<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
THE WESTWOOD 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
Notes:
<PAGE>
PRELIMINARY PROXY STATEMENT FOR INFORMATION OF SECURITIES AND EXCHANGE
COMMISSION
THE WESTWOOD GROUP, INC.
190 VETERANS OF FOREIGN WARS PARKWAY REVERE, MASSACHUSETTS 02151
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 19, 1995
----------------
To the Stockholders of The Westwood Group, Inc.
Notice Is Hereby Given that the Annual Meeting of the Stockholders of The
Westwood Group, Inc. (the "Company") will be held at the Clubhouse Dining
Room, Wonderland Greyhound Park, 190 Veterans of Foreign Wars Parkway, Revere,
Massachusetts, on October 19, 1995 at 10:00 a.m., local time (the "Annual
Meeting"), for the following purposes, all of which are more completely set
forth in the accompanying proxy statement:
1. To elect three (3) Directors by vote of holders of Common Stock and
Class B Common Stock, voting together, two (2) such Directors to serve for
a three (3) year term, one (1) such Director to serve for a one (1) year
term.
2. To elect two (2) Directors by vote of holders of Common Stock, voting
as a separate class, such Directors to serve for a two (2) year term.
3. To approve an amendment to the Company's Certificate of Incorporation
to reduce the number of authorized shares of Common Stock from 10,000,000
to 4,000,000.
4. To ratify the selection of independent auditors for the year ending
December 31, 1995.
5. To transact any other business that may properly come before the
Annual Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on September 13, 1995
as the record date for determination of stockholders entitled to vote at the
Annual Meeting. The stock transfer books of the Company will not be closed.
Whether or not you intend to be present at the Annual Meeting, please fill
out, date and sign the enclosed proxy and return it promptly in the enclosed
envelope.
By Order of the Board of Directors
Richard P. Dalton
President
Approximate date of mailing to Stockholders:
September 15, 1995
IMPORTANT
You are earnestly requested to fill out, date, sign and mail promptly the
enclosed proxy so that your shares may be voted in accordance with your wishes
and in order that the presence of a quorum may be assured. A postage-paid
envelope is provided for mailing in the United States. You are entitled to
revoke your proxy at any time before it is exercised by written notice to the
Secretary of the Company, by submission of another proxy bearing a later date
or by voting in person at the meeting.
<PAGE>
THE WESTWOOD GROUP, INC.
190 VETERANS OF FOREIGN WARS PARKWAY
REVERE, MASSACHUSETTS 02151
----------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS OCTOBER 19, 1995
APPROXIMATE DATE OF MAILING TO STOCKHOLDERS:
SEPTEMBER 15, 1995
----------------
This Proxy Statement is furnished to the stockholders of The Westwood Group,
Inc. (the "Company") in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at the Clubhouse Dining Room,
Wonderland Greyhound Park, 190 Veterans of Foreign Wars Parkway, Revere,
Massachusetts on October 19, 1995 at 10:00 a.m., local time, and at all
adjournments thereof, for the purposes set forth in the attached Notice of
Annual Meeting. Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is exercised, by written notice
to the Secretary of the Company, by submission of another proxy bearing a
later date or by voting in person at the Annual Meeting. Such revocation will
not affect any votes taken prior thereto. The mere presence at the Annual
Meeting of the person appointing a proxy does not revoke the appointment.
The holders of a majority in interest of all Common Stock and Class B Common
Stock issued, outstanding and entitled to vote are required to be present in
person or represented by proxy at the Annual Meeting in order to constitute a
quorum for the transaction of business. Abstentions and "non-votes" are
counted as present in determining whether the quorum requirement is satisfied.
Abstentions and "non-votes" have the same effect as votes against proposals
presented to stockholders other than election of directors.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on September 13, 1995
are entitled to vote at the Annual Meeting. As of September 13, 1995, the
Company had outstanding and entitled to vote 343,210 shares of Common Stock,
par value $.01 per share ("Common Stock"), and 912,015 shares of Class B
Common Stock, par value $.01 per share ("Class B Common Stock"). Each
outstanding share of Common Stock entitles the record holder to one vote and
each outstanding share of Class B Common Stock entitles the record holder to
ten votes.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation (the "Certificate") provides that
the Board of Directors shall be divided into three classes, as nearly equal in
number as possible. The Certificate further provides that, at each annual
meeting of stockholders, one class of directors shall be elected to serve a
term of office to expire at the third succeeding annual meeting of
stockholders. Due to the expiration of the terms of the current directors of
the Company, at the Annual Meeting, two (2) directors are to be elected in the
class serving until the third succeeding annual meeting following election and
until their successors are elected and qualified, two (2) directors are to be
elected in the class serving until the second succeeding annual meeting
following their election and until their successors are elected and qualified
and one (1) director is to be elected in the class serving until the next
annual meeting following his election and until his successor is elected and
qualified.
The Certificate also provides that, at each annual meeting of stockholders,
the holders of Common Stock, voting as a separate class, are entitled to elect
as directors that number of persons which, when added to the
<PAGE>
number of directors previously elected by the holders of Common Stock voting
as a separate class who are to serve after such meeting, would constitute 25%
of the total number of directors to serve after such meeting, provided that at
any such annual meeting the holders of Common Stock are entitled to elect at
least one person as a director but not more than one-half of the members of
the Board of Directors to be elected at such annual meeting. Holders of Common
Stock and holders of Class B Common Stock, voting together as a single class,
are entitled to elect the remaining directors, with each share of Common Stock
entitled to one (1) vote and each share of Class B Common Stock entitled to
ten (10) votes. Directors are elected by a plurality of the votes cast by the
holders of Common Stock and Class B Common Stock entitled to vote.
The Board of Directors has adopted a resolution to fix the number of
directors constituting the Board at five effective as of the Annual Meeting in
accordance with the by-laws of the Company and has nominated (i) Richard P.
Dalton and Jon M. Baker to serve as the directors elected by the holders of
Common Stock, voting as a separate class, for a term of two (2) years, (ii) A.
Paul Sarkis to serve as the director elected by the holders of Common Stock
and Class B Common Stock, voting together, for a term of one (1) year, and
(iii) Charles F. Sarkis and Paul J. DiMare as the directors elected by the
holders of Common Stock and Class B Common Stock, voting together, for a term
of three (3) years. It is the intention of the persons authorized by the
enclosed proxy, unless authority to do so is withheld, to vote to elect
Messrs. Dalton and Baker as directors serving until the second succeeding
annual meeting following their election and until their successors are elected
and qualified, to elect Mr. Paul Sarkis as director serving until the next
annual meeting following his election and until his successor is duly elected
and qualified and to elect Messrs. Charles Sarkis and DiMare as directors
serving until the third succeeding annual meeting following their election and
until their successors are duly elected and qualified. All of the nominees are
current directors of the Company except for Mr. A. Paul Sarkis. Two current
directors of the Company, Messrs. Michael S. Fawcett and Joseph J. O'Donnell,
are not nominees for election at the Annual Meeting.
In the unforeseen event that any of the nominees should become unable or
unwilling to serve as a director, the persons authorized by the enclosed proxy
intend to vote for such substitute nominee as the Board of Directors may
designate, or in the absence of such designation, in accordance with the best
judgment of the person or persons acting under the proxy.
The following table sets forth certain information concerning the nominees
for election at the Annual Meeting. Unless otherwise indicated, titles or
positions of an individual in the table refer to the individual's title or
position with the Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE PRINCIPAL OCCUPATION
------------ -------- --------------------
<C> <C> <S>
NOMINEES
Jon M. Baker (53) 1987 Chairman and Chief Executive Officer of The
Baker Companies (implementation and
administration of executive benefit
programs) since January 1990. Prior to that
time, principal in the firm of Baker &
Lander Insurance Agency, Inc.
(implementation and administration of
executive benefit programs) for more than
five years.
Richard P. Dalton (48) 1987 President and Chief Executive Officer since
1993; Executive Vice President from 1988 to
1992; Chief Operating Officer from 1989 to
1992; Chief Financial Officer from 1988 to
1989; Vice President from 1984 to 1987;
Treasurer from 1974 to 1989. Director of
Back Bay Restaurant Group, Inc.
Paul J. DiMare (53) 1982 President of Paul J. DiMare Management Corp.
(agricultural management and marketing) and
DiMare Homestead, Inc. (agricultural
processing and packaging) for more than the
past five years. Director of First National
Bank, Homestead, Florida.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE PRINCIPAL OCCUPATION
------------ -------- --------------------
<C> <C> <S>
A. Paul Sarkis (27) Nominee Executive Vice President since August, 1995;
Corporate Director of Development from 1993
to 1995; Financial Analyst from 1991 to
1993.
Charles F. Sarkis (55) 1978 Chairman of the Board since 1978; Chief
Executive Officer from 1978 to 1992;
President from 1984 to 1992. Chairman of
the Board, President and Chief Executive
Officer of Back Bay Restaurant Group, Inc.
(restaurant holding company), formerly a
wholly-owned subsidiary of the Company, for
more than five years. Chief Executive
Officer of Sarkis Management Corporation
(restaurant management) and Chairman of the
Board and President of Boraschi Cafe, Inc.
(restaurant holding company) for more than
the past five years.
</TABLE>
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held one (1) meeting during the fiscal
year ended December 31, 1994. Each of the Directors standing for reelection
attended at least 75% of the meetings of the Board of Directors held during
the period in which he served.
The Board of Directors has two standing committees, the Audit Committee and
the Compensation Committee. The Board does not have a nominating committee.
During 1994, the Audit Committee was comprised of Jon M. Baker and Michael S.
Fawcett and the Compensation Committee was comprised of Jon M. Baker. All of
the above committee members are non-employee directors.
The Audit Committee reviews with the Company's independent accountants the
scope of the audit for the year, the results of the audit when completed and
the fees for the services performed. The Audit Committee also recommends
independent accountants to the Board of Directors and reviews with management
various matters relating to internal accounting controls. During the year
ended December 31, 1994, the Audit Committee held no separate meetings.
The Compensation Committee determines and approves compensation and bonuses
to be paid to executive officers of the Company. The Compensation Committee
also administers any stock option, grant or bonus plans of the Company. During
the year ended December 31, 1994, the Compensation Committee held no separate
meetings.
A. Paul Sarkis, currently an Executive Vice President of the Company and a
nominee for director of the Company, is the son of Charles F. Sarkis, the
Chairman of the Board of Directors. All of the directors and executive
officers are citizens of the United States. There are no arrangements or
understandings between any of the directors or executive officers of the
Company and any other person pursuant to which such director or executive
officer was or will be selected as a director or officer of the Company. Each
of executive officers of the Company holds office at the pleasure of the Board
of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Common Stock. The following table sets forth certain information as of
September 13, 1995 with respect to the beneficial ownership of the Company's
Common Stock by each director and each nominee for election as a director, by
each named executive officer, by all directors and officers of the Company as
a group, and by persons known by the Company to own beneficially more than 5%
of the outstanding Common Stock.
3
<PAGE>
Unless otherwise noted, such stockholders have full voting and/or investment
power with respect to the shares listed as beneficially owned by them.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK CLASS
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
---------------- --------------------- ------------------
<S> <C> <C>
MANAGEMENT:
Jon M. Baker......................... 37,975(2) 10.3%
Richard P. Dalton.................... 12,350 3.6%
Paul J. DiMare....................... 143,300(3) 37.4%
A. Paul Sarkis....................... 16,109(4) 4.5%
Michael S. Fawcett................... 25,600(5) 7.0%
Joseph J. O'Donnell.................. 47,380(6) 12.9%
Charles F. Sarkis.................... 895,725(7) 72.3%
All Directors and Officers as a Group
(8 persons)......................... 1,178,439(8) 86.0%
OTHER HOLDERS:
DiMare Homestead, Inc................ 92,500(9) 27.0%
Pauline F. Evans..................... 26,122(10) 7.6%
Estate of Samuel R. Harris, Jr....... 19,850(11) 5.8%
</TABLE>
--------
(1) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose of or to direct the disposition of, a security). For purposes of
this table, a person is deemed to have "beneficial ownership" of any
security that such person has the right to acquire within 60 days,
including by conversion of such stockholder's shares of Class B Common
Stock into shares of Common Stock or by exercise of options. For purposes
of this table, any shares of Common Stock not outstanding which are
subject to such a right, options or conversion privileges, are deemed to
be outstanding for the purpose of computing the percentage of outstanding
shares beneficially owned by such person or group, but are not deemed to
be outstanding for the purposes of computing such percentage owned by any
other person or group.
(2) Includes 5,475 and 7,500 shares held of record by Baker Insurance Agency,
Inc. Profit Sharing Plan and Money Purchase Plan, respectively, over
which Mr. Baker has voting and investment power, and presently
exercisable options to purchase 25,000 shares. Mr. Baker's address is c/o
The Baker Companies, 62 Walnut Street, Wellesley, Massachusetts 02181.
(3) Includes 92,500 shares held of record by DiMare Homestead, Inc., a
Florida corporation controlled by Mr. DiMare. Also includes presently
exercisable options to purchase 40,000 shares. Mr. DiMare's address is
c/o DiMare Homestead, Inc., P.O. Drawer BB, Homestead, Florida 33030.
(4) Issuable upon conversion of the shares of Class B Common Stock
beneficially owned by Mr. Sarkis. Mr. Sarkis' address is c/o the Company,
190 V.F.W. Parkway, Revere, Massachusetts 02151.
(5) Includes presently exercisable options to purchase 25,000 shares. Mr.
Fawcett's address is c/o Dorman & Fawcett, P.O. Box 214, Hamilton,
Massachusetts 01936.
(6) Includes presently exercisable options to purchase 25,000 shares. Mr.
O'Donnell's address is c/o Boston Concessions Group, Inc. 111 6th Street,
Cambridge, Massachusetts 02141.
(7) Consists of 820,725 shares issuable upon conversion of the shares of
Class B Common Stock beneficially owned by Mr. Sarkis as well as
presently exercisable options to purchase 75,000 shares. Does not include
6,750 shares of Common Stock or 2,900 shares of Class B Common Stock held
by Mr. Sarkis' wife; Mr. Sarkis disclaims beneficial ownership of such
shares. See footnote (2) to the table below showing beneficial ownership
of Class B Common Stock. Mr. Sarkis' address is c/o Back Bay Restaurant
Group, Inc., 284 Newbury Street, Boston, Massachusetts 02115.
(8) Includes presently exercisable options to purchase 190,000 shares and
836,834 shares issuable upon conversion of shares of Class B Common
Stock, held by all directors and officers as a group.
(9) See Footnote (3).
(10) Ms. Evans' address is 3600 Galt Ocean Drive, Fort Lauderdale, Florida
33308.
(11) Address is c/o Patricia F. Harris, 11 Royal Road, Brookline,
Massachusetts 02146.
4
<PAGE>
(b) Class B Common Stock. The following table sets forth certain information
as of September 13, 1995, with respect to the beneficial ownership of the
Company's Class B Common Stock by each director who owns Class B Common Stock,
by each named executive officer, by all directors and officers of the Company
as a group, and by persons known by the Company to own beneficially more than
5% of the outstanding Class B Common Stock. Unless otherwise noted, such
stockholders have full voting and/or investment power with respect to the
shares listed as beneficially owned by them.
<TABLE>
<CAPTION>
SHARES OF CLASS B PERCENT OF
COMMON STOCK CLASS
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
---------------- --------------------- ------------------
<S> <C> <C>
Charles F. Sarkis.................... 804,616(2) 88.2%
A. Paul Sarkis....................... 16,109 1.8%
All Directors and Officers as a Group
(8 persons)......................... 820,725(2) 90.0%
</TABLE>
--------
(1) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of a security). For purposes of
this table, a person is deemed to have "beneficial ownership" of any
security that such person has the right to acquire within 60 days.
(2) Includes shares held by Sarkis Management Corporation which is wholly
owned by Mr. Sarkis. Does not include 93,754 shares held by Mr. Sarkis'
six adult children (including Mr. A. Paul Sarkis) or 2,900 shares held by
Mr. Sarkis' wife; Mr. Sarkis disclaims beneficial ownership of such
shares.
EXECUTIVE COMPENSATION
The following table shows the cash and remuneration paid or accrued for the
three years ended December 31, 1994 in respect of services rendered to the
Company and its subsidiaries for the three years ended December 31, 1994 by
the Company and its subsidiaries to the Company's Chief Executive Officer and
to each of the Company's other executive officers whose annual compensation
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION PAYOUTS
------------------------------------ -------------------------------------
NAME AND OTHER RESTRICTED
PRINCIPAL INCENTIVE ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDED SARS PAYOUTS PAYOUTS
--------- ---- -------- --------- ------------ ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles F. Sarkis...... 1994 $200,000 -- -- -- -- -- --
Chairman of the Board 1993 275,000 -- -- -- -- -- --
Chairman of the Board 1992 557,000 -- -- -- 75,000 -- --
President, and Chief
Executive Officer
Richard P. Dalton...... 1994 180,000 -- -- -- -- -- --
President and Chief 1993 180,000 -- -- -- -- -- --
Executive Officer
Executive Vice 1992 195,000 $45,000 -- -- -- -- --
President and
Chief Operating
Officer
</TABLE>
--------
(1) Cash compensation is paid periodically and, from time to time, may be
advanced. Bonus amounts are presented in the year for which they were
earned regardless of when paid.
COMPENSATION PURSUANT TO PLANS
1984 Incentive Stock Option Plan. The Company had in effect the 1984
Incentive Option Plan which permitted the grant of incentive stock options
(within the meaning of Section 422 of the Internal Revenue code of 1986, as
amended) to purchase up to 75,000 shares of the Company's Common stock to key
employees (including full-time management and administrative personnel) of the
Company and its subsidiaries. Such plan terminated in March, 1994 and there
are no options outstanding under such plan.
Remuneration of Directors. The Company pays to each non-employee director
$2,000 per Board meeting attended with an additional fee of $1,000 for each
Committee meeting attended.
5
<PAGE>
Stock Option Exercises and Aggregated Option Values at Fiscal Year End. The
following table summarizes, as of December 31, 1994, information with respect
to (non-plan) stock options then held by the Company's Chairman of the Board
and Chief Executive Officer and President. There are no unexercised in-the-
money options at December 31, 1994, and no options were exercised during the
fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FY-END
-------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------
<S> <C> <C>
Charles F. Sarkis................................. 75,000 0
Richard P. Dalton................................. 0 0
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee (the "Committee"), which determines executive officer
compensation annually. The Committee is composed of independent directors who
are not employees of the Company.
In its deliberations, the Committee considers (i) the levels of
responsibility associated with each executive's position, (ii) the past
performance of the individual executive, (iii) the extent to which any
individual, departmental or Company-wide goals have been met, (iv) the overall
competitive environment and the level of compensation necessary to attract and
retain talented and motivated individuals in key positions, and (v) the
recommendations of appropriate officers of the Company.
The Company's compensation program utilizes a combination of base salaries,
annual bonuses and stock option awards.
In determining the base salaries paid to the Company's executive officers,
the Committee considers, in particular, their levels of responsibility, salary
increases awarded in the past, and the executive's experience and potential.
The Committee views cash bonuses as a vehicle for rewarding executives for
achieving individual and corporate performance objectives.
The Company's stock option program is intended to reward the participating
executives for their efforts in building shareholder value and improving
corporate performance over the long term. The stock option program also
promotes the retention of talented executives. In determining the number of
options granted to executive officers, the Committee takes into consideration
options granted to such executives in previous years and the potential value
which may be realized upon exercise of the options as a result of appreciation
of the Company's stock during the option term.
Due to the Company's performance during the fiscal year ended December 31,
1994, there was no change in base salaries paid, nor bonus or stock option
award grants made, to the Company's chief executive officer or other executive
officers. In 1993, the Compensation Committee reduced the annual base salary
of Mr. Sarkis from $500,000 to $200,000 to reflect his reduced
responsibilities to the Company resulting from his resignation as President
and Chief Executive Officer in October 1992 and the financial condition of the
Company at such time.
The foregoing report has been approved by the sole member of the Committee.
COMPENSATION COMMITTEE
Jon M. Baker
6
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1994, Mr. Dalton served as an executive
officer of the Company and as a member of the Compensation and Benefits
Committee of the Board of Directors of Back Bay Restaurant Group, Inc., and
Mr. Sarkis served as an executive officer of Back Bay Restaurant Group, Inc.
and as Chairman of the Board of the Company.
REDUCTION OF AUTHORIZED COMMON SHARES
In order to reduce Delaware franchise taxes, the Company has proposed to
reduce the number of authorized shares of common stock from the current
10,000,000 to 4,000,000. The Company currently has authorized 10,000,000
shares of all classes of stock of which 5,000,000 shares are designated Common
Stock and 5,000,000 shares are designated Class B Common Stock. Delaware
franchise taxes are based on the Company's authorized shares, which are
currently and expected to be in the foreseeable future, significantly in
excess of the Corporation's issued and outstanding shares. Consequently, the
Board of Directors adopted a resolution to amend the Company's Certificate of
Incorporation to reduce the number of authorized shares of common stock to
4,000,000, of which 3,000,000 shares would be designated Common Stock and
1,000,000 shares would be designated Class B Common Stock. The relative rights
and preferences of the Company's capital stock would otherwise be unchanged.
The Board of Directors unanimously recommends that such amendment be approved
and adopted by the Company's shareholders at the Annual Meeting. Pursuant to
the Certificate, adoption of the amendment requires the affirmative vote of
the holders of at least a majority of the shares of Common Stock and Class B
Common Stock voting at the Annual Meeting, each as a separate class, whether
by proxy or in person, provided that such majority is also at least a majority
of the outstanding shares of Common Stock and Class B Common Stock,
respectively.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee, has
selected the firm of Coopers & Lybrand LLP, as independent auditors for the
Company for the year ending December 31, 1995. Unless instructed to the
contrary, the persons authorized by the enclosed proxy will vote for
ratification of the selection of Coopers & Lybrand LLP as independent
auditors.
The Board of Directors seeks stockholder ratification of its selection of
independent auditors in order to determine stockholder opinion of such
selection. In the event that stockholders fail to ratify its selection of
independent auditors, the Board of Directors will consider such failure
together with other factors, including but not limited to the recommendation
of its Audit Committee, in determining whether or not to select other
independent auditors for the subsequent fiscal year. Even if its selection of
independent auditors is ratified, the Board of Directors, in its discretion,
may direct the appointment of new independent auditors at any time during the
year, if the Board of Directors determines that such a change would be in the
best interests of the Company and its stockholders.
A representative of Coopers & Lybrand LLP will be present at the Annual
Meeting, with the opportunity to make a statement if he or she desires to do
so. The representative will be available to respond to any appropriate
questions directed to him or her by stockholders present at the Annual
Meeting. The Company has been advised by Coopers & Lybrand LLP that neither
the firm nor any of its partners has any direct financial interest or any
material indirect financial interest in the Company or any of its
subsidiaries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) The Company made loans of $28,000, $52,000 and $32,400 to Richard P.
Dalton, a director and executive officer of the Company, in 1986, 1987 and
1988 respectively, in connection with certain purchases by
7
<PAGE>
Mr. Dalton of shares of the Company's Common Stock. Personal loans in the
amounts of $107,905, $55,104 and $10,000 were also made to Mr. Dalton during
1989, 1990 and 1991, respectively. During 1990, Mr. Dalton repaid $25,000 in
principal amount of these loans. The Company also made personal loans to Mr.
Sarkis in the amounts of $201,086 and $209,237 during 1989 and 1990,
respectively. In January, 1995, Mr. Sarkis repaid $80,000 to the Company.
These loans are payable on demand and bear interest at prime plus 1.5% per
annum. As of September 13, 1995, all of these loans ($590,732 in the
aggregate) plus accrued interest remain outstanding.
(b) On December 31, 1990, Revere Realty Group, Inc. ("Revere Realty"), a
company owned by Mr. Dalton, purchased six acres of land located in Revere,
Massachusetts, from the Company for $1,856,000 consisting of $278,400 in cash
and a note receivable of $1,577,600. The note accrued interest at the rate of
10% per annum and was due in quarterly installments of approximately $46,000
commencing March 31, 1991 with the entire unpaid balance of principal and
interest to be paid in full on December 31, 1995. The note was secured by a
mortgage on the property sold, an assignment of the proceeds of an expected
lease on the property and Mr. Dalton's personal guaranty. Revere Realty made
one scheduled payment under the note.
In December 1994, the Company sold 9 acres of land located in Revere,
Massachusetts and Revere Realty sold the six acres of land located in Revere,
Massachusetts (described above) to a third party for $3,705,000. The proceeds
allocated to Revere Realty were used by Revere Realty to satisfy its
indebtedness to the Company.
(c) Mr. Sarkis is the majority shareholder of the Company. The Company owns
more than 10% of the common stock of Back Bay Restaurant Group, Inc. ("BBRG").
The following is a summary of certain arrangements between the Company and
BBRG and/or their respective affiliates. Certain of these arrangements were
made while BBRG was a wholly-owned subsidiary of the Company and accordingly,
were established by related parties and were not subject to arms length
negotiations.
BBRG Operating, Inc., a subsidiary of BBRG, entered into a lease for 7,888
square feet of restaurant space in Boston, Massachusetts with 284 Newbury
Street Trust, a trust for the benefit of 284 Newbury, Inc., a subsidiary of
the Company. The primary lease term expires on September 30, 2001, but may be
extended by the tenant for an additional ten year term. The lease provides for
annual rent equal to the higher of $200,000 and 7 1/2% of sales, with the
annual rent in no event to exceed $240,000. The tenant is also responsible for
utilities, maintenance and taxes.
BBRG also leases approximately 9,000 square feet of office space in Boston,
Massachusetts from 284 Newbury Street Trust. The lease expires on September
30, 2002 and provides for annual rent of $140,000. BBRG is also responsible
for utilities, maintenance and taxes. The landlord was responsible for
$225,000 of the cost of the build out of the premises, with this amount being
deducted from monthly rent payments on a pro rata basis over a two-year
period.
In December 1991, Boraschi Cafe, Inc., a wholly-owned subsidiary of BBRG
(and previously a wholly-owned subsidiary of the Company), entered into a
lease which formalized a prior leasing arrangement for 14,427 square feet of
restaurant space in Boston, Massachusetts which Mr. Sarkis beneficially owns.
The lease, which expires on September 30, 2006, provides for annual rent of
$300,000 and that the tenant is responsible for utilities, maintenance and
taxes.
Prior to 1994, the Company and BBRG were parties to agreements pursuant to
which BBRG operated the concession business and received certain other
revenues in connection with the operation of Wonderland Greyhound Park and
Foxboro Park, two parimutuel race tracks owned by the Company. In May 1994,
BBRG transferred its concession and related operations to the Company in
return for a $770,000 term note, to which $200,000 owed by the Company to BBRG
was added, to bring the total principal amount of the note to $970,000. In
March 1995, this note was amended to provide that principal and interest
payments under the note would not begin until April 1, 1996.
8
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In December 1993, the Company and BBRG amended their existing Cross-
Indemnification Agreement to provide that the Company's indemnification
responsibilities extend only to certain liquor liability claims for which BBRG
may be liable and that BBRG's indemnification responsibilities extend only to
amounts the Company is required to pay pursuant to certain guarantees of the
lease obligations of certain of BBRG's subsidiaries. By March 1995, there were
no longer any contingent liabilities outstanding to which the amended Cross-
Indemnification Agreement related, and this agreement was terminated. In
addition, the Amended and Restated Tax Sharing and Indemnification Agreement
between the Company and BBRG was also terminated at such time.
(d) In November 1992 the Company engaged a firm to assist management in the
planning and execution of financial and operational reorganization of the
Company. One of the principals of such firm is Mr. Fawcett. As compensation
for its services, for the year ended December 31, 1994, the Company paid such
firm an aggregate fee of approximately $437,500. Such firm will also be
granted options to acquire an amount of shares of the Company's common stock
which, upon exercise, will constitute 6% of the Company's capital stock on a
fully diluted basis, with an exercise price of $3 per share and a term of
fifteen years.
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 Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than ten percent
stockholders are required by regulation of the SEC to furnish the Company with
copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the year ended
December 31, 1994, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with,
except that one report was filed late by each of Paul J. DiMare and Jeffrey
Rabin (a former greater than ten percent beneficial owner of the Company's
Common Stock) covering a single transaction.
EXPENSE OF SOLICITATION
All costs connected with the solicitation of proxies will be borne by the
Company. Brokers and other persons holding stock for the benefit of others
will be reimbursed for their expenses in forwarding proxies and accompanying
material to the beneficial owners of such stock and obtaining their proxies.
Solicitation may be made by mail, telephone, telegraph or otherwise, and some
of the directors, officers and regular employees of the Company may assist in
the solicitation without additional compensation.
FUTURE STOCKHOLDER PROPOSALS
The Company presently expects to hold its 1996 Annual Meeting of
Stockholders (the "1996 Annual Meeting") on or about October 17, 1996. If a
stockholder wishes to present a proposal to be voted on at the 1996 Annual
Meeting, the stockholder must, at the time the proposal is submitted, be a
record or beneficial owner of a security entitled to vote at the 1996 Annual
Meeting. Further, for the proposal to be considered at the annual meeting, the
stockholder must continue to own the security through the date of the 1996
Annual Meeting. The proposal, in order to be included in the management proxy
statement and form of proxy, must be received at the Company's executive
offices no later than May 15, 1996.
9
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at the
Annual Meeting, but if other matters do properly come before the Annual
Meeting, it is intended that the persons named in the proxy will vote
according to their best judgment.
Stockholders are requested to fill out, date, sign and return the enclosed
proxy in the enclosed envelope, to which no postage need be affixed if mailed
in the United States. If you attend the Annual Meeting, you may revoke your
proxy at that time and vote in person if you so desire; otherwise your proxy
will be voted for you. Your proxy may also be revoked by written notice to the
Secretary of the Company or by submission of a later dated proxy.
10-K REPORT
The Company will provide each beneficial owner of its securities with a copy
of its Annual Report on Form 10-K, including the financial statements and
schedules thereto, required to be filed with the Securities and Exchange
Commission for the Company's most recent fiscal year without charge upon
receipt of a written request from such person. Such requests should be
directed to The Westwood Group, Inc., 190 VFW Parkway, Revere, Massachusetts
02151, Attention: Corporate Secretary.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
Richard P. Dalton
President
Revere, Massachusetts
September 15, 1995
10
<PAGE>
[FRONT OF CARD]
THE WESTWOOD GROUP
190 Veterans of Foreign Wars Parkway
Revere, Massachusetts 02151
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON OCTOBER 19, 1995
The undersigned hereby appoints as Proxies, Richard P. Dalton and Richard G.
Egan, Jr., each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated on the reverse side, all shares of
capital stock of The Westwood Group, Inc. (the "Company") held of record by the
undersigned on September 13, 1995 at the Annual Meeting of Shareholders to be
held on October 19, 1995 and any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH
PROPOSAL.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF AMERICA.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------ -----------------------------
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<PAGE>
[REVERSE OF CARD]
1. Election of Directors (Common Stock and Class B Common Stock):
Charles F. Sarkis FOR [_]
Paul J. DiMare WITHHOLD [_] ___________________________
A. Paul Sarkis (name of nominee to withhold)
2. Election of Directors (Common Stock only):
Richard P. Dalton FOR [_]
Jon M. Baker WITHHOLD [_] ___________________________
(name of nominee to withhold)
3. Approve amendment to Certificate of Incorporation to reduce authorized
shares from 10,000,000 to 4,000,000:
FOR [_]
AGAINST [_]
ABSTAIN [_]
4. Ratify appointment of Coopers & Lybrand LLP as independent auditors:
FOR [_]
AGAINST [_]
ABSTAIN [_]
5. In their discretion the proxies are authorized to vote upon any other
business that may properly come before the meeting:
FOR [_]
AGAINST [_]
[Stockholder name]
[Address]
RECORD DATE SHARES: ________ Common Stock
-----------------------------
Shareholder signature
______________, 1995
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