<PAGE>
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 BY
RULE 14A-6(E)(2)
[X] Definitive proxy statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COLDWATER CREEK INC.
--------------------------------------------------------
(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)(4) and 0-11.
(1)Title of each class of securities to which transaction applies:
(2)Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4)Proposed maximum aggregate value of transaction:
(5)Total fee paid:
[_]Fee previously paid with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1)Amount previously paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing party:
(4)Date filed:
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 11, 1997
To our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
COLDWATER CREEK INC. (the "Company") which will be held at the Company's
corporate headquarters in Sandpoint, Idaho, at 1:00 p.m. Pacific Daylight Time
on July 11, 1997 for the following purposes:
1. To elect to the Board two directors;
2. To consider and vote upon a proposal to ratify the selection of Arthur
Andersen LLP as independent public accountants for the Company for the
fiscal year ending February 28, 1998; and
3. To act upon such other business as may properly come before the meeting
or any adjournment or postponement thereof.
These matters are more fully described in the Proxy Statement accompanying
this Notice.
The Board of Directors has fixed the close of business on June 5, 1997 as
the record date for determining those stockholders who will be entitled to
vote at the meeting. The stock transfer books will not be closed between the
record date and the date of the meeting.
Representation of at least a majority of the shares of Common Stock of
Coldwater Creek Inc. entitled to vote, whether present in person or
represented by proxy, is required to constitute a quorum. Accordingly, it is
important that your shares be represented at the meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE. Your proxy may be revoked at any
time prior to the time it is voted.
Please read the proxy material carefully. Your vote is important and the
Company appreciates your cooperation in considering and acting on the matters
presented.
Very truly yours,
/s/ Dennis C. Pence
Dennis C. Pence
President and Chief
Executive Officer
Sandpoint, Idaho
June 6, 1997
<PAGE>
STOCKHOLDERS SHOULD READ THE ENTIRE PROXY STATEMENT
CAREFULLY PRIOR TO RETURNING THEIR PROXIES
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS OF
COLDWATER CREEK INC.
TO BE HELD JULY 11, 1997
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of COLDWATER CREEK INC. ("Coldwater Creek" or the
"Company") of proxies to be voted at the Annual Meeting of Stockholders which
will be held at 1:00 p.m. Pacific Daylight Time on July 11, 1997 at the
Company's corporate headquarters in Sandpoint, Idaho 83864 or at any
adjournments or postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement
and the proxy card were first mailed to stockholders on or about June 6, 1997.
VOTING RIGHTS AND SOLICITATION
The close of business on June 5, 1997 was the record date for stockholders
entitled to notice of and to vote at the Annual Meeting. As of that date,
Coldwater Creek had 10,120,118 shares of common stock, $.01 par value per
share (the "Common Stock"), issued, 10,120,118 of which were outstanding. All
of the shares of the Company's Common Stock outstanding on the record date are
entitled to vote at the Annual Meeting, and stockholders of record entitled to
vote at the meeting will have one (1) vote for each share so held on the
matters to be voted upon.
Shares of the Company's Common Stock represented by proxies in the
accompanying form which are properly executed and returned to Coldwater Creek
will be voted at the Annual Meeting of Stockholders in accordance with the
stockholders' instructions contained therein. In the absence of contrary
instructions, shares represented by such proxies will be voted FOR the
election of the directors as described herein under "Proposal 1--Election of
Directors" and FOR ratification of the selection of accountants as described
herein under "Proposal 2--Ratification of Selection of Independent Public
Accountants." Management does not know of any matters to be presented at this
Annual Meeting other than those set forth in this Proxy Statement and in the
Notice accompanying this Proxy Statement. If other matters should properly
come before the meeting, the proxy holders will vote on such matters in
accordance with their best judgment. Any stockholder has the right to revoke
his or her proxy at any time before it is voted by (i) delivering to the
Company at its principal executive office at One Coldwater Creek Drive,
Sandpoint, Idaho 83864, Attention: Chief Financial Officer, a written notice
of revocation or duly executed proxy bearing a later date, or (ii) attending
the meeting and voting in person. Election of directors by stockholders shall
be determined by a majority of the votes cast by the stockholders entitled to
vote at the election present in person or represented by proxy. Abstentions
and broker non-votes are each included in the determination of the number of
shares present for quorum purposes. Abstentions are counted in tabulations of
the votes cast on proposals presented to stockholders, whereas broker non-
votes are not counted for purposes of determining whether a proposal has been
approved.
The entire cost of soliciting proxies will be borne by Coldwater Creek.
Proxies will be solicited principally through the use of the mails, but, if
deemed desirable, may be solicited personally or by telephone, telegraph or
special letter by officers and regular Coldwater Creek employees for no
additional compensation. Arrangements may be made with brokerage houses and
other custodians, nominees and fiduciaries to send proxies and proxy material
to the beneficial owners of the Company's Common Stock, and such persons may
be reimbursed for their expenses.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The members of the Board of Directors of Coldwater Creek are classified into
three classes, one of which is elected at each Annual Meeting of Stockholders
to hold office for a three-year term and until successors of such class have
been elected and qualified. The nominees for the Board of Directors are set
forth below. The proxy holders intend to vote all proxies received by them in
the accompanying form for the nominees for director listed below. In the event
that any nominee is unable or declines to serve as a director at the time of
the Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them for any nominee listed
below. As of the date of this Proxy Statement, the Board of Directors is not
aware that any nominee is unable or will decline to serve as a director.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
NOMINEES LISTED BELOW.
NOMINEES TO BOARD OF DIRECTORS
<TABLE>
<CAPTION>
CLASS AND YEAR
DIRECTOR IN WHICH TERM
NAME PRINCIPAL OCCUPATION SINCE WILL EXPIRE AGE
---- -------------------- -------- -------------- ---
<C> <S> <C> <C> <C>
Dennis C. Pence...... President, Chief 1988 Class III 47
Executive Officer and 2000
Vice Chairman of the
Board of
Coldwater Creek Inc.
Robert H. McCall..... President, McCall and 1994 Class III 51
Landwehr, P.A. 2000
(Accounting Firm)
</TABLE>
Dennis Pence co-founded the Company in 1984, and has served as President and
Chief Executive Officer and as a Director since its incorporation in 1988.
Prior to co-founding Coldwater Creek, Mr. Pence was employed by Sony Corp of
America from 1975 to 1983, where his final position was National Marketing
Manager, Consumer Video Products.
Robert H. McCall, a Certified Public Accountant, has served as a Director
since 1994 and since February 1995 has served as Chairman of the Audit
Committee and as a member of the Compensation Committee. Since 1981 he has
been President of McCall & Landwehr, P.A., an accounting firm based in Hayden
Lake, Idaho, which provided accounting, tax and auditing services to the
Company from 1984 to 1993, and has provided a limited amount of other services
since that time.
DIRECTORS NOT STANDING FOR ELECTION
The members of the Board of Directors who are not standing for election at
this year's Annual Meeting are set forth below.
<TABLE>
<CAPTION>
CLASS AND YEAR
DIRECTOR IN WHICH TERM
NAME PRINCIPAL OCCUPATION SINCE WILL EXPIRE AGE
---- -------------------- -------- -------------- ---
<C> <S> <C> <C> <C>
James R. Alexander... Independent Retail Sales 1994 Class II 54
Consultant 1998
Donald Robson........ Chief Financial Officer, 1995 50
Treasurer and Secretary Class II
of Coldwater Creek Inc. 1998
Curt Hecker.......... President and Chief 1995 36
Executive Officer, Class I
Panhandle State Bank 1999
Ann Pence............ Chairman of the Board of 1988 47
Coldwater Class I
Creek Inc. 1999
</TABLE>
2
<PAGE>
James R. Alexander has served as a Director since 1994 and is Chairman of
the Compensation Committee. He has been an independent consultant for the past
17 years, serving a variety of high ticket mail order companies selling
apparel, home decor and gift merchandise. Mr. Alexander currently resides in
New York City.
Donald Robson has served as Chief Financial Officer, Vice President of
Finance and Administration, Secretary, Treasurer and as a Director of the
Company since January 1995. From 1992 to 1995, prior to joining the Company,
Mr. Robson was a Financial Executive Consultant. From 1978 to 1992, Mr. Robson
served as Executive Vice President and Chief Financial Officer for Neiman
Marcus Stores, a nationally established high-end department store chain and
cataloger. His responsibilities included managing the Company's financial
operations, information services, merchandise distribution and investment
strategies, as well as its substantial credit portfolio, central and store
operations, and telemarketing and distribution in the Direct Marketing
Division.
Curt Hecker has served as a Director since August 1995 and is a member of
the Audit Committee. Since August 1995, his principal occupation has been
President and Chief Executive Officer of Panhandle State Bank in Sandpoint,
Idaho. Prior to Mr. Hecker's employment with Panhandle, he served as Vice
President of West One Bank (now U.S. Bank) with which the Company has had its
primary banking relationship.
Ann Pence co-founded the Company in 1984, where she has acted as its
Creative Director. Since its incorporation in 1988, she has also served as a
Director and as the Chairman of the Board of the Company. Prior to co-founding
Coldwater Creek, Mrs. Pence had an eleven year career in retail advertising,
and was employed by Macy's California from 1974 to 1982 where her final
position was Copy Director.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of 5 meetings during
fiscal 1996. Each director attended at least 75% of the aggregate of (i) the
total number of meetings of the Board and (ii) the total number of meetings
held by all committees of the Board on which he or she served.
The Company's Board of Directors has a Compensation Committee and an Audit
Committee. The Audit Committee is responsible for recommending to the Board of
Directors the appointment of independent public accountants, reviewing and
approving the scope of audit activities of the auditors, reviewing accounting
practices and controls, performing independent director duties and reviewing
audit results. The Audit Committee is composed of Robert H. McCall (Chairman)
and Curt Hecker. The Audit Committee held three meetings in fiscal 1996. The
Compensation Committee is responsible for reviewing and establishing the
compensation structure for the Company's officers and directors, including
salary rates, participation in incentive compensation and benefit plans,
401(k) plans, stock purchase plans and other forms of compensation, and, after
the effective date of the initial registration of the Company's Common Stock
under Section 12(g) of the Securities Exchange Act of 1934, administering the
Company's 1996 Stock Option/Stock Issuance Plan. The Compensation Committee is
composed of Mr. Alexander (Chairman) and Mr. McCall. The Compensation
Committee met three times in fiscal 1996.
DIRECTOR REMUNERATION
The directors currently receive an annual retainer of $10,000. In addition,
each director received a fee of $1,000 for each regular Board of Directors
meeting attended. Any director who was a committee chair received an annual
retainer in the amount of $1,500, and any director who was a committee member
received an annual retainer of $1,000. During fiscal 1997, non-employee
directors will receive annual compensation of $12,000, plus each chairperson
of each committee will receive an additional $1,500 per year and each
committee member will receive an additional $1,000 per year, and each
3
<PAGE>
director will receive an additional $1,000 per regular quarterly meeting
attended. Directors are also reimbursed for certain expenses in connection
with attendance at Board of Directors and committee meetings.
Under the Company's 1996 Stock Option/Stock Issuance Plan automatic option
grant program, each non-employee director of the Company, upon execution of
the Underwriting Agreement associated with the Company's initial public
offering or at the date such person first becomes a director if after the
effective date of this offering, received or will receive options to purchase
13,376 shares of Common Stock at an exercise price per share equal to the fair
market price of the Company's Common Stock on such date. On the date of each
annual stockholders meeting beginning with the first annual meeting following
this offering, each non-employee director who has served for at least six
months and continues to serve at that meeting will receive an automatic option
grant for an additional 1,672 shares of Common Stock exercisable at the fair
market value of such stock as of the date of the option grant.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation and Bylaws provide for
indemnification of all directors and officers. Each director and officer of
the Company has entered into a separate indemnification agreement with the
Company.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 1, 1997 by (i) each person
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each director with beneficial
ownership, (iii) each officer listed in the Summary Compensation Table and
(iv) all directors and executive officers as a group. All shares are subject
to the named person's sole voting and investment power except where otherwise
indicated.
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) BENEFICIALLY
------------------------------------ ------------ -------------
<S> <C> <C>
Dennis Pence(1)(2)................................ 3,622,559 36%
c/o Coldwater Creek Inc.
One Coldwater Creek Drive
Sandpoint, Idaho 83864
Ann Pence(1)(2)................................... 3,622,559 36%
c/o Coldwater Creek Inc.
One Coldwater Creek Drive
Sandpoint, Idaho 83864
Donald Robson(3).................................. 25,079 *
Robin Sheldon(4).................................. 20,899 *
All Directors and Executive Officers
as a group (8 persons)(5)........................ 7,311,995 72%
</TABLE>
- --------
* Less than one (1) percent
(1) Dennis and Ann Pence are husband and wife.
(2) On December 31, 1996, Dennis C. Pence transferred 140,929 shares of
Coldwater Creek Common Stock to the Dennis C. Pence Lead Annuity Trust.
Ann Pence transferred the same number of shares to the Elizabeth Ann Pence
Lead Annuity Trust on the same date. Both Trusts qualify under the Federal
tax code as Charitable Lead Annuity Trusts.
(3) Represents options to purchase Common Stock exercisable as of March 4,
1997. Mr. Robson has an additional 75,238 options, which will become
exercisable on a monthly basis ratably over 36 months beginning March
1997.
(4) Represents options to purchase Common Stock exercisable as of March 4,
1997. Ms. Sheldon has an additional 62,699 options which will become
exercisable on a monthly basis ratably over 36 months beginning March
1997.
(5) Includes 66,877 options exercisable as of March 4, 1997.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information concerning compensation
paid to, earned by or awarded to the Company's Chief Executive Officer and
each of the Company's three other most highly compensated executive officers
or employees for the fiscal years ended March 2, 1996 and March 1, 1997. No
other employee of the Company received salary and bonus of $100,000 or more
during the fiscal year ended March 2, 1996. The persons named in the table are
sometimes referred to herein as the "Named Executive Officers."
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(2) OPTIONS(#) ($)
------------------ ------ ------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Dennis Pence(3) ........ 1996 225,000 0 3,900
President, Chief 1995 207,372 21,000 3,600
Executive Officer and
Vice Chairman of the
Board
Ann Pence(3)............ 1996 225,000 0 3,900
Chairman of the 1995 207,372 21,000 3,600
Board and Creative
Director
Donald Robson........... 1996 160,000 0 4,442 100,317
Chief Financial Officer, 1995 146,538 15,750 --
Vice President of
Finance and
Administration,
Secretary
and Treasurer
Robin Sheldon........... 1996 115,000 0 4,954 83,598
Vice President of 1995 104,647 11,550 2,150
Merchandising
</TABLE>
- --------
(1) In accordance with the rules of the Securities and Exchange Commission
(the "Commission"), the compensation described in this table does not
include medical, group life insurance, or other benefits received by the
Named Executive Officers which are available generally to all salaried
employees of the Company, and certain perquisites and other personal
benefits received by the Named Executive Officers which do not exceed the
lesser of $50,000 or 10% of any such officer's salary and bonus disclosed
in this table.
(2) Contributions by the Company to individuals' 401(k) accounts.
(3)Compensation in this table does not include S Corporation Distributions.
6
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Company's 1996 Stock Option Plan for the 1996 fiscal year to
the named executive officers. No stock appreciation rights were granted to the
named executive officers during such fiscal year. The table also lists
potential realizable values of such options on the basis of assumed annual
compounded stock appreciation rates of 5% and 10% over the life of the options
which are set at a maximum of 10 years.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
-------------------------------------------- -----------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE OR
GRANTED IN FISCAL BASE PRICE EXPIRATION 5% 10%
NAME (#)(1) YEAR(2) ($/SH)(3) DATE ($)(4) ($)(4)
- ---- ---------- ---------- ----------- ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis Pence(5)......... -- -- -- -- -- --
Ann Pence(5)............ -- -- -- -- -- --
Donald Robson........... 100,317 11% 6.58 3/4/06 415,124 1,052,007
Robin Sheldon........... 83,598 9% 6.58 3/4/06 335,221 859,611
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
- --------
(1) On March 4, 1996, the Board granted options to purchase 443,067 shares of
Common Stock in the aggregate under the 1996 Plan to certain employees of
the Company. The options vest over a four-year period measured from the
grant date and have an exercise price of $6.58 per share. Such exercise
price is equal to the fair market value of the Common Stock on the grant
date, as determined by the Board on the basis of a number of factors,
including the anticipated offering price, and reflects the volatile nature
of the stock market and the uncertainty which existed at the time of grant
as to the ultimate completion of the offering.
Each option will become immediately exercisable for all of the option
shares in the event the Company is (i) acquired by merger or consolidation
in which over 50% of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different
from the persons holding these securities immediately prior to such
transaction, or (ii) liquidated or dissolved whereby substantially all of
the Company's assets are sold, transferred or otherwise dispositioned,
unless the option is assumed or otherwise replaced by the acquiring entity
or is otherwise subject to limitations imposed by the Compensation
Committee. Each option has a maximum term of 10 years, subject to earlier
termination in the event of the optionee's cessation of service with the
Company.
(2) Includes options granted pursuant to the Company's Automatic Option Grant
Program for non-employee directors.
(3) Common Stock purchased upon the exercise of an option must be paid for by
cash or by delivery of certain previously acquired shares of Common Stock
with a fair market value (as of the exercise date) equal to the option
exercise price or, with the consent of the Compensation Committee under
the Discretionary Option Grant Program, by delivery of the optionee's
promissory note. With the Compensation Committee's approval, the employee
option holder may elect to satisfy tax withholding obligations by
directing the Company to withhold shares valued at the amount of the
withholding obligation from the number purchased or by delivery of
previously acquired shares of Common Stock.
(4) The potential realizable value is reported net of the option price, but
before income taxes associated with exercise. These amounts represent
assumed annual compounded rates of appreciation at 5% and 10% only from
the date of grant to the expiration date of the option. These amounts are
calculated based on the requirements of the Securities and Exchange
Commission. There is no assurance provided to any executive officer or any
other holder of the Company's
7
<PAGE>
securities that the actual stock price appreciation over the 10-year option
term will be at the assumed 5% and 10% levels or at any other defined level.
Unless the market price of the Common Stock does in fact appreciate over the
option term, no value will be realized from the option grants made to the
executive officers.
(5) Neither Dennis Pence nor Ann Pence have been granted options under the 1996
Stock Option Plan.
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the named executive
officers concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-
VALUE THE-MONEY OPTIONS AT
REALIZED ($) NUMBER OF SECURITIES FY-END ($) (MARKET PRICE
SHARES (MARKET PRICE UNDERLYING UNEXERCISED OF SHARES AT FY-END ($)
ACQUIRED ON AT EXERCISE, OPTIONS AT FY-END (#) LESS EXERCISE PRICE)
EXERCISE LESS EXERCISE ------------------------- -------------------------
NAME (#) PRICE) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- EXERCISABLE ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis Pence............ -- -- -- -- -- --
Ann Pence............... -- -- -- -- -- --
Donald Robson........... -- -- 25,079 75,238 295,806.80 887,432.21
Robin Sheldon........... -- -- 20,899 62,699 246,503.70 739,534.70
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of two non-employee directors: James Alexander and Robert McCall.
During the fiscal year 1996 the Committee met three times. The Committee is
responsible for setting and administering the policies which govern annual
executive salaries, bonuses (if any) and stock ownership programs. The
Committee annually evaluates the performance, and determines the compensation,
of the Chief Executive Officer ("CEO"), and other executive officers of the
Company based upon a mix of the achievement of the corporate financial goals,
individual performance and comparisons with other catalog companies. The CEO is
not present during the discussions of his compensation.
The operation of the Committee is subject to the Bylaws of the Company and
the Committee's Charter, each as in effect from time to time, and the Delaware
General Corporation Law. The Committee has the full power and authority to
carry out the following responsibilities:
1. To establish salaries, incentives and other forms of compensation paid to
officers and other employees of the company.
2. To administer various incentive compensation and benefit plans, including
the bonus plan.
3. To perform such other functions and have other powers as may be necessary
or convenient in the efficient discharge of the foregoing.
4. To report to the Board from time to time, or whenever it shall be called
upon to do so.
The policies of the Committee with respect to executive officers, including
the CEO, are to provide compensation sufficient to attract, motivate and retain
executives of outstanding ability and potential and to establish an appropriate
relationship between executive compensation and the creation of shareholder
value. To meet these goals, the Committee has adopted a mix among the
compensation elements of salary, bonus and stock options. The Committee
determines the salaries for such officers
8
<PAGE>
based upon a review of salary surveys of similar companies performed for the
Committee. To provide the Committee with more information for making
compensation comparisons, the Company surveys a broader group of similar
companies. The Committee may further adjust the salaries of such executive
officers based upon the Company's financial performance during the past year
and upon each officer's performance against the objectives related to his area
responsibility, for which objectives were established last year.
In awarding stock options, the Committee considers a number of factors,
including such executive officer's responsibilities and relative position in
the Company, individual performance of such officer, any changes in such
officer's responsibility and position, such officer's equity interest in the
Company in the form of stock and options held by such individual, the extent
to which existing stock options remain unvested and the total number of stock
options to be awarded.
Under the Company's executive bonus plan, executive officers may receive a
certain percentage of their base salary in bonus payments, based on the
Committee's subjective evaluation of the individual's performance. Further,
the Committee seeks to balance the desire for immediate earnings and the
longer term goal of enhancing shareholder value.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee uses the same procedures described above for the other
executive officers in setting the annual salary, bonus and stock option awards
for the CEO. The CEO's salary is determined based on factors such as the
Company's achievement of corporate goals and comparisons with catalog
companies as described above. In awarding stock options, the Committee
considers the CEO's performance, the number of unvested options and the total
number of options to be granted. No stock options were awarded to Dennis Pence
during fiscal year 1996. The CEO's bonus is dependent upon the Company
achieving the performance goals outlined above and the Committee's subjective
evaluation of the CEO's performance.
FROM THE MEMBERS OF THE COMPENSATION COMMITTEE
James Alexander
Robert McCall
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Company's compensation committee consists of Mr. McCall
and Mr. Alexander. The Compensation Committee met three times during fiscal
1996.
9
<PAGE>
PERFORMANCE GRAPH
The following performance graph shows the percentage change in cumulative
total return to a holder of the Company's Common Stock, assuming dividend
reinvestment, compared with the cumulative total return, assuming dividend
reinvestment, of the Nasdaq Composite Index and the peer group indicated
below, during the period from January 28, 1996 (the date prior to the
Company's initial public offering) through April 30, 1997.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG COLDWATER CREEK INC., PEER GROUP NASDAQ COMPOSITE INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
NASDAQ
Measurement Period COLDWATER PEER COMPOSITE
(Fiscal Year Covered) CREEK INC. GROUP INDEX
- --------------------- ---------- ----- ---------
<S> <C> <C> <C>
Measurement Pt- 1/28/97 $100 $100 $100
2/28/97 $123 $ 91 $ 95
3/31/97 $ 93 $ 95 $ 89
4/30/97 $ 93 $ 93 $ 91
</TABLE>
Peer Group: Lands End, Inc.
Williams Sonoma, Inc.
Spiegel, Inc.
Lillian Vemon Corp.
DM Management Co.
10
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten-percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) reports they file. Based solely upon review of the copies
of such reports furnished to the Company and written representations that no
other reports were required, the Company believes that there was compliance
for the fiscal year ended March 1, 1997 with all Section 16(a) filing
requirements applicable to the Company's officers, directors and greater than
ten-percent beneficial owners.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended March 1, 1997 has
been mailed concurrently with the mailing of the Notice of Annual Meeting and
Proxy Statement to all stockholders entitled to notice of and to vote at the
Annual Meeting. The Annual Report is not incorporated into this Proxy
Statement and is not considered proxy soliciting material. In compliance with
Rule 14a-3 promulgated under the Securities Exchange Act of 1934, the Company
hereby undertakes to provide without charge to each person upon written
request, a copy of the Company's Annual Report on Form 10-K, including the
financial statements and financial schedules thereto. Requests for such copies
should be directed to Coldwater Creek Inc., One Coldwater Creek Drive,
Sandpoint, Idaho 83864, Attention: Investor Relations Officer.
11
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PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP served as independent public accountants for
the Company since fiscal 1993. The Board of Directors has appointed Arthur
Andersen LLP to serve in the same capacity for the current fiscal year and is
asking stockholders to ratify the selection of Arthur Andersen LLP by the
Board of Directors as independent public accountants. The affirmative vote of
a majority of the shares presented and voting at the meeting is required to
ratify the selection of Arthur Andersen LLP. In the event that stockholders
fail to ratify the selection of Arthur Andersen LLP, the Board of Directors
would reconsider such selection.
A representative of Arthur Andersen LLP is expected to attend the Annual
Meeting and will be available to respond to appropriate questions of the
stockholders.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered at the 1998 Annual Meeting
of Stockholders must be received by Coldwater Creek no later than February 6,
1998. The proposal must be mailed to the Company's principal executive
offices, One Coldwater Creek Drive, Sandpoint, Idaho 83864, Attention: Donald
Robson, Secretary. Such proposals may be included in next year's proxy
statement if they comply with certain rules and regulations promulgated by the
Securities and Exchange Commission.
OTHER MATTERS
Management does not know of any matters to be presented at this Annual
Meeting other than those set forth herein and in the Notice accompanying this
Proxy Statement.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. YOU ARE, THEREFORE, URGED TO EXECUTE
PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE WHICH HAS BEEN
ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at the meeting may
revoke their proxies and vote in person or, if they prefer, may abstain from
voting in person and allow their proxies to be voted.
By Order of the Board of Directors,
/s/ Donald A. Robson
Donald A. Robson
Secretary
June 6, 1997
Sandpoint, Idaho
12
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COLDWATER CREEK INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
JULY 11, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned acknowledges receipt of the Notice of the Annual Meeting of
Stockholders to be held on July 11, 1997 and the Proxy Statement and appoints
Dennis C. Pence and Donald Robson, and each or either of them, as Proxies of
the undersigned, with full power of substitution, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all shares of Common
Stock of Coldwater Creek Inc. (the "Company") which the undersigned is entitled
to vote, either on his or her own behalf or on behalf of any entity or
entities, at the Annual Meeting of Stockholders of the Company to be held
July 11, 1997 at 1:00 p.m. local time and at any adjournment or postponement
thereof.
(CONTINUED AND TO BE MARKED, DATED AND SIGNED ON OTHER SIDE)
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The Board of Directors recommends a vote FOR proposals Nos. 1 and 2. This
Proxy, when properly executed, will be voted as specified hereon. This Proxy
will be voted FOR proposals Nos. 1 and 2 if no specification is made.
1. ELECTION OF DIRECTORS
Dennis C. Pence FOR [_] WITHHOLD AUTHORITY [_]
Robert H. McCall FOR [_] WITHHOLD AUTHORITY [_]
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ending February 28, 1998
FOR [_] AGAINST [_] ABSTAIN [_]
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof
FOR [_] AGAINST [_] ABSTAIN [_]
Please sign exactly as your name(s) is (are) shown on the share certificate
to which the Proxy applies. When shares are held by joint tenants, both should
sign. When signing as an attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Signature: _______________________________ Date: _______________________________
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
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