SECURITIES AND EXCHANGE COMISSION
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WASHINGTON, D.C. 20549
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SCHEDULE 14A
RULE 14A-101
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY REGISTRANT /x/
FILED BY PARTY OTHER THAN REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / PRELIMINARY PROXY STATEMENT
/x/ DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO RULE 14-11 (C) OR RULE 14A-12
CACHE INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CACHE INC.
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(NAME OF PERSON(S) FILING PROXY STATEMENT)
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Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6(i) (1) or 14a-6(j) (2)
/ / $500 per each party to the controversy pursuant of Exchange Act Rule
14a-6(i) (3)
/ / 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: (1)
4. Proposed maximum aggregate walue of transaction:
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / 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, of the form or schedule and the date of filing.
CACHE, INC.
1460 Broadway
New York, New York 10036
(212)575-3200
September 20, 2000
Dear Shareholder:
On behalf of the officers and directors of the Company,
you are cordially invited to attend the Cache, Inc. Annual Meeting of
Shareholders to be held at 10:00 a.m. on Tuesday, November 14, 2000,
at our headquarters, 1460 Broadway, New York, New York, 15th Floor.
The Notice of Meeting and Proxy Statement on the following
pages cover the formal business of the meeting, which includes
proposals (i) to elect seven named nominees as directors and (ii) to
ratify the appointment of Arthur Andersen LLP, certified public
accountants, as Cache's auditors for the fiscal year ending December
30, 2000.
The Board of Directors unanimously recommends that
shareholders vote in favor of each proposal. We strongly encourage
all shareholders to participate by voting their shares by Proxy
whether or not they plan to attend the meeting. Please sign, date
and mail the enclosed Proxy as soon as possible. If you do attend
the Annual Meeting, you may still vote in person.
Sincerely,
/s/ Andrew M. Saul
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Andrew M. Saul
Chairman of the Board
CACHE, INC.
1460 Broadway
New York, New York 10036
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 14, 2000
_______________
TO THE SHAREHOLDERS:
The Annual Meeting of the Shareholders of Cache, Inc. will
be held on Tuesday, November 14, 2000 at 10:00 a.m. local time, at our
headquarters, 1460 Broadway, 15th Floor, New York, New York 10036,
for the purpose of considering and acting upon the following
proposals as set forth in the accompanying Proxy Statement:
1. To elect seven named nominees as Directors of the
Company to serve until the next Annual Meeting of
Shareholders and until their successors are elected and
qualified.
2. To ratify the appointment of Arthur Andersen LLP,
certified public accountants, as auditors of the Company
for the fiscal year ending December 30, 2000.
3. To transact such other business as may properly
come before the Annual Meeting or any adjournment thereof.
Only shareholders of record at the close of business on
September 8, 2000 are entitled to notice of and to vote at the
meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting,
please complete, date and sign the enclosed Proxy and return it
promptly to the Company in the return envelope enclosed for your use,
which requires no postage if mailed in the United States. You may
revoke your Proxy at any time before it is voted by delivering to the
Secretary of the Company a written notice of revocation bearing a
later date than the Proxy, by duly executing a subsequent Proxy
relating to the same shares of Common Stock and delivering it to the
Secretary of the Company, or by attending and voting at the Annual
Meeting.
You are cordially invited to attend.
By Order of the Board of Directors,
/s/ Victor J. Coster
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VICTOR J. COSTER
Secretary
September 20, 2000
CACHE, INC.
1460 Broadway
New York, New York 10036
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PROXY STATEMENT
_______________
Accompanying this Proxy Statement is a Notice of Annual
Meeting of Shareholders and a form of Proxy for such meeting
solicited by the Board of Directors. The Board of Directors has
fixed the close of business on September 8, 2000 as the record date
for the determination of shareholders who are entitled to notice of
and to vote at the meeting or any adjournment thereof. The holders
of a majority of the outstanding shares of Common Stock present in
person, or represented by proxy, will constitute a quorum at the
meeting. This Proxy Statement and the enclosed Proxy are being sent
to the shareholders of the Company on or about September 20, 2000.
Only shareholders of record at the close of business on
September 8, 2000 will be entitled to vote at the Annual Meeting. At
the close of business on such record date the Company had outstanding
9,091,338 shares of Common Stock, par value $.01 per share ("Common
Stock"). No other class of voting security of the Company is issued
and outstanding. Each share of Common Stock entitles the holder to
one vote. Shareholders do not have cumulative voting rights.
As of February 29, 2000, Messrs. Andrew and Joseph Saul
and certain Saul family trusts (sometimes collectively referred to
herein as the "Sauls") owned of record an aggregate of 6,382,729
shares of Common Stock, representing approximately 70.21% of the
outstanding shares of Common Stock. See "Principal Shareholders and
Share Ownership by Management." The Sauls intend to vote their
Common Stock in favor of Proposals 1 and 2 which assures the approval
of such proposals.
A Proxy that is properly submitted to the Company may be
properly revoked at any time before it is voted. Proxies may be
revoked by (i) delivering to the Secretary of the Company at or
before the Annual Meeting a written notice of revocation bearing a
later date than the Proxy, (ii) duly executing a subsequent Proxy
relating to the same shares of Common Stock and delivering it to the
Secretary of the Company at or before the Annual Meeting, or (iii)
attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute
revocation of a Proxy). With respect to Proposal 1, unless authority
to vote for all Directors or any individual Director is withheld, all
the shares represented by the Proxy will be voted for the election of
Directors as set forth in the Proxy Statement. Where a shareholder
has specified a vote for or against Proposal 2, such Proxy will be
voted as specified; if no direction is given, all the shares
represented by the Proxy will be voted in favor of the Proposal.
-1-
Under SEC rules, boxes and a designated blank space are
provided on the proxy card for shareholders to mark if they wish
either to vote "for," "against" or "abstain" on one or more of the
proposals, or to withhold authority to vote for one or more of the
Company's nominees for director. Florida law requires the presence
of a quorum for the annual meeting, defined as a majority of the
votes entitled to be cast at the meeting. Votes withheld from
director nominees and abstentions will be counted in determining
whether a quorum has been reached. Broker-dealer non-votes, which
are defined in the third paragraph below, are not counted for quorum
purposes.
Assuming a quorum has been reached, a determination must
be made as to the results of the vote on each matter submitted for
shareholder approval: (1) the election of directors; and (2) the
ratification of auditors. Director nominees must receive a plurality
of the votes cast at the meeting, which means that a vote withheld
from a particular nominee or nominees will not affect the outcome of
the meeting. In order to pass, the proposal to approve the
ratification of the Company's auditors must be approved by a majority
of the votes cast on such matter. Abstentions are not counted in
determining the number of votes cast in connection with the selection
of auditors.
Brokers who hold shares in street name have the authority
to vote on certain items when they have not received instructions
from beneficial owners. Brokers that do not receive instructions are
entitled to vote on the election of directors and ratification of
auditors. Under applicable law, a broker non-vote will have no
effect on the outcome of the election of directors, or ratification
of auditors.
The cost of soliciting Proxies will be paid by the
Company, which will reimburse brokerage firms, custodians, nominees
and fiduciaries for their expenses in forwarding proxy material to
the beneficial owners of the Company's stock.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY
SHAREHOLDER UPON WRITTEN REQUEST A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K (EXCLUDING EXHIBITS BUT INCLUDING THE FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES) FOR THE FISCAL YEAR
ENDED JANUARY 1, 2000 AND/OR A COPY OF ANY OF THE COMPANY'S QUARTERLY
REPORTS ON FORM 10-Q OR CURRENT REPORTS ON FORM 8-K. SUCH WRITTEN
REQUESTS SHOULD BE DIRECTED TO: VICTOR COSTER, SECRETARY, CACHE,
INC., 1460 BROADWAY, NEW YORK, NEW YORK 10036.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THIS MEETING,
PLEASE SIGN, DATE AND MAIL THE PROXY PROMPTLY.
-2-
ELECTION OF DIRECTORS
(Proposal 1)
The Board of Directors of the Company presently consists of
the following seven members: Messrs. Andrew M. Saul, Joseph E. Saul,
Roy C. Smith, Thomas E. Reinckens, Morton J. Schrader and Mark E.
Goldberg and Ms. Mae Soo Hoo, each of whom is a nominee for re-election.
Unless authority to vote on the election of all Directors or
any individual Director is specifically withheld by appropriate
designation on the face of the Proxy, the persons named in the
accompanying Proxy will nominate as Directors, and vote such Proxy for
the election as Directors of, the persons named below. If elected, such
persons will serve as Directors until the next Annual Meeting of
Shareholders and until their successors are elected and qualified.
Management does not contemplate that any of the nominees for
Director will be unable to serve, but if such a situation should arise,
the persons named in the accompanying Proxy will nominate and vote for
the election of such other person or persons as the Board of Directors
may recommend.
NOMINEES FOR DIRECTORS
Director
Name Age Principal Occupation Since
- ------------------------ --- ----------------------------- --------
Andrew M. Saul ......... 53 Chairman of the Board and 1986
Partner, Saul Partners (1)
Roy C. Smith ........... 61 Executive Vice-President of 1993
the Company (2)
Thomas E. Reinckens .... 46 Executive Vice-President, Chief 1993
Financial Officer of the Company (3)
Mae Soo Hoo ............ 45 Executive Vice President of 1995
the Company (4)
Joseph E. Saul ......... 80 Partner, Saul Partners (5) 1986
Morton J. Schrader ..... 68 Real Estate Broker, 1989
Newmark & Company Real Estate, Inc.(6)
Mark E. Goldberg ....... 43 Attorney in Private Practice (7) 1989
_________________________
(1) Mr. Saul, who became Chairman of the Board of Directors on
February 27, 1993, has been a partner of Saul Partners, an
investment partnership, since 1986. He is the son of Mr. Joseph
E. Saul.
(2) Mr. Smith has served as an Executive Vice President of the
Company since October 1990; from December 30, 1986 to October
1990, Mr. Smith was Vice President/Director of Store Operations
of the Company.
(3) Mr. Reinckens has served as Vice President and Chief Financial
Officer of the Company since November 30, 1989; from 1987 to
November 1989, Mr. Reinckens served as the Company's Controller.
He was appointed Executive Vice President on September 13, 1995.
-3-
(4) Ms. Soo Hoo has served as a Vice President of Merchandising since
February 1987. She was appointed to the Board of Directors on
September 13, 1995 and was also appointed Executive Vice
President/General Merchandise Manager on that date.
(5) Mr. Saul has been a partner of Saul Partners, an investment
partnership, since 1986. He is the father of Mr. Andrew M. Saul.
(6) Mr. Schrader was the President of Abe Schrader Corp., a
manufacturer of women's apparel, from 1968 through March 1989.
Since 1989, he has been active as a real estate broker for
Newmark & Company Real Estate, Inc.
(7) Mr. Goldberg has been an attorney in private practice since 1985.
Mr. Goldberg has provided legal assistance to the Company since
1988 and is expected to continue to do so in 2000.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the year ended January 1, 2000 ("Fiscal 1999"), the
Board of Directors held seven meetings. Each Director attended all of
such Board meetings. All non-employee Directors are compensated for
their services to the Company by participation in the Company's group
medical insurance program at an approximate cost to the Company of
$11,500 per individual per year.
The Board of Directors has an Audit Committee and a
Compensation and Plan Administration Committee, but has no standing
nominating committee. The Audit Committee of the Board of Directors,
established in July 1989, currently consists of Messrs. Andrew Saul,
Goldberg and Schrader. The Audit Committee met twice in Fiscal 1999.
Each member of the Audit Committee attended such committee meetings.
Duties of the Audit Committee include meeting with the
independent accountants and certain personnel of the Company to discuss
the planned scope of their examinations, the adequacy of internal
controls and financial reporting; reviewing the results of the annual
examination of the financial statements and periodic internal audit
examinations; reviewing the services and fees of the Company's
independent accountants; authorizing special investigations and studies;
and performing any other duties or functions deemed appropriate by the
Board of Directors.
The Compensation and Plan Administration Committee was
established in July 1991 as the Plan Administration Committee to
administer the Company's stock option plans. In May 1993 it was renamed
the Compensation and Plan Administration Committee and delegated
additional authority to determine the remuneration arrangements for the
three most senior executive officers and to review and approve the
remuneration arrangements for the Company's other executive officers.
It currently consists of Messrs. Andrew M. Saul, Mark E. Goldberg and
Morton J. Schrader. The Compensation and Plan Administration Committee
met twice in Fiscal 1999. Each member of the Committee attended such
Committee meetings.
-4-
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation for the past
three years of the Chief Executive Officer and the Company's other four most
highly compensated executive officers (collectively, the "Named Executive
Officers").
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
SECURITIES ALL OTHER
NAME AND FISCAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#) ($)(1)
- ------------------------- ------ ------------ ----------- ------------
ANDREW M. SAUL 1999 -
(CHAIRMAN) 1998 -
1997 -
MAE SOO HOO 1999 279,410 30,625 1,950
(EXECUTIVE VICE 1998 267,390 - 1,906
PRESIDENT/DIRECTOR) 1997 255,852 103,750 1,874
ROY C. SMITH 1999 273,558 - 9,195
(EXECUTIVE VICE 1998 319,413 - 8,887
PRESIDENT/DIRECTOR) 1997 250,000 97,500 8,611
THOMAS E. REINCKENS 1999 272,596 28,125 2,705
(EXECUTIVE VICE PRESIDENT, 1998 289,328 - 2,513
CHIEF FINANCIAL 1997 230,000 75,000 2,441
OFFICER/DIRECTOR
(1) Included in the figures shown under this column for 1999 are the
following insurance premiums paid by the Company with respect to term
life insurance for the benefit of the executive officer and long-term
disability insurance: $3,420 and $5,775, respectively, for Mr. Smith;
$1,204 and $1,501, respectively, for Mr. Reinckens; $629 and $1,321,
respectively, for Ms. Soo Hoo.
Included in the figures shown under this column for 1998 are the
following insurance premiums paid by the Company with respect to term
life insurance for the benefit of the executive officer long-term
disability insurance: $3,112 and $5,775, respectively, for Mr. Smith;
$1,012 and $1,501, respectively, for Mr. Reinckens; and $585 and
$1,321, respectively, for Ms. Soo Hoo.
-5-
Included in the figures shown under this column for 1997 are the
following insurance premiums paid by the Company with respect to term
life insurance for the benefit of the executive officer and long-term
disability insurance: $2,836 and $5,775, respectively, for Mr. Smith;
$940 and $1,501, respectively, for Mr. Reinckens; and $553 and
$1,321, respectively, for Ms. Soo Hoo.
AGGREGATED FISCAL YEAR-END STOCK OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY STOCK OPTIONS
STOCK OPTIONS AT FY-END(#) AT FY-END ($) (1)
-------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ------------- ----------- -------------
Mae Soo Hoo 158,344 26,031 $528,902 $55,316
Roy C. Smith 147,500 - $497,656 $ -
Thomas E. Reinckens 129,218 23,907 $429,277 $50,801
_______________________
(1) In-the money Stock Options are those where the fair market
value of the underlying stock exceed the exercise price of
the Option. The amounts in this column represent the
difference between the exercise price of the Stock Options
and the closing price of the Company's Common Stock on
December 31, 1999 (the last day of trading for Fiscal 1999)
for all options held by each Named Executive Officer,
whether vested or unvested. The closing price of the
Company's Common Stock as reported on NASDAQ/NMS on December
31, 1999 was $6.50 per share.
-6-
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock
options granted in Fiscal 1999 to each of the Named Executive Officers.
Potential
Realizable Value
At Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (2)
--------------------------------------------------- --------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted(#) Fiscal Year ($)/share) Date 5%($) 10%($)
- ------------------- ---------- ------------ ---------- ---------- ------- ------
Mae Soo Hoo 30,625 17.63% $4.375 01/20/09(1) 37,017 81,799
Thomas E. Reinckens 28,125 16.19% $4.375 01/20/09(1) 33,996 75,121
(1) On January 20,1999, the Company granted 123,750 incentive stock
options to executives and key employees under the Company's 1994
stock option plan. The options were granted at an exercise price of
$4.375,(the closing price of the Common Stock on NASDAQ/NMS on
January 20, 1999) per share, expiring on January 20,2009,
subject to accelerated vesting at the maximum rate of up to 25%
per year for the four years ended December 31, 1999, 2000, 2001
and 2002, to the extent the company's earnings plan was
achieved, based on the following sliding scale:
Options Which
Will Become
Percentage of Earnings Exercisable
---------------------- -------------
Greater than or equal to 90% . . . . . . . . . . . . . . . 25%
Greater than or equal to 75%, but less than 90% . . . . . 20%
Greater than or equal to 60%, but less than 75% . . . . . 15%
Less than 60% . . . . . . . . . . . . . . . . . . . . . . 0%
These options also become immediately exercisable as of the
effective date of a "change in control" (as defined in the
1994 Plan,)
(2) Potential realizable value is based on an assumption that the
market price of the stock appreciates at the stated rate
compounded annually, from the date of grant to the
expiration date. These values are calculated on
requirements promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of
future stock price appreciation. Actual gains, if any,
are dependent on the future market price of the Company's
Common Stock.
-7-
Employment Contracts and Change-of-Control Provisions
All of the options granted under the Company's 1994 Stock Option Plan
contain a provision under which the option will become immediately
exercisable (the "Accelerated Exercise") with respect to all shares
subject to it as follows: (i) except as provided in clause (iii) below,
immediately after the first date on which less than 25% of the outstanding
Common Stock in the aggregate is beneficially owned (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) by Andrew M. Saul and
Joseph E. Saul, members of their immediate families and one or more trusts
established for the benefit of such individuals or members, (ii)
immediately prior to the sale of the Company substantially as an entirety
(whether by sale of stock, sale of assets, merger, consolidation or
otherwise), (iii) immediately prior to the expiration of any tender offer
or exchange offer for shares of Common Stock of the Company, where: (x)
all holders of Common Stock are entitled to participate, and (y) the Sauls
have agreed (or have announced their intent) to sell such number of their
shares of Common Stock as will result in the Sauls beneficially owning
less than 25% of the outstanding shares of Common Stock in the aggregate,
and (iv) immediately, if 20% or more of the directors elected by
shareholders to the Board of Directors are persons who were not nominated
by management in the most recent proxy statement of the Company. The
Company is required to give appropriate notice so as to permit an optionee
to take advantage of the foregoing provisions.
Compensation of Directors
All non-employee Directors (Messrs. Andrew Saul, Joseph Saul, Mark
Goldberg and Morton Schrader) are compensated for their services to the
Company by participation in the Company's group medical insurance program
at an approximate cost to the Company of $11,500 per individual per year.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation and Plan Administration Committee consists
of Messrs. Andrew M. Saul, Mark E. Goldberg and Morton J. Schrader.
Andrew M. Saul is also the Chairman of the Board of the Company.
Mr. Goldberg is also an attorney in private practice. He has been
retained by the Company to provide legal services since 1988 and is
expected to provide further legal services in 2000. During the fiscal
year ended January 1, 2000, Mr. Goldberg received $45,580 from the Company
for legal services rendered during Fiscal 1999.
-8-
COMPENSATION AND PLAN ADMINISTRATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
General
Executive compensation consists generally of two components - base
salary and option awards, and sometimes a third component - a
discretionary bonus award. The Compensation and Plan Administration
Committee (the "Committee"), currently consisting of Messrs. Andrew M.
Saul, Mark E. Goldberg and Morton J. Schrader, administers the Company's
option plans pursuant to which option awards are granted, determines the
remuneration arrangements for the three most senior executive officers and
reviews and approves the remuneration arrangements for the other executive
officers of the Company, which arrangements are determined by the
Chairman, in accordance with parameters set by the Committee.
This report of the Committee of the Board of Directors addresses the
Company's compensation policies for Fiscal 1999 applicable to Cache's
executives including the Named Executive Officers.
The Committee's Report on Executive Compensation 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 under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates this Report on Executive
Compensation by reference, and shall not otherwise be deemed filed under
such Acts.
Philosophy
The Cache executive compensation program is designed to attract and
retain key executives. Its objectives are to reward executives who
contribute to the success of the Company through individual and company
performances. Specifically, compensation includes a competitive base
salary program and long-term stock option awards. The Company will
sometimes grant discretionary bonuses to certain key executive officers
with respect to prior contributions as well as to serve as incentives to
attract key executives into the Company's employ.
Base Salary
The Company believes a competitive base salary is necessary to retain
key management employees. Base salaries are determined based upon a
review of an individual's experience and responsibilities, general
industry practice and the competitive environment for each position.
Annual salary adjustments are determined based upon an individual's
performance, the Company's performance, general industry practice and any
new duties or responsibilities assumed by the individual during the last
year.
-9-
Long-Term Incentives
The Company believes that employee equity ownership is highly
motivating, provides a major incentive to employees in building
stockholder value, and serves to align the interests of employees with
stockholders. Options are based upon the relative position and
responsibilities of each executive officer, historical and expected
contributions of each officer to the Company, and previous option grants
to such executive officers. Options are recommended with a goal to
provide competitive equity compensation for executive officers compared to
executive officers of similar rank in companies of the Company's industry,
geographic location and size.
Cache's stock option programs were designed by the Company as a long-
term incentive program for key executives. The stock option programs have
created an incentive for executives to maximize shareholder return, by
linking long-term compensation with the valuation of the Company's Common
Stock. The stock option plans typically have included initial grants
which have vested from three to five years. Stock options granted under
the 1994 Plan are required to have an exercise price at least equal to the
fair market value of the Company's common stock at the date of grant.
Among other factors considered by the Committee in determining who
qualified for stock option grants under the 1993 Plan and 1994 Plan and
the amount of such grants were an executive's business experience and his
potential to contribute to the future success of the Company.
Other Compensation
The Company provides certain other benefits, such as health
insurance, to the executive officers that are generally available to
Company employees. In addition, the Company provides its executives,
including the Named Executive Officers, with term life insurance and
additional long-term disability insurance, at the Company's cost.
The foregoing report has been furnished by the Compensation and Plan
Administration Committee consisting of Messrs. Andrew M. Saul, Morton J.
Schrader and Mark E. Goldberg.
-10-
FIVE-YEAR PERFORMANCE COMPARISON
The following graph compares the yearly percentage change in the
Company's cumulative total shareholder return on Common Stock with (i) the
cumulative total return of the NASDAQ National Market Index (which tracks
the aggregate performance of equity securities of companies traded on the
NASDAQ National Market System ("NASDAQ/NMS")) and (ii) the cumulative
total return of companies with the same four-digit standard industrial
code (SIC) as the Company (SIC Code 5621, titled "Women's Clothing
Stores"), over the period from January 1, 1995 to December 31, 1999. The
graph assumes an initial investment of $100 and reinvestment of dividends.
The graph is not necessarily indicative of future price performance.
The graph 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 under the Securities Exchange
Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be
deemed filed under such Acts.
FISCAL YEAR ENDING
--------------------------------------------------
COMPANY/INDEX/MARKET 1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
Cache Inc. 100.00 64.29 69.05 57.74 92.86 123.81
Women's Clothing Stores 100.00 80.58 95.44 114.67 134.11 177.63
NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 490.46
Assumes: $100 Invested on Jan. 1, 1995
Assumes: Dividend Reinvested
Fiscal Year Ending Dec. 31, 1999
-11-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1990, Joseph Saul loaned the Company an aggregate of
$1,750,000. All such loans bore interest at the rate of 8 1/2% per annum
and matured on January 1, 1994. On December 14, 1993, Joseph Saul agreed
to replace the promissory note with a new promissory note, having an
interest rate of 7% per annum and a maturity date of January 31, 1997 (the
"First Note"), which note was subordinated to the National Westminster
Bank loan dated December 15, 1993. On August 26, 1996, Mr. Saul agreed to
extend the maturity date of the note to January 31, 2000, due to the
renewal of the Bank line of credit.
In 1991, Joseph Saul made a loan to the Company of an additional
$250,000, which loan bore interest at the rate of 7 1/2% per annum and was
due on January 1, 1994. On December 14, 1993, Joseph Saul agreed to
replace the promissory note with a new promissory note (together with the
First Note, the "Notes"), which note was subordinated to the National
Westminster Bank loan dated December 15, 1993. This note bore interest at
the rate of 7% per annum and had a maturity date of January 31, 1997. On
August 26, 1996, Mr. Saul agreed to extend the maturity date of the note
to January 31, 2000, due to the renewal of the Bank line of credit.
In August 1999, the Company amended its revolving credit facility
with Fleet Bank, N.A. (Successor in interest to National Westminister
Bank, New Jersey). In connection therewith, Fleet Bank, N.A. and the
Company agreed that the Company could repay the Notes if the Company was
in compliance with all of the financial covenants contained in the
agreement. In December 1999, the Company repaid both Notes to Mr. Saul.
On December 16, 1994, the Company loaned $170,000 to Roy Smith,
Executive Vice President and a Director of the Company and $80,000 to
Thomas E. Reinckens, Vice President, Chief Financial Officer and a
Director of the Company, in each case for personal reasons. All such
loans are with full recourse to the executive, payable on demand from the
Company, secured by a pledge of shares of the Company's Common Stock owned
by such executive and bear interest at a rate of 7% per annum. The balance
as of February 29, 2000, and the highest balance during Fiscal 1999, for
these loans were $170,000 and $80,000, respectively.
See Also "Executive Compensation--Compensation Committee Interlocks
and Insider Participation."
As of February 29, 2000, the Sauls beneficially owned in the
aggregate 6,382,679 shares of the Company's outstanding Common Stock,
representing approximately 70.21% of the Company's outstanding Common
Stock. See "Principal Shareholders and Share Ownership by Management."
-12-
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
BY MANAGEMENT
The following table sets forth certain information as to the beneficial
ownership of the Company's equity securities as of February 29, 2000 by
(i) each director or nominee of the Company, (ii) each Named Executive
Officer, (iii) each person who is known to the Company to be the
beneficial owner of more than 5% of the Common Stock, and (iv) all
executive officers and directors as a group. Unless otherwise indicated,
the beneficial ownership for each person consists of the sole voting and
sole investment power with respect to all shares beneficially owned by
him. For purposes of this table, a person or group of persons is deemed
to have "beneficial ownership" of any shares as of a given date which such
person has the right to acquire within 60 days after such date. For
purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, any security which
such person or persons has the right to acquire within 60 days after such
date is deemed to be outstanding, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- ----------------------- ---------------- ------------------
Andrew M. Saul
630 Fifth Avenue
New York, NY 10111 (1) 6,382,679 70.21%
Joseph E. Saul
630 Fifth Avenue
New York, NY 10111 (2) 6,382,679 70.21%
Norma G. Saul
630 Fifth Avenue
New York, NY 10111 (3) 6,382,679 70.21%
Trust f/b/o
Jennifer B. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
Trust f/b/o
Kimberly E. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
-13-
Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- ----------------------- ---------------- ------------------
Jane Saul Berkey
Cache, Inc.
1460 Broadway
New York, NY 10036 (5) 494,046 5.43%
Roy C. Smith
Cache, Inc.
1460 Broadway
New York, NY 10036 (6) 232,500 2.44%
Mae Soo Hoo
Cache, Inc.
1460 Broadway
New York, NY 10036 (7) 200,074 2.10%
Thomas E. Reinckens
Cache, Inc.
1460 Broadway
New York, NY 10036 (8) 154,718 1.62%
Mark E. Goldberg
225 Broadway
New York, NY 10067 12,775 Less than 1%
Morton J. Schrader
733 Park Avenue
New York, NY 10021 5,000 Less than 1%
All Current
Executive Officers
and Directors as a
Group (seven persons) 6,987,746 73.35%
_________________
(1) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts (defined below) according to a
Schedule 13D, as amended, filed by the group with the
Securities and Exchange Commission. Andrew M. Saul may be
deemed to own beneficially 2,891,218 shares of Common
Stock (31.8%), if all shares owned by him or issuable
pursuant to rights owned by him are deemed outstanding
(including the shares owned by the Trusts of which Andrew
Saul is a trustee, and the shares owned by the A. Saul
Foundation, of which Andrew Saul is a director, but
excluding all shares issuable pursuant to rights held by
persons other than Andrew Saul, the Trusts of which
Andrew Saul is a trustee and the A. Saul Foundation),
-14-
consisting of (i) 2,585,158 shares of Common Stock owned
by Andrew Saul, (ii) 140,530 shares of Common Stock owned
by the 85 J. Saul Trust of which Andrew Saul is a
trustee, (iii) 140,530 shares of Common Stock owned by
the 84 K. Saul Trust of which Andrew Saul is a trustee,
and (iv) 25,000 shares of Common Stock owned by the A.
Saul Foundation of which A. Saul is a director. Andrew
Saul, his wife Denise, and Sidney Silberman comprise the
Board of Directors of the A. Saul Foundation and Andrew
Saul is its President. Andrew Saul, in his capacity as
one of the trustees of the trusts referenced in (ii) and
(iii) above, may be deemed to have shared voting power
and disposition power over the shares of Common Stock
owned by such trusts. Andrew Saul, in his capacity as
one of the directors of the A. Saul Foundation, may be
deemed to have shared voting power and disposition power
over the shares held by such foundation. Andrew Saul
disclaims beneficial ownership of the shares not directly
owned or under rights owned by him.
(2) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Joseph E. Saul may be deemed to own
beneficially 2,591,061 shares of Common Stock (28.5%), if
all shares owned by him or issuable pursuant to rights
owned by him are deemed outstanding (including the shares
owned by the Trusts of which Joseph Saul is a trustee,
and the shares owned by the J. Saul Foundation, of which
Joseph Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Joseph Saul, the Trusts of which Joseph Saul is a trustee
and the J. Saul Foundation), consisting of (i) 970,933
shares of Common Stock owned by Joseph Saul, (ii) 756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Joseph Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which
Joseph Saul is a trustee and (iv) 107,500 shares of
Common Stock owned by the J. Saul Foundation of which J.
Saul is a director. Joseph Saul, his wife Norma, and
Sidney Silberman comprise the Board of Directors of the
J. Saul Foundation and Joseph Saul is its President.
Joseph Saul, in his capacity as one of the trustees of
the trusts referenced in (ii) and (iii) above, may be
deemed to have shared voting power and disposition power
over the shares of Common Stock owned by such trusts.
Joseph Saul, in his capacity as one of the directors of
the J. Saul Foundation, may be deemed to have shared
voting power and disposition power over the shares held by
such foundation. Joseph Saul disclaims beneficial
ownership of the shares not directly owned or under
rights owned by him.
-15-
(3) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Norma Saul may be deemed to own
beneficially 2,505,028 shares of Common Stock (27.6%), if
all shares owned by her or issuable pursuant to rights
owned by her are deemed outstanding (including the shares
owned by the Trusts of which Norma Saul is a trustee and
the shares owned by the J. Saul Foundation, of which
Norma Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Norma Saul, the Trusts of which Norma Saul is a trustee
and the J. Saul Foundation), consisting of (i) 884,900
shares of Common Stock owned by Norma Saul, (ii) 756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Norma Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which Norma
Saul is a trustee and (iv) 107,500 shares of Common Stock
owned by the J. Saul Foundation of which Norma Saul is a
director. Norma Saul, in her capacity as one of the
trustees of the trusts referenced in (ii) and (iii)
above, may be deemed to have shared voting power and
disposition power over the shares of Common Stock owned by
such trusts. Norma Saul, in her capacity as one of the
directors of the J. Saul Foundation, may be deemed to have
shared voting power and disposition power over the shares
held by such foundation. Norma Saul disclaims
beneficial ownership of the shares not directly owned or
under rights owned by her.
(4) The trust f/b/o Jennifer B. Saul and the Trust f/b/o
Kimberly E. Saul each own 756,314 shares of Common Stock,
according to a Schedule 13D, as amended, filed with the
Securities and Exchange Commission. Joseph E. Saul, his
wife Norma Saul and Sidney J. Silberman, Esq., are
trustees of such trusts.
(5) Represents shares beneficially owned by Jane Saul Berkey
according to a Schedule 13D, as amended, filed by Ms.
Berkey with the Securities and Exchange Commission. Jane
Saul Berkey is the daughter of Mr. Joseph Saul and the
sister of Mr. Andrew Saul.
(6) Consists of 85,000 shares of Common Stock and options to
acquire 147,500 shares of Common Stock.
(7) Consists of 41,731 shares of Common Stock and options to
acquire 158,344 shares of Common Stock.
(8) Consists of 25,500 shares of Common Stock and options to
acquire 129,218 shares of Common Stock.
-16-
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS
(Proposal 2)
Board of Directors has appointed the firm of Arthur Andersen LLP to
examine the financial statements of the Company for the year ending
December 30, 2000, subject to ratification by shareholders. Arthur
Andersen LLP was employed by the Company as its independent auditors for
Fiscal 1999. Shareholders are asked to ratify the action of the Board of
Directors in making such appointment.
Representatives of Arthur Andersen LLP will attend the Annual
Meeting. They also will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
The Board of Directors recommends a vote for ratification. The
affirmative vote of a majority of the votes cast with respect to this
proposal is required for the ratification of the appointment of auditors.
The Sauls intend to vote shares of Common Stock they own in favor of
Proposal 2 and the vote of such shares will be sufficient to obtain the
required shareholder approval.
OTHER BUSINESS
Management knows of no business to be brought before the meeting
other than Proposals 1 and 2 in the Notice of Annual Meeting. If any
other proposals come before the meeting, it is intended that the shares
represented by Proxies shall be voted in accordance with the judgment of
the person or persons exercising the authority conferred by the Proxies.
Financial statements of the Company, the Company's certified public
accountants' report thereon and management's discussion and analysis of
the Company's financial condition and results of operations are contained
in the Company's 1999 Annual Report to Shareholders, a copy of which has
been sent to each shareholder of record along with a copy of this Proxy
Statement. The Annual Report is not to be regarded as proxy soliciting
material or a communication by means of which any solicitation is to be
made.
-17-
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the next Annual
Meeting (to be held in 2001) must be received by the Company on or before
May 22, 2001 in order to be included in the Proxy Statement and Proxy for
that meeting. The mailing address of the Company for submission of any
such proposal is given on the first page of the Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD AS SOON
AS POSSIBLE, WHETHER OR NOT THEY EXPECT TO ATTEND THE 2000 ANNUAL MEETING
IN PERSON.
By Order of the Board of Directors,
/s/ Victor J. Coster
-----------------
VICTOR J. COSTER
Secretary
-18-
PROXY PROXY
CACHE, INC
ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 14, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Andrew M. Saul and Thomas E. Reinckens,
and each of them, with full power of substitution, Proxies of the undersigned
to vote all shares of Common Stock of Cache, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on November 14, 2000, and all adjournments thereof, with all the powers
the undersigned would possess if personally present, and particularly, without
limiting the generality of the foregoing, to vote and act as follows:
1. Election of seven directors of the Company.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for all
(except as marked to the nominees listed below
contrary below)
Andrew M. Saul, Joseph E. Saul, Mae Soo Hoo, Roy C. Smith,
Thomas E. Reinckens, Mark E. Goldberg, Morton J. Schrader.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space below.)
------------------------------------------------------------------------
2. Ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 30, 2000.
/ / FOR / / AGAINST / / ABSTAIN
CONTINUED AND TO BE SIGNED ON REVERSE
3. In their discretion, upon such other matters as may properly come before
the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH DIRECTOR NAMED HEREIN AND "FOR"
ITEM 2.
DATED_______________________, 2000
(please fill in date)
NOTE: Please sign as name appears.
Joint owners should each sign.
__________________________________
Signature of Shareholder
__________________________________
Signature of Shareholder
When signing as Attorney, Executor,
Administrator, Trustee or Guardian, please
give full title as such. If signer is a
corporation, please sign with the full
corporation name by duly authorized officer
or officers.