 23, 2018.
Holders of our common stock at the close of business on March 9,
2018 will be entitled to vote at the 2018 Annual Meeting. As of
March 9, 2018, 27,252,894 shares of our common stock, $0.01 par value
per share, were outstanding and each entitled to one vote.
Shareholders are entitled to one vote for each share of common
stock held. A majority, or 13,626,448 of these shares, present in
person or represented by proxy at the 2018 Annual Meeting, will
constitute a quorum for the transaction of business.
This Proxy Statement and our 2017 Annual Report are also available
at
www.proxyvote.com
.
All references in this Proxy Statement to “
Fiesta
Restaurant Group
”, the “
Company
”,
“
we
”,
“
us
” and
“
our
”
refer to Fiesta Restaurant Group, Inc. References to the
“
board of
directors
” or “
board
”
refer to the board of directors of Fiesta Restaurant Group.
1
QUESTIONS AND ANSWERS ABOUT THE 2018 ANNUAL MEETING
Why did I receive an “Important Notice Regarding the
Availability of Proxy Materials”?
Pursuant to the “notice and access” rules adopted by
the Securities and Exchange Commission, which we refer to as the
“
SEC
”,
instead of mailing a printed proxy card or printed materials, we
have elected to provide access to our proxy materials (which
include this Proxy Statement, our 2017 annual report and form of
proxy card) via the Internet. A Notice of Internet Availability of
Proxy Materials, which we refer to as the “notice” will
be mailed to our shareholders of record and beneficial owners
(shareholders who own their stock through a nominee such as a bank
or broker). The document will instruct shareholders on how to
access the proxy materials on a secure website referred to in the
notice or how to request printed copies.
In addition, by following the instructions in the notice,
shareholders may request to receive proxy materials in printed form
by mail or electronically by e-mail on an ongoing basis. Choosing
to receive your future proxy materials by e-mail will save us the
cost of printing and mailing documents to you. If you choose to
receive future proxy materials by e-mail, you will receive an
e-mail next year with instructions containing a link to those
materials and a link to the proxy voting site. Your election to
receive proxy materials by e-mail will remain in effect until you
terminate it.
What are the proposals that will be voted at the
meeting?
At the 2018 Annual Meeting, the Company asks you to vote on five
proposals:
Proposal 1
: to
elect two directors of the Company as Class III directors to serve
until his successor has been duly elected and qualified;
Proposal 2
: to
adopt, on an advisory basis, a non-binding resolution approving the
compensation of the Company’s Named Executive Officers, as
described in the Proxy Statement under “Executive
Compensation”;
Proposal 3
: to
approve an amendment to the Company’s Restated Certificate of
Incorporation, as amended, to declassify our board of directors and
to provide for the annual election of all directors beginning with
the 2019 Annual Meeting of
Shareholders
;
Proposal 4
: to
ratify the appointment of Deloitte & Touche LLP as the
independent registered public accounting firm of the Company for
the 2018 fiscal year; and
Proposal 5
: to
consider and act upon such other matters as may properly come
before the 2018 Annual Meeting.
The board may also ask you to participate in the transaction of any
other business that is properly be brought before the 2018 Annual
Meeting in accordance with the provisions of our Restated
Certificate of Incorporation, as amended, which we refer to as the
“
Restated Certificate
of Incorporation
” and Amended and Restated Bylaws, as
amended, which we refer to as the “
Bylaws
”.
THE BOARD UNANIMOUSLY RECOMMENDS VOTING
FOR THE ELECTION OF EACH OF THE BOARD’S NOMINEES ON PROPOSAL
1 AND
FOR PROPOSALS 2, 3 AND 4.
When will the 2018 Annual Meeting be held?
The 2018 Annual Meeting is scheduled to be held at 9:00 A.M. (EST),
on Wednesday, May 2, 2018, at the Marriott Hotel, 255 Biscayne
Boulevard Way, Miami, Florida 33131.
2
Who is soliciting my vote?
In this Proxy Statement, the board is soliciting your vote.
How does the board recommend that I vote?
The board unanimously recommends that you vote by proxy using the
proxy card with respect to the proposals, as follows:
•
FOR
the election
of the two named director nominees as Class III directors;
•
FOR
on an
advisory basis, the approval of the non-binding resolution on the
compensation of the Company’s Named Executive Officers as
described in the Proxy Statement under “Executive
Compensation”;
•
FOR
the approval
of an amendment to our Restated Certificate of Incorporation, as
amended, to declassify our board of directors and to provide for
the annual election of all directors beginning with the 2019 Annual
Meeting of
Shareholders
; and
•
FOR
the
ratification of the appointment of Deloitte & Touche LLP as the
independent registered public accounting firm of the Company for
the 2018 fiscal year.
Why is the board recommending FOR Proposals 1, 2, 3 and
4?
We describe all proposals and the board’s reasons for
supporting Proposals 1, 2, 3 and 4 in detail beginning at page 6 of
this Proxy Statement.
Who can vote?
Holders of our common stock at the close of business on March 9,
2018, the record date, may vote at the 2018 Annual Meeting.
As of March 9, 2018, there were 27,252,894 shares of our common stock
outstanding, each entitled to one vote.
How do I vote if I am a record holder?
You can vote by attending the 2018 Annual Meeting and voting in
person, or you can vote by proxy. If you are the record holder of
your stock, you can vote in the following four ways:
•
By
Internet
: You may vote by submitting a proxy over the
Internet. Please refer to the notice, proxy card or voting
instruction form provided to you by your broker for instructions of
how to vote by Internet.
•
By
Telephone
: Shareholders located in the United States
may vote by submitting a proxy by telephone by calling the
toll-free telephone number on the notice, proxy card or voting
instruction form and following the instructions.
•
By Mail
: If
you received proxy materials by mail, you can vote by submitting a
proxy by mail by marking, dating, signing and returning the proxy
card in the postage-paid envelope.
•
In Person at the 2018
Annual Meeting
: If you attend the 2018 Annual Meeting,
you may deliver your completed proxy card in person or you may vote
by completing a ballot, which we will provide to you at the 2018
Annual Meeting. You are encouraged to submit your proxy in advance
over the Internet, by telephone or by mail regardless of whether or
not you plan to attend the 2018 Annual Meeting.
How do I vote if my common shares are held in “street
name”?
If you hold your shares beneficially in street name through a
nominee (such as a bank or broker), you may be able to complete
your proxy and authorize your vote by proxy by telephone or the
Internet as well as by mail. You should follow the instructions you
receive from your nominee to vote these shares.
3
If you do not provide
voting instructions to your bank, broker, trustee or other nominee
holding shares of our common stock for you, your shares will not be
voted with respect to Proposals 1, 2, 3, and 5 as we do not believe
such proposals qualify for discretionary voting treatment by a
broker. We therefore encourage you to provide voting instructions
on a proxy card or a provided voting instruction form to the bank,
broker, trustee or other nominee that holds your shares by
carefully following the instructions provided in their notice to
you.
How many votes do I have?
Shareholders are entitled to one vote per proposal for each share
of common stock held.
How will my shares of common stock be voted?
The shares of common stock represented by proxies will be voted in
accordance with the directions you make thereon at the 2018 Annual
Meeting, but if no direction is given and you do not revoke your
proxy, your proxy will be voted:
FOR
the election
of the two named director nominees as Class III directors (Proposal
1);
FOR
, on an
advisory basis, the approval of the non-binding resolution on the
compensation of the Company’s Named Executive Officers as
described in the Proxy Statement under “Executive
Compensation,”
(Proposal 2);
FOR
the
approval of an amendment to our Restated Certificate of
Incorporation, as amended, to declassify our board of directors and
to provide for the annual election of all directors beginning with
the 2019 Annual Meeting of
Shareholders
(Proposal
3); and
FOR
the
ratification of the appointment of Deloitte & Touche LLP as the
independent registered public accounting firm of the Company for
the 2018 fiscal year (Proposal 4).
What vote is required with respect to the proposals?
Proposals 1, 2, 4 and 5 will be decided by the affirmative vote of
a majority of the votes present in person or represented by proxy.
A shareholder over the Internet, by telephone, or by mail can vote
“FOR,” “AGAINST”
or “ABSTAIN” on these proposals. Each of Proposals 1,
2, 4 and 5 will pass if the total votes cast “for” a
given proposal exceed the total number of votes cast
“against” and “abstain” on such given
proposal.
Proposal 3 will be decided by the affirmative vote of 66 2/3% of
the outstanding shares of our common stock.
What is the effect of abstentions and broker non-votes on
voting?
Abstentions and broker “non-votes” are included in the
determination of the number of shares present at the 2018 Annual
Meeting for quorum purposes. Abstentions count as a vote against
the proposals. Broker “non-votes” are not counted in
the tabulations of the votes cast or present at the 2018 Annual
Meeting and entitled to vote on any of the proposals and therefore
will have no effect on the outcome of the proposals. A broker
“non-vote” occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial
owner. We anticipate that only Proposal 4 presented at the 2018
Annual Meeting will allow nominees to exercise discretionary voting
power.
What happens if Proposal 3, which would declassify our board of
directors
and provide for the annual election of all directors beginning with
the 2019 Annual Meeting of
Shareholders
,
receives a majority of the votes present in person or represented
by proxy but not a vote of 66 2/3% of the outstanding shares of our
common stock?
Our Restated Certificate of Incorporation, as amended, contains
provisions which divide our board of directors into three classes
of directors, with the classes as nearly equal in number as
possible, each serving three-year terms. In order to declassify our
board of directors and provide for the annual election of all
directors beginning with the 2019 Annual Meeting of
Shareholders
, an
amendment to the Restated Certificate of Incorporation, as amended,
is required and such amendment requires the vote of 66 2/3% of the
outstanding shares of our common stock. If this threshold is not
met, then the amendment to the Restated Certificate of
Incorporation, as amended, will not be adopted and our Board will
remain classified with each class of directors continuing to serve
a three-year term.
If I have already voted by proxy against the proposals, can I still
change my mind?
Yes. To change your vote by proxy, simply sign, date and return the
proxy card or voting instruction form in the accompanying
postage-paid envelope, or vote by proxy by telephone or via the
Internet in accordance with
4
the instructions in the notice, proxy
card or voting instruction form. We strongly urge you to vote by
proxy FOR Proposals 1, 2, 3 and 4. Only your latest dated proxy
will count at the 2018 Annual Meeting.
Will my shares be voted if I do nothing?
If your shares of our common stock are registered in your name, you
must sign and return a proxy card, vote over the Internet or by
telephone or attend the 2018 Annual Meeting and vote in person in
order for your shares to be voted.
If your shares of common stock are held in “street
name,” that is, held for your account by a broker, bank or
other nominee, and you do not instruct your broker or other nominee
how to vote your shares, then, because Proposals 1, 2, 3 and 5 are
“non-routine matters,” your broker or other nominee
would not have discretionary authority to vote your shares on such
proposals. If your shares of our common stock are held in
“street name,” your broker, bank or nominee has
enclosed a proxy card or voting instruction form with this Proxy
Statement. We strongly encourage you to authorize your broker or
other nominee to vote your shares by following the instructions
provided on the proxy card or voting instruction form.
Please return your proxy card or voting instruction form to your
broker or other nominee by proxy, simply sign, date and return the
enclosed proxy card or voting instruction form in the accompanying
postage-paid envelope, or vote by proxy by telephone or via the
Internet in accordance with the instructions in the proxy card or
voting instruction form. Please contact the person responsible for
your account to ensure that a proxy card or voting instruction form
is voted on your behalf.
We strongly urge you to
vote by proxy FOR Proposals 1, 2, 3 and 4
by proxy over the
Internet using the Internet address on the notice or proxy card, by
telephone using the toll-free number on the notice or proxy card or
by signing, dating and returning a proxy card by mail. If your
shares are held in “street name,” you should follow
the instructions on your proxy card or voting instruction form provided
by your broker or other nominee and provide specific instructions
to your broker or other nominee to vote as described above.
What constitutes a quorum?
A majority of the outstanding shares of common stock, present in
person or represented by proxy, will constitute a quorum for the
transaction of business at the 2018 Annual Meeting. Votes withheld,
abstentions and broker non-votes will be counted as present or
represented for purposes of determining the presence or absence of
a quorum for this meeting. In the absence of a quorum, the 2018
Annual Meeting may be adjourned by a majority of the votes entitled
to be cast represented either in person or by proxy.
Whom should I call if I have questions about the 2018 Annual
Meeting?
If you have any questions or
you need additional copies of the proxy materials, please contact
Maria C. Mayer, Senior
Vice President, General Counsel & Secretary
by mail
at 7255 Corporate Center
Drive, Suite C, Miami, Florida 33126 or by telephone at (305)
670-7696.
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2018 ANNUAL
MEETING TO BE HELD ON May 2, 2018: THE PROXY STATEMENT FOR THE 2018
ANNUAL MEETING AND OUR 2017 ANNUAL REPORT ARE AVAILABLE FREE OF
CHARGE AT
WWW.PROXYVOTE.COM
.
5
PROPOSAL 1 —
ELECTION OF DIRECTORS
Our board of directors is currently divided into three classes of
directors, with the classes as nearly equal in number as possible,
each serving staggered three-year terms as described below.
The terms of office of our Class I, Class II, and Class III
directors are:
•
Class I directors, whose term will expire at the 2019 Annual
Meeting of Shareholders and when their successors are duly elected
and qualified;
•
Class II directors, whose term will expire at this 2020 Annual
Meeting of Shareholders and when their successors are duly elected
and qualified; and
•
Class III directors whose term will expire at the 2018 Annual
Meeting of Shareholders and when their successors are duly elected
and qualified.
Our Class I directors are Stacey Rauch, Paul E. Twohig and Nicholas
P. Shepherd; our Class II directors are Brian P. Friedman, Stephen
P. Elker and Barry J. Alperin; and our Class III directors are
Nicholas Daraviras, Jack A. Smith and Richard C. Stockinger.
Our board of directors is subject to a Mandatory Retirement Policy
which provides that (i) effective February 6, 2018, any person
(including any currently serving members of our board) shall not be
eligible for election as a director of the board if such person is
older than 75 years of age, which we refer to as the
“Mandatory Retirement Age”. Mr. Smith has reached
Mandatory Retirement Age under our Mandatory Retirement Policy and
therefore is not eligible to stand for re-election as a Class III
director to our board of directors at the 2018 Annual Meeting and
Mr. Smith’s term will end at the 2018 Annual Meeting.
Effective immediately after the conclusion of the 2018 Annual
Meeting, the number of directors on our board of directors will be
reduced from nine to eight.
Two directors will be elected at the 2018 Annual Meeting.
At the 2018 Annual Meeting, shareholders are also being asked to
vote on a proposal (Proposal 3) to amend the Company’s
Restated Certificate of Incorporation, as amended, to declassify
the board of directors and provide for the annual election of all
directors beginning with the 2019 Annual Meeting of Shareholders
(the “Declassification Amendment”). If the
Declassification Amendment is approved by shareholders, the two
Class III directors who will be elected at the 2018 Annual Meeting
will serve for a one year term ending at the 2019 Annual Meeting of
Shareholders and all of our directors will then stand for election
for a one-year term at the 2019 Annual Meeting of Shareholders. If
Proposal 3 is not approved, (i) our board will remain divided into
three classes and directors will continue to be elected and serve
for three-year terms and (ii) the two directors that will be
elected at the 2018 Annual Meeting as Class III directors of the
Company will serve for a term of three years expiring at the Annual
Meeting of Shareholders to be held in 2021 and until their
successors shall have been elected and qualified. For more
information about the Declassification Amendment, please see
“Proposal 3: Approval of an Amendment to the Company’s
Restated Certificate of Incorporation, as amended, to declassify
our board of directors and to provide for the annual election of
all directors beginning at the 2019 Annual Meeting of
Shareholders.”
The election of a director requires the affirmative vote of a
majority of the shares of common stock voting with respect to such
nominee (excluding abstentions and non-votes). Each proxy received
will be voted FOR the election of the two directors named below
unless otherwise specified in the proxy.
At this time, our board of directors knows of no reason why the
Company’s two nominees would be unable to serve. There are no
arrangements or understandings between any nominee and any other
person pursuant to which such person was selected as a nominee.
Our Corporate Governance and Nominating Committee has reviewed the
qualifications of the two Class III director nominees and has
recommended the election of the two directors recommended by the
board.
6
Director Nominees’
Principal Occupations, Business Experience, Qualifications and
Directorships
|
|
|
|
|
|
|
|
|
Nicholas Daraviras
|
|
Corporate Governance and Nominating,
Finance
|
|
Managing Director of Leucadia National
Corporation; Director of Fiesta Restaurant Group
|
|
44
|
|
2011
|
Richard C. Stockinger
|
|
None
|
|
Chief Executive Officer, President and Director
of Fiesta Restaurant Group
|
|
59
|
|
2017
|
Nicholas Daraviras
Director since
2011
Age:
44
|
|
Mr.
Daraviras brings significant experience with the strategic,
financial and operational issues of retail companies in connection
with his service on the boards of a number of his firm’s
portfolio companies over time.
|
|
|
|
Committee Membership:
|
|
Biography:
|
|
|
|
• Corporate Governance and
Nominating
• Finance
|
|
Nicholas Daraviras has served as a director of Fiesta Restaurant
Group since April 2011. Mr. Daraviras has been a Managing Director
of Leucadia National Corporation (“Leucadia”) since
2014. Mr. Daraviras has served as Vice President, Acquisitions of
Landcadia Holdings, Inc. since May 2016. From 1996 through 2014,
Mr. Daraviras was employed with Jefferies Capital Partners LLC
(“Jefferies Capital Partners”) or its predecessors. He
also served on the boards of Edgen Group Inc., a global distributor
of specialty steel products, or its predecessors from February 2005
until 2013, and Carrols Restaurant Group from 2009 until 2013. Mr.
Daraviras served on the Compensation Committee of Carrols
Restaurant Group, Inc. as well as the Compensation, Corporate
Governance, and Nominating Committees of Edgen Group Inc. He also
serves on several boards of directors of private portfolio
companies of Leucadia.
|
|
|
|
Richard C. Stockinger
Director since 2017
Age: 59
|
|
Mr.
Stockinger, as Chief Executive Officer and President of Fiesta
Restaurant Group, and with over three decades of experience as a
senior executive officer and as a director of several restaurant
companies, brings significant leadership, management, operational,
financial, marketing, franchising, brand management and public
company board experience to the Board. In particular, Mr.
Stockinger brings valuable experience in successful strategic
turnarounds and shareholder value creation.
|
|
|
|
|
|
Biography:
|
|
|
|
|
|
Richard
“Rich” Stockinger has served as a director of Fiesta
Restaurant Group since April 2017, and has been Chief Executive
Officer and President of Fiesta Restaurant Group since February
2017. Previously, he served as President and Chief Executive
Officer of Benihana, Inc. (“Benihana”) from 2009 until
2014, as a member of the Board of Directors of Benihana from 2008
until 2014, as a member of the Audit Committee of Benihana from
2008 until 2009, and as Chairman of the Board of Directors of
Benihana from 2010 until 2012. Mr. Stockinger has significant
experience in successful strategic turnarounds and shareholder
value creation. During his tenure as President and CEO of Benihana,
the stock of Benihana rose from $1.88 per share to $16.30 per share
over a period of three years. Prior to joining Benihana, Mr.
Stockinger spent more than two decades at The Patina Restaurant
Group, LLC in New York and its predecessor, Restaurant Associates,
Inc. (“RA”), during which time he served in various
senior executive capacities, including as President from 2003 until
2008 and as a director from 1998 until 2006. In addition to his
roles at Patina and RA, Mr. Stockinger was involved in the
turnaround of several other successful restaurant companies
including Au Bon Pain, California Pizza Kitchen, Acapulco
Restaurants, El Torito Restaurants, Smith & Wollensky and
Chevy’s. Most recently, Mr. Stockinger served as a consultant
to Bruckmann, Rosser, Sherrill & Co., a private equity firm,
from 2014 until 2017, and Not Your Average Joes, a private
restaurant company where Mr. Stockinger also serves as a member of
its board of directors.
|
7
Your board unanimously
recommends a vote FOR the election of our two named Class III
nominees to your board of directors, Nicholas Daraviras and Richard
C. Stockinger. Proxies received in response to this solicitation
will be voted FOR the election of the two named Class III nominees
to our board of directors unless otherwise specified in the
proxy.
Principal Occupation,
Business Experience, Qualifications and Directorships of Other
Members of the Board of Directors
The following table sets forth information with respect to each of
the other members of the board of directors whose term extends
beyond the 2018 Annual Meeting, including the Class of such
director and the year in which each such director’s term will
expire. Jack A. Smith reached the Mandatory Retirement Age under
our Mandatory Retirement Policy and therefore is not eligible to
stand for re-election to our board of directors.
|
|
|
|
|
|
|
|
|
Stacey Rauch
|
|
Compensation, Corporate Governance and
Nominating (Chair)
|
|
60
|
|
2012
|
|
2019 Class I
|
Nicholas P. Shepherd
|
|
Corporate Governance and Nominating and
Finance
|
|
59
|
|
2017
|
|
2019 Class I
|
Paul
E. Twohig
|
|
Compensation (Chair), Audit
|
|
64
|
|
2017
|
|
2019 Class I
|
Barry
J. Alperin
|
|
Audit, Finance (Chair)
|
|
77
|
|
2012
|
|
2020 Class II
|
Stephen P. Elker
|
|
Audit (Chair), Corporate Governance and
Nominating
|
|
66
|
|
2012
|
|
2020 Class II
|
Brian
P. Friedman
|
|
Compensation
|
|
62
|
|
2011
|
|
2020 Class II
|
Stacey Rauch (Chair)
Director since
2012
Age:
60
|
|
With
her public company board experience and distinguished career
working with retailers, wholesalers and manufacturers during her 24
years at McKinsey & Company, Inc., Ms. Rauch brings to our
board substantial expertise in business strategy, marketing,
merchandising and operations in the retail
industry.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Compensation
• Corporate Governance and Nominating
(Chair)
|
|
Stacey Rauch has served as the non-executive Chairman of the board
of directors of Fiesta Restaurant Group since February 2017 and as
a director of Fiesta Restaurant Group since 2012. Ms. Rauch is a
Director (Senior Partner) Emeritus of McKinsey & Company, Inc.
from which she retired in September 2010. Ms. Rauch was a leader in
McKinsey’s Retail and Consumer Goods Practices, served as the
head of the North American Retail and Apparel Practice, and acted
as the Global Retail Practice Convener. A 24 year veteran of
McKinsey, Ms. Rauch led engagements for a wide range of retailers,
apparel wholesalers, and consumer goods manufacturers in the United
States and internationally. Her areas of expertise include
strategy, organization, marketing, merchandising, omni-channel
management, global expansion, and retail store operations. Ms.
Rauch was a co-founder of McKinsey’s New Jersey office, and
was the first woman at McKinsey appointed as an industry practice
leader. Ms. Rauch is also a non-Executive director of Land
Securities, PLC, the UK’s largest commercial property
company, where she sits on its Audit and Nomination Committees and
the Ascena Retail Group, Inc., a leading national women’s and
girls’ specialty apparel retailer, where she sits on the
Audit Committee. Previously, Ms. Rauch served on the board of
directors of CEB, Inc, a leading member-based advisory company,
Ann, Inc., a women’s specialty apparel retailer and, Tops
Holding Corporation, the parent company of Tops Markets LLC, a US
grocery retailer. Prior to joining McKinsey, Ms. Rauch spent five
years in product management for the General Foods
Corporation.
|
|
|
|
8
Nicholas P. Shepherd
Director since 2017
Age: 59
|
|
Mr.
Shepherd, as former President and Chief Executive Officer of TGI
Friday’s, Inc., brings significant leadership, management,
operational, financial, marketing, franchising, brand management
and public company board experience to the Board.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Corporate Governance and
Nominating
• Finance
|
|
Nicholas P. Shepherd has served as a director of Fiesta Restaurant
Group since April 2017. Mr. Shepherd served as Chief Executive
Officer and President of TGI Friday’s, Inc. (formerly known
as Carlson Restaurants Worldwide Inc.) from 2009 until 2015. From
2008 until 2009, Mr. Shepherd served as Chief Executive Officer and
Chairman of the Board of Directors of Sagittarius Brands, Inc., a
private restaurant holding company, which owned and operated the
Del Taco and Captain D’s restaurant brands. From 1995 until
2007, Mr. Shepherd served in several capacities at Blockbuster,
Inc., including serving as Chief Operating Officer during 2007,
President of Blockbuster North American from 2004 to 2007,
Executive Vice President and Chief Marketing and Merchandising
Officer from 2001 until 2004, Senior Vice President International
from 1998 until 2001 and Vice President and General Manager from
1995 until 1999. Mr. Shepherd currently serves on the Board of
Directors and as Chairman of the Nominating & Corporate
Governance Committee of Spirit Realty Capital, Inc., a publicly
traded real estate investment trust.
|
|
|
|
Paul
E. Twohig
Director since
2017
Age:
64
|
|
With
over 30 years of experience in the restaurant industry, Mr. Twohig
brings to our board of directors significant leadership,
management, operational, financial, marketing and franchising
experience.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Audit
• Compensation (Chair)
|
|
Paul E. Twohig has served as a director of Fiesta Restaurant Group
since February 2017. Mr. Twohig is a global retail and food service
senior executive with demonstrated success leading some of the
world’s most prominent brands. In July 2017, Mr. Twohig was
appointed as the Chief Operating Officer of MOD Super Fast Pizza
Holdings, LLC (“MOD Pizza”). From 2009 until 2017, Mr.
Twohig served as President of Dunkin Donuts, U.S. and Canada. He
was a member of the senior executive team that completed Dunkin
Donuts’ initial public offering in 2011. Previously, Mr.
Twohig held several senior executive roles with Starbucks
Corporation, including Vice President and General Manager, U.K.,
and Senior Vice President, Eastern Division. Additionally, Mr.
Twohig served as Chief Operating Officer and Executive Vice
President at Panera Bread Company. His governance experience
includes serving as a member of the Board of Directors for
Dentistry for Children from 2011 to 2014, and for Solantic Urgent
Care, Inc. from 2007 to 2011.
|
|
|
|
9
Barry
J. Alperin
Director since
2012
Age:
77
|
|
Having served as both an executive within the retail
industry and an attorney, Mr. Alperin possesses deep financial,
operational, legal and management skills. Additionally, his service
on the boards of several public companies allows him to bring
significant corporate governance and leadership experience to our
board of directors.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Audit
• Finance (Chair)
|
|
Barry J. Alperin has served as a director of Fiesta Restaurant
Group since July 2012. Mr. Alperin, who is retired, served as Vice
Chairman of Hasbro, Inc. (“Hasbro”) from 1990 through
1995, as Co-Chief Operating Officer of Hasbro from 1989 through
1990 and as Senior Vice President or Executive Vice President of
Hasbro from 1985 through 1989. He was a director of Hasbro from
1985 through 1996. Prior to joining Hasbro, Mr. Alperin practiced
law in New York City for 20 years, dealing with corporate, public
and private financial transactions, corporate mergers and
acquisitions, compensation issues and securities law matters. Mr.
Alperin currently serves as a director of Henry Schein, Inc. (and
is Chairman of its Compensation Committee and a member of its Audit
Committee and its Nominating and Governance Committee) and is a
director of a privately held marine construction corporation, Weeks
Marine, Inc. Since November 2013, Mr. Alperin has served as a
director of Jefferies Group LLC (a wholly-owned subsidiary of
Leucadia) and serves on its Audit, Compensation, and Governance
Committees. He serves as a trustee and member of the Executive
Committee of The Caramoor Center for Music and the Arts, President
Emeritus and a Life Trustee of The Jewish Museum in New York City
and is a past President of the New York Chapter of the American
Jewish Committee where he also served as Chairman of the Audit
Committee of the national organization. Mr. Alperin also formerly
served as Chairman of the Board of Advisors of the Tucker
Foundation at Dartmouth College, was President of the Board of the
Stanley Isaacs Neighborhood Center in New York City, was a trustee
of the Hasbro Children’s Foundation, was President of the Toy
Industry Association and was a member of the Columbia University
Medical School Health Sciences Advisory Council.
|
|
|
|
Stephen P. Elker
Director since
2012
Age:
66
|
|
Mr.
Elker, with over 36 years of experience with KPMG LLP, brings to
our board of directors extensive knowledge of accounting and tax
practices that strengthens our board of directors’ collective
knowledge, capabilities and experience.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Audit (Chair)
• Corporate Governance and
Nominating
|
|
Stephen P. Elker has served as a director of Fiesta Restaurant
Group since May 7, 2012. Until 2009, Mr. Elker spent over 36 years
with KPMG LLP, the U.S. member firm of KPMG International,
beginning in its Washington D.C. office, and then with offices in
Rochester, New York and Orlando, Florida. In 1999, Mr. Elker was
appointed as managing partner of the Orlando office and served as
partner in charge of the Florida business tax practice from 2001 to
2009. Mr. Elker also served as a member of the Nominating Committee
and Strategy Committee of KPMG. During his career with KPMG, Mr.
Elker led engagements for several hospitality and retail clients
including large, multi-unit restaurant companies. Mr. Elker is a
certified public accountant and recently served as an independent
director and Chairman of the Audit Committee of CNL Growth
Properties, Inc., a public, non-traded real estate investment
trust. Mr. Elker also serves on the board of directors of other
privately held companies in the finance and payments
industries.
|
|
|
|
10
Brian
P. Friedman
Director since
2011
Age:
62
|
|
Having an extensive career in the legal, investment
banking, investment and management fields, Mr. Friedman brings to
our board of directors significant experience related to the
business and financial issues facing public corporations and
businesses generally. In addition, through Mr. Friedman’s
service on the boards of a number of his firm’s portfolio
companies over time, he combines significant executive experience
with his knowledge of the strategic, financial and operational
issues of restaurant companies.
|
|
|
|
Committee Membership:
|
|
Biography:
|
• Compensation
|
|
Brian P. Friedman has served as a director of Fiesta Restaurant
Group since April 2011. Mr. Friedman has been the President and a
director of Leucadia National Corporation (which owns 3,270,578
shares or 12.0% of our common stock as of March 9, 2018) since
March 1, 2013, a director and executive officer of Jefferies Group
LLC since July 2005, Chairman of the Executive Committee of
Jefferies LLC since 2002, and President of Jefferies Capital
Partners and its predecessors since 1997. Mr. Friedman was
previously employed by Furman Selz LLC and its successors,
including serving as Head of Investment Banking and a member of its
Management and Operating Committees. Prior to his 17 years with
Furman Selz and its successors, Mr. Friedman was an attorney with
the law firm of Wachtell Lipton Rosen & Katz. Mr. Friedman
serves on boards of directors/managers of Leucadia’s and
Jefferies Capital Partners’ private subsidiaries and investee
companies. Mr. Friedman has also served on the board of HomeFed
Corporation (majority-owned by Leucadia) since April
2014.
|
Board Skills
Assessment
The Board Skills assessment below illustrates the key skills that
our board has identified as particularly valuable to the effective
oversight of the Company and our strategy. This highlights the
depth and breadth of skills possessed by current directors.
Information Regarding
Executive Officers
|
|
|
|
|
Richard Stockinger
|
|
59
|
|
Chief Executive Officer and President
|
Lynn
S. Schweinfurth
|
|
50
|
|
Senior Vice President, Chief Financial Officer
and Treasurer
|
Danny
K. Meisenheimer
|
|
58
|
|
Senior Vice President, Chief Operating Officer
and President of Pollo Tropical
|
Maria
C. Mayer
|
|
49
|
|
Senior Vice President, General Counsel and
Secretary
|
Anthony Dinkins
|
|
51
|
|
Senior Vice President of Human
Resources
|
Charles Locke
|
|
50
|
|
President of Taco Cabana
|
11
Richard C. Stockinger
Age: 59
|
|
Biography:
|
|
|
|
Chief Executive Officer and
President
|
|
For biographical information regarding Richard
C. Stockinger, please see page 7 of this Proxy
Statement.
|
|
|
|
Lynn
S. Schweinfurth
Age: 50
|
|
Biography:
|
|
|
|
Senior Vice President, Chief Financial Officer
and Treasurer
|
|
Lynn S.
Schweinfurth has been Vice President, Chief Financial Officer and
Treasurer of Fiesta Restaurant Group since 2012 and was appointed
Senior Vice President in February 2015. From 2010 to 2012, Ms.
Schweinfurth served as Vice President of Finance and Treasurer of
Winn-Dixie Stores, Inc. Ms. Schweinfurth was Chief Financial
Officer of Lone Star Steakhouse and Texas Land & Cattle from
2009 to 2010. She was Vice President, Finance, at Brinker
International, Inc. from 2004 to 2009.
|
|
|
|
Danny
K. Meisenheimer Age: 58
|
|
Biography:
|
|
|
|
Senior Vice President, Chief Operating Officer,
President of Pollo Tropical
|
|
Danny K. Meisenheimer has served as Fiesta
Restaurant Group’s Senior Vice President and Chief Operating
Officer since February 2017, President of Pollo Tropical since
October 16, 2017 and formerly served as our Interim Chief Executive
Officer and President from September 2016 until February 2017. Mr.
Meisenheimer has also served as Pollo Tropical’s Vice
President and Chief Operating Officer from February 2013 until
September 2016, the Interim Chief Operating Officer from September
2012 until February 2013 and as Chief Brand Officer from April 2012
until September 2012. Mr. Meisenheimer was Chief Operating Officer
at Souper Salad, Inc. from 2010 until 2012 and Chief Brand Officer
at Souper Salad, Inc. from 2008 until 2010. Mr. Meisenheimer was
Vice President, Brand Management at Pizza Inn, Inc. from 2005 until
2008.
|
|
|
|
Maria
C. Mayer
Age: 49
|
|
Biography:
|
|
|
|
Senior Vice President, General Counsel and
Secretary
|
|
Maria C. Mayer has served as Senior Vice
President, General Counsel and Secretary of Fiesta Restaurant Group
since November 2017. From February 2016 to November 2017, Ms. Mayer
served as general counsel of AMG and Widex USA Inc., U.S.
subsidiaries of Widex A/S, one of the world’s largest hearing
aid manufacturers. From 2007 to 2016, Ms. Mayer served as Senior
Corporate Counsel for Carlton Fields, P.A. Ms. Mayer has also
served in various roles at several national law firms, including at
Hughes Hubbard & Reed LLP (from 1997 to 2007) and Popham Haik
Schnobrich & Kaufman, Ltd. (from 1995 to 1997).
|
|
|
|
Anthony Dinkins
Age: 51
|
|
Biography:
|
|
|
|
Senior Vice President of Human
Resources
|
|
Anthony Dinkins has served as Senior Vice
President of Human Resources of Fiesta Restaurant Group since
September 2017. From May 2015 to June 2017, Mr. Dinkins served as
Senior Vice President of Human Resources at Cable & Wireless
Communications (“C&W”). Prior to joining C&W,
Mr. Dinkins held a number of senior human resources positions for
well-known companies such as Carnival Corporation from 2012 to
2015, Citrix Systems, Inc. from 2006 to 2012, Avaya and Lucent
Technologies, Inc. from 1996 to 2006.
|
|
|
|
Charles Locke
Age: 50
|
|
Biography:
|
|
|
|
President of Taco Cabana
|
|
Charles Locke has
served as President of Taco Cabana since October 2017. From August
2008 to October 2017, Mr. Locke served as Chief Operating Officer
of Anthony’s Coal Fired Pizza. From 2003 to 2008, Mr. Locke
served as an area developer for Family Sports Concepts, Inc. and
grew its Beef O’Brady’s sports-themed concept through
franchisees. Mr. Locke started his career at S&A Restaurant
Group serving in various leadership roles in connection with its
Bennigan’s restaurant brand.
|
12
Information Regarding
the Board of Directors and Committees
Director Attendance
During the fiscal year ended December 31, 2017, our board of
directors met or acted by unanimous consent on 12 occasions. During
the fiscal year ended December 31, 2017, each of the directors who
were on the board attended 100% of the aggregate number of meetings
of the board of directors and of any committees of the board of
directors on which they served. We do not have a policy on
attendance by directors at our Annual Meeting of Shareholders. All
of our directors attended our 2017 Annual Meeting of
Shareholders.
Independence of Directors
As required by the listing standards of NASDAQ, a majority of the
members of our board of directors must qualify as
“independent,” as affirmatively determined by our board
of directors. Our board of directors determines director
independence based on an analysis of such listing standards and all
relevant securities and other laws and regulations regarding the
definition of “independent.”
Consistent with these considerations, after review of all relevant
transactions and relationships between each director, any of his or
her family members, and us, our executive officers and our
independent registered public accounting firm, the board of
directors has affirmatively determined that, other than Mr.
Stockinger, all of the members of our board of directors are
independent pursuant to NASDAQ.
Committees of the Board
The standing committees of our board of directors consist of an
Audit Committee, a Compensation Committee, a Corporate Governance
and Nominating Committee, and a Finance Committee. Our board of
directors may also establish from time to time any other committees
that it deems necessary or advisable.
|
|
Members:
Elker, Twohig,
Smith
+
, and
Alperin
|
Chair:
|
|
Key
Responsibilities:
|
Stephen P. Elker
(Financial
|
|
|
Expert)
|
|
• Reviews our annual and interim financial
statements and reports to be filed with the SEC;
|
|
|
• Monitors our financial reporting process
and internal control system;
|
|
|
• Appoints and replaces our independent
outside auditors from time to time, determines their compensation
and other terms of engagement and oversees their work;
|
|
|
• Oversees the performance of our internal
audit function;
|
|
|
• Conducts a review of all related party
transactions for potential conflicts of interest and approves all
such related party transactions;
|
|
|
• Establishes procedures for the receipt,
retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters and the
confidential anonymous submission by employees of concerns
regarding questionable accounting or auditing matters;
and
|
|
|
• Oversees our compliance with legal,
ethical and regulatory matters.
|
All of the current members of the Audit Committee satisfy the
independence requirements of Rule 10A-3 of the Exchange Act and
Rule 5605 of the NASDAQ listing standards. Each member of our Audit
Committee is financially literate. In addition, Mr. Elker serves as
our Audit Committee “financial expert” within the
meaning of Item 407 of Regulation S-K of the Securities Act and has
the financial sophistication required under the NASDAQ listing
standards.
The Audit Committee has the sole and direct responsibility for
appointing, evaluating and retaining our independent registered
public accounting firm and for overseeing their work. All audit
services to be provided to us and all permissible non-audit
services, other than de minimis non-audit services, to be provided
to us by our independent registered public accounting firm are
approved in advance by our Audit Committee. During the fiscal
13
year ended December 31, 2017, the Audit Committee met or acted by
unanimous consent on four occasions. The Audit Committee has
adopted a formal written Audit Committee charter that complies with
the requirements of the Exchange Act and the NASDAQ listing
standards. A copy of the Audit Committee charter is available on
the investor relations section of our website at
www.frgi.com
.
Audit Committee
Report
The Company’s
management has the primary responsibility for the financial
statements and the reporting process, including the Company’s
system of internal controls and disclosure controls and procedures.
The independent registered public accounting firm audits the
Company’s financial statements and expresses an opinion on
the financial statements based on their audit. The Audit Committee
oversees on behalf of the board (i) the accounting, financial
reporting, and internal control processes of the Company, and (ii)
the audits of the financial statements and internal controls of the
Company. The Audit Committee operates under a written charter
adopted by the board.
The Audit Committee reviews and approves the internal audit plan
once a year and receives periodic updates of internal audit
activity in meetings held at least quarterly throughout the year.
Updates include discussions of audit project results, as well as
quarterly assessments of internal controls.
The Audit Committee has met
and held discussions with management and Deloitte & Touche LLP
(“
Deloitte
”),
the Company’s independent registered public accounting firm.
Management represented to the Audit Committee that the
Company’s financial statements for the year ended December
31, 2017 were prepared in accordance with generally accepted
accounting principles. The Audit Committee reviewed discussed the
financial statements with both management and Deloitte. The Audit
Committee also discussed with Deloitte the matters required to be
discussed by the statement on Auditing Standards No. 61, as amended
(AICPA, Professional Standards, Vol. 1. AU section 380), as adopted
by the Public Company Accounting Oversight Board (PCAOB). The Audit
Committee also reviewed and discussed with Deloitte the
firm’s independence from the Company and management,
including the independent auditor’s written disclosures
required by Independent Standards Board Standard No. 1
(Independence Standards Board Standard No. 1,
Independence
Discussions with Audit Committees
) as adopted by the
PCAOB.
The Audit Committee also discussed with Deloitte the overall scope
and plans for the audit. The Audit Committee met with Deloitte both
with and without management, to discuss the results of their
examination, the evaluation of the Company’s internal
controls and the overall quality of the Company’s financial
reporting.
Management has completed its annual documentation, testing, and
evaluation of the Company’s system of internal control over
financial reporting in response to the requirements set forth in
Section 404 of the Sarbanes-Oxley Act of 2002 and related
regulations. The Audit Committee continues to oversee the
Company’s efforts related to its internal controls.
Based on the foregoing, we have recommended to the board of
directors that the Company’s audited financial statements be
included in its Annual Report on Form 10-K for the year ended
December 31, 2017, for filing with the Securities and Exchange
Commission.
|
|
Audit
Committee
|
|
|
Stephen P. Elker, Chairman
|
|
|
Jack A. Smith
|
|
|
Barry J. Alperin
|
|
|
Paul Twohig
|
|
|
Members:
Rauch,
Friedman, Smith
+
,
and Twohig
|
Chair:
|
|
Key
Responsibilities:
|
Paul Twohig
|
|
|
|
|
• Provides oversight on the development and
implementation of the compensation programs for our executive
officers and outside directors and disclosure relating to these
matters; and
|
|
|
• Reviews and approves the compensation of
our Chief Executive Officer and our executive officers
|
14
The processes and procedures by which the Compensation Committee
considers and determines executive officer compensation and outside
directors’ compensation are described in the Compensation
Discussion and Analysis included in this Proxy Statement. During
the 2017 fiscal year, the Compensation Committee again retained
Pearl Meyer & Partners, LLC, which we refer to as
“
Pearl
Meyer
”, to review the Company’s compensation
policies, plans, and amounts for the CEO and other executive
officers, including the Named Executive Officers. The role of Pearl
Meyer in determining or recommending the amount or form of
executive and director compensation, the nature and scope of Pearl
Meyer’s assignment and the material elements of the
instructions or directions given to Pearl Meyer with respect to the
performance of their duties under the engagement are described in
the Compensation Discussion and Analysis included in this Proxy
Statement. We believe that the use of an independent compensation
consultant provides additional assurance that our compensation
programs are reasonable and consistent with our goals and
objectives. The Compensation Committee may form one or more
subcommittees, each of which shall take such actions as shall be
delegated by the Compensation Committee. All of the members of our
Compensation Committee are “independent” as defined
under Rule 5605 of the NASDAQ listing standards. The Compensation
Committee has adopted a formal, written Compensation Committee
charter that complies with SEC rules and regulations and the NASDAQ
listing standards. During the fiscal year ended December 31, 2017,
the Compensation Committee met or acted by unanimous consent on ten
occasions. A copy of the Compensation Committee charter is
available on the investor relations section of our website at
www.frgi.com.
Corporate Governance and Nominating
Committee
|
|
Members:
Rauch,
Elker, Daraviras* and Shepherd
|
Chair:
|
|
Key
Responsibilities:
|
Stacey Rauch
|
|
|
|
|
• Establishes criteria for board and
committee membership and recommends to our board of directors
proposed nominees for election to the board of directors and for
membership on committees of the board of directors;
|
|
|
• Makes recommendations regarding proposals
submitted by our shareholders; and
|
|
|
• Makes recommendations to our board of
directors regarding corporate governance matters and
practices.
|
All of the members of our Corporate Governance and Nominating
Committee are “independent” as defined under Rule 5605
of the NASDAQ listing standards. The Corporate Governance and
Nominating Committee has adopted a formal written Corporate
Governance and Nominating Committee charter that complies with SEC
rules and regulations and the NASDAQ listing standards. During the
fiscal year ended December 31, 2017, the Corporate Governance and
Nominating Committee met or acted by unanimous consent on four
occasions. A copy of the Corporate Governance and Nominating
Committee charter is available on the investor relations section of
our website at
www.frgi.com
.
Since our 2017 Annual Meeting of Shareholders, the Corporate
Governance and Nominating Committee has focused on the following
initiatives:
•
Approved a proposal for the 2018 Annual Meeting of Shareholders to
declassify our board of directors so that beginning at our 2019
Annual Meeting of Shareholders, our entire board of directors would
stand for re-election for a one-year term; and
•
Approved a maximum age of 75 for any director nominee, including a
mandatory retirement age for an incumbent director which will
preclude an incumbent director from seeking nomination for
re-election to our board of directors.
15
Nominations for the
Board of Directors
The Corporate Governance and Nominating Committee of the board of
directors considers director candidates based upon a number of
qualifications. The qualifications for consideration as a director
nominee vary according to the particular area of expertise being
sought as a complement to the existing composition of the board. At
a minimum, however, the Corporate Governance and Nominating
Committee seeks candidates for director who possess:
•
the highest personal and professional ethics, integrity and
values;
•
the ability to exercise sound judgment;
•
the ability to make independent analytical inquiries;
•
willingness and ability to devote adequate time, energy, and
resources to diligently perform board and board committee duties
and responsibilities; and
•
a commitment to representing the long-term interests of the
shareholders.
In addition to such minimum qualifications, the Corporate
Governance and Nominating Committee takes into account the
following factors when considering a potential director
candidate:
•
whether the individual possesses specific industry expertise and
familiarity with general issues affecting our business; and
•
whether the person would qualify as an “independent”
director under SEC and NASDAQ rules.
The Corporate Governance and Nominating Committee has not adopted a
specific diversity policy with respect to identifying nominees for
director. However, the Corporate Governance and Nominating
Committee takes into account the importance of diversified board
membership in terms of the individuals involved and their various
experiences and areas of expertise.
The Corporate Governance and Nominating Committee shall make every
effort to ensure that the board and its committees include at least
the required number of independent directors, as that term is
defined by applicable standards promulgated by NASDAQ and/or the
SEC. Backgrounds giving rise to actual or perceived conflicts of
interest are undesirable. In addition, prior to nominating an
existing director for election to the board, the Corporate
Governance and Nominating Committee will consider and review such
existing director’s board and committee attendance and
performance, independence, experience, skills, and the
contributions that the existing director brings to the board.
The Corporate Governance and Nominating Committee has relied upon
third-party search firms to identify director candidates, and may
continue to employ such firms in the future if so desired. The
Corporate Governance and Nominating Committee also relies upon,
receives and reviews recommendations from a wide variety of
contacts, including current executive officers, directors,
community leaders, and shareholders as a source for potential
director candidates. The board retains complete independence in
making nominations for election to the board.
The Corporate Governance and Nominating Committee will consider
qualified director candidates recommended by shareholders in
compliance with our procedures and subject to applicable inquiries.
The Corporate Governance and Nominating Committee’s
evaluation of candidates recommended by shareholders does not
differ materially from its evaluation of candidates recommended
from other sources. Pursuant to our Bylaws, any shareholder may
recommend nominees for director not less than 90 days nor more than
120 days in advance of the anniversary date of the immediately
preceding annual meeting of shareholders (provided that if the date
of the current year’s annual meeting of shareholders is
advanced by more than 30 days, or delayed by more than 70 days from
the anniversary date of the immediately preceding annual meeting of
shareholders, any shareholder may recommend nominees for director
not more than 120 days in advance of the date of the current
year’s annual meeting of shareholders and not less than the
close of business on the later of the 90
th
day prior
to the date of the current year’s annual meeting of
shareholders or the 10
th
day
following the date of the public announcement of the date of the
current year’s annual meeting of shareholders), by writing to
Maria C. Mayer, Senior Vice President, General Counsel and
Secretary, Fiesta Restaurant Group, Inc., 14800 Landmark Boulevard,
Suite 500, Dallas, Texas 75254, giving the name, Company
stockholdings and contact information of the person making the
nomination,
16
the candidate’s name, address and other contact information,
any direct or indirect holdings of our securities by the nominee,
any information required to be disclosed about directors under
applicable securities laws and/or stock exchange requirements,
information regarding related party transactions with us, the
nominee and/or the shareholder submitting the nomination, any
actual or potential conflicts of interest, the nominee’s
biographical data, current public and private company affiliations,
employment history and qualifications and status as
“independent” under applicable securities laws and/or
stock exchange requirements. All of these communications will be
reviewed by our Secretary and forwarded to Stacey Rauch, the
Chairman of the Corporate Governance and Nominating Committee, or
her successor, for further review and consideration in accordance
with this policy. Any such shareholder recommendation should be
accompanied by a written statement from the candidate of his or her
consent to be named as a candidate and, if nominated and elected,
to serve as a director.
|
|
Members:
Alperin,
Daraviras* and Shepherd. Lynn S. Schweinfurth serves as non-board
advisor
|
Chair:
|
|
Key
Responsibilities:
|
Barry J. Alperin
|
|
|
|
|
• Reviews and provides guidance to our
board of directors and management about policies relating to the
Company’s working capital; shareholder dividends and
distributions; share repurchases; significant investments; capital
stock and debt issuances; material financial strategies and
strategic investments; and other transactions or financial issues
that management desires to have reviewed by the Finance Committee;
and
|
|
|
• Obtains or performs an annual evaluation
of the Finance Committee’s performance and makes applicable
recommendations to the board of directors.
|
A copy of the Finance Committee charter is available on the
investor relations section of our website at
www.frgi.com
.
Board Leadership
Structure and Role in Risk Oversight
Board Leadership
Our board of directors believes that our current model of separate
individuals serving as Chairman of the board of directors and as
Chief Executive Officer is the appropriate leadership structure for
us at this time. The board of directors believes that each of the
possible leadership structures for a board has its particular
advantages and disadvantages, which must be considered in the
context of the specific circumstances, culture and challenges
facing a company. The Company does not have a member of our board
of directors who is formally identified as the “lead
independent director.” However, the board of directors has
determined that having an independent director serve as Chairman of
the board of directors is in the best interest of our shareholders
at this time. This structure ensures a greater role for the
independent directors in the oversight of Fiesta Restaurant Group,
active participation of the independent directors in setting
agendas and establishing the board of directors’ priorities
and procedures, including with respect to our corporate
governance.
Risk Oversight
Our board of directors believes that oversight of risk management
is the responsibility of the full board, with support from its
committees and senior management. The board of directors’
principal responsibility in this area is to ensure that sufficient
resources, with appropriate technical and managerial skills, are
provided throughout the Company to identify, assess, and facilitate
processes and practices to address material risks. We believe that
the current leadership structure enhances the board of
directors’ ability to fulfill this oversight responsibility,
as the Chairman, with the support and input of the Chief Executive
Officer, is able to focus the board’s attention on the key
risks facing us.
Some risks, particularly those relating to potential operating
liabilities, the protection against physical loss or damage to our
facilities, and the possibility of business interruption resulting
from a large loss event, are contained and managed by legal
contracts of insurance. Our insurance contracts are reviewed,
managed and procured by our Risk Management and Legal departments
along with our Chief Financial Officer to optimize their
completeness and
17
efficacy. We also have a Risk Committee that meets periodically
throughout the year to develop and oversee our risk management
program. The Risk Committee’s responsibilities include
identifying our exposures, developing a risk control program, and
establishing a risk financing strategy. Periodic presentations are
made to the board to identify and discuss risks and the mitigation
of risk.
In addition, the board believes that the Audit Committee plays a
particularly important role in overseeing risk. The Audit Committee
assesses and oversees business risks as a component of its review
of the business and financial activities of the Company.
Codes of
Ethics
We have adopted written codes of ethics applicable to our
directors, officers, and employees in accordance with the rules of
the SEC and the NASDAQ listing standards. With respect to our Code
of Ethics for Executives and Principal Financial Employees, our
policy requires covered employees to execute an annual
certification confirming that they understand and will comply with
the Code. We make our codes of ethics available on the investor
relations section of our website at
www.frgi.com
.
We will disclose on our website amendments to, or waivers from, our
codes of ethics in accordance with all applicable laws and
regulations.
Section 16(a) Beneficial
Ownership Reporting Compliance
Based upon a review of the filings furnished to us pursuant to Rule
16a-3(e) promulgated under the Exchange Act, and on representations
from our executive officers and directors and persons, if any, who
beneficially own more than 10% of our common stock, all filing
requirements of Section 16(a) of the Exchange Act were complied
with in a timely manner during the fiscal year ended December 31,
2017, other than the Statement of Changes of Beneficial Ownership
on Form 4 (“Form 4”) filed by Richard Stockinger on
June 9, 2017 reporting the grant of performance awards on June 2,
2017, the Form 4 filed by Brian P. Friedman on September 15, 2017
reporting the acquisition of our common stock on September 12, 2017
and the Form 4 filed by Jack A. Smith on May 22, 2017 reporting the
acquisition of our common stock on May 17, 2017.
Shareholder
Communications with the Board of Directors
Any shareholder or other interested party who desires to
communicate with our Chairman of the board of directors or any of
the other members of the board of directors may do so by writing
to: Board of Directors, c/o Stacey Rauch, Chairman of the Board of
Directors, Fiesta Restaurant Group, Inc., 14800 Landmark Boulevard,
Suite 500, Dallas, Texas 75254. Communications may be addressed to
the Chairman of the board, an individual director, a board
committee, the non-management directors, or the full board.
Communications will then be distributed to the appropriate
directors unless the Chairman determines that the information
submitted constitutes “spam,” offensive or
inappropriate material, and/or communications offering to buy or
sell products or services.
18
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information regarding beneficial
ownership of our common stock as of March 9, 2018 by:
•
each person known by us to beneficially own more than 5% of all
outstanding shares of our common stock;
•
each of our directors, nominees for director, and Named Executive
Officers (as set forth in “Executive Compensation-Summary
Compensation Table” herein) individually; and
•
all of our directors and executive officers as a group.
27,252,894 shares of our common stock were outstanding on March 9,
2018.
Except as otherwise indicated, to our knowledge, all persons listed
below have sole voting power and investment power and record and
beneficial ownership of their shares, other than to the extent that
authority is shared by spouses under applicable law.
The information contained in this table reflects “beneficial
ownership” as defined in Rule 13d-3 of the Exchange Act.
Except as otherwise indicated, the address for each beneficial
owner is c/o Fiesta Restaurant Group, Inc., 14800 Landmark
Boulevard, Suite 500, Dallas, Texas 75254.
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of Beneficial Ownership
|
|
|
T.
Rowe Price Associates, Inc.
(1)
|
|
4,868,657
|
|
17.9
|
%
|
T.
Rowe Price New Horizons Fund, Inc.
(1)
|
|
2,244,279
|
|
8.2
|
%
|
BlackRock
Inc.
(2)
|
|
3,475,407
|
|
12.8
|
%
|
Leucadia
National Corporation
(3)
|
|
3,270,578
|
|
12.0
|
%
|
Wasatch
Advisors, Inc.
(4)
|
|
2,468,568
|
|
9.1
|
%
|
The
Vanguard Group, Inc.
(5)
|
|
2,155,637
|
|
7.9
|
%
|
Dimensional
Fund Advisors LP
(6)
|
|
1,574,908
|
|
5.8
|
%
|
Richard
C. Stockinger
|
|
84,900
|
|
*
|
|
Lynn
S. Schweinfurth
|
|
100,979
|
|
*
|
|
Danny
K. Meisenheimer
|
|
39,289
|
|
*
|
|
Maria
C. Mayer
|
|
6,017
|
|
*
|
|
Anthony
Dinkins
|
|
5,081
|
|
*
|
|
Charles
Locke
|
|
7,582
|
|
*
|
|
Joseph
A. Zirkman
(7)
|
|
128,614
|
|
*
|
|
Stacey
Rauch
|
|
20,808
|
|
*
|
|
Nicholas
P. Shepherd
|
|
7,696
|
|
*
|
|
Paul
E. Twohig
|
|
13,409
|
|
*
|
|
Barry
J. Alperin
|
|
19,166
|
|
*
|
|
Stephen
P. Elker
|
|
18,851
|
|
*
|
|
Brian
P. Friedman
(8)
|
|
64,938
|
|
*
|
|
Nicholas
Daraviras
|
|
15,198
|
|
*
|
|
Jack
A. Smith
|
|
52,041
|
|
*
|
|
All
directors and executive officers as a group
(9)
|
|
449,995
|
|
1.7
|
%
|
19
Equity
Compensation Plan
The following table summarizes our 2012 Stock Incentive Plan, which
is the equity compensation plan under which our common stock may be
issued as of December 31, 2017. Our shareholders have approved the
Plan.
|
|
Number of securities to be issued upon exercise of
outstanding options, warrants, and rights
|
|
Weighted- average exercise price of outstanding
options
|
|
Number of securities remaining available for future
issuance under equity compensation plans
|
Equity compensation plans approved by security
holders
|
|
—
|
|
—
|
|
1,874,854
|
Equity compensation plans not approved by
security holders
|
|
—
|
|
—
|
|
—
|
Total
|
|
—
|
|
—
|
|
1,874,854
|
20
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
Related Party
Transaction Procedures
The board of directors has assigned responsibility for reviewing
related party transactions to our Audit Committee. The board of
directors and the Audit Committee have adopted a written policy
pursuant to which certain transactions between us or our
subsidiaries and any of our directors or executive officers must be
submitted to the Audit Committee for consideration prior to the
consummation of the transaction as required by the rules of the
SEC. The Audit Committee reports to the board of directors on all
related party transactions considered.
Family
Relationships
There are no family relationships between any of our executive
officers or directors.
21
CORPORATE
GOVERNANCE
Recent Corporate
Governance Initiatives
Over the last few years, we adopted multiple structures to
strengthen our board’s independence, ensure robust risk
oversight and enhance our Company’s governance and executive
compensation programs. The following table of corporate governance
highlights is indicative of our commitment to shareholders and
desire to ensure Fiesta implements best-in-class corporate
governance features, appropriate for our evolving company.
Corporate Governance
Highlights
|
•
Board Declassification (2018 proposal)
|
•
Mandatory Director Retirement Age (adopted in 2018)
|
•
Independent Chair
|
•
Highly Independent Board
|
•
Majority Voting in Uncontested Elections
|
•
Board Refreshment — 3 New Directors in 2017
|
Shareholder Engagement
Initiatives
The Company’s board of directors, Compensation Committee, and
management value the opinions of our shareholders. We are committed
to being transparent with shareholders on all topics, including our
business strategy, governance and compensation programs, and
responsive to shareholder feedback provided. During 2017, we
engaged with over 85% of our shareholders.
As a result of these conversations, the board of directors has put
forth a proposal at this 2018 Annual Meeting to approve an
amendment to the Company’s Restated Certificate of
Incorporation to declassify its board of directors and provide for
the annual election of all directors beginning with the 2019 Annual
Meeting of Shareholders, and the board has recommended that
shareholders vote in favor of it.
Based on feedback received during these meetings, as well as
historical voting outcomes, we believe our shareholders are
generally supportive of the Company’s governance and
compensation programs. Nevertheless, we believe these conversations
with shareholders are invaluable and will continue to seek
shareholder input on similar topics when making future board
decisions.
Board
Declassification
After considering the advantages and disadvantages of
declassification, including through dialogue with our shareholders,
the Board determined it is in the best interests of the company and
its shareholders to declassify the Board. The Board believes this
change is appropriate given the preferences of our shareholders and
our current position as a maturing public company. If approved at
the annual meeting, the Board will be fully declassified by the
2019 annual meeting.
Majority
Voting
In response to strong shareholder support, in 2017, our Board, with
the approval of our shareholders, adopted a majority vote standard
in uncontested director elections. This enhancement to our
governance program is effective for the 2018 Annual Meeting and we
believe this feature will provide shareholders with a more
meaningful role in the outcome of uncontested director elections
and encourage increased director accountability and oversight.
Mandatory Director
Retirement Age
Our Board of directors also recently adopted a mandatory retirement
policy, which provides that a person is not eligible for election
as a director if they are older than 75 years of age. The policy
also imposes a mandatory retirement age for incumbent directors,
which precludes an incumbent director from seeking nomination for
re-election to our board of directors if they have exceeded the age
limit. We believe this policy will promote director refreshment and
ensure the Fiesta board continues to enjoy the benefits associated
with fresh, thoughtful perspectives.
22
EXECUTIVE
COMPENSATION
Compensation Discussion
and Analysis
The purpose of this Compensation Discussion & Analysis, which
we refer to as the “
CD&A
”,
is to provide relevant information to shareholders regarding the
Company’s executive compensation processes, procedures, plan
designs, and practices with respect to its executive officers named
in the Summary Compensation Table, which we refer to each as a
“
Named Executive
Officer
” or “
NEO
”,
for 2017. The following are the Company’s NEOs for 2017:
2017 Named Executive
Officers
|
Mr. Richard C. Stockinger
|
|
Chief Executive Officer and President (since
February 28, 2017); Director (since April 28, 2017)
|
Mr. Danny K. Meisenheimer
|
|
Senior Vice President and Chief Operating
Officer (since February 28, 2017); President of Pollo Tropical
(since October 16, 2017); and Former Interim Chief Executive
Officer and President (until February 28, 2017)
|
Ms. Lynn S. Schweinfurth
|
|
Senior Vice President, Chief Financial Officer,
and Treasurer (since January 1, 2015) and Vice President, Chief
Financial Officer, and Treasurer (since July 16, 2012)
|
Ms. Maria C. Mayer
|
|
Senior Vice President, General Counsel, and
Secretary (since November 15, 2017)
|
Mr. Anthony Dinkins
|
|
Senior Vice President of Human Resources (since
September 26, 2017)
|
Mr. Charles Locke
|
|
President of Taco Cabana (since October 16,
2017)
|
Mr. Joseph A. Zirkman
|
|
Former Senior Vice President, General Counsel,
and Secretary (until June 7, 2017)
|
Executive Compensation:
Context and Overview
Introduction
The Compensation Committee is committed to designing an executive
compensation program that pays for delivering performance in a
straightforward manner and promotes the recruitment and retention
of our executives. Accordingly, the majority of the compensation
for our NEOs is at-risk and based primarily on the Company’s
performance. Our Company incentivizes performance through a
compensation program structure that reflects an appropriate mix of
short-term and long-term vehicles. Accordingly, our executives will
receive larger rewards when performance objectives are exceeded and
conversely, will receive lower, or no rewards, when performance
falls below targeted levels. The Compensation Committee continues to place a
priority on refining our executive compensation program to align
with Fiesta’s business transformation and feedback received
from our shareholders, as appropriate.
Business Overview and Strategic Renewal Plan
Fiesta Restaurant Group
operates and franchises two restaurant brands, Pollo
Tropical
®
and
Taco Cabana
®
, which
have almost 30 and 40 years, respectively, of operating history and
loyal customer bases. The brands specialize in the operation of
fast-casual, ethnic restaurants that offer distinct and unique
Caribbean and Mexican inspired flavors with broad appeal at a
compelling value. Our Pollo Tropical restaurants feature citrus
marinated, fire-grilled chicken and other freshly prepared tropical
inspired menu items, while our Taco Cabana restaurants specialize
in Mexican inspired food made fresh by hand. We believe that both
brands offer distinct and unique flavors with broad appeal at a
compelling value, which differentiates them in the competitive
fast-casual and quick-service restaurant segments.
In February 2017, we appointed Richard Stockinger as the CEO of
Fiesta Restaurant Group and also announced other changes to our
senior management team.
23
In April 2017, we announced a Strategic Renewal Plan (the
“Renewal Plan”) to drive long term shareholder value
creation. The Renewal Plan was based on our comprehensive review of
all aspects of our business to improve the guest experience and
drive our results. The plan was designed to significantly improve
our long-term business model, consisting of the following:
1)
Revitalizing restaurant performance in core markets;
2)
Managing capital and financial discipline;
3)
Establishing platforms for long term growth; and
4)
Optimizing each brands’ restaurant portfolio.
As part of the Renewal Plan, we relaunched the Pollo Tropical brand
in October 2017 and intend to relaunch the Taco Cabana brand in
mid-2018. Additional changes to senior management continued over
the course of the year as we built a team that will help ensure the
successful implementation of the Renewal Plan. The implementation of the
Renewal Plan negatively impacted our revenue and profitability
during 2017, but we believe this multi-year transformation has
positioned us well for the future.
2017 Outcomes Aligned with Performance
The Company’s compensation results for 2017 were aligned with
the Company’s financial results for the year. We made
significant progress against our Renewal Plan. However, our results
of SRS and Adjusted EBITDA were negatively impacted by a variety of
factors, including, among other things:
•
The Hurricanes;
•
Restaurant closures;
•
Reduced marketing as we implemented the Renewal Plan;
•
Challenging market conditions impacting the restaurant industry;
and
•
Costs incurred to improve the quality and consistency of the guest
experience including investments in enhanced food quality,
hospitality and restaurant environment.
As a result of the progress we made against the Renewal Plan, we
awarded our CEO a $550,000 discretionary award and our Senior Vice
President of Human Resources a $21,985 discretionary award, for
progress and achievements related to the Renewal Plan.
The Role of Shareholder Feedback and Vote Results
The Company’s board of directors, Compensation Committee, and
management value the opinions of the Company’s shareholders.
The Company is open to receiving feedback from shareholders, and
currently provides shareholders with the opportunity to cast an
advisory vote to approve NEO compensation every year, or
Say-on-Pay. The Compensation Committee considers any feedback it
receives from shareholders, as well as the outcome of the vote,
when making compensation decisions for NEOs. For the Say-on-Pay
proposal at the 2017 Annual Meeting, approximately 91% of the
shares cast on the proposal were voted in favor of the proposal.
The Compensation Committee believes that this evidences the
Company’s shareholders’ support for its approach to
executive compensation. The Compensation Committee will continue to
consider shareholder feedback and the outcome of the
Company’s Say-on-Pay votes when making future compensation
decisions for its NEOs.
24
2017 CEO Compensation
For 2017, our CEO’s compensation is set forth below:
Pay for performance is the most significant structural element of
Fiesta’s executive compensation program. As shown below for
2017, 70.3% percent of targeted CEO compensation was at risk and
subject to performance.
25
Executive Compensation
Philosophy
Fiesta’s compensation philosophy is designed to strike an
appropriate balance between aligning executive compensation with
financial performance and promoting retention. We strongly believe
that our compensation program is aligned with this compensation
philosophy and that the at risk compensation components have
delivered value and encouraged sustainable shareholder value
creation.
Our executive compensation program is designed to achieve the
following key objectives:
•
Motivate executives to enhance long-term shareholder value
•
Reinforce Fiesta’s pay for performance culture by aligning
executive compensation with Fiesta’s business objectives and
financial performance
•
Provide competitive market compensation that allows Fiesta to
attract and retain talented high-quality executives
•
Use incentive compensation to promote desired behavior without
encouraging unnecessary or excessive risk-taking
Executive Compensation
Components
Base Salary
The Compensation Committee reviews and considers salary increases
of our NEOs on an annual basis, taking into consideration factors
such as the Company’s compensation philosophy and strategy,
the Company’s performance, individual executive performance
and tenure, internal equity among executives, and competitive
market pay levels. In October 2016, the Compensation Committee
increased Mr. Meisenheimer’s salary by 14.4% (from a base
salary of $288,400 to $330,000) when he became Interim Chief
Executive Officer and President prior to the appointment of Mr.
Stockinger. No NEOs received a base salary increase in 2017.
|
|
|
|
|
|
|
Richard Stockinger
|
|
|
—
|
|
$
|
550,000
|
|
—
|
Danny K. Meisenheimer
|
|
$
|
330,000
|
|
$
|
330,000
|
|
—
|
Lynn S. Schweinfurth
|
|
$
|
352,000
|
|
$
|
352,000
|
|
—
|
Maria C. Mayer
|
|
|
—
|
|
$
|
325,000
|
|
—
|
Anthony Dinkins
|
|
|
—
|
|
$
|
275,000
|
|
—
|
Charles Locke
|
|
|
—
|
|
$
|
325,000
|
|
—
|
Joseph A. Zirkman
(1)
|
|
$
|
326,700
|
|
$
|
326,700
|
|
—
|
Short-Term Incentive
Prior to 2017, the
Compensation Committee primarily utilized a formulaic methodology
for Short-Term Incentive payouts. Historically, cash awards for
executives were primarily earned through performance-based
incentive awards tied to corporate, brand, individual executive
performance, and, to a lesser extent, discretionary
awards.
However, in fiscal 2017, the Company relied on a discretionary cash
award program due to the on-boarding of a new CEO, the development
and implementation of the Renewal Plan, and the reset of
performance expectations for the business. This plan was intended
to recognize the improvement in profitability, turnaround and
strategic plan for the Company, and successful management
transition achieved by the Company. The Compensation Committee
wanted to ensure that the incentives were aligned with the creation
of long-term shareholder value and agreed to work closely with the
CEO to evaluate the Company’s financial performance
improvements and overall financial condition throughout the year to
determine whether or not discretionary awards would be paid for the
fiscal year. The Compensation Committee’s determinations were
not based on a formulaic, objective or quantifiable standard;
rather the individual performance considerations were factors,
among others, that were generally taken into account in the course
of many subjective judgments in connection with the compensation
decision.
26
The Compensation Committee determined that, based on the
Company’s performance results in fiscal year 2017, none of
the NEO’s would receive discretionary awards based on company
performance. However, Messrs. Stockinger and Dinkins received
discretionary awards, which were limited to $550,000 and $21,985,
respectively, for their efforts with respect to the Renewal Plan.
Mr. Meisenheimer and Ms. Schweinfurth received retention bonuses
pursuant to the Meisenheimer Agreement and the Schweinfurth
Agreement, respectively, which are defined and described on pages
35, 36 and 37 of this Proxy Statement and Ms. Mayer, Mr. Locke and Mr.
Dinkins received signing bonuses based on their respective offer
letters, which are described on pages 37 and 38 of this Proxy
Statement.
|
|
|
|
|
|
|
|
|
|
|
|
Actual
Short-Term Incentive
$ Value
|
Richard
Stockinger
|
|
$
|
550,000
|
|
|
—
|
|
|
—
|
|
$
|
550,000
|
Danny
K. Meisenheimer
|
|
|
—
|
|
$
|
175,000
|
|
|
—
|
|
$
|
175,000
|
Lynn
S. Schweinfurth
|
|
|
—
|
|
$
|
150,000
|
|
|
—
|
|
$
|
150,000
|
Maria
C. Mayer
|
|
|
—
|
|
|
—
|
|
$
|
45,000
|
|
$
|
45,000
|
Anthony
Dinkins
|
|
$
|
21,985
|
|
|
—
|
|
$
|
2,000
|
|
$
|
23,985
|
Charles
Locke
|
|
|
—
|
|
|
—
|
|
$
|
45,000
|
|
$
|
45,000
|
Joseph
A. Zirkman
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Beginning in 2018, the Company is implementing a new short-term
cash incentive program pursuant to which annual incentives will be
entirely formulaic. The key metrics considered for purposes of
determining whether an award is earned, in accordance with the new
short-term incentive program, are Adjusted EBITDA (50%) and
comparable restaurant sales metrics (50%). The Board determined to
make this change given our expectation that we will have increased
visibility into the business and our expected growth plan beginning
in fiscal year 2018.
Long-Term Incentive
The Company has adopted a long-term incentive program that provides
the opportunity for annual equity grants to the NEOs pursuant to
the 2012 Stock Incentive Plan, as amended, which we refer to as the
“Plan”. The purpose of the long-term incentive program
is to align long-term pay with long-term performance goals by
providing stock-based compensation that will reward executives for
creating sustainable shareholder value. The following sets forth
the target annual long-term incentive grant date value (based on
the closing price of the common stock on the date of grant) for
each NEO for 2017:
|
|
Target
Long-Term Incentive
$ Value
|
Richard
Stockinger
|
|
|
|
2017
related
|
|
$
|
750,000
|
2018
related
|
|
|
750,000
|
2019
related
|
|
|
750,000
|
2020
related
|
|
|
750,000
|
Total
|
|
$
|
3,000,000
|
Danny
K. Meisenheimer
|
|
$
|
275,000
|
Lynn
S. Schweinfurth
|
|
$
|
450,000
|
Maria
C. Mayer
|
|
|
—
|
Anthony
Dinkins
|
|
|
—
|
Charles
Locke
|
|
|
—
|
Joseph
A. Zirkman
|
|
$
|
225,000
|
The Compensation Committee has established a policy to provide that
restricted stock and performance stock unit grants to employees,
including the NEOs, which are determined pursuant to the target
long-term incentive grant date value, will be granted annually in
February or March on a grant date which is five business days
following the announcement of the Company’s financial results
for the prior fiscal year with annual vesting dates linked to the
grant date. Accordingly, the measurement of the value of any
restricted stock grant or performance stock unit grant would be
based upon the price of our common stock at the close of business
on such grant date. Because the Compensation Committee’s
policy is to grant restricted stock and performance stock units on
a fixed date, the
27
Compensation Committee may have previously, or may in the future,
grant restricted stock at a time when it, as well as the senior
management, may be aware of material non-public information that,
once made public, could either have a positive or negative effect
on the price of our common stock.
Restricted Stock
The use of restricted stock creates stock ownership opportunities
and retention strength. The 2017 restricted stock grants
represented 50% of each of Ms. Schweinfurth’s and Mr.
Meisenheimer’s annual equity target opportunity. On March 6,
2017 the restricted stock grants were made to the following NEOs
employed on such date and to certain of our other employees: Mr.
Stockinger, Mr. Meisenheimer and Ms. Schweinfurth were granted
72,290, 6,627 and 10,844 shares of restricted stock, respectively.
Mr. Stockinger’s grant was made pursuant to the Stockinger
Employment Agreement, as defined and described below. The 2017 restricted stock
awards vest 25% on each anniversary date over four years. The 2015
and 2016 restricted stock awards vest 25% on each anniversary date
over four years if the minimum performance condition for vesting is
met each year. This performance condition requires the Company to
achieve at least 75% of its EBT target each year in order for the
restricted stock to vest at the time the service condition is
satisfied, which we refer to as the “
Performance
Condition
”. EBT refers to income before taxes, which
is set forth in Note 11 to the Company’s Annual Report on
Form 10-K for the fiscal year ended January 1, 2017. This
Performance Condition prevents shares from vesting at the vesting
date if the Company did not achieve at least 75% of its EBT target
for the preceding year. The 2015 and 2016 restricted stock awards
for Ms. Schweinfurth and Mr. Meisenheimer were amended in 2017 to
provide that the Performance Condition was not applicable to the
second 25% of the 2016 restricted stock awards which vested on
February 27, 2018 and the third 25% of the 2015 restricted stock
awards which vested on March 2, 2018.
Richard C. Stockinger was appointed Chief Executive Officer and
President of the Company effective February 28, 2017. On February
24, 2017, the Company entered into an Executive Employment
Agreement, which we refer to as the “Stockinger Employment
Agreement”, with Mr. Stockinger and which is further
described on pages 42 to 44 of this Proxy Statement. Pursuant to the
Stockinger Employment Agreement, Mr. Stockinger received a grant of
restricted common stock and market based performance stock units of
the Company pursuant to the Plan with a value (based on the closing
market price of the common stock on March 6, 2017) of $3,000,000
(not fair value), which consisted of 50% time-based restricted
stock of the Company granted on March 6, 2017 vesting 25% on each
anniversary date over four years and 50% market based performance
stock units of the Company granted on June 2, 2017 as further
described below.
Performance Stock Units
The use of performance stock units creates alignment between
long-term pay and long-term company performance. On June 2, 2017,
Mr. Stockinger, and on June 7, 2017, Mr. Meisenheimer and Ms.
Schweinfurth were granted market based performance restricted stock
units under the Plan for 72,290, 6,627 and 10,844 shares of common
stock, respectively. Mr. Stockinger’s grant of market based
performance restricted stock units (which are described below) were
granted pursuant to the Stockinger Employment Agreement. The 2017
market based performance stock unit grants represented 50% of each
of Ms. Schweinfurth and Mr. Meisenheimer’s total annual
equity target opportunity. The market based performance criterion
for the performance stock units for Ms. Schweinfurth and Mr.
Meisenheimer, which was amended in 2017 following the grant on June
7, 2017, is as follows: 33 1/3% vests on March 6, 2018 upon the
Company’s common stock achieving a closing market price at or
above $25.00 for the last 20 trading days of the period between
March 6, 2017 and March 6, 2018 with March 6, 2018 as the last day
of such period, (ii) 33 1/3% vests on March 6, 2019 upon the
Company’s common stock achieving a closing market price at or
above $30.00 for the last 20 trading days of the period between
March 6, 2018 and March 6, 2019 with March 6, 2019 as the last day
of such period, (iii) 33 1/3% vests on March 6, 2020 upon the
Company’s common stock achieving a closing market price at or
above $35.00 for the last 20 trading days of the period between
March 6, 2019 and March 6, 2020 with March 6, 2020 as the last of
day of such period and (iv) the employment of such NEO by the
Company on the applicable vesting date. If the Company common stock
target price above for any performance period is not met, any
unvested shares of the Company common stock will be rolled over to
the subsequent performance period on a pro rata basis and subject
to the Company common stock target price for such subsequent
performance period.
Pursuant to the Stockinger Employment Agreement, Mr. Stockinger
received a grant on June 2, 2017 of market based performance stock
units of the Company of 72,290 shares of common stock pursuant to
the Plan, which
28
represented 50% of Mr. Stockinger’s total annual equity
target opportunity. The market based performance criterion for the
vesting of Mr. Stockinger’s performance-based restricted
stock units is as follows: (i) 25% vests on March 6, 2018 upon the
Company common stock achieving a closing market price at or above
$25.00 for 20 consecutive trading days at any point during the
period between March 6, 2017 and March 6, 2018, (ii) 25% vests on
March 6, 2019 upon the Company common stock achieving a closing
market price at or above $30.00 for 20 consecutive trading days at
any point during the period between March 6, 2018 and March 6,
2019, (iii) 25% vests on March 6, 2020 upon the Company common
stock achieving a closing market price at or above $35.00 for 20
consecutive trading days at any point during the period between
March 6, 2019 and March 6, 2020, (iv) 25% vests on March 6, 2021
upon the Company common stock achieving a closing market price at
or above $40.00 for 20 consecutive trading days at any point during
the period between March 6, 2020 and March 6, 2021 and (v) the
employment of Mr. Stockinger by the Company on the applicable
vesting date. If the Company common stock target price above for
any performance period is not met, any unvested shares of the
Company’s common stock will be rolled over to the subsequent
performance period on a pro rata basis and subject to the Company
common stock target price for such subsequent performance
period.
The Committee determined that the grant mix of 50% restricted stock
and 50% performance stock units continues to be appropriate. In
2018, the performance stock unit portion of the annual equity
grants to the NEOs (excluding the CEO) were structured to align
with the CEO’s remaining closing price performance conditions
of $30, $35, and $40. The 2018 performance stock unit awards represent 3 years of
performance stock unit grants, and therefore it is not anticipated
that these NEOs will receive additional performance stock unit grants until 2021. The
restricted stock portion of the grant will continue to be made
annually to provide ongoing performance and retention
incentives.
Retention Bonus
In November 2016, the Company entered into agreements with certain
key employees including several of our NEO’s that provided
for retention bonuses and severance arrangements. The purpose of such agreements was to ensure continuity in our senior
management team by increasing the likelihood that such key senior
executives would remain employed with the Company while the Company
was engaged in searching for a new Chief Executive Officer and
after a new Chief Executive Officer was appointed.
The Company entered into an agreement, which we refer to as the
“Schweinfurth Agreement”, with Ms. Schweinfurth on
November 4, 2016 which is further described on pages 35, 36 and 45 to 47 of
this Proxy Statement. Pursuant to the Schweinfurth Agreement, Ms.
Schweinfurth was entitled to a retention bonus payments of $150,000
which was paid in February 2017 and $150,000 which will be paid in
March 2018 subject to the provisions of the Schweinfurth
Agreement.
The Company entered into an agreement, which we refer to as the
“Meisenheimer Agreement” with Mr. Meisenheimer on
November 4, 2016 which is further described on pages 37, 44 and 45 of
this Proxy Statement. Pursuant to the Meisenheimer Agreement, Mr.
Meisenheimer was entitled to a retention bonus payments of $175,000
which was paid in February 2017 and $175,000 which will be paid in
March 2018 subject to the provisions of the Meisenheimer
Agreement.
The Company entered into an agreement, which we refer to as the
“Zirkman Agreement” with Mr. Zirkman on November 4,
2016 which is further described on pages 36 and 47 of this Proxy
Statement. Pursuant to the Zirkman Agreement, Mr. Zirkman was
entitled to a retention bonus payment of $100,000 which was paid in
February 2017 subject to the provisions of the Zirkman
Agreement.
Additional Compensation
Policies and Practices
Compensation
Governance Highlights
|
•
Strong pay-for-performance alignment
|
•
Fully independent Compensation Committee
|
•
Fully independent compensation advisor reporting directly to the
Compensation Committee
|
•
Compensation Clawback Policy in the event of a financial
restatement
|
•
Executive and Outside Director stock ownership requirements
|
•
Prohibition on hedging and pledging of company stock
|
•
No perquisites provided to our NEOs
|
29
Executive Stock Ownership Guidelines
Executives of the Company are expected to acquire and continue to
hold shares of the Company’s common stock having an aggregate
market value which equals or exceeds a multiple of base salary as
outlined below within five years of being named an executive.
The following sets forth the minimum stock ownership level for each
NEO:
|
|
|
Richard Stockinger
|
|
3x
|
Danny K. Meisenheimer
|
|
1x
|
Lynn S. Schweinfurth
|
|
1x
|
Maria C. Mayer
|
|
1x
|
Anthony Dinkins
|
|
1x
|
Charles Locke
|
|
1x
|
Joseph A. Zirkman
|
|
1x
|
Only actual shares owned by each executive, including direct and
indirect ownership as reported to the SEC, count toward compliance
with these guidelines.
Compensation Clawback Policy
The Company has adopted a compensation clawback policy. The NEOs
are covered by the policy, which enables the board of directors to
seek repayment of incentive compensation that was paid based on
financial results that are subsequently restated whereby the amount
of incentive compensation that would have been awarded or earned
based on the restated financial results is lower than what was paid
based on the original financial results. This policy will be
reviewed from time to time to ensure that it is compliant with any
SEC requirements.
Executive Compensation
Roles and Responsibilities
Compensation Committee
The Compensation Committee establishes the overall compensation
philosophy and strategy for the NEOs, determines the Chief
Executive Officer’s compensation, and reviews and approves
compensation levels, plan designs, policies, and practices that it
believes are aligned with this philosophy and strategy and that are
in the best interests of the Company and its shareholders. Although
the Compensation Committee receives input from the Chief Executive
Officer (particularly with respect to the other NEOs), executive
leadership, and its independent compensation advisor, the
Compensation Committee makes its own independent determinations
regarding executive compensation.
Chief Executive Officer
The Chief Executive Officer attends portions or all of certain
Compensation Committee meetings and makes specific recommendations
to the Compensation Committee with respect to each NEO’s
compensation other than his own. This information is reviewed and
considered by the Compensation Committee along with all other
relevant factors and circumstances. The Chief Executive Officer is
never present when the Compensation Committee meets in executive
sessions to discuss the compensation of the NEOs.
Executive Leadership
Various members of executive leadership provide information from
time to time either to the Chief Executive Officer or to the
Compensation Committee directly. For example, the Chief Financial
Officer provides information regarding financial performance and
payouts under the short-term incentive program and the General
Counsel provides information regarding executive compensation
policies and practices such as stock ownership requirements.
30
Independent Compensation Advisor
The Compensation Committee has the authority to retain a
compensation advisor. Since 2012, the Compensation Committee has
annually chosen to retain Pearl Meyer as its compensation advisor.
In selecting Pearl Meyer, the Compensation Committee considered the
SEC’s independence criteria and concluded that Pearl Meyer is
independent per the criteria and that the work of Pearl Meyer did
not raise any conflicts of interest. Pearl Meyer reports directly
to the Compensation Committee, and provides no other services to
the Company. Pearl Meyer’s services to the Compensation
Committee include providing periodic data and information regarding
market pay practices and trends, as well as assisting in the
development of appropriate compensation program designs and
policies, and the preparation of the CD&A. The Compensation
Committee has been satisfied with Pearl Meyer’s services.
Change of Control
Agreements
The Stockinger Employment Agreement provides for certain potential
enhanced benefits upon a termination of employment following a
change of control of the Company which is further described on pages
42 to 44 of this Proxy Statement.
During 2017, the Company did not have change of control agreements
with any of its other NEOs.
The Plan and individual award agreements for awards of restricted
stock and performance stock units contain a change of control
provision. Under the Plan and individual award agreements for
restricted stock, in the event of a change of control of the
Company, the vesting provisions on all outstanding unvested
restricted shares shall be accelerated and such shares will become
fully vested and free of all restrictions. With regard to
performance stock units, in the event of a change of control, if
the performance stock unit awards (i) are not continued by the
Compensation Committee, or not assumed or replaced in an equitable
manner to the holder by the successor entity or company after a
change in control, then a portion of such performance stock unit
award that would have vested as of the scheduled vesting date if
the Company were to achieve the target performance level for the
performance period shall immediately vest, and (ii) are continued
by the Compensation Committee, or are assumed or replaced in an
equitable manner to the holder by the successor entity or company
after a change of control and if the holder of such performance
stock unit award is terminated by the Company for reasons other
than cause (as defined under the Plan) or the result of a voluntary
termination by the holder, or employment is terminated by the
holder for good reason (as defined under the Plan) within one year
of the date of the change of control, a portion of such performance
stock unit award that would have vested as of the scheduled vesting
date if the Company were to achieve the target performance level
for the performance period shall immediately vest.
The Role of
Benchmarking
The Compensation Committee periodically requests data and
information regarding the pay practices and program designs of
other, similar companies. However, the Compensation Committee does
not benchmark or target a specified pay level or percentile, nor
does it follow the practices of similar companies. Instead, the
Compensation Committee considers this information along with all
other relevant facts and circumstances facing the Company and the
executives. Such factors include Company performance, individual
executive performance, internal equity, succession planning,
affordability, return on investment, accounting expense, tax
deductibility and shareholder dilution. During 2017, the
Compensation Committee did not request such data and
information.
Retirement
Benefits
The Company provides and maintains a 401(k) Savings Plan, which we
refer to as the “
401(k)
Plan
”, and a Deferred Compensation Plan, which we
refer to as the “
Deferred Compensation
Plan
”, which are intended to provide the
Company’s team members with a competitive tax-deferred
long-term savings vehicle. The 401(k) Plan is a qualified 401(k)
plan and the Deferred Compensation Plan is a non-qualified deferred
compensation plan. The NEOs are not eligible to participate in a
qualified 401(k) plan once they have been excluded as “highly
compensated” employees (as defined under the Code). Under the
Deferred Compensation Plan, eligible employees may elect to
voluntarily defer portions of their base salary and annual bonus.
An eligible employee may elect, with a deferral agreement, to defer
all or a specified amount or percentage of base salary and, if
applicable, all or a specified amount or percentage of cash
bonuses. All amounts deferred by the participants earn interest at
8% per annum. The Company does not provide any matching
contributions to the Deferred Compensation Plan.
31
Executive
Perquisites
We did not provide any perquisites to our NEOs in 2017.
Tax
Implications
The Compensation Committee has considered the impact of Section
162(m) of the Code. This section disallows a tax deduction for any
publicly-held corporation for individual compensation to certain
executives of such corporation exceeding $1,000,000 in any taxable
year, unless compensation is performance-based. It is the intent of
the Company and the Compensation Committee to maximize the
deductibility of our executives’ compensation whenever
possible. However, the Compensation Committee does not believe that
compensation decisions should be based solely upon the amount of
compensation that is deductible for federal income tax purposes.
Accordingly, the Compensation Committee reserves the right to award
compensation that is or could become non-deductible when it
believes that such compensation is consistent with our strategic
goals and in our best interests.
Report of the
Compensation Committee
The Compensation Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by Item
402(b) of Regulation S-K with management and, based on such review
and discussions, the Compensation Committee recommended to the
Company’s board of directors that the Compensation Discussion
and Analysis be included in this Proxy Statement.
|
|
Respectfully submitted,
|
|
|
|
|
|
COMPENSATION COMMITTEE
|
|
|
PAUL E. TWOHIG (Chairman)
|
|
|
BRIAN P. FRIEDMAN
|
|
|
JACK A. SMITH
|
|
|
STACEY RAUCH
|
Compensation Committee
Interlocks and Insider Participation
The members of the Compensation Committee for the fiscal year ended
December 31, 2017 were Paul Twohig, Stacey Rauch, Brian P.
Friedman, and Jack A. Smith. None of the members of the
Compensation Committee were, during such year, an officer of the
Company or any of our subsidiaries or had any relationship with us
other than serving as a director. In addition, no executive officer
served as a director or a member of the compensation committee of
any other entity, other than any subsidiary of the Company, and
which such other entity’s (other than any subsidiary of the
Company) executive officers served as a director of the Company or
on our Compensation Committee. None of the members of our
Compensation Committee had any relationship required to be
disclosed under this caption under the rules of the SEC.
32
Summary Compensation
Table
The following table summarizes historical compensation awarded,
paid to or earned by the NEOs for the fiscal year ended December
31, 2017, January 1, 2017 and January 3, 2016.
Name
and Principal Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
Incentive Plan Compensation
(3)
($)
|
|
Nonqualified
Deferred Compensation Earnings
(4)
($)
|
|
All
Other Compensation
(5)
($)
|
|
|
Richard
C. Stockinger
|
|
2017
|
|
$
|
460,804
|
|
|
$
|
550,000
|
|
$
|
608,184
|
|
2017
related
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
1,618,988
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
608,184
|
|
2018
related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
608,184
|
and
President
(6)
|
|
|
|
|
|
|
|
|
|
|
|
608,184
|
|
2019
related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
608,184
|
|
|
|
|
|
|
|
|
|
|
|
|
608,183
|
|
2020
related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
608,183
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,432,735
|
|
Total
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,443,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Danny
K. Meisenheimer
|
|
2017
|
|
$
|
330,000
|
|
|
$
|
175,000
|
|
$
|
199,230
|
|
|
|
|
—
|
|
|
—
|
|
$
|
3,589
|
|
|
—
|
|
$
|
707,819
|
Sr.
Vice President, Chief
|
|
2016
|
|
$
|
295,333
|
|
|
|
—
|
|
$
|
275,021
|
|
|
|
|
—
|
|
|
—
|
|
$
|
6,247
|
|
$
|
80,709
|
|
$
|
657,310
|
Operating
Officer, President, Pollo Tropical
(8)
|
|
2015
|
|
$
|
288,400
|
|
|
|
—
|
|
$
|
275,122
|
|
|
|
|
—
|
|
$
|
34,608
|
|
$
|
6,668
|
|
|
—
|
|
$
|
604,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn
S. Schweinfurth
|
|
2017
|
|
$
|
352,000
|
|
|
$
|
150,000
|
|
$
|
326,004
|
|
|
|
|
—
|
|
|
—
|
|
$
|
13,566
|
|
|
—
|
|
$
|
841,570
|
Sr.
Vice President,
|
|
2016
|
|
$
|
352,000
|
|
|
|
—
|
|
$
|
450,002
|
|
|
|
|
—
|
|
|
—
|
|
$
|
11,221
|
|
|
—
|
|
$
|
813,223
|
Chief
Financial Officer and Treasurer
|
|
2015
|
|
$
|
352,004
|
|
|
|
—
|
|
$
|
450,129
|
|
|
|
|
—
|
|
$
|
42,240
|
|
$
|
8,277
|
|
|
—
|
|
$
|
852,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maria
C. Mayer
|
|
2017
|
|
$
|
41,250
|
|
|
$
|
45,000
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
86,250
|
Sr.
Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
Counsel and Secretary
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
E. Locke
|
|
2017
|
|
$
|
68,750
|
|
|
$
|
45,000
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
113,750
|
President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taco
Cabana
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony
D. Dinkins
|
|
2017
|
|
$
|
71,639
|
|
|
$
|
21,985
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
2,000
|
|
$
|
95,624
|
Sr.
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Human
Resources
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
A. Zirkman
|
|
2017
|
|
$
|
149,738
|
(12)
|
|
$
|
100,000
|
|
$
|
112,507
|
|
|
|
|
—
|
|
|
—
|
|
$
|
9,613
|
|
$
|
345,101
|
|
$
|
716,959
|
Former
Sr. Vice
President,
|
|
2016
|
|
$
|
326,700
|
|
|
|
—
|
|
$
|
225,036
|
|
|
|
|
—
|
|
|
—
|
|
$
|
8,077
|
|
|
—
|
|
$
|
559,813
|
General
Counsel and Secretary
|
|
2015
|
|
$
|
326,700
|
|
|
|
—
|
|
$
|
225,065
|
|
|
|
|
—
|
|
$
|
39,204
|
|
$
|
5,781
|
|
|
—
|
|
$
|
596,750
|
33
Stockinger Employment
Agreement
Mr. Stockinger was appointed Chief Executive Officer and President
of the Company effective February 28, 2017. On February 24, 2017,
the Company entered into the Stockinger Employment Agreement
pursuant to which Mr. Stockinger will earn a base salary of
$550,000 per year which can be increased at the sole discretion of
the Compensation Committee. Pursuant to the Stockinger Employment
Agreement, Mr. Stockinger was (i) eligible to receive a short term
cash incentive bonus equal to at least 100% of Mr.
Stockinger’s then base salary based upon attainment of
objectives to be established by the Compensation Committee, (ii)
received a sign on grant of restricted common stock of the Company
pursuant to the Plan with a value of $3,000,000 (based on the
closing price of the Company’s common stock on March 6, 2017)
which consisted of 50% time-based restricted stock of the Company
(granted to Mr. Stockinger on March 6, 2017) vesting 25% on each
anniversary date over four years and 50% performance-based
restricted stock units of the Company (granted to Mr. Stockinger on
June 2, 2017) vesting 25% on each anniversary date over four years
if the performance conditions and metrics, which are to be
determined by the Compensation Committee, are achieved, and (iii)
commencing with our 2021 fiscal year (or such earlier time as may
be determined by the Compensation Committee in its sole
discretion), will be entitled to receive additional annual
long-term incentive awards as may be determined by the Compensation
Committee.
The Stockinger Employment Agreement provides that if Mr.
Stockinger’s employment with the Company is terminated by the
Company for Cause (as defined in the Stockinger Employment
Agreement) or if his employment with the Company ends due to death
or “permanent and total disability” (within the meaning
of Section 22(e)(3) of the Code) or voluntary termination of
employment by Mr. Stockinger without Good Reason (as defined in the
Stockinger Employment Agreement), he shall be entitled to receive
(i) any earned but unpaid compensation, (ii) solely with respect to
Mr. Stockinger’s termination for death or “permanent
and total disability”, any earned but unpaid bonus for any
completed year prior to the date of termination and (iii) any other
amounts or benefits owing to Mr. Stockinger under the terms of any
employee benefit plan of the Company or, in the case of
equity-based compensation awards, under the terms of the equity
award plan or applicable award agreement, which we refer to as the
“
Accrued
Benefits
”.
34
The Stockinger Employment Agreement also provides that if Mr.
Stockinger’s employment with the Company is terminated by the
Company without Cause or for reasons other than death or
“permanent and total disability” or is voluntarily
terminated by Mr. Stockinger for Good Reason, he shall be entitled
to receive (i) 1.5 times his then base salary, to be paid at least
monthly, for a period of twelve months, (ii) any earned but unpaid
bonus for any completed year prior to the date of termination plus
a pro rata portion of any annual bonus that Mr. Stockinger would
have been entitled to receive with respect to the fiscal year of
termination had his employment not been terminated, (iii) the
payment by the Company of premium payments for a period of up to
twelve months if Mr. Stockinger and his dependents elect coverage
under the Company’s health insurance plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act, which we refer to
as “
COBRA
”,
(iv) executive outplacement services in an amount not to exceed
$25,000 to be incurred no later than the end of the second year
following the year of termination and (v) the Accrued Benefits
(except as otherwise may be provided in connection with a Change of
Control (as defined in the Stockinger Employment Agreement)).
If within one year after the occurrence of a Change of Control (as
defined in the Stockinger Employment Agreement), Mr.
Stockinger’s employment with the Company is terminated by the
Company without Cause and for reasons other than death or
“permanent and total disability” or is voluntarily
terminated by Mr. Stockinger for Good Reason, then Mr. Stockinger
shall be entitled to (i) 2.0 times his then base salary, payable in
a lump sum (ii) any earned but unpaid bonus for any completed year
prior to the date of termination plus a pro rata portion of any
annual bonus that Mr. Stockinger would have been entitled to
receive with respect to the fiscal year of termination had his
employment not been terminated, (iii) the acceleration of the
vesting provisions of Mr. Stockinger’s outstanding unvested
time-based restricted stock awards, (iv) the acceleration of the
vesting provisions of a portion of Mr. Stockinger’s
outstanding performance-based restricted stock unit awards that
would have vested as of the scheduled vesting date if the Company
were to have achieved the target performance level for the
performance period, if (x) such awards are not continued by the
Compensation Committee or not assumed or replaced in an equitable
manner by the successor entity after a Change of Control or (y)
such awards are continued by the Compensation Committee, or are
assumed or replaced in an equitable manner by the successor entity
after a Change of Control and, within one year after the date of
Change of Control, Mr. Stockinger’s employment is terminated
without Cause and for reasons other than death or “permanent
disability” or voluntarily terminated by Mr. Stockinger for
Good Reason, (v) the payment by the Company of premium payments for
a period of up to twelve months if Mr. Stockinger and his
dependents elect coverage under the Company’s health
insurance plan pursuant to COBRA, (vi) executive outplacement
services in an amount not to exceed $25,000 to be incurred no later
than the end of the second year following the year of termination
and (vii) the Accrued Benefits.
Mr. Stockinger, pursuant to the Stockinger Employment Agreement,
agreed, for a period of two years following his termination of
employment with the Company, not to directly or indirectly solicit
for employment or employ any person who is or was employed by the
Company within six months prior to his termination date.
Additionally, under the Stockinger Employment Agreement, Mr.
Stockinger agreed for a period of eighteen months following his
termination of employment with the Company, not to be employed by
or associated with as employee, consultant, director, or in any
other equivalent capacity, any company operating Tex-Mex or
Mexican-themed quick-service, quick-casual, fast-casual or casual
dining restaurants, or any company operating Caribbean or
Hispanic-themed quick-service, quick-casual, fast-casual or casual
dining restaurants which feature grilled chicken as the primary or
central menu item.
Schweinfurth Letter
Agreement and Schweinfurth Agreement
Pursuant to the terms of an offer letter between Fiesta Restaurant
Group and Ms. Schweinfurth entered into on June 29, 2012, which we
refer to as the “
Schweinfurth Letter
Agreement
”, Ms. Schweinfurth earned an annual base
salary of $320,000 beginning in 2012 and became eligible for annual
merit increases beginning in 2014 based upon recommendations of our
Chief Executive Officer and Compensation Committee. The
Schweinfurth Letter Agreement also provided that Ms. Schweinfurth
would participate in the executive bonus program, as established by
our Compensation Committee.
Pursuant to the Schweinfurth
Letter Agreement, within 30 days of July 16, 2012, the date of Ms.
Schweinfurth’s commencement of employment with the Company,
Ms. Schweinfurth received a one-time sign on grant of 50,000 shares
of restricted common stock of the Company in connection with her
appointment as our Vice President, Chief Financial Officer and
Treasurer. The restricted shares of the Company’s common
stock granted to
35
Ms. Schweinfurth vested over
four years at the rate of 25% per annum beginning on the first
anniversary of the date of grant and are subject to provisions of
the Plan.
The Schweinfurth Letter Agreement also provided that in the event
Ms. Schweinfurth is terminated without Cause (as defined in the
Schweinfurth Letter Agreement), she was entitled to receive a
severance payment equal to her twelve months base salary and the
pro-rated portion of her bonus payable, provided that a bonus would
have been payable.
On November 4, 2016, the Company and Ms. Schweinfurth entered into
the Schweinfurth Agreement pursuant to which Ms. Schweinfurth was
entitled to a retention bonus payment of (a) $150,000, which we
refer to as the “
Schweinfurth 2016
Bonus
”, which was paid in February 2017; provided that
if Ms. Schweinfurth (i) voluntarily resigns as an employee of the
Company other than for Good Reason (as defined in the Schweinfurth
Agreement) or gives notice of such resignation any time during the
twelve month period following the payment date of the Schweinfurth
2016 Bonus or (ii) if Ms. Schweinfurth voluntarily resigns as an
employee of the Company other than for Good Reason any time prior
to December 31, 2017 and fails to provide at least six months prior
written notice of such voluntary resignation, Ms. Schweinfurth
shall repay the Schweinfurth 2016 Bonus to the Company, and (b)
$150,000 less any amount related to short term incentive
compensation received by Ms. Schweinfurth under the Company’s
Executive Bonus Plan (as defined in the Schweinfurth Agreement),
which we refer to as the “
Schweinfurth 2017
Bonus
”, payable in February 2018, provided that Ms.
Schweinfurth remains employed with the Company through the payment
date of the Schweinfurth 2017 Bonus, which will be paid in March
2018. The Schweinfurth Agreement also modifies and supersedes the
severance bonus arrangements contained in the Schweinfurth Letter
Agreement, and provides that upon a termination of Ms.
Schweinfurth’s employment by the Company without Cause (as
defined in the Schweinfurth Agreement) or termination of Ms.
Schweinfurth’s employment by Ms. Schweinfurth with Good
Reason, Ms. Schweinfurth is entitled to (i) an amount equal to one
times Ms. Schweinfurt’s highest annual base salary in effect
prior to the date Ms. Schweinfurth’s employment is terminated
and (ii) an amount equal to a pro rata portion of the aggregate
bonus under the Company’s Executive Bonus Plan for the year
in which Ms. Schweinfurth’s employment is terminated (plus
any earned and unpaid bonus amounts under the Company’s
Executive Bonus Plan for the year prior to the year in which Ms.
Schweinfurth’s employment is terminated). The Schweinfurth
Agreement terminates (other than the severance bonus provisions
which shall survive any such termination, consistent with the terms
of the Schweinfurth Letter Agreement) on December 31, 2018 and if
renewed by the Company upon 90 days written notice prior to the
expiration of the initial term, on December 31, 2019, unless
terminated sooner in accordance with the terms of the Schweinfurth
Agreement.
Zirkman
Agreement
On November 4, 2016, the Company and Mr. Zirkman entered into the
Zirkman Agreement pursuant to which Mr. Zirkman is entitled to a
retention bonus payment of (a) $100,000, which we refer to as the
“
Zirkman 2016
Bonus
”, which was paid in February 2017; provided that
if Mr. Zirkman (i) voluntarily resigns as an employee of the
Company other than for Good Reason (as defined in the Zirkman
Agreement) or gives notice of such resignation any time during the
twelve month period following the payment date of the Zirkman 2016
Bonus or (ii) if Mr. Zirkman voluntarily resigns as an employee of
the Company other than for Good Reason any time prior to December
31, 2017 and fails to provide at least six months prior written
notice of such voluntary resignation, Mr. Zirkman shall repay the
Zirkman 2016 Bonus to the Company, and (b) $100,000 less any amount
related to short term incentive compensation received by Mr.
Zirkman under the Company’s Executive Bonus Plan (as defined
in the Zirkman Agreement), which we refer to as the
“
Zirkman 2017
Bonus
”, payable in February 2018, provided that Mr.
Zirkman remains employed with the Company through the payment date
of the Zirkman 2017 Bonus. The Zirkman Agreement also provides that
upon a termination of Mr. Zirkman’s employment by the Company
without Cause (as defined in the Zirkman Agreement) or termination
of Mr. Zirkman’s employment by Mr. Zirkman with Good Reason,
Mr. Zirkman is entitled to (i) an amount equal to one times Mr.
Zirkman’s highest annual base salary in effect prior to the
date Mr. Zirkman’s employment is terminated, which we refer
to as the “
Zirkman Severance
Payment
” and (ii) an amount equal to a pro rata
portion of the aggregate bonus under the Company’s Executive
Bonus Plan (as defined in the Zirkman Agreement) for the year in
which Mr. Zirkman’s employment is terminated (plus any earned
and unpaid bonus amounts under the Company’s Executive Bonus
Plan for the year prior to the year in which Mr. Zirkman’s
employment is terminated), which we refer to as the
“
Zirkman Bonus
Payment
”. The Zirkman Agreement terminates on December
31, 2018 and if renewed by the Company upon 90 days written notice
prior to the expiration of the initial term, on December 31, 2019,
unless terminated sooner in accordance with the terms of the
Zirkman Agreement.
36
On June 7, 2017, in connection with the termination of Mr.
Zirkman’s employment with the Company, the Company and Mr.
Zirkman entered into a Confidential Separation Agreement and
General Release, which we refer to as the “
Zirkman Separation
Agreement
”. The Zirkman Separation Agreement provides
that in exchange for Mr. Zirkman’s agreement to be bound by
the terms of the Zirkman Separation Agreement, Mr. Zirkman is
entitled to (i) the Severance Payment and Severance Bonus; (ii) his
accrued but unused vacation, less applicable deductions and
withholding; (iii) his unreimbursed business expenses (to the
extent reimbursable under the Company’s reimbursement
policies and provided appropriate receipts are submitted) and (iv)
outplacement services up to $600.
Meisenheimer
Agreement
On November 4, 2016, the Company and Mr. Meisenheimer entered into
the Meisenheimer Agreement pursuant to which Mr. Meisenheimer was
entitled to a retention bonus payment of (a) $175,000, which we
refer to as the “
Meisenheimer 2016
Bonus
”, which was paid in February 2017; provided that
if Mr. Meisenheimer (i) voluntarily resigns as an employee of the
Company other than for Good Reason (as defined in the Meisenheimer
Agreement) or gives notice of such resignation any time during the
twelve month period following the payment date of the Meisenheimer
2016 Bonus or (ii) if Mr. Meisenheimer voluntarily resigns as an
employee of the Company other than for Good Reason any time prior
to December 31, 2017 and fails to provide at least six months prior
written notice of such voluntary resignation, Mr. Meisenheimer
shall repay the Meisenheimer 2016 Bonus to the Company, and (b)
$175,000 less any amount related to short term incentive
compensation received by Mr. Meisenheimer under the Company’s
Executive Bonus Plan (as defined in the Meisenheimer Agreement),
which we refer to as the “
Meisenheimer 2017
Bonus
”, payable in February 2018, provided that Mr.
Meisenheimer remains employed with the Company through the payment
date of the Meisenheimer 2017 Bonus, which will be paid in March
2018. The Meisenheimer Agreement also provides that upon a
termination of Mr. Meisenheimer’s employment by the Company
without Cause (as defined in the Meisenheimer Agreement),
termination of Mr. Meisenheimer’s employment by Mr.
Meisenheimer with Good Reason (other than in the case of a material
diminution of Mr. Meisenheimer’s authority, duties or
responsibilities) and termination of Mr. Meisenheimer’s
employment by Mr. Meisenheimer for any reason during the period
that is between six months and twelve months following the
commencement date of employment of a new Chief Executive Officer of
the Company, Mr. Meisenheimer is entitled to (i) an amount equal to
two times Mr. Meisenheimer’s highest annual base salary in
effect prior to the date Mr. Meisenheimer’s employment is
terminated and (ii) an amount equal to a pro rata portion of the
aggregate bonus under the Company’s Executive Bonus Plan (as
defined in the Meisenheimer Agreement) for the year in which Mr.
Meisenheimer’s employment is terminated (plus earned and
unpaid bonus amounts under the Company’s Executive Bonus Plan
for the year prior to the year in which Mr. Meisenheimer’s
employment is terminated). The Meisenheimer Agreement terminates on
December 31, 2018 and if renewed by the Company upon 90 days
written notice prior to the expiration of the initial term, on
December 31, 2019 unless terminated sooner in accordance with the
terms of the Meisenheimer Agreement.
On February 27, 2018, the Company and Mr. Meisenheimer entered into
an agreement (the “2018 Meisenheimer Agreement”). The
term of the 2018 Meisenheimer Agreement is effective December 31,
2018 (concurrent with the expiration of the Meisenheimer Agreement)
and continues until the date of Mr. Meisenheimer’s
termination of employment with the Company. The 2018 Meisenheimer
Agreement provides that, upon termination of Mr.
Meisenheimer’s employment by the Company without Cause (as
defined in the 2018 Meisenheimer Agreement) or termination of Mr.
Meisenheimer’s employment by Mr. Meisenheimer with Good
Reason (as defined in the 2018 Meisenheimer Agreement), Mr.
Meisenheimer is entitled to (i) an amount equal to one times Mr.
Meisenheimer’s highest annual base salary in effect prior to
the date Mr. Meisenheimer’s employment is terminated (plus
interest equal to the Prime Rate (as defined in the 2018
Meisenheimer Agreement) plus three percent, with such interest
accruing from the date of termination of employment until the date
of payment) and (ii) an amount equal to a pro rata portion of the
aggregate bonus under the Company’s Executive Bonus Plan (as
defined in the 2018 Meisenheimer Agreement) to which Mr. Meisenheimer would otherwise have been entitled had his employment not
terminated, for the year in which Mr. Meisenheimer’s
employment is terminated (plus any earned and unpaid bonus amounts
under the Company’s Executive Bonus Plan for the year prior
to the year in which Mr. Meisenheimer’s employment is
terminated).
Mayer Offer Letter and
Agreement
Pursuant to an offer letter dated October 23, 2017 between the
Company and Maria C. Mayer, which we refer to as the “Mayer
Offer Letter”, Ms. Mayer is entitled to a base salary of
$325,000 which is eligible for discretionary annual increases in
January 2019. Pursuant to the Mayer Offer Letter, Ms. Mayer is
entitled to a bonus target of
37
60% of her annual base salary commencing in 2018 subject to the
terms of the Company’s applicable bonus plan and the
discretion of the Compensation Committee. The Mayer Offer Letter
also provides Ms. Mayer with a sign on bonus of $45,000 payable on
or before March 15, 2018, provided that if Ms. Mayer voluntarily
resigns from the Company within one year of the payment date of
such sign-on bonus, Ms. Mayer must refund the amount of such sign
on bonus to the Company. Pursuant to the Mayer Offer Letter, Ms.
Mayer is eligible for annual equity grants of $225,000 subject to
the discretion of the Compensation Committee which are expected to
be comprised of 50% restricted stock awards that vest 25% on each
anniversary date and 50% based on performance based criteria to be
determined prior to the date of grant.
On November 15, 2017, the Company and Maria C. Mayer entered into
an Agreement, which we refer to as the “Mayer
Agreement”, a summary of which is provided on pages 48 and 49 of this
Proxy Statement.
Locke Offer Letter and
Agreement
Pursuant to an offer letter dated September 24, 2017 between the
Company and Charles Locke, which we refer to as the
“
Locke Offer
Letter
”, Mr. Locke is entitled to a base salary of
$325,000 which is eligible for discretionary annual increases in
January 2019. Pursuant to the Locke Offer Letter, Mr. Locke is
entitled to a bonus target of 60% of his annual base salary
commencing in 2018 subject to the terms of the Company’s
applicable bonus plan and the discretion of the Compensation
Committee. The Locke Offer Letter also provides Mr. Locke with a
sign-on bonus of $45,000 payable on or before March 15, 2018,
provided that if Mr. Locke voluntarily resigns from the Company
within one year of the payment date of such sign on bonus, Mr.
Locke must refund the amount of such sign-on bonus to the Company.
Pursuant to the Locke Offer Letter, Mr. Locke is eligible for
annual equity grants of $225,000 subject to the discretion of the
Compensation Committee which are expected to be comprised of 50%
restricted stock awards that vest 25% on each anniversary date and
50% based on performance based criteria to be determined prior to
the date of grant. The Locke Offer Letter also provides that Mr.
Locke is entitled to reimbursement for temporary housing costs for
up to six months.
On October 12, 2017, the Company and Charles Locke entered into an
Agreement, which we refer to as the “Locke Agreement”,
a summary of which is provided on page 48 of this Proxy
Statement.
Dinkins Offer
Letter
Pursuant to an offer letter dated September 22, 2017 between the
Company and Anthony Dinkins, which we refer to as the
“Dinkins Offer Letter”, Mr. Dinkins is entitled to a
base salary of $275,000 which is eligible for discretionary annual
increases in January 2019. Pursuant to the Dinkins Offer Letter,
Mr. Dinkins is entitled to a bonus target of 60% of his annual base
salary commencing in 2018 subject to the terms of the
Company’s applicable bonus plan and the discretion of the
Compensation Committee. The Dinkins Offer Letter also provides Mr.
Dinkins with a sign-on bonus of $2,000, provided that if Mr.
Dinkins employment with the Company ceases within 12 months of Mr.
Dinkins’ first date of employment with the Company, Mr.
Dinkins must refund the amount of such sign-on bonus to the
Company. Pursuant to the Dinkins Offer Letter, Mr. Dinkins is
eligible for annual equity grants of $190,000 subject to the
discretion of the Compensation Committee which are expected to be
comprised of 50% restricted stock awards that vest 25% on each
anniversary date and 50% based on performance based criteria to be
determined prior to the date of grant.
38
Grants of Plan-Based
Awards
The following table provides certain historical information
regarding grants of plan-based awards made to the NEOs during the
fiscal year ended December 31, 2017:
|
|
|
|
|
|
Estimated Payouts Under Non-Equity Incentive
Plan
Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
Maximum
(#)
(2)
|
|
All
Other Stock Awards: Number of Shares or Units
(#)
(3)
|
|
Grant
Date Fair Value of Stock
Awards
(4)
|
Richard C. Stockinger
|
|
3/6/2017
|
|
3/5/17
|
|
—
|
|
—
|
|
72,290
|
|
$
|
1,500,018
|
|
|
6/2/2017
|
|
3/5/17
|
|
—
|
|
72,290
|
|
—
|
|
$
|
932,718
|
Danny K.
Meisenheimer
|
|
3/6/2017
|
|
3/5/17
|
|
—
|
|
—
|
|
6,627
|
|
$
|
137,510
|
|
|
6/7/2017
|
|
3/5/17
|
|
—
|
|
6,627
|
|
—
|
|
$
|
61,719
|
Lynn S. Schweinfurth
|
|
3/6/2017
|
|
3/5/17
|
|
—
|
|
—
|
|
10,844
|
|
$
|
225,013
|
|
|
6/7/2017
|
|
3/5/17
|
|
—
|
|
10,844
|
|
—
|
|
$
|
100,991
|
Maria C. Mayer
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Charles E. Locke
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Anthony D. Dinkins
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Joseph A. Zirkman
|
|
3/6/2017
|
|
3/5/17
|
|
—
|
|
—
|
|
5,422
|
|
$
|
112,507
|
2012 Stock Incentive
Plan
. The Plan provides for the grant of stock options
and stock appreciation rights, stock awards, performance awards,
outside director stock options, and outside director stock awards.
Any officer, employee, associate, director and any consultant or
advisor providing services to us are eligible to participate in the
Plan.
The Plan is administered by the Compensation Committee which
approves awards and may base its considerations on recommendations
by our Chief Executive Officer. The Compensation Committee has the
authority to (1) approve plan participants, (2) approve whether and
to what extent stock options, stock appreciation rights, stock
awards, and performance awards are to be granted and the number of
shares of stock to be covered by each award (other than an outside
director award), (3) approve forms of agreement for use under the
Plan, (4) determine terms and conditions of awards (including, but
not limited to, the option price, any vesting restriction or
limitation, any vesting acceleration or waiver or forfeiture, and
any right of repurchase, right of first refusal or other transfer
restriction regarding any award), (5) modify, amend or adjust the
terms and conditions of any award, (6) determine the fair market
value, and (7) determine the type and amount of consideration to be
received by us for any stock award issued.
39
Outstanding Equity
Awards at Fiscal Year-End
The following table sets forth certain information with respect to
the value of all equity awards that were not vested at the December
31, 2017 fiscal year end for each of the NEOs.
|
|
|
|
|
|
|
Number
of Securities Underlying Options (#) Exercisable
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
|
|
Option
Exercise Price ($)
|
|
|
|
Number
of Shares of Stock That Have Not Vested
(#)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
(1)
|
|
Equity
Incentive Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights
That Have Not Vested
($)
|
Richard
C. Stockinger
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
72,290
|
(2)
|
|
$
|
1,373,510
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
72,290
|
(3)
|
|
$
|
1,373,510
|
Danny
K. Meisenheimer
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,941
|
(4)
|
|
$
|
55,879
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,058
|
(5)
|
|
$
|
20,102
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,925
|
(6)
|
|
$
|
55,575
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,627
|
(2)
|
|
$
|
125,913
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
2,116
|
(7)
|
|
$
|
40,204
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
3,901
|
(8)
|
|
$
|
74,119
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
6,627
|
(9)
|
|
$
|
125,913
|
Lynn
S. Schweinfurth
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,384
|
(4)
|
|
$
|
83,296
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,730
|
(5)
|
|
$
|
32,870
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,787
|
(6)
|
|
$
|
90,953
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,844
|
(2)
|
|
$
|
206,036
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
3,462
|
(7)
|
|
$
|
65,778
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
6,383
|
(8)
|
|
$
|
121,277
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
10,844
|
(9)
|
|
$
|
206,036
|
Maria
C. Mayer
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
Charles
E. Locke
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
Anthony
D. Dinkins
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
Joseph
A. Zirkman
(10)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
865
|
(5)
|
|
$
|
16,435
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,394
|
(6)
|
|
$
|
45,486
|
|
—
|
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
1,731
|
(7)
|
|
$
|
32,889
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
3,192
|
(8)
|
|
$
|
60,648
|
40
Options Exercised and
Stock Vested
The following table provides summary information about options
exercised by our NEOs and shares of restricted stock that vested
during the fiscal year ended December 31, 2017.
|
|
|
|
|
|
|
Number of Shares Acquired on Exercise
(#)
|
|
Value
Realized on Exercise
($)
|
|
Number of Shares Acquired on Vesting
(#)
|
|
Value
Realized on Vesting
($)
(1)
|
Richard C. Stockinger
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Danny K. Meisenheimer
|
|
—
|
|
—
|
|
2,292
|
|
$
|
64,833
|
Lynn S. Schweinfurth
|
|
—
|
|
—
|
|
4,430
|
|
$
|
125,409
|
Maria C. Mayer
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Charles E. Locke
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Anthony D. Dinkins
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Joseph A. Zirkman
|
|
—
|
|
—
|
|
11,909
|
|
$
|
268,591
|
Non-Qualified Deferred
Compensation
We have adopted a Deferred Compensation Plan for employees not
eligible to participate in our Retirement Savings Plan, which we
refer to as the “
Retirement
Plan
”, because they have been excluded as
“highly compensated” employees (as so defined in the
Retirement Plan), to voluntarily defer portions of their base
salary and annual bonus. An eligible employee may elect, on a
deferral agreement, to defer all or a specified percentage of base
salary and, if applicable, all or a specified percentage of cash
bonuses. All amounts deferred by the participants earn interest at
8% per annum. We do not match any portion of the funds.
41
The following table describes contributions, earnings and balances
at December 31, 2017 under our Deferred Compensation Plan.
|
|
Executive Contributions in Last FY
($)
|
|
Registrant Contributions in Last FY
($)
|
|
Aggregate Earnings in Last FY
($)
(1)
|
|
Aggregate Withdrawals/
Distributions
($)
|
|
Aggregate Balance at Last FYE
($)
(2)
|
Richard C. Stockinger
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
Danny K. Meisenheimer
|
|
$
|
16,049
|
|
—
|
|
$
|
5,767
|
|
$
|
(135,818
|
)
|
|
$
|
26,658
|
Lynn S. Schweinfurth
|
|
$
|
50,804
|
|
—
|
|
$
|
22,423
|
|
|
—
|
|
|
$
|
325,702
|
Maria C. Mayer
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
Charles E. Locke
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
Anthony D. Dinkins
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
Joseph A. Zirkman
|
|
$
|
10,482
|
|
—
|
|
$
|
15,890
|
|
$
|
(216,580
|
)
|
|
|
—
|
Potential Payments upon
Termination or Change-of-Control
Stockinger Employment Agreement
The Stockinger Employment Agreement provides that if Mr.
Stockinger’s employment with the Company is terminated by the
Company for Cause (as defined in the Stockinger Employment
Agreement) or if his employment with the Company ends due to death
or “permanent and total disability” (within the meaning
of
Section
22(e)(3)
of the Code) or voluntary termination of employment
by Mr. Stockinger without Good Reason (as defined in the Stockinger
Employment Agreement), he shall be entitled to receive (i) any
earned but unpaid compensation, (ii) solely with respect to Mr.
Stockinger’s termination for death or “permanent and
total disability”, any earned but unpaid bonus for any
completed year prior to the date of termination and (iii) the
A
ccrued
Benefits
.
The Stockinger Employment Agreement also provides that if Mr.
Stockinger’s employment with the Company is terminated by the
Company without Cause or for reasons other than death or
“permanent and total disability” or is voluntarily
terminated by Mr. Stockinger for Good Reason, he shall be entitled
to receive (i) 1.5 times his then base salary, to be paid at least
monthly, for a period of twelve months, (ii) any earned but unpaid
bonus for any completed year prior to the date of termination plus
a pro rata portion of any annual bonus that Mr. Stockinger would
have been entitled to receive with respect to the fiscal year of
termination had his employment not been terminated, (iii) the
payment by the Company of premium payments for a period of up to
twelve months if Mr. Stockinger and his dependents elect coverage
under the Company’s health insurance plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act, which we refer to
as “
COBRA
”,
(iv) executive outplacement services in an amount not to exceed
$25,000 to be incurred no later than the end of the second year
following the year of termination and (v) the Accrued Benefits
(except as otherwise may be provided in connection with a Change of
Control).
If within one year after the occurrence of a Change of Control (as
defined in the Stockinger Employment Agreement), Mr.
Stockinger’s employment with the Company is terminated by the
Company without Cause and for reasons other than death or
“permanent and total disability” or is voluntarily
terminated by Mr. Stockinger for Good Reason, then Mr. Stockinger
shall be entitled to (i) 2.0 times his then base salary, payable in
a lump sum (ii) any earned but unpaid bonus for any completed year
prior to the date of termination plus a pro rata portion of any
annual bonus that Mr. Stockinger would have been entitled to
receive with respect to the fiscal year of termination had his
employment not been terminated, (iii) the acceleration of the
vesting provisions of Mr. Stockinger’s outstanding unvested
time-based restricted stock awards, (iv) the acceleration of the
vesting provisions of a portion of Mr. Stockinger’s
outstanding performance-based restricted stock unit awards that
would have vested as of the scheduled vesting date if the Company
were to have achieved the target performance level for the
performance period, if (x) such awards are not continued by the
Compensation Committee or not assumed or replaced in an equitable
manner by the successor entity after a Change of Control or (y)
such awards are continued by the Compensation Committee, or are
assumed or replaced in an equitable manner by the successor entity
after a Change of Control and, within one year after the date of
Change of Control, Mr. Stockinger’s employment is terminated
without Cause and for reasons other than death or “permanent
disability” or voluntarily terminated by
42
Mr. Stockinger for Good Reason, (v) the payment by the Company of
premium payments for a period of up to twelve months if Mr.
Stockinger and his dependents elect coverage under the
Company’s health insurance plan pursuant to COBRA, (vi)
executive outplacement services in an amount not to exceed $25,000
to be incurred no later than the end of the second year following
the year of termination and (vii) the Accrued Benefits.
The following table summarizes estimated benefits that would have
been payable to Mr. Stockinger (a) if his employment had been
terminated on December 31, 2017 (i) by us for Cause (as defined in
the Stockinger Employment Agreement) or if his employment with the
Company ends due to death or “permanent and total
disability” (within the meaning of Section 22(e)(3) of the
Code) or voluntary termination of employment by Mr. Stockinger
without Good Reason (as defined in the Stockinger Employment
Agreement) or (ii) by the Company without Cause or for reasons
other than death or “permanent and total disability” or
is voluntarily terminated by Mr. Stockinger for Good Reason, or (b)
upon a change of control of Fiesta Restaurant Group.
|
|
Terminated
Without Cause or By Employee for Good Reason
|
|
Terminated
for Cause or By Employee Without Good Reason
|
|
|
|
|
|
|
Severance
(1)
|
|
$
|
825,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,100,000
|
Bonus
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
33,847
|
|
|
33,847
|
|
|
33,847
|
|
|
33,847
|
|
|
33,847
|
Deferred
Compensation Plan
(4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Outplacement
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
COBRA
(5)
|
|
|
13,325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Equity
(6)
|
|
|
1,373,510
|
|
|
—
|
|
|
1,636,319
|
|
|
1,636,319
|
|
|
1,716,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,270,682
|
|
$
|
33,847
|
|
$
|
1,695,166
|
|
$
|
1,670,166
|
|
$
|
2,875,744
|
43
Meisenheimer Agreement
The Meisenheimer Agreement provides that upon a termination of Mr.
Meisenheimer’s employment by the Company without Cause (as
defined in the Meisenheimer Agreement), termination of Mr.
Meisenheimer’s employment by Mr. Meisenheimer with Good
Reason (other than in the case of a material diminution of Mr.
Meisenheimer’s authority, duties or responsibilities) and
termination of Mr. Meisenheimer’s employment by Mr.
Meisenheimer for any reason during the period that is between six
months and twelve months following the commencement date of
employment of a new Chief Executive Officer of the Company, Mr.
Meisenheimer is entitled to (i) an amount equal to two times Mr.
Meisenheimer’ s highest annual base salary in effect prior to
the date Mr. Meisenheimer’s employment is terminated and (ii)
an amount equal to a pro rata portion of the aggregate bonus under
the Company’s Executive Bonus Plan (as defined in the
Meisenheimer Agreement) for the year in which Mr.
Meisenheimer’s employment is terminated (plus earned and
unpaid bonus amounts under the Company’s Executive Bonus Plan
for the year prior to the year in which Mr. Meisenheimer’s
employment is terminated).
The following table summarizes estimated benefits that would have
been payable to Mr. Meisenheimer (a) if his employment had been
terminated on December 31, 2017 (i) by us without Cause or by Mr.
Meisenheimer for Good Reason, (ii) upon disability, (iii) upon
death, or (b) upon a change of control of Fiesta Restaurant
Group.
|
|
Terminated
Without Cause or By Employee for Good Reason
|
|
|
|
|
|
|
Severance
(1)
|
|
$
|
660,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Bonus
(2)
|
|
|
175,000
|
|
|
—
|
|
|
—
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
19,038
|
|
|
19,038
|
|
|
19,038
|
|
|
19,038
|
Deferred
Compensation Plan
(4)
|
|
|
26,658
|
|
|
26,658
|
|
|
26,658
|
|
|
26,658
|
Equity
(5)
|
|
|
181,792
|
|
|
403,733
|
|
|
403,733
|
|
|
413,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,062,488
|
|
$
|
449,429
|
|
$
|
449,429
|
|
$
|
459,459
|
For the restricted stock grant in 2015 and 2016 and for performance
stock unit awards, in the event the NEO is terminated by the
Company without cause (as defined under the Plan and the applicable
award agreement) or the NEO terminates his or her employment for
good reason (as defined under the applicable award agreement), the
unvested portion of the restricted stock award and performance
stock unit awards shall continue to vest on the scheduled vesting
dates, provided that the performance criteria set forth in the
award agreement is met with regard to each vesting period. For
restricted stock grants, all unvested shares of restricted stock
held by the NEO will automatically vest under the terms of the Plan
and the applicable award agreement upon a termination for death or
disability. For performance stock unit awards, upon the NEO’s
death or disability, a prorated portion of such performance stock
unit award that would have vested as of the scheduled vesting date
if the Company were to achieve the target performance level for the
performance period shall immediately vest. With respect to a change
of control of Fiesta Restaurant Group, (i) all unvested shares of
restricted stock
44
For the market based performance restricted stock units granted to
the NEO in 2017, if the NEO’s employment with the Company
terminates due to death or disability prior to the end of a
performance period, a portion of the units shall immediately vest.
The number of units that will vest is calculated as the number of
units that would vest as of the applicable scheduled vesting date,
if the Company were to achieve the applicable target stock price
for the applicable performance period, multiplied by a fraction.
The numerator of the fraction is the number of days between the
grant date and the date the NEO’s employment ended, and the
denominator is the number of days in the applicable performance
period. If the NEO’s employment with the Company is
terminated by us without cause (as defined under the applicable
award agreement) or by the NEO for good reason (as defined under
the applicable award agreement), the market performance-based
restricted stock units shall continue until the scheduled vesting
dates and be subject to the market performance criteria for the
applicable performance period. If the NEO’s employment with
the Company is terminated due to change in control (as defined
under the Plan) (i) if, pending the change in control, the
Compensation Committee determines that the award of market based
performance restricted stock units will not continue after the
change in control or that the successor entity (or its parent) will
not agree to provide for the assumption or replacement of the award
of market based performance restricted stock units with a
comparable equity-based award covering shares of the successor
entity (or its parent) that would equitably preserve the
compensation element of the award of market based performance
restricted stock units at the time of the change in control, then a
portion of the market based performance restricted stock units
shall vest and be settled within 30 days of the date of the
Compensation Committee action to accelerate vesting. That portion
shall be equal to the number of market based performance restricted
stock units that would vest as of the scheduled vesting date if the
Company were to achieve the target market price for the performance
period and (ii) if, in connection with the change in control, (i)
above is not applicable and the award of market based performance
restricted stock units is continued, assumed or replaced in the
manner described in (i) above and if within one year after that
change in control the NEO’s employment with the Company (or
with any successor entity) is terminated by the Company for reasons
other than cause or the result of a voluntary termination by the
NEO, or employment is terminated by the NEO for good reason then, a
portion of the market based performance restricted stock units
shall immediately vest and be settled within 30 days after the date
of the NEO’s termination of employment. That portion shall be
equal to the number of market based performance restricted stock
units that would vest as of the scheduled vesting date if the
Company were to achieve the target market price for the performance
period.
The amount is based on the unvested shares held by the NEO at
December 31, 2017 and the closing price of our common stock on
December 29, 2017 of $19.00 (the last trading day of fiscal
2017).
Schweinfurth Agreement
The Schweinfurth Letter Agreement provides that upon a termination
of Ms. Schweinfurth’s employment by the Company without Cause
(as defined in the Schweinfurth Agreement) or termination of Ms.
Schweinfurth’s employment by Ms. Schweinfurth with Good
Reason (as defined in the Schweinfurth Agreement), Ms. Schweinfurth
is entitled to (i) an amount equal to one times Ms.
Schweinfurth’s highest annual base salary in effect prior to
the date Ms. Schweinfurth’s employment is terminated and (ii)
an amount equal to a pro rata portion of the aggregate bonus under
the Company’s Executive Bonus Plan (as defined in the
Schweinfurth Agreement) for the year in which Ms.
Schweinfurth’s employment is terminated (plus any earned and
unpaid bonus amounts under the Company’s Executive Bonus Plan
for the year prior to the year in which Ms. Schweinfurth’s
employment is terminated).
The following table summarizes estimated benefits that would have
been payable to Ms. Schweinfurth (a) if her employment had been
terminated on December 31, 2017 (i) by us without Cause or by Ms.
Schweinfurth for Good Reason, (ii) upon disability, (iii) upon
death, or (b) upon a change of control of Fiesta Restaurant
Group.
45
|
|
Terminated
Without Cause or by Employee for Good Reason
|
|
|
|
|
|
|
Severance
(1)
|
|
$
|
352,000
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Bonus
(2)
|
|
|
150,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
20,308
|
|
|
|
20,308
|
|
|
20,308
|
|
|
20,308
|
Deferred
Compensation Plan
(4)
|
|
|
325,702
|
|
|
|
325,702
|
|
|
325,702
|
|
|
325,702
|
Equity
(5)
|
|
|
289,332
|
|
|
|
652,481
|
|
|
652,481
|
|
|
668,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,137,342
|
|
|
$
|
998,491
|
|
$
|
998,491
|
|
$
|
1,014,905
|
For the restricted stock grant in 2015 and 2016 and for performance
stock unit awards, in the event the NEO is terminated by the
Company without cause (as defined under the Plan and the applicable
award agreement) or the NEO terminates his or her employment for
good reason (as defined under the applicable award agreement), the
unvested portion of the restricted stock award and performance
stock unit awards shall continue to vest on the scheduled vesting
dates, provided that the performance criteria set forth in the
award agreement is met with regard to each vesting period. For
restricted stock grants, all unvested shares of restricted stock
held by the NEO will automatically vest under the terms of the Plan
and the applicable award agreement upon a termination for death or
disability. For performance stock unit awards, upon the NEO’s
death or disability, a prorated portion of such performance stock
unit award that would have vested as of the scheduled vesting date
if the Company were to achieve the target performance level for the
performance period shall immediately vest. With respect to a change
of control of Fiesta Restaurant Group, (i) all unvested shares of
restricted stock will automatically vest under the terms of the
Plan and the applicable award agreement and (ii) if the performance
stock unit awards (a) are not continued by the Compensation
Committee, or not assumed or replaced in an equitable manner to the
holder by the successor entity or company after a change in
control, then such performance stock unit award that would have
vested as of the scheduled vesting date if the Company were to
achieve the target performance level for the performance period
shall immediately vest and (b) are continued by the Compensation
Committee, or are assumed or replaced in an equitable manner to the
holder by the successor entity or company after a change of control
and if the holder of such performance stock unit award is
terminated by the Company for reasons other than cause (as defined
under the Plan and the applicable award agreement) or the result of
a voluntary termination by the holder, or employment is terminated
by the holder for good reason (as defined under the applicable
award agreement) within one year of the date of the change of
control, such performance stock unit award that would have vested
as of the scheduled vesting date if the Company were to achieve the
target performance level for the performance period shall
immediately vest. For purposes of the table above under the column,
“Change of Control” it is assumed that the performance
stock unit awards have vested at the target performance level.
For the market performance-based restricted stock units granted to
the NEO in 2017, if the NEO’s employment with the Company
terminates due to death or disability prior to the end of a
performance period, a portion of the units shall immediately vest.
The number of units that will vest is calculated as the number of
units that would vest as of the applicable scheduled vesting date,
if the Company were to achieve the applicable target stock price
for the applicable performance period, multiplied by a fraction.
The numerator of the fraction is the number of days between the
grant date and the date the NEO’s employment ended, and the
denominator is the number of days in the applicable performance
period. If the NEO’s employment with the Company is
terminated by us without cause (as defined under the applicable
award agreement) or by the NEO for good reason (as defined under
the applicable award agreement), the market performance-based
restricted stock units shall continue until the scheduled vesting
dates and be subject to the market performance criteria for the
applicable performance period. If the NEO’s employment with
the Company is terminated due to change in control (as defined in
the applicable award agreement) (i) if, pending the change in
control, the Compensation Committee determines that the award of
market based performance restricted stock units will not continue
after the change in control or that the successor entity (or its
parent) will not agree to provide for the assumption or replacement
of the award of market based performance restricted stock units
with a comparable equity-based award covering shares of the
successor entity (or its parent) that would equitably preserve the
compensation element of the award of market based performance
restricted stock units at the time of the change in control, then a
portion of the market based performance
46
The amount is based on the unvested shares held by the NEO at
December 31, 2017 and the closing price of our common stock on
December 29, 2017 of $19.00 (the last trading day of fiscal
2017).
Other Named Executive
Officers
Zirkman Agreement
The Zirkman Agreement provides that upon a termination of Mr.
Zirkman’s employment by the Company without Cause (as defined
in the Zirkman Agreement) or termination of Mr. Zirkman’s
employment by Mr. Zirkman with Good Reason (as defined in the
Zirkman Agreement), Mr. Zirkman is entitled to (i) an amount equal
to one times Mr. Zirkman ‘s highest annual base salary in
effect prior to the date Mr. Zirkman’s employment is
terminated and (ii) an amount equal to a pro rata portion of the
aggregate bonus under the Company’s Executive Bonus Plan (as
defined in the Zirkman Agreement) for the year in which Mr.
Zirkman’s employment is terminated (plus any earned and
unpaid bonus amounts under the Company’s Executive Bonus Plan
for the year prior to the year in which Mr. Zirkman’s
employment is terminated).
The Zirkman Separation Agreement provides that in exchange for Mr.
Zirkman’s agreement to be bound by the terms of the Zirkman
Separation Agreement, Mr. Zirkman is entitled to the (i) the
Severance Payment and Severance Bonus; (ii) his accrued but unused
vacation, less applicable deductions and withholding; (iii) his
unreimbursed business expenses (to the extent reimbursable under
the Company’s reimbursement policies and provided appropriate
receipts are submitted) and (iv) outplacement services up to
$600.
The following table summarizes benefits payable to Mr. Zirkman upon
his termination of employment on June 7, 2017, the date on which
Mr. Zirkman’s employment with the Company was terminated.
|
|
Termination
at June 7, 2017
($)
|
Severance
(1)
|
|
$
|
326,701
|
Bonus
(2)
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
17,800
|
Deferred
Compensation Plan
(4)
|
|
|
216,580
|
Equity
(5)
|
|
|
193,346
|
Outplacement
services
|
|
|
600
|
|
|
|
|
Total
|
|
$
|
755,027
|
47
Locke Agreement
The Locke Agreement provides that upon a termination of Mr.
Locke’s employment by the Company without Cause (as defined
in the Locke Agreement) or termination of Mr. Locke’s
employment by Mr. Locke with Good Reason (as defined in the Locke
Agreement), Mr. Locke is entitled to (i) an amount equal to one
times Mr. Locke’s highest annual base salary in effect prior
to the date Mr. Locke’s employment is terminated (plus
interest equal to the Prime Rate (as defined in the Locke
Agreement) plus three percent, with such interest accruing from the
date of termination of employment until the date of payment) and
(ii) an amount equal to a pro rata portion of the aggregate bonus
under the Company’s Executive Bonus Plan (as defined in the
Locke Agreement) for the year in which Mr. Locke’s employment
is terminated (plus any earned and unpaid bonus amounts under the
Company’s Executive Bonus Plan for the year prior to the year
in which Mr. Locke’s employment is terminated).
The following table summarizes estimated benefits that would have
been payable to Mr. Locke (a) if his employment had been terminated
on December 31, 2017 (i) by us without Cause or by Mr. Locke for
Good Reason, (ii) upon disability, (iii) upon death, or (b) upon a
change of control of Fiesta Restaurant Group.
|
|
Terminated
Without Cause or By Employee for Good Reason
|
|
|
|
|
|
|
Severance
(1)
|
|
$
|
325,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Bonus
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
18,750
|
|
|
18,750
|
|
|
18,750
|
|
|
18,750
|
Deferred
Compensation Plan
(4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Equity
(5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
343,750
|
|
$
|
18,750
|
|
$
|
18,750
|
|
$
|
18,750
|
Mayer Agreement
The Mayer Agreement provides that upon a termination of Ms.
Mayer’s employment by the Company without Cause (as defined
in the Mayer Agreement) or termination of Ms. Mayer’s
employment by Ms. Mayer with Good Reason (as defined in the Mayer
Agreement), Ms. Mayer is entitled to (i) an amount equal to one
times Ms. Mayer’s highest annual base salary in effect prior
to the date Ms. Mayer’s employment is terminated (plus
interest equal to the Prime Rate (as defined in the Mayer
Agreement) plus three percent, with such interest accruing from the
date of termination of employment until the date of payment) and
(ii) an amount equal to a pro rata portion of the aggregate bonus
under the Company’s Executive Bonus Plan (as defined in the
Mayer Agreement) for the year in which Ms. Mayer’s employment
is terminated (plus any earned and unpaid bonus amounts under the
Company’s Executive Bonus Plan for the year prior to the year
in which Ms. Mayer employment is terminated).
48
The following table summarizes estimated benefits that would have
been payable to Ms. Mayer (a) if her employment had been terminated
on December 31, 2017 (i) by us without Cause or by Ms. Mayer for
Good Reason, (ii) upon disability, (iii) upon death, or (b) upon a
change of control of Fiesta Restaurant Group.
|
|
Terminated
Without Cause or By Employee for Good Reason
|
|
|
|
|
|
|
Severance
(1)
|
|
$
|
325,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Bonus
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Accrued
Vacation
(3)
|
|
|
18,750
|
|
|
18,750
|
|
|
18,750
|
|
|
18,750
|
Deferred
Compensation Plan
(4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Equity
(5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
343,750
|
|
$
|
18,750
|
|
$
|
18,750
|
|
$
|
18,750
|
Dinkins Agreement
If Mr. Dinkins employment had been
terminated on December 31, 2017 for any reason, he would have been
entitled to $15,865 for accrued vacation.
49
DIRECTOR
COMPENSATION
The following table summarizes the compensation we paid to our
non-employee directors during the fiscal year ended December 31,
2017. Compensation information for Richard Stockinger, who has
served as Chief Executive Officer and President since February 28,
2017, is set forth in the Summary Compensation Table above.
|
|
Fees
Earned or Paid in Cash
(1)
($)
|
|
|
|
|
|
Non-Equity Incentive Plan Compensation
($)
|
|
Nonqualified Deferred Compensation Earnings
($)
|
|
All
Other Compensation
($)
|
|
|
Stacey Rauch
|
|
$
|
77,500
|
|
$
|
95,011
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
172,511
|
Barry J. Alperin
|
|
$
|
65,000
|
|
$
|
75,010
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
140,010
|
Nicholas Daraviras
|
|
$
|
55,000
|
|
$
|
75,010
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
130,010
|
Stephen P. Elker
|
|
$
|
73,125
|
|
$
|
75,010
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
148,135
|
Brian P. Friedman
|
|
$
|
55,625
|
|
$
|
75,010
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
130,635
|
Jack A. Smith
|
|
$
|
69,375
|
|
$
|
75,010
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
144,385
|
Paul E. Twohig
|
|
$
|
50,625
|
|
$
|
175,025
|
(3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
225,650
|
Nicholas P. Shepherd
|
|
$
|
41,250
|
|
$
|
175,016
|
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
216,266
|
We use a combination of cash and stock-based compensation to
attract and retain qualified non-employee directors to serve on our
board of directors. The members of our board of directors, except
for any member who is an executive officer or employee, each will
receive a fee for serving on our board or board committees.
Non-employee directors will receive compensation for board service
as follows:
•
Our board members each receive an annual retainer of $50,000 for
serving as a director, except that the Chairman of our board of
directors receives an annual retainer of $65,000.
•
The Chairman of our Audit Committee receives an additional fee of
$15,000 per year and each other member of our Audit Committee
receives an additional fee of $7,500 per year.
•
The Chairman of our Compensation Committee receives an additional
fee of $10,000 per year and each other member of our Compensation
Committee receives an additional fee of $5,000, per year.
•
The Chairman of our Corporate Governance and Nominating Committee
receives an additional fee of $5,000 per year and each other member
of our Corporate Governance and Nominating Committee receives an
additional fee of $2,500.
•
The Chairman of our Finance Committee receives an additional fee of
$5,000 per year and each other member of our Finance Committee
receives an additional fee of $2,500.
50
•
On the date of our 2017 Annual Meeting of Shareholders each
non-executive member of our board of directors received a number of
shares of our restricted common stock having an aggregate fair
market value (as such term is defined in the Plan) of $75,010 on
the date of grant, which will fully vest on the first anniversary
of the date of grant, other than the Chairman of our board of
directors who received a number of shares of our restricted common
stock having an aggregate fair market value (as such term is
defined in the Plan) of $95,011.
•
Members of our board of directors do not receive separate
attendance fees for attending meetings. All directors are
reimbursed for all reasonable expenses they incur while acting as
directors, including as members of any committee of our board of
directors.
•
If any Special Committees are created during the year, the chairman
of such committee receives a retainer of $7,500 per annum (prorated
for the time that the committee is active), and each non-executive
member of the board serving on such Special Committee receives a
retainer of $2,500 per annum (prorated for the time that the
committee is active).
•
Pursuant to the Plan, upon becoming a director, any future director
will receive a number of shares of our restricted common stock
having an aggregate fair market value (as defined in the Plan) of
$100,000 which will vest in equal installments over five years.
Board of Directors Stock
Ownership Guidelines
Members of our board of directors are expected to acquire and
continue to hold shares of our Common Stock having an aggregate
market value which equals or exceeds three times the annual
retainer paid to a director within five years of being named a
director. Only actual shares owned by each director including
direct and indirect ownership as reported to the SEC, count toward
compliance with these guidelines.
Pay Ratio
Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, and Item 402(u) of Regulation S-K, we
are providing the following information about the ratio of the
median annual total compensation of our employees (other than our
CEO) and the annual total compensation of our CEO. This pay ratio
is a reasonable estimate calculated in accordance with applicable
SEC rules based on our payroll and employment records and the
methodology described below.
We determined our median employee based on 2017 total compensation
of our temporary employees and annualized total compensation of our
part-time and full-time employees who were employed on December 17,
2017, other than our CEO. Our median employee was a part-time
employee who was hired in October 2017 and worked a total of 1577.6
hours on an annualized basis. Our CEO, who began serving in such
capacity beginning on February 28, 2017, received sign-on equity
share awards in 2017 with a grant date fair value of $2,432,735.
This sign-on equity is intended to represent awards for fiscal
years 2017 to 2020. Commencing with the Company’s 2021 fiscal
year (or such earlier time as may be determined by the Compensation
Committee in its sole discretion), Mr. Stockinger will be entitled
to receive additional long-term incentive awards as determined by
the Compensation Committee.
To identify the median employee, we used W-2 gross earnings (Box 5)
for 2017 for our temporary employees and annualized W-2 gross
earnings (Box 5) for 2017 for our part-time and full-time
employees. We did not apply a cost of living differential for the
purpose of selecting the median employee or the CEO comparison. We
annualized the median employee’s total compensation based on
the number of days the median employee was employed during the pay
periods included in the 2017 W-2. We annualized the CEO’s
compensation by using a full year base salary.
Hourly part-time team members are the overwhelming
majority of the Company’s employee population.
51
Based on the foregoing, our estimate of the ratio of the annualized
total compensation of our CEO, which reflects the amount of the sign-on equity share award granted in 2017 (which is intended to represent
awards for fiscal years 2017 to 2020), to the median of the annualized total
compensation of all our other employees is as follows:
Median
employee total annualized compensation
|
|
$
|
13,409
|
CEO
total annualized compensation
|
|
$
|
3,532,735
|
Ratio
|
|
|
263.5:1
|
Our
estimate of the ratio of the annualized total compensation of our CEO, which reflects 1/4
th
of the sign-on equity
award granted in 2017 (the amount which is allocable to 2017), to the median of the annualized total compensation of all our other
employees is as follows:
Median employee total annualized compensation
|
|
$
|
13,409
|
|
CEO total annualized compensation
|
|
$
|
1,708,184
|
|
Ratio
|
|
|
127.4:1
|
|
Given the different methodologies that various public companies
will use to determine an estimate of their pay ratio, the estimated
ratio reported above should not be used as a basis for comparison
between companies.
52
PROPOSAL 2 —
ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE
COMPANY’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS
PROXY STATEMENT UNDER “EXECUTIVE
COMPENSATION”
We are providing our shareholders an opportunity to cast a vote to
approve, on an advisory (non-binding) basis, the compensation of
our Named Executive Officers as described in this Proxy Statement
under “Executive Compensation”.
The Compensation Committee continually reviews the compensation
programs for our Named Executive Officers to ensure they achieve
the desired goals of encouraging and rewarding executives to
contribute to the achievement of the Company’s business
objectives and to attract, retain and motivate talented executives
to perform at the highest level and contribute significantly to the
Company’s success. The program is intended to align the
interests of the Named Executive Officers with those of
shareholders, provide an appropriate and balanced mix of short-term
and long-term compensation elements, and reward the achievement of
performance measures that are directly related to the
Company’s financial goals.
The Compensation Committee believes that the amounts of 2017 actual
total compensation for the Named Executive Officers are consistent
with these objectives. The compensation of the Named Executive
Officers is described in the Compensation Discussion and Analysis,
the compensation tables and the accompanying narrative on pages 23
to 49 of this Proxy Statement. The Compensation Discussion and
Analysis section and the accompanying tables and narrative provide
a comprehensive review of the Company’s executive
compensation program and its elements, objectives and rationale.
Shareholders are urged to read this disclosure before voting on
this proposal.
We are asking our shareholders to indicate their support for our
Named Executive Officers’ compensation as described in this
Proxy Statement under “Executive Compensation”. This
proposal, commonly known as a “say-on-pay” proposal,
gives our shareholders the opportunity to express their views on
our Named Executive Officers’ compensation. The Company is
open to receiving feedback from shareholders, and currently
provides shareholders with the opportunity to cast an advisory vote
to approve our Named Executive Officer’s compensation every
year. This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our Named
Executive Officers and the philosophy, policies and practices
described in this Proxy Statement. Accordingly, we will ask our
shareholders to vote “FOR” the following non-binding
resolution at the 2018 Annual Meeting. For the reasons stated
above, the board is requesting approval of the following
non-binding resolution:
RESOLVED, that the
shareholders of Fiesta Restaurant Group, Inc. (the
“
Company
”) approve,
on an advisory basis, the compensation of the Company’s Named
Executive Officers as disclosed in the Compensation Discussion and
Analysis, the Summary Compensation Table and the related
compensation tables, notes and narrative in the Proxy Statement for
the Company’s 2018 Annual Meeting of Shareholders.
This advisory resolution will be considered approved if it receives
an affirmative vote of the majority of the shares present at the
2018 Annual Meeting and entitled to vote on the subject matter. The
shareholder vote on this proposal will be non-binding on the
Company and the board and will not be construed as overruling a
decision by the Company or the board. However, the board and the
Compensation Committee value the opinions that shareholders express
in their votes and will consider the outcome of the vote when
making future executive compensation decisions as they deem
appropriate.
The board of directors
recommends a vote FOR the approval of the non-binding resolution on
the compensation of the Company’s Named Executive Officers as
described in this Proxy Statement under “Executive
Compensation”. Proxies received in response to this
solicitation will be voted FOR the approval of the non-binding
resolution on the compensation of the Company’s Named
Executive Officers as described in this Proxy Statement under
“Executive Compensation” unless otherwise specified in
the proxy.
53
PROPOSAL 3 —
APPROVAL OF AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE
OF INCORPORATION, AS AMENDED, TO
declassify our board of directors and
to provide for the annual election of all directors beginning with
the 2019 Annual meeting of Shareholders
After careful consideration, the Corporate Governance and
Nominating Committee and the board of directors recommend that the
Company’s shareholders approve an amendment to our Restated
Certificate of Incorporation to declassify the board of directors
and provide that all directors elected at or after the 2019 Annual
Meeting of Shareholders be elected on an annual basis (the
“
Declassification
Amendment
”) as described below and set forth on
Appendix
A
to this Proxy Statement.
Background of the
Proposal
The board of directors is committed to good corporate governance
and has considered the advantages and disadvantages of maintaining
a classified board of directors structure. At the time of our
spin-off from our former parent company, Carrols Restaurant Group,
Inc. in April 2012, the board of directors believed that a
classified board of directors structure was an important piece of
the Company’s governance structure in order to promote
continuity and stability, and was in the best interests of the
Company and its shareholders. At the same time, the board of
directors recognizes that many investors view a classified board of
directors as having the effect of reducing the accountability of
directors to shareholders because a classified board of directors
limits the ability of shareholders to evaluate and elect all
directors on an annual basis. After careful consideration of the
issue and taking into account feedback from shareholders, the
Corporate Governance and Nominating Committee and the board of
directors have determined that amending the Restated Certificate of
Incorporation to provide for the annual election of all directors
beginning at the 2019 Annual Meeting of Shareholders is in the best
interests of the Company and its shareholders.
The Declassification
Amendment
Section (A) of Article NINTH in the Restated Certificate of
Incorporation currently provides that the board of directors shall
be classified into three staggered classes, with each class to hold
office for a three-year term. If the Company’s shareholders
approve the Declassification Amendment at this meeting, the annual
election of all directors would begin with the directors elected at
the 2019 Annual Meeting of Shareholders. If the Declassification
Amendment is approved, and once the Declassification Amendment is
effective, the two directors who will be elected at the 2018 Annual
Meeting will serve for a one-year term ending at the 2019 Annual
Meeting and then all of our directors will stand for election for a
one-year term at the 2019 Annual Meeting of Shareholders.
Declassification of the board of directors requires changes to
Section (A) of Article NINTH and a conforming change to Section (B)
of Article NINTH of the Company’s Restated Certificate of
Incorporation to remove the reference to the classified board of
directors structure. The text of the proposed revisions to Article
NINTH, Sections (A) and (B) of the Restated Certificate of
Incorporation, marked to show the proposed deletions and
insertions, is attached as Appendix A to this proxy statement. This
description of the proposed amendments to the Restated Certificate
of Incorporation is only a summary of that amendment and is
qualified in its entirety by reference to the actual text of
Article NINTH, Sections (A) and (B) as proposed to be amended. If
adopted, the Declassification Amendment will become effective upon
the filing of the Declassification Amendment with the Delaware
Secretary of State, which will be done as soon as practicable
following the 2018 Annual Meeting. If the shareholders vote to
approve the Declassification Amendment, certain conforming changes
to the Company’s Bylaws to remove the reference to the
classified board of directors structure will be necessary. The
Corporate Governance and Nominating Committee and the board of
directors has approved those amendments to the Company’s
Bylaws, subject to the shareholders voting to approve the
Declassification Amendment. The amendment to any Bylaws will be
effective upon the amendment to our Restated Certification of
Incorporation.
The proposed amendments to the Restated Certificate of
Incorporation in Appendix A provides that, once the Board has
become declassified, any director may be removed from office at any
time, with or without cause by the affirmative vote of at least a
majority of the voting power of the then outstanding capital stock
entitled to vote on the matter, voting together as a single
class.
If the Declassification Amendment is not approved by our
shareholders, our board will remain divided into three classes and
each director will continue to be elected and serve three-year
terms.
54
The affirmative vote of at least 66⅔% of the outstanding
shares of Common Stock is required to approve the amendment to our
Restated Certificate of Incorporation to declassify our board of
directors and to provide for the annual election of all directors
beginning with the 2019 Annual Meeting of
Shareholders
.
If our shareholders do not approve the Declassification Amendment,
the corresponding amendment to our Bylaws discussed above will not
be implemented.
Our board of directors
recommends that you vote FOR the approval of the amendment to the
Restated Certificate of Incorporation to declassify our board of
directors and to provide for the annual election of all directors
beginning with the 2019 Annual Meeting of Shareholders. Proxies
received in response to this solicitation will be voted FOR the
approval of the amendment to the Restated Certificate of
Incorporation to declassify our board of directors and to provide
for the annual election of all directors beginning with the 2019
Annual Meeting of Shareholders.
55
PROPOSAL 4 —
RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Deloitte & Touche LLP as the
independent registered public accounting firm to audit and report
upon the consolidated financial statements of the Company for the
fiscal year ending December 30, 2018. Although shareholder
ratification of the board’s action in this respect is not
required, the board considers it desirable for shareholders to pass
upon the selection of auditors and, if the shareholders disapprove
of the selection, intends to reconsider the selection of the
independent registered public accounting firm for the fiscal year
ending December 30, 2018.
A representative of Deloitte & Touche LLP is expected to be
present at the 2018 Annual Meeting and will have the opportunity to
make a statement if so desired and is expected to be available to
respond to appropriate questions from shareholders.
The majority of the shares present at the 2018 Annual Meeting and
entitled to vote on the subject matter is required to ratify the
appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the fiscal year ending
December 30, 2018.
The board of directors
recommends a vote FOR the ratification of the appointment of
Deloitte & Touche LLP as our independent registered public
accounting firm for the fiscal year ending December 30, 2018.
Proxies received in response to this solicitation will be voted FOR
the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the fiscal year ending
December 30, 2018 unless otherwise specified in the
proxy.
Fees for Professional
Services
The following table sets forth the aggregate fees billed to us for
the fiscal years ended December 31, 2017 and January 1, 2017 by our
independent registered public accounting firm, Deloitte &
Touche LLP:
|
|
|
|
|
|
|
|
|
|
(Amount
in the thousands)
|
Audit
Fees
(1)
|
|
$
|
703
|
|
$
|
756
|
Audit-Related
Fees
(2)
|
|
|
—
|
|
|
—
|
Total
Audit and Audit Related Fees
|
|
|
703
|
|
|
756
|
Tax
Fees
(3)
|
|
|
—
|
|
|
29
|
|
|
|
|
|
|
|
Total
|
|
$
|
703
|
|
$
|
785
|
Policy on Audit
Committee Pre-Approval of Services Provided by Deloitte &
Touche LLP
The Audit Committee has established policies and procedures
regarding pre-approval of all services provided by the independent
registered public accounting firm. The Audit Committee preapproves
all audit and non-audit services provided by the independent
registered public accounting firm, other than de minimis non-audit
services, and shall not engage the independent registered public
accounting firm to perform the specific non-audit services
proscribed by law or regulation. The Audit Committee may form one
or more subcommittees, each of which shall take such actions as
shall be delegated by the Audit Committee; provided, however, the
decisions of any Audit Committee member to whom pre-approval
authority is delegated must be presented to the full Audit
Committee at its next scheduled meeting.
56
ANNUAL MEETING
PROCEDURES
Annual Meeting
Admission
Only Fiesta Restaurant Group shareholders or their duly authorized
and constituted proxies may attend the 2018 Annual Meeting. Proof
of ownership of our common stock must be presented in order to be
admitted to the 2018 Annual Meeting. If your shares are held in the
name of a bank, broker or other holder of record and you plan to
attend the 2018 Annual Meeting in person, you must bring a
brokerage statement, the proxy card mailed to you by your bank or
broker or other proof of ownership as of the close of business on
March 9, 2018, the record date, to be admitted to the 2018 Annual
Meeting. Otherwise, proper documentation of a duly authorized and
constituted proxy must be presented. This proof can be: a brokerage
statement or letter from a broker, bank or other nominee indicating
ownership on the record date, a proxy card, or a valid, legal proxy
provided by your broker, bank or other nominee.
After the chairman of the meeting opens the 2018 Annual Meeting,
further entry will be prohibited. No cameras, recording equipment,
electronic devices, large bags, briefcases or packages will be
permitted in the 2018 Annual Meeting. The use of mobile phones
during the 2018 Annual Meeting is also prohibited. All persons
attending the 2018 Annual Meeting will be required to present a
valid government-issued picture identification, such as a
driver’s license, state-issued ID card or passport, to gain
admittance to the 2018 Annual Meeting.
Who Can Vote,
Outstanding Shares
Holders of record of our common stock at the close of business on
March 9, 2018 may vote at the 2018 Annual Meeting. As of March 9,
2018, we had 27,252,894 shares of our common stock outstanding and
each entitled to one vote. A majority, or 13,626,448, of these
shares, present in person or represented by proxy at this meeting,
will constitute a quorum for the transaction of business.
Voting
Procedures
You can vote by attending the 2018 Annual Meeting and voting in
person, or you can vote by proxy. If you are the record holder of
your stock, you can vote in the following four ways:
•
By
Internet
: You may vote by submitting a proxy over the
Internet. Please refer to the notice, proxy card or voting
instruction form provided to you by your broker for instructions of
how to vote by Internet.
•
By
Telephone
: Shareholders located in the United States
may vote by submitting a proxy by telephone by calling the
toll-free telephone number on your notice, proxy card or voting
instruction form and following the instructions.
•
By Mail
: If
you received proxy materials by mail, you can vote by submitting a
proxy by mail by marking, dating, signing and returning the proxy
card in the postage-paid envelope.
•
In Person at the 2018
Annual Meeting
: If you attend the 2018 Annual Meeting,
you may deliver your completed proxy card in person or you may vote
by completing a ballot, which we will provide to you at the 2018
Annual Meeting. You are encouraged to complete, sign and date the
proxy card and submit your proxy in advance over the Internet, by
telephone or by mail regardless of whether or not you plan to
attend the 2018 Annual Meeting.
If you hold your shares of common stock in “street
name,” meaning such shares are held for your account by a
broker, bank or other nominee, then you will receive instructions
from such institution or person on how to vote your shares. Your
broker, bank or other nominee will allow you to deliver your voting
instructions via the Internet and may also permit you to submit
your voting instructions by telephone.
Proxy
The shares represented by proxies will be voted in accordance with
the directions made thereon at the 2018 Annual Meeting, but if no
direction is given and you do not revoke your proxy, your proxy
will be voted:
FOR
the election
of the two named director nominees as Class III directors (Proposal
1);
FOR
, on an
advisory basis,
57
the approval of the non-binding resolution on the compensation of
the Company’s Named Executive Officers as described in the
Proxy Statement under “Executive Compensation,”
(Proposal 2);
FOR
the approval
of an amendment to our Restated Certificate of Incorporation, as
amended, to declassify our board of directors and to provide for
the annual election of all directors beginning with the 2019 Annual
Meeting of
Shareholders
(Proposal
3); and
FOR
the
ratification of the appointment of Deloitte & Touche LLP as the
independent registered public accounting firm of the Company for
the 2018 fiscal year (Proposal 4).
The board is not aware of any matters that are expected to come
before the 2018 Annual Meeting other than those described in this
Proxy Statement. If any other matter should be presented at the
2018 Annual Meeting upon which a vote may be properly taken, shares
represented by all proxies received by the board will be voted with
respect thereto at the discretion of the persons named thereon as
proxies.
Record Date
Only holders of record of common stock at the close of business on
March 9, 2018 will be entitled to notice of and to vote at the 2018
Annual Meeting.
Quorum
A majority of the outstanding shares of common stock, present in
person or represented by proxy at the 2018 Annual Meeting, will
constitute a quorum for the transaction of business. Votes
withheld, abstentions and broker non-votes will be counted as
present or represented for purposes of determining the presence or
absence of a quorum for this meeting. In the absence of a quorum,
the 2018 Annual Meeting may be adjourned by a majority of the votes
entitled to be cast represented either in person or by proxy.
Required Vote
As a holder of our common stock, you are entitled to one vote per
share on any matter submitted to a vote of the shareholders.
Proposals 1, 2, 4 and 5 will be decided by the affirmative vote of
a majority of the votes present in person or represented by proxy.
A shareholder over the Internet, by telephone, or by mail can vote
“FOR,” “AGAINST” or “ABSTAIN”
on these proposals. Each of Proposals 1, 2, 4 and 5 will pass if
the total votes cast “for” a given proposal exceed the
total number of votes cast “against” and
“abstain” on such given proposal.
Approval of Proposal 3 requires the affirmative vote of 66⅔%
of the outstanding shares of our common stock.
THE BOARD UNANIMOUSLY RECOMMENDS VOTING
FOR THE ELECTION OF EACH OF THE BOARD’S NOMINEES ON PROPOSAL
1 AND
FOR PROPOSALS 2, 3 and 4.
Abstentions and Broker
Non-Votes
If you are a beneficial owner holding your shares in “street
name” and you do not provide voting instructions to your
bank, broker, trustee or other nominee holding shares of our common
stock for you, your shares of common stock will not be voted with
respect to any proposal for which the shareholder of record does
not have “discretionary” authority to vote. You are
deemed to beneficially own your shares in “street name”
if your shares are held in an account at a brokerage firm, bank,
broker-dealer, trust or other similar organization. If this is the
case, you will receive a separate voting instruction form with this
Proxy Statement from such organization. As the beneficial owner,
you have the right to direct your broker, bank, trustee, or nominee
how to vote your shares. If you hold your shares in street name and
do not provide voting instructions to your broker, bank, trustee or
nominee, your shares will not be voted on any proposals on which
such party does not have discretionary authority to vote (a
“broker non-vote”). Broker “non-votes” are
not counted in the tabulations of the votes cast or present at the
meeting and entitled to vote on any of the proposals and therefore
will have no effect on the outcome of the proposals.
We encourage you to provide voting instructions on the proxy card
or a provided voting instruction form to the bank, broker, trustee
or other nominee that holds your shares by carefully following the
instructions provided in their notice to you.
58
Revocability of
Proxy
A shareholder of record who has properly executed and delivered a
proxy may revoke such proxy at any time before the 2018 Annual
Meeting in any of the four following ways:
•
timely complete and return a new proxy card bearing a later
date;
•
vote on a later date by using the Internet or telephone;
•
deliver a written notice to our Secretary prior to the 2018 Annual
Meeting by any means, including facsimile, stating that your proxy
is revoked; or
•
attend the 2018 Annual Meeting and vote in person.
If your shares are held of record by a bank, broker, trustee or
other nominee and you desire to vote at the 2018 Annual Meeting,
you may change your vote by submitting new voting instructions to
your broker in accordance with such broker’s procedures.
Appraisal
Rights
Holders of shares of common stock do not have appraisal rights
under Delaware law in connection with this proxy solicitation.
Shareholder
List
A list of our shareholders as of the close of business on March 9,
2018 will be available for inspection during business hours for ten
days prior to the 2018 Annual Meeting at our principal executive
offices located at 14800 Landmark Boulevard, Suite 500, Dallas, TX
75254.
Communications with the
Board
Any shareholder or other interested party who desires to
communicate with the chair of our board of directors or any of the
other members of the board of directors may do so by writing to:
Board of Directors, c/o Stacey Rauch, Chair of the Board of
Directors, Fiesta Restaurant Group, Inc., 14800 Landmark Boulevard,
Suite 500, Dallas, Texas 75254 or through the Company’s
website,
www.frgi.com
,
under the Investor Relations link. Communications may be addressed
to the Chair of the board, an individual director, a board
committee, the non-management directors, or the full board.
Communications will then be distributed to the appropriate
directors unless the Chair determines that the information
submitted constitutes “spam,” offensive or
inappropriate material, and/or communications offering to buy or
sell products or services.
Other Matters
If you have any questions, or if you need additional copies of the
proxy materials, please contact
Maria C. Mayer, Senior
Vice President, General Counsel & Secretary by mail at 7255
Corporate Center Dr., Suite C, Miami Florida 33126 or by telephone
at (305) 670-7696.
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2018 ANNUAL
MEETING TO BE HELD ON MAY 2, 2018: THE PROXY STATEMENT FOR THE 2018
ANNUAL MEETING AND OUR 2017 ANNUAL REPORT ARE AVAILABLE FREE OF
CHARGE AT
WWW.PROXYVOTE.COM
.
59
OTHER
INFORMATION
Costs
of Solicitation
We are required by law to convene an annual meeting of shareholders
at which directors are elected. Because our shares are widely held,
it would be impractical for our shareholders to meet physically in
sufficient numbers to hold a meeting. Accordingly, the Company is
soliciting proxies from our shareholders. United States federal
securities laws require us to send you this Proxy Statement, and
any amendments and supplements thereto, and to specify the
information required to be contained in it. The Company will bear
the expenses of calling and holding the 2018 Annual Meeting and the
solicitation of proxies therefor. These costs will include, among
other items, the expense of preparing, assembling, printing and
mailing the proxy materials to shareholders of record and
beneficial owners, and reimbursements paid to brokerage firms,
banks and other fiduciaries for their reasonable out-of pocket
expenses for forwarding proxy materials to shareholders and
obtaining beneficial owner’s voting instructions. In addition
to soliciting proxies by mail, directors, officers and employees
may solicit proxies on behalf of the board, without additional
compensation, personally or by telephone. We may also solicit
proxies by email from shareholders who are our employees or who
previously requested to receive proxy materials electronically.
60
Other Matters
Shareholder proposals intended for inclusion in our proxy statement
relating to the Annual Meeting of Shareholders in 2019 must be
received by us no later than November 24, 2018. Any such proposal
must comply with Rule 14a-8 of Regulation 14A of the proxy rules of
the SEC. The proxy or proxies designated by us will have
discretionary authority to vote on any matter properly presented by
a shareholder for consideration at the 2018 Annual Meeting of
Shareholders but not submitted for inclusion in the proxy materials
for such meeting unless notice of the matter is received by us on
or prior to February 7, 2019 and certain other conditions of the
applicable rules of the SEC are satisfied. Under our Bylaws,
proposals of shareholders not intended for inclusion in the proxy
statement, but intended to be raised at our regularly scheduled
Annual Meeting of Shareholders to be held in 2019, including
nominations for election as directors of persons other than
nominees of the board of directors, must be received by us not more
than the 120 days prior to the 2019 Annual Meeting of Shareholders
and no later than the later of (i) the close of business on the
90
th
day prior to the 2019 Annual Meeting of Shareholders, and (ii) the
10
th
day following the day on which public announcement of the date of
the 2019 Annual Meeting of Shareholders is first made by us. Such
proposals must comply with the procedures outlined in our Bylaws,
which may be found on our website
www.frgi.com
or a copy of which is available upon request from the Secretary of
the Company, 14800 Landmark Boulevard, Suite 500, Dallas, Texas
75254.
We will bear the cost of preparing, assembling, and mailing the
form of proxy, this Proxy Statement and other material which may be
sent to shareholders in connection with this solicitation and all
costs associated with delivering our proxy materials to
shareholders. In addition to solicitation of proxies by use of the
Internet, telephone, and mail, our directors, officers, and
employees (who will receive no compensation therefore in addition
to their regular remuneration) may solicit the return of proxies by
telephone, telegram, or personal interview.
We will request banks, brokerage houses, and other custodians,
nominees, and fiduciaries to forward copies of the proxy materials
to their principals and to request instructions for voting the
proxies. We may reimburse such banks, brokerage houses, and other
custodians, nominees, and fiduciaries for their expenses in
connection therewith.
COPIES OF OUR ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED December 31, 2017,
TOGETHER WITH FINANCIAL STATEMENTS AND SCHEDULES, AS FILED WITH THE
SEC
ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO
MARIA C. MAYER, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY, FIESTA RESTAURANT GROUP, INC., 7255 Corporate center
dr., suite c, miami, florida 33126 OR telephonic REQUEST TO MS.
MAYER at (305) 670-7696
.
Our board of directors does not intend to present, and does not
have any reason to believe that others intend to present, any
matter of business at the 2018 Annual Meeting other than those set
forth in this proxy statement. However, if other matters properly
come before the 2018 Annual Meeting, it is the intention of the
persons named in the enclosed form of proxy to vote any proxies in
accordance with their judgment.
WE ENCOURAGE YOU TO
AUTHORIZE YOUR PROXY ELECTRONICALLY BY GOING TO THE WEBSITE
WWW.PROXYVOTE.COM
OR BY CALLING THE
TOLL-FREE NUMBER (FOR RESIDENTS OF THE UNITED STATES AND CANADA)
LISTED ON YOUR PROXY CARD. PLEASE HAVE YOUR NOTICE OR PROXY CARD IN
HAND WHEN GOING ONLINE OR CALLING. IF YOU AUTHORIZE YOUR PROXY
ELECTRONICALLY OVER THE INTERNET OR BY CALLING THE TOLL-FREE
NUMBER, YOU DO NOT NEED TO RETURN YOUR PROXY CARD. IF YOU CHOOSE TO
AUTHORIZE YOUR PROXY BY MAIL, SIMPLY MARK YOUR PROXY CARD, AND THEN
DATE, SIGN AND RETURN IT IN THE POSTAGE-PAID ENVELOPE
PROVIDED.
|
|
By order of the Board of Directors,
|
|
|
|
|
|
Maria C. Mayer
|
|
|
Senior Vice President, General Counsel &
Secretary
|
7255 Corporate Center Dr.
Suite C
Miami, Florida 33126
March 23, 2018
61
A
PPENDIX
a
Amendment to The Restated Certificate of Incorporation
Article NINTH
(A) The business and affairs of the Corporation shall be managed by
or under the direction of the Board which shall consist of not less
than three directors, the exact number of directors to be
determined from time to time by resolution adopted by an
affirmative vote of a majority of the Board. The directors shall be
elected at
each annual meeting of stockholders for a term expiring at the next
succeeding annual meeting of stockholders and each director shall
remain in office until his or her successor shall have been duly
elected and qualified, or until his or her prior death,
resignation, retirement, disqualification or removal from
office.
divided into three classes designated Class I,
Class II and Class III. Each class shall consist, as nearly as
possible, of one-third of the total number of directors
constituting the entire Board. Class I directors shall be
originally elected for a term expiring at the first annual meeting
of stockholders occurring after the Effective Time, Class II
directors shall be originally elected for a term expiring at the
second succeeding annual meeting of stockholders, and Class III
directors shall be originally elected for a term expiring at the
third succeeding annual meeting of stockholders. At each such
succeeding annual meeting of stockholders, successors to the class
of directors whose term expires at that annual meeting
The
directors
shall be elected by an affirmative vote of a
majority of the votes cast with respect to such nominee at any
meeting for the election of directors at which a quorum is present,
provided that if the number of nominees exceeds the number of
directors to be elected, the directors shall be elected by a
plurality of the votes of the shares represented in person or by
proxy at any such meeting and entitled to vote on the election of
directors. In an election of directors, a majority of the votes
cast means that the number of votes cast “for” a
nominee must exceed 50% of the votes cast with respect to such
nominee (excluding abstentions). If the number of directors is
changed,
any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional director of any class
elected to fill a newly created directorship resulting from an
increase in such class shall hold office for a term that shall
coincide with the remaining term of that class, but
in no case
shall a decrease in the number of directors remove or shorten the
term of any incumbent director.
A director shall hold office
until the annual meeting for the year in which his term expires and
until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification
or removal from office. Any newly
Subject
to the rights of holders of the Preferred Stock, any newly
created directorship on the Board that results from an increase in
the number of directors or any vacancies in the Board resulting
from death, resignation, retirement, disqualification or removal
(whether
or not for cause)
from office or any other cause shall be
filled only by a majority of the directors then in office, although
less than a quorum, or by a sole remaining director. Any director
so elected to fill a vacancy in the Board resulting from death,
resignation, disqualification or removal from office or any other
cause shall have the same remaining term as that of his
predecessor. Directors may be removed
only for
with or
without
cause
, and either
by
majority of the
entire Board or
the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 ⅔%)
a
majority
of the voting power of the outstanding Voting Stock
entitled
to vote thereon
, voting together as a single class.
(B)
Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall
have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors
at an annual or special meeting of stockholders, the election, term of office, removal, filling of vacancies and other features
of such directorships shall be governed by the terms of this Certificate of Incorporation as then in effect (including any Preferred
Stock Designation) applicable thereto
, and such directors so elected shall not be divided into classes pursuant to this
Article Ninth unless expressly provided by such terms.
62