SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use
[X] Definitive Proxy Statement of the Commission Only
[ ] Definitive Additional Materials (as permitted by Rule
[ ] Soliciting Material Pursuant to Rule 14a-11(c) 14a-6(e)(2))
or Rule 14a-12
GRILL CONCEPTS, INC.
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(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:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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:
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2. Form, Schedule or Registration Statement No.:
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4. Date Filed:
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GRILL CONCEPTS, INC.
11661 San Vicente Blvd., Suite 404
Los Angeles, California 90049
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, JUNE 26, 2002
To the Shareholders of Grill Concepts, Inc.:
An Annual Meeting of Shareholders of Grill Concepts, Inc. (the "Company")
will be held at The Grill on Hollywood restaurant in the Hollywood and Highland
complex, 6801 Hollywood Blvd., Hollywood, California, at 9:00 a.m., on
Wednesday, June 26, 2002 for the following purposes:
1. To elect seven directors of the Company to hold office until the next
annual meeting of shareholders or until their successors are duly elected
and qualified.
2. To consider a proposal to ratify the appointment of PricewaterhouseCoopers
LLP as the Company's independent certifying accountants.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on April 27, 2002 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you are
planning to attend the meeting, you are urged to complete, date and sign the
enclosed proxy card and return it promptly.
YOUR VOTE IS IMPORTANT! PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE. IF YOU ARE ABLE TO ATTEND THE MEETING AND
WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE THE PROXY
IS VOTED.
By Order of the Board of Directors
Michael Weinstock
Chairman
Los Angeles, California
April 29, 2002
GRILL CONCEPTS, INC.
11661 San Vicente Blvd., Suite 404
Los Angeles, California 90049
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 26, 2002
---------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Grill Concepts,
Inc. (the "Company") for use at the 2002 Annual Meeting of Shareholders of the
Company and at any adjournment thereof (the "Annual Meeting"). The Annual
Meeting is scheduled to be held at The Grill on Hollywood restaurant in the
Hollywood and Highland complex, 6801 Hollywood Blvd., Hollywood, California, on
Wednesday, June 26, 2002 at 9:00 a.m. local time. This Proxy Statement and the
enclosed form of proxy will first be sent to shareholders on or about April 30,
2002.
Proxies
The shares represented by any proxy in the enclosed form, if such proxy
is properly executed and is received by the Company prior to or at the Annual
Meeting prior to the closing of the polls, will be voted in accordance with the
specifications made thereon. Proxies on which no specification has been made by
the shareholder will be voted FOR the election to the Board of Directors of the
nominees of the Board of Directors named herein, FOR the ratification of the
appointment of the designated independent accountants, and as the proxy holders
deem advisable on other matters that may come before the meeting. Proxies are
revocable by written notice received by the Secretary of the Company at any time
prior to their exercise or by executing a later dated proxy. Proxies will be
deemed revoked by voting in person at the Annual Meeting.
Voting Securities
Shareholders of record at the close of business on April 27, 2002 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. On
the Record Date, the total number of shares of common stock of the Company,
$0.00004 par value per share (the "Common Stock"), outstanding and entitled to
vote was 5,537,071. The holders of all outstanding shares of Common Stock are
entitled to one vote for each share of Common Stock registered in their names on
the books of the Company at the close of business on the Record Date.
Additionally, every shareholder voting for the election of directors may
cumulate such shareholder's votes and give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of shares held
by the shareholder as of the Record Date, or distribute such shareholder's votes
on the same principle among as many candidates as the shareholder may select,
provided that votes cannot be cast for more than the number of directors to be
elected. However, no shareholder shall be entitled to cumulate votes unless the
candidate's name has been placed in nomination prior to the voting and the
shareholder, or any other shareholder, has given notice at the meeting prior to
the voting of the intention to cumulate the shareholder's votes.
Quorum and Other Matters
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum. The Board of Directors is
not aware of any matters that are expected to come before the Annual Meeting
other than those referred to in this Proxy Statement. If any other matter should
come before the Annual Meeting, the persons named in the accompanying proxy
intend to vote such proxies in accordance with their best judgment.
Shares of Common Stock represented by a properly dated, signed and
returned proxy will be counted as present at the Annual Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as casting a
vote or abstaining. Directors will be elected by a plurality of the votes cast
at the Annual Meeting. Each of the other matters scheduled to come before the
Annual Meeting requires the approval of a majority of the votes cast at the
Annual Meeting. Therefore, abstentions and broker non-votes will have no effect
on the election of directors or any other matter.
PROPOSAL 1
ELECTION OF DIRECTORS
Seven directors are to be elected to serve until the next annual
meeting of shareholders and until their successors are elected and shall have
qualified. The Board of Directors has nominated Robert Spivak, Michael
Weinstock, Charles Frank, Glenn Golenberg, Lewis Wolff, Stephen Ross and Norman
MacLeod to serve as directors (the "Nominees"). Each of the Nominees is
currently serving as a director of the Company. Directors shall be elected by
shareholders holding a plurality of the shares of Common Stock present at the
Annual Meeting. It is the intention of the persons named in the form of proxy,
unless authority is withheld, to vote the proxies given them for the election of
all of the Nominees. In the event, however, that any one of them is unable or
declines to serve as a director, the appointees named in the form of proxy
reserve the right to substitute another person of their choice as nominee, in
his place and stead, or to vote for such lesser number of directors as may be
presented by the Board of Directors in accordance with the Company's Bylaws. The
Board of Directors has no reason to believe that any nominee will be unable to
serve or decline to serve as a director. Any vacancy occurring between
shareholders' meetings, including vacancies resulting from an increase in the
number of directors, may be filled by the Board of Directors. A director elected
to fill a vacancy shall hold office until the next annual shareholders' meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE TO THE BOARD OF DIRECTORS.
Information Regarding Nominees
Set out below is certain information concerning our nominees for
election as directors of the Company:
Robert Spivak Director Since 1995 Age 58
Mr. Spivak was a co-founder of the Company's predecessor, Grill Concepts,
Inc. (a California corporation)("GCI") and served as President, Chief
Executive Officer and a director of GCI from the company's inception in
1988 until 1995, when GCI was acquired by the Company (the "Exchange"),
when he assumed the same positions with the Company. Prior to forming GCI,
Mr. Spivak co-founded, and operated, The Grill on the Alley restaurant in
Beverly Hills in 1984. Mr. Spivak continued to provide management services
on a part-time basis as Managing Director of The Grill on the Alley until
1996 when the Company acquired The Grill on the Alley. Mr. Spivak
previously served as (i) vice president of Office Construction Company,
where he headed that company's restaurant construction division from 1980
to 1983, (ii) a partner of Soup 'n Such from 1976 to 1980, (iii) food
department manager of Fedco Stores from 1972 to 1976, and (iv) manager of
Redwood House and Smokey Joe's, both family owned restaurant operations,
from 1965 to 1972. Mr. Spivak is a founder and past president of the
Beverly Hills Restaurant Association. Mr. Spivak also served on the board
of directors of the California Culinary Academy of San Francisco and chairs
the executive advisory board of the Collins School of Hotel and Restaurant
Management at California State Polytechnic University at Pomona.
Michael Weinstock Director Since 1995 Age 59
Mr. Weinstock was a co-founder of GCI and served as Chairman of the Board,
Vice President and a director of GCI from 1988 until the Exchange when he
assumed the positions of Vice Chairman of the Board, Executive Vice
President and director of the Company. Mr. Weinstock was named Chairman of
the Board in 2000. Prior to forming GCI, Mr. Weinstock co-founded The Grill
on the Alley restaurant in Beverly Hills in 1984. Mr. Weinstock previously
served as President, Chief Executive Officer and a director of Morse
Security Group, Inc., a security systems manufacturer.
2
Charles Frank Director Since 1995 Age 54
Mr. Frank is a partner in The Parkside Group, a private equity investor. He
is also President of CAF Restaurant Services, Inc., a restaurant consulting
firm. Mr. Frank served as President of MSA Industries/ Dupont Flooring
Systems, the largest distributor and installer of commercial floor
coverings in the country, from 1995 to 1996 when MSA was acquired by
DuPont. Prior to 1995, Mr. Frank spent 22 years in the restaurant industry
serving as President of both Spectrum Foods, a 16 unit fine dining chain,
and Il Fornaio Corporation. Mr. Frank is Chairman of the Audit Committee
and Compensation Committee of the Board of Directors of the Company.
Glenn Golenberg Director Since 1995 Age 60
Mr. Golenberg is co-founder and Managing Director of Golenberg Schmitz
Capital Partners, LLC, and The Bellwether Group, LLC, merchant banking
firms that invest in and mentor technology and other businesses and
successors to Golenberg & Company which was formed in 1978. Prior to
forming Golenberg & Company, Mr. Golenberg served in various research and
management positions in the investment banking industry from 1966 to 1978.
Previously, Mr. Golenberg was a CPA with Arthur Andersen & Co. Mr.
Golenberg is a member of the Audit Committee and Compensation Committee of
the Board of Directors of the Company.
Lewis Wolff Director Since 2001 Age 66
Mr. Wolff is Chairman and Chief Executive Officer of Wolff DiNapoli LLC, a
diversified asset acquisition, development and management company. Mr.
Wolff is also co-founder and, since 1994, has served as Chairman of Maritz,
Wolff & Co., a privately held hotel investment group that acquires top-tier
luxury hotel properties. Maritz, Wolff's holdings exceed $1.8 billion and
include the Fairmont San Francisco, the Fairmont New Orleans, the Fairmont
Dallas, as well as 50% stake in the Fairmont Hotel Management Company.
Since 1999, Mr. Wolff has also served as co-Chairman of Fairmont Hotels &
Resorts, a hotel management company formed by Fairmont Hotel Management
Company and Canada Pacific Hotels & Resorts, Inc.
Stephen Ross Director Since 2001 Age 53
Mr. Ross is a consultant and private investor. From 1989 to 2001, Mr. Ross
served as Executive Vice President - Special Projects for the Warner Bros.
Division of Time Warner, Inc. Previously, Mr. Ross served as Senior Vice
President and General Counsel for Lorimar Telepictures Corporation, and its
predecessors, from 1981 to 1989. Since 2001, Mr. Ross has served as a
director of MAI Systems Corporation, an information technology solutions
provider for the hotel industry.
Norman MacLeod Director Since 2001 Age 51
Mr. MacLeod has served in various management positions with Starwood Hotels
& Resorts Worldwide, Inc. since 1996 beginning as Area Managing Director
for the North American Southeast operations of the company's Westin Hotels
& Resorts division. Mr. MacLeod was promoted to Vice President of
Operations of Starwood in April 1998 and to Executive Vice President, Hotel
Operations - North America of Starwood Hotels & Resorts Worldwide, Inc. in
October 1999. Previously, Mr. MacLeod served in various management
positions with Omni Hotels.
Information Regarding Executive Officers
The executive officers are elected to serve annual terms. Certain
information concerning the Company's executive officers as of the date of this
proxy statement is set forth below, except that information concerning Messrs.
Spivak and Weinstock is set forth above under "Information Regarding Nominees."
3
Daryl Ansel. Mr. Ansel, age 40, has served as Chief Financial Officer of
the Company since January 2001. Prior to joining the Company, Mr. Ansel served
as food and beverage finance manager at Universal Studios from June 1999 to
January 2001. Previously, Mr. Ansel owned and operated catering and restaurant
businesses from 1990 to 1997, and served, from 1983 to 1990, in various senior
finance positions with the University of California, Berkeley.
John Sola. Mr. Sola, age 49, has served as Vice President - Operations and
Development of the Company since September 2001. Previously, Mr. Sola served as
Executive Chef for GCI from 1988 until the Exchange when he assumed the position
of Vice President - Executive Chef of the Company. Mr. Sola oversees all kitchen
operations, including personnel, food preparation and food costs, as well as
monitoring and maintaining the overall performance of the kitchens and
establishing procedures and policies in connection with the opening of new Daily
Grill restaurants. Mr. Sola, along with Mr. Spivak, created the Daily Grill
menu. Prior to joining GCI, Mr. Sola served as opening chef at The Grill on the
Alley from inception in 1984 to 1988. Previously, Mr. Sola served in various
positions, including Executive Chef, at a wide range of restaurants.
Compliance With Section 16(a) of Exchange Act
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to disclose in this Proxy Statement
any failure to file by these dates during 2001. Based solely on a review of such
reports and written statements of its directors, executive officers and
shareholders, the Company believes that all of the filing requirements were
satisfied on a timely basis in 2001.
Committees and Attendance of the Board of Directors
In order to facilitate the various functions of the Board of Directors, the
Board has created a standing Audit Committee and a standing Compensation
Committee. The Board of Directors has no standing nominating committee or any
committee performing the functions of such committee.
The functions of the Company's Audit Committee are to review the Company's
financial statements with the Company's independent auditors; to determine the
effectiveness of the audit effort through regular periodic meetings with the
Company's independent auditors; to determine through discussion with the
Company's independent auditors that no unreasonable restrictions were placed on
the scope or implementation of their examinations; to inquire into the
effectiveness of the Company's financial and accounting functions and internal
controls through discussions with the Company's independent auditors and
officers of the Company; to recommend to the full Board of Directors the
engagement or discharge of the Company's independent auditors; and to review
with the independent auditors the plans and results of the auditing engagement.
The members of the Audit Committee are Mr. Frank, Chairman, Mr. Golenberg and
Mr. Ross.
The functions of the Company's Compensation Committee include reviewing the
existing compensation arrangements with officers and employees, periodically
reviewing the overall compensation program of the Company and recommending to
the Board modifications of such program which, in the view of the development of
the Company and its business, the Committee believes are appropriate,
recommending to the full Board of Directors the compensation arrangements for
senior management and directors, and recommending to the full Board of Directors
the adoption of compensation plans in which officers and directors are eligible
to participate and granting options or other benefits under such plans. The
members of the Compensation Committee are Mr. Frank, Chairman, Mr. Golenberg and
Mr. Ross.
During the year ended December 30, 2001, the Board of Directors held four
formal meetings, the Audit Committee held one meeting and the Compensation
Committee held three meetings. Each director attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors, plus
(ii) the total number of meetings held by all committees of the Board of
Directors on which the director served.
4
Compensation of Directors
Each non-employee director of the Company is paid a fee of $500 for each
Board meeting attended and $250 for each committee meeting attended. The Company
also reimburses each director for all expenses of attending such meetings.
Additionally, each non-employee director is currently granted options, pursuant
to the Company's amended 1998 Comprehensive Stock Option and Award Plan, to
purchase 6,250 shares of Common Stock upon their initial appointment as a
director. Thereafter, each non-employee director on the day following each
annual meeting of shareholders of the Company shall automatically receive
options to purchase an additional 5,000 shares, plus an additional 1,000 shares
for each committee on which such non-employee director serves. All such options
are exercisable at the fair market value of the Company's Common Stock on the
date of grant. Such options are fully vested and exercisable with respect to all
of the shares covered on the date of each grant.
No additional compensation of any nature is paid to employee directors.
Executive Compensation and Other Matters
The following table sets forth information concerning cash and non-cash
compensation paid or accrued for services in all capacities to the Company
during the year ended December 30, 2001 of each person who served as the
Company's Chief Executive Officer during fiscal 2001 and the four other most
highly paid executive officers whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 30, 2001 (the "Named Officers").
Long Term
Name and Annual Compensation Compensation
--------------------------------------------------------- ------------------
Principal Position Year Salary($) Bonus($) Other ($) Stock Options(1)(#)
------------------ ---- --------- -------- --------- -------------------
Robert Spivak 2001 225,000 -0- 33,500 (2) 100,000
President and 2000 225,000 -0- 33,500 (2) -0-
Chief Executive Officer 1999 200,000 -0- 33,500 (2) 8,500
Daryl Ansel 2001 130,000 -0- -0- 50,000
Chief Financial Officer (3) 2000 -0- -0- -0- -0-
1999 -0- -0- -0- -0-
John Sola 2001 138,000 -0- -0- 9,000
Vice President - Operations 2000 114,423 -0- -0- 10,000
and Development 1999 97,301 -0- -0- 8,750
Michael Weinstock 2001 112,500 -0- -0- -0-
Executive Vice President and 2000 100,000 -0- -0- -0-
Chairman of the Board 1999 100,000 -0- -0- 4,375
----------------
(1) All stock option quantities have been adjusted to reflect the impact of the
1-for-4 reverse stock split on August 9, 1999.
(2) Mr. Spivak receives the use of a leased automobile and reimbursement of all
expenses related to the use thereof ($13,000), a $1,500 per month
non-accountable expense allowance ($18,000) and a $1,000,000 term life
insurance policy, in addition to vacation benefits, expense reimbursements
and participation in medical, retirement and other benefit plans which are
generally available to the Company's executives.
(3) Mr. Ansel joined the Company in January 2001.
5
Stock Option Grants
The following table sets forth information concerning the grant of
stock options made during 2001 to each of the Named Officers:
Percent of Potential Realizable Value
Total Options at Assumed Annual Rates
Granted to of Stock Price Appreciation
Options Employees in Price Expiration For Option Term
Name Granted Fiscal Year Per Share Date 5% 10%
---------- ---------- ---------------- ----------- ------------ -----------------------------
Robert Spivak................... 100,000 35.8 3.16 02/2011 198,731 503,623
Daryl Ansel..................... 50,000 18.0 2.75 01/2011 86,473 219,140
John Sola ...................... 9,000 3.2 2.19 08/2011 12,396 31,413
Michael Weinstock............... - - - - - -
Stock Option Exercises and Year-End Option Values
The following table sets forth information concerning the exercise of
stock options during 2001 by each of the Named Officers and the number and value
of unexercised options held by the Named Officers at the end of 2001:
Number of Unexercised Value of Unexercised
Shares Options at In-the Money Options
Acquired on Value at FY-End (#)(1) at FY-End ($)(2)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
--------- -------------- ------------ ----------- -------------- ------------ --------------
Robert Spivak......... -0- -0- 10,250 103,500 -0- -0-
Daryl Ansel........... -0- -0- -0- 50,000 -0- -0-
John Sola............. -0- -0- 23,750 21,500 -0- -0-
Michael Weinstock..... -0- -0- 4,500 1,750 -0- -0-
----------------------
(1) All stock option quantities have been adjusted to reflect the impact of the
1-for-4 reverse stock split on August 9, 1999.
(2) Based on the fair market value per share of the Common Stock at year end,
minus the exercise price of "in-the-money" options. The closing price for
the Company's Common Stock on December 31, 2001 on the Nasdaq Small-Cap
Market was $1.30.
Employment Contracts
Effective January 1, 2001, the Company entered into an amended three year
employment agreement with Robert Spivak, the Company's President and Chief
Executive Officer. Mr. Spivak's employment agreement provides for an annual
salary of $225,000 in 2001, $235,000 in 2002 and $250,000 in 2003. In addition,
such agreement provides that Mr. Spivak shall receive a 100,000 share stock
option grant, the use of a leased automobile and reimbursement of all expenses
related to the use thereof, a $1,500 per month non-accountable expense
allowance, five weeks paid vacation per year, a $1,000,000 term life insurance
policy, reimbursement of business related travel and meal expenses,
participation in all medical, retirement and other benefit plans available to
the Company's executives and performance based bonuses in an amount up to fifty
percent of salary based on performance criteria established by the Compensation
Committee.
The Company has no other employment agreements with any of its employees.
6
Beneficial Ownership of Common Stock
The following table is furnished as of April 1, 2002 to indicate beneficial
ownership of shares of the Company's Common Stock by (1) each shareholder of the
Company who is known by the Company to be a beneficial owner of more than 5% of
the Company's Common Stock, (2) each director, nominee for director and Named
Officer of the Company, individually, and (3) all officers and directors of the
Company as a group. The information in the following table was provided by such
persons.
Amount and Nature of
Beneficial Ownership (1)
----------------------------
Shares Underlying
Name and Address Options, Warrants
of Beneficial Owner and Other Percent
Shares Convertible Securities (2) Total (2) of Class (2)
-------- -------------------------- ---------- ------------
Starwood Hotels & Resorts
Worldwide, Inc. (3)...................... 666,667 666,667 1,333,334 25.6%
Michael Weinstock (4)(6)(7)............... 439,789 170,125 609,914 10.7%
Robert Spivak (4)(6)(8)................... 426,091 43,250 469,341 8.4%
Aaron Ferrer (9).......................... 410,024 0 410,024 7.4%
Keith Wolff (10).......................... 345,000 95,000 440,000 7.8%
Richard Shapiro (5)....................... 275,685 0 275,685 5.0%
Chelverton Fund Limited (11).............. 249,033 33,333 282,366 5.1%
Lewis Wolff (12).......................... 95,000 751,250 846,250 13.5%
Steven Ross (13).......................... 63,565 105,844 169,409 *
Glenn Golenberg........................... 21,875 16,750 38,625 *
Charles Frank............................. 19,642 16,750 36,392 *
John Sola (14)............................ 8,184 25,550 33,734 *
Daryl Ansel (15).......................... 0 10,000 10,000 *
Norman MacLeod (16)....................... 0 6,250 6,250 *
All executive officers and directors
as a group (9 persons)................... 1,074,146 1,145,769 2,219,915 33.2%
------------------------
* Less than 1%.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws, where applicable, and the information
contained in the footnotes to the table.
(2) Includes shares of Common Stock not outstanding, but which are subject to
options, warrants and other convertible securities exercisable or
convertible within 60 days of the date of the information set forth in this
table, which are deemed to be outstanding for the purpose of computing the
shares held and percentage of outstanding Common Stock with respect to the
holder of such options. Such shares are not, however, deemed to be
outstanding for the purpose of computing the percentage of any other
person.
(3) Address is 1111 Westchester Avenue, White Plains, New York 10604. Includes
(a) 666,667 shares of common stock held, and (b) 666,667 shares of common
stock underlying five year $2.00 warrants. The information set forth herein
is based on the Schedule 13D dated July 27, 2001 filed by Starwood Hotels &
Resorts Worldwide, Inc. with the Securities and Exchange Commission.
(4) Address is 11661 San Vicente Blvd., Suite 404, Los Angeles, California
90049.
(5) Address is 10360 Strathmore Drive, Los Angeles, California 90024.
(6) All shares indicated as being held by Messrs. Weinstock and Spivak exclude
certain shares held by their spouses, children and certain trusts for the
benefit of family members. Messrs. Weinstock and Spivak disclaim any
beneficial interest in such shares.
(7) Includes (a) 4,500 shares out of 6,250 shares issuable upon exercise of
stock options held by Mr. Weinstock and (b) 165,625 shares issuable upon
exercise of warrants, including 150,000 warrants held by the Weinstock
Family Trust.
(8) Includes 43,250 shares out of 113,750 shares issuable upon exercise of
stock options held by Mr. Spivak.
(9) Address is 1 Homs Court Hillsborough, California 94010.
7
(10) Address is 11828 La Grange Avenue, Los Angeles, California 90025. Includes
(a) 250,000 shares of common stock held by Keith Wolff, as Trustee of The
Keith M. Wolff 2000 Irrevocable Trust, (b) 95,000 shares of common stock
held by KMWGEN Partners, of which Mr. Wolff is the general partner, and (c)
95,000 shares of common stock underlying warrants held by KMWGEN Partners.
Mr. Wolff has the sole power to vote or to direct the vote, and the sole
power to dispose or to direct the disposition of, the securities
beneficially owned by Mr. Wolff, other than the securities owned by KMWGEN
Partners, as to which Mr. Wolff shares power with his father, Lewis Wolff.
The information set forth herein is based on Amendment No. 1 to the
Schedule 13D dated July 27, 2001 filed by Mr. Wolff with the Securities and
Exchange Commission.
(11) Address is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British
Virgin Islands. The information set forth herein is based on the Schedule
13G dated September 29, 2000 filed by Chelverton Fund Limited with the
Securities and Exchange Commission.
(12) Address is 11828 La Grange Avenue, Los Angeles, California 90025. Includes
(a) 95,000 shares of common stock held by KMWGEN Partners, of which Mr.
Wolff and his wife, Jean Wolff, as Trustees of the Wolff Revocable Trust of
1993, are general partners, (b) 95,000 shares of common stock underlying
five year $2.25 warrants held by KMWGEN Partners, (c) 6,250 shares of
common stock underlying an option to purchase shares of Common Stock at
$3.30 per share, (d) 125,000 shares issuable upon conversion of 500 shares
of Series II Convertible Preferred Stock, (e) 75,000 shares issuable
pursuant to a warrant to purchase shares at an exercise price of $1.41 per
share; (f) 75,000 shares issuable pursuant to a warrant to purchase shares
at an exercise price of $2.12 per share; (g) 187,500 shares issuable
pursuant to five year $8.00 Warrants and (h) 187,500 shares issuable
pursuant to five year $12.00 Warrants. The Series II Convertible Preferred
Stock is convertible commencing June 24, 1998 into a number of shares
determined by dividing $1,000 per share by the greater of $4.00 or 75% of
the average closing price of the Company's Common Stock over the five
trading days immediately preceding conversion, but not higher than $10.00.
For purposes hereof, the number of shares shown as being issuable upon
conversion of the Series Convertible Preferred Stock is based on a
conversion price of $4.00, the minimum conversion price of the Series II
convertible Preferred Stock. The five-year $8.00 Warrants and $12.00
Warrants are exercisable to purchase one share of Common Stock per warrant
commencing June 24, 2000. Mr. Wolff, as Trustee of the Wolff Revocable
Trust of 1993, may be deemed to be the beneficial owner of all such
securities except for the shares underlying the option to purchase 6,250
shares which option is held directly by Mr. Wolff. Mr. Wolff has the sole
power to vote or to direct the vote, and the sole power to dispose or to
direct the disposition of, all the shares beneficially owned by Mr. Wolff,
other than 190,000 shares beneficially owned by KMWGEN Partners, of which
Mr. Wolff and his son, Keith M. Wolff, are the general partners. The
information set forth herein is based on Amendment No. 4 to the Schedule
13D dated July 27, 2001 filed by Mr. Wolff with the Securities and Exchange
Commission.
(13) Includes (a) 63,565 shares of common stock held by Steven Ross and Rachel
Ross as co-trustees of the Ross Family Trust, (b) (i) 63,565 shares of
common stock underlying five year $2.25 warrants (ii) 40,000 shares of
common stock underlying five year $1.406 warrants, and (iii) 32,508 shares
of common stock underlying five year $2.77 warrants, held by Steven Ross
and Rachel Ross as co-trustees of the Ross Family Trust, and (c) 6,250
shares issuable upon exercise of stock options held by Mr. Ross.
(14) Includes 25,550 shares out of 45,250 shares issuable upon exercise of stock
options held by Mr. Sola.
(15) Includes 10,000 shares out of 50,000 shares issuable upon exercise of stock
options held by Mr. Ansel.
(16) Mr. MacLeod is an officer of Starwood Hotels & Resorts Worldwide. Mr.
MacLeod disclaims any beneficial interest in any shares held by Starwood
Hotels & Resorts Worldwide.
Certain Relationships and Transactions
Since June of 1989, the Company has leased its Cherry Hill restaurant
from Denbob Corporation ("Denbob"), a company controlled by Robert L. Wechsler
who served as Chairman of the Company from inception until 2000 and who served
as a director of the Company until June 2001. The premises are occupied under a
twenty year lease with annual rent commencing at approximately $118,500, plus 6%
of annual gross sales in excess of $1,800,000, 15% of the landlord's cost for
leasehold improvements, equipment and fixtures, and a pro rata share of real
estate taxes, insurance and other common area charges. After five years, the
Company had the option to pay for all or part of any improvements and reduce or
eliminate the 15% additional rent. At the end of each five years, the rent and
the gross sales level at which the 6% commences increase by 15%. The Company
paid rent expense to Denbob for the lease of the Cherry Hill restaurant totaling
$252,000 during fiscal year 2001 and $248,000 during fiscal year 2000.
8
The Company has entered into transactions with various entities which
may be deemed to be controlled by Lewis Wolff. Mr. Wolff is the trustee of the
Wolff Revocable Trust of 1993 which holds all of the outstanding preferred stock
of the Company and may be deemed to be a controlling shareholder of the Company.
Mr. Wolff has served as director of the Company since June 2001. Transactions
which may be deemed to have been entered into with Mr. Wolff and his affiliates
include: (1) lease of the site of the San Jose Grill at the San Jose Fairmont
Hotel from an entity in which Mr. Wolff is a part owner, (2) receipt by the
Company's 50.05% owned subsidiary of a loan in the amount of $800,000 in
connection with the opening of the San Jose Grill, which loan is repayable, with
interest at 10%, from substantially all of the operating cash flows of the San
Jose Grill with unpaid principal and interest due January 2018, (3) management
of the City Bar & Grill in the San Jose Hilton Hotel, of which Mr. Wolff is a
part owner, (4) receipt of a loan in the amount of $500,000 in connection with
the conversion of the Burbank Daily Grill, which loan is repayable, with
interest at 10%, out of management fees from the restaurant with unpaid
principal and interest due December 31, 2003, and (5) entry into an agreement
with Hotel Restaurant Properties, Inc. ("HRP"), an entity controlled by a member
of Mr. Wolff's family, pursuant to which HRP will assist the Company in locating
hotel locations for the opening of restaurants and pursuant to which HRP is
entitled to a portion of the fees or profits from those restaurants. Rents in
the amount of $65,000 and $92,000 were accrued by the Company with respect to
the San Jose Grill during 2001 and 2000, respectively. At December 26, 1999, the
Company owed $198,853 with respect to the loan relating to the Burbank Daily
Grill and $185,000 with respect to the loan relating to the San Jose Grill. Both
of those loans were paid in full at December 31, 2000.
In August 1998, the Company entered into an agreement with HRP, of
which Mr. Keith Wolff is President. Pursuant to the agreement HRP will assist
the Company in locating hotel locations for the opening of restaurants. HRP is
entitled to a portion of the fees or profits from those restaurants. The Company
paid $142,987 and $187,604 of management fees to HRP during fiscal years 2001
and 2000, respectively. The agreement also provides that HRP will repay to the
Company amounts advanced to managed units on behalf of HRP. As of December 30,
2001, HRP owed to the Company $133,000. As of December 31, 2000, the Company
owed $28,813 to HRP.
In July 2000, Lewis Wolff and Michael Weinstock each agreed to
guarantee $750,000 of the Company's bank credit facility. Pursuant to the terms
of the guarantee, the Company issued to each of Mr. Wolff and Mr. Weinstock
75,000 warrants exercisable to purchase common stock at $1.41 per share. In 2001
each of Mr. Wolff and Mr. Weinstock received an additional 75,000 five year
warrants exercisable at $2.12 per share. Additionally, the Company agreed to pay
each of Mr. Wolff and Mr. Weinstock interest at the rate of 2% per annum of the
average annual balance of the loans guaranteed. Interest accrued or paid to Mr.
Wolff and Mr. Weinstock totaled $19,355 each during the year ended December 30,
2001 and $10,023 each at December 31, 2000.
In July 2001, the Company completed a series of transactions with
Starwood Hotels & Resorts Worldwide, Inc., pursuant to which (1) Starwood
acquired, for $1,000,000.50, 666,667 shares of Common Stock and five year $2.00
666,667 warrants to purchase shares of the Company's Common Stock, (2) the
Company and certain shareholders agreed to take appropriate actions, so long as
Starwood owns no fewer than 333,333 shares of Common Stock, to cause one nominee
of Starwood to be elected to the Company's board or, in the event the number of
restaurants operated pursuant to the Starwood Agreements equals or exceeds ten
restaurants, to cause two nominees of Starwood to be elected to the Company's
board, and (3) the Company and Starwood agreed to jointly develop the Company's
branded restaurants in Starwood properties with Starwood being the exclusive
major hotel operator in which the Company's restaurants are developed, managed,
operated or licensed.
In conjunction with, and as a condition of, the Starwood transactions,
the Company was obligated to secure funding, in addition to that provided by
Starwood, in an amount not less than $1,000,000 from the sale of equity
securities to other investors on terms not more favorable to the investors than
those of Starwood. Pursuant to that obligation, the Company sold, for $142,500,
95,000 shares of common stock and 95,000 five year $2.25 warrants to KMWGEN
Partners, a partnership of which Lewis Wolff, as Trustee of the Wolff Revocable
Trust of 1993, and Keith Wolff, as Trustee of The Keith M. Wolff 2000
Irrevocable Trust, are general partners.
9
Also, in conjunction with the Starwood transactions, the Company sold
65,565 shares of common stock to the Ross Family Trust for $95,348. The Ross
Family Trust and the Mazel Trust, both of which Mr. Ross is co-trustee of, in
2000, loaned $400,000 to the Company for which it is paid interest of 10% and
was issued 40,000 five year warrants exercisable at $1.40625 per share. In 2001
the trusts were issued an additional 32,058 four year warrants exercisable at
$2.77 per share. In 2002, the Ross Family Trust acquired the loans from the
Mazel Trust. At December 30, 2001, the Company owed $274,416 to the Ross Family
Trust. Stephen Ross, co-trustee of the Ross Family Trust was elected as a
director of the Company in 2001, following the Starwood transactions.
The Starwood Agreements also provide for the issuance to Starwood,
after the aggregate number of branded restaurants covered by management
agreements or licensing agreements reaches five, ten, fifteen and twenty (each a
"Development Threshold Date"), of warrants (the "Development Warrants") to
purchase a number of shares of the Company's Common Stock equal to 4% of the
then outstanding shares of capital stock. The Development Warrants will have an
exercise price equal to (1) if the fair market value of the Common Stock as of
the applicable Development Threshold Date is greater than the fair market value
of the Common Stock as of the closing date of the transactions contemplated by
the Starwood Agreements (the "Closing Date"), the greater of (A) 75% of the fair
market value of the Common Stock on the date of issuance of the Development
Warrants or (B) the fair market value of the Common Stock on the closing date as
defined in the Starwood Agreements, or (2) if the fair market value of the
Common Stock as of the applicable Development Threshold Date is equal to or less
than the fair market value of the Common Stock on the closing date, the fair
market value of the Common Stock as of the applicable Development Threshold
Date.
In addition to the Development Warrants, the Starwood Agreements
provide for the issuance of warrants (the "Incentive Warrants") to Starwood to
purchase a number of shares of the Company's Common Stock equal to 0.75% of the
then outstanding shares of capital stock of the Company on the date of execution
of any management agreement or license agreement (the "Initial Incentive
Threshold Date") resulting in the total number of restaurants being operated
pursuant to the Starwood Agreements exceeding 35% of the total branded
restaurants operated by the Company. Additional Incentive Warrants will be
issued on each anniversary of the Initial Incentive Threshold Date provided that
the incentive threshold continues to be satisfied.
The Company has no existing corporate policy which prohibits or governs
the terms of any such transactions. Any such transactions are, however, reviewed
by the Audit Committee to determine the fairness of such transactions.
Other than elections to office, no director, nominee for director,
executive officer or associate of any of the foregoing persons has any
substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon at the Annual Meeting.
Compensation Committee Report
The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company with respect to stock options and
the compensation plans and specific compensation levels for executives of the
Company. The Compensation Committee consists of non-employee Directors who are
not eligible to participate in any of the compensation plans or programs it
administers, other than the options these individuals receive under the
guidelines established for the granting of stock options to Board and Committee
members.
The primary consideration of the Compensation Committee in determining
overall executive compensation is to motivate, reward and retain the best
management team to achieve the company's objective and thus compensation is
based upon a combination of overall financial performance of the company, the
meeting of long term objectives and each individuals' experience and past
performance, while considering salaries of other executives in similar
companies.
The executive compensation system consists of three major components:
base salary, annual incentive - consisting of participation in a cash bonus
program, and long-term incentive compensation - consisting of stock option
grants.
10
Base Salary. For fiscal 2001, the base salary of the executive officers,
other than the Chief Executive Officer whose salary is determined by an
employment agreement, were set based upon the results of the executive's
performance review. Each executive is reviewed by the Chief Executive Officer
and given specific objectives, which vary with the executive's position and
responsibilities. At the next annual review, the actual performance of the
executive is compared to the previously established specific objectives. The
results of that comparison, along with the Chief Executive Officer's
compensation recommendation, is provided to the committee. The Committee then
determines what, if any, adjustments should be made to the proposed
compensation.
Cash Bonus Program. During 2001, the Compensation Committee established a
formula for cash bonuses to be paid to executive officers which is based upon
financial performance of the Company. The formula provides for a pool of money
to be split among the various executives. The amount of the bonus pool is based
upon the Company's financial performance taking into account financial
performance of the Company relative to budgeted profitability targets and other
performance criteria established by the Compensation Committee. The maximum
annual bonus available under the bonus plan ranged from 10% to 50% of base
salary during 2001, depending on the individual's position in the Company and
measurement of Company financial performance against the foregoing annual
incentive compensation criteria.
During fiscal 2001 the Company's performance did not meet the required
financial performance goals and thus no cash bonuses were paid.
Stock Options. The Company believes that the granting of stock options
serves as a long term incentive to officers and other employees of the Company
and its subsidiaries. The 1995 and 1998 stock option plans provide the Company
with flexibility in awarding of stock options.
Based on a review of the level of options held and other equity ownership
in the Company, stock option grants to officers during 2001 were made to select
management personnel.
2001 Compensation of the CEO. The 2001 salary of the CEO was fixed by an
employment agreement entered into in January 2001 based on the Committee's
review of Mr. Spivak's prior performance, the Company's future plans and the
salaries of CEO's of similarly positioned companies. Mr. Spivak's salary during
2001 was $225,000. The Company paid no bonus to Mr. Spivak during 2001.
Based on a review of the level of options held and performance versus the
Company's plan, during 2001, the Committee granted to Mr. Spivak 100,000 new
options at an exercise price representing a 10% premium to the market price and
vesting over three years.
Tax Deductibility of Executive Compensation. Section 162(m) of the Internal
Revenue Code contains provisions, which could limit the deductibility of certain
compensation payments to the Company's executive officers. The Company believes
that any compensation realized in connection with the exercise of stock options
granted by the Company will continue to be deductible as performance based
compensation. The policy of the Company is to design its compensation programs
generally to preserve the tax deductibility of compensation paid to its
executive officers. The Committee could determine, however, taking into
consideration the burdens of compliance with Section 162(m) and other relevant
facts and circumstances, to pay compensation that is not fully deductible, if
the Committee believes such payments are in the Company's best interests.
Compensation Committee Interlocks and Insider Participation. Mr. Golenberg
and Mr. Frank have both previously served the company in a consulting capacity.
Neither Mr. Golenberg nor Mr. Frank provided consulting services to the company
during the fiscal year ending 2001.
Charles Frank, Chairman
Glenn Golenberg
Steven Ross
11
Company Performance
The following graph compares the cumulative total investor return on the
Company's Common Stock for the five years ended December 31, 2001 with the S&P
SmallCap 600 Index (the "S&P SmallCap 600 Index") and a peer group of companies,
consisting of Ark Restaurants Corp., Jerry's Famous Deli, Inc., Avado Brands,
Inc. and Chart House Enterprises, Inc. (the "Peer Group"). Il Fornaio America
Corp., which was included in the Peer Group for the year ended December 31,
2000, is no longer publicly traded and is, therefor, excluded from the Peer
Group.
The graph displayed below is presented in accordance with Securities and
Exchange Commission requirements. Shareholders are cautioned against drawing any
conclusions from the data contained herein, as past results are not necessarily
indicative of future performance. This graph in no way reflects the Company's
forecast of future financial performance.
Base Period
December December December December December December
31 1996 31 1997 31 1998 31 1999 31 2000 31 2001
----------- ---------- ----------- ----------- ----------- ----------
Grill Concepts, Inc. 100 81.40 67.43 29.94 53.48 23.25
S&P SmallCap 600 Index 100 122.60 120.13 135.62 157.95 169.69
Peer Group 100 96.07 63.55 38.39 26.60 11.91
12
PROPOSAL 2
INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent auditors for the fiscal year ending December 29, 2001, and
recommends that the shareholders vote for ratification of such appointment.
PricewaterhouseCoopers, and its predecessor firm, Coopers & Lybrand LLP, has
served as the Company's independent auditors since 1997. In the event of a
negative vote on such ratification, the Board of Directors will reconsider its
selection.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting, will be afforded an opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate inquiries from shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR
THE COMPANY.
Audit Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 30, 2001 and for the reviews of
the financial statements included in the Company's Quarterly Reports on Form
10-Q for the 2000 fiscal year were $99,600.
Financial Information Systems Design and Implementation Fees
PricewaterhouseCoopers LLP did not render any professional services to
the Company for financial information systems design and implementation, as
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X, during the
year ended December 30, 2001.
All Other Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for all other
services rendered to the Company during the fiscal year ended December 30, 2001,
other than audit services, were $36,000. These "other fees" were primarily for
tax compliance and planning services.
Audit Committee Report
The Audit Committee of the Board of Directors of the Company is
composed of three directors. The Board of Directors, in its business judgment,
has determined that all current members of the Audit Committee are "independent"
as required by the listing standards of The Nasdaq Stock Market.
The Audit Committee operates under a written charter adopted by the
Board of Directors and reviewed annually by the committee.
As described more fully in its charter, the purpose of the Audit
Committee is to assist the Board of Directors in its general oversight of the
company's financial reporting, internal control and audit functions. Management
is responsible for the preparation, presentation and integrity of the company's
financial statements, accounting and financial reporting principles, internal
controls and procedures designed to ensure compliance with accounting standards,
applicable laws and regulations. PricewaterhouseCoopers, the company's
independent auditing firm, is responsible for performing an independent audit of
the consolidated financial statements in accordance with generally accepted
auditing standards.
13
The Audit Committee members are not professional accountants or
auditors, and their functions are not intended to duplicate or to certify the
activities of management and the independent auditor, nor can the Committee
certify that the independent auditor is "independent" under applicable rules.
The Committee serves a board-level oversight role, in which it provides advice,
counsel and direction to management and the auditors on the basis of the
information it receives, discussions with management and the auditors and the
experience of the Committee's members in business, financial and accounting
matters.
Among other matters, the Audit Committee monitors the activities and
performance of the company's auditors, including the audit scope, audit fees,
auditor independence matters and the extent to which the independent auditor may
be retained to perform non-audit services. The Audit Committee and the Board
have ultimate authority and responsibility to select, evaluate and, when
appropriate, replace the company's independent auditor. The Audit Committee also
reviews the results of the audit work with regard to the adequacy and
appropriateness of the company's financial, accounting and internal controls.
Management and independent auditor presentations to and discussions with the
Audit Committee also cover various topics and events that may have significant
financial impact or are the subject of discussions between management and the
independent auditor. In addition, the Audit Committee generally oversees the
company's internal compliance programs.
In performing its oversight role, the Audit Committee has reviewed and
discussed the consolidated financial statements with management and the
independent accountants. The Audit Committee discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees. The Company's independent
accountants also provided to the Audit Committee the written disclosures
required by Independence Standard No. 1, Independent Discussions with Audit
Committees. The Audit Committee has also considered whether the provision of
non-audit services by the independent accountants is compatible with maintaining
the accountants' independence and has discussed with the independent accountants
that firm's independence.
In reliance on the reviews and discussions referred to in this Report,
the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended December 30, 2001 for filing with the Securities and Exchange
Commission.
Charles A. Frank, Chairman
Glenn Golenberg
Steven Ross
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
In order for shareholder proposals to be included in the Company's
Proxy Statement and proxy relating to the Company's 2003 Annual Meeting of
Shareholders, such proposals must be received by the Company at its principal
executive offices not later than December 31, 2002. If the Company receives
notice of a shareholder proposal after March 16, 2003, persons named as proxies
for the 2003 Annual Meeting of Shareholders will have discretionary authority to
vote on such proposal at such meeting.
EXPENSES OF SOLICITATION
All of the expenses of soliciting proxies from shareholders, including
the reimbursement of brokerage firms and others for their expenses in forwarding
proxies and proxy statements to the beneficial owners of the Company's Common
Stock, will be borne by the Company.
14
OTHER MATTERS
The Board of Directors does not intend to bring any other matters
before the Annual Meeting and has not been informed that any other matters are
to be presented by others. In the event any other matters properly come before
the Annual Meeting, the persons named in the enclosed form of proxy will vote
all such proxies in accordance with their best judgment on such matters.
Whether or not you are planning to attend the Annual Meeting, you are
urged to complete, date and sign the enclosed proxy and return it in the
enclosed stamped envelope at your earliest convenience.
Michael Weinstock
Chairman
Los Angeles, California
April 29, 2002
15
GRILL CONCEPTS, INC.
11661 San Vicente Blvd., Suite 404
Los Angeles, California 90049
Proxy for Annual Meeting of Shareholders
to be held on June 26, 2002
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Robert Spivak and Michael Weinstock,
and each of them, as Proxies, with full power of substitution in each of them,
in the name, place and stead of the undersigned, to vote at an Annual Meeting of
Shareholders (the "Meeting") of Grill Concepts, Inc., a Delaware corporation
(the "Company"), on June 26, 2002, at 9:00 a.m., or at any adjournment or
adjournments thereof, in the manner designated below, all of the shares of the
Company's common stock that the undersigned would be entitled to vote if
personally present.
1. GRANTING _____ WITHHOLDING _____ authority to vote for the election as
directors of the Company the following nominees: Robert Spivak, Michael
Weinstock, Charles Frank, Glenn Golenberg, Lewis Wolff, Steven Ross and Norman
MacLeod.
(Instructions: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name.)
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent certifying accountants.
________FOR ________AGAINST ________ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 2 AND 3 AND FOR
THE ELECTION OF ALL NOMINEES AS DIRECTORS.
Please sign exactly as your name appears
hereon. When shares are held by joint tenants,
both should sign. When signing as an attorney,
executor, administrator, trustee, guardian, or
corporate officer, please indicate the capacity
in which signing.
DATED:__________________________ , 2002
Signature:____________________________________
Signature if held jointly:______________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE