Dave & Buster’s Entertainment Board of Directors Urges Shareholders to
Vote “For” Proposal 4: Amendment to the 2014 Omnibus Incentive Plan
Dear Fellow Dave & Buster’s Shareholder:
We are writing to ask that you support the ballot proposals at our 2020 Annual Meeting of Shareholders. In particular, we seek your support of Proposal 4, which amends our 2014 Omnibus Incentive Plan (“Plan”) to increase the number of shares available for awards under the Plan by 3,000,000 shares.
Background and context
Proposal 4 became necessary this year due to the sudden and unprecedented challenges posed to our Company by the coronavirus pandemic.At the beginning of the pandemic, as we were forced to shut down all of our locations across the country, we took immediate and decisive action to preserve liquidity and significantly reduce our cash burn rate. We temporarily cut base pay for all of our senior executives by 50%. Salaries for most other officers and team members covered by the Plan were cut by20-30%. In addition, we furloughed all of our 15,000 hourly employees, significantly curtailed discretionary operating expenses, temporarily halted capital spending on all new store development and the strategic initiatives we had planned for 2020, and suspended our dividend and share repurchase programs. Our Board of Directors waived its cash compensation for the remainder of the year. We also secured a total of $186 million in new equity capital to significantly extend our liquidity horizon to enhance our ability to persevere through this crisis. Where we could, we paid cash obligations and issued market-competitive long-term retention grants using stock available under the Plan. As a result, (and reflecting the drop in our Company’s share price from more than $41/sharepre-pandemic, to a low of $4.87/share during the shutdown period), the 1.3 million shares that were available under the Plan at the end of our 2019 fiscal year were reduced to just over 440,000 shares. Preserving the Company’s liquidity by minimizing cash outlays of all kinds remains a top priority of management.
As you evaluate Proposal 4, please consider these points:
1. | This is the first time since the Plan was adopted in 2014 that we have sought to add shares.We have long been committed to responsible, market-competitive equity-based compensation that rewards leaders in line with Company performance. We have demonstrated thoughtful, conservative management of the 3,100,000 shares allocated under the original Plan. Our three-year average burn rate of 1.01% is far below the |