<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
The Westwood Group, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (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:
- --------------------------------------------------------------------------------
<PAGE> 2
[The Westwood Group Inc. Letterhead]
October 21, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of The Westwood Group, Inc. on November 19,
1998. The meeting will be held in the Clubhouse Dining Room at Wonderland
Greyhound Park, 190 Veterans of Foreign Wars Parkway, Revere, Massachusetts and
will begin at 10:00 a.m.
At the meeting the stockholders will be asked to consider and vote upon
the election of directors. I hope that you will carefully review the
accompanying Proxy Statement, and cast your vote for the re-election of
Directors standing for election. The formal Notice of Meeting, Proxy Statement
and Proxy Card as well as the Form 10-K for the year ended December 31, 1997
are enclosed.
For the year ended December 31, 1997 the Company realized Income from
Operations of $2,008,129 as compared to $1,592,612 the previous year and
$48,671 in 1995. Operating Revenues increased from $20,581,747 in 1996 to
$21,045,778 in 1997, an increase of $464,031 or 2.3%; whereas Operating
Expenses experienced a nominal increase, of 0.3%, from $18,989,135 to
$19,037,649.
For the year ended December 31, 1997 the Company realized Other Income of
$781,838 as compared to $1,112,630 the previous year. The net decrease of
$330,792 was primarily attributable to a decrease in gains realized from the
disposition of real estate. Additionally, interest expense decreased by
$367,993 relating to the corresponding decrease in debt and the Company
realized a significant increase in the equity income from our investment in
Back Bay Restaurant Group, Inc.
Net Income for the year ended December 31, 1997 was $2,958,856 or $2.36
per share which includes income of $.14 per share attributable to discontinued
operations. This compares favorably with the prior year in which the Company
realized Net Income of $511,806 or $.41 per share which included a loss from
discontinued operations of $1.74 per share.
One very significant development that occurred since the close of the
fiscal year was the refinancing of the Company's debt that took place on June
30, 1998. A $5,000,000 mortgage on the Wonderland property allowed us to
consolidate our debt and eliminate debt that had been in default. This
refinancing is the final chapter in the financial restructuring of the Company.
We can now devote all our attention and energies to the building of our core
business as well as exploring new and different opportunities.
<PAGE> 3
While we have successfully accomplished the restructuring, it is a
critical time in the Company's history. Wonderland Greyhound Park, Inc., the
Company's subsidiary, continues to experience declines in on-site attendance and
wagering on live racing. These declines are not unique to Wonderland and are
being experienced by most other greyhound racetracks that have not had the
opportunity to expand and adapt their business to an ever changing landscape.
Here in Massachusetts we are still faced with the devastating impact
from the Massachusetts lottery, the two Connecticut Indian casinos, Foxwoods and
Mohegan Sun, as well as the slot machines at the Lincoln, Rhode Island greyhound
track. In addition to such competition, we now are faced with casino boats
leaving from Gloucester, Massachusetts, just thirty minutes north of
Wonderland.
This past year we and our fellow Massachusetts track operators failed
to convince the Massachusetts legislature to enact legislation that would
authorize slot machines at racetracks. As a long-term strategy we will continue
to pursue gaming legislation. It is a strategy that insures maximization of
shareholder value. In the shorter term, the statutes that govern racing in the
Commonwealth of Massachusetts expire in 1999. It is imperative that we are
successful in convincing the legislature to not only extend the statutes but
also to amend them in a manner that provides Wonderland with the ability to
remain competitive and earn a fair return on its substantial investment.
There are significant challenges that are before us, but with your
continued support I am confident that we can be successful in building
shareholder value. I look forward to seeing you at the Annual Meeting.
Very truly yours,
RICHARD P. DALTON
President and Chief Executive Officer
The Westwood Group, Inc.
<PAGE> 4
THE WESTWOOD GROUP, INC.
190 VETERANS OF FOREIGN WARS PARKWAY
REVERE, MASSACHUSETTS 02151
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 19, 1998
------------------------
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 November 19, 1998 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 one (1) Director by vote of holders of Common Stock
and Class B Common Stock, voting together, such Director to serve for a
three (3) year term.
2. To elect one (1) Director by vote of holders of Common Stock,
voting as a separate class, such Director to serve for a three (3) year
term.
3. 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 October 14, 1998
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:
October 21, 1998
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> 5
THE WESTWOOD GROUP, INC.
190 VETERANS OF FOREIGN WARS PARKWAY
REVERE, MASSACHUSETTS 02151
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 19, 1998
APPROXIMATE DATE OF MAILING TO STOCKHOLDERS:
OCTOBER 21, 1998
------------------------
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 November 19, 1998 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 October 14, 1998
are entitled to vote at the Annual Meeting. As of August 14, 1998, the Company
had outstanding and entitled to vote 351,210 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 term of two of the current directors of the Company, at
the Annual Meeting, two (2) directors are to be elected to serve until the third
succeeding annual meeting following their election and until their successors
are 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 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
<PAGE> 6
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 four effective as of the Annual Meeting in
accordance with the by-laws of the Company and has nominated (i) Paul J. DiMare
to serve as the director elected by the holders of Common Stock, voting as a
separate class, for a term of three (3) years, and (ii) Charles F. Sarkis to
serve as the director 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 Mr. DiMare as director serving until the third
succeeding annual meeting following his election and until his successor is
elected and qualified and to elect Mr. Charles F. Sarkis as director serving
until the third succeeding annual meeting following his election and until his
successor is duly elected and qualified. All of the nominees are current
directors of the Company.
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 and the other directors of the Company
continuing in office. 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
------------ -------- --------------------
<S> <C> <C>
DIRECTORS STANDING FOR ELECTION
NOMINATED FOR A TERM ENDING IN 2001:
Paul J. DiMare (56) 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.
Charles F. Sarkis (58) 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. (a
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).
DIRECTORS CONTINUING IN OFFICE
SERVING A TERM ENDING IN 2000:
Richard P. Dalton (51) 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.
SERVING A TERM ENDING IN 1999:
A. Paul Sarkis (30) 1995 Executive Vice President since August, 1995; Corporate
Director of Development from 1993 to 1995; Financial
Analyst from 1990 to 1993.
</TABLE>
2
<PAGE> 7
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held two meetings by unanimous
written consent during the fiscal year ended December 31, 1997.
The Board of Directors has two standing committees, the Audit Committee and
the Compensation Committee. The board does not have a nominating committee.
During 1997, the Audit Committee was comprised of the Board of 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, 1997, 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, 1997, the Compensation Committee held no separate
meetings.
Charles F. Sarkis, currently the Chairman of the Board of Directors of the
Company and a nominee for reelection as a director of the Company, is the father
of A. Paul Sarkis, Executive Vice President and director of the Company. 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 the executive officers of the Company holds office at the
pleasure of the Board of Directors.
3
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Common Stock. The following table sets forth certain information as
of October 14, 1998 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. 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:
Richard P. Dalton 52,350(2) 13.7%
Paul J. DiMare 143,300(3) 37.4%
A. Paul Sarkis 48,609(4) 12.4%
Charles F. Sarkis 899,616(5) 72.4%
All Directors and Officers as
a Group (5 persons) 1,143,875(6) 83.4%
OTHER HOLDERS:
DiMare Homestead, Inc. 92,500(7) 27.0%
Jon M. Baker 37,749(8) 10.2%
Michael S. Fawcett 25,600(9) 7.0%
Joseph J. O'Donnell 47,669(10) 12.9%
Pauline F. Evans 26,122(11) 7.6%
Patricia F. Harris 19,850(12) 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 presently exercisable options to purchase 40,000 shares.
(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) Includes presently exercisable options to purchase 32,500 shares and 16,109
shares 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) Consists of 804,616 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 95,000 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.
4
<PAGE> 9
(6) Includes presently exercisable options to purchase 207,500 shares and
820,725 shares issuable upon conversion of shares of Class B Common Stock,
held by all directors and officers as a group.
(7) See Footnote (3).
(8) Includes 7,665 shares held of record by International Planning Group 401(K)
Profit Sharing Plan over which Mr. Baker has voting and investment power,
and presently exercisable options to purchase 26,334 shares. Mr. Baker's
address is c/o The Baker Companies, 62 Walnut Street, Wellesley,
Massachusetts 02181.
(9) 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.
(10) 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.
(11) Ms. Evans' address is 3600 Galt Ocean Drive, Fort Lauderdale, Florida
33308.
(12) Ms. Harris' address is 10190 Collins Avenue, Bal Harbour Manor, Florida
33154.
(b) Class B Common Stock. The following table sets forth certain
information as of October, 14 1998, 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 (5
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 A. Paul Sarkis) or 2,900 shares held by Mr. Sarkis'
wife; Mr. Sarkis disclaims beneficial ownership of such shares.
5
<PAGE> 10
EXECUTIVE COMPENSATION
The following table shows the cash and remuneration paid or accrued for the
three years ended December 31, 1997 in respect of services rendered to the
Company and its subsidiaries for the three years ended December 31, 1997 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 All
Principal Incentive Annual Stock Options/ LTIP Other
Position Year Salary Bonus Compensation Awarded SARs Payouts Payouts
--------- ---- -------- --------- ------------ ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles F. Sarkis.............. 1997 $200,000 -- $23,616 -- 20,000 -- --
Chairman of the Board 1996 $200,000 -- -- -- -- -- --
Chairman of the Board, 1995 $200,000 -- -- -- -- -- --
President and Chief Executive
Officer
Richard P. Dalton.............. 1997 $186,250 -- $19,680 -- 15,000 -- --
President and Chief Executive 1996 $180,000 -- -- -- -- -- --
Officer
Executive Vice President and 1995 $180,000 -- -- -- 25,000 -- --
Chief Operating Officer
A. Paul Sarkis................. 1997 $ 93,750 -- $15,744 -- 7,500 -- --
Executive Vice President
Richard G. Egan, Jr............ 1997 $100,817 -- $ 9,840 -- 5,000 -- --
Vice President and Chief
Financial Officer
</TABLE>
- ------------
(1) Cash compensation is paid periodically and, from time to time, may be
advanced. Other annual compensation reflects bonus amounts paid in 1997.
COMPENSATION PURSUANT TO PLANS
Compensation Plan. The Company has adopted a compensation plan. The
compensation plan is designed to provide an environment and opportunity for key
executives to be rewarded for individual achievement as well as for attaining
overall corporate goals. The compensation plan includes provisions for a base
salary, annual incentive and long term incentives. Base salary is determined
annually and is based upon the level and amount of responsibility in the context
of comparable companies. Additional annual incentives are to be distributed to
key executives from a bonus pool. A performance bonus equal to 10% of income
before tax will be allocated to the key executives at the discretion of the
Compensation Committee and Board of Directors. Additionally, a discretionary
bonus of up to 5% of income before taxes will be available to reward an
employee's individual performance. Finally, long term incentives will consist of
stock options granted to key executives at the discretion of the Compensation
Committee and Board of Directors.
In addition, a special transaction bonus is available in the event that the
Chairman initiates and/or negotiates an extraordinary transaction to enhance
shareholder value, including a merger, sale, acquisition or joint venture. The
transaction bonus is equal to 2% of the value of any such transaction.
As of December 31, 1997, an aggregate bonus of $538,000 had been accrued
but not yet allocated or paid to the named executive officers based upon the
operating results of the Company for 1997.
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.
6
<PAGE> 11
Stock Option Agreements. During 1997, the Company issued to certain
executives 47,500 options to purchase the Company's Common Stock at an exercise
price of $3.00 per share. During 1995, the Company awarded to Directors and
former Directors of the Company, non-qualified stock options to purchase 241,334
shares of the Company's Common Stock at an exercise price of $3.00 per share.
All such options terminate 10 years from the date of grant.
OPTION GRANTS IN FISCAL YEAR 1997 AND YEAR-END OPTION VALUES
The following table provides certain information regarding options to
purchase shares of the Company's Common Stock granted to the named executive
officers in Fiscal Year 1997.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS MARKET
SECURITIES GRANTED TO PRICE ON
UNDERLYING EMPLOYEES EXERCISE DATE OF
OPTIONS IN FISCAL PRICE GRANT EXPIRATION
NAME GRANTED YEAR (%) ($/SHARE) ($/SHARE) DATE
---- ---------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Charles F. Sarkis............... 20,000 38.1 3.00 3.00 11/24/07
Richard P. Dalton............... 15,000 28.6 3.00 3.00 11/24/07
A. Paul Sarkis.................. 7,500 14.3 3.00 3.00 11/24/07
Richard G. Egan, Jr............. 5,000 9.5 3.00 3.00 11/24/07
</TABLE>
The table below shows the total number of unexercised options held at
December 31, 1997. There are no unexercised in-the-money options at the fiscal
year end. No options were exercised in the fiscal year ended December 31, 1997.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNDERLYING
OPTIONS AT FY-END IN-THE-MONEY
---------------------------- OPTIONS AT FISCAL
NAME EXERCISABLE UNEXERCISABLE YEAR-END
---- ----------- ------------- -------------------
<S> <C> <C> <C>
Charles F. Sarkis.......................... 95,000 0 0
Richard P. Dalton.......................... 40,000 0 0
A. Paul Sarkis............................. 32,500 0 0
Richard G. Egan, Jr........................ 0 5,000 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 the Board of Directors.
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, department 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.
7
<PAGE> 12
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 exercised of the options as a result of appreciation of the
Company's stock during the option term.
During the fiscal year ended December 31, 1997, the Board of Directors
approved and ratified the granting of options to certain executives of the
Company to purchase 47,500 shares of Common Stock at an option price equal to
the fair market value of the Company's Common Stock at the date the options were
granted. During 1997, the Board of Directors approved and ratified the increase
in the base salary and bonuses to certain of the Company's executive officers
(See table above, entitled "Summary Compensation Table").
The foregoing report has been approved by the members of the Committee.
COMPENSATION COMMITTEE
Charles F. Sarkis
Richard P. Dalton
A. Paul Sarkis
Paul J. DiMare
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1997, Messrs. Charles F. Sarkis, Richard
P. Dalton and A. Paul Sarkis served as executive officers of the Company and as
members of the Board of Directors of the Company which performs the functions of
a compensation committee. In addition, Mr. Charles F. Sarkis served as a
director and executive officer of Back Bay Restaurant Group, Inc. ("BBRG") and
Mr. Dalton served as a member of the Compensation Committee of the Board of
Directors of BBRG.
STOCK PERFORMANCE GRAPH
A stock price performance graph has been omitted as the Company's Common
Stock is not listed on a national securities exchange or traded on NASDAQ and
thus there is no regularly reported price for such Common Stock.
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 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
8
<PAGE> 13
$80,000 to the Company. These loans are payable on demand and bear interest at
prime plus 1.5% per annum. As of October 14, 1998, all of these loans ($590,732
in the aggregate) plus accrued interest remain outstanding.
(b) Mr. Charles F. 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"). Certain arrangements between the Company and BBRG and/or their
respective affiliates 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. Prior to 1994, the Company and BBRG were
parties to agreements pursuant to which BBRG operated the concessions 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 1997, this note was amended requiring equal quarterly payments of
principal and interest beginning April 1, 1999 of approximately $36,000 with
interest at 6%.
(c) 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. The agreement
provided such Firm would be granted warrants to acquire an amount of shares of
the Company's Common Stock which, upon exercise, would constitute 6% of the
Company's capital stock on a fully diluted basis, with an exercise price of
$3.00 per share and a term of fifteen years upon successful completion of the
engagement. At August 14, 1998, the Company has not executed a warrant agreement
with the consulting firm. The Company is currently in the process of
renegotiating the amount of shares, per share price and other terms.
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, 1997, all filing requirements applicable to its officers,
directors, and greater than ten percent beneficial owners were complied with,
except that Messrs. Charles F. Sarkis, A. Paul Sarkis, Richard P. Dalton and
Richard G. Egan, Jr. failed to timely file a Form 5 with respect to option
grants made in fiscal year 1997.
EXPENSES 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.
AUDIT MATTERS
BDO Seidman, LLP has been selected to examine the financial statements of
the Company for the fiscal year ended December 31, 1997, and to report the
results of their examination. A representative of BDO
9
<PAGE> 14
Seidman, LLP is expected to be present at the Annual Meeting and will be
afforded the opportunity to make a statement and to respond to appropriate
questions from stockholders.
FUTURE STOCKHOLDER PROPOSALS
The Company presently expects to hold its 1999 Annual Meeting of
Stockholders (the "1999 Annual Meeting") on or about October 7, 1999. If a
stockholder wishes to present a proposal to be voted on at the 1999 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 1999 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 1999
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 June 23, 1999.
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
October 21, 1998
10
<PAGE> 15
THE WESTWOOD GROUP, INC.
REVERE, MASSACHUSETTS 02151
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON NOVEMBER 19, 1998
The undersigned hereby appoints as Proxies, Richard F. Dalton and Richard G.
Egan, Jr., each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designed on the reverse side, all shares of
capital stock of The Westwood Group, Inc. (the "Company") held of record by the
undersigned on October 14, 1998 at the Annual Meeting of Stockholders to be
held on November 19, 1998 and any adjournment 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.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
<PAGE> 16
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------------------------------------------------- 1. Election of Directors. For All With- For All
THE WESTWOOD GROUP, INC. Nominees hold Except
- ---------------------------------------------------------------- Charles F. Sarkis by vote of [ ] [ ] [ ]
Common Stock and Class B Common
Stock.
Paul J. DiMare by vote of
Common Stock.
If you wish to withhold authority to vote for all nominees,
mark the "Withhold" box; if you wish to withhold authority
with respect to certain individuals, mark the "For All Except"
box and strike a line through the particular name(s).
RECORD DATE SHARES:
For Against Abstain
2. In their discretion the proxies [ ] [ ] [ ]
are authorized to vote upon any
other business as may properly
come before the meeting.
-----------------
Please be sure to sign and date this Proxy Date Mark box at right if an address change or comment [ ]
- ---------------------------------------------------------------- has been noted on the reverse side of this card.
- ------- Stockholder sign here ----------- Co-owner sign here ---
DETACH CARD DETACH CARD
</TABLE>
