FORM 10-K
QuickLinks-- Click here to rapidly navigate through this documentSCHEDULE 14A
(RULE
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENTSCHEDULE 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: / / PreliminaryProxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting MaterialPursuant toRule 14a-11(c) or 14a-12Section 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: - --------------------------------------------------------------------------------931 [LOGO] ELECTRONICS BOUTIQUE HOLDINGS CORP.SOUTH MATLACK STREET WEST CHESTER, PENNSYLVANIASouth Matlack Street
West Chester, Pennsylvania 19382May 27, 1999June 3, 2002
DEAR FELLOW STOCKHOLDER:
On behalf of the Board of Directors, I am pleased to invite you to attend the
firstannual meeting of stockholders of Electronics Boutique Holdings Corp.(the "Company"), to be held onTuesday,Wednesday, June22, 1999,26, 2002, at 11:00 a.m., local time, atthe Company'sElectronics Boutique's executive offices, 931 South Matlack Street, West Chester, Pennsylvania. TheofficialNotice 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 ofthe CompanyElectronics Boutique and vote upon a proposal to ratify theBoard'sappointment of KPMG LLP as independent accountants forthe CompanyElectronics Boutique for fiscal2000.2003. 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.
931SOUTH 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, 2002TO 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 onTuesday,Wednesday, June22, 1999,26, 2002, at 11:00 a.m., local time, atthe 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,attheAnnual 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, 2002Your 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 Officerenclosed proxy
andSecretary 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 ofthe CompanyElectronics Boutique of proxies to be voted at the19992002 Annual Meeting of Stockholders ofthe Company (such meeting andElectronics Boutique (together with any adjournments or postponements thereof,referred to asthe "Annual Meeting"). The Annual Meeting will be held onTuesday,Wednesday, June22, 199926, 2002 at 11:00 a.m., local time, atthe 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 tothe Company'sElectronics Boutique's stockholders on or aboutMay 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 forthe CompanyElectronics Boutique foritsthe fiscal year endingJanuary 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 ofthe 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-appointedpersons named therein to vote on any other matter that is properly presented for action at the Annual Meeting.CostThe 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 bypersonal interview,telephone and telecopier transmission by the directors, officers and employees ofthe 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, andthe CompanyElectronics Boutique may reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connectiontherewith.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 SECURITIESWhat 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 ofCommon Stock of the Companycommon stock at the close of business on May14, 19991, 2002 (the "Record Date") will be entitled to vote at the Annual Meeting. Onthat date, 20,169,200the Record Date, 25,811,212 shares ofCommon 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 theCompany, 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 onevote.vote on each proposal submitted to stockholders. Stockholders of record may vote on a matter by marking the appropriate box on theproxy.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 powerof the outstanding shares ofcapitalcommon stock ofthe 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 presentin person or represented by proxyat the Annual Meeting and entitled to vote on the election of directors. Action ontheall other matters scheduled to come before the Annual Meeting will be authorized by the affirmative vote of the majority of shares presentin person or represented by proxyat 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
2
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.
ITEM1 -1—ELECTION OF DIRECTORSThe Company'sElectronics Boutique's Certificate of Incorporation
(the "Certificate of Incorporation")and Bylaws(the "Bylaws")provide thattheits directorsof the Companyare 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 atthe Company'sElectronics Boutique's annual meeting of stockholders in20022005 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 VOTEThe 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 MEETINGDirectors—Term Expires at the 2005 annual meeting of stockholdersJEFFREY 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 ofthe CompanyElectronics Boutique since March 1998. Ms. Kim served as a Senior District Manager ofthe 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 to3
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 ChiefFinancialOperating Officer.STANLEY ("MICKEY") STEINBERG
Mr. Steinberg, age
66,69, has served as a Class I Director ofthe CompanyElectronics Boutique since September 1998. Mr. Steinberg has served as a consultant toSony 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 1989untilto 1994, Mr. Steinberg served as Executive Vice President and Chief Operating Officer of Walt Disney Imagineering. Mr. Steinberg serves on theBoardsBoard 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 MEETINGDirectors—Term Expires at the 2003 annual meeting of stockholdersDEAN S. ADLER
Mr. Adler, age
42,45, has served as a Class II Director ofthe CompanyElectronics Boutique since March 1998. In March 1997, Mr. Adler formed Lubert/Adler Partners, LP, a limited partnership investing primarily in real estate and realestate-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 the3University of Pennsylvania. Mr. Adler serves on the Boards of Directors of 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 CompensationCommitteesCommittee of theBoard.Board of Directors.LOUIS J. SIANA
Mr. Siana, age
67,70, has served as a Class II Director ofthe 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 theAudit andCompensationCommitteesCommittee of theBoard. CLASSBoard of Directors.Class III
DIRECTORS - TERM EXPIRES AT THE 2001 ANNUAL MEETINGDirector—Term Expires at the 2004 annual meeting of stockholdersJAMES J. KIM
Mr. Kim, age
63,66, has served asthe 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 oftheAnamgroup of companies, which consists principally of companiesSemiconductor, Inc. based in SouthKorea in the electronics industries.Korea. Mr. Kim is alsoserves as a member of the Board of Managers of Fort[ie] Systems, LLC, a company which provides information technology services, and asa director ofCFM Technologies,Mattson Technology, Inc., amanufacturersupplier ofequipment 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 forelectionre-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 ChiefFinancialOperating Officer. Mr. Kim is a member of the Compensation Committee of theBoard. 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 AdvisoryBoard ofthe 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 DIRECTORSATTENDANCE AT MEETINGSAttendance at Meetings
The Board of Directors held
sevenfour meetings duringthefiscalyear 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 BoardCommitteesof Directors on whichsuch directorhe served.4
COMMITTEES OF THE BOARDCommittees 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 ofthe Company. ThisElectronics Boutique. The Audit Committee also reviews the scope of the audit bythe Company'sElectronics Boutique's independent accountants, the annual financial statements ofthe 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 proceduresof the Companyas it may find appropriate or as may be brought to its attention, and meets from time to time with members ofthe Company'sElectronics Boutique's finance andaccountinginternal audit staff. The Audit Committee is currently comprised of the following non-employee directors: Messrs. Adler, Siana andSiana. BecauseSteinberg, each of which is independent as defined by theCompany was incorporated in March 1998 and completed its initial public offering in July 1998, therequirements of NASDAQ. The Audit Committeedid not meetmet four times in fiscal 2002. The Audit Committee adopted a formal written charter, which was approved by the Board of Directors duringFiscal 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 ofthe Company.Electronics Boutique. In addition,thisthe Compensation Committee advises and consults withthe Company'sElectronics Boutique's management regarding benefit plans and compensation policies and practices ofthe Company.Electronics Boutique. The Compensation Committee is comprised of the following non-employee directors:Messrs:Messrs. Kim, Adler and Siana. The Compensation Committee metone timeonce duringFiscal 1999.fiscal 2002.The Board of Directors has not established a Nominating Committee, nor does any other committee perform similar functions.
DIRECTOR COMPENSATIONAudit 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 Steinberg5
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, payablequarterly. Mr. Kim's salary was awarded in March 1999, retroactivequarterly, and an annual bonus equal toJuly 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 ofCommon 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 ofthe CompanyElectronics Boutique receive no additional compensation for service as directors.5Set 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.
ITEM2 - APPOINTMENT2—RATIFICATION OF INDEPENDENT ACCOUNTANTSThe 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 endingJanuary 29, 2000,February 1, 2003, subject to ratification of such appointment bythe Company'sElectronics Boutique's stockholders. KPMG LLP and its predecessors have served as independent accountants forthe CompanyElectronics Boutique and EB sinceFiscalthe 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 VOTEThe 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. 6the ratification of KPMG LLP. Proxies solicited by the Board of Directors will be voted for the ratification of KPMG LLP unless stockholders specify in their proxies a contrary choice. 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 COMPENSATIONCOMPENSATION SUMMARYCompensation Summary
The following table summarizes for
the Company'sElectronics Boutique's lasttwothree fiscal years the compensation ofthe Company'sElectronics Boutique's President and Chief Executive Officer and the other executive officers ofthe CompanyElectronics Boutique whose salary and bonus was in excess of $100,000 duringFiscal 1999fiscal 2002 (the "Named Executive Officers"), for services rendered in all capacities tothe CompanyElectronics Boutique and its subsidiaries.SUMMARY COMPENSATION TABLESummary Compensation Table
LONG-TERM ANNUAL COMPENSATION COMPENSATION ---------------------------------------- ------------ SECURITIES FISCAL UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OTHER (2) OPTIONS (#) COMPENSATION --------------------------- ---- ------ -------- --------- ----------- ------------Joseph J. Firestone 1999 $488,436 $500,000 -- 428,571 $ 2,000(3)Annual Compensation Long-Term
CompensationName and Title Fiscal
YearSalary Bonus (1) Securities
Underlying
Options(#)All Other
CompensationJeffrey W. Griffiths
President, Chief Executive Officer1998 $397,159 $250,000 -- -- $152,000(4)and DirectorJeffrey W. Griffiths 1999 $238,852 $121,200 -- 150,0002002
2001
2000$ 2,000(3)
$
$370,678
289,800
257,749$
$
$300,000
107,002
129,70090,000
80,000
15,000$
$
$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,of 1998 $218,110 $110,188 -- -- $ 2,000(3) MerchandisingChief Financial Officer andDistribution John R. Panichello 1999 $178,475Secretary
2002
2001
2000
$90,750 -- 128,571
$2,000(3)
$
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 Chief1998 $169,262Information Officer; President of EBWorld.com, Inc.
2002
2001
2000
$82,500 -- -- --- Financial
$
$
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 2001.8
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 tothe Company'sElectronics Boutique's stock option plan. No grants of stock appreciation rights were made duringFiscal 1999fiscal 2002 to any of the Named Executive Officers or any other employees ofthe Company. 7OPTION 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 YearPotential Realizable Value at Assumed Annual Rates of Stock Price Appreciation
for Option TermNumber of
Securities
Underlying
Options GrantedName Exercise
PriceExpiration
Date5% 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
$
1,424,407Option 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 atJanuary 30, 1999. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS AT OPTIONS AT FISCAL FISCAL YEAR-END (#) YEAR-END ($) SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE (1) ---- ------------ ------------ ------------- -----------------Joseph J. Firestone.......... 0 0 0/428,571 0/1,874,988 Jeffrey W. Griffiths......... 0 0 0/150,000 0/656,250 John R. Panichello........... 0 0 0/128,571 0/562,498- -------------February 2, 2002.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Name Shares Acquired
on Exercise (#)Value
Realized ($)
(1)Number of Securities Underlying Unexercised Options at
Fiscal Year-End(#)
Exercisable/UnexercisableValue of Unexercised
in-the-Money Options at Fiscal Year-End($)
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.
9
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 theCompanyBoard 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 asChief Executive Officer,Senior Vice President of Merchandising and Distribution and Senior Vice President and Chief Financial Officer, respectively. The agreements areeachfor 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 insome 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 withtheirits 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 basesalariessalary 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 ofthe 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), theexecutiveExecutive is entitled to receive his then current base salary for the greater of his remaining term under the employment agreement or a one yearperiod. 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 bythe 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 incontrol." Incontrol" and (iii) in the event of disability, Electronics Boutique will continue to pay theagreements provide for the continuation of the executive'sExecutive's compensation for a period of one year, or, if greater, the remaining term ofthehis agreement.10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATIONOVERVIEW OF THE COMPANY'S EXECUTIVE COMPENSATION POLICIES AND PRACTICESOverview 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 ofthe Company.Electronics Boutique. The Compensation Committee, which was formed in July 1998, is charged with reviewingthe 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 ofthe Company.Electronics Boutique.The compensation of the Chief Executive Officer, Jeffrey Griffiths and the
other executive officersChief Operating Officer, John Panichello forFiscal 1999fiscal 2002 was agreed to in amendments to employment agreements entered into bythe CompanyElectronics Boutique and each executive prior to the completion ofthe 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 andthe Company'sElectronics Boutique's prior year and anticipated future performance. The recommendations were reviewed and approved by Electronics Boutique's Chairman, in theCompany's Chairman forcase of the Chief Executive Officer, and bythe 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 ofthe Company'sits stockholders. The Compensation Committee believes that (i) executive compensation should be meaningfully related to the performance ofthe CompanyElectronics Boutique and the value created for stockholders; (ii) compensation programs should support both short and long-term goals and objectives ofthe Company;Electronics Boutique; (iii) compensation programs should reward individuals for outstanding contributions tothe 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 ofthe Company'sElectronics Boutique's Chairman, who is also a member of the CompensationCommittee, and forCommittee. For the compensation ofthe Company'sElectronics Boutique's other executive officers, the Compensation Committee considers the recommendation ofthe Company'sElectronics Boutique's Chief Executive9Officer. 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 tothe 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 CompanyIndustry 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 ofthe Company'sElectronics Boutique's executive officers,wereincluding the19982001 National Retail Federation Survey of SpecialtyStoresStore Retailers,(the "NRF Survey"),the1998/1999 ECS Industry and Geographic Report onWilliam M. Mercer Multi-outlet Retailer Survey, the Watson Wyatt Survey of Top ManagementCompensation (the "ECS Report"), and an independent study completed for the Company by Towers Perrin (the "Towers Perrin Study"). The NRF Survey, the ECS Reportand theTowers 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
detailedcompensation 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.TheECS Report was compiled by Watson Wyatt Data Services. This reportsurveys also provided information regardingretail and wholesale trades and identified base salaries,cash and other incentivesand salary rangesapplicable to seniormanagement 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.11
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. 10Forecasted 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 byCompanyperformance and compared to external research provided in the surveys and reports described above to ensure competitiveness within the industry.STOCK BASED INCENTIVE AWARDSStock 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 athree yearthree-year period, thereby more closely aligning the long-term interest of executives with that ofthe 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-termCompanyElectronics Boutique objectives. The Compensation Committeemakesmade grants underthe Company'sElectronics Boutique's 2000 Equity Participation Plan and granted stock options to purchase an aggregate of707,142325,000 shares of Common12
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 duringFiscal 1999fiscal 2002 bythe 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 theCompanyManager 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 withinthe Company,Electronics Boutique, given the competitive nature of the industry with respect to recruiting and retaining the best available personnel.11CEO
COMPENSATION In accordance withCompensationAs 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 bonusofup to100%75% of his annual base salary. Mr.FirestoneGriffiths earnedthe maximuma bonus of$500,000$300,000 inFiscal 1999, offiscal 2002, which$200,000was paid inMarch 1999 and $300,000 was deferred at Mr. Firestone's election.April 2002. The Compensation Committee awarded Mr.FirestoneGriffiths themaximumbonus based onthe Company'sElectronics Boutique's achievement of its goals, including increases in the following measurement areas overFiscal 1998fiscal 2001 levels:
Measurement Area Percentage Increase ---------------- -------------------Net Sales 27.0%31.7 % Number of Stores 16.8%27.1 % Comparable Store Sales 14.1% Pro Forma20.8 % Net Income 71.2%19.1 % The Compensation Committee believes Mr.
Firestone'sGriffith's current compensation is fully consistent withthe Company'sElectronics Boutique's philosophy on executive compensation and appropriate in view ofthe Company'sElectronics Boutique's performance inFiscal 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 ofthe 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.
CONCLUSION13
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 12
Respectfully submitted,
James J. Kim
Dean S. Adler
Louis J. Siana
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONThe 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 involvingthe CompanyElectronics Boutique duringFiscal 1999.fiscal 2002. See "Certain Relationships and Related Transactions."
COMPARISON OF TOTAL STOCKHOLDER RETURNThe 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 throughJanuary 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]
7/28/98 1/30/99 ------- -------Electronics Boutique Holdings Corp. $100 $131 S&P 500 $100 $114 S&P Retail (Specialty) $100 $ 91TOTAL STOCKHOLDER RETURN
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe table below sets forth, as of
April 30, 1999,May 1, 2002, certain information regarding the beneficial ownership ofthe Company'sCommon Stock by each stockholder known tothe CompanyElectronics Boutique to be the beneficial owner of more than 5% of the Common Stock, each ofthe Company'sElectronics Boutique's directors and Named Executive Officers, and all directors and executive officers as a group.
NAME AND ADDRESS OF SHARES BENEFICIALLY BENEFICIAL OWNER (1) OWNED (2) - -------------------- --------------------------- NUMBER PERCENT ---------- ---------EB Nevada, Inc. (3) 15,169,100 75.2% 2255-A Renaissance Drive, Suite 4 Las Vegas, Nevada 89119 James J. and Agnes C. Kim (3) (4) 15,169,200 75.2% 931 South Matlack Street West Chester, Pennsylvania 19382 Dresdner Bank AG (5) 1,299,000 6.4% Jurgen - Ponto - Platz 113
60301 Frankfurt, Germany Joseph J. Firestone 6,500 * Dean S. Adler -- * Susan Y. Kim (3) (4) -- * Louis J. Siana -- * Stanley Steinberg -- * John R. Panichello (4) -- * Jeffrey W. Griffiths 1,000 * All directors and executive officers as 7,500 * a group (8 persons) (6)- ----------------
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 8911911,569,100 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) (the16
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 TRANSACTIONSIn 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 withEB-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 feesbyfrom 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. TheCompanyservices 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 ServicesAgreement in Fiscal 1999. As of January 30, 1999, EB Nevada owned approximately 25%Corporation, all of the outstandingshares ofcapital stock ofEB-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 aparty 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. 15In 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 cashand968,292 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 itsnet 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 ComplianceSection 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 CommonStock.Stock ("Section 16(a) Reports"). Executive officers, directors and greater than 10% stockholders are required by SEC regulation to furnishthe 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 thecopies of reports furnished to the Company and written representations signed by all directors andexecutive officersthat no other reports wereof Electronics Boutique filed all Section 16(a) Reports requiredwith respecttotheir beneficial ownership of Common Stockbe filed duringFiscal 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 the17
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 THE20002003 ANNUAL MEETINGAny 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 ofthe CompanyElectronics Boutique byJanuary 27, 2000,February 3, 2003, for inclusion inthe Company'sElectronics Boutique's proxy, notice of meeting and proxy statement relating to the20002003 annual meeting.Under
the Company'sElectronics Boutique's Bylaws, a stockholder proposalnotintended to be included in the proxy material for the20002003 annual meeting must generally be received bythe CompanyElectronics Boutique not less than60sixty (60) nor more than90ninety (90) days prior to themeeting.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 inthe Company'sElectronics Boutique's Bylaws relating to stockholder proposals.16
ANNUAL REPORT ON FORM 10-KTHE COMPANY WILL FURNISH WITHOUT CHARGE TO ANY STOCKHOLDER, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORMElectronics 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., 931SOUTH 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 - -------------------------------------------------------------------------------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.
- ------------------------------------------------------------------------------- 17=============================================================================== 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 MEETINGOF STOCKHOLDERS - JUNE 22, 1999 - ------------------------------------------------------------------------------- The undersigned stockholder of ELECTRONICS BOUTIQUE HOLDINGS CORP. (the "Company"), revoking all previous proxies, hereby constitutes and appoints Joseph J. Firestone and John R. Panichello, 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 1999 Annual Meeting of Stockholders of the Company to be held on Tuesday, June 22, 1999 at 11:00 A.M., local time, at the Company's executive offices, 931 South Matlack Street, West Chester, Pennsylvania 19382, and to vote all shares of Common Stock of the Company which the undersigned would be entitled to vote if personally present at the 1999 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 MADE, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR AND "FOR" THE RATIFICATION OF KPMG LLP. This Proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the 1999 Annual Meeting or any adjournment or postponement thereof. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE
ANNUAL REPORTNOTICE OF THE 1999 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. (CONTINUEDONTHE REVERSE SIDE.) ============================================================================================================================================================== 1. Election of Directors / / FOR all nominees. / / WITHHOLD all nominees. / / FOR, except vote withheld from the following nominee(s): _____________ Nominees: SUSAN Y. KIM and STANLEY ("MICKEY") STEINBERG will be considered nominees for election at the 1999 Annual Meeting. 2. The ratification of KPMG LLP, independent certified public accountants, as auditors for the Company for the fiscal year ending January 29, 2000. / / FOR / / AGAINST / / ABSTAIN 3. In their discretion, the proxies will vote on such other business as may properly come before the 1999 Annual Meeting. / / Please check here if you plan to attend the 1999 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 ===============================================================================