SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Filed by a party other than the Registrant ¨ | |||
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¨ 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 (S)240.14a-11(c) or (S)240.14a-12(c) | |||
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¨ | 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. | ||
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(1) | To elect the following directors to serve for the ensuing year and until their successors are elected: Murray H. Dashe, Joseph H. Coulombe, Barry J. Feld, Danny W. Gurr, Kim D. Robbins, Fredric M. Roberts and Thomas D. Willardson. |
(2) | To approve an amendment to the Company’s 1995 Stock Option Plan to increase the shares reserved for issuance thereunder by 900,000 shares. |
(3) | To approve an amendment to the Company’s 1996 Director Option Plan to increase the shares reserved for issuance thereunder by 150,000 shares. |
(4) | To ratify and approve the appointment of Deloitte & Touche LLP as independent auditors of the Company for the fiscal year ending February 1, 2003. |
(5) | To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
Name of Nominee | Age | Principal Occupation | Director Since | |||
Joseph H. Coulombe | 71 | Independent Management Consultant | 1995 | |||
Murray H. Dashe | 59 | Chairman, Chief Executive Officer and President, Cost Plus, Inc. | 1997 | |||
Barry J. Feld | 44 | Chairman, Chief Executive Officer and President, PCA International, Inc. | 2001 | |||
Danny W. Gurr | 44 | President, Quarto Holdings, Inc. | 1995 | |||
Kim D. Robbins | 56 | Director of Product Development, Jack Nadel, Inc. | 1999 | |||
Fredric M. Roberts | 59 | President, F. M. Roberts and Company, Inc. | 1999 | |||
Thomas D. Willardson | 51 | Independent Financial Consultant | 1991 |
Name of Individual or Identity of Group | Dollar Value ($)(1) | Number of Shares Subject to Options Granted | |||
Murray H. Dashe | $ | 727,631 | 168,031 | ||
Stephen L. Higgins | 147,000 | 30,000 | |||
John J. Luttrell | 226,250 | 42,500 | |||
Judith A. Soares | 132,500 | 25,000 | |||
Gary D. Weatherford | 220,392 | 49,125 | |||
All current executive officers as a group (13 total) | 2,403,749 | 500,407 | |||
All other current employees as a group | 1,136,224 | 320,125 |
(1) | Calculated by determining the difference between the fair market value of the Company’s Common Stock on February 1, 2002 ($26.90) and the exercise price of such options, multiplied by the number of shares. |
Name of Individual or Identity of Group | Dollar Value ($)(1) | Expected Number of Shares Subject to Options Granted (#) | |||
Joseph H. Coulombe | $ | 17,400 | 6,000 | ||
Barry J. Feld | 17,400 | 6,000 | |||
Danny W. Gurr | 17,400 | 6,000 | |||
Kim D. Robbins | 17,400 | 6,000 | |||
Fredric M. Roberts | 17,400 | 6,000 | |||
Thomas D. Willardson | 17,400 | 6,000 | |||
All current non-employee directors (6 persons) | 104,400 | 36,000 |
(1) | It is not practical to assign a dollar value to stock option grants expected to be made in the current year as grants are made at the fair market value of the Company’s common stock on date of grant. However, for the purposes of this table prior year data was used. The dollar value is calculated based on the exercise price of options granted in March last year ($24.00) less the fair market value of the Company’s stock on February 1, 2002 ($26.90), multiplied by the number of shares. |
(a) | (b) | (c) | ||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||
1994 Stock Option Plan | 21,871 | $2.563 – $2.638 | None | |||
1995 Stock Option Plan | 1,736,127 | $5.025 – $33.813 | 468,057 | |||
1996 Director Option Plan | 212,105 | $6.667 – $33.438 | 15,290 | |||
Total | 1,970,103 | $2.563 – $33.813 | 483,347 |
Audit Fees | $200,000 | |
Financial Information Systems Design and Implementation Fees | — | |
All Other Fees | $231,000 |
Name and Principal Position | Fiscal Year | Annual Compensation | Long-Term Compensation | All Other Compensation ($) | ||||||||||||||
Salary ($) | Bonus ($) | Restricted Stock Award ($) | Securities Underlying Options (#) | |||||||||||||||
Murray H. Dashe | 2001 | $ | 464,989 | $ | 113,295 | $ | — | 168,031 | $ | — | ||||||||
Chairman, Chief Executive Officer | 2000 | 465,004 | (1) | 247,824 | — | 72,213 | — | |||||||||||
and President | 1999 | 360,577 | 314,184 | — | 109,500 | — | ||||||||||||
Stephen L. Higgins (2) | 2001 | 239,799 | 25,515 | — | 30,000 | 80,274 | (4) | |||||||||||
Senior Vice President, | 2000 | 208,654 | 57,150 | — | 8,000 | 72,685 | (4) | |||||||||||
Merchandising | 1999 | 15,385 | 20,000 | — | 25,000 | — | ||||||||||||
John J. Luttrell (3) | 2001 | 189,195 | 45,805 | — | 42,500 | — | ||||||||||||
Senior Vice President and | 2000 | 102,909 | 22,677 | — | 15,000 | 10,217 | (4) | |||||||||||
Chief Financial Officer | 1999 | — | — | — | — | — | ||||||||||||
Judith A. Soares | 2001 | 177,118 | 57,500 | — | 25,000 | — | ||||||||||||
Senior Vice President, | 2000 | 173,373 | 35,373 | — | 8,000 | — | ||||||||||||
Cost Plus Management Services, Inc. | 1999 | 136,352 | 35,502 | — | 11,250 | — | ||||||||||||
Gary D. Weatherford | 2001 | 209,435 | 31,666 | — | 49,125 | — | ||||||||||||
Senior Vice President, Stores | 2000 | 192,731 | 59,429 | — | 19,650 | — | ||||||||||||
1999 | 155,923 | 78,312 | — | 21,000 | — |
(1) | Includes $23,654 of salary earned in fiscal 1999 but paid in fiscal 2000. |
(2) | Mr. Higgins became Senior Vice President, Merchandising in September 2000. Mr. Higgins joined the Company in December 1999 as Vice President, Merchandising. |
(3) | Mr. Luttrell joined the Company in May 2000 as Vice President, Controller and was promoted to Chief Financial Officer in August 2001. |
(4) | Amount reimbursed for relocation expenses. |
Individual Grants | Potential Realizable Value at Assumed Rates of Stock Price Appreciation for Option Term (3) | |||||||||||||||
Name | Number of Securities Underlying Option Granted (#) | Percent of Total Options Granted to Employees in Fiscal Year(1) | Exercise Price ($/Share) (2) | Expiration Date | 5% ($) | 10% ($) | ||||||||||
Murray H. Dashe | 75,000 | 7.50 | % | $ | 24.00 | 2/27/2011 | $ | 1,132,010 | $ | 2,868,736 | ||||||
43,031 | 4.30 | 23.06 | 3/31/2011 | 624,117 | 1,581,634 | |||||||||||
50,000 | 5.00 | 20.00 | 11/01/2011 | 628,894 | 1,593,742 | |||||||||||
Stephen L. Higgins | 15,000 | 1.50 | 24.00 | 2/27/2011 | 226,402 | 573,748 | ||||||||||
15,000 | 1.50 | 20.00 | 11/01/2011 | 188,668 | 478,123 | |||||||||||
John J. Luttrell | 7,500 | 0.76 | 24.00 | 2/27/2011 | 113,201 | 286,874 | ||||||||||
20,000 | 2.00 | 21.85 | 8/21/2011 | 302,518 | 740,559 | |||||||||||
15,000 | 1.50 | 20.00 | 11/01/2011 | 188,668 | 478,123 | |||||||||||
Judith A. Soares | 10,000 | 1.00 | 24.00 | 2/27/2011 | 150,935 | 382,498 | ||||||||||
15,000 | 1.50 | 20.00 | 11/01/2011 | 188,668 | 478,123 | |||||||||||
Gary D. Weatherford | 15,000 | 1.50 | 24.00 | 2/27/2011 | 226,402 | 573,748 | ||||||||||
19,125 | 1.91 | 23.06 | 3/31/2011 | 277,387 | 702,952 | |||||||||||
15,000 | 1.50 | 20.00 | 11/01/2011 | 188,668 | 478,123 |
(1) | The Company granted options to employees and directors to purchase a total of 1,000,532 of Common Stock during the fiscal year ended February 2, 2002. |
(2) | All options were granted at the fair market value of the Common Stock on the date of grant, as determined by the Board of Directors. The exercise price may be paid in cash, check, shares of the Company’s Common Stock or through a cashless exercise procedure involving same-day sale of the purchased shares, or by any combination of such methods. |
(3) | Potential realizable value is net of exercise price, but before taxes associated with exercise. The amounts represent certain assumed rates of appreciation only, based on the Securities and Exchange Commission rules. Actual gains, if any, on stock option exercises are dependent on the future performance of the Common Stock, overall market conditions and the option holders’ continued employment through the vesting period. The amounts reflected in this table may not necessarily be achieved and do not reflect the Company’s estimate of future stock price growth. |
Name | Shares Acquired on Exercise(#) | Value Realized ($) (1) | Number of Securities Underlying Unexercised Options at Fiscal Year-End(#) | Value of Unexercised in the Money Options at Fiscal Year-End($)(1) | |||||||||||
Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||
Murray H. Dashe | 87,675 | $ | 961,733 | 94,410 | 195,334 | $ | 259,312 | $ | 1,170,911 | ||||||
Stephen L. Higgins | — | — | 17,999 | 45,001 | 13,697 | 215,503 | |||||||||
John J. Luttrell | 3,750 | 17,813 | — | 53,750 | — | 244,812 | |||||||||
Judith A. Soares | 14,459 | 217,906 | 1,332 | 43,461 | 13,686 | 363,935 | |||||||||
Gary D. Weatherford | — | — | 64,829 | 44,750 | 529,321 | 275,525 |
(1) | Calculated by determining the difference between the fair market value of the Company’s Common Stock on the date of exercise or at February 1, 2002 ($26.90), as applicable and the exercise price of such options, multiplied by the number of shares. |
· | to align compensation with Company performance in meeting both short-term and long-term business objectives and with the interests of the Company’s shareholders; |
· | to enable the Company to attract, retain and reward leaders who are key to the continued successful growth of the Company; |
· | to reward high levels of performance, with pay-at-risk increasing at higher levels of the organization. |
· | The Cash Plus Incentive Plan rewards the achievement of short-term operational goals based on the Company’s achievement of targets established prior to the fiscal year for earnings before interest, taxes, depreciation and amortization (EBITDA) and other financial goals. The Committee believes that target bonus awards, in combination with base salaries, provide total cash compensation opportunity at median competitive levels. If actual performance exceeds target levels, total cash compensation would be above median competitive levels. If actual performance does not meet target levels, total cash compensation would fall below median competitive levels. |
· | Long-term incentive opportunity is delivered through annual basic grants under the Company’s 1995 Option Plan at what the Committee believes are median competitive levels. |
Th | e Compensation Committee |
Fre | dric M. Roberts, Chairman |
Ba | rry J. Feld |
Kim | D. Robbins |
* | $100 invested on 1/31/97 in stock or index—including reinvestment of dividends. |
Fiscal year ending February 2, 2002. |
Name and Address(1) | Shares Beneficially Owned | Percentage(2) | |||
Franklin Resources, Inc. (3) | 2,279,155 | 10.6 | % | ||
One Franklin Parkway | |||||
San Mateo, CA 94403 | |||||
The TCW Group, Inc. (4) | 1,994,066 | 9.2 | % | ||
865 South Figueroa Street | |||||
Los Angeles, CA 90017 | |||||
Delaware Management Holdings, Inc. (5) | 1,515,613 | 7.0 | % | ||
One Commerce Square | |||||
2005 Market Street | |||||
Philadelphia, PA 19103 | |||||
Westfield Capital Management Co., LLC (6) | 1,227,914 | 5.7 | % | ||
One Financial Center | |||||
Boston, MA 02111 | |||||
Murray H. Dashe (7) | 116,077 | * | |||
Stephen L. Higgins (7) | 22,021 | * | |||
John J. Luttrell (7) | 5,000 | * | |||
Judith A. Soares (7) | 17,455 | * | |||
Gary D. Weatherford (7) | 72,572 | * | |||
Joseph H. Coulombe (8) | 19,511 | * | |||
Barry J. Feld (7) | 4,000 | * | |||
Danny W. Gurr (9) | 31,239 | * | |||
Kim D. Robbins (7) | 10,584 | * | |||
Fredric M. Roberts (7) | 10,584 | * | |||
Thomas D. Willardson (7) | 5,825 | * | |||
All current directors and executive officers as a group (19 persons) (7) | 576,294 | 2.7 | % |
* | Less than 1% |
(1) | Except as otherwise indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown. |
(2) | Percentage ownership is based on 21,593,139 shares of Common Stock outstanding as of April 6, 2002 plus any shares issuable pursuant to the options held by the person or group in question which may be exercised within 60 days of April 6, 2002. |
(3) | Information is as of February 14, 2002 and is based solely on a Schedule 13G filed with the Securities and Exchange Commission by Franklin Resources, Inc. The shares are beneficially owned by one or more open or closed-end investment companies or other managed accounts, which are advised by direct and indirect investment advisory subsidiaries of Franklin Resources, Inc. (“FRI”). Charles B. Johnson and Rupert H. Johnson, Jr. (the “Principal Shareholders”) each own in excess of 10% of the outstanding Common Stock of FRI and are the principal shareholders of FRI. FRI and the Principal Shareholders may be deemed to be, for purposes of Rule 13d-3 under the 1934 Act, the beneficial owner of securities held by persons and entities advised by FRI subsidiaries. |
(4) | Information is as of February 13, 2002 and is based solely on a Schedule 13G/A filed with the Securities and Exchange Commission by The TCW Group, Inc. Mr. Robert Day is the majority shareholder of The TCW Group, Inc. and is deemed also to have beneficial ownership of the shares held by The TCW Group, Inc. |
(5) | Information is as of February 7, 2002 and is based solely on a Schedule 13G/A filed with the Securities and Exchange Commission by Delaware Management Holdings, Inc. and Delaware Management Business Trust, both of which report to have beneficial ownership of the shares. |
(6) | Information is as of January 16, 2002 and is based solely on a Schedule 13G filed with the Securities and Exchange Commission by Westfield Capital Management Co., LLC. |
(7) | Includes shares issuable upon exercise of stock options exercisable within 60 days of April 6, 2002, as follows: Mr. Dashe, 116,077; Mr. Feld, 4,000; Mr. Higgins, 21,832; Mr. Luttrell, 5,000; Ms. Robbins, 10,584; Mr. Roberts, 10,584; Ms. Soares 17,455; Mr. Weatherford, 71,579; Mr. Willardson, 5,825 and all directors and executive officers as a group (19 persons), 560,722. |
(8) | Includes 2,300 shares held by the Coulombe Family Trust. Also includes 17,211 shares issuable upon exercise of stock options exercisable within 60 days of April 6, 2002. |
(9) | Includes 4,200 shares registered in the name of Mr. Gurr’s spouse. Also includes 25,639 shares issuable upon exercise of stock options exercisable within 60 days of April 6, 2002. |
DETACH HERE
PROXY | PROXY |
PROXY FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited by the Board of Directors
The undersigned shareholder(s) of Cost Plus, Inc., a California corporation (the “Company”), hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement, each dated May 21, 2002, and hereby appoints MURRAY H. DASHE and JOHN J. LUTTRELL, and each of them, Proxies and Attorneys-in-Fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the 2002 Annual Meeting of Shareholders of Cost Plus, Inc. to be held on June 27, 2002 at 2:00 p.m., local time, at the Company’s corporate headquarters located at 200 4th Street, Oakland, California 94607 and at any adjournment or postponement thereof, and to vote all shares of Common Stock which the undersigned would be entitled to vote on any of the matters on the reverse side if personally present and with discretionary authority as to any and all other matters that may properly come before the meeting.
SEE REVERSE SIDE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE SIDE |
DETACH HERE
[X] |
| Please mark votes as in this example. | ||||||
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE PERSONS AND PROPOSALS SET FORTH BELOW AND FOR SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXY HOLDERS DEEM ADVISABLE. | ||||||||
1. | Election of Directors to serve one year terms. Nominees: Murray H. Dashe, Joseph H. Coulombe, Barry J. Feld, Danny W. Gurr, Kim D. Robbins, Fredric M. Roberts, Thomas D. Willardson | |||||||
NOMINEES | PLAN TO ATTEND THE MEETING | |||||||
[_] ________________________________________________ | ADDRESS CHANGE AND NOTE BELOW | |||||||
(Instruction: To withhold authority to vote for any individual nominee write that nominee’s name in the space above.) | ||||||||
2. | To approve an amendment to the Company’s 1995 Stock Option Plan to increase the shares reserved for issuance thereunder by 900,000 shares. | [_] AGAINST | ||||||
3. | To approve an amendment to the Company’s 1996 Director Option Plan to increase the number of shares reserved for issuance thereunder by 150,000 shares. | [_] AGAINST | ||||||
4. | To ratify and approve the appointment of Deloitte & Touche LLP as independent auditors of the Company for the fiscal year ending February 1, 2003. | [_] AGAINST | ||||||
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE. | ||||||||
(This proxy should be marked, dated and signed by each shareholder exactly as such shareholder’s name appears hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate. A corporation is requested to sign its name by its President or other authorized officer, with the office held designated. If shares are held by joint tenants or as community property, both holders should sign.) | ||||||||
Signature: ____________________________________ | Date: ____________________________________ | |||||||
Signature:____________________________________ | Date: ____________________________________ |