<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
The Dwyer 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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
THE DWYER GROUP, INC.
1010 N. University Parks Drive
Waco, Texas 76707
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
To the Shareholders of
THE DWYER GROUP, INC.:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
The Dwyer Group, Inc., a Delaware corporation (the "Company") will be held at
the offices of the Company located at 1010 N. University Parks Drive, Waco,
Texas, on Tuesday, June 29, 1999, at 10:00 A.M., local time, for the following
purposes:
(a) To elect seven directors of the Company to serve until the
next annual meeting of the shareholders or until their
respective successors shall be elected and qualified;
(b) To ratify the appointment of BDO Seidman, LLP as independent
accountants for the Company and its wholly owned subsidiaries
for the year ended December 31, 1999; and
(c) To transact such other business as may properly come before
the meeting or any postponements or adjournments thereof.
Only shareholders of record at the close of business on June 1, 1999
are entitled to notice of, and to vote at, the meeting or any adjournment
thereof. A list of shareholders entitled to vote at the meeting will be
available at the meeting for examination by any shareholder.
It is desirable that as large a proportion as possible of the
shareholders' interests be represented at the meeting. WHETHER OR NOT YOU PLAN
TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED
PROXY IN THE ENVELOPE PROVIDED SO THAT YOUR STOCK WILL BE REPRESENTED. The
giving of such proxy will not affect your right to vote in person, should you
later decide to attend the meeting. You may revoke the proxy at any time before
the proxy is exercised by delivering written notice of revocation to the
Secretary of the Company, by delivering a subsequently dated proxy or by
attending the annual meeting of shareholders and withdrawing the proxy. Please
date and sign the enclosed proxy and return it promptly in the enclosed
envelope.
By Order of the Board of Directors
/s/ DEBORAH WRIGHT-HOOD
DEBORAH WRIGHT-HOOD
Secretary
WACO, TEXAS
June 1, 1999
<PAGE> 3
THE DWYER GROUP, INC.
1010 N. University Parks Drive
Waco, Texas 76707
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
This Proxy Statement is furnished to shareholders of The Dwyer Group,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
annual meeting of shareholders to be held on Tuesday, June 29, 1999. Proxies in
the form enclosed, if properly executed, returned to the Company prior to the
meeting, and not revoked, will be voted at the meeting. The proxy may be revoked
at any time before it is exercised by giving written notice to the Secretary of
the Company. This Proxy Statement and the enclosed proxy card will first be sent
to the shareholders on June 9, 1999. The enclosed 1998 Annual Report of the
Company does not form any part of the proxy solicitation material.
OUTSTANDING COMMON STOCK
The record date for shareholders entitled to vote at the annual meeting
is June 1, 1999. At the close of business on that date, the Company had issued
and outstanding and entitled to vote at the meeting 6,877,210 shares of Common
Stock, $0.10 par value ("Common Stock"), and 351,375 shares of Common Stock were
held in the Company's treasury.
ACTION TO BE TAKEN AT MEETING
The accompanying proxy, if signed and returned, unless the shareholder
otherwise specifies in the proxy, will be voted (i) FOR the election as
directors of the Company of the seven persons named under "Election of
Directors"; (ii) FOR the ratification of the appointment of BDO Seidman, LLP as
the Company's independent accountants for the fiscal year ending December 31,
1999; and (iii) at the discretion of the proxy holder, on any other matter or
business that may properly come before the meeting or any postponements or any
adjournments thereof. Where shareholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If any other matter or
business is brought before the meeting, the proxy holder may vote the proxies in
her discretion. The directors do not know of any such other matter or business.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the annual meeting. In deciding all questions, a holder of Common Stock is
entitled to one vote, in person or by proxy, for each share held in their name
at the close of business on the record date. Abstentions will be included in
vote totals and, as such, will have the same effect on each proposal (other than
the election of directors) as a negative vote. Broker non-votes, if any, will
not be included in vote totals and, as such, will have no effect on any
proposal.
To be elected a director, each nominee must receive a plurality of all
of the votes cast at the meeting for the election of directors. Should any
nominee become unable or unwilling to accept nomination or election, the proxy
holders may vote the proxies for election of any other person the Board of
Directors may recommend. Each nominee has expressed their intention to serve the
entire term for which election is sought.
1
<PAGE> 4
A favorable vote by the holders of a majority of the outstanding shares
of Common Stock, present in person or by proxy and entitled to vote thereon at
the annual meeting, is required to ratify and approve the appointment of BDO
Seidman, LLP as independent accountants for the Company for the year ended
December 31, 1999.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of December 31, 1998, certain
information regarding the beneficial ownership of Common Stock by (i) each of
named executive officers, (ii) each person known by the Company to own
beneficially more than 5% of the outstanding Common Stock, (iii) each director
of the Company and (iv) all directors and officers as a group:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT (2)
- ------------------------------------ ---------------- -----------
<S> <C> <C>
Dwyer Investments, Ltd. (4) (5) 3,900,736 55.0%
Donald J. Dwyer Family Trust (4) 110,683 1.6%
Theresa Dwyer (3) (6) 3,902,036 55.8%
Donald J. Dwyer, Jr. (3) (7) (8) (9) 672,920 9.6%
Dina Dwyer-Owens (3) (8) (10) 558,773 8.0%
Robert Tunmire (3) (8) (11) 675,692 9.5%
Deborah Wright-Hood (3) (8) (12) 559,042 8.0%
Thomas Buckley (3) (13) 12,841 *
John Hayes (14) 22,534 *
James Sirbasku (15) 17,000 *
Donald E. Latin (16) 17,000 *
Michael Bidwell (3) (17) 46,745 *
Darren Dwyer (3) (8) 524,973 7.5%
Douglas Dwyer (3) (8) 538,305 7.7%
Donna Dwyer-Van Zandt (3) (8) 551,637 7.9%
Renaissance Capital Growth & Income Fund III (18) 675,000 9.6%
All officers and directors as a group (nine persons) (5) (6) (19) 4,227,263 58.7%
</TABLE>
- ---------------------
*Less than 1%.
(1) Each beneficial owner's percentage ownership is determined by including
shares over which the person has voting power or dispositive power and
by assuming that options that are held by such person (but not those
held by any other person) and which are exercisable, have been
exercised. Except as noted, the Company believes that all persons named
in the table have voting and dispositive power with respect to all
shares of Common Stock beneficially owned by them.
(2) Based on a total of 6,999,360 shares of Common Stock outstanding prior
to the exercise of any outstanding options or warrants.
2
<PAGE> 5
(3) The principal business address of each of these individuals is c/o the
Company, 1010 N. University Parks Drive, Waco, Texas 76707.
(4) Mr. Dwyer, former Chairman of the Board, President and CEO of the
Company, died December 4, 1994. On April 10, 1997, his Estate
distributed 4,077,501 shares of Common Stock beneficially owned by the
Estate to Ms. Theresa Dwyer with the remaining 115,423 shares
distributed to the Donald J. Dwyer Family Trust (the "Trust), of which
Ms. Theresa Dwyer and Mr. Donald Dwyer, Jr. are Co-Trustees. On
September 4, 1997, Ms. Theresa Dwyer contributed 3,899,182 beneficially
owned shares, and the Trust contributed 115,092 beneficially owned
shares, to Dwyer Investments, Ltd. (the "Partnership") in exchange for
equity interests. On April 10, 1998, Ms. Dwyer sold 13.3% limited
partnership interests in the Partnership to Mr. Donald J. Dwyer, Jr.,
Ms. Donna Dwyer-Van Zandt, Ms. Deborah Wright-Hood, Ms. Dina
Dwyer-Owens, Mr. Darren Dwyer, Mr. Douglas Dwyer, as trustees of
various generation-skipping trusts, and to Mr. Robert Tunmire,
individually, each acquiring a 13.3% limited partnership interest. Ms.
Dwyer, as managing partner, has sole dispositive power over the stock
owned by the Partnership. The principal address for the Partnership and
the Trust is c/o the Company, 1010 N. University Parks Drive, Waco,
Texas, 76707.
(5) The number of shares beneficially owned includes 90,000 Option Shares
(held by the Partnership), currently exercisable pursuant to a Stock
Option Agreement dated April 28, 1989.
(6) Includes 3,900,736 shares of Common Stock of the Partnership over which
Ms. Theresa Dwyer has sole dispositive power as Managing Partner.
(7) Includes 110,683 shares of Common Stock of the Trust over which Ms.
Theresa Dwyer and Donald J. Dwyer, Jr., have shared voting power as
Co-Trustees.
(8) Includes 524,973 shares of Common Stock of the Partnership over which
the individual has full voting power, but no dispositive power.
(9) Includes 3,000 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(10) Includes 4,500 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(11) Includes 130,000 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(12) Includes 5,000 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(13) Includes 12,841 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(14) Includes 22,284 shares of Common Stock now exercisable or exercisable
within 60 days pursuant to options granted Mr. Hayes. The principal
business address of Mr. Hayes is 6612 Dupper Court, Dallas, Texas
75252.
(15) Includes 12,000 shares of Common stock now exercisable or exercisable
within 60 days pursuant to options granted Mr. Sirbasku. The principal
business address of Mr. Sirbasku is 5205 Lakeshore Drive, Waco, TX
76710.
(16) Includes 12,000 shares of Common Stock now exercisable or exercisable
within 60 days pursuant to options granted Mr. Latin. The principal
business address of Mr. Latin is 600 N. Pearl Street, Suite 2250,
Dallas, TX 75201.
3
<PAGE> 6
(17) Includes 45,000 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
(18) The principal business address of Renaissance Capital Growth & Income
Fund III, Inc. is c/o Renaissance Capital Group, Inc., 8080 N. Central
Expressway, Suite 210, Dallas, TX 75206.
(19) Includes 201,725 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan.
ELECTION OF DIRECTORS
Seven directors are to be elected at the annual meeting. Directors are
elected to serve until the next annual meeting of shareholders or until their
successors are elected and qualified. Shareholders are not permitted to
cumulatively vote their shares in connection with the election of directors.
NOMINEES FOR DIRECTOR
Set forth below is certain information concerning the persons nominated
for election as directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES.
Theresa Dwyer, age 64, has been Chairperson of the Board of Directors
since July of 1995, and Director of the Company since December of 1994. She has
been the majority stockholder and President of the following privately held
companies: Worldwide Cabinet Systems, Inc.; Worldwide Refinishing Systems, Inc.;
Worldwide Whirlpool Systems, Inc.; Worldwide Franchise Consultants, Ltd.; Aames
Auto Leasing, Inc.; and Sun Screen of Austin, Inc. since December of 1994. She
also serves as Vice President of Worldwide Supply, Inc., and Secretary of Dwyer
Real Estate and Development, Inc. Mrs. Dwyer also serves as Managing Partner of
Dwyer Investments, Ltd. Prior to December of 1994 Mrs. Dwyer was self-employed.
Dina Dwyer-Owens, age 36, has served as President and Chief Executive
Officer since January 1, 1999 and has been a Director of the Company since 1989.
Prior to that time, she served as Vice President of Operations since September
of 1995 after serving as Co-Chairperson of the Board of Directors from December
of 1994 to July of 1995. Ms. Dwyer-Owens also served as Secretary of the Company
from 1989 through December of 1998. Ms. Dwyer-Owens has been employed by Dwyer
Real Estate and Development, Inc., a real estate concern located in Waco, Texas,
since June of 1981, most recently as President. She also serves as Director to
Rainbow, Mr. Rooter and National Accounts and is President of National Accounts,
and Aire Serv. Ms. Dwyer-Owens has approximately 18 years experience in the
franchising industry.
Robert Tunmire, age 40, has been Executive Vice President since January
1, 1999. Prior to that time, he served as President and Chief Executive Officer
of the Company since December of 1994 after serving as Executive Vice President
since June of 1993. Mr. Tunmire served as President of the Company, then
operating as Mr. Rooter Corporation, from January of 1992 through May of 1993.
Mr. Tunmire also currently serves as President of Glass Doctor. From December of
1980 until May of 1989, Mr. Tunmire was employed by Rainbow, most recently as
Executive Vice President of Franchise Counseling. Mr. Tunmire has approximately
23 years experience in the franchising industry.
Donald J. Dwyer, Jr., age 34, has served as a Director since May of
1989. Mr. Dwyer is currently, and has been since 1994, employed by the Company
as Director of International Operations. He previously served as Director of
International Operations for Rainbow from 1987 to 1994. Mr. Dwyer has
approximately 15 years experience in the franchising industry.
4
<PAGE> 7
James L. Sirbasku, age 59, has served as a Director since July of 1994.
He has served as Chairman and Chief Executive Officer of Profiles International,
Inc., an international company providing pre-employment evaluation systems,
since March of 1991. From 1980 to 1991, Mr. Sirbasku served as President of SMI
International, Inc., a company specializing in franchising businesses.
John P. Hayes, age 49, has served as a Director since July of 1994. He
founded and served, from January of 1987 to 1995, as President of The Hayes
Group, Inc., an international marketing and promotion company specializing in
franchised businesses. Since January of 1996, Mr. Hayes has served as a
consultant to franchisors. Mr. Hayes has approximately 20 years experience in
the franchising industry.
Donald E. Latin, age 68, has served as a Director since July of 1995.
He founded and, since 1986, has served as President of D. Latin and Company,
Inc., an investment banking company which provides such corporate finance
services as: the raising of capital, mergers and acquisitions, valuation of
businesses, fairness opinions, and other financial advisory services.
Dina Dwyer-Owens and Donald J. Dwyer, Jr. are the children of Theresa
Dwyer and the late founder, Donald J. Dwyer.
MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME POSITION
- ---- ---------
<S> <C>
Dina Dwyer-Owens (1)......................President, Chief Executive Officer and Director
Robert Tunmire (1)........................Executive Vice President and Director
Thomas J. Buckley.........................Vice President, Chief Financial Officer and Treasurer
Deborah Wright-Hood.......................Vice President of Administration and Secretary
Michael Bidwell...........................President of Rainbow, Mr. Rooter, and Mr. Appliance
</TABLE>
(1) Information concerning the business experience of Mr. Tunmire and
Ms. Dwyer-Owens is provided under the section entitled "Election of Directors".
Thomas J. Buckley, age 52, has served as Treasurer and Chief Financial
Officer since August of 1997, as Vice President since June of 1998, and as
President of Mr. Electric since May of 1999. Prior to joining the Company, he
served as Chief Financial Officer of Watermarc Food Management Co. ("Watermarc")
since 1994. Mr. Buckley resigned as an officer of Watermarc effective July 1,
1997. In January of 1999, Watermarc filed for bankruptcy protection under
Chapter XI of the U.S. Bankruptcy Code. From 1990 to 1994, Mr. Buckley served as
Vice President of Finance and Franchising for Western Sizzlin' Restaurants. Mr.
Buckley has also owned and operated his own franchising business as a regional
franchisor of SpeeDee Oil Change & Tune-Up, and has 17 years overall experience
in the franchising industry.
Michael Bidwell, age 40, has been President of Rainbow since July of
1995 and President of Mr. Rooter and Mr. Appliance since August of 1998. Mr.
Bidwell was a Rainbow franchisee in Tucson, Arizona from April of 1984 to June
of 1995, and a Mr. Rooter franchisee from August of 1992 to June of 1995. From
1986 to June of 1995, Mr. Bidwell served as President of Ramsoo, Inc., an
Arizona corporation, which operated the Rainbow and Mr. Rooter franchises in
Tucson, Arizona. From November of 1987 until July of 1995, Mr. Bidwell was also
a franchisee and regional director for Worldwide Refinishing Systems, Inc., a
related party to the Company. Mr. Bidwell also serves as a Director of National
Accounts.
5
<PAGE> 8
Deborah Wright-Hood, age 38, has served as Secretary of the Company
since December of 1998 and as Vice President of Administration since June of
1998. Prior to that time, she was employed by the Company in various capacities
since 1985, including Director of Administration since 1994. Ms. Wright-Hood has
also been President of Worldwide Supply, Inc. since 1985. Ms. Wright-Hood is the
daughter of Theresa Dwyer and the late founder, Donald J. Dwyer.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information sets forth compensation earned by the
Company's Chief Executive Officer and all other of its executive officers whose
annual compensation exceeded $100,000 in 1998, for services rendered for the
Company and its Subsidiaries during the fiscal years indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
-------------------------------------------------- COMPENSATION
NAME AND SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($) OPTIONS
------------------ ---- ----------- --------- -------- ---------------------
<S> <C> <C> <C> <C> <C>
Robert Tunmire, 1998 $218,616 $ 20,000 -- --
President & CEO 1997 205,500(1) -- -- --
1996 215,818(1) -- -- --
Donald J. Dwyer, Jr., 1998 $108,983(1) $ -- -- --
Director of International 1997 63,000(1) 5,398 -- --
Operations 1996 53,628(1) -- -- --
Michael Bidwell, 1998 $127,083 $ 31,286 -- --
President of Rainbow, Mr. 1997 121,626 13,170 -- 50,000
Rooter & Mr. Appliance 1996 118,360 44,360 -- --
Thomas J. Buckley (2) 1998 $103,846 $ 10,000 -- 15,000
Vice President & Chief 1997 38,462 -- -- 64,205
Financial Officer
</TABLE>
- -----------------------------------
(1) Includes salary and any commissions from franchise sales or royalties.
(2) Mr. Buckley began employment in August, 1997.
THIS SECTION LEFT INTENTIONALLY BLANK.
6
<PAGE> 9
The following table sets forth information regarding options granted to the
named executive officers during the fiscal year ended December 31, 1998:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE EXPIRATION
NAME OPTIONS GRANTED IN FISCAL YEAR PRICE (1) DATE
---- --------------- ------------------ --------- ----------
<S> <C> <C> <C> <C>
Robert Tunmire -- -- -- --
Donald J. Dwyer, Jr. -- -- -- --
Thomas J. Buckley 15,000 11.6% $ 1.94 8/25/08
Michael Bidwell -- -- -- --
</TABLE>
- -------------------------
(1) Reflects the per share exercise price, which is equal to or greater
than the closing market price of the underlying security on the date of
grant.
The following table shows option exercises during the year ended December 31,
1998 and the value of unexercised options at December 31, 1998 for the named
executive officers who exercised options during 1998 or who had unexercised
options at December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED IN-
OPTIONS AT FISCAL THE-MONEY OPTIONS
YEAR END AT FISCAL YEAR END
SHARES ACQUIRED (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE) UNEXERCISABLE) (1)
---- --------------- -------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Robert Tunmire -- -- 130,100 / -0- $10,837 / -0-
Donald J. Dwyer, Jr. -- -- 2,000/ 3,000 $250 / $405
Michael Bidwell -- -- 45,000 / 30,000 $600 / $2,400
Thomas J. Buckley -- -- 12,841 / 56,364 $1,541 / $8,264
</TABLE>
- -----------------------------
(1) The closing price of the Common Stock on December 31, 1998 was $2.00
per share.
COMPENSATION OF DIRECTORS
Directors are not compensated for their attendance at meetings, but the
Company reimburses the non-employee directors for expenses incurred by them in
attending the meetings. Non-employee directors are eligible to receive stock
options.
7
<PAGE> 10
RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon recommendation of the Audit
Committee, has appointed the firm of BDO Seidman, LLP to serve as independent
accountants of the Company for the year ending December 31, 1999, subject to
ratification of this appointment by the shareholders of the Company. BDO
Seidman, LLP is considered by the Board of Directors of the Company to be well
qualified.
One or more representatives of BDO Seidman, LLP (a) will be present at
the Annual Meeting of Stockholders, (b) have an opportunity to make a statement
if they desire to do so, and (c) be available to respond to appropriate
questions.
Ratification of the appointment of the independent accountants requires
the affirmative vote of a majority of the votes cast by the holders of the
shares of Common Stock of the Company voting in person or by proxy at the Annual
Meeting of Stockholders. If the stockholders do not ratify the appointment of
BDO Seidman, LLP, the Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY, AS
PROPOSED ABOVE.
CERTAIN TRANSACTIONS
The Company engages in a number of transactions with the Chairperson of
the Board and majority stockholder, Ms. Theresa Dwyer ("Ms. Dwyer"), and with
entities controlled by Ms. Dwyer ("Affiliates").
The Company currently leases its principal executive and administrative
facilities from an Affiliate under a lease expiring December 31, 2000, requiring
a monthly lease payment of approximately $31,000. In addition to rent, the
Company pays for repairs and maintenance, promotional materials and other
services from Affiliates. The Company expensed approximately $592,000 for such
rent and services in 1998 and $757,000 in 1997.
The Company recognized income from Affiliates for accounting, legal and
administrative services, interest income, product sales, commissions and
management fees totaling approximately $630,535 in 1998 and $779,000 in 1997.
In addition, from time-to-time, the Company and its Affiliates have
made advances to each other, which generally have not had specific repayment
terms and have been reflected in the Company's financial statements as accounts
receivable or payable from related parties. These advances typically result from
the payment of an invoice by one entity for services or items performed or
delivered on behalf of the Company and one or more of its Affiliates. The
company that pays the invoice is reimbursed by the other companies for the
appropriate amount based on a pro rata allocation of the services provided to
each company.
Dina Dwyer-Owens, Deborah Wright-Hood, Donald J. Dwyer, Jr., Darren
Dwyer, Douglas Dwyer, and Donna Dwyer-Van Zandt are the children of Theresa
Dwyer and the late founder, Donald J. Dwyer, Sr. ("Mr. Dwyer").
In January 1998, the Company agreed to purchase Rainbow International
Carpet Dyeing and Cleaning, Ltd., ("Rainbow Canada") from Ms. Dwyer, for a
purchase price of $250,000. Rainbow Canada owns the Rainbow franchise rights for
Canada and currently has 20 franchisees generating royalties of approximately
$55,000 per year. The Company believes that the purchase price approximates the
price that would have been paid to an unrelated third party in a similar
transaction.
8
<PAGE> 11
In 1993, the Company, Rainbow, and Mr. Dwyer entered into a
reorganization agreement (the "Reorganization Agreement") pursuant to which Mr.
Dwyer was issued 4,035,555 shares of the Company's common stock in exchange for
all of the outstanding stock of Rainbow and GBS (the "Exchange"), and GBS and
Rainbow became wholly owned subsidiaries of the Company. Of the shares issued,
340,300 shares were placed in escrow (the "Escrow Shares") until such time as
GBS met certain earnings requirements. However the material definitive terms of
the escrow were never resolved.
Ms. Dwyer, and Donald J. Dwyer, Jr., were appointed and qualified as
the personal representatives of Mr. Dwyer's Estate (the "Estate") and are now
serving as co-trustees of the Dwyer Family Trust (the "Trust"). In lieu of the
escrow arrangement contemplated by the Reorganization Agreement, and in order to
more accurately represent the intent of the parties, the Company and personal
representatives of Mr. Dwyer, the Estate and the Trust, entered into an
Agreement relating to the Escrow Shares, effective as of June 1, 1993 (the
"Agreement"). The Agreement provides for the cancellation of the Escrow Shares
and such shares have been returned to the authorized but unissued shares of the
Company's Common Stock as of June 1, 1993. Pursuant to the Agreement, 340,300
new shares of Common Stock (the "Contingent Shares") were reserved by the
Company's Board of Directors out of the Company's authorized but unissued Common
Stock and could have been issued to the successors and assigns of Mr. Dwyer if
certain earnings targets were achieved by GBS or if GBS was sold to a third
party in certain transactions as provided in the Agreement.
In July of 1998, the Company sold GBS. GBS had not achieved the
required earnings targets and the gain on the sale did not reach the required
threshold amount. Therefore, the Contingent Shares were not issued and are no
longer reserved out of the Company's authorized but unissued Common Stock.
The Company paid Don Latin, an independent director, $31,400 and
$30,000 for services in 1998 and 1997, respectively. In addition, the Company
uses the consulting services of another independent director, John Hayes,
regarding public relations, marketing and special projects for the Company. The
Company paid approximately $110,000 for Mr. Hayes' services in both 1998 and
1997.
At December 31, 1998 and 1997, the Company had accounts, interest and
notes receivable from related parties totaling approximately $2,037,000 and
$2,255,000, respectively, the majority of which was due from Affiliates. Ms.
Dwyer has guaranteed payment of all amounts due from Affiliates.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the officers and directors of the Company and persons who beneficially
own more than ten percent of the Company's Common Stock to file reports of
securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors, and greater than 10
percent beneficial owners also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it
with respect to the fiscal year ended December 31, 1998, or written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to its directors, officers and persons who own
more than ten percent of a registered class of the Company's equity securities
have been complied with, except that during fiscal 1998 the following officers
and directors were late in filing the number of reports indicated as required by
Section 16(a): Messrs. Tunmire (1), Donald Dwyer, Jr. (1), Buckley (1), Latin
(1), Hayes (1), Sirbasku (1), Bidwell (2), Ms. Dwyer (1), Ms. Wright-Hood (1),
and Ms. Dwyer-Owens (2). No other officer, director, or ten percent shareholder
was late in filing his or its reports pursuant to Section 16(a).
9
<PAGE> 12
BOARD OF DIRECTORS MATTERS
The Board of Directors met 11 times during 1998 and additionally took
action 56 times by means of written consent. Each director attended all of the
meetings with the exception of Mr. Hayes, who was not present at two of the
meetings; Mr. Sirbasku, who was not present at two of the meetings; Donald
Dwyer, Jr., who not present at one of the meetings; and, Ms. Dwyer, who was not
present at one of the meetings. Non-employee directors are reimbursed for
expenses incurred for their attendance at Board of Directors meetings and are
eligible to receive stock options.
The Audit Committee, comprised of Ms. Dwyer-Owens and Messrs. Hayes,
Latin and Sirbasku, met twice during 1998. All members attended.
SHAREHOLDERS' PROPOSAL
Any proposals that shareholders of the Company desire to have presented
at the 2000 annual meeting of shareholders must be received by the Company at
its principal executive offices no later than March 31, 2000.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy and the material used in solicitation thereof will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone, and telegram by directors and regular officers
and employees of the Company. Arrangements may also be made with brokerage
houses and other custodians, nominees, and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
By Order of the Board of Directors
/s/ DEBORAH WRIGHT-HOOD
DEBORAH WRIGHT-HOOD
Secretary
Waco, Texas
June 1, 1999
10
<PAGE> 13
THE DWYER GROUP, INC.
The undersigned hereby (i) acknowledges receipt of the Notice dated June 1,
1999, of the Annual Meeting of Shareholders of The Dwyer Group, Inc. (the
"Company") to be held at the Company's offices located at 1010 N. University
Parks Drive, Waco, Texas on Tuesday, June 29, 1999, at 10:00 A.M., local time,
and the Proxy Statement in connection therewith; and (ii) appoints Deborah
Wright-Hood his proxy with full power of substitution, for and in the name,
place, and stead of the undersigned, to vote upon and act with respect to all of
the shares of Common Stock of the Company standing in the name of the
undersigned or with respect to which the undersigned is entitled to vote and
act, at the meeting and at any adjournment thereof, and the undersigned directs
that his proxy be voted as follows:
(a) Proposal to elect the seven directors to serve until the next annual
meeting of the shareholders or until their respective successors are
elected and qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary) all nominees listed below
Directors: Donald J. Dwyer, Jr., Theresa Dwyer, Dina Dwyer-Owens, John P. Hayes,
Donald E. Latin, James L. Sirbasku, and Robert Tunmire
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
- --------------------------------------------------------------------------------
(b) Proposal to ratify the appointment of BDO Seidman, LLP as independent
accountants for the Company and its wholly owned subsidiaries for the
year ended December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) In the discretion of the proxies on any other matter that may properly
come before the meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL THE NAMED NOMINEES FOR DIRECTOR AND FOR THE MATTERS
SPECIFICALLY REFERRED TO ABOVE.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such Common Stock and hereby ratifies and confirms
that all proxies, their substitutes, or any of them may lawfully do by virtue
hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Dated:
-----------------------------------
Signed:
----------------------------------
Signed:
----------------------------------
Please date this Proxy and sign your name
exactly as it appears hereon. Where there
is more than one owner, each must sign.
When signing as an attorney,
administrator, executor, guardian or
trustee, please add your title as such.
If executed by a corporation, the Proxy
should be signed by a duly authorized
officer.
Please date, sign and mail this proxy
card in the enclosed envelope. No postage
is required.
