<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
------------------------
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 28, 1997
Commission file number 0-19810
BACK BAY RESTAURANT GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 284 NEWBURY STREET 04-2812651
(State or other jurisdiction BOSTON, MASSACHUSETTS 02115 (I.R.S. Employer
of Identification No.)
incorporation or (Address of principal
organization) executive offices, including
Zip Code)
</TABLE>
(617) 536-2800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No__
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [X] No__
The aggregate market value of the voting stock held by non-affiliates of
the registrant based on the closing price of the registrant's Common Stock as
quoted on the National Association of Securities Dealers Automatic Quotation
System on March 2, 1998 was $10,481,288.
On March 2, 1998, there were 3,435,176 shares of the registrant's Common
Stock outstanding.
================================================================================
<PAGE> 2
BACK BAY RESTAURANT GROUP, INC.
FORM 10-K/A
TABLE OF CONTENTS
PART III
<TABLE>
<S> <C> <C>
Item 10. Directors and Executive Officers of the Registrant.......... 3
Item 11. Executive Compensation...................................... 5
Security Ownership of Certain Beneficial Owners and
Item 12. Management.................................................. 10
Item 13. Certain Relationships and Related Transactions.............. 11
</TABLE>
2
<PAGE> 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information regarding each Director of the
Company.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND DIRECTOR
NAME CURRENT DIRECTORSHIPS AGE SINCE
---- ----------------------- --- --------
<S> <C> <C> <C>
(Class I -- Term to Expire 2001)
Joseph M. Cassin.................. Partner in the New York law firm Cassin, Cassin 57 1992
& Joseph.
Richard P. Dalton................. President and Chief Executive Officer of WGI 49 1992
since October 1992, Executive Vice President of
WGI from 1988 to 1992 and Chief Operating
Officer of WGI since 1989. From 1988 until 1989
he served as Chief Financial Officer of WGI,
from 1984 until 1988 he served as Vice President
of WGI and from 1974 to 1989 he served as
Treasurer of WGI. Mr. Dalton is also a Director
of WGI.
Irwin Chafetz..................... President and principal of Interface Group- 61 1995
Massachusetts, Inc., the operator of GWV
International, New England's largest charter
tour operator. Until April 1995, he was Vice
President and a principal of Interface
Group-Nevada, Inc., which operated COMDEX, the
largest American trade show. Mr. Chafetz is also
a Director of Syratech Corporation.
(Class II -- Term to Expire 1999)
Richard K. Howe................... President and Co-owner of Penobscot Bay 53 1992
Provisions Co. Consultant to John Hancock
Freedom Securities Corporation and its
subsidiary, Tucker Anthony, Inc. from July 1992
to March 1996. Prior to July 1992, Mr. Howe was
an Executive Vice President and Director of
Tucker Anthony, Inc. and an officer and/or
Director of its parent corporation and
affiliates. Mr. Howe is also a Director of Chic
by H.I.S., Inc.
Francis P. Bissaillon............. Chief Financial Officer of the Company since 49 1994
March 1993. Executive Vice President since
October 1995, Secretary since June 1997 and Vice
President from March 1993 to October 1995. Prior
to working for the Company, Mr. Bissaillon
served as Chief Operating Officer of La Quinta
Motor Inns, Inc. ("La Quinta"). Prior to July
1991, Mr. Bissaillon served as Senior Vice
President-Administration and Treasurer of La
Quinta.
(Class III -- Term to Expire 2000)
Charles F. Sarkis................. President, Chief Executive Officer and Chairman 58 1983
of the Board of Directors of the Company since
1983 and Chairman of the Board of The Westwood
Group, Inc. ("WGI") since 1978. Prior to October
1992, served as President and Chief Executive
Officer of WGI.
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND DIRECTOR
NAME CURRENT DIRECTORSHIPS AGE SINCE
---- ----------------------- --- --------
<S> <C> <C> <C>
Robert S. Parker.................. Dean Emeritus and Robert S. Parker Professor of 59 1992
Strategy and Finance of the School of Business
Administration at Georgetown University since
1986. Prior to that time, he was a partner at
McKinsey & Company, Inc., an international
management consulting firm. Mr. Parker is also a
Director of Middlesex Mutual Assurance Co., Inc.
and Excel Limited, which are insurance
companies.
</TABLE>
During 1997, the Board of Directors held three meetings. Each Director who
is not an officer or employee of the Company is entitled to receive $1,500 for
each meeting of the Board of Directors he attends and $1,500 for each committee
meeting he attends that takes place on a date other than the date of a Board of
Directors meeting. In addition, each Director receives a retainer fee of
$10,000. All of the Directors attended at least 75% of the aggregate of the
Board and relevant committee meetings during 1997.
The Audit Committee, composed of Richard K. Howe and Robert S. Parker, held
three meetings during 1997. The Audit Committee recommends to the Board of
Directors the independent public accountants to be engaged by the Company;
reviews with the independent public accountants and management the Company's
internal accounting procedures and controls; and reviews with the independent
public accountants the scope and results of the auditing engagement.
The Compensation Committee, composed of Joseph M. Cassin, Irwin Chafetz,
Richard P. Dalton and Robert S. Parker, held two meetings during 1997. The
Compensation Committee administers the Company's compensation plans and makes
decisions regarding the compensation of senior management and other matters
relating to compensation.
The Company does not have a nominating committee.
EXECUTIVE OFFICERS
Certain information regarding the identity and background of the Company's
executive officers is set forth below. All of the Company's executive officers
have been elected for terms continuing until their successors are duly elected
and qualified.
Charles F. Sarkis, age 58, is Chairman of the Board, President and Chief
Executive Officer of the Company and has served in such capacities for the
Company and its predecessors since 1964.
Francis P. Bissaillon, age 49, has served as Chief Financial Officer of the
Company since March 1993. Mr. Bissaillon has served as an Executive Vice
President of the Company since October 1995, as Secretary since June, 1997 and
served as Vice President from March 1993 to October 1995.
Mark L. Hartzfeld, age 51, has served as an Executive Vice President and
Chief Operating Officer of the Company since October 1995. He served as Senior
Vice President of Real Estate and Development of the Company from 1992 to
October 1995, and prior to that served as Vice President of Development since
1986.
Robert J. Ciampa, age 42, has served as Vice President, Chief Accounting
Officer and Treasurer of the Company since October 1992. Mr. Ciampa has served
as Chief Accounting Officer of the Company and its predecessors since 1978.
Ann Marie Lagrotteria, age 33, has served as Vice President, Operations and
Training since August 1997 and served as Director of Training from September
1995 to August 1997. Ms. Lagrotteria has been involved in restaurant operations
with the Company for ten years.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on the review of Forms 3, 4 and 5 and all amendments thereto
furnished to the Company with respect to its most recent fiscal year, it appears
that each Director, officer and 10% beneficial owner of Common Stock of the
Company complied with Section 16(a) of the Securities Exchange Act of 1934.
4
<PAGE> 5
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows certain compensation information for
the fiscal years ended 1997, 1996 and 1995 for the Company's Chief Executive
Officer and to each of the Company's other executive officers whose annual
compensation exceeds $100,000. This information includes the dollar value of
base salaries and bonus awards and the number of stock options granted.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
NAME AND ----------------------- COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) AWARDS-OPTIONS(2) COMPENSATION($)
------------------ ---- --------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Charles F. Sarkis,................. 1997 340,435 -- 92,500(3) 72,671(4)
President and 1996 338,979 -- -- 35,650
Chief Executive Officer 1995 338,395 -- -- 28,600
Francis P. Bissaillon,............. 1997 190,029 -- 55,000(3) 16,200(4)
Executive Vice President, Chief 1996 187,664 -- -- --
Financial Officer and Secretary 1995 173,405 -- 10,000 --
Mark L. Hartzfeld,................. 1997 205,013 -- 60,000(3) 13,212(4)
Executive Vice President 1996 199,534 -- -- 6,100
and Chief Operating Officer 1995 146,617 16,000 15,000 1,350
Robert J. Ciampa,.................. 1997 104,633 -- 23,250(3) 6,840(4)
Vice President, Chief Accounting 1996 101,233 -- -- --
Officer, Treasurer and Assisant 1995 97,751 -- -- --
Secretary
</TABLE>
- ---------------
(1) Cash bonuses and option grants are included in compensation for the year for
which they were earned, even if actually paid or granted in the subsequent
year.
(2) Represents the number of shares of the Company's Common Stock subject to
options.
(3) Includes stock options granted in connection with an exchange of newly
issued stock options for stock options previously held by the executive
officer. (See "Executive Compensation - Stock Option Repricing.")
(4) Includes bonus earned in 1993 which was deferred and subsequently paid out
in cash in 1997.
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.
OPTIONS GRANTED IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT VALUE AT ASSUMED
OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS MARKET STOCK PRICE
SECURITIES GRANTED TO PRICE ON APPRECIATION FOR
UNDERLYING EMPLOYEE EXERCISE OR DATE OF OPTION TERM
OPTIONS IN FISCAL BASE PRICE GRANT EXPIRATION -------------------------
GRANTED # YEAR 1997 ($/SHARE) ($/SHARE) DATE 0%($) 5%($) 10%($)
---------- ---------- ----------- --------- ---------- ----- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles F. Sarkis........... 92,500 17.4 4.125 4.125 06/03/07 0 239,945 608,095
Francis P. Bissaillon....... 55,000 10.4 4.125 4.125 06/03/07 0 142,670 361,570
Mark L. Hartzfeld........... 60,000 11.3 4.125 4.125 06/03/07 0 155,640 394,440
Robert J. Ciampa............ 23,250 4.4 4.125 4.125 06/03/07 0 60,311 152,846
</TABLE>
5
<PAGE> 6
The table below summarizes for each of the named executive officers the
total number of unexercised options, if any, held at December 28, 1997 and the
aggregate dollar value of in-the-money unexercised options held at December 28,
1997. The value of unexercised in-the-money options at fiscal year-end is the
difference between the exercise or base price and the fair market value of the
underlying stock on December 28, 1997, which was $5.625 per share, the closing
price of the Company's stock on the Nasdaq national market system. These values
have not been, and may never be, realized. The underlying options have not been,
and may not be, exercised; and actual gains, if any, on exercise will depend on
the value of the Company's Common Stock on the date of exercise. None of the
named individuals in the following table exercised options in the fiscal year
ended December 28, 1997.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END(#) AT FISCAL YEAR-END($)(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Charles F. Sarkis......................... -- 92,500 0 138,750
Francis P. Bissaillon..................... 3,333 61,667 6,041 94,584
Mark L. Hartzfeld......................... 5,000 70,000 9,063 108,125
Robert J. Ciampa.......................... -- 23,250 0 34,875
</TABLE>
- ---------------
(1) In-the-Money Options are those where the fair market value of the underlying
securities exceeds the exercise price of the option.
OPTION EXCHANGE OFFER
In June 1997, officers and employees were given the opportunity to exchange
their existing stock options for stock options with an exercise price closer to
the then current market value of the Company's Common Stock. This exchange offer
is the second option repricing the Company has undertaken in the past ten years.
The following table provides information on the options exchanged by the named
executive officers in connection with each exchange offer.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET EXERCISE ORIGINAL OPTION
SHARES PRICE AT PRICE AT TERM
UNDERLYING TIME OF TIME OF NEW REMAINING
OPTIONS REPRICING REPRICING EXERCISE AT DATE OF
NAME DATE REPRICED(#) ($) ($) PRICE($) REPRICING
---- ---- ----------- --------- --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles F. Sarkis................. 06/03/97 52,500 4.125 (1) 4.125 (1)
Francis P. Bissaillon............. 06/03/97 45,000 4.125 (2) 4.125 (2)
Mark L. Hartzfeld................. 06/03/97 30,000 4.125 (3) 4.125 (3)
Robert J. Ciampa.................. 06/03/97 23,250 4.125 (4) 4.125 (4)
Charles F. Sarkis................. 03/24/95 52,500 7.375 (5) 7.080 (5)
Francis P. Bissaillon............. 03/24/95 26,250 7.375 (6) 7.130 (6)
Mark L. Hartzfeld................. 03/24/95 18,000 7.375 (7) 7.360 (7)
Robert J. Ciampa.................. 03/24/95 23,250 7.375 (8) 7.460 (8)
</TABLE>
- ---------------
(1) Options terminated had an exercise price of $7.08 per share and an
expiration date of March 24, 2005.
(2) Options terminated had exercise prices from $4.875 per share to $7.50 per
share and expiration dates from December 21, 2004 to October 10, 2005.
(3) Options terminated had exercise prices from $4.875 per share to $7.36 per
share and expiration dates from March 24, 2005 to October 10, 2005.
6
<PAGE> 7
(4) Options terminated had an exercise price of $7.46 per share and an
expiration date of March 24, 2005.
(5) Options terminated had exercise prices from $12.75 per share to $16.82 per
share and an expiration dates from February 17, 2004 to May 10, 2004.
(6) Options terminated had exercise prices from $12.00 per share to $16.92 per
share and expiration dates from March 4, 2003 to February 17, 2004.
(7) Options terminated had exercise prices from $14.00 per share to $17.23 per
share and expiration dates from December 26, 2001 to February 17, 2004.
(8) Options terminated had exercise prices from $11.75 per share to $16.86 per
share and expiration dates from December 26, 2001 to February 17, 2004.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's fiscal year ended December 28, 1997 and during its
current fiscal year, Charles F. Sarkis has served as an executive officer of the
Company and as Chairman of the Board of WGI, and Richard P. Dalton has served as
a member of the Company's Compensation Committee and as an executive officer of
WGI.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is composed solely of
non-employee Directors. The Compensation Committee determines all aspects of the
compensation to be paid to Charles F. Sarkis, the Chief Executive Officer,
Francis P. Bissaillon, the Chief Financial Officer, and Mark L. Hartzfeld, the
Chief Operating Officer, and determines all aspects of the compensation of the
Company's other executive officers, except their base salaries which are
determined by senior management. The objectives of the Compensation Committee in
determining the type and amount of executive officer compensation are to provide
a level of compensation which allows the Company to attract and retain superior
talent and to align the executive officers' interests with those of the
Company's stockholders. The compensation of the Company's executive officers
includes (i) cash compensation, consisting of a base salary and, if earned, a
performance bonus, (ii) long-term incentive compensation in the form of stock
options, and (iii) participation in various benefit plans, most of which are
generally available to employees of the Company.
Cash Compensation. Cash compensation of the Company's executive officers
consists of a base salary and, if earned, an annual performance bonus. The
Compensation Committee sets the base salaries of Messrs. Sarkis, Bissaillon and
Hartzfeld at levels competitive with those of executive officers at similarly
situated restaurant companies, taking into consideration the individual
experience of these officers. Mr. Sarkis' base salary has not changed since
1994. In determining Mr. Sarkis' base salary, the Compensation Committee
reviewed national and regional compensation information for executives in the
restaurant industry, including surveys regarding the compensation of restaurant
executives prepared by DeCotiis Erhard Strategic Consulting Group, Inc.
Management level employees, including executive officers, are eligible to
receive cash bonuses based on the Company's performance.
Stock Options. The executive officers, as well as other key employees, are
eligible to participate in the Company's Stock Option Plan. The purpose of the
Stock Option Plan is to provide increased incentives to salaried employees, to
encourage new employees to become affiliated with the Company and to align the
interests of such persons with those of the Company's stockholders. The Stock
Option Plan is administered by the Compensation Committee. The Compensation
Committee has the authority to determine the individuals to whom the stock
options are awarded, the terms upon which option grants shall be made and the
number of shares subject to each option, all subject to the terms and conditions
of the Stock Option Plan.
In June, 1997, the Compensation Committee offered all of the Company's
employees, including the executive officers and directors, the opportunity to
exchange their existing options for new options with an exercise price closer to
the then current market price of the Company's Common Stock. At the time of this
offer, due at least in part to general conditions in the restaurant industry,
the market price of the Company's
7
<PAGE> 8
Common Stock had declined substantially. As a result, the exercise price of
substantially all the outstanding options was significantly higher than the
market price of the Company's Common Stock. The Compensation Committee believed
that the stock options no longer served as an incentive to optionholders and
believed it was in the best interest of the Company to reprice the existing
options at a price closer to the then current market price of the Common Stock.
The replacement options were subject to vesting over three years from the date
of the exchange.
Other Compensation. The Company provides certain other benefits to the
executive officers, such as health insurance, that are generally available to
Company employees. In addition, officers and key employees of the Company
(including the named executive officers) may be eligible to receive supplemental
disability insurance coverage, automobile allowance and insurance benefits.
Compensation Committee
Joseph M. Cassin, Chairman
Irwin Chafetz
Richard P Dalton
Robert S. Parker
8
<PAGE> 9
STOCK PERFORMANCE GRAPH
<TABLE>
<CAPTION>
DEC 92 DEC 93 DEC 94 DEC 95 DEC 96 DEC 97
<S> <C> <C> <C> <C> <C> <C>
Back Bay Restaurant Group, Inc. $100.00 $125.00 $55.56 $27.78 $21.30 $ 41.20
Restaurants-500 $100.00 $116.74 $116.38 $174.55 $172.45 $185.17
NASDAQ Index Composite $100.00 $114.79 $112.21 $158.68 $195.18 $239.53
</TABLE>
The preceding stock performance price graph compares the cumulative total
return on the Company's Common Stock with the cumulative total return of The
NASDAQ Stock Market Index of U.S. stocks and of the Standard & Poor's Restaurant
Index, Restaurants-500. The beginning of the measurement period for the Company,
March 20, 1992, the date of the Company's initial public offering, and the
beginning of the measurement period for The NASDAQ Stock Market Index and the
S&P Restaurant Index is March 31, 1992. The last day of each measurement period
is the last business day in each calendar year.
The stock price performance on the graph above is not necessarily
indicative of future price performance.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company entered into a three-year employment agreement with Mr. Sarkis
on January 16, 1992 which provides that Mr. Sarkis will be employed as President
and Chief Executive Officer and that the term of his employment under the
agreement will continue from year to year thereafter unless either party
terminates the agreement. Effective December 27, 1993, Mr. Sarkis' base
compensation under the agreement was adjusted to $335,000 per year and may be
readjusted from time to time by the Board of Directors or its Compensation
Committee. In addition, Mr. Sarkis may receive annual bonuses as determined by
the Board of Directors or its Compensation Committee. The Company may terminate
Mr. Sarkis' employment only for cause. The employment agreement contains a
non-competition covenant which prohibits Mr. Sarkis, until the later of five
years from the date of the agreement, the date of a change of control, or such
time that neither he nor WGI owns more than 3% of the outstanding shares of
Common Stock of the Company, from engaging in any competing business, directly
or indirectly. Mr. Sarkis' real estate investments in two properties which
currently are leased to the Company are not subject to the non-competition
covenant.
The Company has entered into Change of Control Severance Agreements
("Severance Agreements") with Charles F. Sarkis, Francis P. Bissaillon, Mark L.
Hartzfeld, Robert J. Ciampa and Ann Marie Lagrotteria. The Severance Agreements
provide that if there were a change of control (as defined in the Severance
Agreements) of the Company, and such officer's employment by the Company is
terminated during the next two years for any reason other than dismissal by the
Company for cause (as defined in the Severance Agreements), the officer would be
entitled to certain benefits. These benefits include receipt of a
9
<PAGE> 10
payment equal to the sum of three times the amount of the officer's annual
salary and bonus, a pro rated amount of the officer's current year bonus, the
amount of salary and bonus deferred in prior years and not yet received by the
officer, and, in certain circumstances, a gross-up for certain taxes payable by
the officer in connection with the receipt of payments under the Severance
Agreements. The Severance Agreements also provide that upon a qualifying
termination of employment, the officer's stock options will become fully vested
and that the Company will continue the officer's life, medical and disability
insurance for two years after the termination of the officer's employment to the
extent that these benefits are not provided by another employer, and that any
non-competition agreements between the Company and the employee shall not be
effective.
ITEM 12. SECURITY OWERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information regarding beneficial
ownership (as defined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934) as of May 1, 1997, except as otherwise indicated below, of
the Company's Common Stock by each person known by the Company to own
beneficially more than 5% of the Company's Common Stock, by each of the
Company's Directors and named executive officers and by all of the Company's
Directors and executive officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
DIRECTORS, EXECUTIVE OFFICERS ----------------------------
AND 5% BENEFICIAL NUMBER PERCENT OF
OWNERS(2) OF SHARES COMMON STOCK
----------------------------- --------- ------------
<S> <C> <C>
Charles F. Sarkis........................................... 241,566(3)(4) 7.0%
Francis P. Bissaillon....................................... 30,999(5) *
Joseph M. Cassin............................................ 6,000(6) *
Irwin Chafetz............................................... 88,000(7) 2.6%
Richard P. Dalton........................................... 10,000(3)(8) *
Richard K. Howe............................................. 6,000(9) *
Robert S. Parker............................................ 5,000(8) *
Mark L. Hartzfeld........................................... 30,500(10) *
Robert J. Ciampa............................................ 7,750(8) *
All Directors and executive officers as a group (10
persons).................................................. 437,536(3) 12.7%
5% Beneficial Owners
William B. Finneran......................................... 782,486(11) 22.8%
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, NY 10281
The Westwood Group, Inc..................................... 673,451(12) 19.6%
190 V.F.W. Parkway
Revere, MA 02151
Hathaway Associates......................................... 190,100 5.5%
119 Rowayton Avenue
Rowayton, CT 06853
Dimensional Fund Advisors Inc............................... 182,100(13) 5.3%
1299 Ocean Avenue, 11(th) Floor
Santa Monica, CA 90401
</TABLE>
(Footnotes)
* Less than one percent
(1) Except as otherwise noted, persons in the table have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
(2) Unless otherwise indicated, the address of each beneficial owner is 284
Newbury Street, Boston, Massachusetts 02115.
10
<PAGE> 11
(3) Does not include 673,451 shares owned by WGI. Mr. Sarkis owns securities
representing approximately 88.63% of the voting power of WGI's outstanding
shares of Common Stock and approximately 66.85% of the outstanding shares
and is Chairman of the Board of WGI. Mr. Dalton is President and a Director
of WGI.
(4) Includes 30,833 shares Mr. Sarkis has the right to acquire within 60 days
under options granted to him pursuant to the Company's Amended and Restated
Stock Option Plan (the "Stock Option Plan").
(5) Includes 24,999 shares Mr. Bissaillon has the right to acquire within 60
days under options granted to him pursuant to the Stock Option Plan.
(6) Includes 5,000 shares Mr. Cassin has the right to acquire within 60 days
under options granted to him pursuant to the Stock Option Plan. Excludes
2,000 shares of Common Stock owned by Mr. Cassin's wife. Mr. Cassin
disclaims beneficial ownership of the shares owned by his wife.
(7) Includes 5,000 shares Mr. Chafetz has the right to acquire within 60 days
under options granted to him pursuant to the Stock Option Plan and 5,000
shares Mr. Chafetz has the right to acquire within 60 days pursuant to a
stock option grant (not under the Stock Option Plan).
(8) Represents shares such Director or officer has the right to acquire within
60 days under options granted to such Director or officer pursuant to the
Stock Option Plan.
(9) Consists of 1,000 shares Mr. Howe owns jointly with his wife and 15,000
shares Mr. Howe has the right to acquire within 60 days under options
granted to him pursuant to the Stock Option Plan.
(10) Includes 30,000 shares Mr. Hartzfeld has the right to acquire within 60
days under options granted to him pursuant to the Stock Option Plan.
(11) Shareholdings information is based on Mr. Finneran's Schedule 13D dated
September 14, 1995.
(12) Shareholdings information is based on WGI's Schedule 13G dated June 1,
1994.
(13) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 182,100 shares of
Company Common Stock as of December 31, 1997, all of which shares are held
in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end investment company, or in a series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND AFFILIATES
Mr. Sarkis is the majority shareholder of WGI. WGI owns more than 10% of
the Common Stock of the Company. The following is a summary of certain
arrangements between the Company and WGI, its subsidiaries, Mr. Sarkis and Mr.
Sarkis' affiliates. Certain of these arrangements were made while the Company
was a wholly-owned subsidiary of WGI and accordingly, were established by
related parties and were not subject to arms length negotiations. The Company's
By-Laws provide that all future proposed agreements between the Company and WGI,
Mr. Sarkis or their respective affiliates are subject to advance approval by a
majority of the independent members of the Company's Board of Directors.
Leasing Arrangements
In December 1991, Boraschi Cafe, Inc. ("Boraschi"), 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 Company is responsible
for utilities, maintenance and taxes. The restaurants operated at this location
are J.C. Hillary's, Ltd. and The Famous Atlantic Fish Company.
11
<PAGE> 12
Concessions and Management Agreements
Prior to 1994, the Company and WGI were parties to agreements pursuant to
which the Company 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 WGI. In May 1994, the Company
transferred its concession and related operations to WGI in return for a
$770,000 term note, to which $200,000 owed by WGI to the Company was added, to
bring the total principal amount of the note to $970,000. This note was
subsequently amended to provide that principal and interest payments under the
note would not begin until April 1, 1999.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized, on the
27th day of April, 1997.
BACK BAY RESTAURANT GROUP, INC.
By: /s/ CHARLES F. SARKIS
----------------------------------
CHARLES F. SARKIS
Chairman, President and Chief
Executive Officer
April 27, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ CHARLES F. SARKIS Chairman of the Board of April 27, 1998
- --------------------------------------------------- Directors, President and Chief
CHARLES F. SARKIS Executive Officer
/s/ FRANCIS P. BISSAILLON Director, Executive Vice April 27, 1998
- --------------------------------------------------- President, Chief Financial
FRANCIS P. BISSAILLON Officer and Secretary
/s/ ROBERT J. CIAMPA Vice President, Chief Accounting April 27, 1998
- --------------------------------------------------- Officer, Treasurer and Assistant
ROBERT J. CIAMPA Secretary
/s/ JOSEPH M. CASSIN Director April 27, 1998
- ---------------------------------------------------
JOSEPH M. CASSIN
/s/ IRWIN CHAFETZ Director April 27, 1998
- ---------------------------------------------------
IRWIN CHAFETZ
/s/ RICHARD P. DALTON Director April 27, 1998
- ---------------------------------------------------
RICHARD P. DALTON
/s/ RICHARD K. HOWE Director April 27, 1998
- ---------------------------------------------------
RICHARD K. HOWE
/s/ ROBERT S. PARKER Director April 27, 1998
- ---------------------------------------------------
ROBERT S. PARKER
</TABLE>
13
