<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
The DeWolfe Companies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
April 4, 2000
Dear Stockholder:
We are pleased to invite you to attend the 2000 Annual Meeting of
Stockholders of The DeWolfe Companies, Inc., which will be held at the Newton
Marriott, 2345 Commonwealth Avenue, Newton, Massachusetts (Route 128 and the
Massachusetts Turnpike) on Tuesday, May 16, 2000, commencing at 10:00, Eastern
time.
A description of business to be conducted at the Annual Meeting is in the
attached Notice of Annual Meeting and Proxy Statement. Also enclosed is a copy
of our Annual Report for 1999.
Your vote is important no matter how many shares you own. We hope you will
be able to attend the meeting in person, but if you cannot, please sign and date
the enclosed proxy and return it in the accompanying envelope. If you plan to
attend, please check the appropriate box on the proxy card.
Sincerely,
/s/ Richard B. DeWolfe
RICHARD B. DEWOLFE
Chairman and
Chief Executive Officer
<PAGE>
THE DEWOLFE COMPANIES, INC.
80 HAYDEN AVENUE
LEXINGTON, MASSACHUSETTS 02421
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders will be held on May 16, 2000 at
10:00 a.m. Eastern Time at the Newton Marriott, 2345 Commonwealth Avenue,
Newton, Massachusetts (Route 128 and the Massachusetts Turnpike), for the
following purposes:
1. To fix the number of directors and to elect directors of the Company for
the ensuing year and until their respective successors are chosen and
qualified;
2. To consider and act upon a proposal to amend the Company's 1998 Stock
Option Plan;
3. To ratify the Company's selection of Ernst & Young LLP as auditors of
the Company for the year ending December 31, 2000; and
4. To consider and act upon matters incidental to the foregoing and to
transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 17, 2000 as
the record date for the determination of stockholders entitled to receive notice
of, and to vote at, the Annual Meeting of Stockholders.
By order of the Board of Directors,
PAUL J. HARRINGTON,
CLERK
April 4, 2000
The Company's Annual Report for 1999 containing a copy of the Company's
Form 10-K (excluding exhibits) for the year ended December 31, 1999 is enclosed
herewith.
PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING.
<PAGE>
THE DEWOLFE COMPANIES, INC.
80 HAYDEN AVENUE
LEXINGTON, MASSACHUSETTS 02421
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2000
This statement is furnished to the stockholders of THE DEWOLFE
COMPANIES, INC. (hereinafter, the "Company") in connection with management's
solicitation of proxies to be used at the Annual Meeting of Stockholders on
May 16, 2000 and at any adjournment of that meeting. The approximate date on
which this proxy statement and accompanying proxy are being sent to stockholders
of the Company is April 4, 2000. Each proxy delivered pursuant to this
solicitation is revocable at the option of the person executing the same by
written notice delivered to the Clerk of the Company at any time before the
proxy is voted. A stockholder who attends the Annual Meeting in person may
revoke his or her proxy at that time and vote his or her shares if such
stockholder so desires. The presence in person or by proxy of stockholders
entitled to cast a majority of the outstanding shares, or 1,680,419 shares,
shall constitute a quorum. With respect to the election of Directors, the
Company will treat votes withheld as shares that are present for purposes of
determining a quorum. A plurality is required to elect Directors, so the five
persons receiving the greatest number of votes will be elected. Withheld votes
will not affect the outcome of the election. With respect to the approval of the
amendment of the 1998 Stock Option Plan and the approval of auditors, the
Company will treat abstentions as shares that are present and entitled to vote
for purposes of determining a quorum. Since a majority of the shares represented
at the meeting and entitled to vote is required for approval, abstentions will
have the effect of a vote against approval of these proposals. If a broker
indicates on a proxy that it does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will be considered as
present for quorum purposes but not as shares entitled to vote with respect to
that matter. Accordingly, broker non-votes will have no effect on such a matter.
All shares represented by a properly executed proxy will be voted unless it
is revoked and, if a choice is specified, will be voted in accordance with such
specification. If no choice is specified, the proxies will be voted FOR the
election of five directors, unless authority to do so is withheld with respect
to one or more of the nominees, FOR the approval of the amendment of the 1998
Stock Option Plan, and FOR the ratification of the Company's selection of
Ernst & Young LLP as auditors for the year ending December 31, 2000. In
addition, the proxy will be voted in the discretion of the proxy holders with
respect to such other business as may properly come before the meeting. The
officers and directors of the Company as a group own beneficially 60%
(excluding, for this purpose, outstanding options) of the outstanding shares of
Common Stock of the Company (see "Principal Stockholders and Stockholdings of
Management"). The Company expects that its officers and directors will vote the
shares owned by them FOR the election of such five nominees, FOR the approval of
the amendment of the 1998 Stock Option Plan, and FOR the ratification of the
Company's selection of Ernst & Young LLP as auditors.
As of March 17, 2000, the Company had outstanding 3,360,836 shares of Common
Stock. Each share of the outstanding Common Stock is entitled to one vote. Only
holders of Common Stock of record on the books of the Company at the close of
business on March 17, 2000 will be entitled to receive notice of, and to vote
at, the Annual Meeting.
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting, directors are to be elected to hold office for the
ensuing year and until their respective successors are chosen and qualified. The
Board of Directors has fixed the size of the Board at five, subject to the
ratification by the stockholders at the Annual Meeting, and has nominated five
persons, to serve until the next Annual Meeting of Stockholders and until their
successors are elected and qualified. If the enclosed proxy is duly executed and
received in time for the Meeting, and unless authority to do so is withheld, it
will be voted to elect as directors the following nominees: Richard B. DeWolfe,
A. Clinton Allen, R. Robert Popeo, Paul R. Del Rossi and Robert N. Sibcy. (For a
description of the business experience of such nominees, see "Business
Experience of Nominees and Executive Officers" below.) With the exception of
Mr. Sibcy, all of the nominees are currently directors of the Company. In the
event that any of the nominees becomes unavailable, then the proxy holders shall
have the right: (i) to vote for such substitute, if any, as the present Board of
Directors may designate; (ii) to leave a vacancy on the Board; or (iii) to fix
the number of directors for the ensuing year at less than five.
The Company did not have a nominating committee of the Board of Directors in
1999. The Stock Option Committee, whose members are Messrs. Popeo and Del Rossi,
administers the Company's 1998 Stock Option Plan. The Stock Option Committee
held one meeting in 1999. The Compensation Committee, whose members are
Messrs. Allen, Popeo and Del Rossi, met one time. The Audit committee, whose
members are Messrs. Popeo and Del Rossi, met one time during 1999. During the
year ended December 31, 1999, there were seven meetings of the Board of
Directors. All of the directors attended, in person or by telephone, at least
75% of the meetings of the Board of Directors. The directors regularly consult
with management and are kept informed of business developments and financial
results as they occur.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of reports filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or written representations from persons required to file such reports
("Reporting Persons"), the Company believes that, except as set forth below, all
such filings required to be made by such Reporting Persons were timely made in
accordance with the requirements of the Exchange Act. In March, 2000,
Mr. DeWolfe filed an amended Form 4 for February, 1999 to correct the number of
shares acquired upon exercise of an option.
2
<PAGE>
BUSINESS EXPERIENCE OF NOMINEES AND EXECUTIVE OFFICERS
Following is a list of names, ages and positions with the Company of all
nominees for election as directors and all executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
Richard B. DeWolfe.......... 56 Chief Executive Officer, President and Treasurer,
Chairman of the Board of Directors, and Nominee
A. Clinton Allen............ 56 Director, Vice Chairman of the Board of Directors, and
Nominee
R. Robert Popeo............. 61 Director and Nominee
Paul R. Del Rossi........... 57 Director and Nominee
Robert N. Sibcy............. 56 Nominee for Director
Paul J. Harrington.......... 47 Chief Operating Officer, Executive Vice President and
Clerk; President of The DeWolfe Company, Inc.
James A. Marcotte........... 42 Senior Vice President and Chief Financial Officer
Patricia A. Griffin......... 54 Senior Vice President; President of DeWolfe Relocation
Services, Inc.
Gail F. Hayes............... 51 Vice President; President of DeWolfe Mortgage Services,
Inc.
Richard A. Pucci............ 44 Vice President; President of DeWolfe Insurance Agency,
Inc.
Richard J. Loughlin, Jr..... 53 Executive Vice President of The DeWolfe Company, Inc.
</TABLE>
All Directors hold office until the next annual meeting of stockholders or
until their successors are elected. Except as noted below, no officer holds his
office for a fixed term and the Board of Directors may terminate any officer's
term of office. Except as noted below, each officer and director described below
has been employed at his or her present place of employment for more than five
years.
Richard B. DeWolfe is the Company's Chief Executive Officer, President and
Treasurer, and the Chairman of the Board of Directors of the Company.
A. Clinton Allen has been Vice Chairman and a Director of the Company since
1991. Mr. Allen is Chairman and Chief Executive Officer of A.C. Allen &
Company, Inc., an investment banking consulting firm located in Cambridge,
Massachusetts. He is a director of Response USA, Inc., The Legal Club of
America, Steinway Musical Instruments, Inc., Diversified Corporate
Resources, Inc., Swiss Army Brands, Inc., and Psychemedics Corporation, where he
serves as Vice Chairman.
R. Robert Popeo has been a Director of the Company since 1992. Mr. Popeo is
a member of the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
of Boston, Massachusetts and currently serves as its Chairman.
Paul R. Del Rossi has been a Director of the Company since 1992. Mr. Del
Rossi is President of General Cinema Theaters, Inc.
3
<PAGE>
Robert N. Sibcy is a nominee for election as a director. Mr. Sibcy is the
President of Sibcy Cline Realtors, Inc., a residential real estate brokerage
firm located in Cincinnati, Ohio. He is a director of Armrel Byrnes and Zaring
National Corp.
Paul J. Harrington has served as Chief Operating Officer of the Company and
as President of The DeWolfe Company, Inc., the Company's real estate sales
subsidiary, since August, 1997. Mr. Harrington was named an Executive Vice
President of the Company in March, 1995. From 1992 until August, 1997 he served
as President of DeWolfe Mortgage Services, Inc. He has also served as Clerk of
the Company since 1992.
James A. Marcotte was appointed the Company's Chief Financial Officer and
Senior Vice President effective in June, 1996. From September, 1992 until June,
1996 Mr. Marcotte served as Senior Vice President and Chief Financial Officer of
First NH Mortgage Corporation. Prior to September, 1992 he was employed by the
Federal Deposit Insurance Corporation.
Patricia A. Griffin is a Senior Vice President of the Company and President
of DeWolfe Relocation Services, Inc. Ms. Griffin is Mr. DeWolfe's sister.
Gail F. Hayes has been a Vice President of the Company and President of
DeWolfe Mortgage Services, Inc. since September, 1997. Prior to joining the
Company, Ms. Hayes served as Senior Vice President of Knutson Mortgage
Corporation, of Bloomington, Minnesota. She served as President of the Minnesota
Mortgage Bankers Association from 1994 to 1995. She is also a Certified Mortgage
Banker.
Richard A. Pucci joined the Company on May 18, 1998 as Vice President and as
President of DeWolfe Insurance Agency, Inc. in connection with the Company's
acquisition of the personal lines insurance business of Curtin Insurance
Agency, Inc., on such date. Mr. Pucci was formerly the President of Curtin
Insurance Agency, Inc.
Richard J. Loughlin, Jr. was appointed Executive Vice President of The
DeWolfe Company, Inc., the Company's real estate brokerage subsidiary, in
October, 1999. Prior to that he served as Senior Vice President of Operations of
the DeWolfe Company, Inc. since August 1997. Mr. Loughlin has held various
management positions with The DeWolfe Company, Inc. since 1989. Prior to that
time, he was the owner of Fred T. Boyd Associates, Inc., a real estate company
in Concord, Massachusetts.
4
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has made advances and loans to Mr. DeWolfe and his spouse on
various dates, including: advances and demand notes in the aggregate principal
amount of $66,000 that bear interest at prime plus one-half percent; a term note
in the amount of $186,000 which Mr. DeWolfe delivered to the Company in payment
of the exercise price of a stock option granted to him in 1993; and term notes
in the aggregate amounts of approximately $440,000 which Mr. DeWolfe and his
spouse delivered to the Company in payment of the exercise price of stock
options granted to them in 1994. The term notes are due on April 27, 2000, and
February 10, 2001 respectively and bear interest at prime plus one-quarter
percent and are secured by the shares acquired upon such exercises. The
aggregate amount of principal and accrued unpaid interest under all such
advances and loans to Mr. DeWolfe and his spouse was approximately $724,000 at
February 29, 2000.
As of December 31, 1999 the Company had outstanding indebtedness of $338,000
to a lender which has been personally guaranteed by Mr. DeWolfe.
Until January, 1999, Amherst Street Realty Trust, an entity controlled by
Mr. DeWolfe, leased office space to the Company in Nashua, New Hampshire on an
oral tenancy-at-will basis. Such space consisted of 1,500 square feet and, until
October, 1995, it was used as a regional office for the Company. The Company
made payments of $37,053 to the trust in 1998 for rent, and to reimburse the
trust for insurance premiums and taxes paid by the trust. As of December 31,
1998, the trust owed $51,000 to the Company pursuant to a non interest bearing
note which was secured by a mortgage on the property. In January, 1999, the
lease was terminated and the indebtedness was reduced by $22,143.
Canton Avenue Realty Trust, an entity controlled by Mr. DeWolfe, leases
office space to the Company in Milton, Massachusetts. Such space consists of
3,750 square feet and is used for the Company's Milton sales center. The Company
made rent payments of $52,923 to such entity in 1999.
During fiscal year 1999 the Company paid consulting fees to Mr. Allen in the
aggregate amount of $97,057 relating to investor relations and mergers and
acquisitions.
On April 27, 1998 and on February 10, 1999, the Company made term loans to
Mr. Harrington in payment of the exercise prices of stock options granted to him
in 1993 and 1994. The principal amounts of the loans were $84,500, and $120,250
respectively and were repayable in two years and bear interest at prime plus
one-quarter percent. The aggregate amount of principal and accrued unpaid
interest under such loans to Mr. Harrington was $207,733 at February 29, 2000.
Each loan is secured by the shares of common stock acquired upon exercise.
C & E Realty Trust, an entity controlled by Mr. Loughlin, leases office
space to the Company in Concord, Massachusetts. Such space consists of 3,500
square feet and is used for the Company's Concord sales center. The Company made
rent payments of $88,769 to such entity in 1999.
The Company believes, based upon its experience in the real estate industry,
that its current leases of office space from affiliated parties are on terms no
less favorable than those which could be obtained from unaffiliated parties.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1999,
1998, and 1997, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for such year, to the
Company's Chairman and Chief Executive Officer and to each of the four highest
paid executive officers of the Company other than the Chief Executive Officer
(collectively the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------- ------------
NAME AND OTHER ANNUAL SECURITIES ALL OTHER
PRINCIPAL COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($) OPTIONS (#) ($)
- --------- -------- --------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard B. DeWolfe 1999 424,539 281,000 16,849(1) 100,000 11,532(2)
Chairman & Chief Executive 1998 395,000 59,520 13,630(3) 100,000 11,093(4)
Officer 1997 351,469 108,150 5,306(5) 50,000 12,200(6)
Paul J. Harrington, 1999 279,538 142,000 12,000(7) 50,000 2,400(8)
Executive Vice President 1998 249,423 56,250 11,539(7) 30,000 2,400(8)
1997 197,808 54,375 11,000(7) 20,000 2,400(8)
James A. Marcotte 1999 194,692 46,000 4,800(7) 30,000 2,400(8)
Senior Vice President and 1998 174,712 14,600 3,600(7) 25,000 2,400(8)
Chief Financial Officer 1997 140,579 11,000 0 7,500 2,274(8)
Gail Hayes 1999 184,731 60,800 6,000(7) 5,000 2,400(8)
Vice President 1998 166,385 35,100 6,000(7) 1,000 800(8)
1997 51,692 0 2,077(7) 10,000 0
Richard Loughlin, Jr. 1999 181,058 90,800 1,534(5) 6,000 2,400(8)
Executive Vice President of 1998 160,096 15,100 0 5,000 2,400(8)
the DeWolfe Company, Inc. 1997 139,269 55,064 0 7,500 2,400(8)
</TABLE>
- --------------
(1) Includes $8,514 of commissions and $8,335 of expense allowances.
(2) Includes $9,132 representing the value of the benefit to Mr. DeWolfe of the
remainder of premiums paid by the Company on his behalf pursuant to the
Company's "split dollar" insurance program; and $2,400 of the Company
contributions for the benefit of Mr. DeWolfe under the Company's 401(k)
retirement plan.
(3) Includes $4,403 of commissions and $9,227 of expense allowances.
(4) Includes: $8,693, representing the value of the benefit to Mr. DeWolfe of
the remainder of premiums paid by the Company on his behalf pursuant to the
Company's "split dollar" insurance program; and $2,400 of Company
contributions for the benefit of Mr. DeWolfe under the Company's 401(k)
retirement plan.
6
<PAGE>
(5) Represents commissions paid on transactions in which the named executive
served as a broker.
(6) Includes: $9,800, representing the value of the benefit to Mr. DeWolfe of
the remainder of premiums paid by the Company on his behalf pursuant to the
Company's "split dollar" insurance program; and $2,400 of Company
contributions for the benefit of Mr. DeWolfe under the Company's 401(k)
retirement plan.
(7) Represents amount paid as an expense allowance to the named executive
officer.
(8) Represents the Company's contribution for the benefit of the named
executive officer under the Company's 401(k) retirement plan.
STOCK OPTION GRANT TABLE
The following table contains information concerning the grant of stock
options to the named executive officers during the Company's fiscal year ended
December 31, 1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
% OF TOTAL OF ASSUMED ANNUAL RATE
OPTIONS EXERCISE OF STOCK APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------------
NAME (#) FISCAL YEAR ($/SH)(1) DATE 0% 5% ($) 10% ($)
---- -------- ------------ --------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard B. DeWolfe 13,850(2) 3.5 7.94(3) 2-04 0 17,655 51,077
86,150(2) 21.8 7.22(4) 2-04 0 171,847 379,739
Paul J. Harrington 50,000(5) 12.6 7.22(4) 2-04 0 99,737 220,394
James A. Marcotte 30,000(5) 7.6 7.22(4) 2-04 0 59,842 132,236
Gail F. Hayes 5,000(5) 1.3 7.22(4) 2-04 0 9,974 22,039
Richard Loughlin, Jr. 6,000(5) 1.5 7.22(4) 2-04 0 11,968 26,447
</TABLE>
- --------------
(1) The exercise price and the withholding obligations related to exercise may
be paid by delivery of already owned shares, subject to certain conditions.
(2) These options were granted under the Company's 1998 Stock Option Plan and
have a term of 5 years. On a combined basis, they become exercisable with
respect to 25% of the shares covered thereby twelve months after the date of
grant and will become exercisable with respect to an additional 25% of the
shares covered thereby on each of the three successive anniversary dates
thereafter. Under the terms of the 1998 Stock Option Plan, the Stock Option
Committee may, in its discretion, accelerate the date on which any option
granted thereunder becomes exercisable in full; upon a change in control of
the Company, the options automatically become exercisable in full.
(3) Represents 110% of the market value on the date of grant.
(4) Represents the market value on the date of grant.
(5) These options were granted under the Company's 1998 Stock Option Plan and
have a term of 5 years. They become exercisable with respect to 25% of the
shares covered thereby twelve months after the
7
<PAGE>
date of grant and will become exercisable with respect to an additional 25%
of the shares covered thereby on each of the three successive anniversary
dates thereafter. Under the terms of the 1998 Stock Option Plan the Stock
Option Committee may, in its discretion, accelerate the date on which any
option granted thereunder becomes exercisable in full; upon a change in
control of the Company, the options automatically become exercisable in
full.
YEAR-END OPTION VALUES
The following table sets forth information with respect to each of the named
executive officers concerning each exercise of stock options during the fiscal
year and the number and value of unexercised options held as of December 31,
1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES VALUE YEAR-END (#) FISCAL YEAR-END ($) (2)
ACQUIRED REALIZED --------------------------- ---------------------------
NAME ON EXERCISE ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard B. DeWolfe 75,000 166,312 200,000 200,000 142,750 57,350
Paul J. Harrington 25,000 59,437 32,500 87,500 48,500 59,300
James A. Marcotte 0 0 14,500 54,000 11,392 19,072
Gail F. Hayes 0 0 5,250 10,750 9,230 9,590
Richard Loughlin, Jr. 0 0 9,375 13,675 17,042 7,8626
</TABLE>
- --------------
(1) Value represents the difference between the closing price of the Common
Stock on the date of exercise and the exercise price, multiplied by the
number of shares acquired on exercise.
(2) Represents the fair market value of the Company's Common Stock on
December 31, 1999 ($6.75 per share based on the closing price on the
American Stock Exchange) minus the exercise price per share, of the
in-the-money options, multiplied by the number of shares subject to each
option.
8
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Effective May 21, 1992, Mr. DeWolfe entered into an employment contract with
the Company which is generally terminable with 90 days prior written notice.
Pursuant to the terms of this contract, Mr. DeWolfe serves as President and
Chief Executive Officer of the Company at a salary to be determined annually by
the Board. In addition, the contract includes provisions providing Mr. DeWolfe
with severance payments at the rate of his then current salary for two years
following the termination of his employment without cause and restricting
Mr. DeWolfe's right to compete with the Company for one year following the
termination of his employment for any reason. The Company owns a $5 million "key
man" life insurance policy on Mr. DeWolfe.
Effective May 21, 1992, Mr. Harrington entered into an employment contract
with the Company which is generally terminable with 90 days prior written
notice. Pursuant to the terms of this contract, Mr. Harrington serves as
Executive Vice President of the Company at a salary to be determined annually by
the Board of Directors. In addition, the contract includes provisions providing
Mr. Harrington with severance payments at the rate of his then current salary
for one year following the termination of his employment without cause and
restricting Mr. Harrington's right to compete with the Company for one year
following the termination of his employment for any reason.
Effective June 27, 1996, Mr. Marcotte entered into an employment contract
with the Company which is generally terminable with 90 days prior written
notice. Pursuant to the terms of this contract, Mr. Marcotte serves as Senior
Vice President and Chief Financial Officer of the Company at a salary to be
determined annually by the Board of Directors. In addition, the contract
includes provisions providing Mr. Marcotte with severance payments at the rate
of his then current salary for one year following the termination of his
employment without cause and restricting Mr. Marcotte's right to solicit
employees or associates of the Company for two years following the termination
of his employment for any reason.
Effective September 2, 1997, Ms. Hayes entered into an employment contract
with the Company which is generally terminable with 60 days prior written
notice. Pursuant to the terms of this contract, Ms. Hayes serves as President of
DeWolfe Mortgage Services, Inc. and Vice President of the Company at a salary to
be determined by the Board of Directors. In addition, the contract includes
provisions providing Ms. Hayes with severance payments at the rate of her then
current salary for one year following the termination of her employment without
cause and restricting Ms. Hayes' right to solicit employees or associates of the
Company following the termination of her employment for the purpose of inducing
such persons to terminate their employment or association with the Company.
Effective February 20, 1998, Mr. Loughlin entered into an employment
contract with The DeWolfe Company, Inc. which is generally terminable with
30 days prior written notice. Pursuant to the terms of this contract,
Mr. Loughlin serves as Executive Vice President of The DeWolfe Company at an
annual base salary to be determined by the Company plus bonus compensation
determined under a formula, based on the Company's performance. In addition, the
contract includes provisions restricting Mr. Loughlin's right to solicit
employees or associates of the Company for one year following the termination of
his employment for any reason.
9
<PAGE>
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION ON COMPENSATION DECISIONS
During fiscal year 1999 Richard B. DeWolfe, the Company's Chairman and Chief
Executive Officer, made recommendations to the Compensation Committee of the
Board of Directors regarding executive officer compensation.
During fiscal year 1999 the Company paid consulting fees to Mr. Allen in the
aggregate amount of $97,057 relating to investor relations and mergers and
acquisitions.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPANY'S EXECUTIVE COMPENSATION PROGRAM IS DESIGNED TO ATTRACT, RETAIN
AND REWARD EXECUTIVES WHO ARE RESPONSIBLE FOR LEADING THE COMPANY IN ACHIEVING
ITS BUSINESS OBJECTIVES. THIS REPORT IS SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS AND ADDRESSES THE COMPENSATION POLICIES FOR FISCAL
1999 AS THEY AFFECTED MR. DEWOLFE, IN HIS CAPACITY AS CHIEF EXECUTIVE OFFICER OF
THE COMPANY, AND THE OTHER EXECUTIVE OFFICERS OF THE COMPANY.
COMPENSATION PHILOSOPHY
THE COMPANY'S EXECUTIVE COMPENSATION PHILOSOPHY IS BASED ON THE BELIEF THAT
COMPETITIVE COMPENSATION IS ESSENTIAL TO ATTRACT, MOTIVATE AND RETAIN HIGHLY
QUALIFIED AND INDUSTRIOUS EMPLOYEES. THE COMPANY'S POLICY IS TO PROVIDE TOTAL
COMPENSATION THAT IS COMPETITIVE FOR COMPARABLE WORK AND COMPARABLE CORPORATE
PERFORMANCE. THE COMPENSATION PROGRAM IS ALSO DESIGNED TO LINK THE INTERESTS OF
THE COMPANY'S EXECUTIVES TO THE INTERESTS OF THE COMPANY'S SHAREHOLDERS.
AT PRESENT, THE EXECUTIVE COMPENSATION PROGRAM IS COMPRISED OF SALARY, CASH
INCENTIVE OPPORTUNITIES, LONG-TERM INCENTIVE OPPORTUNITIES IN THE FORM OF STOCK
OPTIONS, AND BENEFITS TYPICALLY OFFERED TO EXECUTIVES BY MAJOR CORPORATIONS. AS
AN EXECUTIVE'S LEVEL OF RESPONSIBILITY INCREASES, THE GREATER THE MIX OF
COMPENSATION SHIFTS TO INCENTIVE-BASED COMPENSATION AND COMPENSATION BASED ON
INCREASES IN THE VALUE OF THE COMMON STOCK THROUGH STOCK-BASED AWARDS.
SECTION 162(M) OF THE INTERNAL REVENUE CODE GENERALLY DISALLOWS A TAX
DEDUCTION TO PUBLIC COMPANIES FOR COMPENSATION OVER $1 MILLION PAID TO ITS CHIEF
EXECUTIVE OFFICER AND ITS FOUR OTHER MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS
(THE "NAMED EXECUTIVE OFFICERS"). QUALIFYING PERFORMANCE-BASED COMPENSATION IS
NOT SUBJECT TO THE DEDUCTION LIMIT IF CERTAIN REQUIREMENTS ARE MET. IT IS NOT
ANTICIPATED THAT ANY OF THE NAMED EXECUTIVE OFFICERS WILL RECEIVE COMPENSATION
FOR 1999, OR FOR FUTURE YEARS THAT CAN NOW BE PREDICTED, WHICH WOULD NOT BE
DEDUCTIBLE FOR TAX PURPOSES.
COMPENSATION ELEMENTS
BASE SALARY
SALARY RANGES ARE ASSIGNED TO EACH POSITION BASED ON A COMPARISON OF DEWOLFE
POSITIONS WITH SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE IN THE COMPANY'S
INDUSTRY, WITH RANGE MIDPOINTS ESTABLISHED AT THE AVERAGE OF THE MARKETPLACE.
ACTUAL SALARIES WITHIN THE APPROPRIATE RANGE DEPEND UPON INDIVIDUAL PERFORMANCE,
EXPERIENCE AND INTERNAL EQUITY AND ARE REVIEWED AND MAY BE ADJUSTED ANNUALLY BY
THE COMPANY. INCREASES IN THE BASE SALARIES PAID TO EXECUTIVE OFFICERS IN 1999
WERE MADE IN THE DISCRETION OF THE COMPENSATION COMMITTEE BASED ON THE FOREGOING
CRITERIA.
10
<PAGE>
INCENTIVE COMPENSATION
CASH BONUSES PAID TO EXECUTIVE OFFICERS ARE DETERMINED BY THE BOARD OF
DIRECTORS BASED ON SUBJECTIVE CRITERIA AND ON THE FINANCIAL PERFORMANCE OF THE
COMPANY AND ARE PAID AT VARIOUS TIMES DURING THE YEAR. THE BONUSES PAID TO
EXECUTIVE OFFICERS IN 1999 WERE BASED ON BOTH PERFORMANCE IN 1998, AS WELL AS ON
YEAR-TO-DATE PERFORMANCE IN 1999.
STOCK OPTIONS
UNDER THE COMPANY'S 1998 STOCK OPTION PLAN FOR EXECUTIVE OFFICERS AND OTHER
EMPLOYEES AND CONSULTANTS, THE STOCK OPTION COMMITTEE OF THE BOARD OF DIRECTORS
IS AUTHORIZED TO GRANT OPTIONS WITH TERMS OF UP TO TEN YEARS. THE OPTIONS
GENERALLY BECOME EXERCISABLE WITH RESPECT TO 25% OF THE SHARES COVERED THEREBY
ON THE FIRST ANNIVERSARY OF THE DATE OF GRANT AND WITH RESPECT TO AN ADDITIONAL
25% ON EACH OF THE NEXT THREE ANNIVERSARY DATES THEREAFTER. IN GRANTING THE
STOCK OPTIONS TO EXECUTIVES, THE STOCK OPTION COMMITTEE OF THE BOARD OF
DIRECTORS TAKES INTO ACCOUNT THE PRACTICES OF OTHER COMPANIES OF COMPARABLE SIZE
AS WELL AS THE EXECUTIVE'S LEVEL OF RESPONSIBILITY AND INDIVIDUAL AND CORPORATE
PERFORMANCE DURING THE PRIOR YEAR. IN 1999, THE STOCK OPTION COMMITTEE GRANTED
TO MESSRS. HARRINGTON, MARCOTTE AND LOUGHLIN AND TO MS. HAYES OPTIONS TO
PURCHASE AN AGGREGATE OF 91,000 SHARES.
COMPENSATION TO THE CHIEF EXECUTIVE OFFICER
THE COMPENSATION OF RICHARD B. DEWOLFE, CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER, TAKES INTO ACCOUNT THE FACT THAT MR. DEWOLFE IS THE FOUNDER
AND HAS BEEN THE PRINCIPAL EXECUTIVE OFFICER OF THE COMPANY SINCE ITS INCEPTION.
MR. DEWOLFE IS RESPONSIBLE, TO A GREATER DEGREE THAN PRINCIPAL EXECUTIVE
OFFICERS OF MANY COMPANIES OF SIMILAR SIZE, FOR THE SUCCESS OF THE COMPANY AND
THE RESULTING VALUE OF ITS STOCK PRICE. ACCORDINGLY, A SUBSTANTIAL PORTION OF
HIS TOTAL COMPENSATION PACKAGE CONSISTS OF BONUS COMPENSATION AND STOCK OPTIONS.
MR. DEWOLFE'S SALARY FOR 1999 WAS BASED UPON A NUMBER OF 1998 FACTORS, INCLUDING
REVENUE GROWTH, EXPANSION, AND PRE-TAX EARNINGS. THESE FACTORS WERE GIVEN
APPROXIMATELY EQUAL WEIGHT IN THE CONSIDERATION OF MR. DEWOLFE'S 1999
COMPENSATION. REVENUE GREW BY 31% IN 1998. THE COMPANY COMPLETED FOUR
ACQUISITIONS DURING 1998. PRE-TAX INCOME IN 1998 WAS NEARLY TRIPLE THE AMOUNT
ACHIEVED IN 1997. AS A RESULT, THE COMPANY INCREASED MR. DEWOLFE'S BASE SALARY
IN 1999 BY 7% AND PAID MR. DEWOLFE A YEAR-END BONUS OF $217,000. IN ADDITION,
MR. DEWOLFE RECEIVED BONUS COMPENSATION IN 1999 BASED ON 1999 YEAR-TO-DATE
RESULTS. IN 1999, THE STOCK OPTION COMMITTEE GRANTED TO MR. DEWOLFE OPTIONS TO
ACQUIRE 100,000 SHARES.
PAUL R. DEL ROSSI
A. CLINTON ALLEN
ROBERT POPEO
COMPENSATION OF DIRECTORS
The Company's outside (non-employee) directors each receive cash
compensation in the amount of $24,000 annually (provided that they attend a
minimum of 4 meetings) in consideration for serving on the Board of Directors.
In addition, Mr. Allen receives compensation at a rate of $6,000 per month in
exchange for consulting services rendered to the Company relating to investor
relations and mergers and acquisitions. In addition, each of the Company's
non-employee directors is eligible to participate in the Company's 1998 Stock
Option Plan.
Under the 1998 Stock Option Plan, directors are eligible to receive stock
options at the discretion of the Board of Directors, on such dates, in such
amounts and at such times, as the Board of Directors may determine.
11
<PAGE>
THE DEWOLFE COMPANIES, INC.
STOCK PRICE PERFORMANCE GRAPH(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
$ DOLLARS
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1999
THE DEWOLFE COMPANIES, INC. 100 120.59 135.29 123.53 147.06 183.16
S&P RETAIL COMPOSITE(2) 100 110.3 128.36 183.71 294.14 354.42
AMEX MARKET INDEX(3) 100 88.33 113.86 120.15 144.57 142.61
</TABLE>
ASSUMES $100 INVESTED ON JAN. 1, 1995
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1999
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
THE DEWOLFE COMPANIES, INC. 100.00 120.59 135.29 123.53 147.06 183.16
S&P RETAIL COMPOSITE(2) 100.00 110.30 128.38 183.71 294.14 354.42
AMEX MARKET INDEX(3) 100.00 88.33 113.86 120.15 144.57 142.61
</TABLE>
- --------------
(1) The above graph assumes a $100 investment on December 31, 1994, through the
five-year period ended December 31, 1999 in the Company's Common Stock, the
AMEX Market Index, and the S&P Retail Composite. The prices assume the
reinvestment of dividends.
(2) The S&P Retail Composite is a capitalization weighted index of all of the
stocks in the Standard & Poors 500 that are involved in the industrial
sectors of the retail industry.
(3) The AMEX Market Index includes companies whose shares are traded on the
American Stock Exchange.
12
<PAGE>
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following shows as of March 1, 2000 the number of shares of the
Company's Common Stock owned by each director and nominee for director, each
named executive officer, all executive officers and directors as a group, and by
each person known by the Company to own more than 5% of the Company's
outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME(1) OWNERSHIP(2) OWNED(2)
- ------- ------------ ----------
<S> <C> <C>
Richard B. DeWolfe
The DeWolfe Companies, Inc.
80 Hayden Avenue
Lexington, Massachusetts 02421............................ 2,098,192(3) 57.7
Robert N. Sibcy
8044 Montgomery Road
Cincinnati, Ohio 45236.................................... 473,000 14.1
A. Clinton Allen
A.C. Allen & Company, Inc.
1280 Massachusetts Avenue
Cambridge, Massachusetts 02138............................ 236,512(4) 6.6
Paul J. Harrington.......................................... 117,301(5) 3.4
R. Robert Popeo............................................. 57,000(5) 1.7
Paul R. Del Rossi........................................... 57,000(5) 1.7
James A. Marcotte........................................... 30,445(5) *
Richard Loughlin, Jr........................................ 18,839(5) *
Gail F. Hayes............................................... 7,040(5) *
All executive officers and directors as a group (10
persons).................................................. 2,737,848(6) 67.1
</TABLE>
- --------------
* Denotes ownership of less than 1%.
(1) Except as specified otherwise, each person has sole voting and dispositive
power with respect to the indicated shares of Common Stock.
(2) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within
60 days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the number of shares owned by, and
percentage ownership of, such individual or group, but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person shown in the table.
(3) Includes 114,855 shares of Common Stock held by Mr. DeWolfe's spouse and
options to acquire 15,875 shares of Common Stock beneficially owned by his
spouse, beneficial ownership of which shares is disclaimed by Mr. DeWolfe.
Includes 262,500 shares of Common Stock which Mr. DeWolfe has a right to
acquire within 60 days pursuant to the exercise of options.
13
<PAGE>
(4) Includes (i) 7,380 shares of Common Stock owned by Mr. Allen's spouse
beneficial ownership of which shares is disclaimed by Mr. Allen; and
(ii) 197,000 shares of Common Stock which Mr. Allen has a right to acquire
within 60 days pursuant to the exercise of options.
(5) Includes the following number of shares of Common Stock which the
individual has a right to acquire within 60 days pursuant to the exercise
of options: Messrs. Popeo and Del Rossi: 57,000 shares each;
Mr. Harrington: 62,500 shares; Mr. Marcotte: 30,125 shares; Mr. Loughlin:
14,125; and Ms. Hayes: 6,750 shares.
(6) Includes 663,375 shares of Common Stock which executive officers and
directors have a right to acquire within 60 days pursuant to the exercise
of options. Includes shares and options held by the spouses of certain
executive officers, or directors, beneficial ownership of which is
disclaimed by the applicable officer or director.
AMENDMENT OF THE 1998 STOCK OPTION PLAN
On February 8, 2000 the Board of Directors voted unanimously to amend the
Company's 1998 Stock Option Plan (the "1998 Plan") subject to the ratification
of such amendment by the stockholders of the Company at the Annual Meeting, to
increase the number of shares of Common Stock of the Company on which options
may be granted thereunder from 809,700, plus the 3,475 additional shares that
automatically became available during the period February 9, 1999 to
February 8, 2000 due to the cancellation of options under the Company's 1992
Stock Option Plan, by an additional 624,700 shares, so that the aggregate number
of shares issuable thereunder would be 1,437,875 shares, plus any additional
shares that might thereafter become available due to the cancellation of any
option granted under the Company's 1992 Stock Option Plan or its 1992
Non-Employee Director Stock Option Plan. The individual participant annual limit
was also increased to 300,000 shares. A copy of the 1998 Plan, as amended, is
included with this proxy statement as Exhibit A.
The 1998 Plan is intended to benefit the Company and its subsidiaries
through offering certain present and future key employees, directors and
consultants (including sales associates) a favorable opportunity to become
holders of stock in the Company over a period of years, thereby giving them a
permanent stake in the growth and prosperity of the Company and encouraging the
continuance of their services with the Company and/or its subsidiaries. The 1998
Plan, as amended, provides as follows:
ADMINISTRATION
The 1998 Plan is administered by the Stock Option Committee of the Board of
Directors, and, with respect to options to be granted to members of such
Committee, by the full Board of Directors. Option grants under the 1998 Plan may
be made to employees and consultants (including sales associates) of the Company
or any subsidiary, and to members of the Company's Board of Directors, whether
or not they are employees. Options granted under the 1998 Plan are designated as
either "non-qualified stock options" or "incentive stock options" under the
Internal Revenue Code of 1986. Each option is for a term of not more than ten
years from the date of grant, and becomes exercisable in such installments as
may be determined by the Stock Option Committee. The maximum number of options
that may be granted in a single fiscal year to an individual is 300,000.
The Stock Option Committee has the discretion to specify the extent to which
options expire in the event of voluntary or involuntary termination of
employment or in the event of violation of any duty not to compete or not to
disclose confidential Company information. The Stock Option Committee also has
the discretion to make stock options transferable (for example, to family
members). Under the 1998 Plan,
14
<PAGE>
upon a change of control of the Company, options automatically become
immediately exercisable, and remain exercisable throughout their entire term.
The exercise price of stock options granted under the 1998 Plan is
determined by the Stock Option Committee, but it may not be less than the fair
market value of the stock on the date the option is granted, which is defined as
the average of the high and low sales prices of the Company's common stock on
the American Stock Exchange on the trading day immediately preceding the date
the option is granted, unless the Stock Option Committee otherwise determines.
An incentive stock option granted to a person who owns more than 10% of the
Company's outstanding stock must have an exercise price of not less than 110% of
fair market value. The full exercise price must be paid at the time of exercise
either in cash, by tendering previously acquired shares, or by a combination of
the above. The Stock Option Committee may also allow cashless exercises. In
connection with the exercise of options, the Stock Option Committee may make
loans to optionees in its discretion, subject to certain terms and conditions
not inconsistent with the 1998 Plan. Such loans shall bear interest rates, as
determined by the Stock Option Committee, which may be below then current market
rates or may be made without interest. No such loan may exceed the fair market
value of the shares covered by the options, or portion thereof, exercised by the
optionee. No loan shall have an initial term exceeding two years, but such loans
may be renewable at the discretion of the Stock Option Committee. Such loans
shall be secured by a pledge of shares of the optionee having a fair market
value of at least equal to 125% of the principal amount of the loan.
Options granted under the 1998 Plan expire at such time as the Stock Option
Committee determines from time to time, but not later than the tenth anniversary
of the date of grant unless otherwise designated by the Stock Option Committee
at the time of the grant. Options granted under the 1998 Plan are exercisable at
such times and be subject to such restrictions and conditions as the Stock
Option Committee may approve, which need not be the same for each grant or for
each participant. The Stock Option Committee may impose such restrictions on
shares acquired upon the exercise of an option as it deems advisable.
The Board of Directors of the Company may further amend or terminate the
1998 Plan in whole or in part at any time, subject to any requirement of
stockholder approval imposed by any applicable law, rule or regulation. No
amendment, modification or termination of the 1998 Plan shall adversely affect
in any material way any option previously granted under the plan, without the
written consent of the holder of the option.
FEDERAL INCOME TAX CONSEQUENCES
The grant of an option has no immediate tax consequences to the optionee or
the Company. The exercise of a non-qualified stock option requires an optionee
to include in income, as compensation, the amount by which the fair market value
of the acquired shares on the exercise date exceeds the option price. Upon a
subsequent sale or taxable exchange of shares acquired upon exercise of a
non-qualified stock option, an optionee will recognizes long- or short-term
capital gain or loss equal to the difference between the amount realized on the
sale and the tax basis of such shares. The Company is entitled (provided
applicable withholding requirements are met) to a deduction at the same time and
in the same amount as the optionee is in receipt of income in connection with
the exercise of a non-qualified stock option.
If the optionee exercises an incentive stock option and does not dispose of
the acquired shares within two years after the date of grant of the option or
within one year after the date of the transfer of such shares to him (a
"disqualifying disposition"), the optionee realizes no compensation income and
any gain or loss that the optionee realizes on a subsequent disposition of such
shares is treated as long-term capital
15
<PAGE>
gain or loss. For purposes of computing the alternative minimum tax, however,
the option generally will be treated as if it were a non-qualified stock option.
If an optionee makes a disqualifying disposition, the optionee will be required
to include in income, as compensation, the lesser of (i) the difference between
the option price and the fair market value of the acquired shares on the
exercise date or (ii) the amount of gain realized on such disposition. In
addition, depending on the amount received as a result of such disposition, the
optionee may realize long-tem or short-term capital gain or loss. The Company
will be entitled to a deduction at the same time and in the same amount as the
optionee is in receipt of compensation income as a result of a disqualifying
disposition. If there is no disqualifying disposition, no deduction will be
available to the Company.
OPTIONS GRANTED UNDER THE 1998 PLAN
Since the 1998 Plan was amended in February, 2000 to increase the number of
shares available thereunder, an aggregate of 386,800 options have been granted
under the 1998 Plan to employees, directors and consultants (including sales
associates) of the Company, subject to shareholder approval of the 1998 Plan, as
amended, including options to acquire 100,000 shares granted to Mr. DeWolfe,
options to acquire 30,000 shares granted to Mr. Allen, options to acquire 50,000
shares granted to Mr. Harrington, options to acquire 30,000 shares granted to
Mr. Marcotte, options to acquire 10,000 shares granted to Mr. Loughlin, options
to acquire 5,000 shares granted to Mr. Popeo, and options to acquire 5,000
shares granted to Mr. Del Rossi. Executive officers as a group were granted an
aggregate of 202,000 of such options. Non-employee directors as a group were
granted an aggregate of 40,000 of such options. The exercise price of 14,285 of
the options granted to Mr. DeWolfe was $7.70 per share, representing 110% of the
fair market value of a share of the Company's stock on the date of grant. The
exercise price of the balance of 85,715 options granted to Mr. DeWolfe and of
all of the other options granted to executive officers and directors was $7.00
per share, representing 100% of the fair market value of a share of the
Company's stock on the date of grant. The options granted to Messrs. Allen, Del
Rossi and Popeo have a term of 10 years and were vested in full on the date of
grant. All of the other options granted to executive officers have a term of
5 years and vest with respect to 25% of the shares covered thereby on each
anniversary date of the date of grant. As of March 1, 2000 options to purchase
1,074,675 shares under the Plan were outstanding and 363,200 shares were
reserved and available for additional grants under the Plan, subject to
shareholder approval. The closing price of the Company's Common Stock on the
American Stock Exchange on March 17th, 2000 was $7.63 per share.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is necessary to approve the amendment of the 1998 Plan. If
stockholders do not approve the amendment, all options granted by the Company
under the Plan on or after February 8, 2000 will be cancelled and void.
THE BOARD OF DIRECTORS BELIEVES THAT THE APPROVAL OF THE AMENDMENT OF THE
PLAN WILL CONTINUE TO PROMOTE THE LONG-TERM FINANCIAL SUCCESS OF THE COMPANY BY
AFFORDING AN ADDITIONAL OPPORTUNITY TO ALIGN THE INTERESTS OF EMPLOYEES,
DIRECTORS AND CONSULTANTS (INCLUDING SALES ASSOCIATES) WITH THOSE OF
STOCKHOLDERS.
The amendment to the 1998 Plan to increase the number of shares subject to
the Plan can only be made with the approval of the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE AMENDMENT OF THE 1998 PLAN.
16
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has selected as auditors of the Company for the year
ended December 31, 2000 the firm of Ernst & Young LLP and recommends
ratification of such selection by the shareholders. A member of the firm of
Ernst & Young LLP is expected to be present at the Annual Meeting of
Stockholders and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders must comply with Rule 14a-8 of the Securities and
Exchange Commission issued under the Securities Exchange Act of 1934, and must
be received at the principal executive offices of the Company not later than
December 3, 2000.
OTHER MATTERS
The Board of Directors knows of no other matters which may come before the
Meeting. However, if any matter not now known is presented at the Meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
said proxy in accordance with their judgment on such matter.
The Company will bear the cost of solicitation of proxies. Solicitations of
proxies by mail may be followed by telephone or other personal solicitation of
certain stockholders by officers or other employees of the Company.
By order of the Board of Directors,
PAUL J. HARRINGTON,
CLERK
April 4, 2000
17
<PAGE>
EXHIBIT A
THE DEWOLFE COMPANIES, INC.
1998 STOCK OPTION PLAN, AS AMENDED
ARTICLE 1.
ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Effective February 10, 1998 (the "Effective
Date"), THE DEWOLFE COMPANIES, INC., a Massachusetts corporation (hereinafter
referred to as the "Company"), established an incentive compensation plan known
as The DeWolfe Companies, Inc. 1998 Stock Option Plan (hereinafter referred to
as the "Plan"), as set forth in this document.
Subject to the provisions of Article 12 hereof, the Plan was amended on
February 8, 2000. The Plan shall remain in effect as provided in Section 1.4
hereof.
1.2 PRIOR PLANS SUPERSEDED. The Plan replaced and superseded the Company's
1992 Stock Option Plan, as amended (the "1992 Plan"), and the Company's 1992
Non-Employee Director Stock Option Plan, as amended (the "Director Plan"), and
as of the Effective Date, the 1992 Plan was terminated in accordance with the
provisions of Section 13 of the 1992 Plan and the 1992 Director Plan was
discontinued in accordance with the provisions of Section 10 of the Director
Plan, provided, however, that all outstanding options under the 1992 Plan and
the 1992 Director Plan shall remain in full force and effect in accordance with
the 1992 Plan and the 1992 Director Plan, as the case may be, as in effect
immediately prior to the Effective Date.
1.3 PURPOSE OF THE PLAN. The purpose of this Plan is to benefit the Company
and its subsidiaries by enabling the Company to offer to certain present and
future Employees, Directors, and consultants (including sales associates) stock
based incentives in the Company, thereby giving them a stake in the growth and
prosperity of the Company and encouraging the continuance of their services with
the Company or subsidiaries.
1.4 DURATION OF THE PLAN. The Plan commenced on the Effective Date and shall
remain in effect, subject to the right of the Board of Directors to further
amend or terminate the Plan at any time pursuant to Article 9 hereof, until all
Shares subject to it shall have been purchased or acquired according to the
Plan's provisions.
ARTICLE 2.
DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
"BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning ascribed
to such term in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the Company.
A-1
<PAGE>
"CHANGE OF CONTROL" of the Company shall mean:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person (an "Acquiror") and as a result of
such merger, consolidation or reorganization less than 75% of the
outstanding voting securities or other capital interests of the surviving,
resulting or acquiring corporation or other legal person are owned in the
aggregate by the stockholders of the Company, directly or indirectly,
immediately prior to such merger, consolidation or reorganization, other
than by the Acquiror or any corporation or other legal person controlling,
controlled by or under common control with the Acquiror;
(b) The Company sells all or substantially all of its business and/or
assets to an Acquiror, of which less than 75% of the outstanding voting
securities or other capital interests are owned in the aggregate by the
stockholders of the Company, directly or indirectly, immediately prior to
such sale, other than by any corporation or other legal person controlling,
controlled by or under common control with the Acquiror; or
(c) During any period of two consecutive years, individuals who at the
beginning of any such period constitute the directors of the Company cease
for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of
each new director of the Company was approved by a vote of at least
two-thirds of such directors of the Company then still in office who were
directors of the Company at the beginning of any such period.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation thereto.
"COMMITTEE" means the Committee as specified in Article 3 herein appointed
by the Board to administer the Plan with respect to grants of Options.
"COMMON STOCK" means the common stock of the Company.
"COMPANY" means The DeWolfe Companies, Inc., a Massachusetts corporation, as
well as any successor to such entity as provided in Article 11 herein.
"DIRECTOR" means any individual who is a member of the Board of Directors of
the Company.
"DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan. If no long term disability
plan is in place with respect to a Participant, then with respect to that
Participant, Disability shall mean: for the first 24 months of disability, that
the Participant is unable to perform his or her job; thereafter, that the
Participant is unable to perform any and every duty of any gainful occupation
for which the Participant is reasonably suited by training, education or
experience.
"EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
"EMPLOYEE" means any employee of the Company or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
"FAIR MARKET VALUE" shall (i) for purposes of setting any Option Price,
unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, or unless the Committee otherwise determines,
mean as of the date of grant of the Option, the average of the high and low
sales prices of the Common Stock on the American Stock Exchange (as reported in
The Wall Street Journal) on the trading
A-2
<PAGE>
date immediately preceding such date of grant; and (ii) for purposes of the
valuation of any Shares delivered in payment of the Option Price upon the
exercise of an Option, for purposes of the valuation of any Shares withheld to
pay taxes due in connection with the exercise of an Option, mean the average of
the high and low sales prices of the Common Stock on the American Stock Exchange
(as reported in The Wall Street Journal) on the date of exercise (or if the date
of exercise is not a trading day, on the trading day next preceding the date of
exercise).
"INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares granted
under Article 6 herein and which is designated as an Incentive Stock Option and
which is intended to meet the requirements of Code Section 422.
"INSIDER" shall mean an individual who is, on the relevant date, an officer,
director or more than ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act and the
regulations promulgated thereunder.
"NAMED EXECUTIVE OFFICER" means a Participant who is one of the group of
covered employees as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
"NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
"OPTION" means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6 herein.
"OPTION AGREEMENT" means a writing provided by the Company to each
Participant setting forth the terms and provisions applicable to Options granted
under this Plan. The Participant's acceptance of the terms of the Option
Agreement shall be evidenced by the continued rendering by the Participant of
services on behalf of the Company or its subsidiaries without written objection
before any exercise of the Option. If the Participant objects in writing, the
grant of the Option shall be revoked.
"OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
"PARTICIPANT" means an Employee, a Director or a consultant (including a
sales associate) who has outstanding an Option granted under the Plan.
"PERFORMANCE-BASED EXCEPTION" means the exception for performance-based
compensation from the tax deductibility limitations of Code Section 162(m).
"RETIREMENT" means the Participant's termination of employment with the
Company or its Subsidiaries on or after the date on which the Participant
becomes eligible to receive normal or early retirement benefits under The
DeWolfe Companies, Inc. 401(k) Retirement Plan, or such successor plan as may be
implemented in the future. If the Participant is not a participant in the 401(k)
Retirement Plan, then retirement may occur on or after the date the Participant
has achieved the minimum age or combination of age and service with the Company
and its Subsidiaries that would be required to receive an immediate annuity from
the 401(k) Retirement Plan if he or she were a participant. Notwithstanding the
foregoing, the Committee may, in its sole discretion, determine that a
Participant has met the criteria for a Retirement termination from the Company.
"SHARES" means shares of Common Stock of the Company.
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"SUBSIDIARY" means any corporation, partnership, joint venture, affiliate,
or other entity in which the Company is the direct or indirect beneficial owner
of not less than 20% of all issued and outstanding equity interests.
ARTICLE 3.
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Stock Option
Committee of the Board, or by any other Committee appointed by the Board. If and
to the extent that no Committee exists that has the authority to administer the
Plan, the functions of the Committee shall be exercised by the full Board.
Notwithstanding the foregoing, no option shall be granted to any member of the
Committee unless such grant is approved by the unanimous vote of the Board
(which may be by written consent), and with respect to any such Options to be
granted to a member of the Committee, any reference to the Committee in this
Plan shall instead refer to the full Board.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the Articles
of Organization, as amended, or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees,
Directors and consultants (including sales associates) who shall participate in
the Plan; determine the sizes and types of Options; determine the terms and
conditions of Options in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the Plan;
establish, amend, or waive rules and regulations for the Plan's administration;
and (subject to the provisions of Article 9 herein) amend the terms and
conditions of any outstanding Option to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the Committee
may delegate the authority granted to it herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, consultants (including sales
associates) Participants, and their estates and beneficiaries.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN AND MAXIMUM NUMBER OF SHARES SUBJECT TO OPTIONS
4.1 SHARES AVAILABLE FOR OPTIONS. Subject to adjustment as provided below in
this Section 4.1 and in Section 4.3, as of the date hereof, Options to purchase
an aggregate of 1,437,875 Shares may be granted under this Plan, which may be
either authorized and unissued Shares or Shares held in or acquired for the
treasury of the Company. Upon:
(a) a cancellation, termination, expiration, forfeiture, or lapse for
any reason of any Option under this Plan, under the 1992 Plan or under the
Director Plan; or
(b) payment of an Option Price and/or payment of any taxes arising upon
exercise of an Option under this Plan, under the 1992 Plan or under the
Director Plan with previously acquired Shares or by withholding Shares which
otherwise would be acquired on exercise under this Plan, under the 1992 Plan
or under the Director Plan, then the number of Shares underlying any such
Option which were not issued as a result of any of the foregoing actions
shall become available for the purposes of Options which may thereafter
granted under this Plan.
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4.2 INDIVIDUAL PARTICIPANT LIMITATIONS. Unless and until the Committee
determines that an Option to a Named Executive Officer shall not be designed to
comply with the Performance-Based Exception, and subject to adjustment as
provided in Section 4.3 herein, the maximum aggregate number of Options that may
be granted in any one fiscal year to a Participant shall be 300,000.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code
Section 368) or any partial or complete liquidation of the Company, such
adjustment shall be made in the number and class of Shares available for
Options, the number and class of and/or price of Shares subject to outstanding
Options granted under the Plan and the number of Shares set forth in Sections
4.1 and 4.2, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
provided, however, that the number subject to any Option shall always be a whole
number.
ARTICLE 5.
ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
officers and other employees of the Company and its Subsidiaries, Directors and
consultants (including sales associates) to the Company and its Subsidiaries, as
determined by the Committee.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, Directors
and consultants (including sales associates), those to whom Options shall be
granted and shall determine the terms, conditions and amount of each Option.
ARTICLE 6.
GRANTING OF STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to one or more Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee. The Committee may grant Nonqualified Stock Options or Incentive Stock
Options. The Committee shall have complete discretion in determining the number
of Options granted to each Participant (subject to Article 4 herein).
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Option Agreement with respect to the Option also
shall specify whether the Option is intended to be an ISO within the meaning of
Code Section 422, or an NQSO whose grant is intended not to fall under the
provisions of Code Section 422.
6.3 OPTION PRICE. The Committee shall designate the Option Price for each
grant of an Option under this Plan which Option Price shall be at least equal to
one hundred percent (100%) of the Fair Market Value of a Share on the date the
Option is granted, and which Option Price may not be subsequently changed by the
Committee except pursuant to Section 4.3 hereof or to the extent provided in the
Option Agreement.
6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that unless otherwise designated by
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the Committee at the time of grant, no Option shall be exercisable later than
the tenth (10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option Price upon exercise of
any Option shall be payable to the Company in full either:
(a) in cash or its equivalent,
(b) by tendering previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price, or
(c) by a combination of (a) and (b).
The Committee also may allow cashless exercises as permitted under Federal
Reserve Board's Regulation U, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law. As soon as practicable after receipt of a
written notification of exercise and full payment, the Company shall deliver to
the Participant, in the Participant's name, Share certificates in an appropriate
amount based upon the number of Shares purchased under the Option(s).
In connection with the exercise of options granted under the Plan, the
Company may make loans to the Participants as the Committee, in its discretion,
may determine. Such loans shall be subject to the following terms and conditions
and such other terms and conditions as the Committee shall determine not
inconsistent with the Plan. Such loans shall bear interest at such rates as the
Committee shall determine from time to time, which rates may be below then
current market rates or may be made without interest. In no event may any such
loan exceed the Fair Market Value, at the date of exercise, of the shares
covered by the Option, or portion thereof, exercised by the Optionee. No loan
shall have an initial term exceeding two years, but any such loan may be
renewable at the discretion of the Committee. When a loan shall have been made,
Shares having a fair market value at least equal to 125 percent of the principal
amount of the loan shall be pledged by the Participant to the Company as
security for payment of the unpaid balance of the loan.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 TERMINATION OF EMPLOYMENT, DIRECTOR RELATIONSHIP OR CONSULTING
ARRANGEMENT. Each Option Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination of
the Participant's employment, service on the Board of Directors, or consulting
arrangement with the Company and/or its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Option Agreement entered into with each Participant, need not be uniform among
all Options issued pursuant to the Plan, and may reflect distinctions
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based on the reasons for termination of employment, director relationship or
consulting agreement, including, but not limited to, termination of employment
for cause or good reason, or reasons relating to the breach or threatened breach
of restrictive covenants. Subject to Article 8, in the event that a
Participant's Option Agreement does not set forth such termination provisions,
the following termination provisions shall apply:
(a) In the event a Participant's employment, director relationship or
consulting arrangement with the Company and/or its Subsidiaries is
terminated for any reason other than death, Disability or Retirement, all
Options held by the Participant shall expire and all rights to purchase
Shares thereunder shall terminate immediately; provided, however, that
notwithstanding the foregoing, all Options to which the Participant has a
vested right immediately prior to such termination shall be exercisable
until (i) 30 days following the date of termination or (ii) the expiration
date of the Option, whichever is earlier.
(b) In the event a Participant's employment, director relationship or
consulting arrangement with the Company and/or its Subsidiaries is
terminated due to death or Disability, all Options shall immediately become
fully vested on the date of termination.
(c) Subject to Article 8, in the event of termination of the
Participant's employment, director relationship or consulting arrangement,
due to death or Disability, all Options in which the Participant has a
vested right upon termination shall be exercisable for a period of one
(1) year following such termination, or until the expiration date of the
Option, whichever is later.
(d) Subject to Article 8, in the event of termination of the
Participant's employment, director relationship, or consulting arrangement,
due to Retirement, all Options in which the Participant has a vested right
upon termination shall be exercisable until the date which is (i) three
years following the date of termination or (ii) the expiration date of the
Option, whichever is earlier.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, all
ISOs granted to a Participant under the Plan shall be exercisable during his
or her lifetime only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Option Agreement, no NQSO granted under this Article 6 may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant's Option Agreement,
all NQSOs granted to a Participant under this Article 6 shall be exercisable
during his or her lifetime only by such Participant.
ARTICLE 7.
RIGHTS OF EMPLOYEES, DIRECTORS AND CONSULTANTS
7.1 EMPLOYMENT OR CONSULTING ARRANGEMENT. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or consulting arrangement at any time, nor confer upon
any Participant any right to continue in the employ of or consulting arrangement
with the Company or any Subsidiary, nor interfere with or limit in any way the
right of the Board to remove any Participant who is a Director from service on
the Board at any time in accordance with the provisions of the Company's By-laws
and applicable law.
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For purposes of this Plan, temporary absence from employment because of
illness, vacation, approved leaves of absence, and transfers of employment among
the Company and its Subsidiaries, shall not be considered to terminate
employment or to interrupt continuous employment. Temporary cessation of the
provision of consulting services because of illness, vacation or any other
reason approved in advance by the Company shall not be considered a termination
of the consulting arrangement or an interruption of the continuity thereof.
Conversion of a Participant's employment relationship to a consulting
arrangement or from a consulting arrangement to an employment relationship shall
not result in termination of previously granted Options.
7.2 PARTICIPATION. No Employee, Director or consultant shall have the right
to be selected to receive an Option under this Plan, or, having been so
selected, to be selected to receive a future Option.
ARTICLE 8.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, unless otherwise specifically
prohibited under applicable laws, or by the rules and regulations of any
governing governmental agencies or national securities exchanges, any and all
Options granted hereunder shall become immediately exercisable, and shall remain
exercisable throughout their entire term.
ARTICLE 9.
AMENDMENT, MODIFICATION, AND TERMINATION
9.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time and
from time to time, alter, amend, suspend or terminate the Plan in whole or in
part, subject to any requirement of stockholder approval imposed by applicable
law, rule or regulation.
9.2 OPTIONS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Option previously
granted under the Plan, without the written consent of the Participant holding
such Option.
ARTICLE 10.
WITHHOLDING
10.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.
10.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which would be
imposed on the transaction. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
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ARTICLE 11.
SUCCESSORS
All obligations of the Company under the Plan with respect to Options
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect merger,
consolidation, purchase of all or substantially all of the business and/or
assets of the Company or otherwise.
ARTICLE 12.
SHAREHOLDER RATIFICATION
The Plan, as originally adopted by the Board of Directors on February 10,
1998, was ratified by the stockholders of the Company on May 12, 1998. The
amendments to the Plan reflected herein were adopted by the Board of Directors
on February 8, 2000 subject to the ratification by the stockholders of the
Company. If such amendments are ratified by the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock of the Company voting in
person or by proxy at the 2000 Annual Stockholders' Meeting, they shall be
deemed to have become effective on the February 8, 2000. Options may be granted
under the Plan prior to ratification of the amendments by the stockholders of
the Company and, in each such case, the date of grant shall be determined
without reference to the date of ratification of the Plan by stockholders of the
Company; provided, however that if the Plan, as so amended, is not ratified by
stockholders, all options granted hereunder on or subsequent to February 8, 2000
shall be canceled and void.
ARTICLE 13.
LEGAL CONSTRUCTION
13.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
13.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
13.3 REQUIREMENTS OF LAW. The granting of Options and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
13.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the Exchange Act. To the extent any provision of the Plan
or action by the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.
13.5 GOVERNING LAW. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the Commonwealth of Massachusetts.
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THE DEWOLFE COMPANIES, INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
The undersigned, revoking previous proxies relating to these shares,
hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement dated April 4, 2000 in connection with
the Annual Meeting to be held on May 16, 2000 at 10:00 a.m. at the
Newton Marriott, in Newton, Massachusetts, and hereby appoints Richard
B. DeWolfe and Paul J. Harrington, and each of them (with full power to
act alone), the attorneys and proxies of the undersigned, with power of
substitution to each, to vote all shares of the Common stock of the
DeWolfe Companies, Inc. registered in the name provided herein which
the undersigned is entitled to vote at the 2000 Annual Meeting of
Stockholders, and at any adjournment or adjournments thereof, with all
the powers the undersigned would have if personally present. Without
limiting the general authorization hereby given, said proxies are, and
each of them is, instructed to vote or act as follows on the proposals
set forth in said Proxy Statement and on such other matters as may
properly come before the meeting.
SEE REVERSE SIDE. If you wish to vote in accordance with the Board of Directors'
recommendations, just sign on the reverse side. You need not mark any boxes.
SEE REVERSE SIDE
<PAGE>
/X/ Please mark votes as
in this example.
This proxy, when properly executed, will be voted in the manner directed herein.
If no direction is made, this Proxy will be voted FOR all of the Board of
Directors' nominees, FOR Proposal 2, and FOR Proposal 3.
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
1. To fix the size of the Board at five and to elect the nominees named in
the Proxy Statement.
Nominees: Richard B. DeWolfe, A. Clinton Allen,
Paul R. Del Rossi, R. Robert Popeo
and Robert N. Sibcy
/ / For / / withheld
/ / ________________________________________
For all nominees except as noted above
2. To approve the amendment to the Company's 1998 Stock Option Plan.
/ / For / / Against / / Abstain
3. To ratify the Company's Selection of Ernst & Young LLP as the Company's
Independent Auditors.
/ / For / / Against / / Abstain
MARK HERE / / MARK HERE / /
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
Signature:___________________________________ Date:____________________________
Signature:___________________________________ Date:____________________________
