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 14a-6(e)(2))
Rule 14a-11(c) 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 25, 2003
To the Shareholders of Grill Concepts, Inc.:
An Annual Meeting of Shareholders of Grill Concepts, Inc. (the "Company")
will be held at the Daily Grill restaurant located at 2121 Rosecrans, El
Segundo, California, at 9:00 a.m., on Wednesday, June 25, 2003 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, 2003 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
/s/ Michael Weinstock
------------------------------------
Michael Weinstock
Chairman
Los Angeles, California
April 28, 2003
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 25, 2003
---------------
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 2003 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 Daily Grill Restaurant, 2121 Rosecrans, El Segundo,
California, on Wednesday, June 25, 2003 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 28, 2003.
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, 2003 (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.
1
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 59
------
Mr. Spivak has served as President, Chief Executive Officer and a director of
the Company since 1995. 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. Prior to forming GCI, Mr. Spivak co-founded, and
operated, The Grill on the Alley restaurant in Beverly Hills in 1984. Mr.
Spivak is a founder and past president of the Beverly Hills Restaurant
Association. Mr. Spivak also chairs the executive advisory board of the Collins
School of Hotel and Restaurant Management at California State Polytechnic
University at Pomona, is Director Emeritus of the California Restaurant
Association and is a member of the Board of Directors of DiRoNA - Distinguished
Restaurants of North America.
MICHAEL WEINSTOCK Director Since 1995 Age 60
------
Mr. Weinstock has served as Executive Vice President and a director of the
Company since 1995 and as Chairman of the Board since 2000. From 1995 to 2000,
Mr. Weinstock served as Vice-Chairman of the Board. 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 1995. 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 55
------
Mr. Frank has been a partner in The Parkside Group of San Francisco, LLC, a
private equity investment firm, since 1997. He has also served as President of
CAF Restaurant Services, Inc., a restaurant consulting firm, since 1990, and as
Chief Financial Officer of MacGregor Golf Company since 2002. 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 62
------
Mr. Golenberg is a Managing Director of Golenberg & Company, formed in 1978, and
The Bellwether Group, LLC, merchant banking firms that invest in and provide
consulting and financial advisory services to a broad range of businesses.
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 67
------
Mr. Wolff is Chairman of Wolff DiNapoli LLC and Wolff Urban Management, Inc.,
real estate acquisition, investment, development and management firms. 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 $1.0 billion. 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 54
------
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 AOL 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 52
------
Mr. MacLeod is Executive Vice President of the Sheraton Hotels & Resorts
division of Starwood Hotels & Resorts Worldwide, Inc. Mr. MacLeod has served in
various management positions with Starwood since 1996, beginning as Area
Managing Director for the North American Southeast operations of the company's
Westin Hotels & Resorts division and then Executive Vice President of the Westin
Hotels & Resorts division and, most recently, Executive Vice President,
Operations, North America Division. 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 41, 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 50, 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 1995 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 2002. 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 2002.
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. Based on management's assessment and the standards established by
Nasdaq, the Company believes that each of the members of the Audit Committee is
an "independent" director and satisfies the definition of a "financial expert".
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 29, 2002, the Board of Directors held four
formal meetings, the Audit Committee held four meetings and the Compensation
Committee held one meeting. 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. Each non-employee director is also granted a $500 per quarter food
credit at the Company's restaurants. 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 29, 2002 of each person who served as the
Company's Chief Executive Officer during fiscal 2002 and the four other most
highly paid executive officers whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 29, 2002 (the "Named Officers").
5
Long Term
Name and Annual Compensation Compensation
Principal Position Year Salary($) Bonus($) Other ($) Stock Options(#)
-------------------- ------- ---------- --------------- ------------ ---------------------
Robert Spivak 2002 235,000 -0- 33,500 (1) -0-
President and 2001 225,000 -0- 33,500 (1) 100,000
Chief Executive Officer 2000 225,000 -0- 33,500 (1) -0-
Daryl Ansel 2002 140,000 -0- -0- 15,000
Chief Financial Officer (2) 2001 130,000 -0- -0- 50,000
2000 -0- -0- -0- -0-
John Sola 2002 146,000 -0- -0- 12,000
Vice President - Operations 2001 138,000 -0- -0- 9,000
and Development 2000 114,423 -0- -0- 10,000
Michael Weinstock 2002 112,500 -0- -0- -0-
Executive Vice President and 2001 112,500 -0- -0- -0-
Chairman of the Board 2000 100,000 -0- -0- -0-
(1) 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.
(2) 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 2002 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 - - - - - -
Daryl Ansel 15,000 11.4% 1.65 06/26/12 $15,565 $39,445
John Sola 12,000 9.1% 1.65 06/26/12 $12,452 $31,556
Michael Weinstock - - - - - -
STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information concerning the exercise of stock
options during 2002 by each of the Named Officers and the number and value of
unexercised options held by the Named Officers at the end of 2002:
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE MONEY OPTIONS
ACQUIRED ON VALUE AT FY-END (#) AT FY-END ($)(1)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----- ----------- --------------- -------------- -------------- ------------- --------------
Robert Spivak . . 0 0 73,000 40,750 0 0
Daryl Ansel . . . 0 0 20,000 45,000 0 0
John Sola . . . . 0 0 30,300 26,950 0 0
Michael Weinstock 0 0 3,500 875 0 0
(1) Based on the fair market value per share of the Common Stock at year-end,
minus the exercise price of "in-the-money"
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, 2003 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.
7
Amount and Nature of
Beneficial Ownership (1)
-------------------------
Shares Underlying
Options, Warrants
Name and Address and Other Percent
of Beneficial Owner Shares Convertible Securities (2) Total (2) of Class (2)
------------------------- --------- -------------------------- ------------ ------------
Starwood Hotels & Resorts
Worldwide, Inc. (3) . . . . . . . . . 666,667 666,667 1,333,334 21.5
Michael Weinstock (4)(5)(6). . . . . . 439,789 153,500 593,289 10.4
Robert Spivak (4)(5)(7). . . . . . . . 426,091 73,000 499,091 8.9
Aaron Ferrer (8) . . . . . . . . . . . 410,024 0 410,024 7.4
Keith Wolff (9). . . . . . . . . . . . 337,625 95,000 432,625 7.7
Cundill International Company Ltd (10) 450,000 0 450,000 8.1
Lewis Wolff (11) . . . . . . . . . . . 102,375 381,250 483,625 8.2
Stephen Ross (12). . . . . . . . . . . 63,565 148,873 212,438 3.7
Glenn Golenberg. . . . . . . . . . . . 21,875 23,750 45,625 *
Charles Frank. . . . . . . . . . . . . 19,642 23,750 43,392 *
John Sola (13) . . . . . . . . . . . . 8,750 30,300 39,050 *
Daryl Ansel (14) . . . . . . . . . . . - 20,000 20,000 *
Norman MacLeod (15). . . . . . . . . . - 11,250 11,250 *
All executive officers and directors
as a group (9 persons). . . . . . . . 1,082,087 865,673 1,947,760 30.4
* 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) 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.
(6) Includes (a) 3,500 shares out of 4,375 shares issuable upon exercise of
stock options held by Mr. Weinstock and (b) 150,000 shares issuable upon
exercise of warrants held by the Weinstock Family Trust.
(7) Includes 73,000 shares out of 113,750 shares issuable upon exercise of
stock options held by Mr. Spivak.
(8) Address is 1 Homs Court Hillsborough, California 94010.
(9) Address is 11828 La Grange Avenue, Los Angeles, California 90025. Includes
(a) 242,625 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 and information reflected in Schedule 13D described in
foot (11) below.
7
(10) Address is 15 Alton Hill, Southampton SN01 Bermuda. The information set
forth herein is based on the Schedule 13G dated September 25, 2002 filed by
Cundill International Company Ltd with the Securities and Exchange
Commission.
(11) Address is 11828 La Grange Avenue, Los Angeles, California 90025. Includes
(a) 102,375 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) 11,250 shares of
common stock underlying an options to purchase shares of Common Stock, (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; and (f)
75,000 shares issuable pursuant to a warrant to purchase shares at an
exercise price of $2.12 per share. 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. 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 11,250
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. 5 to the Schedule
13D dated March 1, 2003 filed by Mr. Wolff with the Securities and Exchange
Commission on April 9, 2003.
(12) Includes (a) 63,565 shares of common stock held by Stephen 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) 20,000 shares of
common stock underlying five year $1.406 warrants held by Stephen Ross and
Rachel Ross as co-trustees of the Ross Family Trust, (iii) 20,000 shares of
common stock underlying five year $1.406 warrants held by the Mazel Trust
of which Stephen Ross is the co-trustee, and (iv) 32,058 shares of common
stock underlying five year $2.77 warrants, held by Stephen Ross and Rachel
Ross as co-trustees of the Ross Family Trust, and (c) 13,250 shares
issuable upon exercise of stock options held by Mr. Ross.
(13) Includes 30,300 shares out of 57,250 shares issuable upon exercise of stock
options held by Mr. Sola.
(14) Includes 20,000 shares out of 65,000 shares issuable upon exercise of stock
options held by Mr. Ansel.
(15) 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
The Company has entered into transactions with various entities that may be
deemed to be controlled by Lewis Wolff. Mr. Wolff is the trustee of the Wolff
Revocable Trust of 1993 that 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 that
provide for ongoing obligations and/or rights of the Company, or with respect to
which amounts were paid during 2001 and/or 2002, and 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 and (2) 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 $62,000 were accrued by the Company with respect to the San Jose
Grill during 2001 and 2002, respectively.
8
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 $168,000 of management fees to HRP during fiscal years
2001 and 2002, respectively. The agreement also provides that HRP will repay to
the Company amounts advanced to managed units on behalf of HRP. As of December
29, 2002, HRP owed to the Company $192,000. As of December 30, 2001, HRP owed
to the Company $133,000.
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 $0 each at December 29, 2002.
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. Norman MacLeod has been designated as Starwood's board
representative and currently serves as a Director of the Company.
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.
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. The Company owed $274,416 to the Ross Family Trust at December 30,
2001 and $175,657 at December 29, 2002. 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.
9
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.
During 2002, the Company entered into a Management Agreement with respect
to a restaurant operated in a Starwood property in Houston, Texas. In
conjunction with the Management Agreement, the Company advanced certain costs
relating to the opening of the restaurant. At December 29, 2002, Starwood owed
$63,653 to the Company.
The Company has no existing corporate policy that 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 reviews and approves
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.
Base Salary. For fiscal 2002, 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 and base
salary is adjusted accordingly.
Cash Bonus Program. During 2002, the Compensation Committee established a
formula for cash bonuses to be paid to executive officers that 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 2002, depending on the individual's position in the Company and
measurement of Company financial performance against the foregoing annual
incentive compensation criteria.
10
During fiscal 2002 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 2002 were made to select
management personnel.
2002 Compensation of the CEO. The 2002 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
2002 was $235,000. The Company paid no bonus to Mr. Spivak during 2002.
Based on a review of the level of options held and performance versus the
Company's plan, during 2002, the Committee granted no additional options to Mr.
Spivak.
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. None of the
Company's executive officers served during fiscal 2002 as a member of the board
of directors or compensation committee of any entity that has had one or more
executive officers which served as a member of the Company's Board of Directors
or Compensation Committee.
COMPENSATION COMMITTEE
Charles Frank, Chairman
Glenn Golenberg
Stephen Ross
COMPANY PERFORMANCE
The following graph compares the cumulative total investor return on the
Company's Common Stock for the five years ended December 29, 2002 with the S&P
SmallCap 600 Index and the S&P SmallCap 600 Restaurant Index.
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.
11
[GRAPHIC OMITED]
Base Period
December December December December December December
31 1997 31 1998 31 1999 31 2000 31 2001 31 2002
------- ------- ------- ------- ------- -------
Grill Concepts, Inc. 100 82.84 36.78 65.70 28.57 30.85
S&P SmallCap 600 Index 100 97.99 110.63 128.84 138.41 117.02
S&P 600 Restaurants 100 106.16 87.93 115.01 159.27 148.51
PROPOSAL 2
INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent auditors for the fiscal year ending December 28, 2003, 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.
12
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 29, 2002 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for the 2002
fiscal year were $122,000.
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 29, 2002.
ALL OTHER FEES
PricewaterhouseCoopers LLP did not render any other professional services
to the Company during the fiscal year ended December 29, 2002.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is primarily
responsible for overseeing management's practices and conduct regarding (i)
financial reporting, accounting policies and disclosure practices; (ii) internal
controls and (iii) compliance with all applicable laws, regulations and Company
policy. The Audit Committee functions in accordance with a written charter
adopted by the Board and included in the proxy statement for the 2001 Annual
Meeting of Shareholders. The Audit Committee reviews its charter annually and
is in the process of considering changes to its charter for recommendation to
the Board to address recent legislation and Nasdaq initiatives.
The Audit Committee is comprised of three outside directors. Each of these
individuals meets the current independence and financial experience requirements
of Nasdaq.
For the fiscal year ended December 29, 2002, the Audit Committee met four
times. At these meetings, the Audit Committee met with members of senior
management (including the CEO, CFO and controller) and the Company's independent
auditors to discuss and review overall audit scope and plans, the results of
audit examinations, evaluations by the auditors of the Company's internal
controls, the quality of the Company's financial reporting and other matters.
Specifically, the Audit Committee, among other things: (i) reviewed and
discussed the audited financial statements with management; (ii) discussed with
the Company's independent auditors, the matters required to be discussed under
generally accepted auditing standards, including Statement on Auditing Standards
No. 61 (as amended by Statement on Auditing Standards No. 90); (iii) received
the written disclosures and the letter from the auditors as required by the
Independence Standards Board Standard No. 1 and discussed with the independent
auditors the independence of the independent auditors from management and from
the Company; (iv) reviewed and oversaw the process by which the Company's chief
executive officer and chief financial officer provided legally required
certifications; and (v) considered whether the rendition of non-audit services
by the independent auditors was compatible with their independence.
In reliance on these reviews and discussions, the Audit Committee, in
furtherance of its oversight role, recommended, and the Board approved, that
Grill Concepts' audited financial statements be included in Grill Concepts'
Annual Report on Form 10-K for the fiscal year ended December 29, 2002, for
filing with the Securities and Exchange Commission. The Audit Committee,
subject to shareholder ratification, also re-appointed PricewaterhouseCoopers as
the independent auditors of the Company for fiscal year 2003 and set
PricewaterhouseCoopers' compensation.
13
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting. Members of the Audit Committee rely,
without independent verification, on the information provided to them and on the
representations made by management and the independent accountants.
Accordingly, the Audit Committee's oversight does not provide an independent
basis to determine that management has maintained procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions referred to
above do not assure that the audit of the Company's financial statements has
been carried out in accordance with generally accepted auditing standards, that
the financial statements are presented in accordance with generally accepted
accounting principles and that the Company's independent accountants are in fact
"independent."
THE AUDIT COMMITTEE
Charles A. Frank, Chairman
Glenn Golenberg
Stephen 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 2004 Annual Meeting of
Shareholders, such proposals must be received by the Company at its principal
executive offices not later than December 31, 2003. If the Company receives
notice of a shareholder proposal after March 15, 2004, persons named as proxies
for the 2004 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.
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 28, 2003
14
GRILL CONCEPTS, INC.
11661 San Vicente Blvd., Suite 404
Los Angeles, California 90049
Proxy for Annual Meeting of Shareholders
to be held on June 25, 2003
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 25, 2003, 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, Stephen 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: , 2003
----------------------------
Signature:
--------------------------------
Signature if held
jointly:
--------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE