April 2, 1997
Dear Stockholder:
We are pleased to invite you to attend the 1997 Annual Meeting of
Stockholders of The DeWolfe Companies, Inc., which will be held at Lantana, 43
Scanlon Drive, Randolph, Massachusetts (I-93 to Exit 5A, Route 28 South, right
at first stoplight) on Tuesday, May 13, 1997, commencing at 10:00 a.m., Eastern
time.
A description of business to be conducted at the Annual Meeting is in
the attached Notice of Annual Meeting and Proxy Statement. Also enclosed is a
copy of our Annual Report for 1996.
Your vote is important no matter how many shares you own. We hope you
will be able to attend the meeting in person, but if you cannot, please sign and
date the enclosed proxy and return it in the accompanying envelope. If you plan
to attend, please check the appropriate box on the proxy card.
Sincerely,
RICHARD B. DEWOLFE
Chairman and Chief Executive Officer
THE DEWOLFE COMPANIES, INC.
80 Hayden Avenue
Lexington, Massachusetts 02173
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders will be held on May 13, 1997 at
10:00 a.m. Eastern Time at Lantana, 43 Scanlon Drive, Randolph, Massachusetts
02368 (I-93 to Route 28 South to Scanlon Drive), for the following purposes:
1. To fix the number of directors and to elect directors of the
Company for the ensuing year and until their respective successors
are chosen and qualified;
2. To consider and vote upon a proposal to ratify the Company's
selection of Ernst & Young LLP as auditors of the Company for the
year ending December 31, 1997; and
3. To consider and act upon matters incidental to the foregoing and
to transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 21, 1997 as
the record date for the determination of stockholders entitled to receive notice
of, and to vote at, the Annual Meeting of Stockholders.
PAUL J. HARRINGTON
Clerk
April 2, 1997
The Company's Annual Report for 1996 containing a copy of the Company's
Form 10-K (excluding exhibits) for the year ended December 31, 1996 is enclosed
herewith.
- -------------------------------------------------------------------------------
Please fill in, date, sign and mail promptly the accompanying proxy in the
return envelope furnished for that purpose, whether or not you plan to attend
the meeting.
- -------------------------------------------------------------------------------
THE DEWOLFE COMPANIES, INC.
80 Hayden Avenue
Lexington, Massachusetts 02173
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
This statement is furnished to the stockholders of THE DEWOLFE
COMPANIES, INC. (hereinafter, the "Company") in connection with management's
solicitation of proxies to be used at the Annual Meeting of Stockholders on May
13, 1997 and at any adjournment of that meeting. The approximate date on which
this proxy statement and accompanying proxy are being sent to stockholders of
the Company is April 2, 1997. Each proxy delivered pursuant to this solicitation
is revocable at the option of the person executing the same by written notice
delivered to the Clerk of the Company at any time before the proxy is voted. A
stockholder who attends the Annual Meeting in person may revoke his or her proxy
at that time and vote his or her shares if such stockholder so desires. The
presence in person or by proxy of stockholders entitled to cast a majority of
the outstanding shares, or 1,646,041 shares, shall constitute a quorum. If a
share is represented for any purpose at the meeting, it is deemed to be present
for all other matters. Abstentions and shares held of record by a broker or its
nominee ("Broker Shares") that are voted on any matter are included in
determining whether a quorum is present. Broker shares that are not voted on any
matter will not be included in determining whether a quorum is present. The
election of each nominee for director requires a plurality of the votes cast. In
order to approve the selection of auditors, the affirmative vote of a majority
of all votes cast on such matter shall be required. In all cases, shares with
respect to which authority is withheld, abstentions, and Broker Shares that are
not voted will not be included in determining the number of votes cast.
All shares represented by a properly executed proxy will be voted
unless it is revoked and, if a choice is specified, will be voted in accordance
with such specification. If no choice is specified, the proxies will be voted
FOR the election of four directors, unless authority to do so is withheld with
respect to one or more of the nominees, and FOR the ratification of the
Company's selection of Ernst & Young LLP as auditors for the year ending
December 31, 1997. In addition, the proxy will be voted in the discretion of the
proxy holders with respect to such other business as may properly come before
the meeting.
As of March 21, 1997, the Company had outstanding 3,292,081 shares of
Common Stock. Each share of the outstanding Common Stock is entitled to one
vote. Only holders of Common Stock of record on the books of the Company at the
close of business on March 21, 1997 will be entitled to receive notice of, and
to vote, at the Annual Meeting.
ELECTION OF DIRECTORS
At the Annual Meeting, the directors to serve on the Board are to be
elected to hold office for the ensuing year and until their respective
successors are chosen and qualified. The Board of Directors has fixed the size
of the Board at four, subject to the ratification by the stockholders at the
Annual Meeting and has nominated four persons, all of whom are now directors of
the Company, to serve until the next Annual Meeting of Stockholders and until
their successors are elected and qualified. If the enclosed proxy is duly
executed and received in time for the Meeting, and unless authority to do so is
withheld, it will be voted to elect as directors the following nominees: Richard
B. DeWolfe, A. Clinton Allen, R. Robert Popeo and Paul R. Del Rossi. (For a
description of the business experience of such nominees, see "Business
Experience of Nominees and Executive Officers" below.) In the event that any of
the nominees becomes unavailable, then the proxy holders shall have the right:
(i) to vote for such substitute, if any, as the present Board of Directors may
designate; (ii) to leave a vacancy on the Board; or (iii) to fix the number of
directors for the ensuing year at less than four.
The Company did not have a nominating committee of the Board of
Directors in 1996. The Stock Option Committee, whose members are Messrs. Popeo
and Del Rossi, administers the Company's 1992 Stock Option Plan. The Stock
Option Committee held one meeting in 1996. The Compensation Committee, whose
members are Messrs. Allen, Popeo and Del Rossi met one time. The Audit
committee, whose members are Messrs. Popeo and Del Rossi met one time during
1996. During the year ended December 31, 1996, there were five meetings of the
Board of Directors. All of the directors attended, in person or by telephone,
all of the meetings of the Board of Directors except for Mr. Popeo, who attended
three of the meetings. The directors regularly consult with management and are
kept informed of business developments and financial results as they occur.
BUSINESS EXPERIENCE OF NOMINEES AND EXECUTIVE OFFICERS
Following is a list of names, ages and positions with the Company of
all nominees for election as directors and all executive officers of the
Company.
Name Age Position
---- --- --------
Richard B. DeWolfe................ 53 Chief Executive Officer, President
and Treasurer, Chairman of the Board
of Directors, and Nominee
A. Clinton Allen.................. 53 Director, Vice Chairman of the Board
of Directors, and Nominee
R. Robert Popeo................... 58 Director and Nominee
Paul R. Del Rossi................. 54 Director and Nominee
Paul J. Harrington................ 44 Executive Vice President and Clerk;
President of DeWolfe New England
Mortgage Services, Inc.
Patricia A. Griffin............... 50 Senior Vice President; President of
DeWolfe Relocation Services, Inc.
Theodore F. Parker................ 54 President of The DeWolfe Company, Inc.
James A. Marcotte................. 39 Senior Vice President and Chief
Financial Officer
-2-
All Directors hold office until the next annual meeting of stockholders
or until their successors are elected. Except as noted below, no officer holds
his office for a fixed term and the Board of Directors may terminate any
officer's term of office. Except as noted below, each officer and director
described below has been employed at his or her present place of employment for
more than five years.
Richard B. DeWolfe is the Company's Chief Executive Officer, President
and Treasurer, and the Chairman of the Board of Directors of the Company.
A. Clinton Allen has been Vice Chairman and a Director of the Company
since 1991. Mr. Allen is Chairman and Chief Executive Officer of A.C. Allen &
Company, Inc., an investment banking consulting firm located in Cambridge,
Massachusetts. Mr. Allen currently serves as a director of Swiss Army Brands,
Inc. and is a member of its Executive Committee, and as a director of
SweetWater, Inc. He also serves as a director and Vice Chairman of Psychemedics
Corporation.
R. Robert Popeo has been a Director of the Company since May, 1992. Mr.
Popeo is a member of the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., of Boston, Massachusetts and currently serves as its Chairman.
Paul R. Del Rossi has been a Director of the Company since May, 1992.
Mr. Del Rossi is President of General Cinema Theaters, Inc.
Paul J. Harrington has been the Company's Clerk and President of
DeWolfe New England Mortgage Services, Inc. since April, 1992. Mr. Harrington
was named an Executive Vice President of the Company in March, 1995. Prior to
that time, and since April, 1992, Mr. Harrington was a Senior Vice President of
the Company. Before joining the Company, Mr. Harrington had been a partner in
the law firm of Harrington and Libby, P.C. in Braintree, Massachusetts since
1979.
Patricia A. Griffin is the Company's Senior Vice President and
President of DeWolfe Relocation Services, Inc. Ms. Griffin is Mr. DeWolfe's
sister.
Theodore Parker has been President of The DeWolfe Company, Inc., the
Company's real estate sales subsidiary, since May, 1995. Prior to joining the
Company, Mr. Parker served as President of Willcox Realty, Inc., a business
which was acquired by the Company in September, 1994.
James A. Marcotte was appointed the Company's Chief Financial Officer
and Senior Vice President effective in June, 1996. From September, 1992 until
June, 1996 Mr. Marcotte served as Senior Vice President and Chief Financial
Officer of First NH Mortgage Corporation. Prior to September, 1992 he was
employed by the Federal Deposit Insurance Corporation.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on its review of copies of reports filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or written representations from persons required to file such reports
("Reporting Persons"), the Company believes that, except as follows, all such
filings required to be made by such Reporting Persons were timely made in
accordance with the requirements of the Exchange Act. In July,
-3-
1996, Mr. Marcotte filed a Form 3 two days after the date specified therefor
with respect to his appointment as an executive officer in June, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 31, 1996 the Company had outstanding indebtedness of
$626,000 to various individual lenders, which has been personally guaranteed by
Mr. DeWolfe.
Amherst Street Realty Trust, an entity controlled by Mr. DeWolfe,
leases office space to the Company in Nashua, New Hampshire on an oral
tenancy-at-will basis. Such space consists of 1,500 square feet and, until
October, 1995, it was used as a regional office for the Company. The Company
made rent payments of $34,953 to such entity in 1996.
Canton Avenue Realty Trust, an entity controlled by Mr. DeWolfe, leases
office space to the Company in Milton, Massachusetts on an oral tenancy-at-will
basis. Such space consists of 3,750 square feet and is used for the Company's
Milton sales center. The Company made rent payments of $46,222 to such entity in
1996.
Wire Road Realty Trust, an entity controlled by Messrs. DeWolfe and
Harrington, leases office space to the Company in Merrimack, New Hampshire on an
oral tenancy-at-will basis. Such space consists of approximately 2,000 square
feet and is used for the Company's Merrimack, New Hampshire sales center. The
Company made rent payments of $11,576 to such entity in 1996.
The Company believes, based upon its experience in the real estate
industry, that its current leases of office space from affiliated parties are on
terms no less favorable than those which could be obtained from unaffiliated
parties.
-4-
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31,
1996, 1995, and 1994, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued for such
year, to the Company's Chairman and Chief Executive Officer, to each of the
other executive officers of the Company whose salary and bonus exceeded $100,000
in 1996 (the "named executive officers").
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------- -------------
Name and Other Annual Securities
Principal Compensa- Underlying
Position Year Salary($) Bonus($) tion($) Options (#)
- --------- ---- --------- -------- ------------ ------------
Richard B. 1996 307,292 64,000 12,890(1) -0-
DeWolfe, 1995 294,230 22,625 4,304 -0-
Chairman & 1994 275,000 95,000 3,813 75,000
Chief Executive
Officer
Paul J. 1996 180,769 25,695 12,000(3) 20,000
Harrington, (2) 1995 149,038 -0- -0- -0-
Executive Vice 1994 127,223 -0- -0- 25,000
President
Patricia A. 1996 129,808 9,375 1,647(1) 3,000
Griffin 1995 125,000 -0- 3,055 -0-
Senior Vice 1994 127,162 -0- -0- 10,000
President
Theodore F. 1996 128,846 15,000 6,000(3) 10,000
Parker, 1995 91,144 -0- -0- 1,000
President of 1994 18,657 -0- -0- -0-
the DeWolfe
Company, Inc.
(1) Represents commissions paid on transactions in which the named executive
served as a broker.
(2) Mr. Harrington served as a Senior Vice President of the Company from April
1, 1992 through February, 1995. He was named an Executive Vice President in
March, 1995.
(3) Represents amount paid as an expense allowance to the named executive
officer.
-5-
Stock Option Grant Table
The following table contains information concerning the grant of stock
options to the named executive officers during the Company's fiscal year ended
December 31, 1996:
OPTIONS GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
% of Total Exercise of Assumed Annual Rate
Options or Base of Stock Appreciation
Options Granted to Price for Option Term
Granted Employees in ($/sh)(5) Expiration -------------------------
NAME (#) (1) Fiscal Year (2) (3) Date 0% 5%($) 10%($)
---- ------- ------------ --------- ---------- -- ------ ------
Paul J. Harrington 20,000 27.4 4.75 2-27-01 0 26,247 57,998
Patricia A. Griffin 3,000 4.0 4.75 2-27-01 0 3,937 8,700
Theodore F. Parker 10,000 13.7 4.75 2-27-01 0 13,123 29,000
- -------------
(1) All options were granted under the Company's 1992 Stock Option Plan and have
a term of 5 years. They become exercisable with respect to 25% of the shares
covered thereby twelve months after the date of grant and with respect to an
additional 25% of the shares covered thereby on each successive anniversary date
thereafter. Under the terms of the 1992 Stock Option Plan the Stock Option
Committee may, in its discretion, accelerate the date on which any option
granted thereunder becomes exercisable in full.
(2) The exercise price and the withholding obligations related to exercise may
be paid by delivery of already owned shares, subject to certain conditions.
(3) Represents the market value on the date of grant.
-6-
Year-End Option Values
The following table sets forth information with respect to the named
executives concerning the number and value of unexercised options held as of
December 31, 1996. None of the named executives exercised any options during the
fiscal year ended December 31, 1996.
Year-End Option Values
Number of unexercised Value of unexercised
options at fiscal in-the-money options at
year-end(#) fiscal year-end ($) (1)
--------------------- -----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Richard B. DeWolfe 225,000 50,000 68,375 30,125
Paul J. Harrington 31,250 38,750 40,563 27,187
Patricia A. Griffin 6,700 8,500 5,355 4,635
Theodore F. Parker 250 10,750 280 5,840
- -------------
(1) Represents the fair market value of the Company's Common Stock on December
31, 1996 ($5.25 per share based on the closing price on the American Stock
Exchange) minus the exercise price per share, of the in-the-money options,
multiplied by the number of shares subject to each option.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Effective May 21, 1992, Mr. DeWolfe entered into an employment contract with
the Company which is generally terminable with 90 days prior written notice.
Pursuant to the terms of this contract, Mr. DeWolfe serves as President and
Chief Executive Officer of the Company at a salary to be determined annually by
the Board. In addition, the contract includes provisions providing Mr. DeWolfe
with severance payments at the rate of his then current salary for two years
following the termination of his employment without cause and restricting Mr.
DeWolfe's right to compete with the Company for one year following the
termination of his employment for any reason. The Company owns a $2 million "key
man" life insurance policy on Mr. DeWolfe.
Effective May 21, 1992, Mr. Harrington entered into an employment contract
with the Company which is generally terminable with 90 days prior written
notice. Pursuant to the terms of this contract, Mr. Harrington serves as
Executive Vice President of the Company at a salary to be determined annually by
the Board of Directors. In addition, the contract includes provisions providing
Mr. Harrington with severance payments at the rate of his then current salary
for one year following the termination of his employment without cause and
restricting Mr. Harrington's right to compete with the Company for one year
following the termination of his employment for any reason.
Effective May 21, 1992, Ms. Griffin entered into an employment contract with
the Company which is generally terminable with 90 days prior written notice.
Pursuant to the terms of this contract, Ms. Griffin serves as Senior Vice
President of the Company at a salary to be determined annually by the Board of
Directors. In addition, the contract includes provisions providing Ms. Griffin
with severance
-7-
payments at the rate of her then current salary for one year following the
termination of her employment without cause and restricting Ms. Griffin's right
to compete with the Company for one year following the termination of her
employment for any reason.
Additional Information with respect to Compensation Committee Interlocks and
Insider Participation on Compensation Decisions
During fiscal year 1996 Richard B. DeWolfe, the Company's Chairman and Chief
Executive Officer, made recommendations to the Compensation Committee of the
Board of Directors regarding executive officer compensation.
During fiscal year 1996 the Company paid consulting fees to Mr. Allen in the
aggregate amount of $60,000 relating to investor relations and mergers and
acquisitions.
Compensation Committee Report on Executive Compensation
-------------------------------------------------------
The Company's executive compensation program is designed to attract,
retain and reward executives who are responsible for leading the company in
achieving its business objectives. This report is submitted by the Board of
Directors and addresses the compensation policies for fiscal 1996 as they
affected Mr. DeWolfe, in his capacity as Chief Executive Officer of the
Company, and the other executive officers of the Company.
Compensation Philosophy
-----------------------
The Company's executive compensation philosophy is based on the belief
that competitive compensation is essential to attract, motivate and retain
highly qualified and industrious employees. The Company's policy is to
provide total compensation that is competitive for comparable work and
comparable corporate performance. The compensation program is also designed
to link the interests of the Company's executives to the interests of the
Company's shareholders.
At present, the executive compensation program is comprised of salary,
cash incentive opportunities, long-term incentive opportunities in the form
of stock options, and benefits typically offered to executives by major
corporations. As an executive's level of responsibility increases, the
greater the mix of compensation shifts to incentive-based compensation and
compensation based on increases in the value of the Common Stock through
stock-based awards.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to its
chief executive officer and its four other most highly compensated
executive officers (the "named executive officers"). Qualifying
performance-based compensation is not subject to the deduction limit if
certain requirements are met. It is not anticipated that any of the named
executive officers will receive compensation for 1996, or for future years
that can now be predicted, which would not be deductible for tax purposes.
-8-
Compensation Elements
---------------------
Base Salary
-----------
Salary ranges are assigned to each position based on a comparison of
DeWolfe positions with similar positions in companies of similar size in
the Company's industry, with range midpoints established at the average of
the marketplace. Actual salaries within the appropriate range depend upon
individual performance, experience and internal equity and are reviewed and
may be adjusted annually by the Company. Increases in the base salaries
paid to executive officers in 1996 were made in the discretion of the Board
of Directors based on the foregoing criteria.
Incentive Compensation
----------------------
Cash bonuses paid to executive officers are determined by the Board of
Directors based on subjective criteria and on the financial performance of
the Company and are paid at various times during the year. The bonuses paid
to executive officers in 1996 were primarily based on year to date
performance in 1996.
Stock Options
-------------
The Company's current stock option plan for executive officers and
other employees has been in existence since 1992. Under the plan, the Stock
Option Committee of the Board of Directors may grant options with terms of
up to ten years. The options generally become exercisable with respect to
25% of the shares covered thereby on the first anniversary of the date of
grant and with respect to an additional 25% on each of the next three
anniversary dates thereafter. In granting the stock options to executives,
the Stock Option Committee of the Board of Directors takes into account the
practices of other companies of comparable size as well as the executive's
level of responsibility and individual and corporate performance during
this prior year. The Stock Option Committee did not grant any options to
executive officers in 1995. In 1996 it granted options to Messrs.
Harrington, Parker and Marcotte and to Ms. Griffin to purchase an aggregate
of 39,000 shares.
Compensation to the Chief Executive Officer
-------------------------------------------
The compensation of Richard B. DeWolfe, Chairman of the Board and Chief
Executive Officer, takes into account the fact that Mr. DeWolfe is the
founder and has been the principal executive officer of the Company since
its inception. Mr. DeWolfe is responsible, to a greater degree than
principal executive officers of many companies of similar size, for the
success of the Company and the resulting value of its stock price.
Accordingly, a substantial portion of his total compensation package
consists of bonus compensation and stock options. Mr. DeWolfe's salary for
1996 was based upon a number of 1995 factors, including revenue growth,
expansion, and pre-tax earnings. These factors were given approximately
equal weight in the consideration of Mr. DeWolfe's 1996 compensation.
Revenue grew by 33% in 1995, and the Company completed seven acquisitions
during the year, causing the total workforce to increase by 12%. However
pre-tax earnings decreased by 79% during 1995. As a result, the Company did
not increase Mr. DeWolfe's base salary in 1996 (the amount shown in the
Summary Compensation Table for Mr. DeWolfe in 1996 reflects one additional
pay period during such year) and Mr. DeWolfe was
-9-
not granted any stock options in 1996. Mr. DeWolfe's bonus paid in 1996
was primarily attributable to year-to-date financial performance in 1996.
A. Clinton Allen
Paul R. Del Rossi
R. Robert Popeo
Compensation of Directors
The Company's outside (non-employee) directors each receive cash
compensation in the amount of $24,000 annually (provided that they attend a
minimum of 4 meetings) in consideration for serving on the Board of Directors.
In addition, Mr. Allen receives compensation at a rate of $5,000 per month in
exchange for consulting services rendered to the Company relating to investor
relations and mergers and acquisitions. In addition, each of the Company's
non-employee directors participates in the Company's 1992 Non-Employee Director
Stock Option Plan (the "1992 Director Plan").
Under the 1992 Director Plan, each outside director automatically
received a grant of an option for 12,000 shares upon the adoption of the Plan.
Each newly appointed outside director automatically receives a grant of an
option to acquire 12,000 shares upon the date of his appointment. Each such
option is for a term of ten years and will become exercisable over a period of
twenty-four months from the date of grant in equal monthly installments on a
cumulative basis, provided that the optionee continues to serve as a director
during such period. Commencing with the first business day of calendar year 1993
and continuing in effect for each subsequent calendar year, each person then
serving as an outside director receives an additional automatic grant of an
option to acquire 5,000 shares, which shall also be for a term of ten years, but
is immediately exercisable in full on the date of grant.
Options under the 1992 Director Plan are not transferable by the
optionee otherwise than by will or the laws of descent and distribution and
terminate if the optionee ceases to serve as a member of the Company's Board of
Directors. In the event of the optionee's death or permanent disability, the
option becomes exercisable in full and the optionee or his heirs, legatees or
legal representatives may exercise the option during the following three years
or the remainder of the option term, whichever period is shorter.
Options to acquire an aggregate of 15,000 shares at an exercise price
of $5.75 per share were granted in 1996 under the 1992 Director Plan, including
options to acquire 5,000 shares, which were granted to Mr. Allen, options to
acquire 5,000 shares, which were granted to Mr. Popeo, and options to acquire
5,000 shares, which were granted to Mr. Del Rossi.
-10-
[GRAPHIC OF LINE CHART
THE DEWOLFE COMPANIES, INC.
STOCK PRICE PERFORMANCE GRAPH(1)
9/30/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- ------- -------- --------
DeWolfe $100.00 $58.33 $70.33 $85.42 $95.83 $87.50
AMEX Market Value Index(2) $100.00 $105.98 $126.66 $115.12 $145.53 $154.83
AMEX Financial Sub Index(3) $100.00 $106.18 $114.10 $103.36 $135.05 $160.77
(1) The above graph assumes a $100 investment on the last day of September,
1992, the month during which the Company's initial public offering was declared
effective, through the end of fiscal year 1996 in the Company's Common Stock,
the AMEX Composite, and AMEX Financial Stocks. The prices for the AMEX Composite
and AMEX Financial Stocks assume the reinvestment of dividends. The DeWolfe
Companies, Inc. did not declare or pay any dividends during the operative
period.
(2) The AMEX Market Value Index includes companies whose stock is traded on the
American Stock Exchange.
(3) The AMEX Financial Sub Index is comprised of companies which are in the
financial services industry and whose shares are traded on the American Stock
Exchange. Although the Company considers only its mortgage subsidiary to be a
financial services Company, the Company is currently unaware of any published
index stock price performance in the Company's primary line of business,
residential real estate sales and marketing.
-11
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following shows as of March 21, 1997 the number of shares of the
Company's Common Stock owned by each director and nominee for director, each
named executive officer, all executive officers and directors as a group, and by
each person known by the Company to own more than 5% of the Company's
outstanding Common Stock.
Amount and
Nature of
Beneficial Percentage
Name (1) Ownership (2) Owned (2)
-------- ------------- ----------
Richard B. DeWolfe 2,032,467(3) 57.2
The DeWolfe Companies, Inc.
80 Hayden Avenue
Lexington, Massachusetts 02173
A. Clinton Allen 194,330(4) 5.6
A.C. Allen & Company, Inc.
1280 Massachusetts Avenue
Cambridge, Massachusetts 02138
R. Robert Popeo 37,000(5) 1.1
Paul R. Del Rossi 37,000(5) 1.1
Patricia A. Griffin 94,805(5) 2.9
Paul J. Harrington 52,349(5) 1.6
Theodore F. Parker 18,126(5) *
All executive officers and
directors as a group 2,466,078(6) 64.0
(8 persons)
* Denotes ownership of less than 1%.
(1) Except as specified otherwise, each person has sole voting and dispositive
power with respect to the indicated shares of Common Stock.
-12-
(2) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within 60 days
pursuant to the exercise of options or warrants are deemed to be outstanding for
the purpose of computing the number of shares owned by, and percentage ownership
of, such individual or group, but are not deemed outstanding for the purpose of
computing the percentage ownership of any other person shown in the table.
(3) Includes 108,655 shares of Common Stock held by Mr. DeWolfe's spouse and
options to acquire 7,700 shares of Common Stock beneficially owned by his
spouse, beneficial ownership of which shares is disclaimed by Mr. DeWolfe.
Includes 256,250 shares of Common Stock which Mr. DeWolfe has a right to acquire
within 60 days pursuant to the exercise of options.
(4) Includes (i) 5,380 shares of Common Stock owned by Mr. Allen's spouse
beneficial ownership of which shares is disclaimed by Mr. Allen; and (ii) 62,000
shares of Common Stock which Mr. Allen has a right to acquire within 60 days
pursuant to the exercise of options; and (iii) 100,000 shares of common stock
which Mr. Allen has a right to acquire within 60 days pursuant to the exercise
of warrants.
(5) Includes the following number of shares of Common Stock which the individual
has a right to acquire within 60 days pursuant to the exercise of options,
Messrs. Popeo and Del Rossi: 37,000 shares each; Ms. Griffin: 10,450 shares; and
Mr. Harrington: 48,750 shares.
(6) Includes 562,150 shares of Common Stock which executive officers and
directors have a right to acquire within 60 days pursuant to the exercise of
options and warrants. Includes shares and options held by the spouse or children
of certain executive officers, or directors, beneficial ownership of which is
disclaimed by the applicable officer or director.
INDEPENDENT AUDITORS
The Board of Directors has selected as auditors of the Company for the
year ended December 31, 1997 the firm of Ernst & Young LLP and recommends
ratification of such selection by the shareholders. A member of the firm of
Ernst & Young LLP is expected to be present at the Annual Meeting of
Stockholders and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders must comply with Rule 14a-8 of the Securities and
Exchange Commission issued under the Securities Exchange Act of 1934, and must
be received at the principal executive offices of the Company not later than
December 4, 1997.
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OTHER MATTERS
The Board of Directors knows of no other matters which may come before
the Meeting. However, if any matter not now known is presented at the Meeting,
it is the intention of the persons named in the accompanying form of proxy to
vote said proxy in accordance with their judgment on such matter.
The Company will bear the cost of solicitation of proxies.
Solicitations of proxies by mail may be followed by telephone or other personal
solicitation of certain stockholders by officers or other employees of the
Company.
By order of the Board of Directors.
PAUL J. HARRINGTON
Clerk
April 2, 1997
-14-
THE DEWOLFE COMPANIES, INC.
PROXY
The undersigned, revoking previous proxies relating to these shares,
hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement dated April 2, 1997 in connection with
the Annual Meeting to be held on May 13, 1997 at 10:00 a.m. at Lantana
in Randolph, Massachusetts, and hereby appoints Richard B. DeWolfe and
Paul J. Harrington, and each of them (with full power to act alone),
the attorneys and proxies of the undersigned, with power of
substitution to each, to vote all shares of the Common stock of the
DeWolfe Companies, Inc. registered in the name provided herein which
the undersigned is entitled to vote at the 1997 Annual Meeting of
Stockholders, and at any adjournment or adjournments thereof, with all
the powers the undersigned would have if personally present. Without
limiting the general authorization hereby given, said proxies are, and
each of them is, instructed to vote or act as follows on the proposal
set forth in said Proxy Statement and on such other matters as may
properly come before the meeting.
SEE REVERSE SIDE. If you wish to vote in accordance with the Board of Directors'
recommendations, just sign on the reverse side. You need not mark any boxes.
SEE REVERSE SIDE
/X/ Please mark votes as
in this example.
This proxy, when properly executed, will be voted in the manner directed herein.
If no direction is made, this Proxy will be voted FOR all of the Board of
Directors' nominees and FOR Proposal 2.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1. Election of Directors
Nominees: Richard B. DeWolfe, A. Clinton Allen,
Paul R. Del Rossi and R. Robert Popeo
[ ] For all nominees [ ] withheld
[ ]
----------------------------------------
For all nominees except as noted above
2. Selection of Ernst & Young LLP as the Company's Independent Auditors.
[ ] For [ ] Against [ ] Abstain
MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
Signature:________________________________ Date:__________________________
Signature:________________________________ Date:__________________________