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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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DAVID'S BRIDAL, INC.
(NAME OF SUBJECT COMPANY)
DAVID'S BRIDAL, INC.
(NAME OF PERSON FILING STATEMENT)
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COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
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238576102
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ROBERT D. HUTH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DAVID'S BRIDAL, INC.
1001 WASHINGTON STREET
CONSHOHOCKEN, PENNSYLVANIA 19428
(610) 896-2111
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF PERSON FILING STATEMENT)
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WITH A COPY TO:
ALAN SINGER
MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103-2921
(215) 963-5000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
(a) NAME AND ADDRESS. The name of the subject company to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
relates is David's Bridal, Inc., a Florida corporation ("David's Bridal"). The
address of the principal executive offices of David's Bridal is 1001 Washington
Street, Conshohocken, Pennsylvania 19428. The telephone number of the principal
executive offices of David's Bridal is 610-896-2111.
(b) SECURITIES. The title of the class of equity securities to which this
Schedule 14D-9 relates is the common stock, $.01 par value, of David's Bridal
(the "Common Stock"). As of July 3, 2000, there were 19,469,276 shares of Common
Stock issued and outstanding and options to acquire 2,322,952 shares of Common
Stock.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) NAME AND ADDRESS. The name, business address, and business telephone
number of David's Bridal, which is the person filing this Schedule 14D-9, are
set forth in Item 1 above. The filing person is the subject company.
(b) TENDER OFFER. This Schedule 14D-9 relates to the offer by Alpha Omega
Acquisition, Inc., a Florida corporation ("Purchaser") and a wholly owned
subsidiary of The May Department Stores Company, a Delaware corporation ("May"),
disclosed in a Tender Offer Statement on Schedule TO, dated July 10, 2000 (the
"Schedule TO"), to purchase all of the issued and outstanding shares of Common
Stock at a price of $20.00 per share, net to the seller in cash (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated July 10, 2000 and filed as Exhibit (a)(1) to the Schedule TO
(the "Offer to Purchase"), and the related Letter of Transmittal (which, as they
may be amended and supplemented from time to time, together constitute the
"Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 3, 2000 (the "Merger Agreement"), among May, Purchaser and David's
Bridal. The Merger Agreement provides, among other things, that as soon as
practicable following the satisfaction or waiver of the conditions set forth in
the Merger Agreement, Purchaser will be merged with and into David's Bridal (the
"Merger"), with David's Bridal as the surviving corporation (the "Surviving
Corporation") and a wholly owned subsidiary of May. At the effective time of the
Merger (the "Effective Time"), each share of Common Stock then outstanding
(other than shares of Common Stock held by May, Purchaser or David's Bridal or
by shareholders who perfect dissenters' rights under the Merger Agreement and/or
the Florida Business Corporation Act ("FBCA")) will be converted into the right
to receive the Offer Price. A copy of the Merger Agreement is filed herewith as
Exhibit (e)(1) and is incorporated herein by reference.
As set forth in the Schedule TO, the principal offices of May and Purchaser
are located at 611 Olive Street, St. Louis, Missouri 63101-1799. The telephone
number of the principal executive offices of May and Purchaser is 314-342-6300.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Certain contacts, agreements, arrangements or understandings between
David's Bridal or its affiliates and certain of its directors and executive
officers are, except as noted below, described in the Proxy Statement of David's
Bridal dated May 5, 2000 previously sent to shareholders and in the Information
Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934 and
Rule 14f-1 thereunder (the "Information Statement") that is attached as Annex B
to this Schedule 14D-9 and is incorporated herein by reference. Except as set
forth in the response to this Item 3 or in Annex B attached hereto or as
incorporated by reference herein, to the knowledge of David's Bridal, there are
no material agreements, arrangements or understandings and no actual or
potential conflicts of interest between David's Bridal or its affiliates and (1)
David's Bridal's executive officers, directors or affiliates, or (2) May or
Purchaser, or their respective executive officers, directors or affiliates.
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TREATMENT OF DAVID'S BRIDAL STOCK OPTIONS. The Merger Agreement provides
that David's Bridal will use its reasonable best efforts to cause each
outstanding option to purchase shares of Common Stock (including any related
alternative rights) granted under any equity plan or arrangement of David's
Bridal or its subsidiaries (collectively, the "Company Option Plans") (including
those granted to current or former employees and directors of David's Bridal or
any of its subsidiaries) (the "Employee Stock Options") to become exercisable,
and each restricted share granted under the Company Option Plans, to vest in
full and become fully transferable and free of restrictions, either prior to the
purchase of the shares of Common Stock pursuant to the Offer or immediately
prior to the Effective Time, as permitted pursuant to the terms and conditions
of the applicable Company Option Plan. David's Bridal will offer to each holder
of an Employee Stock Option that is outstanding immediately prior to the first
purchase of shares of Common Stock pursuant to the Offer (the "Purchase Date")
(whether or not then presently exercisable or vested) to, and will use its
reasonable best efforts to cause such holders to, cancel such Employee Stock
Option in exchange for an amount in cash equal to the product obtained by
multiplying (x) the difference between the Offer Price and the per share
exercise price of such Employee Stock Option, by (y) the number of shares of
Common Stock covered by such Employee Stock Option. All payments in respect of
such Employee Stock Options will be funded by May and made on the Purchase Date,
subject to the collection or withholding of all applicable withholding taxes
required by law to be collected or withheld by David's Bridal. The Company
Option Plans currently provide that upon a change in control (which includes the
commencement of the Offer), the David's Bridal Board of Directors may require
all holders of Employee Stock Options to surrender such options in exchange for
payment by David's Bridal of an amount by which the then existing fair market
value of the Common Stock subject to such options exceeds the exercise price of
such options. The David's Bridal Board of Directors has taken such action
conditioned upon consummation of the transactions contemplated by the Merger
Agreement.
EMPLOYMENT AGREEMENT. In connection with the transactions contemplated by
the Merger Agreement, May entered into an employment agreement (the "Employment
Agreement") with Robert Huth, President and Chief Executive Officer of David's
Bridal, effective as of the closing date of the Merger. A copy of the Employment
Agreement is filed herewith as Exhibit (e)(4) and is incorporated herein by
reference.
The Employment Agreement provides that May will employ Mr. Huth as the
president and chief executive officer of David's Bridal for a term that
commences on the closing date of the Merger and ends on April 30, 2004. The
Employment Agreement provides that, after the closing date of the Merger, Mr.
Huth will receive a base salary of $600,000 per year, subject to annual review,
become eligible for a bonus for fiscal 2000 on the basis of David's Bridal
current bonus plan and will be eligible for annual and long-term bonuses in
future years under May's bonus plan for executives in positions comparable to
his, and be granted shares of May's restricted common stock and options to
purchase May's common stock. The Employment Agreement also provides that Mr.
Huth will not compete with May during the term of the Employment Agreement and
for a period of two years following termination of his employment with May.
EMPLOYEE BENEFITS MATTERS. The Merger Agreement provides that David's
Bridal will, and after the Effective Time May or the Surviving Corporation will,
honor all obligations under all existing employee benefit plans and employment
agreements.
Except with respect to any stock options or stock-related programs, for the
period of one year following the Effective Time, May will, or will cause the
Surviving Corporation, to provide, on an uninterrupted basis, employee benefits
to the employees of the Surviving Corporation which are, in the aggregate, no
less favorable than those in effect on the date of the Merger Agreement.
DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. The Merger Agreement
provides that:
(i) from and after the Effective Time, May will, or will cause the
Surviving Corporation to, indemnify and hold harmless each present and
former director and officer of David's Bridal and its subsidiaries, against
any costs or expenses (including attorneys' fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation,
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whether civil, criminal, administrative or investigative, by reason of the
fact that such individual is or was a director, officer, employee or agent
of David's Bridal or any of its subsidiaries, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the purchase of Common Stock in
the Offer, to the fullest extent permitted under applicable law, and May
will, or will cause the Surviving Corporation to, also advance fees and
expenses (including attorneys' fees) as incurred to the fullest extent
permitted under applicable law;
(ii) the articles of incorporation of David's Bridal will, from and
after the Effective Time, and the articles of incorporation of the
Surviving Corporation shall, from and after the Effective Time, contain
provisions no less favorable with respect to indemnification than are set
forth as of the date of the Merger Agreement in the articles of
incorporation of David's Bridal, which provisions will not be amended,
repealed or otherwise modified for a period of six years from the Effective
Time in any manner that would adversely affect the rights of individuals
who at the Effective Time were directors, officers or employees of David's
Bridal, provided that this provision shall not limit May's ability to merge
David's Bridal into May or any of its affiliates or otherwise eliminate
David's Bridal corporate existence if the surviving person assumes
responsibility for such indemnification;
(iii) for six years from the Effective Time, May will maintain, or
cause the Surviving Corporation to maintain, in effect David's Bridal's and
its subsidiaries' current directors' and officers' liability insurance
policy covering those persons who are currently covered by such policy,
provided, however, that in no event will May or the Surviving Corporation
be required to expend in any one year an amount in excess of the annual
premiums paid on the date of the Merger Agreement by David's Bridal and its
subsidiaries for such insurance, and, provided, further, that if the annual
premiums of such insurance coverage exceeds such amount, May or the
Surviving Corporation will be obligated to obtain policies with the
greatest coverage available for a cost not exceeding 150% of such amount,
and provided, further, that May or the Surviving Corporation may meet its
obligations under this provision by covering the above persons under May's
or the Surviving Corporation's insurance policy on the terms described
above that expressly provide coverage for any acts which are covered by the
existing policies of David's Bridal and its subsidiaries;
(iv) nothing in the Merger Agreement is intended to, shall be
construed to, or shall release, waive or impair any rights to directors'
and officers' insurance claims under any policy that is or has been in
existence with respect to David's Bridal or any of its subsidiaries or any
of their respective officers, directors or employees;
(v) each present and former director and officer of David's Bridal and
its subsidiaries is a third party beneficiary to these provisions and may
directly enforce the obligations of the provisions of May, David's Bridal
and the Surviving Corporation; and
(vi) the Surviving Corporation will pay all expenses, including
reasonable fees and expenses of counsel, that an indemnified party may
incur in enforcing the indemnity and other obligations provided for.
SHAREHOLDER AGREEMENTS. As an inducement to May to enter into the Merger
Agreement with David's Bridal, the following shareholders (collectively, the
"Shareholders"), who in the aggregate own approximately 42% of the outstanding
shares of Common Stock, have each entered into a shareholder agreement (each a
"Shareholder Agreement" and collectively, the "Shareholder Agreements") with May
relating to the number of shares of Common Stock indicated below:
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<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK SUBJECT TO
SHAREHOLDER SHAREHOLDER AGREEMENT
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<S> <C>
Clipper/Merchant Partners, L.P.............................. 1,214,996
Clipper Equity Partners I, L.P.............................. 912,496
Clipper/Merban, L.P......................................... 1,216,661
Clipper Capital Associates, L.P............................. 73,192
Clipper/European Re, L.P.................................... 608,331
Gary Erlbaum................................................ 598,946
Erlbaum Family L.P.......................................... 101,098
Trust of S. H. Erlbaum...................................... 109,045
Adam Erlbaum Trust.......................................... 228,014
Michael Erlbaum............................................. 200,060
MCE Family Limited Partnership.............................. 90,335
Steven Erlbaum.............................................. 1,400,399
Robert Huth................................................. 6,632
Steven Sidewater............................................ 22,217
Grantor Retained Annuity Trust of Steven J. Sidewater....... 107,645
SPWJ Associates, L.P........................................ 107,645
Wendy Sidewater Trust....................................... 19,751
Peter Sidewater Trust....................................... 19,751
Nancy Sidewater Trust....................................... 277,473
</TABLE>
The total number of shares of Common Stock subject to Shareholder
Agreements represents 37.6% of the outstanding shares of Common Stock.
A summary of the material provisions of the Shareholder Agreements is
included in the Offer to Purchase, which is being mailed to shareholders
together with this Schedule 14D-9, and is incorporated herein by reference. The
summary is qualified in its entirety by reference to the form of Shareholder
Agreement, a copy of which is filed herewith as Exhibit (e)(3) and is
incorporated herein by reference.
THE MERGER AGREEMENT. A summary of the material provisions of the Merger
Agreement is included in the Offer to Purchase, which is being mailed to
shareholders together with this Schedule 14D-9, and is incorporated herein by
reference. The summary is qualified in its entirety by reference to the complete
text of the Merger Agreement, a copy of which is filed herewith as Exhibit
(e)(1) and is incorporated herein by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) RECOMMENDATION OF THE BOARD OF DIRECTORS. At a meeting held on July 2,
2000, the David's Bridal Board of Directors determined that the Merger
Agreement, the Offer, the Merger and the other transactions contemplated by the
Merger Agreement, are fair to and in the best interests of David's Bridal and
its shareholders and approved and adopted the Merger Agreement, the Offer, the
Merger and the other transactions contemplated by the Merger Agreement. The
David's Bridal Board of Directors recommends that David's Bridal's shareholders
accept the Offer, tender their shares of Common Stock pursuant to the terms of
the Offer and approve and adopt the Merger Agreement and the Merger.
(b) BACKGROUND; REASONS FOR THE RECOMMENDATION BY THE DAVID'S BRIDAL BOARD
OF DIRECTORS; FACTORS CONSIDERED. A description of the background of the merger
is located in Section 10 of the Offer to Purchase, which is being mailed to
shareholders together with this Schedule 14D-9, and is incorporated herein by
reference.
In approving the Merger Agreement, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement, and recommending that David's
Bridal's shareholders accept the Offer, tender their shares of Common Stock
pursuant to the terms of the Offer and approve and adopt the Merger
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Agreement and the Merger, the David's Bridal Board of Directors considered a
number of factors, including:
1. The historical market prices and recent trading activity of
David's Bridal's Common Stock, including the fact that the Offer Price
represents (i) a premium of 73.0% over the closing price of David's
Bridal's Common Stock on June 30, 2000 (the last trading date prior to
announcement of the Offer), (ii) a premium of 68.0% and 85.6%,
respectively, over the three-month and six-month average closing prices of
David's Bridal's Common Stock, and (iii) a premium of 25.0% over the
52-week high price of David's Bridal's Common Stock.
2. The concern of the David's Bridal Board that although the
performance of David's Bridal since its initial public offering has met
management's expectations, the price of the Common Stock has not responded
as anticipated, and trading activity in the Common Stock has, for the most
part, been limited.
3. The extensive arms-length negotiations between David's Bridal and
May that resulted in the $20.00 per share price for the Common Stock.
4. The opinion of Credit Suisse First Boston Corporation ("Credit
Suisse First Boston") received by the David's Bridal Board to the effect
that, as of the date of such opinion and based upon and subject to certain
matters stated in such opinion, the $20.00 per share cash consideration to
be received in the Offer and the Merger by the holders of shares of Common
Stock was fair, from a financial point of view, to such holders (other than
May and its affiliates). The full text of Credit Suisse First Boston's
written opinion dated July 3, 2000, which sets forth the assumptions made,
matters considered and limitations on the review undertaken by Credit
Suisse First Boston, is attached hereto as Annex A and is incorporated
herein by reference. Credit Suisse First Boston's opinion is directed only
to the fairness, from a financial point of view, of the $20.00 per share
cash consideration to be received in the Offer and the Merger by the
holders of shares of Common Stock (other than May and its affiliates) and
is not intended to constitute, and does not constitute, a recommendation as
to whether any shareholder should tender shares pursuant to the Offer or as
to any other matters relating to the Offer or the Merger. HOLDERS OF SHARES
OF COMMON STOCK ARE URGED TO READ SUCH OPINION CAREFULLY IN ITS ENTIRETY.
5. The fact that the Offer and the Merger provide for a prompt cash
tender offer for all shares of Common Stock to be followed by a second-step
merger for the same consideration, thereby enabling David's Bridal's
shareholders to obtain the benefits of the transaction at the earliest
possible time.
6. The fact that May's and Purchaser's obligations under the Offer
are not subject to any financing condition and the financial ability of May
to consummate the acquisition.
7. The limited rights of May or Purchaser to terminate the Offer or
the Merger Agreement.
8. The fact that the Merger Agreement permits the David's Bridal
Board of Directors to, or to authorize David's Bridal, its subsidiaries and
their respective officers, directors, employees, agents and representatives
to, in response to an Acquisition Proposal that the David's Bridal Board
concludes in good faith is an Incipient Superior Proposal, (x) furnish
information with respect to David's Bridal and its subsidiaries to any
person making such Acquisition Proposal pursuant to a customary
confidentiality agreement and (y) participate in discussions or
negotiations regarding such Acquisition Proposal, provided that, prior to
taking any such action, David's Bridal provides reasonable advance notice
to May that it is taking such action.
The term "Acquisition Proposal" is defined in the Merger Agreement to
mean any direct or indirect inquiry, proposal or offer (or any improvement,
restatement, amendment, renewal or reiteration thereof) relating to the
acquisition or purchase of a business or shares of any class of equity
securities of David's Bridal or any of its subsidiaries, any tender offer
or exchange offer that, if consummated, would result in any person
beneficially owning any class of equity securities of David's
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Bridal or any of its subsidiaries, or any merger, reorganization, share
exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction (a "Business Combination
Transaction") involving David's Bridal or any of its subsidiaries, or any
purchase or sale of a substantial portion of the assets (including stock of
subsidiaries owned directly or indirectly by David's Bridal) or business of
David's Bridal or any of its subsidiaries (an "Asset Transaction"), other
than the transactions contemplated by the Merger Agreement or certain other
transactions permitted by the Merger Agreement.
The term "Incipient Superior Proposal" is defined in the Merger
Agreement to mean an unsolicited bona fide written Acquisition Proposal
that the David's Bridal Board concludes in good faith (after consultation
with David's Bridal's financial advisor) would, if consummated, provide
greater aggregate value to David's Bridal's shareholders from a financial
point of view than the transactions contemplated by the Merger Agreement,
provided that for purposes of this definition the term "Acquisition
Proposal" shall have the meaning set forth above, except that (x)
references to "shares of any class of equity securities of David's Bridal"
shall be deemed to be references to "100% of the outstanding shares" and
(y) an "Acquisition Proposal" shall be deemed to refer only to a Business
Combination Transaction involving David's Bridal or, with respect to an
Asset Transaction, such transaction must involve the assets of David's
Bridal and its subsidiaries, taken as a whole, and not any subsidiary of
David's Bridal alone.
9. The fact that the Merger Agreement permits the David's Bridal Board
to, in response to a Superior Proposal, (1) withdraw, modify or change or
propose publicly to withdraw, modify or change its recommendation of the
Offer, the Merger or the Merger Agreement, (2) approve or recommend, or
propose publicly to approve or recommend, a Superior Proposal and (3) so
long as David's Bridal is not in breach of its obligations described in the
"No Solicitations" section of the Merger Agreement, terminate the Merger
Agreement, but only after the third business day following May's receipt of
written notice advising May that the David's Bridal Board is prepared to
accept an Acquisition Proposal and attaching the most current version of
any such Acquisition Proposal or any draft of an Acquisition Agreement.
The term "Superior Proposal" is defined in the Merger Agreement to
mean an Incipient Superior Proposal for which any required financing is
committed or which, in the good faith judgment of the David's Bridal Board,
is capable of being financed by the person making the Acquisition Proposal.
10. The fact that May has stated that there will be no changes in the
employment status of associates of David's Bridal due to the Offer and
Merger.
11. That, while the consummation of the Offer and the Merger would
eliminate the opportunity for David's Bridal shareholders to participate in
any future growth in the profits and equity valuation of David's Bridal,
the Offer gives shareholders the opportunity to realize a significant
premium over the price at which shares of Common Stock traded at any time
prior to the public announcement of the execution of the Merger Agreement.
12. The reasonable likelihood of the consummation of the transactions
contemplated by the Merger Agreement.
The foregoing discussion of the information and factors considered by the
David's Bridal Board of Directors is not intended to be exhaustive, but includes
the material factors considered by the Board of Directors. In view of the
variety of factors considered in connection with its evaluation of the Offer and
the Merger, the David's Bridal Board of Directors did not find it practicable
to, and did not, quantify or otherwise assign relative weights to the specific
factors considered in reaching its determination and recommendation. In
addition, individual directors may have given differing weights to different
factors.
(c) INTENT TO TENDER. To David's Bridal's knowledge after reasonable
inquiry, all of David's Bridal's executive officers, directors and affiliates
intend to tender all shares of Common Stock held of record or beneficially owned
by them pursuant to the Offer (other than shares of Common Stock underlying
options to acquire shares of Common Stock).
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As an inducement to May to enter into the Merger Agreement with David's
Bridal, Clipper/Merchant Partners, L.P., Clipper Equity Partners I, L.P.,
Clipper/Merban, L.P., Clipper Capital Associates, L.P., Clipper/European Re,
L.P., Gary Erlbaum, Erlbaum Family L.P., Trust of S. H. Erlbaum, Adam Erlbaum
Trust, Michael Erlbaum, MCE Family Limited Partnership, Steven Erlbaum, Robert
Huth, Steven Sidewater, Grantor Retained Annuity Trust of Steven J. Sidewater,
SPWJ Associates, L.P., Wendy Sidewater Trust, Peter Sidewater Trust and Nancy
Sidewater Trust, who in the aggregate own approximately 42% of the outstanding
shares of Common Stock, have each entered into a Shareholder Agreement with May
pursuant to which, among other things, the Shareholders have agreed to tender
90% of the shares of Common Stock owned by each Shareholder.
A summary of the material provisions of the Shareholder Agreements is
included in the Offer to Purchase, which is being mailed to shareholders
together with this Schedule 14D-9, and is incorporated herein by reference. The
summary is qualified in its entirety by reference to the form of Shareholder
Agreement, a copy of which is filed herewith as Exhibit (e)(3) and is
incorporated herein by reference.
ITEM 5. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
David's Bridal has retained Credit Suisse First Boston as its exclusive
financial advisor in connection with the Offer and the Merger. Pursuant to the
terms of Credit Suisse First Boston's engagement, David's Bridal has agreed to
pay Credit Suisse First Boston for its financial advisory services an aggregate
fee equal to 1.25% of the total consideration, including liabilities assumed,
payable in connection with the Offer and the Merger. It is currently estimated
that the aggregate fee payable to Credit Suisse First Boston will be
approximately $5.5 million. David's Bridal also has agreed to reimburse Credit
Suisse First Boston for reasonable out-of-pocket expenses, including the fees of
legal counsel and any other advisor retained by Credit Suisse First Boston, and
to indemnify Credit Suisse First Boston and certain related parties against
certain liabilities, including liabilities under the federal securities laws,
arising out of Credit Suisse First Boston's engagement. In the ordinary course
of business, Credit Suisse First Boston and its affiliates may actively trade
the securities of David's Bridal for its and such affiliates' own accounts and
for the accounts of customers and, accordingly, may at any time hold long or
short positions in such securities. In addition, Credit Suisse First Boston and
certain of its employees beneficially own shares of Common Stock and/or options
to acquire shares of Common Stock.
A summary of the material provisions of the agreement among May, Purchaser
and Morgan Stanley & Co. Incorporated, in its capacity as dealer manager, is
included in the Offer to Purchase and is incorporated herein by reference.
A summary of the material provisions of the agreement among May, Purchaser
and D.F. King & Co., Inc., in its capacity as information agent, is included in
the Offer to Purchase and is incorporated herein by reference.
A summary of the material provisions of the agreement among May, Purchaser
and The Bank of New York in its capacity as depositary, is included in the Offer
to Purchase and is incorporated herein by reference.
Neither David's Bridal nor any person acting on its behalf currently
intends to employ, retain or compensate any other person to make solicitations
or recommendations to security holders on its behalf concerning the Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
No transactions in shares of Common Stock have been effected during the
past 60 days by David's Bridal or any subsidiary of David's Bridal or, to the
best of the David's Bridal's knowledge, by any executive officer, director or
affiliate of David's Bridal, except that certain individuals named in paragraph
(c) of Item 4 hereto have entered into Shareholder Agreements. A summary of the
material provisions of the Shareholder Agreements is included in the Offer to
Purchase, which is being mailed to shareholders together with this Schedule
14D-9, and is incorporated herein by reference. The summary is
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qualified in its entirety by reference to the form of Shareholder Agreement, a
copy of which is filed herewith as Exhibit (e)(3) and is incorporated herein by
reference.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Schedule 14D-9, David's Bridal is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to (1) a tender offer for, or other acquisition of, David's Bridal's securities
by David's Bridal, any subsidiary of David's Bridal or any other person; (2) an
extraordinary transaction, such as a merger, reorganization or liquidation,
involving David's Bridal or any subsidiary of David's Bridal; (3) a purchase,
sale, or transfer of a material amount of assets of David's Bridal or any
subsidiary of David's Bridal; or (4) any material change in the present dividend
rate or policy, or indebtedness or capitalization of David's Bridal.
Except as set forth in this Schedule 14D-9, there are no transactions,
resolutions of the David's Bridal Board of Directors, agreements in principle,
or signed contracts in response to the Offer that relate to one or more of the
events referred to in the preceding paragraph.
ITEM 8. ADDITIONAL INFORMATION.
SHORT FORM MERGER. Section 607.1104 of the FBCA provides that, if a parent
corporation owns at least 80% of the outstanding shares of each class of a
subsidiary corporation, the merger into the subsidiary corporation of the parent
corporation may be effected by a plan of merger adopted by the board of
directors of the parent corporation and the appropriate filings with the Florida
Department of State, without the approval of the shareholders of the subsidiary
corporation. Under the FBCA, if the Purchaser acquires at least 80% of the
outstanding shares of Common Stock, the Purchaser will be able to effect the
Merger without a vote of the other shareholders of David's Bridal. In such
event, David's Bridal has agreed in the Merger Agreement to take, at the request
of Purchaser, all necessary and appropriate action to cause the Merger to become
effective, as soon as practicable after such acquisition, without a meeting of
the David's Bridal shareholders. Upon successful completion of the Offer,
Purchaser would have a sufficient number of Shares to approve the Merger without
the vote of any other David's Bridal shareholder.
DISSENTERS' RIGHTS. Under the FBCA appraisal rights are not available (as
a matter of law) to holders of Common Stock in connection with the Offer.
However, Section 3.3 of the Merger Agreement provides that if the Merger is
consummated, holders of Common Stock shall have the right to dissent and demand
appraisal of their shares pursuant to the Merger Agreement and/or under the
FBCA. Dissenting shareholders who comply with the applicable statutory
procedures will be entitled to receive a judicial determination of the fair
value of their shares of Common Stock (exclusive of any element of value arising
from the accomplishment or expectation of the Merger) and to receive payment of
such fair value in cash, together with a fair rate of interest, if any. Any such
judicial determination of the fair value of the Common Stock could be based upon
considerations other than or in addition to the Offer Price, the consideration
per share of Common Stock to be paid in the Merger and the market value of the
Common Stock, including asset values and the investment value of the Common
Stock. Shareholders should recognize that the value so determined could be
higher or lower than the price per share of Common Stock paid pursuant to the
Offer or the consideration per share of Common Stock to be paid in the Merger.
Shareholders who wish to exercise dissenters' rights in connection with the
Merger need not take any action at this time. If the Offer is consummated,
David's Bridal will distribute to the remaining shareholders additional
information on the procedures to be followed to perfect their dissenters'
rights.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF PROCEDURES TO BE FOLLOWED BY SHAREHOLDERS
DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. FAILURE TO FOLLOW THE STEPS
REQUIRED BY THE FBCA FOR PERFECTING DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF
THOSE RIGHTS.
9
<PAGE> 10
SECTION 14(f) INFORMATION STATEMENT. The Information Statement attached at
Annex B hereto is being furnished in connection with the possible designation by
Purchaser, pursuant to the Merger Agreement, of certain persons to be appointed
to the David's Bridal Board of Directors other than at a meeting of David's
Bridal's shareholders.
ITEM 9. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
(a)(1) Offer to Purchase, dated July 10, 2000 (incorporated herein
by reference to Exhibit (a)(1) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(a)(2) Form of Letter of Transmittal (incorporated herein by
reference to Exhibit (a)(2) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(a)(3) Letter to Shareholders of David's Bridal, Inc., dated June
10, 2000 (included with Schedule 14D-9 mailed to
Shareholders of David's Bridal).
(e)(1) Agreement and Plan of Merger, dated as of July 3, 2000,
among The May Department Stores Company, Alpha Omega
Acquisition, Inc. and David's Bridal, Inc. (incorporated
herein by reference to Exhibit (d)(1) to Schedule TO filed
by Alpha Omega Acquisition, Inc. and The May Department
Stores Company on July 10, 2000).
(e)(2) Opinion of Credit Suisse First Boston Corporation, dated
July 3, 2000, to the Board of Directors of David's Bridal,
Inc., attached hereto as Annex A (included with Schedule
14D-9 mailed to Shareholders of David's Bridal).
(e)(3) Form of Shareholder Agreement dated as of July 3, 2000 by
and between The May Department Stores Company and certain
shareholders of David's Bridal, Inc. (incorporated herein by
reference to Exhibit (d)(2) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(e)(4) Employment Agreement dated as of July 3, 2000 between The
May Department Stores Company and Robert Huth (incorporated
herein by reference to Exhibit (d)(3) to Schedule TO filed
by Alpha Omega Acquisition, Inc. and The May Department
Stores Company on July 10, 2000).
</TABLE>
10
<PAGE> 11
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DAVID'S BRIDAL, INC.
By: /s/ ROBERT D. HUTH
------------------------------------
Name: Robert D. Huth
Title: President & Chief Executive
Officer
Dated: July 10, 2000
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated July 10, 2000 (incorporated herein
by reference to Exhibit (a)(1) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(a)(2) Form of Letter of Transmittal (incorporated herein by
reference to Exhibit (a)(2) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(a)(3) Letter to Shareholders of David's Bridal, Inc., dated June
10, 2000 (included with Schedule 14D-9 mailed to
Shareholders of David's Bridal).
(e)(1) Agreement and Plan of Merger, dated as of July 3, 2000,
among The May Department Stores Company, Alpha Omega
Acquisition, Inc. and David's Bridal, Inc. (incorporated
herein by reference to Exhibit (d)(1) to Schedule TO filed
by Alpha Omega Acquisition, Inc. and The May Department
Stores Company on July 10, 2000).
(e)(2) Opinion of Credit Suisse First Boston Corporation, dated
July 3, 2000, to the Board of Directors of David's Bridal,
Inc., attached hereto as Annex A (included with Schedule
14D-9 mailed to Shareholders of David's Bridal).
(e)(3) Form of Shareholder Agreement dated as of July 3, 2000 by
and between The May Department Stores Company and certain
shareholders of David's Bridal, Inc. (incorporated herein by
reference to Exhibit (d)(2) to Schedule TO filed by Alpha
Omega Acquisition, Inc. and The May Department Stores
Company on July 10, 2000).
(e)(4) Employment Agreement dated as of July 3, 2000 between The
May Department Stores Company and Robert Huth (incorporated
herein by reference to Exhibit (d)(3) to Schedule TO filed
by Alpha Omega Acquisition, Inc. and The May Department
Stores Company on July 10, 2000).
</TABLE>
12
<PAGE> 13
ANNEX A
[CREDIT SUISSE FIRST BOSTON CORPORATION LETTERHEAD]
July 3, 2000
Board of Directors
David's Bridal, Inc.
1001 Washington Street
Conshohocken, Pennsylvania 19428
Members of the Board:
You have asked us to advise you with respect to the fairness to the holders of
the common stock of David's Bridal, Inc. ("David's"), other than The May
Department Stores Company ("May") and its affiliates, from a financial point of
view, of the Cash Consideration (as defined below) set forth in the Agreement
and Plan of Merger, dated as of July 3, 2000 (the "Merger Agreement"), by and
among May, Alpha Omega Acquisition, Inc., a wholly owned subsidiary of May
("Sub"), and David's. The Merger Agreement provides for, among other things, (i)
a tender offer by Sub to purchase all outstanding shares of the common stock,
par value $0.01 per share, of David's ("David's Common Stock") at a purchase
price of $20.00 per share, net to the seller in cash (the "Cash Consideration"
and, such tender offer, the "Tender Offer") and (ii) subsequent to the Tender
Offer, the merger of Sub with and into David's (the "Merger" and, together with
the Tender Offer, the "Transaction") pursuant to which each outstanding share of
David's Common Stock not acquired in the Tender Offer will be converted into the
right to receive the Cash Consideration.
In arriving at our opinion, we have reviewed the Merger Agreement and certain
related documents, and also have reviewed publicly available business and
financial information relating to David's. We have also reviewed certain other
information relating to David's, including financial forecasts, provided to or
discussed with us by David's, and have met with the management of David's to
discuss the business and prospects of David's. We have also considered certain
financial and stock market data of David's, and we have compared those data with
similar data for other publicly held companies in businesses similar to David's,
and we have considered, to the extent publicly available, the financial terms of
certain other business combinations and other transactions which have recently
been effected. We also considered such other information, financial studies,
analyses and investigations and financial, economic and market criteria which we
deemed relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
such information being complete and accurate in all material respects. With
respect to the financial forecasts, we have been advised, and have assumed, that
such forecasts have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of the management of David's as to
the future financial performance of David's. In addition, we have not been
requested to make, and we have not made, an independent evaluation or appraisal
of the assets or liabilities (contingent or otherwise) of David's, nor have we
been furnished with any such evaluations or appraisals. Our opinion is
necessarily based upon information available to us, and financial, economic,
market and other conditions as they exist and can be evaluated, on the date
hereof. In connection with our engagement, we were not requested to, and we did
not, solicit third party indications of interest in the possible acquisition of
all or a part of David's.
We have acted as financial advisor to the Board of Directors of David's in
connection with the Transaction and will receive a fee for such services, a
significant portion of which is contingent upon the consummation of the
Transaction. In the ordinary course of business, we and our affiliates may
actively trade the debt and equity
A-1
<PAGE> 14
[CREDIT SUISSE FIRST BOSTON CORPORATION LETTERHEAD]
Board of Directors
David's Bridal, Inc.
July 3, 2000
Page 2
securities of David's for our and such affiliates' own accounts and for the
accounts of customers and, accordingly, may at any time hold long or short
positions in such securities. In addition, we and certain of our employees
beneficially own shares and/or options to acquire shares of David's Common
Stock.
It is understood that this letter is for the information of the Board of
Directors of David's in connection with its evaluation of the Transaction and
does not constitute a recommendation to any stockholder as to whether such
stockholder should tender shares of David's Common Stock pursuant to the Tender
Offer or how such stockholder should vote with respect to any matter relating to
the Merger.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Cash Consideration to be received in the Transaction by the holders
of David's Common Stock is fair to such holders (other than May and its
affiliates) from a financial point of view.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
A-2
<PAGE> 15
ANNEX B
DAVID'S BRIDAL, INC.
1001 WASHINGTON STREET
CONSHOHOCKEN, PA 19428
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
This information statement ("Information Statement") is being mailed on or
about July 10, 2000 as part of the Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") to holders of record of shares of common
stock, par value $0.01 (the "Common Stock" or the "Shares"), of David's Bridal,
Inc., a Florida corporation ("David's Bridal"). You are receiving this
Information Statement in connection with the possible election of persons
designated by The May Department Stores Company, a Delaware corporation ("May"),
to a majority of seats on the Board of Directors of David's Bridal (the
"Board"). As of July 3, 2000, David's Bridal entered into an Agreement and Plan
of Merger (the "Merger Agreement") among May, Alpha Omega Acquisition, Inc., a
Florida corporation ("Purchaser") and a wholly owned subsidiary of May and
David's Bridal pursuant to which Purchaser is required to commence a tender
offer for all of the issued and outstanding shares of Common Stock, at a price
per Share of $20.00, net to the seller in cash (the "Offer Price"), upon the
terms and conditions set forth in Purchaser's Offer to Purchase, dated July 10,
2000, and in the related Letter of Transmittal (which together with any
amendments and supplements thereto, collectively constitute the "Offer"). Copies
of the Offer to Purchase and the Letter of Transmittal have been mailed to
David's Bridal's shareholders and are filed as Exhibits (a)(1) and (a)(2)
respectively, to the Tender Offer Statement on Schedule TO (as amended from time
to time, the "Schedule TO") filed by Purchaser and May with the Securities and
Exchange Commission (the "SEC") on July 10, 2000. The Merger Agreement provides
that, subject to the satisfaction or waiver of certain conditions, following
completion of the Offer, and in accordance with the Florida Business Corporation
Act (the "FBCA"), Purchaser will be merged with and into David's Bridal (the
"Merger"). Following consummation of the Merger, David's Bridal will continue as
the surviving corporation (the "Surviving Corporation") and will be a wholly
owned subsidiary of May. At the effective time of the Merger (the "Effective
Time"), each issued and outstanding Share (other than Shares that are owned by
May, Purchaser, any of their respective subsidiaries, David's Bridal or any of
its subsidiaries, and Shares held by shareholders of David's Bridal who perfect
their dissenters' rights granted pursuant to the Merger Agreement and/or rights
under the FBCA) will be converted into the right to receive $20.00 in cash or
any greater amount per Share paid pursuant to the Offer.
Purchaser commenced the Offer on July 10, 2000. The Offer is scheduled to
expire at 12:00 midnight, New York City time, on August 7, 2000, unless it is
extended by Purchaser in accordance with the terms and conditions of the Merger
Agreement.
The Merger Agreement provides that, upon the consummation of the Offer,
David's Bridal will cause certain designees of May (the "May Designees") to be
elected to the Board. If, however, the Merger Agreement is terminated or if
Purchaser does not accept Shares tendered for purchase, then May will not have
any right to designate directors for election to the Board.
This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder. You are urged to read this Information Statement
carefully. You are not, however, required to take any action.
THE MAY DESIGNEES
Promptly upon the purchase of and payment for a number of Shares which
represent at least a majority of the then outstanding Shares on a fully diluted
basis pursuant to the Offer, pursuant to the terms of the Merger Agreement, May
will be entitled to designate the number of directors, rounded up to the next
whole number, on the Board that equals the product of (1) the total number of
directors on the Board (giving effect to the
B-1
<PAGE> 16
election of any additional directors elected pursuant to the Merger Agreement)
and (2) the percentage that the number of Shares owned by Purchaser or any of
its affiliates bears to the total number of Shares outstanding, and David's
Bridal will, upon request of Purchaser, promptly increase the size of the Board
or exercise its reasonable best efforts to secure the resignations of such
number of directors, or both, as is necessary to enable May's designees to be so
elected or appointed to the Board. If requested by Purchaser, David's Bridal
also will cause directors designated by May to constitute at least the same
percentage as is on the Board of each committee of the Board to the extent
permitted by law. Notwithstanding the foregoing, if Shares are purchased
pursuant to the Offer, until the Effective Time, May and Purchaser will take no
action which would cause the Board to include fewer than two members who were
directors on the date of the Merger Agreement and are not employees of David's
Bridal.
The directors of Purchaser at the Effective Time will be the directors of
the Surviving Corporation, until successors are duly elected or appointed and
qualified or until their death, resignation or removal in accordance with the
FBCA.
May has informed David's Bridal that it will choose the May Designees from
among the individuals listed below. Each of the following individuals has
consented to serve as a director of David's Bridal if appointed or elected. None
of the May Designees currently is a director of, or holds any positions with,
David's Bridal. May has advised David's Bridal that, to the best of May's
knowledge, except as set forth below, none of the May Designees or any of their
affiliates beneficially owns any equity securities or rights to acquire any such
securities of David's Bridal nor has any such person been involved in any
transaction with David's Bridal or any of its directors, executive officers or
affiliates that is required to be disclosed pursuant to the rules and
regulations of the SEC other than with respect to transactions between Purchaser
and David's Bridal that have been described in the Schedule TO or the Schedule
14D-9.
The name, age as of July 10, 2000, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each of the individuals who may be selected as May Designees
are set forth below. Unless otherwise indicated, the current business address of
each person is 611 Olive Street, St. Louis, Missouri 63101. Unless otherwise
indicated, each person is a citizen of the United States of America and each
occupation set forth opposite an individual's name refers to employment with
May.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS
NAME AND AGE DURING THE PAST FIVE YEARS
------------ --------------------------------------------------------------
<S> <C>
John L. Dunham, 53 Director since 1997. Vice chairman and chief financial officer
since November, 1999. He joined May in 1976, serving in a
number of senior positions at operating divisions. He became
chairman of May Merchandising Company in 1993. He became
executive vice president and chief financial officer in May
1996.
Richard A. Brickson, 52 Secretary and senior counsel since 1988.
Alan E. Charlson, 51 Senior vice president and chief counsel since 1998. He served
as senior counsel from 1988 to 1998.
</TABLE>
B-2
<PAGE> 17
<TABLE>
<CAPTION>
<S> <C>
Michael G. Culhane, 38 Vice president since 1998. He served in a financial position
for May from 1997 to 1998. He was associated with the
accounting firm of Arthur Andersen LLP from 1984 to 1997.
Martin M. Doerr, 45 Senior vice president since September, 1999. He served as vice
president from 1992 through August, 1999.
William D. Edkins, 47 Senior vice president since 1990.
Thomas D. Fingleton, 53 Executive vice president of finance and operations since May,
2000. He joined May in 1978, serving in a number of senior
positions at operating divisions. He served as chairman of
Hecht's from 1991 through May 14, 2000.
Lonny J. Jay, 58 Senior vice president since 1986.
Jan R. Kniffen, 51 Senior vice president since 1991.
</TABLE>
CERTAIN INFORMATION CONCERNING DAVID'S BRIDAL
As of July 6, 2000, David's Bridal had 19,469,276 shares of Common Stock
issued and outstanding, its only class of voting securities that would be
entitled to vote for directors at a shareholder meeting if one were to be held,
each shares entitled to one vote.
INFORMATION CONCERNING DIRECTORS AND OFFICERS OF DAVID'S BRIDAL
DIRECTORS AND OFFICERS OF DAVID'S BRIDAL
STEVEN H. ERLBAUM, 51, is a co-founder of David's Bridal and has been the
Chairman of the Board of David's Bridal since 1990. Prior to May 1999, Mr.
Erlbaum also served as Chief Executive Officer of David's Bridal. 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 B. CALHOUN, JR., 57, has been a director of David's Bridal 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 on the boards of directors of Avondale Incorporated,
Interstate Bakeries, Inc. and TravelCenters of America, Inc.
CHARLES C. CONAWAY, 40, is Chairman and Chief Executive Officer of Kmart
Corporation. Prior to joining Kmart, Mr. Conaway served as President and Chief
Operating Officer of CVS Corporation ("CVS"), President and Chief Operating
Officer of CVS Pharmacy, Inc. and 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.
GARY E. ERLBAUM, 55, has been Secretary, Treasurer and a director of
David's Bridal 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.
ROBERT D. HUTH, 54, has been the President, Chief Operating Officer and a
director of David's Bridal since July 1995, and became Chief Executive Officer
of David's Bridal in May 1999. Mr. Huth has been primarily responsible for
running the day-to-day operations of David's Bridal since joining the company in
1995. Prior to joining David's Bridal, 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
B-3
<PAGE> 18
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.
EUGENE P. LYNCH, 38, 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, 51, 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 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.
STEVEN SIDEWATER, 56, has been a director of David's Bridal 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.
ROBERT W. FROST, 53, has been Senior Vice President, Real Estate of David's
Bridal since August 1998. Prior to joining David's Bridal, Mr. Frost served as
Senior Vice President, Development of Homestead Village Incorporated from
October 1994 through July 1998. From February 1981 through September 1994, Mr.
Frost served as Vice President, Director of Real Estate for Payless Shoe Source,
Incorporated.
THOMAS P. JOHNSON, 42, has been Senior Vice President, Sales of David's
Bridal since March 2000. Prior to joining David's Bridal, Mr. Johnson was Senior
Vice President, Director of Stores of Brooks Brothers, a division of Marks &
Spencer plc, from January 1997 through February 2000. From 1989 through December
1997, Mr. Johnson was employed by Macy's Department Stores Inc. a division of
Federated Department Stores, Inc., his last position was Vice President, Stores.
FRED A. POSTELLE, 54, has been Senior Vice President, Human Resources of
David's Bridal since July 1998. From September 1995 through July 1998, Mr.
Postelle served as a human resources consultant to David's Bridal. Prior to
joining David's Bridal, Mr. Postelle served as Senior Vice President, Human
Resources of Woodward & Lothrop/John Wanamaker from January 1995 through
September 1995.
EDWARD S. WOZNIAK, 54, has been Senior Vice President and Chief Financial
Officer of David's Bridal since April 1998. Prior to joining David's Bridal, Mr.
Wozniak was Senior Vice President, Chief Administrative Officer of Things
Remembered, Inc. from November 1996 through April 1998. Mr. Wozniak served as
Vice President, Chief Financial Officer and Secretary of Egghead, Inc. from May
1996 to November 1996. From 1990 through April 1996, Mr. Wozniak was employed by
Thom McAnn Shoe Company, a division of Melville Corporation, his last position
was Senior Vice President and Chief Financial Officer.
PHILIP YOUTIE, 52, has been an executive officer of David's Bridal since
its founding in 1990.
JEFFREY ZELENKO, 44, has been Senior Vice President, General Merchandising
Manager of David's Bridal since April 2000. Prior to joining David's Bridal, Mr.
Zelenko was President of Graphically Speaking Clothing Company from April 1997
through March 2000. From June 1995 through April 1997, Mr. Zelenko served as
Executive Vice President, General Merchandise Manager of Charming Shoppes, Inc.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of David's Bridal has an Audit and a Compensation
Committee. During fiscal year 1999, the Board of Directors of David's Bridal
held eight meetings and the Audit and Compensation Committees each held two
meetings. Each director attended at least 75% of the Board of Directors meetings
and of the Board committee or committees on which he served during 1999.
B-4
<PAGE> 19
The Audit Committee is responsible for recommending to the Board the firm
to be employed by David's Bridal as 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 the Board the compensation
of the chief executive officer, reviews and takes action on the chief executive
officer's recommendations regarding the appropriate compensation of the other
officers and key personnel, approves the granting of any bonuses to officers,
reviews other compensation and personnel development matters generally and
recommends to the 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.
B-5
<PAGE> 20
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 PERCENT OF
STOCK COMMON
BENEFICIALLY STOCK
OWNED OUTSTANDING
------------ -----------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
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(g)........................................... 1,000 *
All executive officers and directors as a group (12
persons)(h)............................................... 5,227,636 26.1%
FIVE PERCENT HOLDERS
The Clipper Group(i)........................................ 4,472,971 23.0%
Scudder Kemper Investments, Inc.(j)......................... 1,211,990 6.2%
Wellington Management Company, LLP(k)....................... 1,090,600 5.6%
</TABLE>
---------------
* Less than 1%.
(a) 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 Gary Erlbaum's three children. Gary Erlbaum is the President
of the general partner of the Erlbaum Family LP. 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.
(c) 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.
B-6
<PAGE> 21
(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) Ms. Zeitz terminated her employment with David's Bridal in June 2000.
(h) Includes 606,065 shares of Common Stock obtainable under options
exercisable within sixty days.
(i) 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. 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.
(j) 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.
(k) 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.
B-7
<PAGE> 22
EXECUTIVE COMPENSATION
COMPENSATION
The following table sets forth certain information with respect to
compensation earned during fiscal year 1999 by the current chief executive
officer of David's Bridal, the former chief executive officer of David's Bridal
and the four other most highly compensated executive officers of David's Bridal
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION(1) ------------
------------------------------------ SECURITIES
OTHER 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 1998 $425,000 -- -- -- $924
Officer(4)
Robert D. Huth................. 1999 $463,462 -- -- 296,474 $949
President and Chief 1998 $400,000 -- -- -- $985
Executive 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, 1998 $ 58,073 -- -- -- --
Real Estate
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(5).............. 1999 $189,749 $35,769 -- 10,000 --
Senior Vice President, 1998 $146,716 -- -- 29,460 --
Marketing
</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.
(5) Ms. Zeitz terminated her employment with David's Bridal in June 2000.
B-8
<PAGE> 23
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 VALUE
NUMBER OF PERCENT OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTION/SARS EMPLOYEES IN FISCAL BASE PRICE EXPIRATION -----------------------------
NAME GRANTED YEAR 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. Additionally, all options
become fully exercisable upon the commencement of a tender offer for 25% or
more of the Common Stock outstanding.
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
OPTIONS AT JANUARY 1, 2000 JANUARY 1, 2000(1)
SHARES 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.
DIRECTOR COMPENSATION ARRANGEMENTS
David's Bridal has a director compensation plan under which directors, upon
initial election to the 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.
B-9
<PAGE> 24
During 1999, David's Bridal 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 the initial public
offering of David's Bridal in May 1999, Steven H. Erlbaum became a consultant to
David's Bridal 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, and will continue to assist,
David's Bridal 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.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors are Mr.
Steven H. Erlbaum, Mr. Steven J. Sidewater and Mr. Robert B. Calhoun. Mr.
Sidewater and Mr. Calhoun are non-employee directors. Mr. Steven Erlbaum served
as the Chief Executive Officer of David's Bridal prior to May 1999, at which
time he became a non-employee director.
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. 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.
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.
B-10
<PAGE> 25
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
PERFORMANCE GRAPH
The following line graph compares the yearly change in the cumulative total
shareholder return of the Common Stock of David's Bridal 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 the Common Stock of David's Bridal), the S&P 500 and the S&P's
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 and Poor's Smallcap Index and includes companies such as Men's
Wearhouse, Ann Taylor Stores and Gymboree Corp.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
5/22/1999 6/30/1999 9/30/1999 1/1/2000
--------- --------- --------- --------
<S> <C> <C> <C> <C>
DAVID'S 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>
B-11
<PAGE> 26
EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
David's Bridal entered into an employment agreement with Philip Youtie on
May 20, 1999, the principal terms of which are as follows:
- Term: two years.
- Base Salary: $200,000 in the first year, $210,000 in the second year.
- Bonus: Eligible for an annual bonus in accordance with the David's Bridal
bonus plan.
- Severance: in the event of termination of Mr. Youtie's employment by
David's Bridal without cause, David's Bridal 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.
David's Bridal entered into an employment agreement with Robert D. Huth on
May 20, 1999, the principal terms of which are as follows:
- Term: three years.
- Base Salary: $500,000 per year, subject to annual review by the
Compensation Committee of the board of directors of David's Bridal.
- Bonus: eligible to participate in a bonus plan to be adopted by the
Compensation Committee of the board of directors of David's Bridal.
- Severance: in the event of termination of Mr. Huth's employment by
David's Bridal without cause, David's Bridal 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.
David's Bridal entered into a consulting agreement with Steven H. Erlbaum
on May 20, 1999, the principal terms of which are as follows:
- Term: three years.
- Base Compensation: $425,000 in the first two years, $200,000 in the third
year.
- Bonus: eligible for a bonus based upon a comparison of actual to budgeted
earnings for 1999.
Steven H. Erlbaum has also agreed to non-competition and non-solicitation
covenants as set forth in his consulting agreement.
CERTAIN 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 Huth, the President and Chief Executive Officer
of David's Bridal. This loan was made in connection with his relocation and
establishment of a permanent residence in the vicinity of the primary executive
office of David's Bridal. The loan is evidenced by a promissory note which
includes the following terms:
- interest at the rate of 8% per annum;
- on each of June 6, 2000 and June 6, 2001, to the extent Mr. Huth remains
employed by David's Bridal as of such date, principal in the amount of
$150,000, and all accrued interest as of such date, shall be forgiven;
B-12
<PAGE> 27
- on June 6, 2002, to the extent Mr. Huth remains employed by David's
Bridal as of such date, all remaining principal and interest shall be
forgiven;
- all principal and interest shall be forgiven in the event Mr. Huth's
employment is terminated by David's Bridal without cause; and
- Mr. Huth shall be required to pay David's Bridal 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. David's
Bridal paid $143,418 in rental payments to this partnership in fiscal 1999.
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 Common Stock, file reports of ownership of David's Bridal
securities and changes in ownership of David's Bridal 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.
B-13
