[LOGO]
THE J. JILL GROUP, INC.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
AND
PROXY STATEMENT
IMPORTANT
PLEASE MARK, SIGN AND DATE YOUR PROXY
AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
[LOGO]
April 10, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
The J. Jill Group, Inc. The meeting will be held at the offices of Foley,
Hoag & Eliot LLP, One Post Office Square, 16(th) Floor, Boston, Massachusetts on
Thursday, June 1, 2000, beginning at 8:00 A.M. local time.
As a stockholder, your vote is important. We encourage you to execute and
return your proxy promptly whether you plan to attend the meeting or not so that
we may have as many shares as possible represented at the meeting. Returning
your completed proxy will not prevent you from voting in person at the meeting
prior to the proxy's exercise if you wish to do so.
Thank you for your cooperation, continued support and interest in The
J. Jill Group, Inc.
Sincerely,
[SIGNATURE]
Gordon R. Cooke
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE J. JILL GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2000
Notice is hereby given that the Annual Meeting of Stockholders of The J.
Jill Group, Inc. (the "Company") will be held at the offices of Foley, Hoag &
Eliot LLP, One Post Office Square, 16(th) Floor, Boston, Massachusetts on
Thursday, June 1, 2000, beginning at 8:00 A.M. local time for the following
purposes:
1. To consider and vote upon the election of two Class A Directors;
2. To act upon a proposal to amend the 1998 Employee Stock Purchase Plan to
increase the number of shares of Common Stock that may be issued
thereunder to 400,000; and
3. To transact such further business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 3, 2000 as
the record date for the determination of the stockholders of the Company
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof. Only stockholders of record on such date are entitled to notice of, and
to vote at, the Annual Meeting or any adjournment thereof.
By Order of the Board of Directors,
/s/ David R. Pierson
David R. Pierson
SECRETARY
Boston, Massachusetts
April 10, 2000
YOUR VOTE IS IMPORTANT
PLEASE SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
THE J. JILL GROUP, INC.
4 BATTERYMARCH PARK
QUINCY, MASSACHUSETTS 02169-7468
(617) 376-4300
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2000
This Proxy Statement and the enclosed form of proxy are being mailed to
stockholders on or about April 10, 2000 in connection with the solicitation by
the Board of Directors of The J. Jill Group, Inc. (the "Company") of proxies to
be used at the Annual Meeting of Stockholders of the Company, to be held on
Thursday, June 1, 2000, and at any and all adjournments thereof (the "Annual
Meeting"). When proxies are returned properly executed, the shares represented
will be voted in accordance with the stockholders' directions. Stockholders are
encouraged to vote on the matters to be considered. However, if no choice has
been specified by a stockholder, the shares will be voted as recommended by
management. Any stockholder may revoke his proxy at any time before it has been
exercised by providing the Company with a later dated proxy, by notifying the
Company's Secretary in writing or by orally notifying the Company in person.
The Board of Directors of the Company (the "Board") has fixed the close of
business on April 3, 2000, as the record date for the determination of the
stockholders of the Company entitled to notice of, and to vote at, the Annual
Meeting and any adjournment thereof. Only stockholders of record on such date
are entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. At the close of business on the record date, there were issued and
outstanding 10,007,247 shares of the Company's Common Stock, $.01 par value (the
"Common Stock"), entitled to cast 10,007,247 votes.
The By-Laws of the Company provide that the holders of a majority of the
shares of Common Stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at the
Annual Meeting. Shares of Common Stock represented by a properly signed and
returned proxy will be treated as present at the Annual Meeting for purposes of
determining a quorum. Abstentions and broker non-votes with respect to
particular proposals will not affect the determination of a quorum. Thus, shares
voted to abstain as to a particular matter, or as to which a nominee (such as a
broker holding shares in street name for a beneficial owner) has no voting
authority in respect of a particular matter, shall be deemed present for
purposes of determining a quorum. Any stockholder who attends the Annual Meeting
may not withhold his shares from the quorum count by declaring such shares
absent from the Annual Meeting.
The Class A Directors will be elected by a plurality of the votes properly
cast. Abstentions and broker non-votes as to this election do not count as votes
for or against such election. The affirmative vote of a majority of the shares
of Common Stock properly cast at the Annual Meeting will be necessary to approve
the proposal to amend the Company's 1998 Employee Stock Purchase Plan.
Abstentions as to this proposal will count as being present and represented at
the Annual Meeting and entitled to vote, and will be included in calculating the
number of votes cast on this proposal (and thus will have the effect of "no"
votes). Broker non-votes will not be included in calculating the number of votes
cast on this proposal.
Votes will be tabulated by the Company's transfer agent, State Street Bank
and Trust Company.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board is divided into three classes, labeled Class A, Class B and
Class C, each containing, insofar as possible, an equal number of directors.
Directors are elected to serve for three-year terms, and until their respective
successors are duly elected and qualified, with the term of one of the three
classes expiring each year at the Company's annual meeting or special meeting in
lieu thereof.
The number of directors constituting the whole Board is currently fixed at
six, and the Board currently consists of two Class A Directors, one Class B
Director and two Class C Directors.
The terms of the Company's two Class A Directors, William E. Engbers and
Samuel L. Shanaman, will expire at the Annual Meeting. The Company's current
Class B Director is Ruth M. Owades. In addition, Brett D. Heffes has been
elected a Class B Director, to fill the vacancy caused by the death of Walter J.
Levison. Mr. Heffes is scheduled to begin serving as a Class B Director on
April 17, 2000. The terms of Ms. Owades and Mr. Heffes as directors will expire
at the Company's 2001 annual meeting of stockholders or special meeting in lieu
thereof. The Company's current Class C directors are Gordon R. Cooke and Thomas
J. Litle. Their terms as directors will expire at the Company's 2002 annual
meeting of stockholders or special meeting in lieu thereof.
The Board has nominated Mr. Engbers and Mr. Shanaman for election as
Class A Directors, to serve until the Company's 2003 annual meeting of
stockholders or special meeting in lieu thereof, and until their successors are
duly elected and qualified.
The nominees have agreed to serve as Directors if elected, and the Company
has no reason to believe that they will be unable to serve. In the event that
any of them is unable or declines to serve as director at the time of the Annual
Meeting, proxies may be voted for such other nominee as is then designated by
the Board.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MR. ENGBERS AND
MR. SHANAMAN AS CLASS A DIRECTORS.
PROPOSAL TWO
AMENDMENT TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON
STOCK THAT MAY BE ISSUED THEREUNDER
The 1998 Employee Stock Purchase Plan currently provides that the total
number of shares of Common Stock that may be issued thereunder may not exceed
150,000 (subject to adjustment upon certain changes in capitalization of the
Company). The Company is proposing that the 1998 Employee Stock Purchase Plan be
amended to increase the number of shares of Common Stock that may be issued
thereunder to 400,000. Currently, after potential issuances for the 2000
offering year, only approximately 15,000 shares would remain available for
issuance under the 1998 Employee Stock Purchase Plan.
The purpose of the 1998 Stock Purchase Plan is to provide a method whereby
employees have an opportunity to acquire an ownership interest (or increase an
existing ownership interest) in the Company through the purchase of shares of
Common Stock of the Company. The Company believes that providing such employees
with a direct stake in the Company's welfare assures a closer identification of
the interests of participants in the 1998 Stock Purchase Plan with those of the
stockholders of the Company, thereby stimulating the participants' efforts on
the Company's behalf and strengthening their desire to remain with the Company.
2
The Board has authorized the amendment of the 1998 Employee Stock Purchase
Plan to increase the number of shares available for issuance thereunder to
400,000, but this amendment will be effective only if this Proposal Two is
approved by the stockholders of the Company.
The full text of the 1998 Employee Stock Purchase Plan as proposed to be
amended is printed as Appendix A, beginning on page A-1.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL TO AMEND
THE 1998 EMPLOYEE STOCK PURCHASE PLAN.
DESCRIPTION OF THE 1998 EMPLOYEE STOCK PURCHASE PLAN
In December 1997 the Company's Board of Directors adopted, and in May 1998
the Company's stockholders approved, the 1998 Employee Stock Purchase Plan. On
March 27, 2000, the Board of Directors of the Company adopted an amendment to
the 1998 Employee Stock Purchase Plan to increase the number of shares of Common
Stock that may be issued thereunder to 400,000 (subject to adjustment in the
event of certain changes in the Company's capital structure), effective only if
the amendment is approved by the stockholders of the Company.
The 1998 Stock Purchase Plan is administered by the Compensation Committee
of the Board of Directors. The right to purchase stock under the 1998 Stock
Purchase Plan is made available by a series of one-year offerings (the
"Offering" or "Offerings") to eligible employees. The applicable date of
commencement ("Offering Commencement Date") and date of termination ("Offering
Termination Date") of each Offering under the 1998 Stock Purchase Plan is the
first and the last business day of each calendar year, respectively, unless the
Compensation Committee, in its discretion, determines otherwise.
All employees of the Company are eligible to participate in the 1998 Stock
Purchase Plan on the first Offering Commencement Date following the commencement
of employment if (a) the employee is customarily employed at least twenty hours
per week and more than five months in a calendar year by the Company or any
parent or subsidiary of the Company, (b) immediately after the grant of an
option to participate such employee would not own stock, and/or hold outstanding
options to purchase stock, possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or any parent or
subsidiary of the Company (as determined in accordance with Section 424(d) of
the Internal Revenue Code of 1986, as amended (the "Code"), and (c) the grant of
an option to participate in the 1998 Stock Purchase Plan would not cause his
rights to purchase stock under all employee stock purchase plans of the Company
and any parent or subsidiary of the Company to exceed $25,000 of the fair market
value of the stock (determined at the time such option is granted) for each
calendar year in which the option is outstanding (determined in accordance with
Section 423(b)(8) of the Code). Participation in the 1998 Stock Purchase Plan is
voluntary and participation in any one or more of the Offerings under the 1998
Stock Purchase Plan will neither limit nor require participation in any other
Offering.
At the time a participant files his authorization for a payroll deduction,
he may elect to have deductions made from his pay on each payday during the time
he is a participant in an Offering at any integral rate up to 10% of his base
pay on the Offering Commencement Date. Payroll deductions for a participant will
commence on the applicable Offering Commencement date and end on the applicable
Offering Termination Date unless terminated sooner by the participant in
accordance with the terms of the 1998 Stock Purchase Plan. All payroll
deductions made for a participant will be credited to his account under the 1998
Stock Purchase Plan. No separate cash payments may be made into such account by
the employee. No interest will be paid or allowed on any money paid into the
1998 Stock Purchase Plan or credited to the account of any participant. An
employee may terminate his participation in the 1998 Stock Purchase Plan at any
time by giving notice to the Company's Treasurer. During the Offering, the
participant may not change the percentage of compensation which is to be
deducted.
3
On the applicable Offering Commencement Date, a participating employee will
be deemed to have been granted an option to purchase a maximum number of shares
of the Company's Common Stock equal to an amount determined as follows: 85% of
the per share market value of the Company's Common Stock on such Offering
Commencement Date shall be divided into an amount equal to the percentage of the
employee's compensation which he has elected to have withheld (but no more than
10%) multiplied by the employee's compensation over the Offering period. The per
share market value of the Common Stock purchased under the 1998 Stock Purchase
Plan will be, with respect to each Offering thereunder, the lower of (a) 85% of
the closing price per share (determined in accordance with the terms of the 1998
Stock Purchase Plan) on the Offering Commencement Date and (b) 85% of the
closing price per share (determined in accordance with the terms of the 1998
Stock Option Plan) on the Offering Termination Date.
Unless a participant first gives written notice of his withdrawal from
participation in the applicable Offering, his option for the purchase of Common
Stock with payroll deductions made during any Offering will be deemed to have
been exercised automatically on the applicable Offering Termination Date. The
number of full shares of Common Stock so purchased will be equal to the
accumulated payroll deductions in the participant's account at that time divided
by the applicable option price (but not in excess of the number of shares for
which options have been granted to the participant), and any excess in his
account at that time (other than amounts relating to fractional shares, as
discussed in the following sentence) will be automatically returned to the
participant. Fractional shares will not be issued under the 1998 Stock Purchase
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be automatically carried forward to the next
Offering unless the participant chooses to have the excess funds returned to him
by giving written notice to the Company's Treasurer to that effect.
An employee's participation under the 1998 Stock Purchase Plan terminates
upon voluntary withdrawal from the 1998 Stock Purchase Plan at any time prior to
the Offering Termination Date for an Offering, or when such employee ceases
employment because of retirement, resignation, lay-off or discharge, except that
if an employee's employment terminates due to death, his beneficiary will have
the right to withdraw all of the payroll deductions or to exercise the option.
The Offering for 2000 under the 1998 Stock Purchase Plan commenced on
January 3, 2000, and 123 employees of the Company (representing approximately
18% of those eligible to participate) have elected to participate in the current
Offering. As of January 3, 2000, 40,716 shares had been issued and sold pursuant
to the 1998 Stock Purchase Plan, and 109,284 shares of Common Stock remained
available for future issuance under the 1998 Stock Purchase Plan, including up
to 94,714 shares to be issued in connection with the Offering for 2000.
The Company intends to file, as soon as practicable, a registration
statement covering the additional shares of Common Stock that will be issuable
under the 1998 Stock Purchase Plan if Proposal Two is approved by the
stockholders of the Company. Except in the case of shares issued to affiliates
of the Company, as defined in the Securities Act of 1933, as amended, the shares
of Common Stock issued under the 1998 Stock Purchase Plan will be freely
eligible for resale in the public market if they are issued while a registration
statement is effective.
NEW PLAN BENEFITS
The Company is unable to determine the dollar value and number of options or
other benefits or amounts that will be received by or allocated to (i) any of
the Company's executive officers, (ii) the Company's current executive officers,
as a group, (iii) the Company's current directors who are not executive
officers, as a group, or (iv) the Company's employees who are not executive
officers, as a group, as a result of the proposed amendment to the 1998 Stock
Purchase Plan. Had the 1998 Stock Purchase Plan been amended during fiscal 1999,
the dollar value or number of options or other benefits or amounts received by
or allocated to such persons during the fiscal year would not have been
affected.
4
AMENDMENT OF 1998 STOCK PURCHASE PLAN
The Company's Board of Directors may, in its discretion, at any time,
terminate or amend the 1998 Stock Purchase Plan, except that no such termination
may affect options previously granted, nor may any amendment make a change in
any option previously granted which would adversely affect the rights of an
option holder under such Plan.
FEDERAL INCOME TAX INFORMATION WITH RESPECT TO THE 1998 STOCK PURCHASE PLAN.
If an employee acquires shares of Common Stock pursuant to the 1998 Stock
Purchase Plan and does not dispose of them within two years after the
commencement of the Offering period pursuant to which the shares were acquired,
nor within one year after the date on which the shares were acquired, any gain
realized upon subsequent disposition will be treated for federal income tax
purposes as long-term capital gain, except that the portion of such gain equal
to the lesser of (a) the excess of the fair market value of the shares on the
date of disposition over the amount paid to the Company upon purchase of the
shares, or (b) the excess of the fair market value of the shares on the Offering
Commencement Date over the amount paid upon purchase of the shares, is taxable
as ordinary income. There is no corresponding deduction for the Company,
however. If the employee disposes of the shares at a price less than the price
at which he acquired the shares, the employee realizes no ordinary income and
has a capital loss measured by the difference between the purchase price and the
selling price.
If the employee disposes of shares acquired pursuant to the 1998 Stock
Purchase Plan within two years after the Offering Commencement Date of the
Offering pursuant to which the shares were acquired, or within one year after
the date on which the shares were acquired, the difference between the purchase
price and the fair market value of the shares at the time of purchase will be
taxable to him as ordinary income in the year of disposition. In this event, the
Company may deduct from its gross income an amount equal to the amount treated
as ordinary income to such employee. Any excess of the selling price over the
fair market value at the time the employee purchased the shares will be taxable
as long-term capital gain if the shares were held for more than 12 months, or
short-term capital gain if the shares were held for 12 months or less. If any
shares are disposed of within either the two-year or one-year period at a price
less than the fair market value at the time of purchase, the same amount of
ordinary income (i.e., the difference between the purchase price and the fair
market value of the shares at the time of purchase) is realized, and a capital
loss is recognized equal to the difference between the fair market value of the
shares at the time of purchase and the selling price.
If a participating employee should die while owning shares acquired under
the 1998 Stock Purchase Plan, ordinary income may be reportable on his final
income tax return.
The 1998 Stock Purchase Plan is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, nor is the plan qualified under
Section 401(a) of the Code.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of the directors or executive officers of the Company has any interest
in the adoption of Proposal Two except that in the future, the Company's
directors (other than directors who are not employees of the Company) and
executive officers might choose to acquire some portion of the shares proposed
to be made available for purchase by employees of the Company through
participation in the 1998 Stock Purchase Plan.
5
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning each director
and nominee for election as a director and each executive officer of the
Company:
NAME AGE POSITION
- ---- -------- --------
Gordon R. Cooke........................... 54 President, Chief Executive Officer and Chairman of
the Board of Directors; Director
Dennis J. Adomaitis....................... 49 President--J. JILL Retail
Olga L. Conley............................ 42 Chief Financial Officer, Senior Vice
President--Finance and Treasurer
John J. Hayes............................. 44 Executive Vice President of Marketing
Patricia C. Lee........................... 36 President--J. JILL Merchandising
Peter J. Tulp............................. 46 Vice President/Controller
William E. Engbers*(1)(2)................. 57 Director
Brett D. Heffes(3)........................ 32 Director
Thomas J. Litle(2)........................ 59 Director
Ruth M. Owades(1)......................... 51 Director
Samuel L. Shanaman*(1).................... 58 Director
- ------------------------
* Nominee for re-election as a Director.
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Scheduled to begin service on the Board of Directors and the Audit Committee
on April 17, 2000.
GORDON R. COOKE has been President and Chief Executive Officer of the
Company and a director since joining the Company in December 1995 and Chairman
of the Board of Directors since August 1997. Mr. Cooke served as President of
Time-Warner Interactive Merchandising, a division of Time Warner Inc., a media
conglomerate, from November 1993 until December 1995. Mr. Cooke is a director of
Geerlings & Wade, Inc. Mr. Cooke is also a member of the executive committee of
the board of directors of the Direct Marketing Association.
DENNIS J. ADOMAITIS has been President--J. JILL Retail since joining the
Company in March 1999. From 1990 until joining the Company, Mr. Adomaitis served
in a variety of positions at Time Warner Inc., including Executive Vice
President from January 1997 until March 1999 and Senior Vice President from
January 1996 until January 1997 of the Warner Bros. Studio Stores International
Division and Senior Vice President--Operations of the Warner Bros. Studio Stores
Division from January 1992 until January 1996.
OLGA L. CONLEY has been Chief Financial Officer since August 1997, Senior
Vice President--Finance since May 1998 and Treasurer since August 1993. She also
served as Vice President of Finance from June 1996 until May 1998.
JOHN J. HAYES has served as Executive Vice President of Marketing since
joining the Company in May 1996. From September 1990 until May 1996, Mr. Hayes
served as Vice President, Marketing and Catalog Production, of Bloomingdale's By
Mail, a division of Federated Department Stores, Inc.
PATRICIA C. LEE has been President--J. JILL Merchandising since March 1999.
She also served as Executive Vice President--J. JILL from May 1998 until
March 1999, as Vice President--J. JILL from
6
December 1996 until May 1998 and as Director of Merchandising from
November 1994 until December 1996.
PETER J. TULP joined the Company in August 1997 as Corporate Controller and
has been Vice President/ Controller since May 1998. From July 1994 until
August 1997 Mr. Tulp was Group Controller of Mercer Management
Consulting, Inc., an international general management consulting firm. From
August 1993 until June 1994 he was Assistant Corporate Controller of Bolt
Beranek and Newman, Inc., an international computer software and communications
company.
WILLIAM E. ENGBERS has been a director of the Company since July 1990. He is
a venture capital consultant and was Director, Venture Capital of Allstate
Insurance Company from June 1989 until January 1999. Mr. Engbers is a director
of La Jolla Pharmaceutical Company. He has been chairman, president or a
director of over two dozen corporations.
BRETT D. HEFFES is scheduled to become a director of the Company in
April 2000. Since January 1998 Mr. Heffes has been with Department 56, Inc., a
designer and marketer of giftware and collectibles, where he is currently Vice
President--Corporate Development and Treasurer. From May 1992 to December 1997,
Mr. Heffes held a number of positions, most recently Principal, with Wessels,
Arnold & Henderson, L.L.C., an investment banking firm.
THOMAS J. LITLE has been a director of the Company since May 1997. Since
1995 Mr. Litle has been the Chairman of OrderTrust (formerly known as LitleNet
LLC), a company which he founded and which provides direct commerce connection
and information sharing services to the direct marketing industry. From 1985 to
1995, he was Chairman and Chief Executive Officer of Litle & Company, which
provided information sharing, payment processing and electronic network services
for the direct marketing industry. Mr. Litle is a director of SkyMall, Inc.
Mr. Little is also a member of the executive committee of the board of directors
of the Direct Marketing Association.
RUTH M. OWADES has been a director of the Company since May 1997. Since
1988, Ms. Owades has been President and Chief Executive Officer of Calyx &
Corolla, Inc., a catalog business which she founded and which offers consumers
fresh-cut flowers and plants. Ms. Owades is a director of Providian Financial
Corporation, a consumer lender, and Gerald Stevens, Inc., an integrated floral
retailer.
SAMUEL L. SHANAMAN has been a director of the Company since July 1990. Since
mid-1998, Mr. Shanaman has been Managing Director of Logan Enterprises, a
private investment venture. From June 1990 until March 1998 he held a number of
positions with the Company, including President and Chief Executive Officer,
Chief Financial Officer, Treasurer, Chief Operating Officer, Executive Vice
President and Vice President--Finance.
The Company's executive officers are elected by the directors and hold
office until the first directors' meeting after the next annual meeting of
stockholders or special meeting in lieu thereof, and thereafter until their
successors are chosen and qualified, unless a shorter term is specified in the
vote appointing them, or until they sooner die, resign, are removed or become
disqualified.
COMMITTEES AND MEETINGS OF THE BOARD
During the fiscal year ended December 25, 1999 ("fiscal 1999"), the Board
met seven times and acted by unanimous written consent four times. No incumbent
director attended fewer than 75% of the aggregate of the total number of
meetings held by the Board and Committees of the Board on which he or she
served.
The Board currently has two committees. The Audit Committee (currently
composed of Mr. Engbers and Mr. Litle; Mr. Heffes is scheduled to join the
Committee on April 17, 2000) reviews the internal accounting procedures of the
Company and consults with and reviews the services provided by the Company's
independent auditors. The Audit Committee met once during fiscal 1999. The
Compensation
7
Committee (currently composed of Mr. Engbers, Ms. Owades and Mr. Shanaman) makes
general policy decisions relating to compensation and benefits for the Company's
employees, including decisions with respect to compensation for the Company's
executive officers, and administers the Company's stock option and employee
stock purchase plans. The Compensation Committee met four times during fiscal
1999 and acted three times by unanimous written consent.
REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS
DIRECTORS' COMPENSATION
Each member of the Board of Directors who is not an employee of the Company
or any parent or subsidiary of the Company (an "Outside Director") receives a
$15,000 annual retainer and a fee of $1,000 for each meeting of the Board of
Directors attended. Directors who are employees of the Company are not paid any
separate fees for serving as directors.
Under the Company's Amended and Restated 1993 Incentive and Nonqualified
Stock Option Plan (the "1993 Stock Option Plan"), each Outside Director is
automatically granted an option to purchase 20,000 shares of Common Stock upon
first joining the Board of Directors. Such option is immediately vested in full
unless otherwise determined by the Compensation Committee of the Board of
Directors prior to grant. In addition, in connection with each annual meeting of
stockholders each Outside Director who has served for at least six months before
the meeting and continues to serve at the meeting is automatically granted an
option to purchase 7,500 shares of Common Stock. Such option is immediately
vested in full. All options automatically granted to Outside Directors under the
1993 Stock Option Plan have exercise prices equal to the closing price of the
Common Stock on the date of grant as reported by the Nasdaq National Market and
expire on the seventh anniversary of the date of grant.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation for services rendered in all capacities to the Company for fiscal
1999, the fiscal year ended December 26, 1998 ("fiscal 1998") and the fiscal
year ended December 27, 1997 ("fiscal 1997") of the Chief Executive Officer of
the Company and the four other most highly paid executive officers of the
Company.
8
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(4)
------------------------------------ ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY(1) BONUS(2) COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION PERIOD ($) ($) (3)($) (#) (5)($)
- ----------------------------- ----------- --------- --------- ------------ ------------ ------------
Gordon R. Cooke.............. Fiscal 1999 $528,846 $ 280,000 $ * 50,000 $273,785
President, Chief Executive Fiscal 1998 439,903 437,500 * 150,000 123,660
Officer and Chairman of the Fiscal 1997 338,952 397,506 80,800 150,000 1,900
Board of Directors
Dennis J. Adomaitis.......... Fiscal 1999 225,000 300,000 * 150,000 20,000
President--J. JILL Retail Fiscal 1998 -- -- -- -- --
Fiscal 1997 -- -- -- -- --
Patricia C. Lee.............. Fiscal 1999 267,500 120,000 * 25,000 18,410
President--J. JILL Fiscal 1998 189,332 118,500 * 100,000 3,000
Merchandising Fiscal 1997 119,239 58,001 * 60,000 1,900
John J. Hayes................ Fiscal 1999 255,000 82,500 * 25,000 22,683
Executive Vice President of Fiscal 1998 218,176 110,500 * 50,000 3,000
Marketing Fiscal 1997 187,017 74,998 * 52,500 1,900
Olga L. Conley............... Fiscal 1999 192,500 63,000 * 10,000 22,072
Chief Financial Officer, Fiscal 1998 158,173 87,500 * 50,000 3,000
Senior Vice President-- Fiscal 1997 118,080 48,001 * 37,500 1,900
Finance and Treasurer
- ------------------------
(1) Amounts reported for each period include amounts deferred by the named
individuals pursuant to the Company's 401(k) Plan and Trust. Amounts shown
do not include amounts expended by the Company pursuant to plans (including
group disability, life and health) that do not discriminate in scope, terms
or operation in favor of officers and directors and are generally available
to all salaried employees.
(2) Amounts reported for each period include amounts earned with respect to that
period but paid in the subsequent period.
(3) In accordance with the rules of the Securities and Exchange Commission,
perquisites and other benefits, securities and property that, in the
aggregate, do not equal or exceed the lesser of either $50,000 or
10 percent of the total annual salary and bonus reported for the named
executive officer for the period in question do not need to be reported, and
in such cases an asterisk appears in the table. Amounts reported for
Mr. Cooke for fiscal 1997 include $80,700 for living expenses.
(4) The Company did not grant any restricted stock awards or stock appreciation
rights or make any long-term incentive plan payouts to any of the executive
officers during any of the reported periods.
(5) The amounts reported include the following Company matching contributions
pursuant to the Company's 401(k) Plan and Trust for fiscal 1999, fiscal 1998
and fiscal 1997, respectively, for the benefit of the named individuals:
Mr. Cooke, $0, $3,000 and $1,900; Mr. Adomaitis, $0, $0 and $0; Ms. Lee $0,
$3,000 and $1,900; Mr. Hayes, $0, $3,000 and $1,900; and Ms. Conley, $0,
$3,000 and $1,900. The amounts reported for fiscal 1999 include (i) the
following amounts paid by the Company with respect to the term life portion
of a "split-dollar" life insurance policy naming the named individual as
beneficiary, and (ii) the following amounts paid by the Company representing
the remainder of the policy premium for such insurance with respect to each
named individual:
9
Mr. Cooke, (i) $3,092 and (ii) $241,144; Mr. Adomaitis, (i) $233 and
(ii) $19,767; Ms. Lee, (i) $176 and (ii) $18,234; Mr. Hayes, (i) $216 and
(ii) $22,467; and Ms. Conley, (i) $172 and (ii) $21,900. The amount reported
for Mr. Cooke for fiscal 1999 also includes $23,430 paid for a term life
insurance policy for the benefit of Mr. Cooke and $6,119 with respect to
interest on a loan to Mr. Cooke from a bank. The amount reported for
Mr. Cooke for fiscal 1998 includes $8,050 paid by the Company with respect
to the term life portion of a "split-dollar" life insurance policy naming
Mr. Cooke as beneficiary and $112,610 paid by the Company representing the
remainder of the policy premium.
OPTION GRANTS
The following table sets forth certain information regarding stock options
granted during fiscal 1999 by the Company to the individuals named in the
Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SHARES TOTAL OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO PRICE PER OPTION TERM (2)
OPTIONS EMPLOYEES IN SHARE EXPIRATION --------------------
NAME GRANTED(#)(1) FISCAL 1999 ($/SH) DATE 5%($) 10%($)
- ---- ------------- ------------- --------- ---------- -------- ---------
Gordon R. Cooke.............. 35,000(3) 9.46% 14.3125 03/03/06 203,932 475,248
15,000(3) 4.05 14.3125 03/03/06 87,399 203,678
Dennis J. Adomaitis.......... 132,145(4) 35.71 14.0000 03/24/06 753,148 1,755,155
17,855(4) 4.83 14.0000 03/24/06 101,763 237,151
Patricia C. Lee.............. 25,000(5) 6.76 14.0000 03/24/06 142,485 332,051
John J. Hayes................ 25,000(5) 6.76 14.0000 03/24/06 142,485 332,051
Olga L. Conley............... 10,000(6) 2.70 14.7500 06/25/06 60,047 139,936
- ------------------------
(1) All of these options were granted under the 1993 Stock Option Plan. These
options are exercisable during the holder's lifetime only by the holder, and
by the holder only while the holder is an employee of the Company, and for
certain limited periods of time thereafter in the event of retirement, death
or termination of employment other than for cause. In addition, in the event
of death of the option holder while an employee of the Company and before
expiration of the option, these options vest in full. These options also are
subject to accelerated vesting in the event that a "Qualified Sale" occurs
and immediately prior to the closing of such Qualified Sale the holder is an
employee of the Company. Immediately prior to such closing each such option
shall become exercisable as to the number of shares subject to the option,
up to 100%, equal to two times the number of shares as to which the option
otherwise would have been exercisable immediately prior to such closing.
"Qualified Sale" means the sale of all or substantially all of the assets or
issued and outstanding capital stock of the Company or a merger or
consolidation involving the Company in which stockholders of the Company
immediately before such merger or consolidation do not own immediately after
such merger of consolidation capital stock or other equity interests of the
surviving corporation or entity representing more than 50% in voting power
of the capital stock or other equity interests of such surviving corporation
or entity outstanding immediately after such merger or consolidation.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based upon assumed rates of share price appreciation set by the
Securities and Exchange Commission of five percent and ten percent
compounded annually from the date the respective options were granted to
their expiration date. The gains shown are net of
10
the option exercise price, but do not include deductions for taxes or other
expenses associated with the exercise. Actual gains, if any, are dependent
on the performance of the Common Stock and the date on which the option is
exercised. There can be no assurance that the amounts reflected will be
achieved.
(3) This option vests as to 25% of the shares which may be purchased thereunder
on March 3, 2000 and as to an additional one forty-eighth (1/48) of the
shares on the 3rd day of each month thereafter through March 2003.
(4) This option vests as to 20% of the shares which may be purchased thereunder
on March 24, 2000 and as to an additional one thirty-sixth (1/36) of the
remaining unvested shares on the 24th day of each month thereafter through
March 2003.
(5) This option vests as to 20% of the shares which may be purchased thereunder
on March 24, 2000 and as to an additional one sixtieth (1/60) of the shares
on the 24th day of each month thereafter through March 2004.
(6) This option vests as to 20% of the shares which may be purchased thereunder
on June 25, 2000 and as to an additional one sixtieth (1/60) of the shares
on the 25th day of each month thereafter through June 2004.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning the number and
value of stock options exercised by each of the individuals named in the Summary
Compensation Table during fiscal 1999 and of unexercised stock options held by
each of such individuals on December 25, 1999:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS HELD AT HELD AT
SHARES DECEMBER 25, 1999(#) DECEMBER 25, 1999($)(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------------- ----------- ------------- ----------- -------------
Gordon R. Cooke....... 92,447 $1,441,375 295,803 168,750 $553,230 $69,400
Dennis J. Adomaitis... 0 0 0 150,000 0 0
Patricia C. Lee....... 30,625 427,659 42,737 137,838 4,403 28,681
John J. Hayes......... 30,000 156,871 67,281 115,219 32,615 38,428
Olga L. Conley........ 18,932 321,997 52,998 82,570 30,370 28,933
- ------------------------
(1) Value is based on the last sales price of the Common Stock on the exercise
date, as reported by The Nasdaq Stock Market, less the applicable option
exercise price.
(2) Value is based on the last sales price of the Common Stock before the end of
fiscal 1999 ($4.1250 per share on December 23, 1999), as reported by The
Nasdaq Stock Market, less the applicable option exercise price.
CERTAIN EMPLOYMENT AND SEVERANCE ARRANGEMENTS
Gordon R. Cooke and Dennis J. Adomaitis have employment agreements with the
Company which, among other things, provide that if their employment is
terminated by the Company other than for just cause (as defined in the
agreements), the Company will make severance payments to them in an aggregate
amount equal to their annual base salary at the time of termination, payable at
the same time and in the same amounts as such base salary otherwise would have
been paid.
11
In addition, each of the persons named in the Summary Compensation Table is
a party to a severance agreement with the Company which provides for the
following payments to the executive if the executive's employment is terminated
within two years following a change in control (as defined in the agreements) by
the Company without cause (as defined in the agreements) or by the executive
with good reason (as defined in the agreements): (i) a lump sum equal to 2 times
the sum of (A) the executive's annual base salary at the time of termination
plus (B) the average annual incentive compensation plan bonus payment to the
executive over the last two years, such lump sum to supersede any other
post-termination compensation and benefits payable to the executive under any
other agreements with the executive; (ii) a pro-rated incentive compensation
bonus for the year of termination; and (iii) continuation of standard group
life, disability, accident and health insurance for a period of two years
post-termination. In addition, the executive's employment shall be deemed to
have been terminated following a change in control by the Company without cause
or by the executive with good reason if the executive's employment is terminated
prior to a change in control without cause at the direction of a person who has
entered into an agreement with the Company the consummation of which will
constitute a change in control or if the executive terminates his employment
with good reason prior to a change in control (determined by treating a
potential change in control (as defined in the agreements) as a change in
control in applying the definition of good reason), if the circumstance or event
which constitutes good reason occurs at the direction of such person.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is composed of
independent, non-employee directors. The Committee currently consists of
Mr. Engbers, Ms. Owades and Mr. Shanaman. Mr. Shanaman joined the Compensation
Committee in March 2000. During fiscal 1999 the Compensation Committee consisted
of Mr. Engbers, Ms. Owades and the late Walter J. Levison.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICY
During fiscal 1999 the Company's compensation package for its executive
officers had three principal components: (1) base salary, (2) bonus, and
(3) stock options. The Company's executive officers were also eligible to
participate in other employee benefit plans on substantially the same terms as
other senior management employees and other employees who met applicable
eligibility criteria, subject to any legal limitations on the amounts that may
be contributed or the benefits that may be payable under these Company plans.
Base salary levels for the Company's executive officers are intended to be
fair and competitive in the Company's industry. Base salaries for executive
officers are reviewed annually, and any adjustments are based on such factors as
individual performance, change in responsibilities and market-based comparisons
with other comparable companies.
Under the Company's incentive compensation plan for fiscal 1999, the
Company's executive officers were eligible to receive bonuses based on a
percentage of base salary conditioned on the Company's ability to achieve its
operating plan. Assigned bonus percentages varied depending on the Compensation
Committee's view of the importance of the executive officer's contribution to
the Company's ability to achieve its operating plan. The Company did not achieve
its operating plan for fiscal 1999. In addition, new executive officers
sometimes receive hiring bonuses or guaranteed bonuses in connection with their
initial hiring. One executive officer received such a guaranteed bonus for
fiscal 1999. The Compensation Committee was also authorized under the fiscal
1999 incentive compensation plan to award additional bonuses in its discretion
based upon such factors as it determined to be appropriate. In light of the need
of the Company to retain its key executives and managers, the desirability in
that connection of offering its executives and managers compensation packages
competitive with those offered by other companies in the
12
Company's industry, the fact that the market price of the Company's Common Stock
had declined to a level well below the exercise price of most options held by
executive officers and the fact that no bonuses would be paid for fiscal 1999
under the operating results provisions of the fiscal 1999 incentive compensation
plan, the Compensation Committee decided to pay various employees of the
Company, including most executive officers, special bonuses for fiscal 1999,
payable on December 29, 2000, aggregating approximately $1.2 million.
Stock option awards are intended to provide the Company's executive officers
with longer term incentives that align their interests with those of the
Company's stockholders more generally. The Compensation Committee granted
additional stock options to all of the Company's current executive officers
during fiscal 1999.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Cooke's base salary during fiscal 1999 was at the rate of $500,000 per
annum until July 3, 1999, and $560,000 per annum thereafter. Mr. Cooke received
a special bonus for fiscal 1999 of $280,000. During fiscal 1999 Mr. Cooke was
granted options to purchase 50,000 shares of Common Stock at $14.3125 per share.
The Company paid $244,236 in premiums with respect to "split-dollar" life
insurance and $23,430 in premiums with respect to term life insurance for the
benefit of Mr. Cooke and also paid $6,119 on behalf of Mr. Cooke with respect to
interest on a loan to Mr. Cooke from a bank. In connection with the split-
dollar insurance, Mr. Cooke has collaterally assigned the policy to the Company
and, with certain exceptions, the Company will be entitled to receive from the
insurer upon termination of Mr. Cooke's employment or his death the aggregate
amount of premiums paid by the Company (or, in the case of termination of
employment, the cash surrender value of the policy if less).
In setting Mr. Cooke's compensation for fiscal 1999, the Compensation
Committee considered the compensation payable to the chief executive officers at
other public companies in the Company's industry, the total compensation being
paid or offered to individuals involved in Internet-based marketers and the
Company's historical performance under Mr. Cooke's leadership.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
William E. Engbers (Chairman)
Ruth M. Owades
Samuel L. Shanaman
13
PERFORMANCE GRAPH
The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of two broad market indexes, the Nasdaq
Stock Market Index for U.S. Companies and the Russell 2000 Index, and a peer
group of companies selected on a line-of-business basis. The peer group consists
of Blair Corporation, Coldwater Creek Inc., dELiA's Inc., Geerlings &
Wade, Inc., Hanover Direct, Inc., Lands' End, Inc., Lillian Vernon Corp.,
Spiegel, Inc., and Williams-Sonoma Incorporated. The return for each issuer in
the peer group is weighted according to the issuer's stock market
capitalization.
The cumulative stockholder return for shares of the Company's Common Stock,
the market indexes and the peer group are calculated assuming $100 was invested
on December 31, 1994. The Company paid no cash dividends during the periods
shown. The performance of the market indexes and the peer group is shown on a
total return (dividends reinvested) basis.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG THE J. JILL GROUP, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX,
THE RUSSELL 2000 INDEX AND A PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
THE J.JILL GROUP, INC. PEER GROUP NASDAQ STOCK MARKET (US) RUSSELL 2000
12/31/94 100.00 100.00 100.00 100.00
12/31/95 43.42 72.14 141.33 127.49
12/31/96 78.95 103.02 173.89 154.73
12/31/97 328.95 134.25 213.07 203.91
12/31/98 600.00 155.06 300.25 190.75
12/31/99 130.26 171.42 542.43 187.92
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on April 3, 2000, there were issued and outstanding
10,007,247 shares of Common Stock entitled to cast 10,007,247 votes. On
April 3, 2000, the closing price of the Company's Common Stock as reported by
The Nasdaq Stock Market was $3.9375 per share.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of April 3, 2000 by (i) each person
known by the Company to own beneficially more than five percent of the Common
Stock as of such date, (ii) each current director and nominee for director of
the Company, (iii) each of the persons named in the Summary Compensation Table
and (iv) all current executive officers and directors of the Company as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Shares of Common Stock issuable by the
Company pursuant to options which may be exercised within 60 days after
April 3, 2000 are deemed to be beneficially owned and outstanding for purposes
of calculating the number of shares and the percentage beneficially owned by the
applicable person. However, these shares are not deemed to be beneficially owned
and outstanding for purposes of computing the percentage beneficially owned by
any other person or entity.
SHARES BENEFICIALLY
OWNED(1)
--------------------
NAME NUMBER PERCENT
- ---- --------- --------
Putnam Investments, Inc. and affiliates (2)................. 1,289,200 12.9%
One Post Office Square
Boston, MA 02109
Special Situations Fund III, L.P. and affiliates (3)........ 906,200 9.1%
153 East 53(rd) Street
51(st) Floor
New York, NY 10022
Dimensional Fund Advisors Inc (4)........................... 688,550 6.9%
1299 Ocean Avenue
Santa Monica, CA 90401
Dennis J. Adomaitis (5)..................................... 36,666 *
Olga L. Conley (6).......................................... 83,099 *
Gordon R. Cooke (7)......................................... 404,342 3.9%
William E. Engbers (8)...................................... 22,650 *
John J. Hayes (9)........................................... 174,347 1.7%
Brett D. Heffes(10)......................................... 0 *
Patricia C. Lee (11)........................................ 98,116 *
Thomas J. Litle (12)........................................ 51,250 *
Ruth M. Owades (13)......................................... 51,500 *
Samuel L. Shanaman (14)..................................... 151,406 1.5%
All current directors and executive officers as group (10 1,105,158 10.3%
persons) (15).............................................
- ------------------------
* Less than one percent.
(1) The persons named in this table have sole voting and investment power with
respect to the shares listed, except as otherwise indicated. The inclusion
herein of shares listed as beneficially owned does not constitute an
admission of beneficial ownership.
(2) The Company has received a copy of a report (the "Putnam Report") on
Schedule 13G, with a signature dated February 7, 2000, filed by Putnam
Investments, Inc. ("PI") on behalf of itself as well
15
as its affiliates, Marsh & McLennan Companies, Inc. ("MMC"), Putnam
Investment Management, Inc. ("PIM") and the Putnam Advisory Company, Inc.
("PAC"). The report states that PI is a wholly owned subsidiary of MMC and
owns PIM and PAC, which are registered investment advisers, that the
securities reported as beneficially owned by MMC and PI consist of
securities beneficially owned by by PIM and PAC, that such securities
include securities beneficially owned by clients of PIM and PAC, and that
such clients may include investment companies registered under the
Investment Company Act and/or employee benefit plans, pension funds,
endowment funds or other institutional clients. The report states that MMC
and PI disclaim beneficial ownership and power to vote, dispose of, or
direct the voting or disposal of any of the securities covered by the Putnam
Report. The report also states that of the securities covered by the Putnam
Report, PI has shared voting power as to 401,700 of the such securities and
shared dispositive power as to all of such securities, that PIM has shared
dispositive power as to 118,200 of such securities and that PAC has shared
voting power as to 401,700 of the such securities and shared dispositive
power as to 1,171,000 of such securities.
(3) The Company has received a copy of a report (the "SSF Report") on
Schedule 13G, with signatures dated March 1, 2000, filed by Special
Situations Fund III, L.P. ("SSF"), MGP Advisers Limited Partnership ("MGP"),
Special Situations Cayman Fund, L.P. ("Cayman"), AWM Investment
Company, Inc. ("AWM"), Austin W. Marxe ("Marxe") and David M. Greenhouse
("Greenhouse"). The report states that SSF and Cayman are limited
partnerships that invest in, sell, convey, transfer, exchange and otherwise
trade in equity and equity related securities, that MGP is the general
partner and investment adviser of SSF, that AWM is the general partner of
MGP and the general partner and investment adviser of Cayman, and that Marxe
and Greenhouse are officers, directors and members or principal shareholders
of AWM and MGP. The SSF Report also states that SSF, MGP, Cayman and AWM
have sole power to vote or direct the vote and to dispose or direct the
disposition of all securities reported in the SSF Report which are
respectively beneficially owned by each fund and its adviser (673,400 shares
of Common Stock are shown as being beneficially owned by SSF and MGP,
232,800 shares of Common Stock are shown as being beneficially owned by
Cayman and AWM). The SSF Report further states that Marxe and Greenhouse
have power to vote or direct the vote and to dispose or direct the
disposition of securities reported in the SSF Report which are beneficially
owned by Marxe and Greenhouse by virtue of their being Executive Officers of
MGP and AWM.
(4) The Company has received a copy of a report (the "Dimensional Report") on
Schedule 13G, with a signature dated February 4, 2000, filed by Dimensional
Fund Advisors Inc. ("Dimensional"). The report states that Dimensional, an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940, furnishes investment advice to four investment companies
registered under the Investment Advisors Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts ("Funds"). Dimensional reports that it possesses voting and/or
investment power over the securities described in the Dimensional Report
that are owned by the Funds and that all of the securities described in the
Dimensional Report are owned by the Funds. In the Dimensional Report,
Dimensional disclaims beneficial ownership of all of the securities
described in the Dimensional Report.
(5) Represents shares issuable upon the exercise of an outstanding stock option
currently exercisable or exercisable within sixty days following April 3,
2000.
(6) Includes 65,300 shares issuable upon the exercise of an outstanding stock
option currently exercisable or exercisable within sixty days following
April 3, 2000.
(7) Includes 20,600 shares held by Mr. Cooke's daughters. Also includes 344,761
shares issuable upon the exercise of an outstanding stock option currently
exercisable or exercisable within sixty days following April 3, 2000.
16
(8) Includes 150 shares held by Mr. Engbers' wife. Mr. Engbers disclaims
beneficial ownership of the shares held by his wife. Also includes 15,000
shares issuable upon the exercise of an outstanding stock option currently
exercisable or exercisable within sixty days following April 3, 2000.
(9) Includes 90,666 shares issuable upon the exercise of an outstanding stock
option currently exercisable or exercisable within sixty days following
April 3, 2000.
(10) Mr. Heffes is scheduled to join the Board of Directors on April 17, 2000.
Upon joining the Board he will receive a nonqualified stock option to
purchase 20,000 shares of Common Stock which will be immediately vested in
full. No portion of the shares issuable under such option are included
above.
(11) Includes 65,674 shares issuable upon the exercise of an outstanding stock
option currently exercisable or exercisable within sixty days following
April 3, 2000.
(12) Includes 250 shares held by Mr. Litle's wife. Also includes 51,000 shares
issuable upon the exercise of an outstanding stock option currently
exercisable or exercisable within sixty days following April 3, 2000.
(13) Includes 51,000 shares issuable upon the exercise of an outstanding stock
option currently exercisable or exercisable within sixty days following
April 3, 2000.
(14) Includes 15,000 shares issuable upon the exercise of an outstanding stock
option currently exercisable or exercisable within sixty days following
April 3, 2000.
(15) Includes shares listed in notes 5 to 14. Also includes 1,033 shares held by
an executive officer not named in this table and 30,749 shares issuable to
an executive officer not named in this table upon the exercise of
outstanding stock options currently exercisable or exercisable within sixty
days of April 3, 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater-than-10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon review of Forms 3 and 4 and amendments thereto furnished
to the Company during fiscal 1999 and Form 5 and amendments thereto furnished to
the Company with respect to fiscal 1999, or written representations that Form 5
was not required, the Company believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater-than-10%
stockholders were fulfilled in a timely manner except as previously reported,
except as follows: (i) Patricia C. Lee, the Company's President--J. JILL
Merchandising, reported on a Form 4 filed eight days late in August 1999 a
transaction that occurred in July 1999 and reported on a Form 4 filed in
November 1999 three transactions that occurred in March 1999; and (ii) Ruth M.
Owades, a Director, reported on three Forms 4 filed in November 1999
transactions that occurred in February 1998, September 1998 and August 1999.
17
INFORMATION CONCERNING AUDITORS
The accounting firm of PricewaterhouseCoopers L.L.P., which has served as
the Company's principal independent accountants continuously since the Company's
formation, was selected by the Board to continue in that capacity for fiscal
2000. A representative of PricewaterhouseCoopers L.L.P. is expected to be
present at the Annual Meeting. This representative will have the opportunity to
make a statement if such representative desires to do so and will be available
to respond to appropriate questions presented at the Annual Meeting.
SOLICITATION
No compensation will be paid by any person in connection with the
solicitation of proxies. Brokers, banks and other nominees will be reimbursed
for their out-of-pocket expenses and other reasonable clerical expenses incurred
in obtaining instructions from beneficial owners of the Common Stock. In
addition to the solicitation by mail, special solicitation of proxies may, in
certain instances, be made personally or by telephone by directors, officers and
certain employees of the Company. It is expected that the expense of such
special solicitation will be nominal. All expenses incurred in connection with
this solicitation will be borne by the Company.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy statement and
form of proxy for the annual meeting scheduled to be held in May 2001,
stockholder proposals must comply with SEC Rule 14a-8 and any other applicable
rules and must be delivered to the Company's principal executive offices at
least 120 days prior to the anniversary date of mailing of this Proxy Statement.
This Proxy Statement was mailed on or about April 10, 2000, so the date by which
proposals are required to be received under Rule 14a-8 will be December 11,
2000.
In addition, the By-Laws of the Company provide that for business to be
properly brought before any annual meeting of stockholders by any stockholder or
for the nomination by a stockholder of a candidate for election to the Board of
Directors, the stockholder must give timely notice thereof in writing to the
Secretary of the Company not less than 60 days before the date of the annual
meeting; provided, however, that if an annual meeting of stockholders is to be
held on a date prior to the date for the annual meeting specified in the
By-Laws, and if less than 70 days' notice or prior public disclosure of the date
of such annual meeting is given or made, notice by the stockholder to be timely
must be so delivered or received not later than the close of business on the
10th day following the earlier of the date on which notice of the date of such
annual meeting was mailed or the day on which public disclosure was made of the
date of such annual meeting. If next year's annual meeting is held on the date
specified in the By-laws, the deadline for submission of notice will be
March 11, 2001, and any proposal or nomination submitted after March 11, 2001
will be untimely. The By-Laws contain a number of other substantive and
procedural requirements which should be reviewed by any interested stockholder.
Any proposals should be mailed to: Secretary, The J. Jill Group, Inc., 4
Batterymarch Park, Quincy, Massachusetts 02169-7468.
MISCELLANEOUS
The Board does not intend to present to the Annual Meeting any business
other than the proposals listed herein, and the Board was not aware, a
reasonable time before mailing this Proxy Statement to stockholders, of any
other business which may be properly presented for action at the Annual Meeting.
If any other business should come before the Annual Meeting, the persons present
will have discretionary authority to vote the shares they own or represent by
proxy in accordance with their judgment.
18
AVAILABLE INFORMATION
Stockholders of record on April 3, 2000 will receive a Proxy Statement and
the Company's 1999 Annual Report, which contains detailed financial information
concerning the Company. The Company will mail, without charge, a copy of the
Company's Annual Report on Form 10-K (excluding exhibits) to any stockholder
entitled to receive this Proxy Statement who requests it in writing. Please
submit any such written request to Olga L. Conley, Chief Financial Officer, The
J. Jill Group, Inc., 4 Batterymarch Park, Quincy, Massachusetts 02169-7468.
19
APPENDIX A
THE J. JILL GROUP, INC.
AMENDED 1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The J. Jill Group, Inc. Employee Stock Purchase Plan (the "Plan") is
intended to provide a method whereby employees of The J. Jill Group, Inc. (the
"Company") will have an opportunity to acquire an ownership interest (or
increase an existing ownership interest) in the Company through the purchase of
shares of the Common Stock of the Company. It is the intention of the Company
that the Plan qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. DEFINITIONS.
(a) "Compensation" means, for the purpose of any Offering pursuant to this
Plan, base pay in effect as of the Offering Commencement Date (as hereinafter
defined). Compensation shall not include any deferred compensation other than
contributions by an individual through a salary reduction agreement to a cash or
deferred plan pursuant to Section 401(k) of the Code or to a cafeteria plan
pursuant to Section 125 of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Compensation Committee of the Board.
(d) "Common Stock" means the common stock, $.01 par value per share, of the
Company.
(e) "Company" shall also include any Parent or Subsidiary of DM Management
Company designated by the Board, unless the context otherwise requires.
(f) "Employee" means any person who is customarily employed at least
20 hours per week and more than five months in a calendar year by the Company.
(g) "Parent" shall mean any present or future corporation which is or would
constitute a "parent corporation" as that term is defined in Section 424 of the
Code.
(h) "Subsidiary" shall mean any present or future corporation which is or
would constitute a "subsidiary corporation" as that term is defined in
Section 424 of the Code.
3. ELIGIBILITY.
(a) Participation in the Plan is completely voluntary. Participation in any
one or more of the offerings under the Plan shall neither limit, nor require,
participation in any other offering.
(b) Each employee shall be eligible to participate in the Plan on the first
Offering Commencement Date, as hereafter defined, following the commencement of
employment with the Company. Notwithstanding the foregoing, no employee shall be
granted an option under the Plan:
(i) if, immediately after the grant, such employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more of
the total combined voting power or value of all classes of stock of the
Company or any Parent or Subsidiary; for purposes of this Paragraph the
rules of Section 424(d) of the Code shall apply in determining stock
ownership of any employee; or
(ii) which permits his rights to purchase stock under all Section 423
employee stock purchase plans of the Company and any Parent or Subsidiary to
exceed $25,000 of the fair market value of the
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stock (determined at the time such option is granted) for each calendar year
in which such option is outstanding; for purposes of this Paragraph, the
rules of Section 423(b)(8) of the Code shall apply.
4. OFFERING DATES.
The right to purchase stock hereunder shall be made available by a series of
one-year offerings (the "Offering" or "Offerings") to employees eligible in
accordance with Paragraph 3 hereof. The applicable date of commencement
("Offering Commencement Date") and date of termination ("Offering Termination
Date") for each Offering shall be the first and the last business day of each
calendar year, respectively, unless the Committee, in its discretion, determines
otherwise. Participation in any one or more of the Offerings under the Plan
shall neither limit, nor require, participation in any other Offering.
5. PARTICIPATION.
Any eligible employee may become a participant by completing a payroll
deduction authorization form provided by the Company and filing it with the
office of the Company's Treasurer 20 days prior to each applicable Offering
Commencement Date, as determined by the Committee pursuant to Paragraph 4, or
such other period as may be permitted by the Company in its sole discretion and
which shall be applicable in a uniform and nondiscriminatory manner.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his authorization for a payroll
deduction, he shall elect to have deductions made from his pay on each payday
during any Offering in which he is a participant at a specified percentage of
his Compensation as determined on the applicable Offering Commencement Date;
said percentage shall be in increments of one percent up to a maximum percentage
of ten percent.
(b) Payroll deductions for a participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of the Offering
to which such authorization is applicable unless sooner terminated by the
participant as provided in Paragraph 10.
(c) All payroll deductions made for a participant shall be credited to his
account under the Plan. A participant may not make any separate cash payment
into such account.
(d) A participant may withdraw from the Plan at any time during the
applicable Offering period.
7. GRANTING OF OPTION.
(a) On the Offering Commencement Date of each Offering, a participating
employee shall be deemed to have been granted an option to purchase a maximum
number of shares of the Common Stock equal to an amount determined as follows:
85% of the market value per share of the Common Stock on the applicable Offering
Commencement Date shall be divided into an amount equal to the percentage of the
employee's Compensation which he has elected to have withheld (but no more than
10%) multiplied by the employee's Compensation over the Offering period. Such
market value per share of the Common Stock shall be determined as provided in
clause (i) of Paragraph 7(b).
(b) The option price of the Common Stock purchased with payroll deductions
made during each such Offering for a participant therein shall be the lower of:
(i) 85% of the closing price per share on the Offering Commencement Date
as reported by a nationally recognized stock exchange, or, if the Common
Stock is not listed on such an exchange, as reported by the National
Association of Securities Dealers Automated Quotation System ("Nasdaq")
National Market System or, if the Common Stock is not listed on the Nasdaq
National Market System, 85% of the mean of the bid and asked prices per
share on the Offering Commencement Date or, if the Common Stock is not
traded over the counter, 85% of the fair market value on the Offering
Commencement Date as determined by the Committee; and
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(ii) 85% of the closing price per share on the Offering Termination Date
as reported by a nationally recognized stock exchange, or, if the Common
Stock is not listed on such an exchange, as reported by the Nasdaq National
Market System or, if the Common Stock is not listed on the Nasdaq National
Market System, 85% of the mean of the bid and asked prices per share on the
Offering Termination Date or, if the Common Stock is not traded over the
counter, 85% of the fair market value on the Offering Termination Date as
determined by the Committee.
8. EXERCISE OF OPTION.
(a) Unless a participant gives written notice to the Treasurer of the
Company as hereinafter provided, his option for the purchase of Common Stock
with payroll deductions made during any Offering will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering for the purchase of the number of full shares of Common Stock which the
accumulated payroll deductions in his account at that time will purchase at the
applicable option price (but not in excess of the number of shares for which
options have been granted the employee pursuant to Paragraph 7(a)), and any
excess in his account at that time, other than as described in Paragraph 8(b),
will be automatically returned to the participant.
(b) Fractional shares will not be issued under the Plan and any accumulated
payroll deductions which would have been used to purchase fractional shares
shall be automatically carried forward to the next Offering unless the
participant elects, by written notice to the Treasurer of the Company, to have
the excess cash returned to him.
9. DELIVERY.
The Company will deliver to each participant (as promptly as possible after
the appropriate Offering Termination Date), a certificate representing the
Common Stock purchased upon exercise of his option.
10. WITHDRAWAL AND TERMINATION.
(a) Prior to the Offering Termination Date for an Offering, any participant
may withdraw the payroll deductions credited to his account under the Plan for
such Offering by giving written notice to the Treasurer of the Company. All of
the participant's payroll deductions credited to such account will be paid to
him promptly after receipt of notice of withdrawal, without interest, and no
future payroll deductions will be made from his pay during such Offering. The
Company will treat any attempt to borrow by a participant on the security of
accumulated payroll deductions as an election to withdraw such deductions.
(b) A participant's election not to participate in, or withdrawal from, any
Offering will not have any effect upon his eligibility to participate in any
succeeding Offering or in any similar plan which may hereafter be adopted by the
Company.
(c) Upon termination of the participant's employment for any reason,
including retirement but excluding death, the payroll deductions credited to his
account will be returned to him, or, in the case of his death, to the person or
persons entitled thereto under Paragraph 14.
(d) Upon termination of the participant's employment because of death, his
beneficiary (as defined in Paragraph 14) shall have the right to elect, by
written notice given to the Company's Treasurer prior to the expiration of a
period of 90 days commencing with the date of the death of the participant,
either:
(i) to withdraw all of the payroll deductions credited to the
participant's account under the Plan; or
(ii) to exercise the participant's option for the purchase of stock on
the Offering Termination Date next following the date of the participant's
death for the purchase of the number of full shares which the accumulated
payroll deductions in the participant's account at the date of the
participant's death will purchase at the applicable option price (subject to
the limitation contained in Paragraph 7(a)), and any excess in such account
will be returned to said beneficiary. In the event that no
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such written notice of election shall be duly received by the office of the
Company's Treasurer, the beneficiary shall automatically be deemed to have
elected to withdraw the payroll deductions credited to the participant's
account at the date of the participant's death and the same will be paid
promptly to said beneficiary.
11. INTEREST.
No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any participating employee.
12. STOCK.
(a) The maximum number of shares of Common Stock available for issuance and
purchase by employees under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in Paragraph 17, shall be 400,000
shares of Common Stock, par value $.01 per share, of the Company. If the total
number of shares for which options are exercised on any Offering Termination
Date in accordance with Paragraph 8 exceeds the maximum number of shares for the
applicable Offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in an equitable manner, and the balances
of payroll deductions credited to the account of each participant under the Plan
shall be automatically returned to the participant.
(b) The participant will have no interest in stock covered by his option
until such option has been exercised.
13. ADMINISTRATION.
The Plan shall be administered by the Committee. The interpretation and
construction of any provision of the Plan and adoption of rules and regulations
for administering the Plan shall be made by the Committee. Determinations made
by the Committee with respect to any matter or provision contained in the Plan
shall be final, conclusive and binding upon the Company and upon all
participants, their heirs or legal representatives. Any rule or regulation
adopted by the Committee shall remain in full force and effect unless and until
altered, amended, or repealed by the Committee.
14. DESIGNATION OF BENEFICIARY.
A participant shall file with the Treasurer of the Company a written
designation of a beneficiary who is to receive any Common Stock and/or cash
under the Plan. Such designation of beneficiary may be changed by the
participant at any time by written notice. Upon the death of a participant and
upon receipt by the Company of proof of the identity and existence at the
participant's death of a beneficiary validly designated by him under the Plan,
the Company shall deliver such Common Stock and/or cash to such beneficiary. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such Common Stock and/or cash to
the executor or administrator of the estate of the participant. No beneficiary
shall prior to the death of the participant by whom he has been designated,
acquire any interest in the Common Stock and/or cash credited to the participant
under the Plan.
15. TRANSFERABILITY.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive Common Stock under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in any
way by the participant other than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge, or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Paragraph 8(b).
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16. USE OF FUNDS.
All payroll deductions received or held by the Company under this Plan may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.
17. EFFECT OF CHANGES OF COMMON STOCK.
If the Company shall subdivide or reclassify the Common Stock which has been
or may be optioned under this Plan, or shall declare thereon any dividend
payable in shares of such Common Stock, or shall take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
participant) shall be adjusted accordingly and in the case of each option
outstanding at the time of any such action, the number and class of shares which
may thereafter be purchased pursuant to such option and the option price per
share shall be adjusted to such extent as may be determined by the Committee,
with the approval of independent public accountants and counsel, to be necessary
to preserve the rights of the holder of such option.
18. AMENDMENT OR TERMINATION.
The Board may at any time terminate or amend the Plan. No such termination
shall affect options previously granted, nor may an amendment make any change in
any option theretofore granted which would adversely affect the rights of any
participant holding options under the Plan.
19. NOTICES.
All notices or other communications by a participant to the Company under or
in connection with the Plan shall be deemed to have been duly given when
received by the Treasurer of the Company.
20. MERGER OR CONSOLIDATION.
If the Company shall at any time merge into or consolidate with another
corporation, the holder of each option then outstanding will thereafter be
entitled to receive at the next Offering Termination Date upon the exercise of
such option, in lieu of the number of shares of Common Stock as to which such
option shall be exercisable, the number and class of shares of stock or other
securities to which such holder would have been entitled pursuant to the terms
of the agreement of merger or consolidation if, immediately prior to such merger
or consolidation, such holder had been the holder of record of a number of
shares of Common Stock equal to the number of shares for which such option was
exercisable. In accordance with this Paragraph and Paragraph 17, the Committee
shall determine the kind and amount of such securities or property which such
holder of an option shall be entitled to receive. A sale of all or substantially
all of the assets of the Company shall be deemed a merger or consolidation for
the foregoing purposes.
21. APPROVAL OF STOCKHOLDERS.
The Plan is subject to the approval of the stockholders of the Company at
their next annual meeting or at any special meeting of the stockholders for
which one of the purposes shall be to act upon the Plan. If the Plan is not
approved by the stockholders of the Company, all payroll deductions credited to
a participant's account under the Plan shall be automatically returned to the
participant.
22. GOVERNMENTAL AND OTHER REGULATIONS.
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Company's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by
any regulatory or governmental agency as may, in the opinion of counsel for the
Company, be required. The Plan shall be governed by, and construed and enforced
in accordance with, the provisions of Sections 421, 423 and 424 of the Code and
the substantive laws of the Commonwealth of Massachusetts. In the event of any
inconsistency between such provisions of the Code and any such laws, said
provisions of the Code shall govern to the extent necessary to preserve
favorable federal income tax treatment afforded employee stock purchase plans
under Section 423 of the Code.
* * *
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/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------------------------- 1. To elect the following nominees as Class A
THE J. JILL GROUP, INC. Directors of the Company
- ---------------------------------------- For All With- For All
Nominees hold Except
(01) William E. Engbers / / / / / /
(02) Samuel L. Shanaman
Mark box at right if an address change / / NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
or comment has been noted on the "For All Except" box and strike a line through the name of the nominee. Your
reverse side of this card. shares will be voted for the remaining nominee.
CONTROL NUMBER:
RECORD DATE SHARES:
For Against Abstain
2. To amend the 1998 Employee Stock Purchase / / / / / /
Plan to increase the number of shares of
Common Stock that may be issued thereunder
to 400,000.
Please be sure to sign and date this Proxy Date
- -------------------------------------------------------------------
Please promptly date and sign this proxy and mail it in the
enclosed envelope to ensure representation of your shares.
No postage need be affixed if mailing in the United States.
- -------------------------------------------------------------------
Stockholder sign here Co-owner sign here
DETACH CARD DETACH CARD
THE J. JILL GROUP, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballot. There are a number of issues related to the
management and operation of your Company that require your immediate attention and approval. These are discussed in detail in the
enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be voted, then sign the card, detach it and return it
in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders to be held June 1, 2000.
Sincerely,
The J. Jill Group, Inc.
THE J. JILL GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE J. JILL GROUP, INC.
A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE BOARD OF DIRECTORS NEED ONLY SIGN AND DATE THIS PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE
Proxy for the Annual Meeting of Stockholders to be held on June 1, 2000
The undersigned stockholder of The J. Jill Group, Inc. (the "Company"),
revoking all prior proxies, hereby appoints Gordon R. Cooke and Olga L.
Conley, or either of them acting singly, proxies, with full power of
substitution, to vote all shares of capital stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held at the offices of Foley, Hoag & Eliot, LLP, One Post Office Square, 16th
Floor, Boston, Massachusetts on Thursday, June 1, 2000, beginning at 8:00
a.m., local time, and at any adjournments thereof, upon matters set forth in
the Notice of Annual Meeting dated April 10, 2000 and the related Proxy
Statement, copies of which have been received by the undersigned, and in
their discretion upon any other business that may properly come before the
meeting or any adjournments thereof. Attendance of the undersigned at the
meeting or any adjourned session thereof will not be deemed to revoke this
proxy unless the undersigned shall affirmatively indicate the intention to
vote the shares represented hereby in person prior to the exercise of this
proxy.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN WITH RESPECT TO ONE OR MORE OF THE PROPOSALS SET FORTH ON
THE REVERSE SIDE OF THIS CARD, WILL BE VOTED FOR SUCH PROPOSAL OR PROPOSALS.
- -------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on stock certificate. If
stockholder is a corporation, please sign in full corporate name by president
or other authorized officer and, if a partnership, please sign full
partnership name by an authorized person.
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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