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
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
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12
URBAN OUTFITTERS, INC.
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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
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[LOGO] URBAN OUTFITTERS, INC.
Dear Shareholder:
You are cordially invited to attend the 2002 Annual Meeting of Shareholders
of Urban Outfitters, Inc. to be held at 10:30 a.m., on Tuesday, June 25, 2002,
at the National Society of the Colonial Dames of America, 1630 Latimer Street,
Philadelphia, Pennsylvania.
The matters to be considered and voted upon are described in the 2002 Notice
of Annual Meeting of Shareholders and the Proxy Statement that accompany this
letter. It is important that your shares be represented and voted at the Annual
Meeting. Kindly read the attached Proxy Statement, date and sign the enclosed
proxy card and return the proxy card in the accompanying envelope.
I look forward to seeing you at the meeting and having the opportunity to
review the business operations of Urban Outfitters with you.
Sincerely,
/s/ Richard A. Hayne
Richard A. Hayne
Chairman of the Board
June 4, 2002
[LOGO] URBAN OUTFITTERS, INC.
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 25, 2002
-----------------
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Urban
Outfitters, Inc. will be held at the National Society of the Colonial Dames of
America, 1630 Latimer Street, Philadelphia, Pennsylvania, on June 25, 2002 at
10:30 a.m., for the following purposes:
1. To elect five Directors to serve for a term of one year.
2. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on May 24, 2002 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Glen A. Bodzy
Glen A. Bodzy
Secretary
June 4, 2002
URBAN OUTFITTERS, INC.
1809 Walnut Street
Philadelphia, Pennsylvania 19103
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
-----------------
The accompanying proxy is solicited by the Board of Directors of Urban
Outfitters, Inc. (the "Company") for use at the Annual Meeting of Shareholders
(the "Meeting") to be held on Tuesday, June 25, 2002 at 10:30 a.m. at the
National Society of the Colonial Dames of America, 1630 Latimer Street,
Philadelphia, Pennsylvania, and any adjournments or postponements thereof. This
Proxy Statement and accompanying proxy card are being mailed to Shareholders on
or about June 4, 2002.
Only Shareholders of record, as shown on the transfer books of the Company,
at the close of business on May 24, 2002 (the "Record Date") are entitled to
notice of, and to vote at, the Meeting. On the Record Date, there were
19,152,786 Common Shares outstanding.
The Company's Common Shares represented by an unrevoked Proxy in the
enclosed form, which has been properly executed and received prior to the
Meeting, will be voted in accordance with the specifications made on such
Proxy. Any properly executed Proxy received on a timely basis on which no
specification has been made by the Shareholder will be voted "FOR" the election
of the nominees to the Board of Directors listed in this Proxy Statement and,
to the extent permitted by the rules and regulations of the Securities and
Exchange Commission, in accordance with the judgment of the persons voting the
Proxies upon such other matters as may come before the Meeting and any
adjournments. Any Shareholder giving a Proxy has the power to revoke it prior
to its exercise either by giving written notice to the Secretary of the
Company, by voting in person at the Meeting or by execution of a subsequent
Proxy.
Presence at the Meeting in person or by Proxy of the holders of a majority
of the Common Shares entitled to vote is necessary to constitute a quorum. Each
share entitles the holder to one vote. The election of directors will be
determined by a plurality vote and the five nominees receiving the most "FOR"
votes will be elected. Approval of any other proposal will require the
affirmative vote of a majority of the shares cast on the proposal. In all
matters, an abstention or broker nonvote will not be counted as a vote cast.
1. ELECTION OF DIRECTORS
The Company's By-laws provide for the Board of Directors to be composed of
as many directors as are designated from time to time by the Board of
Directors. Currently there are six directors. However, Messrs. Cleeland and
Sapiro have informed the Company that they are not seeking re-election to the
Company's Board of Directors. The Company has nominated
Robert H. Strouse to fill one of the vacancies on the Board and is currently
seeking an eligible individual to fill the remaining vacancy. Proxies cannot be
voted for a greater number of persons than the number of nominees set forth
below. Each director shall be elected for a term of one year and shall serve
until his successor is elected and qualified.
At the Meeting, five directors will be elected. The Board of Directors has
nominated the five persons listed below for election to the Board at the
Meeting. Unless otherwise directed, the persons named on the Proxy intend to
vote all valid proxies received by them "FOR" the election of the listed
nominees. In the event any of the nominees shall be unable or unwilling to
serve as a director, the persons named on the Proxy intend to vote "FOR" the
election of such person as may be nominated by the Board of Directors in
substitution. The Company has no reason to believe that any nominee of the
Board of Directors will be unable to serve as a director if elected.
The nominees for election to the Board of Directors are Richard A. Hayne,
Scott A. Belair, Harry S. Cherken, Jr., Joel S. Lawson III and Robert H.
Strouse.
Biographical Information
The following information is submitted concerning each nominee for election
as a director:
Name Age Position
---- --- --------
Richard A. Hayne (1).. 55 Chairman of the Board of Directors and
President
Scott A. Belair (2)... 54 Director
Harry S. Cherken, Jr.. 52 Director
Joel S. Lawson III (3) 54 Director
Robert H. Strouse..... 53 Director
- --------
(1) Member of the Nominating Committee
(2) Chairman of the Compensation Committee; member of the Audit Committee
(3) Chairman of the Audit Committee; member of the Compensation Committee
Mr. Hayne co-founded the Company in 1970 and has been its President and
Chairman of the Board of Directors since the Company's incorporation in 1976.
Mr. Belair co-founded the Company in 1970 and has been a director since its
incorporation in 1976. He has served as Principal of The ZAC Group, a financial
consulting services firm, during the last eleven years. Previously, he was a
managing director of Drexel Burnham Lambert Incorporated. Mr. Belair is a
director and President of Balfour Maclaine Corporation.
Mr. Cherken, a director since 1989, has been a partner in the law firm of
Drinker Biddle & Reath LLP in Philadelphia, Pennsylvania since 1984 and served
as a Managing Partner of that firm from February 1996 to January 2000.
Mr. Lawson, a director since 1985, has, since November 2001, been Executive
Director of M&A International Inc., a global organization of merger and
acquisition advisory firms. From 1980
2
until November 2001, Mr. Lawson was Chief Executive Officer of Howard, Lawson &
Co., a Philadelphia-based investment banking and corporate finance firm.
Howard, Lawson and Co. became an indirect, wholly-owned subsidiary of
FleetBoston Financial Corporation on March 1, 2001.
Mr. Strouse has, since 1998, been Chief Operating Officer of the AMC Group,
a company which oversees a diversified group of insurance, industrial, service
and real estate businesses. Previously, he was a partner at the law firm of
Drinker Biddle & Reath LLP in Philadelphia, Pennsylvania.
Board Committees and Attendance at Meetings
The Board of Directors currently has an Audit Committee, a Compensation
Committee and a Nominating Committee. The Audit Committee oversees the
Company's financial reporting process and system of internal controls on behalf
of the Board of Directors. The functions performed by the Audit Committee and
its membership are set forth in the "Report of the Audit Committee," included
in this annual proxy statement. The Audit Committee is governed by a written
charter approved by the Board of Directors. The Board's Compensation Committee
is responsible for determining salaries, incentives and other forms of
compensation of the executive officers, and also administers the Company's
stock option plans. The Board's Nominating Committee makes recommendations to
the Board with regard to the size and composition of the Board, as well as
qualified nominees for election as directors. The Nominating Committee gives
appropriate consideration to qualified persons recommended by shareholders for
nomination as directors, prior to the shareholder-proposed date referred to in
the "Shareholder Proposals" section in this annual proxy statement, provided
such recommendations are accompanied by sufficient information to permit the
Nominating Committee to evaluate the qualifications and experience of the
nominees.
The Company's Board of Directors held five meetings in the fiscal year ended
January 31, 2002 ("Fiscal 2002"). The Compensation Committee and the Audit
Committee held four meetings and three meetings, respectively, during Fiscal
2002. The Board's Nominating Committee held one meeting during Fiscal 2002.
Each director attended 75% or more of the meetings of the Board and committees
of which they were members during Fiscal 2002.
3
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
During Fiscal 2002, the Audit Committee was composed of three independent
directors of the Company (as independence is defined in the National
Association of Securities Dealers' listing standards) and oversees the
Company's financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the
reporting process, including the systems of internal controls. In fulfilling
its oversight responsibilities, the Committee reviewed the audited financial
statements in the Annual Report with management, including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Committee reviewed with the independent accountants, Arthur Andersen
LLP, who are responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting principles,
their judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee under Statement of Auditing Standards No. 61 and other
generally accepted auditing standards. In addition, the Committee has discussed
with the independent accountants the accountants' independence from management
and the Company, including the matters in the written disclosures required by
the Independence Standards Board Standard No. 1 and considered the
compatibility of nonaudit services with the accountants' independence.
The Committee discussed with the Company's independent accountants the
overall scope and plans for the audit. The Committee met with the independent
accountants, with and without management present, to discuss the results of
their examination, their evaluation of the Company's internal controls, and the
overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors and the Board has approved that the
audited financial statements be included in the Company's Annual Report on Form
10-K for Fiscal 2002 for filing with the Securities and Exchange Commission.
In light of recent, well-publicized events involving Arthur Andersen LLP,
the Audit Committee and the Board of Directors has decided to reconsider that
firm's engagement as the Company's independent public accountants. The Board of
Directors and the Audit Committee will review and monitor Arthur Andersen LLP's
ability to provide high quality, professional services to the Company and may,
subject to this review, either continue the engagement of Arthur Andersen LLP
or, if at any time during the year it is determined that such a change would be
in the best interest of the Company and its shareholders, direct the
appointment of a different independent accounting firm.
Joel S. Lawson III, Chairman of the Audit Committee
Scott A. Belair
Kenneth K. Cleeland
4
Compensation of Directors
The Company currently pays each director who is not also an employee of the
Company ("Outside Directors") $1,000 for each meeting of the Board of Directors
attended, excluding committee meetings. The Company also reimburses the
directors for their expenses incurred in connection with their activities as
directors. The Company's 1997 Stock Option Plan (the "1997 Plan") provides for
the grant of nonqualified stock options to each director who is also not an
employee, and the Company's 2000 Stock Incentive Plan (the "2000 Plan")
provides for a continuation of these grants.
A person who becomes an Outside Director will receive an initial grant of an
option to purchase 10,000 Common Shares on the date he or she becomes a
director. Thereafter, on the first business day immediately following each of
the dates on which an incumbent Outside Director is elected or reelected, he or
she will receive an additional grant of an option to purchase 10,000 Common
Shares provided that he or she did not receive an initial grant within the
preceding six-month period under the 1997 Plan or within the preceding 12 month
period under the 2000 Plan. Options generally become exercisable 12 months
after the date of their grant. Each Outside Director may exercise options upon
the termination of his or her membership on the Board for a reason other than
death or disability for up to one year following termination, except where the
option, by its terms, expires on an earlier date. During Fiscal 2002, each
Outside Director received the grant of an option to purchase 10,000 Common
Shares. The exercise price of options granted under the Plans is the fair
market value of the Common Shares at the date of grant.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Mr. Belair and Mr. Lawson.
Certain Business Relationships
Harry S. Cherken, Jr., a director of the Company, is a partner in the law
firm of Drinker Biddle & Reath LLP, which provided legal services to the
Company in Fiscal 2002 and is expected to continue to do so in the future.
Drinker Biddle & Reath LLP has received customary compensation for these
services.
2. OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at the
Meeting, other than those set forth in the attached Notice and customary
procedural matters. If any other matters should properly come before the
Meeting or any adjournments thereof, the proxies solicited hereby will be voted
on such matters, to the extent permitted by the rules and regulations of the
Securities and Exchange Commission, in accordance with the judgment of the
persons voting such proxies.
5
EXECUTIVE COMPENSATION
Summary Executive Compensation
The following Summary Compensation Table sets forth certain information
concerning the compensation paid or accrued by the Company for services
rendered during Fiscal 2002 and the Company's fiscal years ended January 31,
2001 ("Fiscal 2001") and January 31, 2000 ("Fiscal 2000") by the Company's
President and the Company's four most highly compensated other executive
officers whose total annual salary and bonus exceeded $100,000 (collectively,
the "Named Officers").
Annual Compensation does not include medical, group life insurance or other
benefits received by the Named Officers that are generally available to all
salaried employees of the Company, and certain perquisites and other personal
benefits, securities or property received by the Named Officers that do not
exceed the lesser of $50,000 or 10% of any such officer's salary and bonus
disclosed in this table.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options (#) Compensation(1)
- --------------------------- ---- -------- -------- ------------ ---------------
Richard A. Hayne............... 2002 $235,000 $ 55,000 -- $13,695(2)
Chairman and President 2001 235,000 5,000 -- 16,403
2000 235,000 30,000 -- 20,954
Glen T. Senk................... 2002 370,214 275,000 -- 7,058(3)
President, Anthropologie, Inc. 2001 350,000 5,000 -- 7,303
2000 259,968 205,000 -- 958
Stephen A. Feldman............. 2002 260,000 54,000 -- 2,681(4)
Chief Financial Officer 2001 260,000 4,000 -- 3,093
2000 260,000 44,000 -- 3,358
David C. Frankel............... 2002 225,000 50,750 200,000(6) --
President, Free People(5) 2001 -- -- -- --
2000 -- -- -- --
Glen A. Bodzy.................. 2002 220,192 54,000 20,000(7) 2,918(8)
General Counsel and Corporate 2001 200,000 4,000 10,000 4,813
Secretary 2000 187,019 21,500 5,000 75,778
- --------
(1) Includes matching cash contributions in Fiscal 2002 of $1,658 by the
Company under the Urban Outfitters 401(k) Savings Plan for each of Messrs.
Hayne, Senk, Feldman and Bodzy.
6
(2) Includes life insurance premiums paid by the Company for Mr. Hayne in the
amount of $12,037 in Fiscal 2002.
(3) Includes an auto allowance paid by the Company for Mr. Senk in the amount
of $5,400 in Fiscal 2002.
(4) Includes life insurance premiums paid by the Company for Mr. Feldman in the
amount of $1,023 in Fiscal 2002.
(5) Mr. Frankel joined the Company in May 2001.
(6) These options became exercisable as to 40,000 shares on May 14, 2002, and
as to additional 40,000 shares on each May 14 thereafter.
(7) These options become exercisable as to 4,000 shares on August 8, 2002, and
as to additional 4,000 shares on each August 8 thereafter.
(8) Includes parking expenses paid by the Company for Mr. Bodzy in the amount
of $1,260 for Fiscal 2002.
7
Stock Option Information
Options Grant Table: The following table sets forth certain information
concerning grants of stock options made to the Named Officers during Fiscal
2002.
Option Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
- ----------------------------------------------------------- -----------------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal or Base Expiration
Name Granted 2002 Price Date 5% 10%
- ---- ---------- ---------- -------- ---------- ---------- ----------
Glen A. Bodzy... 20,000(1) 3.7% $11.4750 08/07/2011 $ 144,340 $ 365,760
David C. Frankel 200,000(2) 37.0% 12.1750 05/13/2009 1,162,600 2,784,600
- --------
(1) Pursuant to a five year, 20% per year vesting schedule commencing August 8,
2002.
(2) Pursuant to a five year, 20% per year vesting schedule commencing May 14,
2002.
Aggregate Option Exercises and Fiscal Year-End Option Value Table: The
following table sets forth certain information concerning options exercised by
the Named Officers during Fiscal 2002, information concerning the number of
stock options held by the Named Officers on January 31, 2002, and the value of
in-the-money options outstanding as of such date. The value of in-the-money
options represents the aggregate excess of the fair market value of a Common
Share on January 31, 2002 of $26.14 over the applicable exercise prices
multiplied by the number of Common Shares issuable upon the exercise of the
stock options.
Aggregated Option Exercises
in Fiscal 2002 and
Fiscal 2002 Year-End Option Values
Number of Unexercised Value of In-the-Money
Shares Options At Fiscal Year-End Options At Fiscal Year-end
Acquired On Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
Richard A. Hayne -- $-- -- -- $ -- $ --
Glen T. Senk.... -- -- 270,000 180,000 3,694,050 2,162,700
Stephen A.
Feldman....... -- -- 20,000 80,000 197,800 791,200
David C. Frankel -- -- -- 200,000 -- 2,793,000
Glen A. Bodzy... -- -- 19,000 41,000 168,380 522,320
8
REPORT OF THE COMPENSATION COMMITTEE
OF THE
BOARD OF DIRECTORS
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Company is required to provide certain data and information in
regard to the compensation and benefits provided to the Company's executive
officers. In fulfillment of this requirement, the Compensation Committee at the
direction of the Board of Directors has prepared the following report for
inclusion in this Proxy Statement.
The Compensation Committee is composed of two nonmanagement directors of the
Company. The Compensation Committee determines the compensation for the
executive officers of the Company named in the Summary Compensation Table and
the other key employees of the Company. The Compensation Committee also
administers the Company's stock option plans.
The Compensation Committee's philosophy is that executive compensation
should be designed to:
. reflect the Company's entrepreneurial orientation;
. assist the Company in attracting and retaining superior executive talent
while incentivizing a long-term commitment to the Company;
. align the interests of management with those of shareholders through a
significant equity-based component; and
. reward an executive's individual contribution toward achievement of the
Company's long- and short-term business goals.
The Company's overall executive compensation program consists of three
principal elements: base salaries, discretionary bonuses and stock options and
other equity-based compensation. Base salaries are ordinarily established at
the beginning of the fiscal year, while discretionary bonuses are awarded
following the completion of the fiscal year. Stock options and other
equity-based compensation may be granted at any time during the fiscal year.
The base salaries for the Company's executive officers in Fiscal 2002 were
competitively established by the Compensation Committee based upon a general
assessment of the compensation paid by other companies in the retail specialty
apparel industry. In evaluating compensation paid by other companies, the
Compensation Committee relied on the general knowledge that its members have
obtained from informal reviews of various press and industry reports. The
Company's President does not participate in the determination of compensation
policies by the Compensation Committee.
The Compensation Committee, however, consults with the Company's President
in determining base salary levels for each executive officer and takes into
consideration the President's assessment of the performance of each of the
executive officers (other than the President) against the factors established
by the Compensation Committee.
The Compensation Committee also establishes the level of discretionary
bonuses and option awards to the Company's executive officers. Discretionary
cash bonuses to the President and other
9
executive officers are awarded based upon the Compensation Committee's
subjective assessment of the Company's overall financial performance and the
Compensation Committee's subjective assessment of the President's and other
executive officers' individual contributions to that overall performance.
Factors considered by the Compensation Committee in awarding cash bonuses
include the officer's initiative, managerial ability, level of
responsibilities, development of subordinates, fairness with respect to bonuses
of other executives and handling of special projects, but no particular weight
is ascribed by the Compensation Committee to any one or more of these factors.
The Compensation Committee does not rely upon or utilize any particular
hurdles, benchmarks or other objective criteria to determine the amount of the
bonuses, nor does the Compensation Committee compare the compensation of the
President or other executive officers to any peer group for purposes of
awarding bonuses.
During Fiscal 2002, the factors considered by the Compensation Committee in
determining the President's salary and bonus were the extent to which the
Company met sales and net income objectives, stock performance and the
recruitment and development of management talent for the Company. The
Compensation Committee also takes into account the fact that the President
beneficially owns Common Shares of the Company.
The Compensation Committee believes that stock ownership by management and
equity-based performance compensation arrangements are useful tools to align
the interests of management with those of the Company's shareholders. A
decision whether to grant stock options and the size of the grant to each
executive officer is determined by the Compensation Committee based upon a
subjective assessment of such executive officer's performance after taking into
consideration prior years' grants and the organizational impact of the
executive officer, as well as to respond to competitive conditions in the
attraction and retention of new and current executive officers.
During Fiscal 2002, the only stock options or other equity based
compensation granted to Named Officers of the Company were options to purchase
20,000 and 200,000 Common Shares granted to Mr. Bodzy and Mr. Frankel,
respectively.
This report is submitted by the Compensation Committee.
Scott A. Belair, Chairman of the Compensation Committee
Joel S. Lawson III
10
STOCK PERFORMANCE CHART
The following graph compares the cumulative total shareholder return on the
Company's Common Shares with the cumulative total return on the Standard and
Poor's 500 Composite Stock Index and the Standard and Poor's 500 Apparel Retail
Index for the period beginning February 1, 1997 and ending January 31, 2002,
assuming the reinvestment of any dividends and assuming an initial investment
of $100 in each. The comparisons in this table are required by the Securities
and Exchange Commission and are not intended to forecast or be indicative of
possible future performance of the Common Shares or the referenced indices.
[CHART]
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02
------- ------- ------- ------- ------- -------
Urban Outfitters, Inc. $100.00 $140.21 $134.54 $111.34 $ 73.20 $215.59
S&P 500 Index......... $100.00 $126.91 $168.14 $185.54 $183.87 $154.18
SP500 Apparel Retail.. $100.00 $181.59 $375.80 $358.37 $334.53 $236.19
11
BENEFICIAL OWNERSHIP
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Shares as of April 30, 2002 by: (a) each
person known to the Company who beneficially owns more than five percent of the
Company's outstanding Common Shares, (b) each director and Named Officer and
(c) all directors and executive officers of the Company as a group. Unless
otherwise indicated: (a) the address of each of the beneficial owners
identified is 1809 Walnut Street, Philadelphia, Pennsylvania 19103 and (b) each
person has sole voting and investment power with respect to all such shares.
Amount of Percent
Beneficial Ownership of Class
-------------------- --------
Richard A. Hayne (1).............................. 6,755,940 35.3%
Scott A. Belair (2)............................... 692,000 3.6%
Glen T. Senk (3).................................. 240,641 1.3%
Kenneth K. Cleeland (4)........................... 155,996 *
Harry S. Cherken, Jr. (5)......................... 78,000 *
Joel S. Lawson III (6)............................ 73,800 *
Burton M. Sapiro (7).............................. 40,000 *
David C. Frankel (8).............................. 40,000 *
Stephen A. Feldman (9)............................ 32,098 *
Glen A. Bodzy (10)................................ 25,598 *
Robert H. Strouse................................. -- --
All directors and officers as a group (13 persons) 8,140,773 42.5%
- --------
* Less than 1%.
(1) Includes 480,334 shares owned by the Irrevocable Trust of Richard A. Hayne,
480,334 shares owned by the Irrevocable Trust of Elizabeth Van Vleck, 8,300
shares owned by the Hayne Foundation and 2,990 shares allocated under the
Company's 401(k) Savings Plan (formerly the Profit-Sharing Fund). Excludes
144,498 shares beneficially owned by Mr. Hayne's spouse, as to which he
disclaims beneficial ownership.
(2) Excludes 283,334 shares owned by Trust U/A/D April 16, 1993 by Scott A.
Belair as grantor and Steven D. Burton as Trustee, as to which he disclaims
beneficial ownership. Includes 72,000 shares subject to presently
exercisable options and 10,000 shares subject to options that will become
exercisable within 60 days.
(3) Includes 240,000 shares subject to presently exercisable options and 641
shares allocated under the Company's 401(k) Savings Plan (formerly the
Profit-Sharing Fund).
(4) Includes 30,000 shares subject to presently exercisable options and 10,000
shares subject to options that will become exercisable within 60 days.
(5) Includes 60,000 shares subject to presently exercisable options and 10,000
shares subject to options that become exercisable within 60 days.
(6) Includes 50,000 shares subject to presently exercisable options, 10,000
shares subject to options that become exercisable within 60 days and 1,800
shares held by a trust of which he is a trustee.
(7) Includes 30,000 shares subject to presently exercisable options and 10,000
shares subject to options that become exercisable within 60 days.
12
(8) Includes 40,000 shares subject to options that become exercisable within 60
days.
(9) Includes 20,000 shares subject to presently exercisable options, 10,000
shares subject to options that become exercisable within 60 days and 98
shares allocated under the Company's 401(k) Savings Plan (formerly the
Profit-Sharing Fund).
(10) Includes 24,000 shares subject to presently exercisable options, 1,000
shares subject to options that become exercisable within 60 days and 98
shares allocated under the Company's 401(k) Savings Plan (formerly the
Profit-Sharing Fund).
SHAREHOLDER PROPOSALS
Shareholder proposals for next year's 2003 Annual Meeting of Shareholders
must comply with applicable Securities and Exchange Commission rules and
regulations and must be received by the Secretary of the Company prior to
February 11, 2003, to be considered for inclusion in the Company's Proxy
Statement. If the February 11, 2003 deadline is missed, a shareholder proposal
still may be submitted for consideration at the 2003 Annual Meeting of
Shareholders, although it will not be included in the Proxy statement, if it is
received no later than April 21, 2003. If notification of a shareholder
proposal is not received by April 21, 2003, the Company may vote, in its
discretion, any and all of the proxies received in its solicitation against
such proposal.
INDEPENDENT ACCOUNTANTS
In the past, Arthur Andersen LLP has acted as independent public accountants
for the Company. In light of recent, well-publicized events involving Arthur
Andersen LLP, the Audit Committee and the Board of Directors have decided to
reconsider that firm's engagement as the Company's independent public
accountants. The Board of Directors and the Audit Committee will review and
monitor Arthur Andersen LLP's ability to provide high quality, professional
services to the Company and may, subject to this review, either continue the
engagement of Arthur Andersen LLP or, if at any time during the year it is
determined that such a change would be in the best interest of the Company and
its shareholders, direct the appointment of a different independent accounting
firm. The Board has not proposed that any formal action be taken at the Meeting
with respect to the ratification of the selection of Arthur Andersen LLP
because no action is required.
The Company has invited a representative of Arthur Andersen LLP to be
present at the Meeting to make a statement, if the representative desires to do
so, and to respond to appropriate questions, although we do not expect a
representative of Arthur Andersen LLP to attend the Meeting.
Audit Fees
The aggregate fees of Arthur Andersen LLP for professional services rendered
for the audit of the Company's annual financial statements for Fiscal 2002 and
for the reviews of the financial statements included in the Company's Quarterly
Reports on Form 10-Q for that fiscal year were $117,000.
13
Financial Information Systems Design and Implementation Fees
For Fiscal 2002, there were no fees incurred by Arthur Andersen LLP for
professional services rendered for information technology services relating to
financial information systems design and implementation.
All Other Fees
All additional Arthur Andersen LLP fees for Fiscal 2002 were for nonaudit
professional services which totaled $381,700. They consisted principally of tax
consulting and compliance services and costs associated with the Company's
secondary stock offering.
ADDITIONAL INFORMATION
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 ("10% Shareholders") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Officers,
directors and 10% Shareholders are required to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms received by
it and a written representation from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the period
February 1, 2001 through January 31, 2002, all filing requirements applicable
to its officers, directors and 10% Shareholders were complied with on a timely
basis.
Proxy Solicitation Costs. The cost of soliciting proxies will be borne by
the Company. Solicitation may be made by mail, personal interview or telephone
by certain officers and other employees of the Company who will receive no
additional compensation therefor. The Company will reimburse banks, brokers and
other nominees for their reasonable expenses in forwarding proxy materials to
the beneficial owners for whom they hold shares.
Annual Review. This Proxy Statement is accompanied by the Company's Annual
Review to Shareholders for Fiscal 2002 and a copy of the Company's Annual
Report on Form 10-K for Fiscal 2002, as filed with the Securities and Exchange
Commission (except for exhibits). Requests for additional copies of such Form
10-K should be directed to the Company, Attention: Investor Relations.
By Order of the Board of Directors
/s/ Richard A. Hayne
Richard A. Hayne
Chairman of the Board
June 4, 2002
14
URBAN OUTFITTERS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Richard A.
Hayne and Stephen A. Feldman, or either of them, with full power of
substitution, as the undersigned's proxies to vote at the Annual Meeting of
Shareholders of Urban Outfitters, Inc. (the "Company") called for June 25, 2002
and at any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR the nominees listed WITHHOLD AUTHORITY
below (except as noted to to vote for the nominees
the contrary below) listed below
Nominees: Richard A. Hayne, Scott A. Belair, Harry S. Cherken, Jr.,
Joel S. Lawson III, Robert H. Strouse.
(Instruction: To withhold authority to vote for any individual nominee(s),
write the name(s) of such nominee(s) on the line below.)
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2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
(Continued on reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MATTER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1.
You are urged to sign and return this proxy
so that you may be sure that your shares
will be voted.
Date: _______________________________, 2002
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Signature of Shareholder
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Signature of Shareholder
Please sign exactly as your name appears
hereon, date and return promptly. When
shares are held by joint tenants, both
should sign. Executors, administrators,
trustees and other fiduciaries should
indicate their capacity when signing.