SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ASHFORD.COM, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
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[LOGO]
ASHFORD.COM, INC.
3800 BUFFALO SPEEDWAY, SUITE 400
HOUSTON, TEXAS 77098
June 29, 2000
TO THE STOCKHOLDERS OF ASHFORD.COM, INC.
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Ashford.com, Inc. (the "Company"), which will be held at the Renaissance Hotel,
Greenway II Room, Concourse Level, located at 6 Greenway Plaza East, Houston,
Texas 77046, on Thursday, July 27, 2000, at 4:30 p.m., Central Time.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement and Notice of Annual Meeting of Stockholders.
It is important that your shares be represented and voted at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does NOT deprive you of your right to attend the
Annual Meeting. If you decide to attend the Annual Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company. We look
forward to seeing you at the Annual Meeting.
Sincerely,
Kenneth E. Kurtzman
CHIEF EXECUTIVE OFFICER
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[LOGO]
ASHFORD.COM, INC.
3800 BUFFALO SPEEDWAY, SUITE 400
HOUSTON, TEXAS 77098
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 27, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of Ashford.com,
Inc. (the "Company") will be held at the Renaissance Hotel, Greenway II Room,
Concourse Level, located at 6 Greenway Plaza East, Houston, Texas, 77046, on
Thursday, July 27, 2000, at 4:30 p.m., Central Time, for the following purposes:
1. To elect two directors of the Board of Directors to serve until their
three-year term expires or until their successors have been duly elected and
qualified;
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending March 31, 2001; and
3. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only stockholders of record at the close of business on June 28, 2000 are
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournments or postponements thereof. A list of such stockholders will be
available for inspection at the Company's headquarters located at 3800 Buffalo
Speedway, Suite 400, Houston, Texas, during ordinary business hours for the
ten-day period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Gary A. Paranzino
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
Houston, Texas
June 29, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
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ASHFORD.COM, INC.
3800 BUFFALO SPEEDWAY, SUITE 400
Houston, Texas 77098
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 27, 2000
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Ashford.com, Inc., a Delaware corporation
(the "Company"), for the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at the Renaissance Hotel, Greenway II Room, Concourse Level, located
at 6 Greenway Plaza East, Houston, Texas 77046, on Thursday, July 27, 2000, at
4:30 p.m., Central Time, and at any adjournment or postponement of the Annual
Meeting. These proxy materials were first mailed to stockholders on or about
June 30, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders. Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote
at the Annual Meeting. On June 28, 2000, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 45,891,116
shares of Common Stock outstanding. Each stockholder of record on June 28, 2000
is entitled to one vote for each share of Common Stock held by such stockholder
on June 28, 2000. Shares of Common Stock may not be voted cumulatively. All
votes will be tabulated by the inspector of election appointed for the meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the
Company's Common Stock issued and outstanding and entitled to vote at the Annual
Meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the presence
of a quorum.
VOTES REQUIRED
PROPOSAL 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled to
vote at the Annual Meeting. The two nominees for director receiving the highest
number of affirmative votes will be elected. Abstentions and broker non-votes
will not be counted toward a nominee's total. Stockholders may not cumulate
votes in the election of directors.
PROPOSAL 2. Ratification of the appointment of Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year ending March 31,
2001 requires the affirmative vote of a majority of those shares present in
person, or represented by proxy, and cast either affirmatively or negatively at
the Annual Meeting. Abstentions and broker non-votes will not be counted as
having been voted on the proposal.
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you
are urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your proxy
when properly completed. In the event no directions are specified, such proxies
will be voted FOR the
2
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Nominees of the Board of Directors (as set forth in Proposal No. 1) and FOR
Proposal 2 and in the discretion of the proxy holders as to other matters that
may properly come before the Annual Meeting. You may also revoke or change your
proxy at any time before the Annual Meeting. To do this, send a written notice
of revocation or another signed proxy with a later date to the Secretary of the
Company at the Company's principal executive offices before the beginning of the
Annual Meeting. You may also automatically revoke your proxy by attending the
Annual Meeting and voting in person. All shares represented by a valid proxy
received prior to the Annual Meeting will be voted.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
The Company has retained the services of ChaseMellon Consulting Services, L.L.C.
("ChaseMellon") to aid in the solicitation of proxies from brokers, bank
nominees and other institutional owners. The Company estimates that it will pay
ChaseMellon a fee not to exceed $5,500.00 for its services and will reimburse
ChaseMellon for certain out-of-pocket expenses that are usual and proper. In
addition, the Company may reimburse brokerage houses, fiduciaries, and
custodians representing beneficial owners of shares for their costs of
forwarding the solicitation material to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees or agents
of the Company. No additional compensation will be paid to these individuals for
any such services. Except as described above, the Company does not presently
intend to solicit proxies other than by mail.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company currently has authorized seven directors. In accordance with
the terms of the Company's Certificate of Incorporation, the Board of Directors
is divided into three classes: Class I, whose term will expire at the 2000
Annual Meeting; Class II, whose term will expire at the 2001 Annual Meeting; and
Class III, whose term will expire at the 2002 Annual Meeting. At the 2000 Annual
Meeting, two directors will be elected to serve until the Annual Meeting to be
held in 2003 or until his respective successor is elected and qualified. The
Board of Directors has selected two nominees as the nominees for Class I. The
nominees for the Board of Directors are both currently directors of the Company
and are set forth below. The proxy holders intend to vote all proxies received
by them in the accompanying form for the nominees for directors listed below. In
the event any nominee is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them for the nominees listed
below. As of the date of this Proxy Statement, the Board of Directors is not
aware of any nominee who is unable or will decline to serve as a director.
NOMINEES FOR TERM ENDING IN 2003
Set forth below is information regarding the nominees, including their
ages, the period during which they have served as directors, and certain
biographical information.
DIRECTOR
NAME SINCE AGE
---------------------- --------- ------
J. Robert Shaw (1) April 1998 34
Robert Cohn May 2000 51
--------------------
(1) Member of Compensation Committee and Audit Committee.
J. ROBERT SHAW is a co-founder of the Company and has served as the
Chairman of the Board since April 1998. In 1989, Mr. Shaw founded Synergy
Development Corp., an information-technology consulting firm that provided
equipment and services to online commerce companies, and was President and
Chief Executive Officer since its inception. In 1999, Synergy Development
Corp. reorganized as Emerging Inc., an online commerce consulting firm.
Mr. Shaw has been President, Chief Executive Officer and Director of Emerging
Inc. since its inception. From 1985 to 1989, Mr. Shaw served as Vice
President of Sales and Finance for StyleWare, Inc., a software company that
was subsequently sold to Claris Corporation. Mr. Shaw received a Bachelor of
Business Administration in economics CUM LAUDE from the University of St.
Thomas.
ROBERT COHN has served as a director of the Company since May 2000.
From September 1997 until his retirement in May 1999, Mr. Cohn served as
Executive Vice President of Lucent Technologies, Inc. From June 1982 until
September 1997, Mr. Cohn served as founder, Chief Executive Officer and
Chairman of the Board of Octel Communications, a provider of voice messaging
systems. Mr. Cohn presently serves as a director of Chapters Online Inc., a
Canadian internet portal company, and Saba Software, Inc., an enterprise
software company. Mr. Cohn holds a B.S. from the University of Florida and
an M.B.A. from Stanford University.
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Set forth below is information regarding the continuing directors of the
Company, including their ages, the period in which they have served as
directors, and certain biographical information.
DIRECTOR
NAME SINCE AGE
----------------------- ------------- -----
Kenneth E. Kurtzman (2) May 1999 37
James H. Whitcomb, Jr. (2) March 1998 34
Kevin R. Harvey (3) December 1998 35
Colombe M. Nicholas (4) August 1999 55
--------------------
(2) Member of Stock Option Committee.
(3) Member of Audit Committee.
(4) Member of Compensation Committee.
KENNETH E. KURTZMAN joined the Company in May 1999 as our Chief Executive
Officer and a Director. From August 1995 to April 1999, Mr. Kurtzman served as
Vice President and General Manager of several divisions of Compaq Computer
Corporation, including the Small and Medium Business Division and Compaq.com.
From September 1989 to August 1995, Mr. Kurtzman worked for McKinsey & Co., an
international consulting firm, where most recently he served as a Principal
working in the computing, telecommunications, systems integration, banking and
energy industries. Mr. Kurtzman received a Bachelor of Arts in economics MAGNA
CUM LAUDE from Rice University, an undergraduate degree in economics from
Cambridge University and a Masters in Business Administration from the Graduate
School of Business at Stanford University.
JAMES H. WHITCOMB, JR. co-founded the Company and oversees all aspects of
technology as well as general corporate issues and strategy. He has served as
the Company's President and as a Director since March 1998. From the Company's
inception to May 1999, he served as Chief Executive Officer and from May 1999 to
February 2000 he served as the Company's Chief Operating Officer. From February
1990 to March 1998, Mr. Whitcomb served as Chief Technology Officer at Synergy
Development Corp, an information-technology consulting firm that provided
equipment and services to online commerce companies, and has been a Director
since its inception. In 1999, Synergy Development Corp. reorganized as Emerging
Inc., an online commerce consulting firm. Mr. Whitcomb has served as a Director
of Emerging Inc. since its inception. Mr. Whitcomb earned a bachelor's degree in
accounting from the University of Texas at Austin.
KEVIN R. HARVEY has served as a Director of the Company since December
1998. Mr. Harvey has been a Managing Member of the general partner of Benchmark
Capital, a venture capital firm, since January 1995. From July 1993 to January
1995, he served as General Manager for Lotus Development Corporation. In August
1990, Mr. Harvey founded Approach Software Corporation, a software company,
where he served as the President and Chief Executive Officer until July 1993
when Approach was sold to Lotus Development Corporation. Prior to founding
Approach, Mr. Harvey founded Styleware Inc. Mr. Harvey is also a director of
Broadbase Software, Inc., a developer and provider of customer relationship
applications, Critical Path, Inc., an e-mail hosting services company, Red Hat
Software, a developer and provider of open source software and services, and a
director of several privately held companies. Mr. Harvey received a B.S.E.E.
from Rice University.
COLOMBE M. NICHOLAS has served as a Director of the Company since August
1999. Ms. Nicholas served as President and Chief Executive Officer for Anne
Klein Group, a women's fashion apparel company, from August 1996 to July 1999,
when the company was sold to Kasper, ASL. From December 1993 to July 1996, Ms.
Nicholas served as President and Chief Executive Officer of Orr Felt Company, a
family-owned business that provides felt for paper manufacturing. From April
1991 to November 1993, she was the President and Chief Operating Officer of
Giorgio Armani Fashion Corporation, the largest licensee of Armani Spa, Italy.
From May 1980 to January 1989, Ms. Nicholas served as President and Chief
Executive Officer of Christian Dior New York, a designer fashion company. Ms.
Nicholas received a Bachelor of Arts in languages from the University of Dayton
and a J.D. from the University of Cincinnati College of Law.
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<PAGE>
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended March 31, 2000, the Board of Directors held
twelve (12) meetings and acted by written consent on six (6) occasions. For the
fiscal year, each of the directors during the term of his or her tenure attended
or participated in at least 75% of the aggregate of (i) the total number of
meetings or actions by written consent of the Board of Directors and (ii) the
total number of meetings held by all committees of the Board of Directors on
which each such director served. The Board of Directors has three standing
committees: the Audit Committee, the Compensation Committee and the Stock Option
Committee.
During the fiscal year ended March 31, 2000, the Audit Committee of the
Board of Directors held one (1) meeting. The Audit Committee reviews, acts on
and reports to the Board of Directors with respect to various auditing and
accounting matters, including the selection of the Company's independent
accountants, the scope of the annual audits, fees to be paid to the independent
accountants, the performance of the Company's independent accountants and the
accounting practices of the Company. The members of the Audit Committee are J.
Robert Shaw and Kevin R. Harvey.
During the fiscal year ended March 31, 2000, the Compensation Committee of
the Board of Directors held one (1) meeting and acted by written consent on two
(2) occasions. The Compensation Committee establishes salaries, incentives and
other forms of compensation for officers and other employees of the Company and
administers the incentive compensation and benefit plans of the Company. The
members of the Compensation Committee are J. Robert Shaw and Colombe M.
Nicholas.
During the fiscal year ended March 31, 2000, the Stock Option Committee of
the Board of Directors held one (1) meeting and acted by written consent on
forty-eight (48) occasions. The Stock Option Committee administers the Company's
stock-based incentive compensation plans for employees and consultants who are
not considered officers or directors of the Company. The members of the Stock
Option Committee are Kenneth E. Kurtzman and James H. Whitcomb, Jr.
DIRECTOR COMPENSATION
Directors currently do not receive any cash compensation from the Company
for their services as members of the Board of Directors. Directors are eligible
to participate in our stock plans. Subsequent to the Company's initial public
offering, non-employee directors are eligible to receive automatic option grants
under the Company's 1999 Equity Incentive Plan. New non-employee directors
joining the Board subsequent to the Company's initial public offering receive,
at a minimum, a fully vested option for 2,375 shares of the Company's Common
Stock. At each annual meeting of stockholders, beginning in 2000, all
non-employee directors continuing to be Board members after the annual meeting
will receive, at a minimum, a fully vested option for 7,125 shares of the
Company's Common Stock.
Ms. Nicholas has received the following options from the Company: (a) on
August 15, 1999, she received an option for 71,250 shares of the Company's
Common Stock at an exercise price per share of $4.22; (b) on February 18, 2000,
Ms. Nicholas received an option for 72,000 shares of the Company's Common Stock
at an exercise price per share of $7.31; and (c) on April 25, 2000, Ms. Nicholas
received an option for 72,000 shares of the Company's Common Stock at an
exercise price per share of $2.625. The Company paid Ms. Nicholas $47,612 during
fiscal 2000 for the consulting services she provided to the Company. Mr. Cohn
has received an option for 143,250 shares of the Company's Common Stock at an
exercise price per share of $2.625.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 31, 2000, certain information
known to the Company regarding the beneficial ownership of the Company's Common
Stock by (i) each person who is known by the Company to be the beneficial owner
of more than five percent of the Company's outstanding shares of Common Stock,
(ii) the directors, (iii) the executive officers named in the Summary
Compensation Table and (iv) the directors and executive officers as a group.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 (the "Exchange Act"). Under this rule, certain
shares may be deemed to be beneficially owned by more than one person (if, for
example, persons share the power to vote or the power to dispose of the shares).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire shares (for example, upon exercise of an option
or warrant) within sixty (60) days of May 31, 2000. In computing the percentage
ownership of any person, the amount of shares is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason of
such acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in the following table does not necessarily reflect the
person's actual voting power at any particular date. The percentage of
beneficial ownership for the following table is based on 45,891,116 shares of
Common Stock outstanding as of May 31, 2000. Unless otherwise indicated, the
address for each listed stockholder is: c/o Ashford.com, Inc., 3800 Buffalo
Speedway, Suite 400, Houston, Texas 77098. To our knowledge, except as otherwise
indicated in the footnotes to this table and pursuant to applicable community
property laws, the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock.
SHARES BENEFICIALLY OWNED
AS OF MAY 31, 2000 (1)
--------------------------
NUMBER OF PERCENTAGE
BENEFICIAL OWNER SHARES OF CLASS
-------------------------------------------------- ------------ ------------
Kevin Harvey 10,982,177 23.93%
Entities affiliated with Benchmark Capital
Partners II, L.P. (2)
Michael Moritz 2,491,053 5.43
Entities affiliated with Sequoia Capital (3)
Bernard Arnault 2,375,000 5.18
Arkaro Holdings B.V. (4)
Amazon.com, Inc. 7,406,632 16.14
Entities affiliated with Amazon.com, Inc. (5)
J. Robert Shaw 3,111,250 6.78
Kenneth E. Kurtzman (6) 1,856,104 4.04
James H. Whitcomb, Jr. (7) 3,147,250 6.85
David F. Gow (8) 332,770 *
Gary A. Paranzino (9) 225,618 *
Jeffrey R. Helms (10) 1,702,083 3.71
Colombe Nicholas (11) 78,750 *
Robert Cohn 243,250 *
All directors and executive officers as a group
(11 persons) (12) 20,480,895 43.51
-----------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power
with respect to securities.
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(2) Consists of shares held by Benchmark Capital Partners II, L.P. as nominee
for Benchmark Capital Partners II, L.P., Benchmark Founders Fund II, L.P.,
Benchmark Founders Fund II-A, L.P. and Benchmark Members' Fund II, L.P.
Kevin R. Harvey is a Managing Member of Benchmark Capital Management Co. II,
L.L.C., the general partner of the Benchmark entities and is a director of
the Company. He disclaims beneficial ownership of the shares held by the
entities except to the extent of his pecuniary interest therein. The address
for Mr. Harvey and the Benchmark entities is 2480 Sand Hill Road, Suite 200,
Menlo Park, California 94025.
(3) Includes 903,056 shares held by Sequoia Capital VIII, 11,457 shares held by
Sequoia International Technology Partners VIII, 59,784 shares held by
Sequoia International Technology Partners VIII(Q), 19,931 shares held by CMS
Partners LLC, 2,195 shares held by Sequoia 1997, 1,484,185 shares held by
Sequoia Capital Franchise Fund and 10,445 shares held by Sequoia Capital
Franchise Partners. Mr. Moritz is a managing member of the general partner
of Sequoia Capital VIII, Sequoia International Technology Partners VIII,
Sequoia International Technology Partners VIII (Q), Sequoia Capital
Franchise Fund and Sequoia Capital Franchise Partners. He disclaims
beneficial interest in the shares held by the partnerships except to the
extent of his pecuniary interest therein. The address for each of these
entities and for Mr. Moritz is 3000 Sand Hill Road, Building 4, Suite 280,
Menlo Park, California 94025.
(4) Mr. Arnault, the majority shareholder of the ultimate parent company of
Arkaro Holdings B.V., may be deemed to share the power to direct the voting
and disposition of all of the shares held by Arkaro Holdings B.V., and he
disclaims beneficial interest of such shares except to the extent of his
pecuniary interest therein. The address for Arkaro Holdings B.V. and for Mr.
Arnault is Locatellikade, 1, Parnassustoren 1076 AZ Amsterdam, The
Netherlands.
(5) As reported in a Schedule 13G filed on January 7, 2000, Amazon.com, Inc. has
the sole power to vote or to direct the vote as to 707,964 shares and has,
along with Amazon.com Holdings, Inc. and Amazon.com Advertising Services NV,
Inc., shared power to vote or to direct the vote as to 6,698,668 shares.
Amazon.com, Inc.'s address is 1200 12th Avenue South, Suite 1200, Seattle,
Washington 98144
(6) Includes options to purchase 3,604 shares subject to options exercisable
within 60 days of May 31, 2000.
(7) Includes options to purchase 36,000 shares subject to options exercisable
within 60 days of May 31, 2000.
(8) Includes options to purchase 332,770 shares subject to options exercisable
within 60 days of May 31, 2000.
(9) Includes options to purchase 225,618 shares subject to options exercisable
within 60 days of May 31, 2000.
(10) Includes options to purchase 39,583 shares subject to options exercisable
within 60 days of May 31, 2000.
(11) Includes options to purchase 78,750 shares subject to options exercisable
within 60 days of May 31, 2000.
(12) Includes options to purchase 1,180,468 shares subject to options
exercisable within 60 days of May 31, 2000.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors (the
"Compensation Committee" or the "Committee") has the exclusive authority to
establish the level of base salary payable to the Chief Executive Officer
("CEO") and certain other executive officers of the Company and to administer
the Company's 1998 Stock Incentive Plan, 1999 Equity Incentive Plan, 1999
Employee Stock Purchase Plan and 2000 Non-Officer Stock Plan. In addition, the
Committee has the responsibility for approving the individual bonus programs to
be in effect for the CEO and certain other executive officers. The Committee is
composed of non-employee directors and meets on a scheduled basis to evaluate
the effectiveness of the compensation program in linking Company performance and
executive pay. Additionally, the Committee is routinely consulted to approve the
compensation package of a newly hired executive or of an executive whose scope
of responsibility has changed significantly.
For the fiscal year ended March 31, 2000, the process utilized by the
Committee in determining executive officer compensation levels was based on the
subjective judgment of the Committee. Among the factors considered by the
Committee were the recommendations of the CEO with respect to the compensation
of the Company's key executive officers. However, the Committee made the final
compensation decisions concerning such officers.
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GENERAL COMPENSATION POLICY. The objective of the Company's executive
compensation program is to align executive compensation with the Company's long
and short-term business objectives and performance. Additionally, it is
imperative that executive compensation enables the Company to attract, retain,
and motivate qualified executives who are able to contribute to the long-term
success of the Company. The following specific strategies are utilized to guide
the Company's executive compensation decisions:
o RISK AND REWARD. A significant portion of an executive's compensation
should be tied to their performance and contributions to the success of
the Company.
o PAY FOR PERFORMANCE. If an executive performs at a higher level, then the
executive should be rewarded with a higher level of compensation.
Similarly, if performance is below minimum expectations, then there should
be a lower level of compensation or there may be no variable compensation.
o COMPENSATE COMPETITIVELY. The Company compares its compensation programs
to those of other companies of comparable size and in similar industries
and establishes compensation programs that are substantially at market.
During fiscal 2000, the Company's executive compensation program included
these key elements:
o BASE SALARY. The Company establishes the base salaries of its executives
based on competitive market practices derived from comparisons with
companies of similar size and in similar industries. Additionally, each
executive's base pay is positioned relative to the total compensation
package, including cash incentives and equity-based incentives.
o CASH BONUS. Mr. Paranzino received a signing bonus and a bonus to pay
certain relocation expenses, according to the offer letter from the
Company to Mr. Paranzino.
o EQUITY-BASED INCENTIVES. Stock options are designed to align the interests
of each executive with those of the shareholders. Each year, the Committee
considers the grant to executives of stock option awards. The Committee
believes that stock options provide added incentive for executives to
influence the strategic direction of the Company and to create and grow
value for customers, stockholders and employees. Options are granted at
fair market value and typically have four-year vesting periods, contingent
upon the executives continued employment with the Company. The number of
stock option shares that are granted to individual executives is based on
demonstrated performance. In fiscal 2000 the Company granted to each
employee, including each executive officer, a fully vested option for
1,000 shares as a seasonal holiday bonus. The additional options granted
to the Named Officers in fiscal 2000 were granted based on each officer's
annual performance review.
CEO COMPENSATION. The annual base salary for Mr. Kurtzman, the Company's
Chief Executive Officer, was established by the Board based on the Board's
subjective evaluation of Mr. Kurtzman's personal performance of his duties. Mr.
Kurtzman's bonus for fiscal 2000 was guaranteed according to Mr. Kurtzman's
employment agreement with the Company. The option grants made to Mr. Kurtzman
during the 2000 fiscal year were based upon his potential for increasing
long-term shareholder value and are intended to place a significant portion of
his total compensation at risk. His options will have no value unless there is
appreciation in the value of the Company's Common Stock over the option terms.
TAX LIMITATION. Under the federal tax laws, a publicly held company such
as Ashford.com, Inc. will not be allowed a federal income tax deduction for
compensation paid to certain executive officers to the extent that compensation
exceeds $1 million per officer in any year. It is not expected that the
compensation to be paid to the Company's executive officers for the 2000 fiscal
year will exceed the $1 million limit per officer. In order to qualify option
grants under the Company's 1999 Equity Incentive Plan (the "Plan") for an
exemption available to performance-based compensation, certain provisions of the
Plan provide a limit on the maximum number of shares of Common Stock for which
any one participant may be granted stock options each year over the term of the
Plan. Accordingly, any compensation deemed paid to an executive officer when he
exercises an outstanding option under the Plan with an exercise price equal to
the fair market value of the option shares on the grant date will qualify as
9
<PAGE>
performance-based compensation that will not be subject to the $1 million
limitation.
Compensation Committee
J. Robert Shaw
Colombe M. Nicholas
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board was formed in September
1999, and the members of the Compensation Committee are J. Robert Shaw and
Colombe M. Nicholas. Mr. Shaw currently serves as Chairman of the Board of the
Company and Ms. Nicholas is currently a member of the Board of Directors of the
Company. Neither of these individuals was at any time during fiscal 2000, or at
any other time, an officer or employee of the Company. No member of the
Compensation Committee of the Company serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Company's Board or Compensation Committee.
10
<PAGE>
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's Common Stock between September 23, 1999 and March 31, 2000 with
the cumulative total return of (i) the Nasdaq National Market Composite Index
and (ii) the Chase H&Q Internet 100 Index (the "H&Q Internet Index"), over the
same period. This graph assumes the investment of $100.00 on September 23, 1999
in the Company's Common Stock and on September 23, 1999 in the Nasdaq National
Market Composite Index and the H&Q Internet Index, and assumes the reinvestment
of dividends, if any.
The comparisons shown in the graph below are based upon historical data. The
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance of
the Company's Common Stock. Information used in the graph was obtained from
Research Data Group, Inc., a source believed to be reliable, but the Company is
not responsible for any errors or omissions in such information.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
9/23/99 9/30/99 12/31/99 3/31/00
------- ------- -------- -------
Ashford.com, Inc. $100.00 $ 70.91 $ 84.62 $ 36.30
NASDAQ Stock Market (U.S.) 100.00 99.76 147.36 165.48
Chase H&Q Internet 100 100.00 104.81 202.89 211.91
The Company effected its initial public offering of its Common Stock on
September 22, 1999 and trading of the Company's Common Stock commenced on
September 24, 1999. The closing price on September 24, 1999 was $12.625 per
share. The graph above commences with the price of $13.00 per share on September
23, 1999.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and Stock Performance Graph shall not be deemed
filed with the Securities and Exchange Commission and shall not be deemed
incorporated by reference into any of those prior filings or into any future
filings made by the Company under those statutes.
11
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information concerning
compensation earned during the fiscal years ended March 31, 2000 and 1999 by the
Company's Chief Executive Officer and each of the Company's other four highest
paid executive officers whose total salary and bonus for services rendered in
all capacities to the Company exceeded $100,000 during the fiscal year ended
March 31, 2000 (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
-----------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
FISCAL ----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
------------------------------ ------ ---------- ---------- -----------
Kenneth E. Kurtzman 2000 $ 225,962 $ 50,000 1,878,500
Chief Executive Officer 1999 -- -- --
and Director
James H. Whitcomb, Jr 2000 200,923 -- 36,000
President and Chief 1999 76,923(1) -- --
Information
Officer and Director
David F. Gow 2000 175,606 -- 27,250
Chief Financial Officer 1999 13,462(2) -- 831,250
Gary A. Paranzino 2000 94,615(3) 57,308 443,199
Vice President, General 1999 -- -- --
Counsel and Secretary
Jeffrey R. Helms 2000 163,885 -- --
Vice President, 1999 35,962(4) -- 118,750
Technology
------------------------------
(1) Mr. Whitcomb commenced employment with the Company in November, 1998.
(2) Mr. Gow commenced employment with the Company in March, 1999.
(3) Mr. Paranzino commenced employment with the Company in July, 1999.
(4) Mr. Helms commenced employment with the Company in November, 1998 and
ceased full-time employment with the Company in November, 1999.
12
<PAGE>
STOCK OPTIONS GRANTED IN LAST FISCAL YEAR
The following table provides information concerning grants of options to
purchase the Company's Common Stock made during the fiscal year ended March 31,
2000 to the Named Officers. No stock appreciation rights were granted during
such fiscal year to the Named Officers.
OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (2)
-----------------------------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO ANNUAL RATES OF STOCK PRICE
UNDERLYING EMPLOYEES EXERCISE APPRECIATION FOR OPTION TERM(4)
OPTIONS IN FISCAL PRICE PER EXPIRATION -----------------------------
NAME GRANTED(#) YEAR SHARE($)(3) DATE 5%($) 10%($)
------------------ ------------ --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth E. Kurtzman 1,852,500(5) 25.48% $ 0.43 5/15/09 $ 500,962 $1,269,535
1,000(6) 0.01 8.56 2/2/10 5,383 13,642
25,000(7) 0.34 7.31 2/18/10 114,930 291,256
James H. Whitcomb, Jr. 1,000(6) 0.01 8.56 2/2/10 5,383 13,642
35,000(5) 0.48 7.31 2/18/10 160,903 407,759
David F. Gow 1,000(6) 0.01 8.56 2/2/10 5,383 13,642
26,250(7) 0.36 7.31 2/18/10 120,677 305,819
Gary A. Paranzino 118,750(5) 1.63 0.43 7/31/09 32,113 81,380
304,699(7) 4.19 9.22 10/1/09 1,766,769 4,477,340
1,000(6) 0.01 8.56 2/2/10 5,383 13,642
18,750(7) 0.26 7.31 2/18/10 86,198 218,442
Jeff R. Helms -- -- -- -- -- --
</TABLE>
(1) In August 1999, the Company's Board of Directors declared a stock split of
4.75 shares for every 1 share of Common Stock or Preferred Stock then
outstanding. The stock split became effective on September 21, 1999.
Accordingly, all share information included herein has been restated to
reflect the stock split.
(2) The Company granted options to purchase 7,269,976 shares of Common Stock
during the fiscal year ended March 31, 2000. The plan administrator has the
discretionary authority to reprice the options through the cancellation of
those options and the grant of replacement options with an exercise price
based on the fair market value of the option shares on the regrant date. The
options have a maximum term of 10 years measured from the option grant date,
subject to earlier termination if the optionee's service with the Company
ceases. The plan administrator has the discretion to accelerate the vesting
of options upon a change in control.
(3) The exercise price may be paid in cash, check, promissory note, in shares of
the Company's Common Stock valued at fair market value on the exercise date
or a broker-assisted cashless exercise procedure. All options were granted
at an exercise price equal to the fair market value of the Company's Common
Stock as of the date of grant. Prior to the Company's initial public
offering of its securities, the Company's Board of Directors determined the
fair market value of the Company's Common Stock. Following the Company's
initial public offering of its securities, the fair market value of the
Company's Common Stock was based on the Common Stock prices reported on the
Nasdaq National Market.
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<PAGE>
(4) The potential realizable value is calculated based on the ten-year term of
the option at the time of grant. Annual stock price appreciation of 5% and
10% is assumed in keeping with rules promulgated by the Securities and
Exchange Commission and does not represent the Company's prediction of the
Company's stock price performance. The potential realizable value at 5% and
10% appreciation is calculated by assuming that the exercise price on the
date of grant appreciates at the indicated rate for the entire term of the
option and that the option is exercised at the exercise price and sold on
the last day of the term at the appreciated price.
(5) Each of these options is immediately exercisable. The shares underlying
these options are subject to repurchase by the Company at the original
exercise price per share, upon the optionee's cessation of service before
vesting in such shares. The repurchase right lapses in equal monthly
installments over a 48-month period of service.
(6) Each of these options is immediately exercisable and fully vested on the
date of the grant.
(7) Each of these options becomes exercisable and vested in equal monthly
installments over a 48-month period of service.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table provides the specified information concerning
unexercised options held as of March 31, 2000 by the Named Officers and the
number and value of options that were exercised in the fiscal year ended March
31, 2000. No stock appreciation rights were exercised during the fiscal year
ended March 31, 2000, and no stock appreciation rights were outstanding as of
March 31, 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FY-END(#)(1) AT FY-END($)(1)(2)
ON VALUE --------------------- ----------------------
NAME EXERCISE(#) REALIZED($) VESTED UNVESTED VESTED UNVESTED
------------------- ----------- --------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth E. Kurtzman 1,852,500 $0 1,520 24,480 - -
James H. Whitcomb, Jr. - - 1,729 34,271 - -
David F. Gow - - 261,311 597,189 $1,213,103 $2,668,835
Gary A. Paranzino - - 59,268 383,931 84,903 424,534
Jeff R. Helms - - 39,583 79,167 184,853 369,710
---------------------
</TABLE>
(1) Vested shares are not subject to repurchase by the Company. Unvested shares
are subject to repurchase by the Company.
(2) Based on the fair market value of the Company's Common Stock per share at
March 31, 2000 ($4.72) less the exercise price per share payable for such
shares.
EMPLOYMENT CONTRACTS, CHANGE IN CONTROL ARRANGEMENTS AND
SEVERANCE AGREEMENTS
Under the Company's 1999 Equity Incentive Plan and 1998 Stock Incentive
Plan, if a change in control of Ashford.com occurs, an option or other award
will become fully exercisable and fully vested if the option or award is not
assumed by the surviving corporation or its parent or if the surviving
corporation or its parent does not substitute comparable awards for the awards
granted under such plans.
14
<PAGE>
All of the Named Officers have executed agreements with the Company
indicating that their employment is at will and employment may be terminated by
each officer or the Company at any time for any reason.
The Company entered into an employment agreement with Mr. Kurtzman, the
Company's Chief Executive Officer, as of May 1, 1999, which provided for Mr.
Kurtzman's salary, bonus, option and severance payments. He received a signing
bonus of $50,000 in May, 1999. The Company's Board of Directors will determine
whether he receives any future bonuses, which will be awarded based on objective
or subjective criteria established in advance by the Company's Board of
Directors. Under this agreement Mr. Kurtzman was granted an option for 1,852,500
shares of the Company's Common Stock. If a change in control occurs, the vesting
of the option shares will accelerate, and an additional 25% of Mr. Kurtzman's
unvested option shares will become vested. If Mr. Kurtzman is terminated without
cause, Mr. Kurtzman will receive a severance payment equal to nine months of
salary and additional vesting of his option shares as if he provided another
nine months of service with the Company. Mr. Kurtzman's employment is at-will.
Either he or Ashford.com can terminate his employment at any time for any
reason, with or without cause.
The Company entered into an employment agreement with Mr. Paranzino, the
Company's Vice President, General Counsel and Secretary, as of July 24, 1999,
which provided for Mr. Paranzino's salary, bonus, option and severance payments.
He received a signing bonus and a relocation bonus. Mr. Paranzino also received
an option for 118,750 shares of the Company's Common Stock. If a change in
control occurs, or Mr. Paranzino is involuntarily or constructively terminated
or he becomes deceased or permanently disabled (collectively, "Severance
Event"), this option becomes exercisable and vested as to an additional number
of shares, as if he provided another 12 months of service following the event;
provided, however, in no event will he receive more than 12 months of vesting
acceleration if more than one of the previously described events occur. Mr.
Paranzino's option for 304,699 shares of the Company's Common Stock also has the
same vesting acceleration provision. In addition, if a Severance Event occurs,
Mr. Paranzino will receive six months of continued salary and employee benefits.
In addition, the Company entered into a stock restriction agreement, dated
December 4, 1998, with Mr. Whitcomb, the Company's President and Chief
Information Officer. Pursuant to that agreement, if a change in control occurs
and the Company's repurchase right that applies to his shares is not assigned to
the successor corporation, then Mr. Whitcomb's shares will become fully vested.
Pursuant to an employment agreement all shares vest upon termination with or
without cause and would no longer be subject to the stock restriction agreement
upon such termination. Under this employment agreement, Mr. Whitcomb's
employment is at-will. Either he or Ashford.com can terminate his employment at
any time for any reason, with or without cause. In addition, the Company's Board
of Directors will determine whether he receives any bonuses, which will be
awarded based on objective or subjective criteria established in advance by the
Company's Board of Directors.
The Company entered into a separation agreement with Mr. Helms, the
Company's Vice President, Technology, dated November 11, 1999. Under this
agreement, Mr. Helms ceased full-time employment November 11, 1999 and continued
employment as a part-time employee through August 13, 2000 (the "Remaining
Period"). During the Remaining Period, the Company will pay Mr. Helms $50,000
for his services, and Mr. Helms will not be eligible for vacation accrual or any
employee benefit, other than health benefits under COBRA. During the Remaining
Period, the Company agreed to pay a portion of Mr. Helms' COBRA premiums, such
that his share of the premiums remains the same as when he was a full-time
employee. The Company also paid Mr. Helms a lump sum cash payment of $76,000. In
consideration for the benefits under this agreement, Mr. Helms signed a release
of claims against the Company.
15
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of Arthur
Andersen LLP as the Company's independent public accountants for the fiscal year
ending March 31, 2001. The affirmative vote of the holders of a majority of
shares present or represented by proxy and voting at the Annual Meeting will be
required to ratify the appointment of Arthur Andersen LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
Arthur Andersen LLP has audited the Company's financial statements since
inception through March 31, 2000. Its representatives are expected to be present
at the Annual Meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's Certificate of Incorporation limits the liability of its
directors for monetary damages arising from a breach of their fiduciary duty as
directors, except to the extent otherwise required by the Delaware General
Corporation Law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.
The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by Delaware law,
including in circumstances in which indemnification is otherwise discretionary
under Delaware law. The Company has also entered into indemnification agreements
with its officers and directors containing provisions that may require the
Company, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified.
In May 1999, the Company loaned $780,000 to Kenneth E. Kurtzman, Chief
Executive Officer and director, in connection with Mr. Kurtzman's exercise of an
option to purchase 1,852,500 shares of common stock. Mr. Kurtzman issued a
promissory note to us bearing interest at the rate of 5.22% per annum that is
secured by a pledge of a portion of the shares acquired and is payable in full
by May 2004.
In December 1999, the Company sold 707,964 shares of its common stock to
Amazon.com, Inc., a leading online retailer, for $10 million in cash. The
Company also issued an additional 6,698,664 shares of its common stock to
Amazon.com in exchange for advertising placements targeted at Amazon.com's
customer base with the intent of delivering new customers to the Company (the
"Advertising Placements"). The fair market value of the shares issued in
connection with the Advertising Placements totaled $94.6 million and is being
amortized over the one-year term of the agreement. During fiscal 2000, the
Company paid $6.0 million and expects to pay an additional $2.0 million during
fiscal 2001 to Amazon.com for promotional costs in connection with the
acquisition of new customers. As of March 31, 2000, Amazon.com held an
approximate 16.5% ownership interest in the Company.
16
<PAGE>
In April 2000, the Company loaned $375,888 to Robert Cohn, a director, in
connection with Mr. Cohn's exercise of an option to purchase 143,250 shares of
common stock. Mr. Cohn issued a promissory note to us bearing interest at the
rate of 6.71% per annum that is secured by a pledge of the shares acquired and
is payable in full by April 2004.
J. Robert Shaw, the Chairman of the Board of the Company and one of our
founders, is the President and Chief Executive Officer of Emerging Inc. and
Synergy Development Corp., information-technology consulting firms that provide
equipment and services to online commerce companies. In addition, James H.
Whitcomb, Jr., our President, Chief Information Officer and one of our
directors, is also a director of Emerging Inc. and Synergy Development Corp.
During fiscal 2000, the Company purchased computer equipment and consulting
services from Emerging Inc. and Synergy Development Corp. at prices and terms
that the Company believes are equivalent to those available to and transacted
with unrelated parties. During fiscal 2000, charges for consulting services and
payments for computer equipment to Emerging Inc. and Synergy Development Corp.
totaled $2.5 million.
Kevin Harvey, a director of the Company, is also a director of Broadbase
Software, Inc., a developer and provider of customer relationship applications.
During fiscal 2000, the Company purchased software from Broadbase totaling
approximately $160,000 at prices and terms that the Company believes are
equivalent to those transacted with unrelated parties.
We believe that all of these transactions were made on terms no less
favorable to us than we could have obtained from unaffiliated third parties. All
future transactions, including loans, between us and our officers, directors,
principal stockholders and their affiliates will be approved by a majority of
the Board of Directors, including a majority of the independent and
disinterested outside directors on the Board of Directors, and will continue to
be on terms no less favorable to us we could have obtained from unaffiliated
third parties.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, which require them to file reports
with respect to their ownership of the Company's Common Stock and their
transactions in such Common Stock. Based upon (i) the copies of Section 16(a)
reports that the Company received from such persons for their 2000 fiscal year
transactions in the Common Stock and their Common Stock holdings and (ii) the
written representations received from one or more of such persons that no annual
Form 5 reports were required to be filed by them for the 2000 fiscal year, the
Company believes that all reporting requirements under Section 16(a) for such
fiscal year were met in a timely manner by its executive officers, Board members
and greater than ten-percent stockholders.
FORM 10-K
THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S FORM 10-K REPORT FOR FISCAL YEAR 2000, INCLUDING THE FINANCIAL
STATEMENTS, SCHEDULE AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO
ASHFORD.COM, INC., 3800 BUFFALO SPEEDWAY, SUITE 400, HOUSTON, TEXAS 77098, ATTN:
ELLEN BROOKS, INVESTOR RELATIONS.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals that are intended to be presented at the 2001 Annual
Meeting that are eligible for inclusion in the Company's proxy statement and
related proxy materials for that meeting under the applicable rules of the
Securities and Exchange Commission must be received by the Company no later than
May 29, 2001, in order to be included. Such stockholder proposals should be
addressed to Ashford.com, Inc., 3800 Buffalo Speedway, Suite 400, Houston, Texas
77098, Attn: Gary Paranzino, Corporate Secretary.
17
<PAGE>
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
Kenneth E. Kurtzman
CHIEF EXECUTIVE OFFICER
Houston, Texas
June 29, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
18
<PAGE>
PROXY ASHFORD.COM, INC. PROXY
3800 BUFFALO SPEEDWAY, SUITE 400, HOUSTON, TEXAS 77098
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ASHFORD.COM, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 27, 2000
The undersigned holder of Common Stock, par value $.001, of Ashford.com, Inc.
(the "Company") hereby appoints Kenneth Kurtzman and Gary A. Paranzino, or
either of them, proxies for the undersigned, each with full power of
substitution, to represent and to vote as specified in this Proxy all Common
Stock of the Company that the undersigned stockholder would be entitled to vote
if personally present at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Thursday, July 27, 2000 at 4:30 p.m. local time, at the
Renaissance Hotel, Greenway II Room, Concourse Level, located at 6 Greenway
Plaza East, Houston, Texas 77046, and at any adjournments or postponements of
the Annual Meeting. The undersigned stockholder hereby revokes any proxy or
proxies heretofore executed for such matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTORS AND FOR PROPOSAL 2, AND IN THE
DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING. THE UNDERSIGNED STOCKHOLDER MAY REVOKE THIS PROXY AT ANY TIME
BEFORE IT IS VOTED BY DELIVERING TO THE CORPORATE SECRETARY OF THE COMPANY
EITHER A WRITTEN REVOCATION OF THE PROXY OR A DULY EXECUTED PROXY BEARING A
LATER DATE, OR BY APPEARING AT THE ANNUAL MEETING AND VOTING IN PERSON.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE DIRECTORS
AND "FOR" PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN
ALL CARDS IN THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(Reverse)
ASHFORD.COM, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. To elect the following directors to 2. To ratify the
serve for a term ending upon the 2003 appointment of Arthur
Annual Meeting of Stockholders or Andersen LLP as the
until their successors are elected and Company's independent
qualified: public accountants for
the fiscal year ending
NOMINEES: J. Robert Shaw and Robert Cohn March 31, 2001.
FOR WITHHELD For all nominees, [ ] [ ] [ ]
except for nominees FOR AGAINST ABSTAIN
written below.
[ ] [ ] [ ]
_______________________
Nominee exception(s).
In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before
the Annual Meeting.
19
<PAGE>
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Stockholders and Proxy Statement.
Signature: _______________________ Signature (if held jointly): _______________
Date: _____________, 2000
Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the Proxy applies. When shares are held as joint
tenants, both should sign. When signing as an executor, administrator, trustee,
guardian, attorney-in fact or other fiduciary, please give full title as such.
When signing as a corporation, please sign in full corporate name by President
or other authorized officer. When signing as a partnership, please sign in
partnership name by an authorized person.
20
