UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E) (2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to section 240.14a-11(c) or Section 240.14a-12
BIG DOG HOLDINGS, INC.
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(Name of Registrant as Specified in its Charter)
- - - - - - - - --------------------------------------------------------------------------------
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<PAGE>
BIG DOG HOLDINGS, INC.
121 Gray Avenue
Santa Barbara, California 93101
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders
which will be held on Friday, June 2, 2000 at 3:00 pm, local time, in Santa
Barbara, California.
The following notice of meeting identifies each business item for your
action. These items are the election of two directors and the ratification of
Deloitte & Touche LLP as the Company's independent public accountants and
auditors for the 2000 fiscal year. The Board of Directors recommends that you
vote FOR each of these items. We have also included a proxy statement that
contains more information about these items and the meeting.
Whether or not you plan to attend in person, please complete, sign, date
and return the enclosed proxy card(s) promptly to ensure that your shares will
be represented. If you do attend the meeting and wish to vote your shares
personally, you may revoke your proxy.
Thank you for your continued interest in Big Dog Holdings, Inc.
Sincerely,
Andrew D. Feshbach
Chief Executive Officer and Director
<PAGE>
BIG DOG HOLDINGS, INC.
121 Gray Avenue
Santa Barbara, California 93101
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 2000
TO THE STOCKHOLDERS OF
BIG DOG HOLDINGS, INC.
The 2000 Annual Meeting of Stockholders of BIG DOG HOLDINGS, INC. (the
"Company") will be held at the Radisson Hotel Santa Barbara, 1111 Cabrillo
Blvd., Santa Barbara, California, 93101 on Friday, June 2, 2000 at 3:00 pm,
local time, for the following purposes:
1. To elect two directors to serve until the Company's 2003 Annual Meeting;
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants and auditors for the 2000 fiscal year; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on April 18, 2000
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof.
By Order of the Board of Directors,
Anthony J. Wall
Secretary
April 17, 2000
<PAGE>
BIG DOG HOLDINGS, INC.
121 Gray Avenue
Santa Barbara, California 93101
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 2000
This Proxy Statement is furnished to stockholders by the Board of
Directors of Big Dog Holdings, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders of the
Company to be held at the Radisson Hotel Santa Barbara, 1111 Cabrillo Blvd,
Santa Barbara, California, 93101 on Friday, June 2, 2000 at 3:00 pm (local
time), and at any adjournments or postponements of the meeting. The Company's
principal executive offices are located at 121 Gray Avenue, Santa Barbara,
California 93101 and its telephone number is (805) 963-8727. This Proxy
Statement, Notice of Annual Meeting and the accompanying proxy card(s) are being
first mailed to stockholders on or about May 2, 2000.
General Information, Voting Rights and Voting Procedures
April 18, 2000 is the record date (the "Record Date") for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting or any adjournments or postponements of the meeting. 12,000,350 shares
of Common Stock of the Company ("Common Stock") were outstanding on the Record
Date, and are entitled to vote at the meeting. The Common Stock is the only
outstanding voting stock of the Company, with each share entitled to one vote.
Each accompanying proxy card that is properly signed and returned to the
Company, and not revoked, will be voted in accordance with the instructions
contained therein. The proxy may be revoked at any time before it is exercised
by delivery to the Secretary of the Company, either in person or by mail, of a
written notice of revocation. Attendance at the Annual Meeting will not in
itself constitute revocation of the proxy.
Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying proxy card(s) (or their substitutes) will (i) vote
FOR the election of Fred Kayne and Andrew D. Feshbach to the Board of Directors
of the Company, (ii) vote FOR the approval of Deloitte & Touche LLP as the
Company's independent public accountants and auditors for the 2000 fiscal year
and (iii) will use their discretion with regard to other matters (of which the
Company is not now aware) that may be properly presented at the meeting or any
adjournments or postponements of the meeting and all matters incident to the
conduct of the meeting.
The presence at the meeting, in person or by proxy, of a majority of the
shares of Common Stock outstanding on the Record Date will constitute a quorum.
Assuming the presence of a quorum, the directors nominated will be re-elected by
a plurality of the votes cast by the stockholders entitled to vote at the
meeting, and the approval of the appointment of Deloitte & Touche LLP as the
Company's independent accountants and auditors will require a majority of the
votes cast by the stockholders represented and entitled to vote at the meeting.
Abstentions will be treated as shares that are present in determining
those entitled to vote on a matter and the presence of a quorum. If a broker or
nominee indicates on its proxy that it does not have discretionary authority to
vote on a particular matter as to certain share, those shares will be counted
for general quorum purposes, but will not be counted as represented at the
meeting in determining the number of shares necessary for approval of that
matter. Any unmarked proxies, including those submitted by brokers or nominees,
will be voted in favor of the nominees of the Board of Directors and appointment
of Deloitte & Touche LLP.
Security Ownership of Principal Shareholders and Management
The following table shows certain information, as of April 15, 2000, with
respect to the shares of the Company's Common Stock beneficially owned by (i)
persons or entities known by the Company to own 5% or more of the Company's
Common Stock, (ii) the Company's directors and Named Executive Officers (as
defined under "Executive Compensation") and (iii) all directors and Named
Executive Officers as a group.
<PAGE>
<TABLE>
<CAPTION>
Number of Options and Percent of
Name and Address Shares Owned(1) Warrant(2) Total Class 3
---------------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Fred Kayne................................. 5,969,500(4) 0 5,969,500 49.7%
c/o Fortune Financial
1800 Avenue of the Stars, Suite 1112
Los Angeles, CA 90067
Andrew D. Feshbach......................... 1,194,300(5) 0 1,194,300 10.0%
c/o Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, CA 93101
Fidelity Advisor Strategic Opportunities Fund 1,011,600(6) --- 1,011,600 8.4%
82 Devonshire Street
Boston, MA 02109
FMR Corp., Edward C. Johnson 3d and
Abigail P. Johnson
c/o FMR Corp.
82 Devonshire Street
Boston, MA 02109
Robert H. Schnell.......................... 317,220(7) 35,000 352,220 2.9%
Anthony J. Wall............................ 117,000 9,500 126,500 ---
Douglas N. Nilsen.......................... 100,000 13,500 113,500 ---
Roberta J. Morris.......................... 70,000 7,500 77,500 ---
Andrew W. Wadhams.......................... 50,000 13,500 63,500 ---
David J. Walsh............................. 20,000 15,000 35,000 ---
Steven C. Good............................. 5,000 6,000 11,000 ---
Kenneth A. Solomon......................... 0 6,000 6,000 ---
All directors and executive officers as a
group (10 persons)......................... 7,843,020 106,000 7,949,020 66.2%
</TABLE>
[FN]
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown.
(2) Represents shares subject to options or warrants held by directors and
Named Executive Officers that are exercisable as of April 15, 2000 or become
exercisable within 60 days thereof.
(3) Based on 12,000,350 shares outstanding. Percentage information is
omitted for individuals who own less than one percent of the outstanding shares
of Common Stock and the shares deemed outstanding due to exercisable options.
(4) Includes 206,610 shares of Common Stock held in trusts (of which Mr.
Kayne is one of two co-trustees) for the benefit of certain relatives. Mr. Kayne
disclaims any pecuniary interest in the trust's shares.
(5) All such shares are owned by the Feshbach Trust, of which Mr. Feshbach
and his wife are co-trustees.
(6) Based on a Schedule 13G dated February 14, 2000 filed with the
Securities and Exchange Commission. According to such 13G, all of the shares
shown are owned by Fidelity Advisor Value Strategies Fund (the "Fund"). Fidelity
Management & Research Company ("Fidelity"), as advisor to the Fund, and FMR
Corp., Edward P. Johnson and Abigail Johnson, as a result of their direct or
indirect control of Fidelity, may also be deemed to be beneficial owners of the
shares.
(7) All such shares are owned by the Robert and Renee Schnell Living Trust,
of which Mr. Schnell and his wife are co-trustees.
</FN>
PROPOSAL 1
ELECTION OF DIRECTORS
Board of Directors
The Board of Directors of the Company is comprised of six members divided
into three classes. Stockholders elect one-third of the members of the Board of
Directors each year, and the members of each class serve on the Board of
Directors for three years. The terms of Fred Kayne and Andrew D. Feshbach, the
Class III Directors, expire in 2000 and each has been nominated to stand for
re-election at the Annual Meeting to hold office until the Company's Annual
Meeting in 2003 or until his successor is duly elected and qualified. The terms
of other directors expire at the Annual Meeting in 2001 or 2002.
The Board of Directors recommends a vote "FOR" the election of each of
the nominees. Unless authority to do so is withheld, the persons named in the
enclosed proxy card(s) (or their substitutes) will vote the shares represented
thereby FOR the election of Fred Kayne and Andrew D. Feshbach. If either nominee
becomes unavailable or is unable to serve as a director, the persons named as
proxies (or their substitutes) will have full discretion and authority to vote
or refrain from voting for any other nominee.
The following table contains information regarding the nominees and the
other incumbent directors.
Nominees For Election --Term Expiring 2000 (Class III)
Year First
Name Age Elected
Fred Kayne................................................ 61 1992
Andrew D. Feshbach........................................ 39 1992
Incumbent Directors--Term Expiring 2001(Class I)
Year First
Name Age Elected
Steven C. Good............................................ 57 1997
Kenneth A. Solomon........................................ 37 1997
Incumbent Directors--Term Expiring 2002 (Class II)
Year First
Name Age Elected
Robert H. Schnell......................................... 60 1997
David J. Walsh............................................ 40 1997
Mr. Kayne co-founded the Company in May 1992 and has served as its Chairman
since that time. Mr. Kayne co-founded Fortune Fashions, Inc., a custom
manufacturer of embellished apparel for the tourist industry, in 1991 and has
served as its Chairman and President since that time. Mr. Kayne also founded
Fortune Financial, a private merchant banking firm, in 1986 and has served
aChairman and President since that time. Mr. Kayne also serves as a director of
The Right Start, Inc., an infant products retailer and catalog company, and is a
director and controlling member of Fortune Casuals, LLC, a manufacturer of
casual apparel for the mass market.
Mr. Feshbach co-founded the Company in May 1992 and has served as
President, Chief Executive Officer and as a director since that time. From June
1992 until May 1997, Mr. Feshbach also served as Chief Financial Officer of the
Company. Mr. Feshbach co-founded Fortune Fashions, Inc. in 1991, and he has
served as one of its directors since that time. Mr. Feshbach serves as a
director of The Right Start, Inc.
Mr. Schnell co-founded Fortune Casuals, LLC, in January 1999 and has
since served as its President. During and prior to that time, Mr. Schnell has
been a private investor. Mr. Schnell served as Chairman of the Board of Cosmar
Corporation, a designer and, through an affiliated company, a manufacturer of
artificial nail and nail care products, from October 1986 until its sale in
August 1994.
Mr. Walsh co-founded FortuneLinx, Inc., providing fraud control solutions
for data networks, in March 2000, and has served as its President since that
time. Mr. Walsh served as Senior Vice President-Strategic Planning of
Transaction Network Services, Inc., a provider of data communications services
from 1994 to September 1999.
Mr. Good founded Good, Swartz & Berns, an accountancy corporation, more
than five years ago and is the senior partner of that firm. Mr. Good also serves
as a director of Opto Sensors, Inc. and Arden Realty Company.
Mr. Solomon has served as President of iBlast Networks, a new national
television network that will deliver broadband digital content and services to
consumers, since March 2000. Mr. Solomon served as President of Network
Television for Studios USA Television (formerly Universal Television) from July
1997 until April 1999. From August 1995 to July 1997, Mr. Solomon served as
co-head of television at DreamWorks SKG. From June 1994 to August 1995, Mr.
Solomon served as Executive Vice President of Network Distribution at Fox
Broadcasting. From 1992 to 1995, Mr. Solomon was Executive Vice President and
General Sales Manager at Fox's Twentieth Century Television. Mr. Solomon
currently serves as a director and Chair of the Convention Committee for the
National Association of Television Producing Executives.
Board and Committee Meetings
During 1999, there were four meetings of the Board of Directors. The
Board maintains an Audit, Compensation, Employee Stock Option and Special
Compensation Committee, the responsibilities of which are summarized below. Each
Board member attended 75% or more of the meetings of the Board and the
committees on which he served that were held in 1999.
Audit Committee. Steven Good and David Walsh, neither of whom is an
officer or employee of the Company, are the current members of the Audit
Committee. The Audit Committee is responsible for monitoring and reviewing
accounting methods adopted by the Company, internal accounting procedures and
controls and audit plans. The Audit Committee recommends to the Board of
Directors the engagement of the Company's independent auditors and monitors the
scope and results of the Company's audits, the internal accounting controls of
the Company, and the audit practices and professional services furnished by the
Company's independent auditors. The Audit Committee held three meetings during
1999.
Compensation Committee. Fred Kayne, Robert Schnell and David Walsh, none
of whom is an officer or employee of the Company, are the current members of the
Compensation Committee. The Compensation Committee is responsible for reviewing
and approving all compensation arrangements for the officers of the Company and
has principal responsibility for administering the Amended and Restated 1997
Performance Award Plan (the "1997 Plan"). The Compensation Committee held three
meetings during 1999.
Employee Stock Option Committee. The Employee Stock Option Committee is
comprised of Fred Kayne and Andrew Feshbach and is responsible for authorizing
grants of stock options and other awards under the 1997 Plan to employees of the
Company who have positions below that of vice president, within guidelines
established by the Compensation Committee. The Employee Stock Option Committee
generally operates by unanimous written consent and held no meetings during
1999.
Special Compensation Committee. Robert Schnell and David Walsh are the
current members of the Special Compensation Committee, which has the
responsibility of evaluating, authorizing and administering stock option grants
and other awards under the 1997 Plan to directors and executive officers whose
compensation may be subject to Section 162(m) limits under the Internal Revenue
Code. The Special Compensation Committee held no meetings during 1999.
Compensation of Directors
Cash Compensation of Directors. Each non-employee director (excluding Mr.
Kayne) receives a fee of $10,000 per year for his services and is entitled to be
reimbursed for expenses incurred in connection with attendance at Board or
committee meetings. Mr. Kayne is paid a fee of $10,000 per month for acting as
Chairman. Directors who are employees of the Company are not paid any additional
compensation for their services as a director. During 1999, each member of the
Compensation Committee received an additional $2,500 and each member of the
Audit Committee received an additional $5,000. For 2000, the Board has approved
payment of an additional $5,000 per year for each director who is a member of
the Audit Committee.
Option Grants to Non-Employee Directors. On May 20, 1999, each
non-employee director was granted an option to purchase 5,000 shares of Common
Stock at an exercise price of $5.25 per share, which was greater than the market
price of the Common Stock at the close of trading on the date of grant.
If a non-employee director's services are terminated for any reason other
than death, disability or retirement, any option held by the non-employee
director that is then exercisable will remain exercisable for six months after
the termination of service or until the expiration of the option term, whichever
occurs first. If the non-employee director dies, becomes disabled or retires,
his option will become fully exercisable and will remain exercisable for two
years or until the expiration of the option term, whichever occurs first. Upon a
change in control (as defined in the 1997 Plan), each option will become
immediately exercisable for all shares at the time subject to that option. Any
outstanding option that is not exercised prior to a reorganization in which the
Company as an entity does not survive as a public company, may terminate, unless
the option is assumed or replaced in the context of the reorganization.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation paid in the years indicated to the Company's Chief Executive
Officer and the Company's four other most highly compensated officers (the
"Named Executive Officers").
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
------------------------------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus1 Compensation Options2
--------------------------- ---- ------ ----- ------------ -------
<S> <C> <C> <C> <C> <C>
Andrew D. Feshbach........................ 1999 $288,848 $90,000 --- ---
President and Chief Executive Officer 1998 $269,269 $90,000 --- ---
1997 $233,000 $75,000 --- ---
Anthony J. Wall........................... 1999 $218,271 $27,500 --- ---
Executive Vice President and General Counsel 1998 $164,385 $25,000 --- 77,500
1997 $126,000 $20,000 --- ---
Douglas N. Nilsen......................... 1999 $209,809 $30,000 --- ---
Executive Vice President 1998 $196,154 $25,000 --- 127,500
1997 $175,000 $20,000 --- ---
Andrew W. Wadhams......................... 1999 $198,651 $30,000 --- ---
Executive Vice President--Retail 1998 $148,077 $25,000 --- 127,500
1997 $138,000 $30,000 --- ---
Roberta J. Morris......................... 1999 $125,770 $27,500 --- ---
Chief Financial Officer and Treasurer 1998 $115,481 $25,000 --- 62,500
1997 $ 99,000 $15,000 --- ---
</TABLE>
[FN]
1 Amounts shown represent the bonus earned by the Named Executive Officer
during the year indicated, whether or not paid in that year.
2 Does not include options granted to Mr. Feshbach that were voluntarily
surrendered by him for no consideration and canceled.
</FN>
Option Grants
No options or SARs were granted to the Named Executive Officers during
1999.
Option Values
The following table sets forth certain information with respect to the
value of unexercised options held by the Named Executive Officers at the end of
1999. "Value" is calculated as the difference between the fair market value and
the exercise price of in-the-money options at year end. None of the Named
Executive Officers exercised options during 1999.
<TABLE>
<CAPTION>
Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 1999 December 31, 1999
--------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - - - - - - - -------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Andrew D. Feshbach.......................... 0 0 0 0
Douglas N. Nilsen........................... 9,500 118,000 $20,656 $91,375
Andrew W. Wadhams........................... 9,500 118,000 $20,656 $91,375
Anthony J. Wall............................. 7,500 70,000 $19,781 $83,500
Roberta J. Morris........................... 6,000 56,500 $16,128 $67,781
</TABLE>
Employment Contracts, Termination of Employment and Change in Control
Arrangements
The Company currently does not have any employment contracts with its
Chief Executive Officer or any other Named Executive Officers. Unless the
Compensation Committee provides otherwise, upon a change in control (as defined
in the 1997 Plan) each option and stock appreciation right issued under the 1997
Plan will be come immediately exercisable, any restricted stock issued under the
1997 Plan will immediately vest free of restrictions, and the number of shares,
cash or other property covered by any "performance share award" issued under the
1997 Plan will be issued to the grantee of such award. The Company has to date
issued only options under the 1997 Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee Report shall not be deemed to be incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filings of the Company pursuant to the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except to
the extent the Company specifically incorporates the report by reference
therein. The report shall not be deemed soliciting material or otherwise deemed
filed under either such Act.
The Compensation Committee consists of Messrs. Kayne, Schnell and Walsh,
who are non-employee directors of the Company. The responsibilities of the
Compensation Committee and the other committees to which the Board has delegated
certain compensation responsibilities are described above under "Board and
Committee Meetings."
Compensation Philosophy
The Company's executive compensation program consists of three main
components: (1) base salary, (2) potential for annual cash incentive
compensation (bonus) based on the Company's overall performance and the
employee's individual performance and (3) stock options to provide long-term
incentives for performance and to align the interests of executive officers and
stockholders. There is no fixed ratio of total compensation to be represented by
salary, incentive compensation or stock options.
Compensation of Named Executive Officers
With respect to the base salaries and annual bonuses for 1999 for the
Named Executive Officers, the Compensation Committee met with Mr. Feshbach to
review his recommendations. The decisions of the Compensation Committee were not
based on any set formula but focused on consideration of the performance of each
executive in his or her particular area of responsibility, the executive's
contribution to the Company's overall management team, an assessment of the
future contributions the executive may be expected to make to the Company, and
prevailing industry compensation levels. No stock options were granted to any
Named Executive Officers in 1999.
Compensation of the Chief Executive Officer
In 1999, Mr. Feshbach's salary and bonus were determined by the
Compensation Committee based on the same factors applied to the other executive
officers. In addition, the determination of Mr. Feshbach's base salary and bonus
compensation also took into consideration the Company's achievement of sales and
profit goals and the implementation of growth plans, cost controls, and other
items affecting its business and stockholder value. No stock options were
granted to Mr. Feshbach in 1999.
Section 162(m) Considerations
Section 162(m) of the Internal Revenue Code limits the tax deductibility
to the Company of compensation in excess of $1 million in any year for certain
executive officers, except for qualified "performance-based compensation" under
the Section 162(m) rules. No covered executive's compensation for these purposes
exceeded $1 million for 1999. The Compensation Committee considers the Section
162(m) rules as a factor with respect to compensation matters, but will not
necessarily limit compensation to amounts deductible under Section 162(m).
The Compensation Committee
Fred Kayne
Robert Schnell
David Walsh
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was, during 1999, an officer or
employee of the Company or any of its subsidiaries, nor was any member of the
Compensation Committee formerly an officer of the Company or any of its
subsidiaries. No executive officer of the Company served (i) as a member of the
compensation committee (or board of directors serving the compensation function)
of another entity, one of whose executive officers served on the Compensation
Committee or (ii) as a member of the compensation committee of another entity,
one of whose executive officers served on the Company's Board.
Certain Relationships and Related Party Transactions
In connection with the purchase of Common Stock from the Company under
the Company's 1996 Stock Incentive Plan (the "1996 Plan"), as partial payment
from participants in the 1996 Plan, the Company accepted promissory notes with a
10-year term bearing interest at a rate of seven percent (7%) per annum,
compounded annually and not payable until maturity. The only promissory notes
evidencing 1996 Plan participant indebtedness exceeding $60,000 were executed by
Mr. Wall, Mr. Nilsen and Mr. Wadhams, each dated July 29, 1996. Each such loan
to Mr. Wall and Mr. Nilsen was in the original principal amount of $49,210 and
is secured by a pledge of 20,000 shares of Common Stock. The loan to Mr. Wadhams
was in the original principal amount of $123,025 and is secured by the pledge of
50,000 shares of Common Stock. The amount of indebtedness, including accrued
interest, outstanding under these notes as of March 1, 2000, which was the
maximum amount outstanding from January 1, 1999 through March 1, 2000 was, for
Mr. Wall, $62,804, for Mr. Nilsen, $62,804 and for Mr. Wadhams, $157,011.
In connection with the purchase of a personal residence, on June 3, 1998,
the Company loaned $175,000 to Mr. Wall. The loan has a term of 5 years, bears
interest at the rate of 8-1/2% per annum and is secured by a second lien on such
residence.
See also "Compensation Committee Interlocks and Insider Participation."
COMPARISON OF CUMULATIVE TOTAL RETURN
The following is a comparison of the cumulative total stockholder return
on a $100 investment in the Common Stock of the Company, including the
reinvestment of dividends, with the cumulative total return of a $100 investment
in the NASDAQ National Stock Market Index and the CRSP Total Return Industry
Index for Retail Trade Stocks for the period from September 30, 1997 (the first
quarter ending after the Company's September 25, 1997 initial public offering)
through December 31, 1999. The two comparison indexes are intended to provide a
relevant comparison of total annual return in the time period (through December
31, 1999) in which the Company's Common Stock has been publicly traded.
BIG DOG HOLDINGS, INC.
Comparison of Cumulative Total Return
September 30, 1997 through December 31, 1999
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
NASDAQ NASDAQ
Measurement Period BIG DOG RETAIL MARKET
(Fiscal Year Covered) HOLDINGS, INC. TRADE STOCKS INDEX
- - - - - - - - ----------------------- -------------- ------------ -------
<S> <C> <C> <C>
Measurement Pt- 9/26/97 $100.00 $100.00 $100.00
9/30/97 100.00 106.63 105.91
12/31/97 40.18 102.82 99.31
3/31/98 47.32 123.41 116.20
6/30/98 36.61 126.02 119.57
9/30/98 22.32 91.65 108.25
12/31/98 33.93 124.45 139.61
03/31/99 41.07 117.31 148.00
06/30/99 37.50 113.77 161.94
09/30/99 39.74 102.29 165.87
12/31/99 49.56 104.70 244.37
</TABLE>
The Comparison of Cumulative Total Return shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing of the Company pursuant to the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended
except to the extent the Company specifically incorporates the Comparison by
reference therein. The Comparison shall not be deemed soliciting material or
otherwise deemed filed under either such Act.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS AND AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has appointed Deloitte & Touche LLP as the Company's independent
public accountants and auditors for the fiscal year ending December 31, 2000,
subject to stockholder approval. Deloitte & Touche LLP has served as the
Company's independent public accountants and auditors since 1992.
Services which will be provided to the Company and its subsidiaries by
Deloitte & Touche LLP with respect to the 2000 fiscal year include the
examination of the Company's consolidated financial statements, reviews of
quarterly reports, services related to filings with the SEC and consultations on
various tax matters.
A representative of Deloitte & Touche LLP is expected to be present at
the Annual Meeting to respond to appropriate questions, and to make such
statements as he or she may desire.
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of Deloitte & Touche LLP as the Company independent public
accountants and auditors for the 2000 fiscal year.
MISCELLANEOUS
Other Matters
If any other matters properly come before the meeting, it is the
intention of the proxy holders to vote in their discretion on such matters
pursuant to the authority granted in the proxy and permitted under applicable
law.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that
executive officers, directors, and holders of more than 10% of a company's
registered class of securities file reports of their ownership of a company's
securities with the SEC. Based on a review of these reports, the Company
believes that its reporting persons complied with all applicable filing
requirements.
Cost of Soliciting Proxies
The expenses of preparing and mailing the Notice of Annual Meeting, the
Proxy Statement and the proxy card(s) will be paid by the Company. In addition
to the solicitation of proxies by mail, proxies may be solicited by directors,
officers and employees of the Company (who will receive no additional
compensation) by personal interviews, telephone, telegraph and facsimile. The
Company has not retained, and does not intend to retain, any other entities to
assist in the solicitation of proxies. It is anticipated that banks, custodians,
nominees and fiduciaries will forward proxy soliciting material to beneficial
owners of the Company's Common Stock and that such persons will be reimbursed by
the Company for their expenses incurred in so doing.
Form 10-K and Annual Report to Stockholders
Enclosed with the Proxy Statement is the Annual Report of the Company for
1999, which includes a copy of the Company's Annual Report on Form 10-K for
1999. The Annual Report is enclosed for the convenience of stockholders only and
should not be viewed as part of the proxy solicitation material. If any person
who was a beneficial owner of Common Stock of the Company on the record date for
the 2000 Annual Meeting desires additional copies of the Company's Annual
Report, it will be furnished without charge upon receipt of a written request.
The request should identify the person making the request as a stockholder of
the Company and should be directed to:
Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, CA 93101
Attn: Stockholder Relations
Telephone requests may be directed to Stockholder Relations at (805) 963-8727,
ext. 1362.
Proposals of Stockholders
The 2001 Annual Meeting of stockholders is presently expected to be held
in June 2001. To be considered for inclusion in the Company's Proxy Statement
for the 2001 Annual Meeting, proposals of stockholders intended to be presented
at the meeting must be received by the Corporate Secretary, Big Dog Holdings,
Inc., 121 Gray Avenue, Santa Barbara, California 93101, no later than January 2,
2001.
A stockholder may wish to have a proposal presented at the 2001 Annual
Meeting, but not to have it included in the Company's Proxy Statement for the
meeting. If notice of the proposal is not received by the Company at the above
address by March 18, 2001, then the proposal will be deemed untimely under Rule
14a-4(c) under the Securities and Exchange Act of 1934, and the Company will
have the right to exercise discretionary voting authority with respect to the
proposal.
Stockholders wishing to bring proposals before the 2001 Annual Meeting
must also comply with Section 1.9 of the Company's Bylaws, which requires
certain information to be provided in connection with the submission of
stockholder proposals and sets forth certain requirements in regard thereto.
Anthony J. Wall
Executive Vice President,
General Counsel and Secretary
