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SCHEDULE 14A
(RULE
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 of
the Commission Only (as
permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12
Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
| Filed by the Registrantý | ||
| Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
| o | Preliminary Proxy Statement | |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ý | Definitive Proxy Statement | |
| o | Definitive Additional Materials | |
| o | Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12 | |
ELECTRONICS BOUTIQUE HOLDINGS CORP. | ||||
(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): | ||||
| ý | No Fee Required | |||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11 | |||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| o | Fee paid previously with preliminary materials. | |||
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
| (1) | Amount Previously Paid: | |||
| (2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: | |||
ELECTRONICS BOUTIQUE HOLDINGS CORP.
- --------------------------------------------------------------------------------
(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 14(a)-6(i)(1) and 0-11.
(1) Title of each class of securities to which investment applies:
-----------------------------------------
(2) Aggregate number of securities to which investment applies:
-----------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------
(5) Total fee paid
-----------------------------------------
/ / Fee paid previously with preliminary materials.
---------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
[LOGO]
ELECTRONICS BOUTIQUE HOLDINGS CORP.
SOUTH MATLACK STREET
WEST CHESTER, PENNSYLVANIASouth Matlack Street
West Chester, Pennsylvania 19382
May 27, 1999
June 3, 2002
DEAR FELLOW STOCKHOLDER:
On behalf of the Board of Directors, I am pleased to invite you to attend the first annual meeting of stockholders of Electronics Boutique Holdings Corp.
(the "Company"), to be held on Tuesday,Wednesday, June 22, 1999,26, 2002, at 11:00 a.m., local time, at the Company'sElectronics Boutique's executive offices, 931 South Matlack Street, West Chester, Pennsylvania. The official Notice of Meeting, Proxy Statement and form of proxy are enclosed with this letter.
At the annual meeting, stockholders will elect twothree persons to serve as directors of the CompanyElectronics Boutique and vote upon a proposal to ratify the Board's
appointment of KPMG LLP as independent accountants for the CompanyElectronics Boutique for fiscal 2000.2003. Our Annual Report to Stockholders for the fiscal year ended February 2, 2002 accompanies this Proxy Statement.
I am delighted you have chosen to invest in the CompanyElectronics Boutique and hope that, whether or not you plan to attend the annual meeting, you will vote as soon as possible by completing, signing and returning the enclosed proxy card in the envelope provided. Your vote is important. Voting by written proxy will ensure your representation at the annual meeting if you do not attend in person.
I look forward to seeing you at the annual meeting.
Very truly yours,
/s/ James J. Kim
JAMES J. KIM
Chairman of the Board
[LOGO]
| Very truly yours, | ||
 James J. Kim Chairman of the Board |
ELECTRONICS BOUTIQUE HOLDINGS CORP.
931 SOUTH MATLACK STREET
WEST CHESTER, PENNSYLVANIASouth Matlack Street
West Chester, Pennsylvania 19382
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 22, 1999
To Be Held On June 26, 2002
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of Electronics Boutique Holdings Corp., a Delaware corporation, (the
"Company"), will be held on Tuesday,Wednesday, June 22, 1999,26, 2002, at 11:00 a.m., local time, at the Company'sElectronics Boutique's executive offices, 931 South Matlack Street, West Chester, Pennsylvania, for the following purposes:
- 1.
- To elect
twothree Class Idirectors,Directors, each to serve for a term of three years; - 2.
- To consider and vote upon a proposal to ratify the appointment of KPMG LLP, independent certified public accountants, as auditors for
the CompanyElectronics Boutique for its fiscal year endingJanuary 29, 2000;February 1, 2003; and - 3.
- To act upon such other matters and transact such other business as may properly come before the
Annual Meetingannual meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on May 14, 19991, 2002 as the record date for determining the stockholders entitled to receive notice of and to vote at, either in person or by proxy, at the Annual Meetingannual meeting and at any and all adjournments or postponements thereof.
| By Order of the Board of Directors: | ||
 James A. Smith Senior Vice President, Chief Financial Officer and Secretary | ||
West Chester, Pennsylvania June 3, 2002 |
Your vote is important.
To vote your shares, please sign, date and complete the Board of Directors:
/s/ John R. Panichello
JOHN R. PANICHELLO
Senior Vice President,
Chief Financial Officer
enclosed proxy
and Secretary
West Chester, Pennsylvania
May 27, 1999
YOUR VOTE IS IMPORTANT.
TOVOTE YOUR SHARES, PLEASE SIGN, DATE AND COMPLETE THE ENCLOSED PROXY
AND MAIL IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID RETURN ENVELOPE.
-------------------------------
mail it promptly in the enclosed, postage-paid return envelope.
PROXY STATEMENT
------------------------------
This Proxy Statement is furnished to the stockholders of Electronics Boutique Holdings Corp. (the "Company"("Electronics Boutique") in connection with the solicitation on behalf of the Board of Directors of the CompanyElectronics Boutique of proxies to be voted at the 19992002 Annual Meeting of Stockholders of the Company (such meeting andElectronics Boutique (together with any adjournments or postponements thereof, referred to as the "Annual Meeting"). The Annual Meeting will be held on Tuesday,Wednesday, June 22, 199926, 2002 at 11:00 a.m., local time, at the principalElectronics Boutique's executive offices, of the Company, which are located at 931 South Matlack Street, West Chester, Pennsylvania 19382.
This Proxy Statement, the accompanying proxy and the Company'sElectronics Boutique's Annual Report to Stockholders were first mailed to the Company'sElectronics Boutique's stockholders on or about May 27, 1999.June 3, 2002.
All shares represented by properly executed proxies will be voted in accordance with directions on the proxies. If no direction is indicated, the shares will be voted at the Annual MeetingFOR the election of all the named nominees for director andFOR the ratification of the appointment of KPMG LLP as independent auditorsaccountants for the CompanyElectronics Boutique for itsthe fiscal year ending January 29,
2000.February 1, 2003. A stockholder executing and returning a proxy may revoke it at any time before it is exercised by written notice to the Secretary of the CompanyElectronics Boutique or by voting in person at the Annual Meeting.
The Board of Directors does not know of any matters to be brought before the Annual Meeting other than the items set forth in the accompanying Notice of Annual Meeting of Stockholders. The enclosed proxy confers discretionary authority to the Board-appointed persons named therein to vote on any other matter that is properly presented for action at the Annual Meeting.
Cost
The cost of solicitation of proxies by the Board of Directors is to be borne by the Company.Electronics Boutique. In addition to the use of the mails, proxies may be solicited by personal interview, telephone and telecopier transmission by the directors, officers and employees of the Company.Electronics Boutique. 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 CompanyElectronics Boutique may reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith.
with the solicitation.
YOU ARE HEREBY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS TO COMPLETE, SIGN, DATE AND RETURN THE PROXY IN THE ACCOMPANYING ENVELOPE, WHICH IS POSTAGE-PAID IF MAILED IN THE UNITED STATES.
VOTING SECURITIES
What is the purpose of the Annual Meeting?
At our Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders on the cover page of this proxy statement, including the election of three Class I Directors and the ratification of KPMG LLP as our independent accountants for the fiscal year ending February 1, 2003. In addition, management will report on the performance of Electronics Boutique during fiscal 2002 and respond to appropriate questions from stockholders.
Who is entitled to vote at the meeting?
Only holdersstockholders of record of shares of Common Stock of the Companycommon stock at the close of business on May 14, 19991, 2002 (the "Record Date") will be entitled to vote at the Annual Meeting. On that date, 20,169,200the Record Date, 25,811,212 shares of Common Stock,common stock, the only outstanding voting securities of Electronics Boutique, were outstanding. If you were a stockholder of record of shares of common stock on that date, you will be entitled to vote all of the Company, were issued and outstanding.shares that you held on that date at the Annual Meeting.
What are the voting rights of the stockholders of Electronics Boutique common stock?
Each share of Common Stockcommon stock is entitled to one vote.vote on each proposal submitted to stockholders. Stockholders of record may vote on a matter by marking the appropriate box on the proxy.proxy card.
Who can attend the Annual Meeting?
Any interested person may attend the Annual Meeting.
What constitutes a quorum?
A majority of the voting
power of the outstanding shares of capitalcommon stock of the Company,Electronics Boutique, represented in person or by proxy, shall constituteconstitutes a quorum for the transaction of business at the Annual Meeting. As of the Record Date, 25,811,212 shares of common stock of Electronics Boutique were outstanding. Thus, the presence, in person or by proxy, of the stockholders of common stock representing at least 12,905,607 votes will be required to establish a quorum. Directors will be elected by a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. Action on theall other matters scheduled to come before the Annual Meeting will be authorized by the affirmative vote of the majority of shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on such matters. Abstentions will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum but as unvoted for purposes of determining the approval of any matter submitted to the stockholders for a vote. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will not be considered as present and entitled to vote with respect to that matter.
How do I vote?
If you complete and properly sign the accompanying proxy card and return it to Electronics Boutique, it will be voted as you direct. If you are a stockholder of record and attend the Annual Meeting, you may deliver your completed proxy card in person. "Street name" stockholders who wish to vote at the Annual Meeting will need to obtain a proxy form from the institution that holds their shares.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy card, you may change your vote at any time before the proxy is exercised by filing with the secretary of Electronics Boutique, James A. Smith, either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will
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be suspended if you attend the Annual Meeting in person and so request, although attendance at the Annual Meeting will not by itself revoke a previously granted proxy.
What are the recommendations of the Board of Directors?
Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board of Directors. The recommendation of the Board of Directors is set forth with the description of each item in this proxy statement. In summary, the Board of Directors recommends a vote for Mr. Griffiths, Ms. Kim and Mr. Steinberg as Class I Directors with terms expiring at the 2005 annual meeting of stockholders and a vote to ratify the appointment of KPMG LLP, as Electronics Boutique's independent accountants for the fiscal year ending February 1, 2003.
With respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors, or, if no recommendation is given, in their own discretion.
ITEM 1 - 1—ELECTION OF DIRECTORS
The Company's
Electronics Boutique's Certificate of Incorporation (the "Certificate of
Incorporation") and Bylaws (the "Bylaws") provide that theits directors of the
Company are to be classified into three classes, with the directors in each class serving for three-year terms and until their successors are elected.
The Board of Directors has nominated Jeffrey W. Griffiths, Susan Y. Kim and Stanley ("Mickey") Steinberg, each of whom is currently a member of the Board, for election as Class I Directors. If elected, such nominees will serve for a three-year term to expire at the Company'sElectronics Boutique's annual meeting of stockholders in 20022005 or until their successors are duly elected and qualified. Information regarding the foregoing nominees, as well as the other persons who are expected to serve on the Board following the Annual Meeting, is set forth below.
The Board of Directors has no reason to believe that any of the nominees will not serve if elected, but if any nominee should subsequently become unavailable to serve as a director, the persons named as proxies may, in their discretion, vote for a substitute nominee designated by the Board of Directors or, alternatively, the Board of Directors may reduce the number of directors to be elected at the Annual Meeting.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE
The Board of Directors recommends that stockholders vote FOR THE ELECTION OF ALL THE
NOMINEES. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED EXCEPT WHERE AUTHORITY
HAS BEEN WITHHELD.
NOMINEES FOR ELECTION AS CLASSthe election of all nominees. Proxies solicited by the Board of Directors will be so voted except where authority has been withheld.
Nominees for Election as Class I DIRECTORS - TERM EXPIRES AT THE 2002 ANNUAL
MEETING
Directors—Term Expires at the 2005 annual meeting of stockholders
JEFFREY W. GRIFFITHS
Mr. Griffiths, age 51, has served as the President and Chief Executive Officer of Electronics Boutique and a Class I Director since June 2001. Prior thereto, he served as Senior Vice President of Merchandising and Distribution from March 1998 to June 2001. Mr. Griffiths served as Senior Vice President of Merchandising and Distribution of The Electronics Boutique, Inc. ("EB"), the predecessor of Electronics Boutique, from March 1996 to March 1998. From March 1987 to February 1996, Mr. Griffiths served as Vice President of Merchandising of EB, and from April 1984 to February 1987 he served as Merchandise Manager.
SUSAN Y. KIM
Ms. Kim, age 36,39, has served as a Class I Director of the CompanyElectronics Boutique since March 1998. Ms. Kim served as a Senior District Manager of the Company's
predecessor, The Electronics Boutique, Inc. ("EB")EB, from 1991 to 1992, as EB's Personnel Manager from 1989 to 1991, as a Buyer for EB from 1986 to 1989, and as a Field Manager for EB from 1985 to
3
1986. Ms. Kim is the daughter of James J. Kim, the Company'sElectronics Boutique's Chairman and the wife of John R. Panichello, the Company's
SeniorElectronics Boutique's Executive Vice President and Chief FinancialOperating Officer.
STANLEY ("MICKEY") STEINBERG
Mr. Steinberg, age 66,69, has served as a Class I Director of the CompanyElectronics Boutique since September 1998. Mr. Steinberg has served as a consultant to Sony Corp. of
Americavarious lending institutions and corporations since June 1998. From August 1994 to June 1998, Mr. Steinberg served as Chairman of Sony Retail Entertainment. From 1989 untilto 1994, Mr. Steinberg served as Executive Vice President and Chief Operating Officer of Walt Disney Imagineering. Mr. Steinberg serves on the BoardsBoard of Directors of AMC, Inc. and from August 1997 to June 1998, served on the Board of Directors of Loews Cineplex Entertainment. CLASSMr. Steinberg is a member of the Audit Committee of the Board of Directors.
Class II DIRECTORS - TERM EXPIRES AT THE 2000 ANNUAL MEETING
Directors—Term Expires at the 2003 annual meeting of stockholders
DEAN S. ADLER
Mr. Adler, age 42,45, has served as a Class II Director of the CompanyElectronics Boutique since March 1998. In March 1997, Mr. Adler formed Lubert/Adler Partners, LP, a limited partnership investing primarily in real estate and real estate-relatedestate related ventures. For ten years prior thereto, Mr. Adler was a principal and co-head of the private equity group of CMS Companies, which specialized in acquiring operating businesses and real estate within the private equity market. Mr. Adler was also an instructor at The Wharton School of the 3
USU.S. Franchise Systems, Inc., Trans World Entertainment Corporation and Developers Diversified Realty Corporation. Mr. Adler is a member of the Audit Committee and the Compensation CommitteesCommittee of the Board.
Board of Directors.
LOUIS J. SIANA
Mr. Siana, age 67,70, has served as a Class II Director of the CompanyElectronics Boutique since March 1998. Mr. Siana is a certified public accountant and a senior partner in the accounting firm of Siana, Carr & O'ConnerO'Connor LLP. Mr. Siana is Chairman of the Audit Committee and a member of the Audit and Compensation CommitteesCommittee of the Board.
CLASSBoard of Directors.
Class III DIRECTORS - TERM EXPIRES AT THE 2001 ANNUAL MEETING
Director—Term Expires at the 2004 annual meeting of stockholders
JAMES J. KIM
Mr. Kim, age 63,66, has served as the Company'sElectronics Boutique's Chairman and a Class III Director since March 1998. Mr. Kim founded EB in 1977 and has served as its Chairman since its inception. Mr. Kim has served as Chairman and Chief Executive Officer of Amkor Technology, Inc. ("Amkor") and Amkor Electronics, Inc. ("AEI") since September 1997 and 1968, respectively. In April 1998, AEI merged with and into Amkor. Amkor is a semiconductor packaging and test service company. Mr. Kim also serves as the Chairman of the Anam group of companies, which consists
principally of companiesSemiconductor, Inc. based in South Korea in the electronics industries.Korea. Mr. Kim is also serves as a member of the Board of Managers of Fort[ie] Systems, LLC, a
company which provides information technology services, and as a director of CFM
Technologies,Mattson Technology, Inc., a manufacturersupplier of equipment used in the manufacturing
process of semiconductors and flat panel displays.high productivity semiconductor processing equipment. Mr. Kim is the father of Susan Y. Kim, a Class I Director and nominee for electionre-election as a Class I Director and the father-in-law of John R. Panichello, the Company's SeniorElectronics Boutique's Executive Vice President and Chief FinancialOperating Officer. Mr. Kim is a member of the Compensation Committee of the Board.
JOSEPH J. FIRESTONE
Mr. Firestone, age 67, has served as the President, Chief Executive
Officer and a Class III Director of the Company since March 1998. Mr. Firestone
has served as the President of EB since February 1984, and the President and
Chief Executive Officer of EB since February 1995. Mr. Firestone has served as a
director of an affiliate of EB, Electronics Boutique Plc, since November 1995
and served as the non-executive chairman of Electronics Boutique Plc from
November 1995 until June 1998. Mr. Firestone also serves on the Executive
Advisory Board of the Center for Retailing Education and Research of the
University of Florida and as a Director of the National Retail Federation.
Directors.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
ATTENDANCE AT MEETINGS
Attendance at Meetings
The Board of Directors held sevenfour meetings during the fiscal year ended January 30,
1999 ("Fiscal 1999"). No director2002. Mr. Adler attended fewer than 75% of the total number of meetings of the Board of Directors and Committees of the Board Committeesof Directors on which such directorhe served.
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COMMITTEES OF THE BOARD
Committees of the Board of Directors
The Board of Directors has established two standing committees: the Audit Committee and the Compensation Committee.
AUDIT COMMITTEE.
Audit Committee. The Audit Committee reviews the professional services provided by the Company'sElectronics Boutique's independent accountants and the independence of such firm from the management of the Company. ThisElectronics Boutique. The Audit Committee also reviews the scope of the audit by the Company'sElectronics Boutique's independent accountants, the annual financial statements of the Company, the Company'sElectronics Boutique, its systems of internal accounting controls and such other matters with respect to the accounting, internal auditing and financial reporting practices and procedures of the Company as it may find appropriate or as may be brought to its attention, and meets from time to time with members of the Company'sElectronics Boutique's finance and accountinginternal audit staff. The Audit Committee is currently comprised of the following non-employee directors: Messrs. Adler, Siana and Siana. BecauseSteinberg, each of which is independent as defined by the Company was incorporated in March 1998 and completed its initial public offering
in July 1998, therequirements of NASDAQ. The Audit Committee did not meetmet four times in fiscal 2002. The Audit Committee adopted a formal written charter, which was approved by the Board of Directors during Fiscal 1999.
COMPENSATION COMMITTEE.fiscal 2001.
Compensation Committee. The Compensation Committee reviews executive salaries, administers the stock option plan of the CompanyElectronics Boutique and approves the salaries, bonuses and other benefits of the executive officers of the Company.Electronics Boutique. In addition, thisthe Compensation Committee advises and consults with the Company'sElectronics Boutique's management regarding benefit plans and compensation policies and practices of the Company.Electronics Boutique. The Compensation Committee is comprised of the following non-employee directors: Messrs:Messrs. Kim, Adler and Siana. The Compensation Committee met one timeonce during Fiscal 1999.fiscal 2002.
The Board of Directors has not established a Nominating Committee, nor does any other committee perform similar functions.
DIRECTOR COMPENSATION
Audit Committee Report
Notwithstanding anything to the contrary set forth in Electronics Boutique's filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate other filings with the Securities and Exchange Commission, including this Proxy Statement, in whole or in part, the following report shall not be deemed incorporated by reference into any such filings.
The Audit Committee has reviewed and discussed Electronics Boutique's audited financial statements with both management and KPMG LLP, Electronics Boutique's independent accountants. The Audit Committee has discussed with KPMG LLP the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Audit Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and has discussed with KPMG LLP, the independent auditors' independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included in Electronics Boutique's Annual Report on Form 10-K.
| Respectfully submitted, | ||
Dean S. Adler Louis J. Siana Stanley Steinberg |
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Compensation of Board of Directors
Non-employee directors receive a fee of $1,500 for each Board of Directors or Board Committee meeting attended.attended and a $15,000 retainer per annum for services provided to Electronics Boutique, which is paid in four quarterly installments. Non-employee directors also receive options to purchase 5,000 shares of common stock of Electronics Boutique which are awarded at the annual meeting of stockholders for each fiscal year. In addition, commencing in March 2002, Mr. Kim, the Chairman of the Board, receives an annual salary of $250,000,$350,000, payable quarterly. Mr. Kim's salary was
awarded in March 1999, retroactivequarterly, and an annual bonus equal to July 28, 1998, the date on which the
Company completed its initial public offering. Messrs. Adler, Siana and
Steinberg were each granted options to purchase 15,000 sharesseventy-five percent of Common Stock in
respect of their service as non-employee directors during Fiscal 1999.
Commencing after the Annual Meeting, the Company intends to grant annually to
each non-employee director (other than Messrs. Adler, Siana and Steinberg until
after the 2002 Annual Meeting) options to purchase 2,500 shares of Common Stock.base salary. Directors who are also full-time employees of the CompanyElectronics Boutique receive no additional compensation for service as directors.
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Set forth below is information regarding the executive officers of Electronics Boutique who are not members of or nominees for the Board of Directors.
SETH P. LEVY
Mr. Levy, age 44, has served as Senior Vice President, Logistics, Chief Information Officer and the President of Electronics Boutique'sEBworld.com subsidiary since June 2001. Prior thereto, he served as Senior Vice President, Chief Information Officer and the President of Ebworld.com from March 1999 to June 2001. From February 1997 to March 1999, Mr. Levy served as the Vice President and Chief Information Officer. From 1991 to February 1997, Mr. Levy served as the Director of System Development for the May Merchandising and May Department International divisions of May Department Stores.
STEVEN R. MORGAN
Mr. Morgan, age 50, has served as Senior Vice President, President of Stores—North America and President of Electronics Boutique Canada since April 2002. Prior thereto, Mr. Morgan served as Senior Vice President of Stores of Electronics Boutique and Canadian Operations from June 2001 to April 2002. Mr. Morgan served as Senior Vice President of Stores of Electronics Boutique from January 2001 to June 2001. From May 1998 to January 2001, Mr. Morgan served as President and CEO of Millennium Futures, Inc., a commodity trading company. From July 1996 to May 1998, he served as Senior Vice President, Director of Stores at Filene's Department Stores. From May 1988 to July 1996, he served as Regional Vice President at Filene's Department Stores.
JOHN R. PANICHELLO
Mr. Panichello, age 40, has served as Executive Vice President and Chief Operating Officer since April 2002. Prior thereto, Mr. Panichello served as Senior Vice President, Chief Operating Officer, President of EB GameWorld and Secretary of Electronics Boutique from June 2001 to April 2002. Mr. Panichello served as Senior Vice President, Chief Financial Officer, President of EB GameWorld and Secretary of Electronics Boutique from June 2000 to June 2001. Mr. Panichello served as Senior Vice President, Chief Financial Officer and Secretary of Electronics Boutique from March 1998 to June 2000. Mr. Panichello served as the Senior Vice President of Finance of EB from March 1997 to February 1998. Mr. Panichello served as EB's Vice President of Finance and Treasurer from June 1994 to February 1997. Mr. Panichello served as a director of Electronics Boutique plc ("EB-UK") from May 1995 to November 1999. Mr. Panichello is a Certified Public Accountant. Mr. Panichello is the husband of Susan Y. Kim and the son-in-law of James J. Kim. Mr. Panichello serves on the Board of Directors of the Interactive Entertainment Merchants Association.
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JAMES A. SMITH
Mr. Smith, age 46, has served as Senior Vice President, Chief Financial Officer and Secretary since June 2001. Prior thereto, Mr. Smith served as Senior Vice President of Finance of Electronics Boutique from August 2000 to June 2001. Mr. Smith served as Electronics Boutique's Vice President-Finance from May 1998 to August 2000. From 1996 to 1998, Mr. Smith served as EB's Vice President and Controller and, from 1993 to March 1996, he served as Controller of EB.
ITEM 2 - APPOINTMENT2—RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has appointed the firm of KPMG LLP, independent certified public accountants, to audit the books, records and accounts of the CompanyElectronics Boutique and its subsidiaries for the fiscal year ending January 29, 2000,February 1, 2003, subject to ratification of such appointment by the Company'sElectronics Boutique's stockholders. KPMG LLP and its predecessors have served as independent accountants for the CompanyElectronics Boutique and EB since Fiscalthe 1995 fiscal year, and are considered well qualified. Representatives of KPMG LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE
The Board of Directors recommends that the stockholders vote FOR SUCH RATIFICATION.
PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY IN
THEIR PROXIES A CONTRARY CHOICE.
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Audit Fees
The following table presents the fees for professional audit services rendered by KPMG LLP for the audit of the fiscal 2002 financial statements and the fees billed for other services rendered by KPMG LLP.
| Audit fees, excluding audit related | $ | 190,200 | ||
| All other fees: | ||||
| Audit related fees (1) | $ | 215,700 | ||
| Other non-audit services (2) | $ | 319,400 | ||
| Total all other fees | $ | 535,100 | ||
- (1)
- Audit related fees consist primarily of foreign statutory audits, employee benefit plan audits and review of registration statements.
- (2)
- Other non-audit fees consist of tax compliance and due diligence assistance.
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EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
Compensation Summary
The following table summarizes for the Company'sElectronics Boutique's last twothree fiscal years the compensation of the Company'sElectronics Boutique's President and Chief Executive Officer and the other executive officers of the CompanyElectronics Boutique whose salary and bonus was in excess of $100,000 during Fiscal 1999fiscal 2002 (the "Named Executive Officers"), for services rendered in all capacities to the CompanyElectronics Boutique and its subsidiaries.
SUMMARY COMPENSATION TABLE
Summary Compensation Table
| Annual Compensation | Long-Term Compensation | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and Title | Fiscal Year | Salary | Bonus (1) | Securities Underlying Options(#) | All Other Compensation | |||||||||
| Jeffrey W. Griffiths President, Chief Executive Officer | 2002 2001 2000 | $ $ $ | 370,678 289,800 257,749 | $ $ $ | 300,000 107,002 129,700 | 90,000 80,000 15,000 | $ $ $ | 2,000 2,000 1,531 | (2) (2) (2) | |||||
John R. Panichello Executive Vice President and Chief Operating Officer | 2002 2001 2000 | $ $ $ | 292,375 252,818 192,978 | $ $ $ | 195,000 93,750 97,100 | 90,000 70,000 15,000 | $ $ $ | 2,000 2,000 1,522 | (2) (2) (2) | |||||
James A. Smith Senior Vice President, | 2002 2001 2000 | $ $ $ | 205,555 160,832 117,992 | $ $ $ | 105,000 67,500 25,000 | 45,000 — 7,500 | $ $ $ | 2,000 2,000 1,598 | (2) (2) (2) | |||||
Seth P. Levy Senior Vice President, Logistics and Chief | 2002 2001 2000 | $ $ $ | 207,066 195,297 173,604 | $ $ $ | 105,000 72,373 87,725 | 50,000 47,000 15,000 | $ $ $ | 2,000 2,000 1,715 | (2) (2) (2) | |||||
Steven R. Morgan (3) Senior Vice President, President of Stores—North America and President of Electronics Boutique Canada | 2002 2001 | $ $ | 272,108 24,038 | $ $ | 125,000 — | — 60,000 | — — | |||||||
Joseph J. Firestone (4) Former President, Chief Executive Officer and Director | 2002 2001 2000 | $ $ $ | 271,330 604,221 529,582 | $ $ $ | — 441,375 535,000 | 50,000 145,000 30,000 | $ $ $ | 2,000 2,000 1,590 | (2) (2) (2) | |||||
- (1)
- Amounts have been listed for the year earned although actually paid in the following fiscal year or deferred at the executive's election until a subsequent fiscal year.
- (2)
Does not include perquisites and other personal benefits, securities or property if the aggregate amount of such compensation for each of the persons listed did not exceed the lesser of (i) $50,000 or (ii) ten percent of the combined salary and bonus for such person in the applicable fiscal year. (3) - Consists of
the Company's $2,000Electronics Boutique's matching contribution pursuant to its 401(k) defined contribution plan. - (3)
- Mr. Morgan joined Electronics Boutique in January 2001.
- (4)
Consists - Mr. Firestone served as President and Chief Executive Officer of
$150,000 of deferred compensation and the Company's $2,000 matching contribution pursuant to its 401(k) defined contribution plan. FISCAL 1999 STOCK OPTION GRANTSElectronics Boutique until June 2001.
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Fiscal 2002 Stock Option Grants
The following table sets forth certain information regarding grants of stock options made during Fiscal 1999fiscal 2002 to the Named Executive Officers pursuant to the Company'sElectronics Boutique's stock option plan. No grants of stock appreciation rights were made during Fiscal 1999fiscal 2002 to any of the Named Executive Officers or any other employees of the Company.
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OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE EXPIRATION ------------------------------
NAME GRANTED YEAR PRICE DATE 5% 10%
---- ------- ---- ----- ---- -- ---
Joseph J. Firestone......... 428,571(1) 27.3% $14.00 7/28/08 $3,773,364 $9,562,445
Jeffrey W. Griffiths........ 150,000(1) 9.6% $14.00 7/28/08 $1,320,679 $3,346,859
John R. Panichello.......... 128,571(1) 8.2% $14.00 7/28/08 $1,132,007 $2,868,727
- -------------
(1) One-third of the option award vests on each of the first three
anniversaries of the award, beginning July 28, 1999.
FISCAL YEAR-END OPTION VALUESElectronics Boutique.
Option Grants in Last Fiscal Year
Individual Grants
| | | % of Total Options Granted to Employees in Fiscal Year | | | Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | Number of Securities Underlying Options Granted | | | ||||||||||||
| Name | Exercise Price | Expiration Date | |||||||||||||
| 5% | 10% | ||||||||||||||
| Jeffrey W. Griffiths | 90,000 | 8.3 | % | $ | 17.875/sh | 3/16/11 | $ | 1,011,734 | $ | 2,563,933 | |||||
John R. Panichello | 90,000 | 8.3 | % | $ | 17.875/sh | 3/16/11 | $ | 1,011,734 | $ | 2,563,933 | |||||
James A. Smith | 45,000 | 4.1 | % | $ | 17.875/sh | 3/16/11 | $ | 505,867 | $ | 1,281,967 | |||||
Seth P. Levy | 50,000 | 4.6 | % | $ | 17.875/sh | 3/16/11 | $ | 562,075 | $ | 1,424,407 | |||||
Joseph J. Firestone | 50,000 | 4.6 | % | $ | 17.875/sh | 3/16/11 | $ | 562,075 | $ | 1,424,407 | |||||
Option Exercises and Fiscal Year-End Option Values
The following table sets forth certain information regarding the total number and aggregate value of options exercised by each of the Named Executive Officers during Fiscal 1999fiscal 2002 and the total number and aggregate value of options held by each of the Named Executive Officers at January 30, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
| Name | Shares Acquired on Exercise (#) | Value Realized ($) (1) | Number of Securities Underlying Unexercised Options at Fiscal Year-End(#) Exercisable/Unexercisable | Value of Unexercised in-the-Money Options at Fiscal Year-End($) Exercisable/Unexercisable(2) | |||||
|---|---|---|---|---|---|---|---|---|---|
| Jeffrey W. Griffiths | 40,000 | $ | 930,900 | 146,667/148,333 | $3,296,524/$2,987,251 | ||||
John R. Panichello | 50,000 | $ | 1,343,200 | 111,904/141,667 | $2,498,084/$2,840,549 | ||||
James A. Smith | 20,000 | $ | 487,900 | 17,143/47,500 | $366,114/$906,763 | ||||
Seth P. Levy | 35,000 | $ | 815,772 | 22,810/86,333 | $453,866/$1,735,286 | ||||
Steven R. Morgan | — | $ | — | 20,000/40,000 | $412,650/$825,300 | ||||
Joseph J. Firestone (3) | 360,000 | $ | 7,706,000 | 146,904/146,667 | $3,161,471/$3,087,149 | ||||
- (1)
- Values are reported before the payment of any commissions or taxes associated with the exercise of the options or the subsequent sale of the underlying common stock.
- (2)
- In-the-money options are options having a per share exercise price below the closing price of shares of Common Stock on the Nasdaq National Market on
January 29, 1999February 1, 2002 (the last trading day inFiscal 1999)fiscal 2002). The dollar amounts shown represent the amount by which the product of such closing price and the number of shares purchasable upon the exercise of such in-the-money options exceeds the aggregate price payable upon such exercise.8EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS - (3)
- Options were exercised by Mr. Firestone after he retired in June 2001.
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Employment Agreements, Termination of Employment and Change in Control Arrangements
In Fiscalfiscal 1999, Electronics Boutique entered into an employment agreement with Mr. Firestone, providing for his employment as President and Chief Executive Officer. In June 2001, Mr. Firestone retired as President and Chief Executive Officer and began to serve a two-year term as a consultant to the CompanyBoard of Directors, as outlined in his employment agreement. During the two-year term, Mr. Firestone will be paid an annual base salary of $500,000.
In fiscal 1999, Electronics Boutique entered into employment agreements with Messrs. Firestone, Griffiths and Panichello providing for their employment as
Chief Executive Officer, Senior Vice President of Merchandising and Distribution and Senior Vice President and Chief Financial Officer, respectively. The agreements are each for a period of three years and have been extended for an additional one-year period pursuant to their terms. In fiscal 2002, Electronics Boutique amended its employment agreement with Mr. Griffiths to reflect (i) his change in some cases,position from Senior Vice President of Merchandising and Distribution to President and Chief Executive Officer, (ii) the increase in his base salary to an annual rate of $400,000 and (iii) the increase in the target amount for his bonus to 75% of his annual base salary. In fiscal 2002, Electronics Boutique amended its employment agreement with Mr. Panichello to reflect (i) his change in position from Senior Vice President and Chief Financial Officer to Senior Vice President and Chief Operating Officer, (ii) the increase in his base salary to an annual rate of $300,000 and (iii) the increase in the target amount of his bonus to 65% of his base salary. All other terms of their employment agreements remain in effect. Mr. Panichello was promoted to Executive Vice President and Chief Operating Officer in April 2002.
In fiscal 2000, Electronics Boutique entered into an employment agreement with Mr. Levy providing for his employment as Senior Vice President and Chief Information Officer. The agreement provided for a term of two years and, has been extended for an additional one-year term pursuant to its terms. In fiscal 2002, Electronics Boutique amended its employment agreement with Mr. Levy to increase his base salary to an annual rate of $210,000. All other terms of his employment agreement remain in effect.
In fiscal 2001, Electronics Boutique entered into an employment agreement with Mr. Smith providing for his employment as Senior Vice President of Finance. The agreement provided for a term of two years and may be extended automatically for an additional one year terms,one-year term, unless terminated by either party in accordance with theirits terms. In fiscal 2002, Electronics Boutique amended its employment agreement with Mr. Smith to reflect (i) his change in position from Senior Vice President of Finance to Senior Vice President, Chief Financial Officer and Secretary and (ii) the increase in his base salary to an annual rate of $210,000. All other terms of his employment agreement remain in effect.
In fiscal 2001, Electronics Boutique entered into an employment agreement with Mr. Morgan providing for his employment as Senior Vice President of Stores. The agreement provides for a term of three years and may be extended automatically for an additional one-year term, unless terminated by either party in accordance with its terms. The agreements provideagreement provides for compensation consisting of a base salariessalary of $500,000, $242,375 and $181,500 for
Messrs. Firestone, Griffiths and Panichello, respectively,$250,000 and certain fringe and other employee benefits that are made available to the senior executives of the Company. InElectronics Boutique.
The employment agreements with Messrs. Firestone, Griffiths, Panichello, Levy, Smith and Morgan (each an "Executive") provide that (i) in the event that employment is terminated for any reason other than death, disability or "cause" (as defined in the agreement)their respective agreements), the executiveExecutive is entitled to receive his then current base salary for the greater of his remaining term under the employment agreement or a one year period. The
agreement also limitsperiod, (ii) certain severance payments are limited to an amount equal to $100 less than the maximum that could be paid to the executive and deducted by the CompanyElectronics Boutique under Section 280G of the Internal Revenue Code in the event of termination of employment for any reason other than death, disability or "cause," or if the termination is related to a "change in control." Incontrol" and (iii) in the event of disability, Electronics Boutique will continue to pay the agreements provide for the
continuation of the executive'sExecutive's compensation for a period of one year, or, if greater, the remaining term of thehis agreement.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW OF THE COMPANY'S EXECUTIVE COMPENSATION POLICIES AND PRACTICES
Overview of Electronics Boutique's Executive Compensation Policies and Practices
The current members of the Compensation Committee are Messrs. Kim, Adler and Siana. Mr. Kim is the Company'sElectronics Boutique's Chairman and Messrs. Adler and Siana are non-employee directors of the Company.Electronics Boutique. The Compensation Committee, which was formed in July 1998, is charged with reviewing the Company'sElectronics Boutique's compensation practices and policies generally and specifically establishing such practices and policies for the Chief Executive Officer and the other executive officers of the Company.Electronics Boutique.
The compensation of the Chief Executive Officer, Jeffrey Griffiths and the other executive
officersChief Operating Officer, John Panichello for Fiscal 1999fiscal 2002 was agreed to in amendments to employment agreements entered into by the CompanyElectronics Boutique and each executive prior to the completion of the Company'sElectronics Boutique's initial public offering and the formation of the Compensation Committee. The compensation levels in the employment agreements were based on recommendations regarding current market data for the specific positions held by each of the incumbents, as well as individual and the Company'sElectronics Boutique's prior year and anticipated future performance. The recommendations were reviewed and approved by Electronics Boutique's Chairman, in the Company's Chairman forcase of the Chief Executive Officer, and by the Company'sElectronics Boutique's Chief Executive Officer for the other positions. The employment agreements for Messrs. Levy, Smith and Morgan were entered into by Electronics Boutique in consultation with the Compensation Committee.
The Compensation Committee has developed and continuously enhances compensation policies, plans and programs which align the financial interests of the Company'sElectronics Boutique's senior management, in their management capacities, with those of the Company'sits stockholders. The Compensation Committee believes that (i) executive compensation should be meaningfully related to the performance of the
CompanyElectronics Boutique and the value created for stockholders; (ii) compensation programs should support both short and long-term goals and objectives of the Company;Electronics Boutique; (iii) compensation programs should reward individuals for outstanding contributions to the Company'sElectronics Boutique's success; and (iv) short and long-term compensation policies play a significant role in attracting and retaining well qualified executives. For the Chief Executive Officer's compensation, the Compensation Committee considers the recommendations of the Company'sElectronics Boutique's Chairman, who is also a member of the Compensation Committee, and forCommittee. For the compensation of the Company'sElectronics Boutique's other executive officers, the Compensation Committee considers the recommendation of the Company'sElectronics Boutique's Chief Executive 9
In setting annual compensation for executive officers, the Compensation Committee reviews a number of criteria relating to the financial performance of the CompanyElectronics Boutique generally and of each executive officer specifically during the prior fiscal year, establishes expectations as to each such individual's future contributions to the CompanyElectronics Boutique and considers industry and comparably-sized company data. In making its decision on compensation levels, the Compensation Committee does not use any predetermined formula or assign any particular weight to any individual criteria.
INDUSTRY DATA
The Company
Industry Data
Electronics Boutique participates in and subscribes to a number of compensation and benefits surveys. In Fiscal 1999, the three predominant compensationfiscal 2002, a variety of surveys were utilized to determine the compensation of the Company'sElectronics Boutique's executive officers, wereincluding the 19982001 National Retail Federation Survey of Specialty StoresStore Retailers, (the
"NRF Survey"), the 1998/1999 ECS Industry and Geographic Report onWilliam M. Mercer Multi-outlet Retailer Survey, the Watson Wyatt Survey of Top Management Compensation (the "ECS Report"), and an independent study completed
for the Company by Towers Perrin (the "Towers Perrin Study"). The NRF Survey,
the ECS Report and the Towers Perrin Study were each used to determine the
Fiscal 1999 compensation recommendations for the Company's executive officers.
The NRF SurveyEconomic Research Institute Executive Compensation Assessor.
These surveys provided detailed compensation information, by position, including base salary and bonus for executives in the retail industry. In
addition, the NRF Survey reported, as to each position, a compensation
comparison by category. Categories included merchandise (e.g., gifts,
entertainment, apparel, footwear, etc.), sales volume, number of stores, number
of employees, average store square footage, and primary retail location
(regional malls versus other locations). Each category, as it applied to the
Company, was evaluated to determine an average compensation level for each
executive officer.
The ECS Report was compiled by Watson Wyatt Data Services. This reportsurveys also provided information regarding retail and wholesale trades and identified base
salaries, cash and other incentives and salary ranges applicable to senior management positions.
In February 1998, the Company retained Towers Perrin, an independent
compensation consulting firm, to perform a market-based study of executive
compensation among other corporations of similar size, and in industries and
locations comparable to that of the Company.
BASE SALARYmanagement.
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Base Salary
Recommendations for base salary levels take into account what is being paid elsewhere in the market, as described above, so that the CompanyElectronics Boutique can remain competitive. Increases in base salary also take into account what has happened in the business in the prior fiscal year as well as what is expected to happen in the upcoming year. These factors include:
Sales The Company's prior fiscal year sales
volume is an important factor when
evaluating base salary increases.
Increased sales volume indicates that
the executives have ensured that
products are in the Company's stores
at the proper time, stores are staffed
with knowledgeable sales people, and
customers are satisfied with the
Company's products and service.
10
Forecasted Sales Evaluation of industry forecasts
for the retail industry, what new
products will be introduced into the
market, and the overall economic
outlook for the country are all
important factors regarding the
Company's anticipated profitability
and, therefore, compensation levels.
Growth The Company's growth is evaluated, in
both absolute terms and as compared to
planned rates of growth, based on
several determinants, as follows:
o Number of stores
o Comparable store sales
o Overall sales volume
o Market share
o Net income
o Planned vs. actual
growth rates
Net Profit Goals These include an evaluation of store
profit and loss, expenses associated
with the management of the stores and
support from the home office and
distribution center.
BONUS
| Sales | Electronics Boutique's prior fiscal year sales volume is an important factor when evaluating base salary increases. Increased sales volume indicates that the executives have ensured that products are in Electronics Boutique's stores at the proper time, stores are staffed with knowledgeable sales people, and customers are satisfied with Electronics Boutique's products and service. | |
Forecasted Sales | Evaluation of industry forecasts for the retail industry, what new products will be introduced into the market, and the overall economic outlook for the country are all important factors regarding Electronics Boutique's anticipated profitability and, therefore, compensation levels. | |
Growth | Electronics Boutique's growth is evaluated, in both absolute terms and as compared to planned rates of growth, based on several determinants, as follows: | |
• Number of stores | ||
| • Comparable store sales | ||
| • Overall sales volume | ||
| • Market share | ||
| • Net income | ||
| • Planned vs. actual growth rates | ||
Net Profit Goals | These include an evaluation of store profit and loss, expenses associated with the management of the stores and support from the home office and distribution center. |
Bonus
Bonus payments are made based on CompanyElectronics Boutique's performance for the prior fiscal year. Provided the Company meets or exceeds its goals for the year,
bonuses are paid as per existing employment agreements. Bonus amounts included in the agreements are determined by Company performance and compared to external research provided in the surveys and reports described above to ensure competitiveness within the industry.
STOCK BASED INCENTIVE AWARDS
Stock Based Incentive Awards
The Compensation Committee believes that it is important for executives, as well as other employees, to have a vested interest in the
Company,Electronics Boutique, through the granting of stock options which generally vest over a three
yearthree-year period, thereby more closely aligning the long-term interest of executives with that of the Company'sElectronics Boutique's stockholders. The Compensation Committee believes that stock options provide incentive to executives by giving them a strong economic interest in maximizing stock price appreciation and enhancing their performance in attaining long-term CompanyElectronics Boutique objectives. The Compensation Committee makesmade grants under the Company'sElectronics Boutique's 2000 Equity Participation Plan and granted stock options to purchase an aggregate of 707,142325,000 shares of Common
12
Stock to the Named Executive Officers during Fiscal 1999.fiscal 2002. Mr. Firestone and Mr. Griffiths also authorized grants of stock options to new employees with the consent of the Compensation Committee. All stock options granted during Fiscal 1999fiscal 2002 by the CompanyElectronics Boutique had exercise prices equal to the fair market value of the Common Stock on the date of grant. All full-time employees of Electronics Boutique at the CompanyManager level and above are eligible to receive grants of stock options under the 2000 Equity Participation Plan, and the Compensation Committee, upon senior management's recommendations, makes an effort to ensure that option grants are made to a significant number of levels of employees within the Company,Electronics Boutique, given the competitive nature of the industry with respect to recruiting and retaining the best available personnel.
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CEO COMPENSATION
In accordance withCompensation
As Chief Executive Officer until June 2001, Mr. Firestone'sFirestone was compensated pursuant to his employment agreement at an annual salary of $588,500. Mr. Firestone began to serve as a consultant to the Board of Directors in July 2001 for a two-year period at an annual salary of $500,000, as outlined in his employment agreement. Mr. Firestone is ineligible for further bonus payments or stock option grants.
As Chief Executive Officer, effective June 2001, Mr. Griffiths was compensated pursuant to his amended employment agreement at an annual salary of $400,000. Under his amended employment agreement, Mr. Firestone's annual base salary, beginning in July 1998, was $500,000. Under his
employment agreement, Mr. FirestoneGriffiths is entitled to a cash bonus of up to 100%75% of his annual base salary. Mr. FirestoneGriffiths earned the maximuma bonus of $500,000$300,000 in Fiscal 1999, offiscal 2002, which $200,000 was paid in March 1999 and $300,000 was deferred
at Mr. Firestone's election.April 2002. The Compensation Committee awarded Mr. FirestoneGriffiths the maximum bonus based on the Company'sElectronics Boutique's achievement of its goals, including increases in the following measurement areas over Fiscal 1998fiscal 2001 levels:
| Measurement Area | Percentage Increase | ||
|---|---|---|---|
| Net Sales | 31.7 | % | |
| Number of Stores | 27.1 | % | |
| Comparable Store Sales | 20.8 | % | |
| Net Income | 19.1 | % |
The Compensation Committee believes Mr. Firestone'sGriffith's current compensation is fully consistent with the Company'sElectronics Boutique's philosophy on executive compensation and appropriate in view of the Company'sElectronics Boutique's performance in Fiscal
1999.
TAX DEDUCTIBILITY; OTHERfiscal 2002.
Tax Deductibility; Other
Section 162(m) of the Internal Revenue Code imposes a $1 million limit on the allowable tax deduction of compensation paid by a publicly-held corporation to its chief executive officer and its other four most highly compensated officers employed at year-end, subject to certain pre-established objective performance-based exceptions. The Compensation Committee intends to take Section 162(m) into account when formulating its compensation policies for the Company'sElectronics Boutique's executive officers and to comply with Section 162(m) where the Compensation Committee determines compliance to be practicable and in the best interests of the CompanyElectronics Boutique and its stockholders.
The Report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 and shall not otherwise be deemed filed under such Acts.
CONCLUSION
13
Conclusion
The Committee intends to seek to continue to operate under, and to adjust where necessary, these performance-driven compensation policies and practices to assure that they are consistent with the goals and objectives of the Company,Electronics Boutique, and with the primary mission of the full Board of increasing long-term stockholder value.
Respectfully submitted,
JAMES J. KIM
DEAN S. ADLER
LOUIS J. SIANA
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| Respectfully submitted, | ||
James J. Kim Dean S. Adler Louis J. Siana |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during Fiscal 1999fiscal 2002 were James J. Kim, Dean S. Adler and Louis J. Siana. Mr. Kim had a direct or indirect material interest in certain transactions involving the CompanyElectronics Boutique during Fiscal
1999.fiscal 2002. See "Certain Relationships and Related Transactions."
COMPARISON OF TOTAL STOCKHOLDER RETURN
The following graph compares the cumulative total stockholder return on the Common Stock with the Standard & Poor's 500 Composite Index and the Standard & Poor's 500 Specialty Retail (Specialty) Index for the period from July 28, 1998 through January 30, 1999,February 1, 2002 (the last trading day of fiscal 2002), assuming an initial investment of $100 and the reinvestment of all dividends.
ELECTRONICS BOUTIQUE HOLDINGS CORP. v. S&P 500 v. S&P RETAIL (SPECIALTY)
[THE TABLE BELOW WAS REPRESENTED IN THE PRINTED MATERIAL
BY A LINE GRAPH]
TOTAL STOCKHOLDER RETURN
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of April 30, 1999,May 1, 2002, certain information regarding the beneficial ownership of the Company's Common Stock by each stockholder known to the CompanyElectronics Boutique to be the beneficial owner of more than 5% of the Common Stock, each of the Company'sElectronics Boutique's directors and Named Executive Officers, and all directors and executive officers as a group.
| | Shares Beneficially Owned (3) | ||||
|---|---|---|---|---|---|
| Name and Address of Beneficial Owner (1)(2) | |||||
| Number | Percentage | ||||
| EB Nevada Inc. (4) 2255-A Renaissance Drive, Suite 4 Las Vegas, Nevada 89119 | 11,569,100 | 44.8 | % | ||
James J. and Agnes C. Kim (4)(5) | 11,641,661 | 45 | % | ||
Joseph J. Firestone | 246,237 | * | |||
Dean S. Adler | 15,000 | * | |||
Susan Y. Kim (4)(5) | 11,734,338 | 45.2 | % | ||
Louis J. Siana | 15,000 | * | |||
Stanley Steinberg | 17,000 | * | |||
John R. Panichello (4)(5) | 11,734,338 | 45.2 | % | ||
Jeffrey W. Griffiths | 206,596 | * | |||
Seth P. Levy | 56,143 | * | |||
Steven R. Morgan | 20,000 | * | |||
James A. Smith | 33,143 | * | |||
All directors and executive officers as a group (10 persons) (6) | 600,681 | 2.3 | % | ||
- *
- Less than 1.0%
- (1)
- Unless otherwise noted,
the CompanyElectronics Boutique believes that all persons named in the above table have sole voting and investment power with respect to the shares beneficially owned by them. - (2)
- Unless otherwise noted, the address for all beneficial owners is 931 S. Matlack Street, West Chester, PA 19382.
- (3)
- For purposes of this table, a person is deemed to be the "beneficial owner" of any shares that such person has the right to acquire within 60 days, including upon the exercise of stock options. For purposes of computing the percentage of outstanding shares held by each person named above on a given date, any security that such person has the right to acquire within 60 days is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
None of the options to purchase shares of Common Stock held by any directors or executive officers of the Company are exercisable within 60 days of April 30, 1999. (3) - (4)
- EB Nevada Inc. is a wholly-owned subsidiary of The Electronics Boutique, Inc., all of the outstanding capital stock of which is owned by James J. Kim, Agnes C. Kim, the David D. Kim Trust of December 31, 1987, the John T. Kim Trust of December 31, 1987 and the Susan Y. Kim Trust of December 31,
1987 (such trusts referred to as the "Kim Trusts").1987. Each of the Kim Trusts has in common Susan Y. Kim and John F.A. Earley as co-trustees, in addition to a third trustee (John T. Kim in the case of the Susan Y. Kim Trust and the John T. Kim Trust and David D. Kim in the case of the David D. Kim Trust) (the
16
trustees of each trust may be deemed to be the beneficial owners of the shares held by such trust). In addition, the trust agreement for each of these trusts encourages the trustees of the trusts to vote the shares of Common Stock held by them, in their discretion, in concert with James J. Kim's family. Accordingly, the trusts, together with their respective trustees and James J. and Agnes C. Kim, may be considered a "group" under Section 13(d) of the Exchange Act. This group may be deemed to have beneficial ownership of the shares owned by EB Nevada Inc.
(4)
- (5)
- James J. Kim and Agnes C. Kim are the parents of Susan Y. Kim. John R. Panichello and Susan Y. Kim are husband and wife.
(5) As reported in a Schedule 13G filed with the Securities and Exchange Commission on February 16, 141999. The Schedule 13G was filed jointly - (6)
- Excludes 11,569,100 shares owned by
Dresdner RCM Global Investors LLC ("Dresdner RCM"), Dresdner RCM Global Investors US Holdings LLC ("DRCM Holdings") and Dresdner Bank AG ("Dresdner"). Dresdner RCM is an investment advisor and a wholly-owned subsidiary of DRCM Holdings. DRCM Holdings is a wholly-owned subsidiary of Dresdner, an international banking organization headquartered in Frankfurt, Germany. (6) Excludes sharesEB Nevada Inc. which may be deemed to be beneficially owned by James J.Kim.Kim, Susan Y. Kim and John R. Panichello and 246,237 shares owned by Joseph J. Firestone who retired in June 2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In contemplation of the Company's initial public offering, on May 31,
1998, the Company's predecessor, EB, a company wholly owned by the Kim Trusts
and James and Agnes Kim (collectively, the "Kim Shareholders"), (i) transferred
certain assets, including its leases, leasehold improvements, inventory,
employee contracts, fixed assets and prepaid expenses, subject to all of its
liabilities, to Electronics Boutique of America Inc. ("EBOA") in exchange for
all of the outstanding shares of capital stock of EBOA, (ii) entered into a two
year lease, which is described below, with EBOA for the West Chester
distribution center and headquarters, and (iii) assigned its intangible assets,
including its trademarks and trade names, to Elbo Inc. ("Elbo"), in exchange for
all of the outstanding shares of capital stock of Elbo. EB retained (i) all of
the outstanding shares of capital stock (collectively, the "Operating Shares")
in its affiliates EBOA, Elbo, EB International, Inc. ("EB Int'l") and EB Canada,
Inc. ("EB Canada"), (ii) its shares of Electronics Boutique Plc ("EB-UK")
capital stock (which represented 25.1% of the outstanding shares of capital
stock of EB-UK), (iii) its West Chester distribution center and headquarters,
(iv) approximately $17.5 million of cash, accounts receivable and cash surrender
value of certain split-dollar life insurance policies and (v) approximately $7.7
million of intercompany receivables.
In July 1998, immediately prior to the completion of the Company's
initial public offering, (i) EB transferred the Operating Shares and its shares
of EB-UK capital stock to EB Nevada, Inc. ("EB Nevada") in exchange for all of
the outstanding shares of capital stock of EB Nevada, (ii) EB Nevada then
contributed the Operating Shares to the Company in exchange for 15,794,100
shares of common stock of the Company, and (iii) the Company then acquired from
the Kim Shareholders and EB Services Corp. (a corporation wholly-owned by James
J. Kim), for an aggregate of 100 shares of Common Stock, 99.99% of the
partnership interests of EB Services Company LLP, with EB Services Corp.
retaining a 0.01% general partnership interest. The Company also entered into a
Registration Rights Agreement with EB Nevada. The transactions in this and the
preceding paragraph were made pursuant to the terms of certain contribution,
assignment and exchange agreements among such entities (the transactions in this
and the immediately preceding paragraph are collectively referred to herein as
the "Reorganization").
Pursuant to the terms of a services agreement between EB (the predecessor of Electronics Boutique) and EB-UK, EB Services AgreementCompany, LLP ("EB Services") is required to provide, at EB-UK's request, management services, including assistance with EB-UK, the Company
provides management, administrativeordering and purchasing inventory, store design and acquisition, advertising, assistance in exchange for
the payment ofpromotion, publicity and information systems. Electronics Boutique receives management fees byfrom EB-UK equal to 1.0% of EB-UK's net sales, plus a bonus calculated on the basis of net income in excess of a pre-established target set by EB-UK. The Companyservices agreement expires on January 31, 2006. Electronics Boutique earned $2.5approximately $5.9 million in management fees under the services agreement in fiscal 2002. EB remains a guarantor of the obligations owed EB-UK under the services agreement. EB Services Agreement in Fiscal 1999. As of January 30, 1999, EB Nevada owned approximately
25%Corporation, all of the outstanding shares of capital stock of EB-UK.
Pursuant to the Reorganization, on May 31, 1998, EBOA, an operating
subsidiary of the Company, joined EB aswhich is owned by Mr. Kim, also owns a party to certain loan documents with
Fleet Financial Corporation and entered into a lease agreement with EB, pursuant
to which EBOA leases the West Chester headquarters and primary distribution
center from EB. The lease has a two year term and provides EBOA with an option
to purchase the property for $6.7 million, EB's cost of acquisition. The monthly
rent pursuant to such lease is $50,000.
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In March 1998, EB paid a distribution of $13.9 million to the Kim
Shareholders. In July 1998, prior to the completion of the initial public
offering,.01% partnership interest in EB Services, Company LLP declared a distribution of approximately $6.6
million to the Kim Shareholders. EB Services Company LLP paid this distribution
in two installments. The first, in August 1998, was comprised of $5.0 million of
cash and 968,292 shares of EB-UK capital stock. The second, in October 1998,
consisted of $1.1 million of cash.
In June 1998, EB loaned $7.0 million to James J. Kim, who in turn
loaned such funds to EBOA for working capital purposes. The demand notes
reflecting such loans required that interest be paid at the highest prime rate
as published in the Wall Street Journal. The Company used $7.0 million ofis its net proceeds of its initial public offering to repay this obligation to Mr. Kim
in July 1998.
The Company has a policy that any future transactions between it and
any of its officers, directors, principal stockholders or the affiliates of the
foregoing persons be on terms no less favorable to the Company than could
reasonably be obtained in arm's length transactions with independent third
parties, and that any such transactions also be approved by the members of the
Audit Committee who are disinterested in the transaction.
SECTIONgeneral partner.
Section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEBeneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires the Company'sElectronics Boutique's directors and executive officers, and certain persons who own more than 10% of the outstanding Common Stock, to file with the SEC and the Nasdaq Stock Market (the "Nasdaq""NASDAQ") initial reports of ownership and reports of changes in ownership of Common Stock.Stock ("Section 16(a) Reports"). Executive officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the
CompanyElectronics Boutique with copies of all Section 16(a) reportsReports they file. To the Company's knowledge, based solely on a reviewDuring fiscal 2002, all of the copies of
reports furnished to the Company and written representations signed by all
directors and executive officers that no other reports wereof Electronics Boutique filed all Section 16(a) Reports required with
respect to their beneficial ownership of Common Stockbe filed during Fiscal 1999, the
Company believes that the directors and executive officers andfiscal 2002. To Electronics Boutique's knowledge, all beneficial owners of more than 10% of the Common Stock outstanding complied with all applicable filing requirements under Section 16(a) of the Exchange Act with respect to their beneficial ownership of common stock during fiscal 2002.
In fiscal 2000, James J. Kim, his wife, Agnes C. Kim, the David D. Kim Trust of December 31, 1987, the John T. Kim Trust of December 31, 1987, the Susan Y. Kim Trust of December 31, 1987 and the trustees of such trusts (collectively, the "Kim Family"), EB Nevada Inc. and The Electronics Boutique, Inc. each inadvertently failed to file a Section 16(a) Report of the sale of 1,500,000 shares of Common Stock during Fiscal 1999.
by EB Nevada Inc. in connection with the November 24, 1999 secondary offering by Electronic Boutique of Common Stock to the public. The sale of the 1,500,000 shares of Common Stock by EB Nevada Inc., however, was fully disclosed in Electronics Boutique's Registration Statement on Form S-3 (333-88561), which was filed with the SEC in connection with the 1999 secondary offering, and in the related prospectus for the 1999 secondary offering and sale of Common Stock by EB Nevada Inc. The Section 16(a) Reports that were timely filed by the Kim Family on September 10, 2001, to report the sale of 2,100,000 shares of Common Stock by EB Nevada, in connection with the
17
August 14, 2001 secondary offering by Electronics Boutique of Common Stock to the public, set forth the correct number of shares of Common Stock that may be deemed beneficially owned by the Kim Family, EB Nevada Inc. and The Electronics Boutique, Inc., as of the date of such reports, taking into account the 1999 and 2001 secondary offerings. Additionally, on March 19, 2002, James J. and Agnes C. Kim reported the grant of stock options to Mr. Kim in February 2000, for which they inadvertently failed to file a Section 16(a) Report in March 2001. The Section 16(a) Reports of the members of the Kim Family currently on file with the SEC accurately reflect the number of shares of Common Stock that may be deemed beneficially owned by members of the Kim Family, EB Nevada Inc. and The Electronics Boutique, Inc.
STOCKHOLDER PROPOSALS FOR THE 20002003 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
2000Electronics Boutique's 2003 annual meeting of stockholders must conform to the applicable proxy rules of the Securities and Exchange Commission concerning the submission and content of proposals and must be received in writing by the Secretary of the CompanyElectronics Boutique by January 27, 2000,February 3, 2003, for inclusion in the Company'sElectronics Boutique's proxy, notice of meeting and proxy statement relating to the 20002003 annual meeting.
Under the Company'sElectronics Boutique's Bylaws, a stockholder proposal not intended to be included in the proxy material for the 20002003 annual meeting must generally be received by the CompanyElectronics Boutique not less than 60sixty (60) nor more than 90ninety (90) days prior to the meeting.meeting; provided, however, that in the event that less than seventy (70) days notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by a stockholder, to be timely, must be received by Electronics Boutique no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. Any such proposal must also comply with the other provisions contained in the Company'sElectronics Boutique's Bylaws relating to stockholder proposals.
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ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO ANY STOCKHOLDER, UPON THE
WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
Electronics Boutique will furnish without charge to any stockholder, upon written request, a copy of Electronics Boutique's annual report on Form 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 1999. REQUESTS FOR THIS REPORT SHOULD
BE ADDRESSED TO INVESTOR RELATIONS, ELECTRONICS BOUTIQUE HOLDINGS CORP.for the fiscal year ended February 2, 2002. Requests for this report should be addressed to Investor Relations, Electronics Boutique Holdings Corp., 931 SOUTH MATLACK STREET, WEST CHESTER, PENNSYLVANIASouth Matlack Street, West Chester, Pennsylvania 19382.
The Board of Directors knows of no business which will be presented for consideration at the Annual Meeting other than that shown above. However, if any business shall properly come before the Annual Meeting, the persons named in the enclosed proxy or their substitutes will vote saidthe proxy in respect of any such business in accordance with their best judgment pursuant to the discretionary authority conferred thereby.
May 27, 1999
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June 3, 2002
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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ELECTRONICS BOUTIQUE HOLDINGS CORP.
18
931 South Matlack Street • West Chester, PA 19382
www.ebholdings.com • www.ebgames.com
ELECTRONICS BOUTIQUE HOLDINGS CORP. | ||||||||||||||
| PROXY SOLICITED BY THE BOARD OF DIRECTORS | ||||||||||||||
| Annual Meeting of Stockholders—June 26, 2002 | ||||||||||||||
The undersigned stockholder of ELECTRONICS BOUTIQUE HOLDINGS CORP. ("Electronics Boutique"), revoking all previous proxies, hereby constitutes and appoints James A. Smith and Daniel J. Kaufman, and each of them acting individually, as the agents and proxies of the undersigned, with full power of substitution in each, for and in the name and stead of the undersigned, to attend the 2002 Annual Meeting of Stockholders of Electronics Boutique to be held on Wednesday, June 26, 2002 at 11:00 A.M., local time, at Electronics Boutique's executive offices, 931 South Matlack Street, West Chester, Pennsylvania 19382, and to vote all shares of Common Stock of Electronics Boutique which the undersigned would be entitled to vote if personally present at the 2002 Annual Meeting, and at any adjournment or postponement thereof; provided, that said proxies are authorized and directed to vote as indicated with respect to the matters set forth on the reverse side hereof: | ||||||||||||||
This Proxy will be voted in the manner directed herein by the undersigned stockholder(s).IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP. This Proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the 2002 Annual Meeting or any adjournment or postponement thereof. | ||||||||||||||
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE ANNUAL REPORT, NOTICE OF THE 2002 ANNUAL MEETING AND THE PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH. The undersigned also hereby ratifies all that the said agents and proxies may do by virtue hereof and hereby confirms that this Proxy shall be valid and may be voted whether or not the stockholder's name is signed as set forth below or a seal is affixed or the description, authority or capacity of the person signing is given or other defect of signature exists. | ||||||||||||||
(Continued on the reverse side.) | ||||||||||||||
| 1. | Election of Directors | |||||||||||||
o | FORall nominees. | |||||||||||||
o | WITHHOLDall nominees. | |||||||||||||
o | FOR, except vote withheld from the following nominee(s): _____________________________________. | |||||||||||||
Nominees:JEFFREY W. GRIFFITHS, SUSAN Y. KIM and STANLEY STEINBERGwill be considered nominees for election at the 2002 Annual Meeting. | ||||||||||||||
2. | The ratification of the appointment ofKPMG LLP, independent certified public accountants, as auditors for Electronics Boutique for the fiscal year ending February 1, 2003. | |||||||||||||
o | FOR | o | AGAINST | o | ABSTAIN | |||||||||
3. | In their discretion, the proxies will vote on such other business as may properly come before the 2002 Annual Meeting. | |||||||||||||
o | Please check here if you plan to attend the 2002 Annual Meeting in person. | |||||||||||||
NOTE: PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. | ||||||||||||||
Please sign this Proxy exactly as name(s) appear in address below. When signing as attorney-in-fact, executor, administrator, trustee or guardian, please add your title as such. Corporations please sign with full corporate name by a duly authorized officer and affix the corporate seal. | ||||||||||||||
Signature(s) | Date | |||||||||||||
ABOUT THE MEETING
ITEM 1—ELECTION OF DIRECTORS
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
EXECUTIVE OFFICERS
ITEM 2—RATIFICATION OF INDEPENDENT ACCOUNTANTS
EXECUTIVE COMPENSATION
Option Grants in Last Fiscal Year Individual Grants
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
COMPARISON OF TOTAL STOCKHOLDER RETURN
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
ANNUAL REPORT