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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE GYMBOREE CORPORATION
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(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 14a-6(i)(1) 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:
[ ] 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:
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Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held at 9:00 a.m. on Friday, May 20, 1998, at the South San Francisco
Conference Center, 255 South Airport Boulevard, South San Francisco, California
94080. Detailed information as to the business to be transacted at the meeting
is contained in the accompanying Notice of Annual Meeting and Proxy Statement.
Regardless of whether you plan to attend the meeting, it is important that
your shares be voted. Accordingly, we ask that you sign and return your proxy as
soon as possible in the envelope provided.
Sincerely,
Gary White
President and Chief Executive Officer
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THE GYMBOREE CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
TO THE STOCKHOLDERS OF THE GYMBOREE CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The
Gymboree Corporation, a Delaware corporation (the "Company"), will be held on
Wednesday, May 20, 1998 at 9:00 a.m., local time, at the South San Francisco
Conference Center, 255 South Airport Boulevard, South San Francisco, California
94080 for the following purposes:
1. To elect two Class II directors to serve for three year terms expiring
upon the year 2001 Meeting of Stockholders or until their successors are
elected.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending January 30, 1999.
3. To approve the proposed amendments to the Company's 1993 Stock Option
Plan (the "1993 Plan").
4. To transact such other business as may properly come before the meeting
and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 31, 1998 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.
FOR THE BOARD OF DIRECTORS
JEFFREY D. SAPER
Secretary
Burlingame, California
April 20, 1998
IMPORTANT: Whether or not you plan to attend the meeting, you are requested to
complete and promptly return the enclosed proxy in the envelope provided.
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THE GYMBOREE CORPORATION
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of The
Gymboree Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held May 20, 1998 at 9:00 a.m., local time, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the
South San Francisco Conference Center, 255 South Airport Boulevard, South San
Francisco, California 94080. The address of the Company's principal executive
offices is 700 Airport Boulevard, Burlingame, California 94010-1912. The
telephone number of the Company's principal offices is (650) 579-0600.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended January 31, 1998, including financial
statements, were mailed on or about April 20, 1998 to all stockholders entitled
to vote at the meeting. The anticipated cost of the proxy solicitation will be
approximately $30,000.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on March 31, 1998 (the
"Record Date") are entitled to notice of and to vote their shares at the
meeting. At the Record Date, 24,134,959 shares of the Company's Common Stock,
$0.001 par value per share, were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulative voting in the election of directors.
The Company will bear the cost of soliciting proxies. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Solicitation of proxies by mail may be supplemented by
telephone, telegram, facsimile or personal solicitation by directors, officers
or regular employees of the Company. No additional compensation will be paid to
such persons for such services.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST," "WITHHELD" or "ABSTAIN" are treated as being present at the meeting
for purposes of establishing a quorum and are also treated as shares entitled to
vote at the Annual Meeting (the "Votes Cast") with respect to such matter.
Although there is no definitive statutory or case law authority in Delaware
as to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the
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contrary, the Company intends to treat abstentions in this manner. Accordingly,
abstentions will have the same effect as a vote against a proposal.
The Delaware Supreme Court has held that, while broker non-votes should be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business, broker non-votes should not be counted for purposes of
determining the number of Votes Cast with respect to the particular proposal on
which the broker has expressly not voted. The Company intends to treat broker
non-votes in a manner consistent with such holding. Thus, a broker non-vote will
not affect the outcome of the voting on a proposal.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1999 Annual Meeting must be received by
the Company no later than December 18, 1998 in order that they may be considered
for inclusion in the proxy statement and form of proxy relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The number of directors authorized by the Company's Bylaws is a range from
six to eleven, with the exact number currently fixed by the Board at eight. The
Company's Restated Certificate of Incorporation provides that the directors
shall be divided into three classes, with the classes serving for staggered,
three year terms. Currently, there are three directors in Class I, two directors
in Class II and three directors in Class III.
Two Class II directors are to be elected at the Annual Meeting. Each of the
two Class II directors elected at the Annual Meeting will hold office until the
Annual Meeting of Stockholders in 2001 or until his or her successor has been
duly elected and qualified. The term of each Class III director will expire at
the Annual Meeting of Stockholders in 1999. The term of each Class I director
will expire at the Annual Meeting of Stockholders in 2000.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's two nominees named in the table below, both
of whom are currently directors of the Company. In the event that any nominee of
the Company becomes unable or declines to serve as a director at the time of the
Annual Meeting, the proxy holders will vote the proxies for any substitute
nominee who is designated by the current Board of Directors to fill the vacancy.
It is not expected that the nominees listed below will be unable or will decline
to serve as a director.
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The names of the two Class II nominees for director and certain information
about each of them are set forth in the table below. The names of, and certain
information about, the current Class I and Class III directors with unexpired
terms are also set forth below.
NAME AGE PRINCIPAL OCCUPATION
---- --- --------------------
NOMINEES FOR CLASS II DIRECTORS
Gary White........................... 46 President and Chief Executive Officer, The Gymboree
Corporation
Barbara L. Rambo..................... 45 Group Executive Vice President, Bank of America
CONTINUING CLASS I DIRECTORS
Arthur S. Berliner................... 54 General Partner, Walden Group of Venture Capital Funds
Walter F. Loeb....................... 73 President, Loeb Associates Inc.
Peter L. Thigpen..................... 58 Partner, Executive Reserves
CONTINUING CLASS III DIRECTORS
Stuart G. Moldaw..................... 71 Chairman of the Board, The Gymboree Corporation
William U. Westerfield............... 67 Consultant, Price Waterhouse LLP
Jerome A. Chazen..................... 71 Chairman of Chazen Capital Partners
Except as indicated below, each nominee or incumbent director has been
engaged in the principal occupation set forth above during the past five years.
There are no family relationships between any directors or executive officers of
the Company.
Gary White has been the Company's President and Chief Executive Officer,
and a director since February 1997, and served as a Senior Vice President and
the Chief Operating Officer of the Company from January 1996 until February
1997. Prior to joining the Company, Mr. White served as Executive Vice President
of Mervyn's, a division of Dayton Hudson Corporation. Mr. White was employed by
Dayton Hudson Corporation since 1976 having served in various positions as an
officer with Dayton Hudson Corporation from January 1988 to January 1996.
Barbara L. Rambo has served as a director of the Company since January
1996. Ms. Rambo is Group Executive Vice President and head of the Commercial
Banking Division of Bank of America. Ms. Rambo has been an employee of Bank of
America since 1974 and has held various positions within BankAmerica
International in New York, the New York Corporate Banking Office and the U.S.
Division Corporate Banking Group.
Arthur S. Berliner has been a director of the Company since June 1987. Mr.
Berliner has been a General Partner of Walden Group of Venture Capital Funds, a
venture capital investment firm, since 1974. Mr. Berliner is a director of
Natural Wonders, Inc., a specialty retail store, and Mark's Work Wearhouses,
Ltd., a work and casual wear retailer in Canada.
Walter F. Loeb has been a director of the Company since March 1995. Mr.
Loeb has been president of Loeb Associates Inc., a retail consulting firm, since
February 1990. Mr. Loeb is also the publisher of "Loeb Retail Letter," which
provides a monthly analysis of the retail industry. Following ten years of
service as a senior retail analyst with Morgan Stanley & Company, Inc., Mr. Loeb
was a principal at Morgan Stanley from 1984 to 1990. Mr. Loeb also serves as a
director of specialty apparel retailers, Mothers Work, Inc., The Wet Seal, Inc.
and InterTAN, Inc., an international electronics retailer. Mr. Loeb is also a
director of the Federal Realty Investment Trust, a real estate investment trust,
Hudson's Bay Co. and the Warnaco Group, Inc.
Peter L. Thigpen has been a director of the Company since March 1995. Mr.
Thigpen has been a partner of Executive Reserves, a consulting firm, since its
inception in March 1991. From 1967 until 1991, Mr. Thigpen was employed by Levi
Strauss & Co., an apparel company, most recently as Senior Vice
President -- U.S. Operations. Mr. Thigpen has been a lecturer at the Haas
Graduate School of Business at the University of California, Berkeley, since
1992. Mr. Thigpen is also a director of Designs, Inc., a retail apparel company.
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Stuart G. Moldaw has been the Chairman of the Board of Directors of the
Company since January 1994, and has been a director of the Company since May
1982. Mr. Moldaw previously served as Chairman of the Board of Directors of the
Company from January 1990 through January 1993. From 1980 through February 1990,
Mr. Moldaw served as a general partner of U.S. Venture Partners and he is
currently a special venture partner of U.S. Venture Partners. From February 1987
through January 1988, Mr. Moldaw served as Chief Executive Officer of Ross
Stores, Inc., an off-price retailer, and is currently a director and Chairman
Emeritus of Ross Stores, Inc.
William U. Westerfield has been a director of the Company since August
1994. Mr. Westerfield has served as a consultant to the public accounting firm
of Price Waterhouse LLP since July 1992. Mr. Westerfield was employed by Price
Waterhouse LLP from 1956 through June 1992 and served as a partner from 1965
through June 1992.
Jerome A. Chazen has been a director since February 1997. Mr. Chazen is the
founder and chairman of Chazen Capital Partners LLC, a private investment firm.
Mr. Chazen is also Chairman Emeritus of Liz Claiborne, Inc., and is one of the
four founding partners who established the Company in 1976. Mr. Chazen also
serves on the Board of Directors of Learningsmith and Taubman Centers, Inc.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings during
the fiscal year ended January 31, 1998, and no director attended fewer than 75%
of the meetings of the Board of Directors or the committees upon which such
director served.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Real Estate Committee. The Board of Directors has no nominating committee or
any committee performing similar functions.
The Audit Committee currently consists of Directors Thigpen, Rambo, and
Westerfield, Chairman. The Audit Committee principally reviews the scope and
results of the work of the Director of Internal Audit and of the annual audit of
the financial statements and other services provided by the Company's
independent auditors. In addition, the Audit Committee reviews the information
provided to stockholders and the Company's systems of internal controls. The
Audit Committee held six meetings during the last fiscal year.
The Compensation Committee currently consists of Directors Berliner,
Chazen, Thigpen and Loeb, Chairman. The Compensation Committee is responsible
for reviewing and approving the Company's compensation policies and the
compensation paid to executive officers. The Compensation Committee held three
meetings during the last fiscal year.
The Real Estate Committee currently consists of Directors Moldaw and White.
The Real Estate Committee reviews and approves all new store locations and store
lease arrangements. The Real Estate Committee held more than twelve meetings
during the last fiscal year.
COMPENSATION OF DIRECTORS
In fiscal year 1997, each non-employee director of the Company received an
annual retainer of $20,000 and an additional $1,000 for each Board meeting
attended and $500 for each Committee meeting attended (including telephonic
meetings). Each non-employee director of the Company is entitled to participate
in the Company's 1993 Stock Option Plan by receiving automatic grants of options
to purchase Common Stock of the Company. Each non-employee director is
automatically granted an option to purchase 2,500 shares of the Company's Common
Stock upon each anniversary of such director's initial election to the Board.
Each committee chairperson is entitled to receive an option to purchase 500
shares of the Company's Common Stock upon each anniversary of such director's
initial appointment as chairperson. In the event that an additional non-employee
director is elected to the Board, such person shall be entitled to receive an
option to purchase 2,500 shares of the Company's Common Stock upon election.
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VOTE REQUIRED
The two nominees receiving the highest number of affirmative votes of the
shares entitled to vote on this matter shall be elected as the Class II
directors. Votes withheld from any director will be counted for purposes of
determining the presence or absence of a quorum but are not counted as
affirmative votes. A broker non-vote will be counted for purposes of determining
the presence or absence of a quorum, but, under Delaware law, it will have no
other legal effect upon the election of directors.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
NOMINEES SET FORTH HEREIN.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending January 30, 1999, and recommends that the stockholders vote for
ratification of such appointment. Deloitte & Touche LLP has served as the
Company's independent auditors since 1987. In the event of a negative vote on
such ratification, the Board of Directors will reconsider its selection.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting of Stockholders and will have the opportunity to make a statement
if they so desire. The representatives also are expected to be available to
respond to appropriate questions from stockholders.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JANUARY 30, 1999.
PROPOSAL THREE
APPROVAL OF PROPOSED AMENDMENTS TO THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "1993 Plan") was originally
adopted by the Board of Directors in June, 1992 and became effective on the
initial public offering of the Company's stock on April 6, 1993. As of March 31,
1998, 2,352,815 shares of Common Stock were reserved for future grant under the
1993 Plan, and options to acquire 3,672,185 shares were granted and outstanding
under the 1993 Plan.
PROPOSED AMENDMENTS TO THE 1993 PLAN
On February 27, 1998, the Board of Directors amended the 1993 Plan to: (i)
increase the aggregate number of shares authorized for issuance thereunder by
2,000,000 shares (bringing the total number of shares reserved for future grant
under the 1993 Plan to 2,352,815 shares, and raising the number of shares
available since inception of the Plan to 6,025,000) and authorize automatic
increases thereto on the date of each annual stockholders' meeting equal to the
number of shares required to return the maximum aggregate number of shares
reserved for issuance on such date to 2,000,000 shares; (ii) impose annual
limits on the number of shares subject to stock option grants, so as to qualify
the compensation associated with such grants as "performance-based' compensation
within the meaning of Section 162(m) of the Internal Revenue Code (the "Code");
and (iii) provide for the award of "common stock equivalents," pursuant to which
recipients will be entitled to receive shares of Common Stock on a future date
(such as the recipient's retirement or other termination of employment).
Proposal Three seeks stockholder approval of the foregoing amendments.
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VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATIONS
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present or represented and voting at this meeting will be
required to approve the amendments to the 1993 Plan.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE PROPOSED AMENDMENTS TO THE 1993 PLAN.
SUMMARY OF THE 1993 PLAN
General. The purpose of the Plan is to attract and retain the best
available personnel for positions of substantial responsibility with the
Company, to provide additional incentive to the employees, directors and
consultants of the Company and to promote the success of the Company's business.
Options, stock purchase rights and common stock equivalents may be granted under
the Plan. Options granted under the Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory stock options.
Administration. The Plan may generally be administered by the Board or a
Committee appointed by the Board (as applicable, the "Administrator").
Eligibility; Limitations. Nonstatutory stock options, stock purchase rights
and common stock equivalents may be granted under the Plan to employees,
directors and consultants of the Company and any parent or subsidiary of the
Company. Incentive stock options may be granted only to employees. The
Administrator, in its discretion, selects the employees, directors and
consultants to whom options, stock purchase rights and common stock equivalents
may be granted, the time or times at which such options, stock purchase rights
and common stock equivalents shall be granted, and the number of shares subject
to each such grant.
Section 162(m) of the Code places limits on the deductibility for federal
income tax purposes of compensation paid to certain executive officers of the
Company. In order to qualify the compensation income associated with options
granted to such persons as performance-based compensation under Section 162(m)
of the Code, thereby preserving the Company's ability to deduct such
compensation income, the Plan provides that no employee, director or consultant
may be granted, in any fiscal year of the Company, options to purchase more than
500,000 shares of Common Stock. Notwithstanding this limit, however, in
connection with an individual's initial employment with the Company, he or she
may be granted options to purchase up to an additional 500,000 shares of Common
Stock.
Terms and Conditions of Options. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
additional terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted; provided, however, that the
exercise price of an option may generally not be less than 100% of the fair
market value of the Common Stock on the date such option is granted (except
that the exercise price may be as low as 85% of the fair market value of
the Common Stock on the date such option is granted if the option is
expressly granted in lieu of a reasonable amount of cash compensation). The
fair market value of the Common Stock is generally determined with
reference to the closing sale price for the Common Stock (or the closing
bid if no sales were reported) on the last market trading day prior to the
date the option is granted.
(b) Exercise of Option; Form of Consideration. The Administrator
determines when options become exercisable, and may in its discretion,
accelerate the vesting of any outstanding option. Stock options granted
under the Plan generally vest and become exercisable over four years. The
means of payment for shares issued upon exercise of an option is specified
in each option agreement. The Plan permits payment to be made by cash,
check, promissory note, other shares of Common Stock of the Company (with
some restrictions), cashless exercise, any other form of consideration
permitted by applicable law, or any combination thereof.
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(c) Term of Option. The term of an incentive stock option may be no
more than ten (10) years from the date of grant; provided that in the case
of an incentive stock option granted to a 10% shareholder, the term of the
option may be no more than five (5) years from the date of grant. No option
may be exercised after the expiration of its term.
(d) Termination of Employment. If an optionee's employment or
consulting relationship terminates for any reason (other than death or
disability), then all options held by the optionee under the Plan expire on
the earlier of (i) the date set forth in his or her notice of grant
generally, or (ii)the expiration date of such option. To the extent the
option is exercisable at the time of such termination, the optionee may
exercise all or part of his or her option at any time before termination.
(e) Death or Disability. If an optionee's employment or consulting
relationship terminates as a result of death or disability, then all
options held by such optionee under the Plan expire on the earlier of (i)
the date set forth in his or her notice of grant generally, or (ii) the
expiration date of such option. The optionee (or the optionee's estate or
the person who acquires the right to exercise the option by bequest or
inheritance), may exercise all or part of the option at any time before
such expiration to the extent that the option was exercisable at the time
of such termination.
(f) Nontransferability of Options: Options granted under the Plan are
generally not transferable other than by will or the laws of descent and
distribution.
(g) Other Provisions: The stock option agreement may contain other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator.
Stock Purchase Rights. Stock purchase rights give the purchaser the right
to buy shares of Common Stock from the Company. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator. Stock purchase rights granted under the Plan are generally
not transferable other than by will or the laws of descent and distribution.
Common Stock Equivalents. Common stock equivalents awarded to a recipient
are credited to a bookkeeping account established by the Company in his or her
name. Each common stock equivalent entitles the recipient to a share of Common
Stock at such time or times as specified in the recipient's Common Stock
Equivalent Agreement. The Company's obligations with respect to common stock
equivalents are not funded or secured in any manner. A recipient's right to
receive common stock equivalents granted under the Plan are generally not
transferable other than by will or the laws of descent and distribution.
Adjustments upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of stock
subject to the Plan, the number and class of shares of stock subject to any
option or stock purchase right outstanding under the Plan, the exercise price of
any such outstanding option or stock purchase right, and the number of common
stock equivalents credited to each account under the 1993 Plan.
In the event of a liquidation or dissolution, any unexercised options or
stock purchase rights will terminate. The Administrator may, in its discretion,
provide that each optionee shall have the right to exercise all of the
optionee's options and stock purchase rights, including those not otherwise
exercisable prior to the consummation of the liquidation or dissolution. In
addition, the Administrator may in its discretion provide that each common stock
equivalent shall convert into shares of Common Stock.
In connection with any merger, consolidation, acquisition of assets or like
occurrence involving the Company, each outstanding option, stock purchase right
and common stock equivalent shall be assumed or an
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equivalent option or right substituted by the successor corporation. If the
successor corporation refuses to assume the options, stock purchase rights and
common stock equivalents or to substitute substantially equivalent options and
rights, each optionee shall have the right to exercise his or her option as to
all the optioned stock, any Company repurchase option applicable to any Shares
of Common Stock acquired under the 1993 Plan shall lapse as to all such shares,
and each common stock equivalent credited to an account under the 1993 Plan will
convert to shares of Common Stock.
In the event of a change of control of the Company, all outstanding options
and stock purchase rights will vest and become exercisable in full, and, unless
otherwise determined by the Board, shall be terminated in exchange for a cash
payment equal to: (i) the highest closing price of the Common Stock within the
60-day period immediately preceding the change of control, (ii) the highest
price paid or offered per share in any bona fide transaction related to a change
of control at any time within the 60-day period immediately preceding the change
of control, or (iii) such lower price as determined by the Board in its
discretion. In addition, in such event each common stock equivalent credited to
an account under the 1993 Plan shall convert into shares of Common Stock. For
these purposes, a change of control is defined to include certain mergers, asset
sales, or consolidations, the acquisition of more than 50% of the Company by any
person or entity, or certain changes in the composition of the Board.
Amendment and Termination of the Plan. The Board may amend, alter, suspend
or terminate the Plan, or any part thereof, at any time and for any reason.
However, the Company shall obtain shareholder approval for any amendment to the
Plan to the extent necessary to comply with any applicable rule or statute. No
such action by the Board or shareholders may alter or impair any option, stock
purchase right or common stock equivalent previously granted under the Plan
without the written consent of the holder. Unless terminated earlier, the Plan
shall terminate on June 4, 2002.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain or
loss is treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income is treated as long-term or short-term capital gain or loss, depending on
the holding period. A different rule for measuring ordinary income upon such a
premature disposition may apply if the optionee is also an officer, director, or
10% shareholder of the Company.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Upon
a disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, to the extent not recognized as taxable
income as provided above, is treated as long-term or short-term capital gain or
loss, depending on the holding period.
Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time of
purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when a stock ceases to be subject to
a substantial risk of forfeiture. The stock will generally cease to be subject
to a substantial risk of forfeiture when it is no longer subject to the
Company's right to repurchase the stock upon the purchaser's termination of
employment with the Company. At such times, the purchaser will recognize
ordinary income measured as the
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difference between the purchase price and the fair market value of the stock on
the date the stock is no longer subject to a substantial risk of forfeiture.
The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and the beginning of any capital gain holding period
by timely filing an election pursuant to Section 83(b) of the Code. In such
event, the ordinary income recognized, if any, is measured as the difference
between the purchase price and the fair market value of the stock on the date of
purchase, and the capital gain holding period commences on such date. Different
rules may apply if the purchaser is also an officer, director, or 10%
shareholder of the Company.
Common Stock Equivalents. A recipient generally will not recognize any
taxable income at the time he or she receives common stock equivalents. Upon
conversion of the common stock equivalents into shares of Common Stock, the
recipient will generally recognize taxable income equal to the then fair market
value of the shares of Common Stock received. Upon a disposition of such shares
by the recipient, any difference between the sale price and the fair market
value of the shares on the date of conversion is treated as long-term or
short-term capital gain or loss, depending on the holding period.
Deductibility by the Company. Ordinarily, the Company will receive a tax
deduction for federal income tax purposes in connection with awards under the
1993 Plan in the same amount as the compensation income recognized by the
participant. However, as discussed above, Section 162(m) of the Internal Revenue
Code contains special rules limiting the federal income tax deductibility of
compensation paid to the Company's Chief Executive Officer and each of the other
four most highly compensated executive officers. The general rule is that annual
compensation paid to any of these executives will be deductible only to the
extent that it does not exceed $1,000,000. Compensation that qualifies as
"performance-based compensation" is excluded from the $1,000,000 deductibility
cap, and therefore remains fully deductible by the Company. In addition to the
inclusion in the 1993 Plan of limits on the number of shares which may be
granted to a person in any one year, to qualify the compensation income
associated with options as performance-based compensation the options must,
among other things, be granted with an exercise price of not less than 100% of
the fair market value of the Common Stock on the date of grant. To the extent
these requirements are met, compensation attributable to options granted to
executive officers under the 1993 Plan will qualify as performance-based
compensation for purposes of Section 162(m) of the Code, and the Company will
generally be entitled to a tax deduction in the amount recognized by such
officers in connection with such awards. Compensation attributable to stock
purchase rights and common stock equivalents will not generally qualify as
performance-based compensation within the meaning of Section 162(m) of the Code.
As a result, the deductibility of income recognized by executive officers in
connection with such awards may be limited.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, HOLDERS OF STOCK PURCHASE RIGHTS, AND THE COMPANY WITH RESPECT
TO THE GRANT AND EXERCISE OF OPTIONS AND STOCK PURCHASE RIGHTS UNDER THE PLAN.
IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF
THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF
ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE EMPLOYEE OR CONSULTANT
MAY RESIDE.
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ADDITIONAL INFORMATION
EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company during
fiscal years 1995, 1996 and 1997 to (i) the Company's current and former Chief
Executive Officers during fiscal 1997 and (ii) each of the four other most
highly compensated executive officers during fiscal 1997 (collectively, the
"Named Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -----------------------
----------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION(1)
--------------------------- ---- -------- -------- ------------ ---------- ---------- ---------------
Gary White(2)................ 1997 $385,540 $242,775 -- -- 450,000 $390
President and Chief 1996 303,387 138,000 -- -- -- 450
Executive Officer 1995 -- -- 50,000 --
Nancy J. Pedot(3)............ 1997 464,490 -- -- -- -- --
President and Chief 1996 452,042 256,128 -- -- 53,013 450
Executive Officer 1995 370,184 209,475 -- 46,570 360
James P. Curley(4)........... 1997 276,732 125,538 -- -- 20,833 390
Senior Vice President and 1996 253,224 115,000 -- -- 25,000 450
Chief Financial Officer/ 1995 210,828 68,533 -- -- -- 297
Chief Administrative Officer
Mindy C. Meads............... 1997 358,197 140,602 -- -- 23,333 390
Senior Vice President and 1996 234,062 140,000 -- 50,000 419
General Merchandise Manager
R. Mark Syrstad.............. 1997 247,492 93,375 -- -- 35,000 390
Senior Vice President,
Operations
Kenneth F. Meyers............ 1997 214,060 77,190 -- -- 27,749 310
Senior Vice President,
Human Resources
- ---------------
(1) The amount included under "All Other Compensation" represents the dollar
value of term life insurance premiums paid by the Company for the benefit of
each Named Officer.
(2) Mr. White joined the Company in January 1996 as Senior Vice President and
Chief Operating Officer. On February 12, 1997, Mr. White was named President
and Chief Executive Officer.
(3) On February 12, 1997, Ms. Pedot resigned as the Company's President and
Chief Executive Officer.
(4) On January 31, 1998, Mr. Curley resigned as the Company's Director, Senior
Vice President, Chief Financial Officer and Chief Administrative Officer.
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OPTION GRANTS AND EXERCISES
The following table sets forth certain information with respect to stock
option grants during the fiscal year ended January 31, 1998 to the Named
Officers. In accordance with the rules of the Securities and Exchange Commission
(the "SEC"), also shown below is the potential realizable value over the term of
the option (the period from the grant date to the expiration date) based on
assumed rates of stock appreciation from the option exercise price of 5% and
10%, compounded annually. These amounts are based on certain assumed rates of
appreciation and do not represent the Company's estimate of future stock price.
Actual gains, if any, on stock option exercise will be dependent on the future
performance of the Common Stock.
OPTION GRANTS IN FISCAL 1997
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
----------------------------- AT ASSUMED ANNUAL RATE
NUMBER OF PERCENT OF OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE OR EXPIRATION --------------------------
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5% 10%
---- ----------- -------------- ------------ ----------- ----------- ------------
James P. Curley(1)............... 20,833 1.8% $24.00 2/27/07 $ 243,341 $ 629,840
Gary White....................... 75,000 6.4 24.00 2/27/07 876,041 2,267,460
Gary White....................... 375,000 31.8 25.38 11/19/07 3,862,706 10,819,799
Mindy C. Meads................... 23,333 2.0 24.00 2/27/07 272,542 705,422
Kenneth F. Meyers................ 27,749 2.4 24.44 5/16/07 311,914 826,720
R. Mark Syrstad.................. 35,000 3.0 24.44 5/16/07 393,419 1,042,748
- ---------------
(1) Mr. Curley resigned as the Company's Senior Vice President and Chief
Financial Officer on January 31, 1998.
The following table sets forth information with respect to options
exercised in the fiscal year ended January 31, 1998 by the Named Officers and
the value of unexercised options at January 31, 1998.
AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND YEAR-END VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT JANUARY 31, 1998 AT JANUARY 31, 1998
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ---------- ------------ -------------- ------------ --------------
Nancy J. Pedot................. 346,542 $4,066,964 127,948 63,163 $1,859,437 $460,634
James P. Curley................ 50,843 932,475 129,303 29,081 1,463,163 --
Gary White..................... -- -- 57,811 442,189 156,244 156,256
Mindy C. Meads................. -- -- 28,262 45,071 -- --
Kenneth F. Meyers.............. -- -- -- 27,749 -- --
R. Mark Syrstad................ -- -- -- 35,000 -- --
EMPLOYMENT CONTRACTS, INDEMNIFICATION AGREEMENTS, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
In connection with Ms. Pedot's resignation as the Company's President and
Chief Executive Officer in February 1997, the Company agreed that, subject to
certain conditions, Ms. Pedot will continue to receive payments equivalent to
her fiscal 1996 base salary until the earlier of February 28, 1998 or the
commencement of employment by Ms. Pedot with another company. Further, in the
event that Ms. Pedot's salary in such new employment does not equal or exceed
her 1996 base salary, the Company agreed to continue paying Ms. Pedot the
difference through February 1998. In April 1997, Ms. Pedot received payment of
her bonus relating to the 1996 fiscal year. In addition, subject to certain
conditions, the Company agreed that all of Ms. Pedot's unvested options to
purchase Common Stock and all of Ms. Pedot's Common Stock subject to a right of
repurchase will continue to vest until February 1998.
In connection with Mr. Curley's resignation as the Company's Senior Vice
President, Chief Financial Officer/Chief Administration Officer and in
accordance with an employment agreement the Company entered
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into with him in July 1992, the Company agreed that, following the termination
of Mr. Curley's employment by the Company for any reason, Mr. Curley's salary
and benefits will continue to be paid to him until the earlier of six months
following his termination or such time as he obtains alternate employment.
The Company has entered into indemnification agreements with certain of its
directors and officers requiring the Company to indemnify them to the fullest
extent of the law.
TRANSACTIONS WITH RELATED PARTIES
Mr. Westerfield is a director and serves as a consultant to Price
Waterhouse LLP. During 1997, the Company retained Management Horizons, a company
associated with Price Waterhouse, for certain studies relating to a marketing
and feasibility study in connection with the Company's introduction of a new
retail concept.
Ms. Rambo is a director and Group Executive Vice President and head of the
Commercial Banking Division of Bank of America, which provides banking services
to the Company.
Mr. Saper serves as the Company's corporate secretary, and is a partner at
the firm of Wilson Sonsini Goodrich and Rosati, which provides legal services to
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended January 31, 1998, the Compensation Committee
of the Board of Directors consisted of Messrs. Berliner, Thigpen, Chazen, and
Loeb, Chairman. No member of the Compensation Committee has a relationship that
would constitute an interlocking relationship with executive officers or
directors of another entity. The Committee is comprised of the members named
above. None of the Committee members is an employee of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To the Board of Directors:
As members of the Compensation Committee, we are responsible for reviewing
and approving the Company's compensation policies and the levels of compensation
paid to executive officers.
The following is the report to the Board of Directors describing
compensation policies and rationales applicable to the Company's executive
officers with respect to compensation paid to such executive officers for the
fiscal year ended January 31, 1998. The information contained in the following
report shall not be deemed to be "soliciting material" or to be filed with the
Securities and Exchange Commission, nor shall such information be incorporated
by reference into any future filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates it by reference into such
filing.
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the Company's compensation policies and the compensation
paid to executive officers. The Committee is comprised of the members named
above, none of whom is an employee of the Company.
Compensation Philosophy
The general philosophy of the Company's compensation program is to offer
executive officers competitive compensation based both on the Company's
performance and on the individual's contribution and performance. The Company's
compensation policies are intended to motivate, reward and retain highly
qualified executives for long-term strategic management and the enhancement of
stockholder value, to support a performance-oriented environment that rewards
achievement of specific internal Company goals and to attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company.
There are three main components to the Company's executive compensation
program:
- Base Salary
- Annual Bonus
- Stock Incentives
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BASE SALARY
Executive officers' salaries have been targeted at a level that, when
combined with the annual bonus, is at or above the average rates paid by
competitors. The Committee believes that these rates are necessary to retain key
employees. The Committee reviews and approves salaries for the Chief Executive
Officer and the executive officers on an annual basis, generally in the first
fiscal quarter.
In reviewing the salaries for executive officers, the Committee examined
salary surveys prepared in late 1997 by a national, independent compensation
consulting company for rapidly growing specialty retailers. The Committee
reviewed individual base salaries of executive officers, and adjusted salaries
based on individual job performance and changes in the position's duties and
responsibilities. In making salary decisions, the Committee exercised its
discretion and judgment based on these factors. No specific formula was applied
to determine the weight of each factor.
Annual Bonus
Annual incentive bonuses for executive officers are intended to reflect the
Committee's belief that a significant portion of the annual compensation of each
executive officer should be contingent upon the performance of the Company, as
well as the individual contribution of each officer.
To carry out this philosophy, the Company has implemented The Gymboree
Corporation Bonus Plan (the "Bonus Plan"), which provides executive officers and
other employees the opportunity to earn annual incentive bonuses. The purpose of
the bonus plan is to attract, retain, motivate and reward employees by directly
linking the amount of any cash bonus to specific corporate and/or divisional
financial goals. To this end, specific earnings measurements are defined each
year and threshold, target and maximum payout levels are established to reflect
the Company's objectives. These goals and the potential amounts of bonuses are
reviewed and approved by the Committee in the first fiscal quarter of each year.
In fiscal 1997, the Company experienced a 23% net sales increase and an 11%
increase in net income. As a result, the Chief Executive Officer and other Named
Officers received bonuses for fiscal 1997 which aggregated $679,480. The
Committee believes that the Bonus Plan provides an excellent link between
earnings performance and the incentives paid to executives.
Stock Incentives
The Company utilizes stock options as long-term incentives to reward and
retain executive officers. The Committee believes that these programs serve to
link management interests with stockholder interests and to motivate executive
officers to make long-term decisions that are in the best interests of the
Company and that will, over the long-term, promote better returns to
stockholders.
Stock options are granted to executive officers periodically. Generally,
stock options vest over four years after the grant date and optionees must be
employed by the Company at the time of vesting in order to exercise the options.
The Committee believes that stock option grants provide an incentive which
focuses the executives' attention on the Company from the perspective of an
owner with an equity stake in the business. Because options are typically
granted with an exercise price equal to the fair market value of the Common
Stock on the date of grant, the Company's stock options are tied to the future
performance of the Company's Common Stock and will provide value to the
recipient only when the price of the Company's stock increases above the
exercise price, that is, only to the extent that stockholders as a whole have
benefited.
In order to determine the appropriate number of options to be granted to
its executive officers, the Company has relied on competitive guidelines
prepared by a national, independent compensation consultant. In fiscal 1997, the
Named Officers were granted options to purchase an aggregate of 556,915 shares
of Common Stock with a weighted average exercise price of $24.98 per share. All
options were granted with an exercise price equal to the fair market value of
the Common Stock on the date of grant.
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Compensation of the Chief Executive Officer
Nancy J. Pedot resigned as the Company's President and Chief Executive
Officer in February 1997. Ms. Pedot's fiscal 1997 base salary was established by
the Compensation Committee in accordance with the guidelines applicable to all
executive officers, as set forth above.
Ms. Pedot was succeeded as President and Chief Executive Officer of the
Company by Gary White. Mr. White's salary and bonus for fiscal 1997 were
established by the Compensation Committee in accordance with the practices
described above.
THE COMPENSATION COMMITTEE
Walter F. Loeb, Chairman
Arthur S. Berliner
Peter L. Thigpen
Jerome A. Chazen
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PERFORMANCE GRAPH
The following line graph compares the annual percentage change in the
cumulative total stockholder return for the Company's Common Stock with the
Nasdaq U.S. Index and a peer group of companies selected by the Company (the
"Peer Group"), consisting of 45 companies whose primary business is the
operation of apparel and accessory retail stores. The graph assumes that $100
was invested on the date of the Company's initial public offering, March 30,
1993. In accordance with the guidelines of the SEC, the stockholder return for
each entity in the Peer Group has been weighted on the basis of market
capitalization as of each measurement date set forth in the graph. The
information in the graph is provided in annual intervals. Historic stock price
performance should not be considered indicative of future stock price
performance.
COMPARISON OF THE GYMBOREE CORPORATION'S CUMULATIVE TOTAL RETURNS
TO NASDAQ MARKET INDEX AND PEER GROUP INDEX
MEASUREMENT PERIOD THE GYMBOREE NASDAQ MARKET
(FISCAL YEAR COVERED) CORPORATION INDEX PEER GROUP INDEX
3/30/93 100.00 100.00 100.00
1/30/94 193.13 114.80 88.27
1/29/95 231.25 110.69 81.00
2/4/96 173.75 158.30 79.90
2/2/97 229.99 205.20 94.18
1/31/98 263.75 242.70 117.62
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SECURITY OWNERSHIP
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of March
31, 1998 by (i) each beneficial owner of more than 5% of the Company's Common
Stock, (ii) each director and each nominee, (iii) each Named Officer and (iv)
all directors and executive officers as a group. Except as otherwise indicated,
each person has sole voting and investment power with respect to all shares
shown as beneficially owned, subject to community property laws where
applicable.
NUMBER OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF TOTAL
------------------------------------ --------- --------
Massachusetts Financial Service Company(1).................. 3,038,961 12.5
500 Boylston Street
Boston, Massachusetts 02116
FMR Corp.(2)................................................ 2,849,450 11.8
82 Devonshire Street
Boston, Massachusetts 02109
The Capital Group Companies, Inc.(3)........................ 2,520,700 10.0
333 South Hope Street
Los Angeles, California 90071
T. Rowe Price Associates, Inc.(4)........................... 1,837,800 7.6
100 E. Pratt Street
Baltimore, Maryland 21202
Morgan Stanley Dean Witter Discover Co.(5).................. 1,269,109 5.2
1585 Broadway
New York, New York 10036
Stuart G. Moldaw(6)......................................... 356,527 *
Gary White(7)............................................... 99,477 *
Mindy Meads(7).............................................. 37,940 *
Arthur S. Berliner(8)....................................... 14,230 *
Jerome A. Chazen(9)......................................... 5,000 *
Walter Loeb(7).............................................. 3,000 *
Barbara L. Rambo(7)......................................... 1,500 *
Peter L. Thigpen(7)......................................... 3,000 *
William U. Westerfield(7)................................... 3,000 *
Kenneth F. Meyers(7)........................................ 10,336 *
R. Mark Syrstad(7).......................................... 11,620 *
James P. Curley(10)......................................... 342,480 1.4
All directors and executive officers as a group (13
persons)(11).............................................. 888,110 3.7
- ---------------
* Percentage of shares beneficially owned is less than one percent of total.
(1) Based solely on information contained in a Schedule 13G filed with the SEC
on February 12, 1998.
(2) Based solely on information contained in a Schedule 13G filed with the SEC
on February 14, 1998.
(3) Based solely on information contained in a Schedule 13G filed with the SEC
on February 10, 1998.
(4) Based solely on information contained in a Schedule 13G filed with the SEC
on February 12, 1998.
(5) Based solely on information contained in a Schedule 13G filed with the SEC
on February 13, 1998.
(6) Includes 143,020 shares which may be acquired upon exercise of options
exercisable within 60 days of March 31, 1998.
(7) Represents shares which may be acquired upon exercise of options
exercisable within 60 days of March 31, 1998.
(8) Includes 12,750 shares which may be acquired upon exercise of options
exercisable within 60 days of March 31, 1998.
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20
(9) Includes 500 shares which may be acquired upon exercise of options
exercisable within 60 days of March 31, 1998.
(10) Based solely upon shares reported owned as of March 31, 1997 and the number
of options exercised during fiscal 1997.
(11) Includes 795,324 shares which may be acquired upon exercise of options
exercisable within 60 days of March 31, 1998.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities to file an initial report of ownership on Form 3 and changes
in ownership on Form 4 or 5 with the SEC and the National Association of
Securities Dealers, Inc. Executive officers, directors and greater than ten
percent stockholders are also required by SEC rules to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on its review of the
copies of such forms received by it, or written representations from certain
reporting persons, the Company believes that, with respect to fiscal year 1997,
all filing requirements applicable to its officers, directors and ten percent
stockholders were met, except for Edward Loseman who filed his Form 3 on
February 18, 1998.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
form of proxy to vote the shares they represent as the Board of Directors may
recommend.
FOR THE BOARD OF DIRECTORS
JEFFREY D. SAPER
Secretary
Dated: April 20, 1998
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PROXY
DETACH HERE
THE GYMBOREE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, MAY 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE GYMBOREE CORPORATION
The undersigned revokes all previous proxies, acknowledges receipt of the notice
of the Annual Meeting of Stockholders to be held May 20, 1998 and the proxy
statement related thereto and appoints Gary White the proxy of the undersigned,
with full power of substitution, to vote all shares of Common Stock of The
Gymboree Corporation which the undersigned is entitled to vote, either on his or
her own behalf or on behalf of an entity or entities, at the Annual Meeting of
Stockholders of the Company to be held at the South San Francisco Conference
Center, 255 South Airport Boulevard, South San Francisco, California 94080 on
Wednesday, May 20, 1998 at 9:00 a.m., and at any adjournment or postponement
thereof, with the same force and effect as the undersigned might or could do it
personally present thereat. The shares represented by this proxy shall be voted
in the manner set forth on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-----------
SEE REVERSE
SIDE
-----------
22
DETACH HERE
Please mark [X] votes as in this example.
The Board of Directors recommends a vote FOR each of the matters listed below.
This Proxy, when properly executed, will be voted as specified below. This Proxy
will be voted FOR Proposals No. 1, 2 and 3 if no specification is made.
FOR AGAINST ABSTAIN
1. Election of two Class II Directors 2. To ratify the appointment of Deloitte
NOMINEES: Gary White & Touche LLP as independent auditors [ ] [ ] [ ]
Barbara L. Rambo of the Company for the Fiscal year
ending January 30, 1999.
FOR WITHHELD
[ ] [ ] 3. To approve the proposed amendments to
the Company's 1993 Stock Option Plan [ ] [ ] [ ]
[ ]
_______________________________ 4. In their discretion with respect to such
For all nominees except as noted other business as may properly come before
above the meeting and any adjournment or
postponement thereof.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND NOTE AT
LEFT
Please sign your name exactly as it appears
hereon. If acting as attorney, executor,
trustee or in other representative capacity,
sign name and title.
Signature:_____________________ Date:_____________
Signature:_____________________ Date:_____________