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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
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The Dwyer Group, Inc
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THE DWYER GROUP, INC.
1010 N. University Parks Drive
Waco, Texas 76707
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 2001
To the Shareholders of
THE DWYER GROUP, INC.:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
The Dwyer Group, Inc., a Delaware corporation (the "Company") will be held at
the offices of the Company located at 1010 N. University Parks Drive, Waco,
Texas, on Friday, June 22, 2001, at 10:00 A.M., local time, for the following
purposes:
(a) To elect seven directors of the Company to serve until the
next annual meeting of the shareholders or until their
respective successors shall be elected and qualified;
(b) To amend the Company's 1997 Stock Option Plan;
(c) To ratify the appointment of BDO Seidman, LLP as independent
accountants for the Company and its wholly owned subsidiaries
for the year ended December 31, 2001; and
(d) To transact such other business as may properly come before
the meeting or any postponements or adjournments thereof.
Only shareholders of record at the close of business on May 10, 2001
are entitled to notice of, and to vote at, the meeting or any adjournment
thereof. A list of shareholders entitled to vote at the meeting will be
available at the meeting for examination by any shareholder.
It is desirable that as large a proportion as possible of the
shareholders' interests be represented at the meeting. WHETHER OR NOT YOU PLAN
TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED
PROXY IN THE ENVELOPE PROVIDED SO THAT YOUR STOCK WILL BE REPRESENTED. The
giving of such proxy will not affect your right to vote in person, should you
later decide to attend the meeting. You may revoke the proxy at any time before
the proxy is exercised by delivering written notice of revocation to the
Secretary of the Company, by delivering a subsequently dated proxy or by
attending the annual meeting of shareholders and withdrawing the proxy. Please
date and sign the enclosed proxy and return it promptly in the enclosed
envelope.
By Order of the Board of Directors
DEBORAH WRIGHT-HOOD
Secretary
WACO, TEXAS
May 31, 2001
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THE DWYER GROUP, INC.
1010 N. University Parks Drive
Waco, Texas 76707
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 2001
This Proxy Statement is furnished to shareholders of The Dwyer Group,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
annual meeting of shareholders to be held on Friday, June 22, 2001 at 10:00 a.m.
CDT at the Company's headquarters in Waco, Texas. Proxies in the form enclosed,
if properly executed, returned to the Company prior to the meeting, and not
revoked, will be voted at the meeting. The proxy may be revoked at any time
before it is exercised by giving written notice to the Secretary of the Company.
This Proxy Statement and the enclosed proxy card will first be sent to the
shareholders on May 31, 2001. The enclosed 2000 Annual Report of the Company
does not form any part of the proxy solicitation material.
OUTSTANDING COMMON STOCK
The record date for shareholders entitled to vote at the annual meeting
is May 10, 2001. At the close of business on that date, the Company had issued
and outstanding and entitled to vote at the meeting 6,997,931 shares of Common
Stock, $0.10 par value ("Common Stock"), and 647,254 shares of Common Stock were
held in the Company's treasury.
ACTION TO BE TAKEN AT MEETING
The accompanying proxy, if signed and returned, unless the shareholder
otherwise specifies in the proxy, will be voted (1) FOR the election as
directors of the Company, the seven persons named under "Election of Directors";
(2) FOR the proposed amendment to the Company's 1997 Stock Option Plan ("Option
Plan"); (3) FOR the ratification of the appointment of BDO Seidman, LLP as the
Company's independent accountants for the fiscal year ending December 31, 2001;
and (4) at the discretion of the proxy holder, on any other matter or business
that may properly come before the meeting or any postponements or any
adjournments thereof. Where shareholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If any other matter or
business is brought before the meeting, the Secretary of the Company ("Proxy
Holder") may vote the proxies in her discretion. The directors do not know of
any such other matter or business.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the annual meeting. In deciding all questions, a holder of Common Stock is
entitled to one vote, in person or by proxy, for each share held in their name
at the close of business on the record date. Abstentions will be included in
vote totals and, as such, will have the same effect on each proposal (other than
the election of directors) as a negative vote. Broker non-votes, if any, will
not be included in vote totals and, as such, will have no effect on any
proposal.
To be elected a director, each nominee must receive a plurality of all
of the votes cast at the meeting for the election of directors. Should any
nominee become unable or unwilling to accept nomination or election, the Proxy
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Holder may vote the proxies for election of any other person the Board of
Directors may recommend. Each nominee has expressed their intention to serve the
entire term for which election is sought.
A favorable vote by the holders of a majority of the outstanding shares
of Common Stock, present in person or by proxy and entitled to vote thereon at
the annual meeting, is required to approve the amendment to the Option Plan and
to ratify and approve the appointment of BDO Seidman, LLP as independent
accountants for the Company for the year ended December 31, 2001.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of December 31, 2000, certain
information regarding the beneficial ownership of Common Stock by (i) each of
named executive officers, (ii) each person known by the Company to own
beneficially more than 5% of the outstanding Common Stock, (iii) each director
of the Company and (iv) all directors and officers as a group:
BENEFICIAL OWNERSHIP (1)
------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT (2)
- ------------------------------------ ---------------- -----------
Dwyer Investments, Ltd. (4) 3,800,706 54.3%
Donald J. Dwyer Family Trust (4) 115,659 1.7%
Theresa Dwyer (3) (6) (7) 4,013,746 57.4%
Donald J. Dwyer, Jr. (3) (5) (7) (8) (9) 983,315 14.0%
Dina Dwyer-Owens (3) (8) (10) 569,191 8.1%
Robert Tunmire (3) (8) (11) 683,934 9.6%
Deborah Wright-Hood (3) (8) 562,460 8.0%
Thomas Buckley (3) (12) 81,623 1.2%
John Hayes (13) 35,102 *
James Sirbasku (14) 21,000 *
Donald E. Latin (15) 15,500 *
Michael Bidwell (3) (16) 99,945 1.4%
Darren Dwyer (3) (8) 533,391 7.6%
Douglas Dwyer (3) (8) 550,773 7.9%
Donna Dwyer-Van Zandt (3) (8) 560,055 8.0%
Renaissance Capital Growth & Income Fund III (17) 675,000 9.6%
All officers and directors as a group (nine persons) (5) (6) (18) 4,861,870 66.3%
- ----------------------
*Less than 1%.
(1) Each beneficial owner's percentage ownership is determined by including
shares over which the person has voting power or dispositive power and
by assuming that options that are held by such person (but not those
held by any other person) and which are exercisable, have been
exercised. Except as noted, the Company believes that all persons named
in the table have voting and dispositive power with respect to all
shares of Common Stock beneficially owned by them.
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(2) Based on a total of 6,997,931 shares of Common Stock outstanding prior
to the exercise of any outstanding options or warrants.
(3) The principal business address of each of these individuals is c/o the
Company, 1010 N. University Parks Drive, Waco, Texas 76707.
(4) Mr. Dwyer, former Chairman of the Board, President and CEO of the
Company, died December 4, 1994. On April 10, 1997, his Estate
distributed 4,077,501 shares of Common Stock beneficially owned by the
Estate to Ms. Theresa Dwyer with the remaining 115,423 shares
distributed to the Donald J. Dwyer Family Trust (the "Trust), of which
Ms. Theresa Dwyer and Mr. Donald Dwyer, Jr. are Co-Trustees. On
September 4, 1997, Ms. Theresa Dwyer contributed 3,899,182 beneficially
owned shares, and the Trust contributed 115,092 beneficially owned
shares, to Dwyer Investments, Ltd. (the "Partnership") in exchange for
equity interests. On April 10, 1998, Ms. Dwyer sold 13.3% limited
partnership interests in the Partnership to Mr. Donald J. Dwyer, Jr.,
Ms. Donna Dwyer-Van Zandt, Ms. Deborah Wright-Hood, Ms. Dina
Dwyer-Owens, Mr. Darren Dwyer, Mr. Douglas Dwyer, as trustees of
various generation-skipping trusts, and to Mr. Robert Tunmire,
individually, each acquiring a 13.3% limited partnership interest. Ms.
Dwyer, as managing partner, has sole dispositive power over the stock
owned by the Partnership. The principal address for the Partnership and
the Trust is c/o the Company, 1010 N. University Parks Drive, Waco,
Texas, 76707.
(5) Includes beneficial ownership of 295,000 shares of Common Stock
acquired in 1999 pursuant to a stock option agreement with the Company.
(6) Includes 3,800,706 shares of Common Stock of the Partnership over which
Ms. Theresa Dwyer has sole dispositive power as Managing Partner.
(7) Includes 115,659 shares of Common Stock of the Trust over which Ms.
Theresa Dwyer and Donald J. Dwyer, Jr., have shared voting power as
Co-Trustees.
(8) Includes 533,215 shares of Common Stock of the Partnership over which
the individual has full voting power, but no dispositive power.
(9) Includes 5,000 shares of Common Stock now exercisable under an
Incentive Stock Option Plan.
(10) Includes 5,000 shares of Common Stock now exercisable under an
Incentive Stock Option Plan.
(11) Includes 100,000 shares of Common Stock now exercisable under an
Incentive Stock Option Plan.
(12) Includes 46,923 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan and 30,000 warrants
purchased from an unrelated third party in 2000.
(13) Includes 34,852 shares of Common Stock now exercisable or exercisable
within 60 days pursuant to options granted Mr. Hayes. The principal
business address of Mr. Hayes is 6612 Dupper Court, Dallas, Texas
75252.
(14) Includes 16,000 shares of Common stock now exercisable or exercisable
within 60 days pursuant to options granted Mr. Sirbasku. The principal
business address of Mr. Sirbasku is 5205 Lakeshore Drive, Waco, TX
76710.
(15) Includes 5,000 shares of Common Stock now exercisable pursuant to
options granted Mr. Latin. The principal business address of Mr. Latin
is 3102 Maple Avenue, Suite 450, Dallas, TX 75201.
(16) Includes 68,200 shares of Common Stock now exercisable under an
Incentive Stock Option Plan and 30,000 warrants purchased from an
unrelated third party in 2000.
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(17) The principal business address of Renaissance Capital Growth & Income
Fund III, Inc. is c/o Renaissance Capital Group, Inc., 8080 N. Central
Expressway, Suite 210, Dallas, TX 75206.
(18) Includes 280,975 shares of Common Stock now exercisable or exercisable
within 60 days under an Incentive Stock Option Plan and 60,000 warrants
exercisable by officers of the Company.
PROPOSAL 1: ELECTION OF DIRECTORS
Seven directors are to be elected at the annual meeting. Directors are
elected to serve until the next annual meeting of shareholders or until their
successors are elected and qualified. Shareholders are not permitted to
cumulatively vote their shares in connection with the election of directors.
NOMINEES FOR DIRECTOR
Set forth below is certain information concerning the persons nominated
for election as directors of the Company.
Theresa Dwyer, 66, has been Chairperson of the Board of Directors since
July of 1995, and Director of the Company since December of 1994. She has been
the majority stockholder and President of the following privately held
companies: Worldwide Cabinet Systems, Inc.; Worldwide Refinishing Systems, Inc.;
Worldwide Whirlpool Systems, Inc.; Worldwide Franchise Consultants, Ltd.; Aames
Auto Leasing, Inc.; and Sun Screen of Austin, Inc. since December of 1994. She
also serves as Vice President of Worldwide Supply, Inc., and Secretary of Dwyer
Real Estate and Development, Inc. Mrs. Dwyer also serves as Managing Partner of
Dwyer Investments, Ltd.
Dina Dwyer-Owens, 38, has served as President and Chief Executive
Officer since January 1, 1999 and has been a Director of the Company since 1989.
Prior to that time, she served as Vice President of Operations since September
of 1995 after serving as Co-Chairperson of the Board of Directors from December
of 1994 to July of 1995. Ms. Dwyer-Owens also served as Secretary of the Company
from 1989 through December of 1998. Ms. Dwyer-Owens was also employed by Dwyer
Real Estate and Development, Inc., a real estate concern located in Waco, Texas,
from June of 1981 until December of 2000. She also serves as Director to
Rainbow, Mr. Rooter, Dwyer Group Canada and National Accounts. Ms. Dwyer-Owens
has approximately 20 years experience in the franchising industry.
Robert Tunmire, 43, has been Executive Vice President since January 1,
1999 and a Director of the Company since 1989. Prior to that time, he served as
President and Chief Executive Officer of the Company since December of 1994
after serving as Executive Vice President since June of 1993. Mr. Tunmire also
currently serves as President of Glass Doctor. Mr. Tunmire served as President
of the Company, then operating as Mr. Rooter Corporation, from January of 1992
through May of 1993. From 1989 to 1992, he served as Vice President of Mr.
Rooter. From December of 1980 until May of 1989, Mr. Tunmire was employed by
Rainbow, most recently as Executive Vice President of Franchise Counseling. Mr.
Tunmire has approximately 25 years experience in the franchising industry.
Donald J. Dwyer, Jr., 36, has served as a Director since May of 1989.
Mr. Dwyer is currently, and has been since 1994, employed by the Company as
Director of International Operations. He previously served as Director of
International Operations for Rainbow from 1987 to 1994. Mr. Dwyer has
approximately 17 years experience in the franchising industry.
James L. Sirbasku, 61, has served as a Director since July of 1994. He
has served as Chairman and Chief Executive Officer of Profiles International,
Inc., an international company providing pre-employment evaluation systems,
since March of 1991. From 1980 to 1991, Mr. Sirbasku served as President of SMI
International, Inc., a company specializing in franchising businesses. Mr.
Sirbasku has over 26 years experience in the franchising industry.
John P. Hayes, 51, has served as a Director since July of 1994. He
founded and served, from January of 1987 to 1995, as President of The Hayes
Group, Inc., an international marketing and promotion company specializing in
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franchised businesses. Since January of 1996, Mr. Hayes has served as a
consultant to franchisors. Mr. Hayes has approximately 22 years experience in
the franchising industry.
Donald E. Latin, 70, has served as a Director since July of 1995. He
founded and, since 1986, has served as President of D. Latin and Company, Inc.,
an investment banking company which provides such corporate finance services as:
the raising of capital, mergers and acquisitions, valuation of businesses,
fairness opinions, and other financial advisory services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES.
MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
NAME AGE POSITION
- ---- --- --------
Dina Dwyer-Owens..........................38..................President, Chief Executive Officer and Director
Robert Tunmire............................42..................Executive Vice President and Director
Thomas J. Buckley.........................54..................Vice President, Treasurer and Chief Financial
Officer
Deborah Wright-Hood.......................40..................Vice President of Administration and Assistant
Treasurer
Michael Bidwell...........................43..................Chief Operating Officer
(1) Information concerning the business experience of Mr. Tunmire and
Ms. Dwyer-Owens is provided under the section entitled "Election of Directors".
Thomas J. Buckley has served as Treasurer and Chief Financial Officer
since August of 1997 and as Vice President since June of 1998. He has also
served as President of Mr. Electric since May of 1999. Prior to employment by
the Company, he served as Chief Financial Officer of Watermarc Food Management
Co. ("Watermarc") since 1994. Mr. Buckley resigned as an officer of Watermarc
effective July 1, 1997. In January of 1999, Watermarc filed for bankruptcy
protection under Chapter XI of the U.S. Bankruptcy Code. From 1990 to 1994, Mr.
Buckley served as Vice President of Finance and Franchising for Western Sizzlin'
Restaurants. Mr. Buckley has also owned and operated his own franchising
business as a regional franchisor of SpeeDee Oil Change & Tune-Up, and has 19
years overall experience in the franchising industry.
Deborah Wright-Hood has served as Secretary of the Company since
December of 1998 and as Vice President of Administration since June of 1998.
Prior to that time, she was employed by the Company in various capacities since
1985, including Director of Administration since 1994. Ms. Wright-Hood was also
President of Worldwide Supply, Inc. from 1985 until December of 2000. Ms.
Wright-Hood has over 21 years experience in the franchising industry.
Michael Bidwell has been Chief Operating Officer since July of 2000,
has been President of Rainbow since July of 1995 and President of Mr. Rooter and
Mr. Appliance since August of 1998. Mr. Bidwell was a Rainbow franchisee from
April of 1984 to June of 1995, and a Mr. Rooter franchisee from August of 1992
to June of 1995. From 1986 to June of 1995, Mr. Bidwell served as President of
Ramsoo, Inc., an Arizona corporation, which operated Rainbow and Mr. Rooter
franchises. From November of 1987 until July of 1995, Mr. Bidwell was also a
franchisee and regional director for Worldwide Refinishing Systems, Inc., a
related party to the Company. Mr. Bidwell also serves as a Director of National
Accounts. Mr. Bidwell has over 16 years experience in the franchising industry.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information sets forth compensation earned by the
Company's Chief Executive Officer and all other of its executive officers whose
annual compensation exceeded $100,000 in 2000, for services rendered for the
Company and its Subsidiaries during the fiscal years indicated:
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------- ------------
NAME AND SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($) OPTIONS
------------------ ---- --------- -------- -------- -------
Dina Dwyer-Owens, 2000 $142,822 $ 40,172 -- --
President and CEO 1999 81,125 300 -- --
1998 76,111 7,000 -- --
Robert Tunmire, 2000 (1) $125,716 $ 132,650 -- --
Executive Vice President 1999 (1) 125,215 104,932 -- --
1998 (1) 218,616 20,000 -- --
Thomas J. Buckley, 2000 $126,890 $68,072 -- 5,000
Vice President & Chief 1999 112,692 1,555 -- 12,000
Financial Officer 1998 103,846 10,000 -- 15,000
Michael Bidwell, 2000 $117,756 $ 235,372 -- 5,000
Chief Operating Officer 1999 117,305 96,816 -- 16,000
1998 127,083 31,286 -- --
Deborah Wright-Hood 2000 $ 87,000 $ 19,149 -- --
Secretary & Vice 1999 74,889 1,647 -- --
President of 1998 87,317 3,374 -- --
Administration
- -----------------------------------
(1) Includes salary plus commissions from franchise sales.
THIS SECTION LEFT INTENTIONALLY BLANK.
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The following table sets forth information regarding options granted to the
named executive officers during the fiscal year ended December 31, 2000:
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE EXPIRATION
NAME OPTIONS GRANTED IN FISCAL YEAR PRICE (1) DATE
---- --------------- -------------- --------- ----
Dina Dwyer-Owens -- -- -- --
Robert Tunmire -- -- -- --
Thomas J. Buckley 5,000 8.5% $2.50 1/27/10
Michael Bidwell 5,000 8.5% $2.38 9/1/10
Deborah Wright-Hood -- -- -- --
- -----------------------------
(1) Reflects the per share exercise price, which is equal to or greater
than the closing market price of the underlying security on the date of
grant.
The following table shows option exercises during the year ended December 31,
2000 and the value of unexercised options at December 31, 2000 for the named
executive officers who exercised options during 2000 or who had unexercised
options at December 31, 2000:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED IN-
OPTIONS AT FISCAL THE-MONEY OPTIONS
YEAR END AT FISCAL YEAR END
SHARES ACQUIRED (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE) UNEXERCISABLE) (1)
---- ----------- -------------- ------------- ------------------
Dina Dwyer-Owens -- -- 5,000 / -0- $0 / $0
Robert Tunmire -- -- 100,000 / -0- $0 / $0
Thomas J. Buckley -- -- 46,923 / 49,282 $0 / $0
Michael Bidwell -- -- 68,200 / 27,800 $0 / $0
Deborah Wright-Hood -- -- -0- / -0- $0 / $0
- -----------------------------
(1) The closing price of the Common Stock on December 31, 2000 was $1.88
per share.
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COMPENSATION OF DIRECTORS
Directors are not compensated for their attendance at meetings, but the
Company reimburses the non-employee directors for expenses incurred by them in
attending the meetings. Non-employee directors are eligible to receive stock
options.
PROPOSAL 2: AMENDMENT OF OPTION PLAN
On December 23, 1997, the Board of Directors adopted (ratified by the
Company's shareholders on June 30, 1998), the Company's 1997 Option Plan
("Option Plan") as a replacement for the Company's 1986 Option Plan, which had
expired, as to the issuance of additional shares.
The purpose of the Option Plan is to provide key employees and eligible
officers and directors with a proprietary interest in the Company through the
granting of options that will (a) increase the interest of such persons in the
Company's welfare, (b) furnish an incentive to such persons to continue their
services to the Company, and (c) provide a means through which the Company may
attract persons to enter its employ or accept a directorship. On March 1, 2001,
the Board of Directors unanimously approved, subject to shareholder approval, an
amendment to the Option Plan that would increase the number of shares available
under the Option Plan from 700,000 to 850,000.
Approval of the proposed amendment to the Option Plan requires the
affirmative vote of a majority of the outstanding shares of Common Stock of the
Company entitled to be voted, in person or by proxy, at the Annual Meeting.
DESCRIPTION OF PLAN
The Option Plan provides for the grant of options to eligible
employees, officers, and directors for the purchase of Common Stock of the
Company. The Option Plan currently covers, in the aggregate (including any and
all options exercised or outstanding under the Company's 1986 Option Plan), a
maximum of 700,000 shares of Common Stock. The Option Plan provides for the
granting of qualified ("Incentive Options") stock options (options which meet
the requirements of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code")) and nonqualified ("Non-Incentive Options") stock options
(options which do not meet the requirements of Section 422A of the Code) to
eligible key employees, officers, consultants and directors of the Company.
The Board of Directors currently administers the Option Plan,
designates the optionees, the number of shares subject to the options and the
terms and conditions of each option. If the Board of Directors so elects, the
Option Plan may be administered by a stock option committee (the "Committee")
appointed by the Board of Directors and comprised of members of the Board of
Directors. Shares of Common Stock issued upon exercise of the options granted
under the Option Plan may be treasury or authorized but unissued shares. If an
option under the Option Plan expires or terminates before it has been exercised
in full, the shares of Common Stock allocable to the unexercised portion of such
option may again be subject to an option under the Option Plan. The number of
shares available for options and subject to options, and the exercise price
hereinafter described, are to be adjusted upward or downward, as the case may
be, in the event of any subdivision or consolidation of shares or other capital
readjustment, stock dividend, merger, consolidation or similar transactions
affecting the shares.
The exercise price of each option granted under the Option Plan may not
be less than 100% of the fair market value of the Common Stock on the date of
grant (110% in the case of Incentive Options granted to employees owning more
than 10% of the Common Stock of the Company). No option may terminate later than
10 years from the date of grant.
Options granted under the Option Plan become exercisable at the rate of
20% of the number of shares covered thereby per year, beginning one year from
the date of grant, unless otherwise determined by the Board of Directors or the
Committee at the time an option is granted.
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The Board of Directors may amend, alter, suspend or discontinue the
Option Plan or alter or amend (including decreasing the option price by
cancellation and substitution of options or otherwise) any option agreements
granted under the Option Plan. However, without the approval of the
shareholders, the Board of Directors may not alter the provisions of the Option
Plan to materially increase the benefit accruing to participants under the
Option Plan, to materially increase the number of securities which may be issued
under the Option Plan, or to materially modify the requirements as to
eligibility for participation in the Option Plan.
At December 31, 2000, a total of 609,375 options were outstanding. In
addition, 52,500 options granted under the Plan had been exercised as of that
date.
On March 1, 2001, the Board of Directors granted options to purchase a
total of 97,625 shares of Common Stock under the Option Plan, at an exercise
price of $2.25 per share. Officer and director stock option grants were as
follows: Thomas J. Buckley - 25,000 shares; Don Latin - 20,000 shares; John
Hayes - 10,000 shares; and Jim Sirbasku - 10,000 shares. The above option grants
are subject to final approval of the amendment to the Option Plan by affirmative
vote of the shareholders as described herein, which would increase the number of
shares available under the plan to 850,000.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE OPTION PLAN, AS PROPOSED ABOVE.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon recommendation of the Audit
Committee, has appointed the firm of BDO Seidman, LLP to serve as independent
accountants of the Company for the year ending December 31, 2001, subject to
ratification of this appointment by the shareholders of the Company. BDO
Seidman, LLP is considered by the Board of Directors of the Company to be well
qualified.
One or more representatives of BDO Seidman, LLP will be available
during the Annual Meeting of Stockholders to respond to appropriate questions.
Ratification of the appointment of the independent accountants requires
the affirmative vote of a majority of the votes cast by the holders of the
shares of Common Stock of the Company voting in person or by proxy at the Annual
Meeting of Stockholders. If the stockholders do not ratify the appointment of
BDO Seidman, LLP, the Board of Directors will reconsider the appointment.
DISCLOSURE OF AUDIT AND OTHER FEES
Fees paid by the Company for the year 2000 annual audit were
approximately $84,000. The Company did not pay any fees to its auditors during
the last fiscal year for financial information systems design and implementation
fees. The Company paid approximately $36,000 to its auditors for all other fees,
which includes fees for tax consulting and the audit of the Company's employee
benefit plan. All fees were paid to the Company's principal accounting firm, BDO
Seidman, LLP. The Audit Committee has considered whether the provision of the
services included in other fees is compatible with maintaining the auditor's
independence.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY, AS
PROPOSED ABOVE.
CERTAIN TRANSACTIONS
The Company engages in a number of transactions with its Chairperson of
the Board and majority stockholder, Ms. Theresa Dwyer ("Ms. Dwyer"), and with
entities controlled by Ms. Dwyer ("Affiliates").
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From December 31, 2000, when an operating lease expired, until April of
2001, the Company leased its principal executive and administrative facilities
from an Affiliate, under a month-to-month operating lease requiring monthly
payments of approximately $33,000. In April of 2001, the Company purchased these
facilities (land, buildings and equipment), plus adjoining land for possible
expansion, from the Affiliate for approximately $3.7 million, which equaled the
appraised value of the facilities. The Company paid approximately $1.5 million
in cash to pay off an existing mortgage, with the remaining amount paid in cash
to the Affiliate. Approximately $2.2 million in cash was then paid back to the
Company as payment on debt due from Affiliates. The net cash paid by the Company
was funded by a portion of a $2.9 million mortgage loan from a bank.
In addition to rent, the Company paid for repairs and maintenance,
promotional materials and other services received from Affiliates. The Company
expensed approximately $425,000 for these rents and services in 2000, and
$387,000 in 1999.
The Company recognized income from Affiliates for accounting, legal and
administrative services, interest income, product sales commissions and
management fees of approximately $612,000 in 2000, and $582,000 in 1999. In
addition, from time-to-time, the Company and its Affiliates have made advances
to each other, which generally have not had specific repayment terms and have
been reflected in the Company's financial statements as accounts receivable or
payable from related parties. These advances typically result from the payment
of an invoice by one entity for services or items performed or delivered on
behalf of the Company and one or more of its Affiliates. The company that pays
the invoice is eventually reimbursed by the other companies for the appropriate
amount based on a pro rata allocation of the services provided to each company.
In both 2000 and 1999, the Company paid an independent director
approximately $31,000 for consulting services. In addition, another independent
director provides consulting services regarding public relations, marketing and
special projects to the Company. The Company paid approximately $113,000 and
$123,000, in 2000 and 1999, respectively, for these services.
At December 31, 2000 and 1999, the Company had accounts, interest and
notes receivable from related parties totaling approximately $2,679,000 and
$2,229,000, respectively, the majority of which was due from Affiliates. Ms.
Dwyer has guaranteed payment of all amounts due from Affiliates.
Dina Dwyer-Owens, Deborah Wright-Hood, Donald J. Dwyer, Jr., Darren
Dwyer, Douglas Dwyer, and Donna Dwyer-Van Zandt are the children of Theresa
Dwyer ("Ms. Dwyer") and the late founder, Donald J. Dwyer, Sr. ("Mr. Dwyer").
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the officers and directors of the Company and persons who beneficially
own more than ten percent of the Company's Common Stock to file reports of
securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors, and greater than 10
percent beneficial owners also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it
with respect to the fiscal year ended December 31, 2000, or written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to its directors, officers and persons who own
more than ten percent of a registered class of the Company's equity securities
have been complied with, except that during 2000 the following persons were late
in filing one report each: Messers. Tunmire, Donald Dwyer, Jr., Ms. Dwyer, Ms.
Wright-Hood and Ms. Dwyer-Owens. No other officer, director or ten percent
holder was late in filing reports pursuant to Section 16(a).
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BOARD AND COMMITTEE MEETINGS AND STRUCTURE
The Board of Directors met four times during 2000 and additionally took
action 31 times by means of written consent. Each director attended all of the
meetings with the exception of Mr. Sirbasku, who was not present at two of the
meetings and Donald Dwyer, Jr., who was not present at one of the meetings.
Non-employee directors are reimbursed for expenses incurred for their attendance
at Board of Directors meetings and are eligible to receive stock options.
Audit Committee
The Audit Committee, comprised of three independent directors, Messrs.
Latin, Hayes and Sirbasku, met twice during 2000. All members attended. The
Committee recommends the independent certified public accountants to the Board
of Directors for approval, holds discussions with the independent accountants
regarding their independence and objectivity, reviews the adequacy of internal
controls, reviews management's responses to any weaknesses reported by the
independent accountants or others, considers the adequacy of the Audit Committee
Charter (See Exhibit A), reviews the Company's Securities and Exchange
Commission filings and other public financial reports, and reviews significant
financial reporting issues with the Company's Chief Financial Officer and
independent accountants.
Compensation Committee
The Compensation Committee, comprised of Ms. Dwyer, Messers. Hays,
Latin and Sirbasku, met five times during 2000 and took action one time by means
of written consent. All members attended with the exception of Mr. Sirbasku, who
was not present at any of the meetings. The Committee sets the compensation and
benefit packages for key executives and makes determinations in regard to the
Company's 1997 Stock Option Plan.
The Board of Directors does not have a nominating committee.
INDEPENDENT ACCOUNTANT AND AUDIT COMMITTEE MATTERS
General
BDO Seidman, LLP served as the Company's independent public accountant
for the year ended December 31, 2000. A representative of BDO Seidman, LLP will
be available to respond to appropriate questions during the annual meeting.
Audit Committee Report
Management is responsible for the Company's internal controls and the
financial reporting process. The independent public accountant is responsible
for performing an independent audit of the consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes. In this context, the Audit Committee of the Board of Directors has
reviewed the audited financial statements of the Company for the fiscal year
ended December 31, 2000 with management. Management represented to the Audit
Committee that the consolidated financial statements were prepared in accordance
with generally accepted accounting principles.
The Audit Committee has discussed the consolidated financial statements
with BDO Seidman, LLP, and the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committees) relating to the
conduct of the audit. The Audit Committee has also received written disclosures
and a letter from BDO Seidman, LLP regarding its independence from the Company
as required by Independence Standards Board Standard No 1 (Independence
Discussions with Audit Committees), has discussed with BDO Seidman, LLP the
independence of that firm and has considered the compatibility of non-audit
services with the independence of BDO Seidman, LLP.
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Based upon the above materials and discussions, 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-KSB for the fiscal year ended
December 31, 2000.
The Audit Committee
Donald E. Latin, Chairman
John Hayes
James L. Sirbasku
SHAREHOLDER PROPOSALS
Any proposals that shareholders of the Company desire to have presented
at the 2002 annual meeting of shareholders must be received by the Company at
its principal executive offices no later than December 31, 2001.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy and the material used in solicitation thereof will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone, and telegram by directors and regular officers
and employees of the Company. Arrangements may also be made with brokerage
houses and other custodians, nominees, and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
By Order of the Board of Directors
DEBORAH WRIGHT-HOOD
Secretary
Waco, Texas
May 31, 2001
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THE DWYER GROUP, INC.
The undersigned hereby (i) acknowledges receipt of the Notice dated May 31,
2001, of the Annual Meeting of Shareholders of The Dwyer Group, Inc. (the
"Company") to be held at the Company's offices located at 1010 N. University
Parks Drive, Waco, Texas on Friday, June 22, 2001, at 10:00 A.M., local time,
and the Proxy Statement in connection therewith; and (ii) appoints Deborah
Wright-Hood as proxy with full power of substitution, for and in the name,
place, and stead of the undersigned, to vote upon and act with respect to all of
the shares of Common Stock of the Company standing in the name of the
undersigned or with respect to which the undersigned is entitled to vote and
act, at the meeting and at any adjournment thereof, and the undersigned directs
that the proxy vote as follows:
(a) Proposal to elect the seven directors to serve until the next annual
meeting of the shareholders or until their respective successors are
elected and qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below
Directors: Donald J. Dwyer, Jr., Theresa Dwyer, Dina Dwyer-Owens, John P.
Hayes, Donald E. Latin, James L. Sirbasku, and Robert Tunmire
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
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(b) Proposal for the amendment to the Company's 1997 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) Proposal to ratify the appointment of BDO Seidman, LLP as independent
accountants for the Company and its wholly owned subsidiaries for the
year ended December 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) In the discretion of the proxy on any other matter that may properly
come before the meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL THE NAMED NOMINEES FOR DIRECTOR AND FOR THE MATTERS
SPECIFICALLY REFERRED TO ABOVE.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such Common Stock and hereby ratifies and confirms
that all proxies, their substitutes, or any of them may lawfully do by virtue
hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Dated:
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Signed:
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Signed:
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Please date this Proxy and sign your name
exactly as it appears hereon. Where there is
more than one owner, each must sign. When
signing as an attorney, administrator,
executor, guardian or trustee, please add
your title as such. If executed by a
corporation, the Proxy should be signed by a
duly authorized officer.
Please date, sign and mail this proxy card
in the enclosed envelope. No postage is
required.