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
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DAVID'S BRIDAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
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:
_____________________________________________________________________________
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
[LOGO]
DAVID'S BRIDAL, INC.
44 W. LANCASTER AVE.
ARDMORE, PA 19003
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 7, 2000
To Our Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of David's
Bridal, Inc. ("David's Bridal") will be held on June 7, 2000 at 10:00 a.m.,
local time, at the Adams Mark Hotel, 4000 City Line Avenue, Philadelphia,
Pennsylvania, for the following purposes:
(1) To elect three directors to our Board of Directors to serve for a
three-year term ending at the 2003 annual meeting of shareholders and until
the election and qualification of their successors and to elect one
director to our Board of Directors for a one-year term ending at the 2001
annual meeting of shareholders and until the election and qualification of
his successor;
(2) To approve an amendment to the Stock Option and Restricted Stock
Plan of David's Bridal to increase the number of shares reserved for
issuance under such Plan;
(3) To approve the appointment of Arthur Andersen LLP as the
independent accountants of David's Bridal; and
(4) To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 31, 2000 are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting and
any adjournments thereof. The transfer books will not be closed.
By Order of the Board of Directors,
/s/ Gary E. Erlbaum
---------------
Secretary
May 5, 2000
YOUR PROXY VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN
AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
[LOGO]
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 7, 2000
This Proxy Statement is being furnished to the shareholders of David's
Bridal, Inc. ("David's Bridal") in connection with the Annual Meeting of
Shareholders of David's Bridal to be held on June 7, 2000 and any postponements
or adjournments thereof (the "Annual Meeting"). This Proxy Statement and the
enclosed Proxy Card are being mailed to shareholders on or about May 5, 2000.
Execution and return of the enclosed Proxy Card are being solicited by and
on behalf of the Board of Directors of David's Bridal for the purposes set forth
in the foregoing notice of meeting. The costs incidental to the solicitation and
obtaining of proxies, including the cost of reimbursing banks and brokers for
forwarding proxy materials to their principals, will be borne by David's Bridal.
Proxies may be solicited, without extra compensation, by officers and employees
of David's Bridal by mail, telephone, telefax, personal interviews and other
methods of communication.
The Annual Report to Shareholders for the fiscal year ended January 1,
2000, including consolidated financial statements and other information with
respect to David's Bridal and our subsidiaries, is being mailed to shareholders
with this Proxy Statement. Such Annual Report is not part of this Proxy
Statement.
VOTING AT THE MEETING
RECORD DATE; VOTE REQUIRED; PROXIES
Only shareholders of record at the close of business on March 31, 2000 are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting. As
of that date, David's Bridal had outstanding 19,417,721 shares of Common Stock.
The holders of a majority of such shares, represented in person or by proxy,
shall constitute a quorum at the Annual Meeting. A quorum is necessary before
business may be transacted at the Annual Meeting except that, even if a quorum
is not present, the shareholders present in person or by proxy shall have the
power to adjourn the meeting from time to time until a quorum is present. Each
shareholder entitled to vote shall have the right to one vote for each share of
Common Stock outstanding in such shareholder's name.
The shares of Common Stock represented by each properly executed Proxy Card
will be voted at the Annual Meeting in the manner directed therein by the
shareholder signing such Proxy Card. The Proxy Card provides space for a
shareholder to vote for the nominees, or to withhold authority to vote for the
nominees, for our Board of Directors. The nominees for election as a director
are to be elected by a plurality of the votes cast at the Annual Meeting. With
respect to the approval of the Amendment to the Stock Option and Restricted
Stock Plan ("Plan"), the ratification of Arthur Andersen LLP and any other
matter that may properly be brought before the Annual Meeting, the affirmative
vote of a majority of the votes cast by shareholders entitled to vote thereon is
required to take action, unless a greater percentage is required either by law
or by the Amended and Restated Certificate of Incorporation or Bylaws of David's
Bridal. For determining the number of votes cast with respect to any voting
matter, only those cast "for" or "against" are included. Abstentions will be
considered present and entitled to vote at the Annual Meeting but will not be
counted as votes cast. Accordingly, abstentions will have no effect on the vote.
Similarly, where brokers submit proxies but are prohibited and thus refrain from
exercising discretionary authority in voting shares on certain matters for
beneficial owners who have not provided voting instructions with respect to such
matters (commonly referred to as "broker non-votes"), those shares will be
considered present and entitled to vote at the Annual Meeting but will not be
counted as votes cast as to such matters and thus will have no effect on the
vote.
<PAGE>
If a signed Proxy Card is returned and the shareholder has given no
direction with respect to a voting matter, the shares will be voted with respect
to that matter by the proxy agents as recommended by the Board of Directors.
Execution and return of the enclosed Proxy Card will not affect a shareholder's
right to attend the Annual Meeting and vote in person. Any shareholder giving a
proxy has the right to revoke it by giving notice of revocation to the Secretary
of David's Bridal at any time before the proxy is voted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 31, 2000 (or
as of such other date as may be noted below) with respect to shares of Common
Stock of David's Bridal beneficially owned by each person believed by David's
Bridal to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock, by each director of David's Bridal, by each executive officer of
David's Bridal named in the Summary Compensation Table under "Executive
Compensation" and by all current directors and executive officers of David's
Bridal as a group. Except as indicated below, David's Bridal understands that
the shareholders listed in such table have sole voting and investment power with
respect to the shares owned by them. The number of shares in the table below
includes shares issuable upon the exercise of outstanding stock options to the
extent that such options are exercisable by the shareholder, incumbent director,
nominee for director or executive officer on or within 60 days after March 31,
2000. In the case of each incumbent director, nominee for director and executive
officer, the information below has been provided by such person at the request
of David's Bridal.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY COMMON STOCK
EXECUTIVE OFFICERS AND DIRECTORS OWNED OUTSTANDING
- -------------------------------- ------------ ------------
<S> <C> <C>
Steven H. Erlbaum(a).................................................. 1,687,055 8.6%
Gary E. Erlbaum(b).................................................... 1,252,336 6.4%
Philip Youtie(c)...................................................... 1,185,775 6.1%
Steven J. Sidewater(d)................................................ 619,092 3.2%
Robert D. Huth(e)..................................................... 482,378 2.4%
Robert B. Calhoun, Jr.(f)............................................. -- --
Charles C. Conaway.................................................... -- --
Michael W. Rayden..................................................... -- --
Robert Frost.......................................................... -- --
Eugene P. Lynch....................................................... -- --
Edward S. Wozniak..................................................... -- --
Susan M. Zeitz........................................................ 1,000 *
All executive officers and directors as a group (12 persons)(g)....... 5,227,636 26.1%
FIVE PERCENT HOLDERS
The Clipper Group(h).................................................. 4,472,971 23.0%
Scudder Kemper Investments, Inc.(i)................................... 1,211,990 6.2%
Wellington Management Company, LLP(j)................................. 1,090,600 5.6%
</TABLE>
- ------------------
* Less than 1%
(a) Mr. Steven H. Erlbaum's address is 44 West Lancaster Avenue, Suite 250,
Ardmore, Pennsylvania 19003. Includes 131,056 shares of Common Stock
obtainable under options exercisable within sixty days.
(b) Includes 112,331 shares held by the Erlbaum Family LP and excludes 82,149
shares held by Mr. Gary Erlbaum's three children. Mr. Gary Erlbaum is the
President of the general partner of the Erlbaum Family LP. Mr. Gary Erlbaum
disclaims beneficial ownership of the shares held by his children. Includes
121,161 shares of Common Stock held by Michael Erlbaum and Gary Erlbaum as
Trustees under the Agreement of Trust of S. H. Erlbaum. Includes 253,349
shares of Common Stock held by Gary Erlbaum as Trustee for Adam Erlbaum
Trust. Mr. Gary Erlbaum's address is 44 West Lancaster Avenue, Suite 250,
Ardmore, Pennsylvania 19003.
2
<PAGE>
(c) Mr. Youtie's address is 44 West Lancaster Avenue, Suite 250, Ardmore,
Pennsylvania 19003. Includes 11,041 shares of Common Stock held by Philip
Youtie as custodian for Haleigh Youtie, 1,572 shares of Common Stock held
by Philip Youtie as custodian for Maxwell Evan Youtie. Excludes 89,093
shares of Common Stock held by Eileen Ray Winkler Youtie as custodian for
Haleigh Youtie 102,322 shares of Common Stock held by Eileen Ray Winkler
Youtie as custodian for Maxwell Evan Youtie. Mr. Youtie disclaims
beneficial ownership of the shares held by Eileen Ray Winkler Youtie as
custodian for each Haleigh Youtie and Maxwell Youtie.
(d) Includes (i) 119,606 shares of Common Stock held by Steven J. Sidewater,
Wendy Sidewater and Peter Sidewater as Trustees of the Grantor Retained
Annuity Trust of Steven J. Sidewater and (ii) 119,606 shares of Common
Stock held by SPWJ Associates, L.P. Mr. Sidewater is the general partner of
SPWJ Associates, L.P. Includes 21,946 shares of Common Stock held by the
1998 Irrevocable Deed of Trust of Steven J. Sidewater for Wendy Sidewater,
21,946 shares of Common Stock held by the 1998 Irrevocable Deed of Trust of
Steven J. Sidewater for Peter Sidewater and 308,303 shares of Common Stock
held by the Nancy Sidewater Trust. Includes 1,000 shares of Common Stock
owned by Janet Sidewater, 1,000 shares of Common Stock owned by Maurice
Sidewater and 1,000 shares of Common Stock owned by Catherine Sidewater.
(e) Includes 475,009 shares of Common Stock obtainable under options
exercisable within sixty days.
(f) Excludes 4,472,971 shares of Common Stock held by The Clipper Group. Mr.
Calhoun is the sole shareholder and a director of the ultimate general
partner of The Clipper Group and is deemed to beneficially own all shares
of Common Stock beneficially owned by the Clipper Group.
(g) Includes 606,065 shares of Common Stock obtainable under options
exercisable within sixty days.
(h) Includes shares beneficially owned by Clipper/Merchant Partners, L.P.,
Clipper Equity Partners I, L.P., Clipper/Merban, L.P., Clipper Capital
Associates, L.P. and Clipper/European Re, L.P. The address for each of
these entities is 650 Madison Avenue, New York, New York 10022. Clipper
Capital Associates, L.P. is the general partner of all of The Clipper Group
partnerships. The general partner of Clipper Capital Associates, L.P. is
Clipper Capital Associates, Inc. Robert B. Calhoun is the sole shareholder
and a director of Clipper Capital Associates, Inc. As a result, each of Mr.
Calhoun, Clipper Capital Associates, L.P. and Clipper Capital Associates,
Inc. is deemed to beneficially own all shares of Common Stock beneficially
owned by The Clipper Group.
(i) These shares are held by Scudder Kemper Investments, Inc., an investment
advisor registered under the Investment Adviser Act of 1940. Scudder has
sole investment power as to 1,211,990 shares, sole voting power as to
848,100 shares and shared voting power as to 13,800 shares. The foregoing
information was derived from a Schedule 13G filed by Scudder on January 28,
2000. The address of Scudder is 345 Park Avenue, New York, New York 10154.
(j) These shares are held by Wellington Management Company, LLP, an investment
advisor registered under the Investment Adviser Act of 1940. Wellington has
shared investment power as to 1,090,600 shares and shared voting power as
to 713,900 shares. The foregoing information was derived from a Schedule
13G filed by Wellington on February 9, 2000. The address of Wellington is
75 State Street, Boston, Massachusetts, 02109.
3
<PAGE>
MATTERS CONCERNING DIRECTORS
ELECTION OF DIRECTORS
Our Board of Directors currently consists of eight directors and is
classified with respect to terms of office into three classes. Our Class I
directors elected at the Annual Meeting will serve until the 2003 annual meeting
of shareholders and until such directors' successors have been elected and
qualified, except in the event of such directors' earlier death, resignation or
removal. The terms of office of our Class III and Class II directors will expire
at the annual meetings to be held in 2001 and 2002, respectively, upon the
election and qualification of their successors.
Our Board of Directors has nominated Mr. Steven J. Sidewater, Mr. Eugene P.
Lynch and Mr. Michael W. Rayden for election as the Class I directors. Each
currently are directors of David's Bridal. Mr. Rayden was elected by our Board
as a director on September 1, 1999 to fill a vacancy created when we increased
the size of the Board from seven to eight members. Our Board of Directors has
also nominated Mr. Charles C. Conaway for election as a Class II director. Mr.
Conaway was elected by our Board as a director November 10, 1999 to fill a
vacancy on our Board.
The persons named as proxy agents in the enclosed Proxy Card intend (unless
instructed otherwise by a shareholder) to vote for the election of Messrs.
Sidewater, Lynch and Rayden for election as the Class I directors and Mr.
Conaway as a Class II director. In the event that one or more of the nominees
should become unable to accept nomination or election (a circumstance which our
Board of Directors does not expect), the proxy agents intend to vote for any
alternate nominee designated by our Board of Directors, or, in the discretion of
our Board, the position may be left vacant.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE CLASS I NOMINEES
AND THE CLASS II NOMINEE.
Set forth below is certain information with respect to each nominee for
director and each other person currently serving as a director of David's Bridal
whose term of office will continue after the Annual Meeting, including the class
and term of office of each such person. This information has been provided by
each director at the request of David's Bridal.
Class III--Directors with Terms Continuing until 2002
STEVEN H. ERLBAUM has been the Chairman of our Board since 1990 and is a
co-founder of David's Bridal. Prior to the completion of our initial public
offering in May 1999, Mr. Erlbaum also served as our Chief Executive Officer.
Mr. Erlbaum is also a private investor in real estate and other private business
ventures and was a founder of Mr. Goodbuys, a chain of home improvement retail
stores.
ROBERT D. HUTH has been our President, Chief Operating Officer and one of
our directors since July 1995, and became our Chief Executive Officer in May
1999. Mr. Huth has been primarily responsible for running our day-to-day
operations since joining us in 1995. Prior to joining us, from 1987 to 1995, Mr.
Huth was Executive Vice President and Chief Financial Officer of Melville
Corporation, a specialty retailer operating diversified businesses. Mr. Huth
also served on the Melville Board of Directors. From 1971 to 1987, Mr. Huth
practiced accounting at KPMG Peat Marwick where he became a partner in 1981. Mr.
Huth also serves on the board of directors of Stage Stores, Inc.
Class I--Nominees for Terms Continuing until 2003
STEVEN SIDEWATER has been one of our directors since August 1992. Mr.
Sidewater is currently President of RP Management, a real estate holding and
management company, a position he has held since June 1991. Mr. Sidewater served
in various capacities at Charming Shoppes, Inc. for approximately 25 years,
including President, Chief Operating Officer and Vice Chairman of the board of
directors from 1988 through 1990.
EUGENE P. LYNCH was one of the founders of The Clipper Group where he has
been a Managing Director since 1993. Prior to joining The Clipper Group, Mr.
Lynch was a Vice President of Credit Suisse First Boston, which he joined in
1983. Mr. Lynch also serves as a director of AVTEAM, Inc., Owosso Corp.,
TravelCenters of America, Inc. as well as several privately-held companies.
MICHAEL W. RAYDEN has served as the President and Chief Executive Officer
of Limited Too, Inc. since March 1996. Before joining Limited Too, Inc., he
served as the President, Chief Executive Officer and
4
<PAGE>
Chairman of the Board of Pacific Sunwear of California, Inc. from 1990 to 1996.
Mr. Rayden also serves on the board of directors of Limited Too, Inc.
Class II--Directors with Terms Continuing until 2001
ROBERT B. CALHOUN, JR. has been one of our directors since July 1995. Mr.
Calhoun is a founder and has been a Managing Director of Monitor Clipper
Partners, Inc. since its formation in June 1997. Mr. Calhoun also founded The
Clipper Group, L.P. in 1990 and has served as its President since such date.
Prior to forming The Clipper Group, Mr. Calhoun was a Managing Director of
Credit Suisse First Boston Corporation, which he had joined in 1965. Mr. Calhoun
also serves as a director of Avondale Incorporated, Interstate Bakeries, Inc.
and TravelCenters of America, Inc.
GARY E. ERLBAUM has been our Secretary, Treasurer and one of our directors
since August 1992. Since 1983, Mr. Erlbaum has been involved in real estate and
other business ventures. Mr. Erlbaum is also a director and a member of the
executive committee of DBT Online, Inc., an on-line provider of database
services.
CHARLES C. CONAWAY is President and Chief Operating Officer of CVS
Corporation ("CVS"), and President and Chief Operating Officer of CVS Pharmacy,
Inc. Prior to his current position, Mr. Conaway served as Executive Vice
President and Chief Financial Officer of both CVS Corporation and Melville
Corporation. Mr. Conaway also serves as a director of Linens 'n Things, Inc. and
Streamline.com, Inc.
COMMITTEES AND MEETINGS
Our Board of Directors has an Audit and a Compensation Committee. During
fiscal year 1999, the Board of Directors held eight meetings and the Audit and
Compensation Committees each held two meetings. Each director attended at least
75% of the meetings of our Board of Directors and of our Board committee or
committees on which he served during 1999.
The Audit Committee is responsible for recommending to our Board the firm
to be employed by David's Bridal as our independent accountants and auditors,
consulting with such firm as to the annual audit and the adequacy of internal
controls, reviewing the accounting controls, practices and policies of David's
Bridal and reviewing budgets, cash and debt management and financial matters
generally. The Compensation Committee recommends to our Board the compensation
of our chief executive officer, reviews and takes action on the chief executive
officer's recommendations regarding the appropriate compensation of our other
officers and key personnel, approves the granting of any bonuses to officers,
reviews other compensation and personnel development matters generally and
recommends to our Board the compensation of non-employee directors and for
administering the Plan.
The current members of the Audit Committee are Steven J. Sidewater and
Eugene P. Lynch. The current members of the Compensation Committee are Steven H.
Erlbaum, Steven J. Sidewater and Robert B. Calhoun, Jr.
DIRECTOR COMPENSATION ARRANGEMENTS
David's Bridal has a director compensation plan under which directors, upon
initial election to our Board, are granted options to purchase 20,000 shares of
Common Stock. The plan provides for annual compensation to directors of either a
stock option to purchase 5,000 shares of Common Stock or $15,000 cash, at the
election of the director. Members of the Audit and Compensation Committees are
paid $500 per meeting, $250 if attendance is by telephone. Directors are also
reimbursed for out-of-pocket expenses incurred.
During 1999, we granted each non-management director stock options to
purchase 5,000 shares of our Common Stock as compensation for their services. In
addition, effective upon the consummation of our initial public offering in May
1999, Steven H. Erlbaum became a consultant to us for a three year term. He is
paid a consulting fee in each of the first two years of $425,000. In addition,
he will receive a fee of $200,000 for the third year. Gary E. Erlbaum has
assisted us, and will continue to assist us in bank financing, real estate
matters and as a liaison with legal counsel. He has received aggregate cash
compensation of $70,901 in fiscal 1999.
5
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION
The following table sets forth certain information with respect to
compensation earned during fiscal year 1999 by our current chief executive
officer, our former chief executive officer and our four other most highly
compensated executive officers in the fiscal year 1999 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
-------------------------------------- --------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) OPTIONS COMPENSATION(3)
- --------------------------- ---- -------- ------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven H. Erlbaum .................. 1999 $168,365 -- -- 106,056 $ 693
Former Chief Executive Officer(4) 1998 $425,000 -- -- -- $ 924
Robert D. Huth ..................... 1999 $463,462 -- -- 296,474 $ 949
President and Chief Executive 1998 $400,000 -- -- -- $ 985
Officer
Philip Youtie ...................... 1999 $195,116 $38,659 -- -- $ 499
Executive Vice President, 1998 $183,000 $38,659 -- -- $ 518
Bridal Product Development/
Sourcing
Robert Frost ....................... 1999 $185,000 $46,898 $ 81,541 25,000 --
Senior Vice President, Real Estate 1998 $ 58,073 -- -- -- --
Edward S. Wozniak .................. 1999 $207,308 $50,700 $ 194,355 7,500 --
Senior Vice President and 1998 $133,369 -- -- 51,555 --
Chief Financial Officer
Susan M. Zeitz ..................... 1999 $189,749 $35,769 -- 10,000 --
Senior Vice President, Marketing 1998 $146,716 -- -- 29,460 --
</TABLE>
- ------------------
(1) In accordance with the rules of the Commission, the compensation described
in this table does not include medical, group life insurance or other
benefits received by the named executive officers that are generally
available to all salaried employees of David's Bridal, and certain
perquisites and other personal benefits received by the named executive
officers that do not exceed the lesser of $50,000 or 10% of any such
officer's salary and bonus disclosed in this table.
(2) Represents reimbursement for relocation expenses.
(3) Represents amounts contributed by David's Bridal for the benefit of the
executive officers under the David's Bridal 401(k) Plan.
(4) Mr. Erlbaum served as David's Bridal chief executive officer through May
26, 1999 and has served as a consultant since such date. Excludes
consulting payments of $256,635 in 1999.
6
<PAGE>
OPTION GRANTS
The following table discloses options granted to the Named Executive
Officers during the fiscal year ended January 1, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(3)
------------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF TOTAL VALUE AT ASSUMED ANNUAL
NUMBER OF OPTIONS/SARS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATE FOR OPTION
UNDERLYING EMPLOYEES IN EXERCISE OR TERM
OPTIONS/SARS FISCAL YEAR BASE PRICE EXPIRATION ------------------------
NAME GRANTED 1999(1) PER SHARE(2) DATE 5% 10%
---- ------------ ---------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Huth................ 296,474 29.6% $13.00 5/19/09 $2,423,862 $6,142,542
Robert Frost.................. 25,000 2.5% $13.00 5/19/09 $ 204,391 $ 517,966
Edward S. Wozniak............. 7,500 0.7% $13.00 5/19/09 $ 61,317 $ 155,390
Susan M. Zeitz................ 10,000 1.0% $13.00 5/19/09 $ 81,756 $ 207,187
</TABLE>
- ------------------
(1) During fiscal year 1999, options to purchase 1,002,530 shares of Common
Stock were granted to 149 employees.
(2) The exercise price of the options granted was equal to the fair market
value of the underlying stock on the date of grant.
(3) All options become exercisable on the third anniversary of the date of
grant with the exception of options granted to Mr. Huth to purchase 106,056
shares of Common Stock which are immediately exercisable.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information regarding the number and
value of stock options held at January 1, 2000 by the Named Executive Officers.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT JANUARY 1, 2000 JANUARY 1, 2000(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Huth................... 97,947 $791,412 450,009 190,418 $ 2,155,244 --
Robert Frost..................... -- -- -- 25,000 -- --
Edward S. Wozniak................ -- -- -- 59,055 -- $ 226,796
Susan M. Zeitz................... -- -- -- 39,460 -- $ 129,597
</TABLE>
- ------------------
(1) Based on the closing price of Common Stock as reported on the Nasdaq
National Market on December 31, 1999 ($11.188 per share), net of the option
exercise price.
EMPLOYMENT AGREEMENTS
We entered into an employment agreement with Philip Youtie on May 20, 1999,
the principal terms of which are as follows:
o Term: two years.
o Base Salary: $200,000 in the first year, $210,000 in the second year.
o Bonus: Eligible for an annual bonus in accordance with our bonus plan.
o Severance: in the event of termination of Mr. Youtie by us without cause,
we will continue to pay Mr. Youtie's salary for the lesser of 12 months
or the remaining term of the employment agreement.
Mr. Youtie has also agreed to non-competition and non-solicitation
covenants as set forth in his employment agreement.
7
<PAGE>
We entered into an employment agreement with Robert D. Huth on May 20,
1999, the principal terms of which are as follows:
o Term: three years.
o Base Salary: $500,000 per year, subject to annual review by the
Compensation Committee of our Board of directors
o Bonus: eligible to participate in a bonus plan to be adopted by the
Compensation Committee of our board of directors.
o Severance: in the event of termination of Mr. Huth by us without cause,
we will continue to pay Mr. Huth's salary over the 12 months following
termination.
Mr. Huth has also agreed to non-competition and non-solicitation covenants
as set forth in his employment agreement.
We entered into a consulting agreement with Steven H. Erlbaum on May 20,
1999, the principal terms of which are as follows:
o Term: three years
o Base Compensation: $425,000 in the first two years, $200,000 in the third
year.
o Bonus: eligible for a bonus based upon a comparison of actual to budgeted
earnings for 1999.
Mr. Erlbaum has also agreed to non-competition and non-solicitation
covenants as set forth in his consulting agreement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LOAN TO CHIEF EXECUTIVE OFFICER
On June 7, 1999, David's Bridal made a loan in the principal amount of
$450,000 (the "loan") to Robert D. Huth, our President and Chief Executive
Officer. This loan was made in connection with his relocation and establishment
of a permanent residence in the vicinity of our primary executive office. The
loan is evidenced by a promissory note which includes the following terms:
o interest at the rate of 8% per annum;
o on each of June 6, 2000 and June 6, 2001, to the extent Mr. Huth remains
employed by us as of such date, principal in the amount of $150,000, and
all accrued interest as of such date, shall be forgiven;
o on June 6, 2002, to the extent Mr. Huth remains employed by us as of such
date, all remaining principal and interest shall be forgiven;
o all principal and interest shall be forgiven in the event we terminate
Mr. Huth without cause; and
o Mr. Huth shall be required to pay us all principal and accrued interest
which has not been forgiven, within thirty days following the date on
which Mr. Huth is either terminated for cause or voluntarily resigns his
employment.
INTEREST OF DIRECTOR IN STORE LEASE
Steven J. Sidewater, a director of David's Bridal, and members of his
family own a 12% limited partnership interest in a limited partnership that has
leased a store located in Danvers, Massachusetts to David's Bridal. We paid
$143,418 in rental payments to this partnership in fiscal 1999.
8
<PAGE>
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH ON PAGE 10 SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL
STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, EXCEPT TO THE EXTENT THAT DAVID'S BRIDAL SPECIFICALLY
INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.
REPORT OF THE COMPENSATION COMMITTEE
As members of the Compensation Committee, it is our duty to review the
compensation paid to the Named Executive Officers, to recommend to our Board the
annual base salary of David's Bridal Chief Executive Officer, to approve the
annual base salaries of the other Named Executive Officers and of all other
officers of David's Bridal and to approve all bonuses and other material
compensation granted to such persons. In addition, we also constitute the
committee (the "Committee") which administers the Plan, and thus are responsible
for the granting of stock options, stock appreciation rights and restricted
stock to officers and employees. These duties and the other responsibilities of
the Compensation Committee are more fully described on page 4 of this Proxy
Statement under the caption "Matters Concerning Directors -- Committees and
Meetings." In fulfilling these duties and responsibilities, it is the
Compensation Committee's goal to have a policy that will enable David's Bridal
to attract, retain and reward senior officers who contribute to both its
short-term and long-term success.
The David's Bridal compensation policy for senior officers is to pay
competitively and to be fair and equitable in the administration of pay. This is
the same policy applicable to all employees of David's Bridal. David's Bridal
seeks to balance the compensation paid to a particular individual with the
compensation paid to other executives holding comparable positions both inside
David's Bridal and at other similar companies.
Robert Huth, our Chief Executive Officer, received a grant of options to
purchase 296,474 shares of Common Stock in fiscal year 1999. Mr. Huth's grant
was determined by the Compensation Committee and reflected the Compensation
Committee's recognition of the key role played by Mr. Huth during fiscal year
1999, including our achievement of record financial results. Additionally, Mr.
Huth and Steven Erlbaum, our Chief Executive Officer through May 26, 1999 each
received a grant of options to purchase 25,000 shares of Common Stock in fiscal
year 2000 for performance in 1999. The grants made to the other four Named
Executive Officers were recommended by Mr. Huth based on the performance of
these officers in fiscal 1999. As with respect to bonuses, the decisions of the
Compensation Committee regarding salaries are subjective and not based on any
list of specific criteria.
The Compensation Committee also administers the Plan providing for grants
of stock options, stock appreciation rights and restricted stock. The purpose of
stock option grants is to provide an additional incentive to key employees to
work to maximize shareholder value, and vesting periods may be utilized to
encourage such employees to remain with David's Bridal. Stock option grants are
entirely at the discretion of the Compensation Committee, including their
timing, the recipients thereof and the number of shares underlying any
particular grant.
In summary, we believe that the combination of salary, bonus, stock options
and awards and other compensation received by each of the Named Executive
Officers for fiscal year 1999 was reasonable in view of their past and
anticipated future contributions to David's Bridal.
Payments during 1999 to David's Bridal executives as discussed above were
made with regard to the provisions of Section 162(m) of the Internal Revenue
Code. Section 162(m) limits the deduction that may be claimed by a "public
company" for compensation paid to certain individuals to $1 million except to
the extent that any excess compensation is "performance-based compensation." It
is the Compensation Committee's intention that as a general rule compensation
should not be limited as to its deductibility under Section 162(m).
COMPENSATION COMMITTEE
Steven H. Erlbaum
Steven J. Sidewater
Robert B. Calhoun
April 3, 2000
9
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PERFORMANCE GRAPH
The following line graph compares the yearly change in the cumulative total
shareholder return of our Common Stock for the past five fiscal years with the
cumulative total return of the Standard & Poor's 500 Stock Index (the "S&P 500")
and the Standard & Poor's Smallcap Retail Specialty-Apparel Index (the "S&P
Smallcap Retail Specialty Apparel Index"). The graph assumes that $100 was
invested at May 21, 1999 (the date of the initial public trading of our Common
Stock), the S&P 500 and the S&P Smallcap Retail Specialty-Apparel Index.
Dividend reinvestment has been assumed. The S&P Smallcap Retail
Specialty-Apparel Index is a capitalization-weighted index that measures the
performance of the specialty apparel retail sector of Standard & Poor's Smallcap
Index and includes companies such as Men's Wearhouse, Ann Taylor Stores and
Gymboree Corp.
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
<TABLE>
<CAPTION>
5/22/99 6/30/99 9/30/99 1/1/2000
------- ------- ------- --------
<S> <C> <C> <C> <C>
David Bridal, Inc.................................. $100.00 $119.68 $ 57.19 $ 86.06
S&P 500............................................ $100.00 $ 96.09 $ 89.79 $ 109.74
S&P Smallcap Retail Specialty-Apparel Index........ $100.00 $ 97.55 $ 90.23 $ 91.65
</TABLE>
10
<PAGE>
APPROVAL OF AMENDMENT TO STOCK OPTION AND RESTRICTED STOCK PLAN
At the Annual Meeting, a proposal will be presented to the stockholders to
approve the adoption of an amendment (the "Amendment") to increase the number of
shares of our Common Stock reserved for issuance under the Plan from 2,450,000
to 2,900,000. On February 16, 2000, our Board of Directors adopted the
Amendment, subject to stockholder approval at the Annual Meeting. The Amendment
will not be effective unless or until stockholder approval is obtained.
VOTE REQUIRED FOR APPROVAL
The proposal to amend the Plan requires the affirmative vote of a majority
of the shares present in person or represented by proxy at the Annual Meeting
for its approval. Abstentions may be specified on the proposal and will be
considered present at the Annual Meeting, but will not be counted as affirmative
votes. Abstentions, therefore, will have the practical effect of voting against
the proposal because the affirmative vote of a majority of the shares present at
the Annual Meeting is required to approve the proposal. Broker non-votes are
considered not present at the Annual Meeting and, therefore, will not be voted
or have any effect on the proposal.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
DESCRIPTION OF THE PLAN
The Plan was last approved by our stockholders in October 1995. Under the
Plan, our designated employees, consultants and non-employee members of our
board of directors may receive grants of incentive stock options, nonqualified
stock options and restricted stock. The aggregate number of shares of our Common
Stock that may be issued under the Plan is 2,450,000 shares. As of March 31,
2000, stock options to purchase 2,446,702 shares have been granted under the
Plan.
The maximum number of shares that may be subject to grants to any
individual in a year is 150,000 shares. Employees may receive incentive stock
options, nonqualified stock options and restricted stock under the Plan.
Non-employee directors and consultants may receive nonqualified stock options
and restricted stock. If options terminate or expire, or if restricted stock is
forfeited, the shares attributable to such grants may again be subject to grants
under the Plan. The Plan will terminate on September 30, 2005, unless sooner
terminated pursuant to its terms.
The Plan is currently administered by the Compensation Committee (the
"Committee"). Grants and other actions by the Committee are subject to
ratification by our Board of Directors.
The Committee may select the employees to receive grants under our stock
option plans, the amount of Common Stock to be optioned to each such employee
and the terms of each grant. As of January 1, 2000, we employed approximately
394 individuals who were eligible to participate in the Plan. As of January 1,
2000, under the Plan, 198,475 shares of Common Stock had been obtained upon
exercise of stock options and stock options exercisable for 2,148,227 shares of
Common Stock were outstanding and held by all employees as a group.
The option price of an option may be equal to, greater than or less than
the fair market value of a share of Common Stock on the date of grant, provided
that:
o the option price of an incentive stock option may not be less than the
fair market value of a share of Common Stock on the date of grant and
o an incentive stock option that is granted to a person who owns more than
10% of our outstanding Common Stock or the outstanding Common Stock of a
subsidiary must have an option price of not less than 110% of the fair
market of the Common Stock on the date of grant.
On January 1, 2000, the fair market value of our Common Stock was $11.1875
per share.
11
<PAGE>
The Committee determines the term of each option, which cannot exceed ten
years from the date of grant. However, an incentive stock option granted to a
10% shareholder may not have a term longer than five years from the date of
grant.
Unless the committee determines otherwise, upon a change of control where
David's Bridal is not the surviving corporation, outstanding options will be
assumed by the surviving corporation and will continue to vest following the
change of control. In other cases, unless the Committee determines otherwise,
outstanding grants will automatically vest in full in the event of a change of
control. Alternatively, in the event of a change of control, the Committee may
require that grantees surrender their outstanding options in exchange for
payment by us, in cash or Common Stock, of an amount equal to the amount by
which the fair market value of the Common Stock exceeds the option price.
A change of control will be deemed to occur if:
o any person acquires securities representing more than 25% of the voting
power of our then outstanding securities, or
o shareholders approve an agreement providing for:
o a merger or consolidation where David's Bridal shareholders immediately
before the transaction will not hold, immediately after the
transaction, more than 50% of the stock of the surviving corporation
and where, immediately after the transaction, persons who were
directors of David's Bridal immediately before the transaction do not
constitute a majority of the board of the surviving corporation,
o a sale of substantially all of the assets of David's Bridal,
o a liquidation or dissolution of David's Bridal,
o any person begins a tender offer for 25% or more of the Common Stock of
David's Bridal or
o directors are elected such that a majority of the directors have been
members of our Board for less than two years, unless the election or
nomination of the directors was approved by at least two-thirds of the
directors then in office who were directors at the beginning of the
period.
GRANTS OF OPTIONS, APPRECIATION RIGHTS, RESTRICTED STOCK AND PERFORMANCE UNITS
The following table summarizes the number of Stock Options that were
granted in Fiscal 2000 to the following persons:
NUMBER OF
RECIPIENT OPTION SHARES
--------- -------------
Steven H. Erlbaum.................................... 25,000
Robert D. Huth....................................... 25,000
Executive Officers as a Group (2 persons)............ 75,000
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as David's Bridal independent public
accountants and auditors since 1992. It is management's expectation that Arthur
Andersen LLP will continue in such capacity for the current year. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting with the opportunity to make a statement if he or she desires to do so
and to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS -- 2001 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for shareholder
action at annual meetings in accordance with regulations adopted by the
Securities and Exchange Commission. Any proposal which an eligible shareholder
desires to have presented at the 2001 annual meeting of shareholders (which is
expected to be held on or about May 15, 2001) concerning a proper subject for
inclusion in the proxy statement and for consideration at the annual meeting,
will be included in our proxy statement and related proxy card if it is received
by David's Bridal no later than January 17, 2001. In addition, our Bylaws
provide that any shareholder wishing to make a nomination for director must give
David's Bridal notice no later than 90 days nor more than 120 days prior to the
meeting. The notice must meet certain other requirements set forth in the
Bylaws. Shareholders may request a copy of the Bylaws from the Secretary of
David's Bridal, 44 W. Lancaster Ave., Ardmore, PA., 19003.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that directors and certain officers of David's Bridal, and persons who own more
than ten percent of our Common Stock, file reports of ownership of Company
securities and changes in ownership of Company securities with the Securities
and Exchange Commission. Based on our review of Section 16(a) filings, David's
Bridal believes that all filings required to be made during 1999 were made on a
timely basis except as follows: Robert B. Calhoun, Jr., Clipper Capital
Associates, L.P., Clipper/European Re, L.P., Clipper Merchant Partners, L.P.,
Clipper Capital Associates, Inc., Clipper Equity Partners I, L.P.
Clipper/Merban, L.P., Gary Erlbaum, Michael C. Erlbaum, Steven H. Erlbaum,
Robert D. Huth, Eugene P. Lynch, Fred A. Postelle, Steven J. Sidewater, Edward
S. Wozniak, Philip Youtie and Susan Zeitz did not file their initial reports of
beneficial ownership on a timely basis. Each of Robert B. Calhoun, Jr., Clipper
Capital Associates, L.P. Clipper/European Re, L.P., Clipper Merchant Partners,
L.P., Clipper Capital Associates, Inc., Clipper Equity Partners I, L.P.
Clipper/Merban, L.P., Gary Erlbaum, Michael C. Erlbaum, Steven H. Erlbaum,
Robert D. Huth, Steven J. Sidewater and Philip Youtie filed two reports, each
covering one transaction, after the applicable due date. Robert Frost, Thomas P.
Johnson, Nancie Samet, Charles Conaway and Michael Rayden did not file their
initial reports of beneficial ownership on a timely basis.
OTHER MATTERS
Our Board of Directors does not intend to bring any other matters before
the Annual Meeting and has no reason to believe any other matters will be
presented. If, however, other matters properly do come before the meeting, it is
the intention of the persons named as proxy agents in the enclosed Proxy Card to
vote upon such matters in accordance with their judgment.
By Order of the Board of Directors,
/s/ Gary E. Erlbaum
---------------
Secretary
April 30, 2000
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[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3.
<TABLE>
<S> <C> <C> <C>
1. Election of Directors FOR all nominees below [X] WITHHOLD AUTHORITY to vote [X} *EXCEPTIONS [X}
(except as marked to the for all nominees listed below
contrary below)
The nominees for the Board of Directors are: Charles C. Conaway, Eugene P. Lynch, Michael W. Rayden, Steven J. Sidewater
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that
nominee's name in the space provided below.)
*Exceptions
-----------------------------------------------------------------------------------------------------------
2. To approve an amendment to our Stock Option and Restricted 3. To approve the appointment of Arthur Anderson LLP
Stock Plan to increase the number of shares available for as our independent accountants.
grant thereunder from 2,450,000 shares to 2,900,000 shares.
FOR [X] AGAINST [X] ABSTAIN [A] FOR [X] AGAINST [X] ABSTAIN [X]
4. In their discretion, to transact any other business that may properly come before the Annual Meeting. Address Change and
or Comments Mark Here [X]
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such.
Dated: , 2000
-------------------------------------
----------------------------------------------------
Signature
----------------------------------------------------
Signature
Votes MUST be indicated
Sign, Date and Return the Proxy Card in the Enclosed Envelope. (x) in Black or Blue ink. [X]
</TABLE>
<PAGE>
DAVID'S BRIDAL, INC.
44 West Lancaster Avenue
Ardmore, PA 19003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS, JUNE 7, 2000
KNOW ALL MEN BY THESE PRESENTS that I (we), the undersigned stockholder(s) of
David's Bridal, Inc., a Florida corporation (the "Company") do hereby
nominate, constitute, and appoint Robert D. Huth or Edward S. Wozniak, or any
one or more of them, proxies with full power of substitution for me and in
my name, place and stead, to vote all if the Common Stock, par value $.01
per share, of the Company, standing in my name on its books on March 31, 2000
at the Annual Meeting of its Stockholders to be held on June 7, 2000 at the
Adam's Mark Hotel, 4000 City Line Avenue, Philadelphia, PA 19131, at 10:00 a.m.,
local time, and at any and all postponement or adjournment thereof.
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED, WILL
BE VOTED "FOR" PROPOSALS 1, 2 AND 3 AND IN THE DISCRETION OF THE PERSON VOTING
THE PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE
MEETING.
(Continued, and please sign on reverse side)
DAVID'S BRIDAL, INC.
P.O. BOX 11441
NEW YORK, NY 10203-0441
