SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14A-101)
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY REGISTRANT /X/
FILED BY PARTY OTHER THAN REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / PRELIMINARY PROXY STATEMENT
/X/ DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO RULE 14-11 (C) OR RULE 14A-12
CACHE INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CACHE INC.
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(NAME OF PERSON(S) FILING PROXY STATEMENT
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Payment of filing fee (Check appropriate box):
/ / $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6(i) (1) or 14a-6(j) (2)
/ / $500 per each party to the controversy pursuant of Exchange Act Rule
14a-6(i) (3)
/ / 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: (1)
4. Proposed maximum aggregate value of transaction:
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / 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, of the form or schedule and the date of filing.
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
(212)575-3200
September 17, 1999
Dear Shareholder:
On behalf of the officers and directors of the Company,
you are cordially invited to attend the Cache, Inc. Annual
Meeting of Shareholders to be held at 10:00 a.m. on Tuesday,
October 19, 1999, at our headquarters, 1460 Broadway, New York,
New York, 15th Floor.
The Notice of Meeting and Proxy Statement on the
following pages cover the formal business of the meeting, which
includes proposals (i) to elect seven named nominees as directors
and (ii) to ratify the appointment of Arthur Andersen LLP,
certified public accountants, as Cache's auditors for the fiscal
year ending January 1, 2000.
The Board of Directors unanimously recommends that
shareholders vote in favor of each proposal. We strongly
encourage all shareholders to participate by voting their shares
by Proxy whether or not they plan to attend the meeting. Please
sign, date and mail the enclosed Proxy as soon as possible. If
you do attend the Annual Meeting, you may still vote in person.
Sincerely,
/s/ Andrew M. Saul
-----------------------
Andrew M. Saul
Chairman of the Board
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 19, 1999
_______________
TO THE SHAREHOLDERS:
The Annual Meeting of the Shareholders of Cache, Inc.
will be held on Tuesday, October 19, 1999 at 10:00 a.m. local
time, at our headquarters, 1460 Broadway, 15th Floor, New York,
New York 10036, for the purpose of considering and acting upon
the following proposals as set forth in the accompanying Proxy
Statement:
1. To elect seven named nominees as Directors of
the Company to serve until the next Annual Meeting of
Shareholders and until their successors are elected and
qualified.
2. To ratify the appointment of Arthur Andersen
LLP, certified public accountants, as auditors of the
Company for the fiscal year ending January 1, 2000.
3. To transact such other business as may
properly come before the Annual Meeting or any
adjournment thereof.
Only shareholders of record at the close of business on
September 13, 1999 are entitled to notice of and to vote at the
meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting,
please complete, date and sign the enclosed Proxy and return it
promptly to the Company in the return envelope enclosed for your
use, which requires no postage if mailed in the United States.
You may revoke your Proxy at any time before it is voted by
delivering to the Secretary of the Company a written notice of
revocation bearing a later date than the Proxy, by duly executing
a subsequent Proxy relating to the same shares of Common Stock
and delivering it to the Secretary of the Company, or by
attending and voting at the Annual Meeting.
You are cordially invited to attend.
By Order of the Board of Directors,
/s/ Victor J. Coster
--------------------
VICTOR J. COSTER
Secretary
September 17, 1999
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
_______________
PROXY STATEMENT
_______________
Accompanying this Proxy Statement is a Notice of Annual
Meeting of Shareholders and a form of Proxy for such meeting
solicited by the Board of Directors. The Board of Directors has
fixed the close of business on September 13, 1999 as the record
date for the determination of shareholders who are entitled to
notice of and to vote at the meeting or any adjournment thereof.
The holders of a majority of the outstanding shares of Common
Stock present in person, or represented by proxy, will constitute
a quorum at the meeting. This Proxy Statement and the enclosed
Proxy are being sent to the shareholders of the Company on or
about September 17, 1999.
Only shareholders of record at the close of business on
September 13, 1999 will be entitled to vote at the Annual
Meeting. At the close of business on such record date the
Company had outstanding 9,091,338 shares of Common Stock, par
value $.01 per share ("Common Stock"). No other class of voting
security of the Company is issued and outstanding. Each share of
Common Stock entitles the holder to one vote. Shareholders do
not have cumulative voting rights.
As of February 28, 1999, Messrs. Andrew and Joseph Saul
and certain Saul family trusts (sometimes collectively referred
to herein as the "Sauls") owned of record an aggregate of
6,382,729 shares of Common Stock, representing approximately
70.21% of the outstanding shares of Common Stock. See "Principal
Shareholders and Share Ownership by Management." The Sauls
intend to vote their Common Stock in favor of Proposals 1 and 2
which assures the approval of such proposals.
A Proxy that is properly submitted to the Company may
be properly revoked at any time before it is voted. Proxies may
be revoked by (i) delivering to the Secretary of the Company at
or before the Annual Meeting a written notice of revocation
bearing a later date than the Proxy, (ii) duly executing a
subsequent Proxy relating to the same shares of Common Stock and
delivering it to the Secretary of the Company at or before the
Annual Meeting, or (iii) attending the Annual Meeting and voting
in person (although attendance at the Annual Meeting will not in
and of itself constitute revocation of a Proxy). With respect to
Proposal 1, unless authority to vote for all Directors or any
individual Director is withheld, all the shares represented by
the Proxy will be voted for the election of Directors as set
forth in the Proxy Statement. Where a shareholder has specified
a vote for or against Proposal 2, such Proxy will be voted as
specified; if no direction is given, all the shares represented
by the Proxy will be voted in favor of the Proposal.
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<PAGE>
Under SEC rules, boxes and a designated blank space are
provided on the proxy card for shareholders to mark if they wish
either to vote "for," "against" or "abstain" on one or more of
the proposals, or to withhold authority to vote for one or more
of the Company's nominees for director. Florida law requires the
presence of a quorum for the annual meeting, defined as a
majority of the votes entitled to be cast at the meeting. Votes
withheld from director nominees and abstentions will be counted
in determining whether a quorum has been reached. Broker-dealer
non-votes, which are defined in the third paragraph below, are
not counted for quorum purposes.
Assuming a quorum has been reached, a determination
must be made as to the results of the vote on each matter
submitted for shareholder approval: (1) the election of
directors; and (2) the ratification of auditors. Director
nominees must receive a plurality of the votes cast at the
meeting, which means that a vote withheld from a particular
nominee or nominees will not affect the outcome of the meeting.
In order to pass, the proposal to approve the ratification of the
Company's auditors must be approved by a majority of the votes
cast on such matter. Abstentions are not counted in determining
the number of votes cast in connection with the selection of
auditors.
Brokers who hold shares in street name have the
authority to vote on certain items when they have not received
instructions from beneficial owners. Brokers that do not receive
instructions are entitled to vote on the election of directors
and ratification of auditors. Under applicable law, a broker
non-vote will have no effect on the outcome of the election of
directors, or ratification of auditors.
The cost of soliciting Proxies will be paid by the
Company, which will reimburse brokerage firms, custodians,
nominees and fiduciaries for their expenses in forwarding proxy
material to the beneficial owners of the Company's stock.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY
SHAREHOLDER UPON WRITTEN REQUEST A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K (EXCLUDING EXHIBITS BUT INCLUDING THE FINAN-
CIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES) FOR THE FISCAL
YEAR ENDED JANUARY 2, 1999 AND/OR A COPY OF ANY OF THE COMPANY'S
QUARTERLY REPORTS ON FORM 10-Q OR CURRENT REPORTS ON FORM 8-K.
SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO: VICTOR COSTER,
SECRETARY, CACHE, INC., 1460 BROADWAY, NEW YORK, NEW YORK 10036.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THIS MEETING,
PLEASE SIGN, DATE AND MAIL THE PROXY PROMPTLY.
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<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
The Board of Directors of the Company presently consists
of the following seven members: Messrs. Andrew M. Saul, Joseph E.
Saul, Roy C. Smith, Thomas E. Reinckens, Morton J. Schrader and Mark
E. Goldberg and Ms. Mae Soo Hoo, each of whom is a nominee for
re-election.
Unless authority to vote on the election of all
Directors or any individual Director is specifically withheld by ap-
propriate designation on the face of the Proxy, the persons named in
the accompanying Proxy will nominate as Directors, and vote such
Proxy for the election as Directors of, the persons named below. If
elected, such persons will serve as Directors until the next Annual
Meeting of Shareholders and until their successors are elected and
qualified.
Management does not contemplate that any of the nominees
for Director will be unable to serve, but if such a situation should
arise, the persons named in the accompanying Proxy will nominate and
vote for the election of such other person or persons as the Board
of Directors may recommend.
NOMINEES FOR DIRECTORS
Director
Name Age Principal Occupation Since
- --------------------- --- ------------------------------ -------
Andrew M. Saul ...... 52 Chairman of the Board and 1986
Partner, Saul Partners (1)
Roy C. Smith ........ 60 Executive Vice-President of 1993
the Company (2)
Thomas E. Reinckens . 45 Executive Vice-President, Chief 1993
Financial Officer of the Company (3)
Mae Soo Hoo ......... 44 Executive Vice President of 1995
the Company (4)
Joseph E. Saul ...... 79 Partner, Saul Partners (5) 1986
Morton J. Schrader .. 67 Real Estate Broker, 1989
Newmark & Company Real Estate, Inc.(6)
Mark E. Goldberg .... 42 Attorney in Private Practice (7) 1989
_________________________
(1) Mr. Saul, who became Chairman of the Board of Directors on
February 27, 1993, has been a partner of Saul Partners, an
investment partnership, since 1986. He is the son of Mr.
Joseph E. Saul.
(2) Mr. Smith has served as an Executive Vice President of the
Company since October 1990; from December 30, 1986 to October
1990, Mr. Smith was Vice President/Director of Store
Operations of the Company.
(3) Mr. Reinckens has served as Vice President and Chief
Financial Officer of the Company since November 30, 1989;
from 1987 to November 1989, Mr. Reinckens served as the
Company's Controller. He was appointed Executive Vice
President on September 13, 1995.
-3-
<PAGE>
(4) Ms. Soo Hoo has served as a Vice President of Merchandising
since February 1987. She was appointed to the Board of
Directors on September 13, 1995 and was also appointed
Executive Vice President/General Merchandise Manager on that
date.
(5) Mr. Saul has been a partner of Saul Partners, an investment
partnership, since 1986. He is the father of Mr. Andrew M.
Saul.
(6) Mr. Schrader was the President of Abe Schrader Corp., a
manufacturer of women's apparel, from 1968 through March
1989. Since 1989, he has been active as a real estate broker
for Newmark & Company Real Estate, Inc..
(7) Mr. Goldberg has been an attorney in private practice since
1985. Mr. Goldberg has provided legal assistance to the
Company since 1988 and is expected to continue to do so in
1999.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the year ended January 2, 1999 ("Fiscal 1998"),
the Board of Directors held six meetings. Each Director attended
all of such Board meetings. All non-employee Directors are
compensated for their services to the Company by participation in
the Company's group medical insurance program at an approximate cost
to the Company of $11,500 per individual per year.
The Board of Directors has an Audit Committee and a
Compensation and Plan Administration Committee, but has no standing
nominating committee. The Audit Committee of the Board of
Directors, established in July 1989, currently consists of Messrs.
Andrew Saul, Goldberg and Schrader. The Audit Committee met once in
Fiscal 1998. Each member of the Audit Committee attended such
committee meeting.
Duties of the Audit Committee include meeting with the
independent accountants and certain personnel of the Company to
discuss the planned scope of their examinations, the adequacy of
internal controls and financial reporting; reviewing the results of
the annual examination of the financial statements and periodic
internal audit examinations; reviewing the services and fees of the
Company's independent accountants; authorizing special
investigations and studies; and performing any other duties or
functions deemed appropriate by the Board of Directors.
The Compensation and Plan Administration Committee was
established in July 1991 as the Plan Administration Committee to
administer the Company's stock option plans. In May 1993 it was
renamed the Compensation and Plan Administration Committee and
delegated additional authority to determine the remuneration
arrangements for the three most senior executive officers and to
review and approve the remuneration arrangements for the Company's
other executive officers. It currently consists of Messrs. Andrew
M. Saul, Mark E. Goldberg and Morton J. Schrader. The Compensation
and Plan Administration Committee did not meet in Fiscal 1998.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation for the past
three years of the Chief Executive Officer and the Company's other four
most highly compensated executive officers (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
SECURITIES ALL OTHER
NAME AND FISCAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#) ($)(1)
- ---------------------------- ---- --------- ------------ ------------
<S> <C> <C> <C> <C>
ANDREW M. SAUL 1998 -
(CHAIRMAN) 1997 -
1996 -
MAE SOO HOO 1998 267,390 - 1,906
(EXECUTIVE VICE 1997 255,852 103,750 1,874
PRESIDENT/DIRECTOR) 1996 255,852 - 1,786
ROY C. SMITH 1998 319,413 - 8,887
(EXECUTIVE VICE 1997 250,000 97,500 8,611
PRESIDENT/DIRECTOR) 1996 250,000 - 7,983
THOMAS E. REINCKENS 1998 289,328 - 2,513
(EXECUTIVE VICE PRESIDENT, 1997 230,000 75,000 2,441
CHIEF FINANCIAL 1996 210,000 - 2,260
OFFICER/DIRECTOR
</TABLE>
(1) Included in the figures shown under this column for 1998 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer
long-term disability insurance: $3,112 and $5,775, respectively,
for Mr. Smith; $1,012 and $1,501, respectively, for Mr.
Reinckens; and $585 and $1,321, respectively, for Ms. Soo Hoo.
Included in the figures shown under this column for 1997 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer and
long-term disability insurance: $2,836 and $5,775, respectively,
for Mr. Smith; $940 and $1,501, respectively, for Mr. Reinckens;
and $553 and $1,321, respectively, for Ms. Soo Hoo.
-5-
<PAGE>
Included in the figures shown under this column for 1996 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer and
long-term disability insurance: $2,591 and $5,392, respectively,
for Mr. Smith; $879 and $1,381, respectively, for Mr. Reinckens;
$565 and $1,221, respectively, for Ms. Soo Hoo.
AGGREGATED FISCAL YEAR-END STOCK OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY STOCK OPTIONS
STOCK OPTIONS AT FY-END(#) AT FY-END ($) (1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------------------- --------------------------
Mae Soo Hoo 123,750 30,000 $205 513 $54,600
Roy C. Smith 117,500 30,000 $195,325 $54,600
Thomas E. Reinckens 95,000 30,000 $158,650 $54,600
____________________
(1) In-the money Stock Options are those where the fair market
value of the underlying stock exceed the exercise price of
the Option. The amounts in this column represent the
difference between the exercise price of the Stock Options
and the closing price of the Company's Common Stock on
December 31, 1998 (the last day of trading for Fiscal 1998)
for all options held by each Named Executive Officer,
whether vested or unvested. The closing price of the
Company's Common Stock as reported on NASDAQ/NMS on December
31, 1998 was $4.88 per share.
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<PAGE>
Employment Contracts and Change-of-Control Provisions
All of the options granted under the Company's 1994 Stock Option
Plan contain a provision under which the option will become
immediately exercisable (the "Accelerated Exercise") with respect to
all shares subject to it as follows: (i) except as provided in clause
(iii) below, immediately after the first date on which less than 25%
of the outstanding Common Stock in the aggregate is beneficially owned
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
by Andrew M. Saul and Joseph E. Saul, members of their immediate
families and one or more trusts established for the benefit of such
individuals or members, (ii) immediately prior to the sale of the
Company substantially as an entirety (whether by sale of stock, sale
of assets, merger, consolidation or otherwise), (iii) immediately
prior to the expiration of any tender offer or exchange offer for
shares of Common Stock of the Company, where: (x) all holders of
Common Stock are entitled to participate, and (y) the Sauls have
agreed (or have announced their intent) to sell such number of their
shares of Common Stock as will result in the Sauls beneficially owning
less than 25% of the outstanding shares of Common Stock in the
aggregate, and (iv) immediately, if 20% or more of the directors
elected by shareholders to the Board of Directors are persons who were
not nominated by management in the most recent proxy statement of the
Company. The Company is required to give appropriate notice so as to
permit an optionee to take advantage of the foregoing provisions.
Compensation of Directors
All non-employee Directors (Messrs. Andrew Saul, Joseph Saul,
Mark Goldberg and Morton Schrader) are compensated for their services
to the Company by participation in the Company's group medical
insurance program at an approximate cost to the Company of $11,500 per
individual per year.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation and Plan Administration Committee
consists of Messrs. Andrew M. Saul, Mark E. Goldberg and Morton J.
Schrader. Andrew M. Saul is also the Chairman of the Board of the
Company.
Mr. Goldberg is also an attorney in private practice. He has
been retained by the Company to provide legal services since 1988 and
is expected to provide further legal services in 1999. During the
fiscal year ended January 2, 1999, Mr. Goldberg received $28,982 from
the Company for legal services rendered during Fiscal 1998.
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<PAGE>
COMPENSATION AND PLAN ADMINISTRATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
General
Executive compensation consists generally of two components -
base salary and option awards, and sometimes a third component - a
discretionary bonus award. The Compensation and Plan Administration
Committee (the "Committee"), currently consisting of Messrs. Andrew M.
Saul, Mark E. Goldberg and Morton J. Schrader, administers the
Company's option plans pursuant to which option awards are granted,
determines the remuneration arrangements for the three most senior
executive officers and reviews and approves the remuneration
arrangements for the other executive officers of the Company, which
arrangements are determined by the Chairman, in accordance with
parameters set by the Committee.
This report of the Committee of the Board of Directors addresses
the Company's compensation policies for Fiscal 1998 applicable to
Cache's executives including the Named Executive Officers.
The Committee's Report on Executive Compensation shall not be
deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates
this Report on Executive Compensation by reference, and shall not
otherwise be deemed filed under such Acts.
Philosophy
The Cache executive compensation program is designed to attract
and retain key executives. Its objectives are to reward executives
who contribute to the success of the Company through individual and
company performances. Specifically, compensation includes a
competitive base salary program and long-term stock option awards.
The Company will sometimes grant discretionary bonuses to certain key
executive officers with respect to prior contributions as well as to
serve as incentives to attract key executives into the Company's
employ.
Base Salary
The Company believes a competitive base salary is necessary to
retain key management employees. Base salaries are determined based
upon a review of an individual's experience and responsibilities,
general industry practice and the competitive environment for each
position. Annual salary adjustments are determined based upon an
individual's performance, the Company's performance, general industry
practice and any new duties or responsibilities assumed by the
individual during the last year.
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<PAGE>
Long-Term Incentives
The Company believes that employee equity ownership is highly
motivating, provides a major incentive to employees in building
stockholder value, and serves to align the interests of employees with
stockholders. Options are based upon the relative position and
responsibilities of each executive officer, historical and expected
contributions of each officer to the Company, and previous option
grants to such executive officers. Options are recommended with a
goal to provide competitive equity compensation for executive officers
compared to executive officers of similar rank in companies of the
Company's industry, geographic location and size.
Cache's stock option programs were designed by the Company as a
long-term incentive program for key executives. The stock option
programs have created an incentive for executives to maximize
shareholder return, by linking long-term compensation with the
valuation of the Company's Common Stock. The stock option plans
typically have included initial grants which have vested from three to
five years. Stock options granted under the 1994 Plan are required to
have an exercise price at least equal to the fair market value of the
Company's common stock at the date of grant. Among other factors
considered by the Committee in determining who qualified for stock
option grants under the 1993 Plan and 1994 Plan and the amount of such
grants were an executive's business experience and his potential to
contribute to the future success of the Company.
Other Compensation
The Company provides certain other benefits, such as health
insurance, to the executive officers that are generally available to
Company employees. In addition, the Company provides its executives,
including the Named Executive Officers, with term life insurance and
additional long-term disability insurance, at the Company's cost.
The foregoing report has been furnished by the Compensation and
Plan Administration Committee consisting of Messrs. Andrew M. Saul,
Morton J. Schrader and Mark E. Goldberg.
-9-
<PAGE>
FIVE-YEAR PERFORMANCE COMPARISON
The following graph compares the yearly percentage change in the
Company's cumulative total shareholder return on Common Stock with (i)
the cumulative total return of the NASDAQ National Market Index (which
tracks the aggregate performance of equity securities of companies
traded on the NASDAQ National Market System ("NASDAQ/NMS")) and (ii)
the cumulative total return of companies with the same four-digit
standard industrial code (SIC) as the Company (SIC Code 5621, titled
"Women's Clothing Stores"), over the period from January 1, 1994 to
December 31, 1998. The graph assumes an initial investment of $100
and reinvestment of dividends. The graph is not necessarily
indicative of future price performance.
The graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933 or under the Securities
Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
----------------------------------------------
COMPANY 1993 1994 1995 1996 1997 1998
- ---------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CACHE, INC. 100.00 87.50 56.25 60.42 50.52 81.25
INDUSTRY INDEX 100.00 96.21 77.53 91.82 110.32 129.03
BROAD INDEX 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
-10-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1990, Joseph Saul loaned the Company an aggregate of
$1,750,000. All such loans bore interest at the rate of 8 1/2% per
annum and matured on January 1, 1994. On December 14, 1993, Joseph
Saul agreed to replace the promissory note with a new promissory note,
having an interest rate of 7% per annum and a maturity date of January
31, 1997 (the "First Note"), which note was subordinated to the
National Westminster Bank loan dated December 15, 1993. On August 26,
1996, Mr. Saul agreed to extend the maturity date of the note to
January 31, 2000, due to the renewal of the Bank line of credit.
In 1991, Joseph Saul made a loan to the Company of an additional
$250,000, which loan bore interest at the rate of 7 1/2% per annum and
was due on January 1, 1994. On December 14, 1993, Joseph Saul agreed
to replace the promissory note with a new promissory note (together
with the First Note, the "Notes"), which note was subordinated to
the National Westminster Bank loan dated December 15, 1993. This note
bore interest at the rate of 7% per annum and had a maturity date of
January 31, 1997. On August 26, 1996, Mr. Saul agreed to extend the
maturity date of the note to January 31, 2000, due to the renewal of
the Bank line of credit.
In August 1996, the Company amended and restated its revolving
credit facility with Fleet Bank, N.A. (Successor in interest to
National Westminister Bank, New Jersey). In connection therewith,
Joseph Saul and the Company agreed that the Company would not repay
the Notes until such revolving credit facility was terminated and all
senior debt thereunder repaid, except that the Company was permitted
to repay an aggregate of $1,000,000 on the Notes if the Company's
tangible net worth (as defined in the credit agreement) at December
31, 1997 was greater than or equal to $25 million, and to repay an
additional $1,000,000 on the Notes if the Company's tangible net worth
at December 31, 1998 was greater than or equal to $29 million. The
interest rate on the Notes remains 7% per annum, payable annually.
On December 16, 1994, the Company loaned $170,000 to Roy Smith,
Executive Vice President and a Director of the Company and $80,000 to
Thomas E. Reinckens, Vice President, Chief Financial Officer and a
Director of the Company, in each case for personal reasons. All such
loans are with full recourse to the executive, payable on demand from
the Company, secured by a pledge of shares of the Company's Common
Stock owned by such executive and bear interest at a rate of 7% per
annum. The balance (as of February 28, 1999) and the highest balance
during Fiscal 1998 for these loans were $170,000 and $80,000,
respectively. There have been no additional borrowings or repayments
for these since 1994.
See Also "Executive Compensation--Compensation Committee
Interlocks and Insider Participation."
As of February 28, 1999, the Sauls beneficially owned in the
aggregate 6,382,679 shares of the Company's outstanding Common Stock,
representing approximately 70.21% of the Company's outstanding Common
Stock. See "Principal Shareholders and Share Ownership by
Management."
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<PAGE>
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
BY MANAGEMENT
The following table sets forth certain information as to the
beneficial ownership of the Company's equity securities as of February
28, 1999 by (i) each director or nominee of the Company, (ii) each
Named Executive Officer, (iii) each person who is known to the Company
to be the beneficial owner of more than 5% of the Common Stock, and
(iv) all executive officers and directors as a group. Unless
otherwise indicated, the beneficial ownership for each person consists
of the sole voting and sole investment power with respect to all
shares beneficially owned by him. For purposes of this table, a
person or group of persons is deemed to have "beneficial ownership" of
any shares as of a given date which such person has the right to
acquire within 60 days after such date. For purposes of computing the
percentage of outstanding shares held by each person or group of
persons named above on a given date, any security which such person or
persons has the right to acquire within 60 days after such date is
deemed to be outstanding, but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- ----------------------- ---------------- -------------------
Andrew M. Saul
630 Fifth Avenue
New York, NY 10111 (1) 6,382,679 70.21%
Joseph E. Saul
630 Fifth Avenue
New York, NY 10111 (2) 6,382,679 70.21%
Norma G. Saul
630 Fifth Avenue
New York, NY 10111 (3) 6,382,679 70.21%
Trust f/b/o
Jennifer B. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
Trust f/b/o
Kimberly E. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
-12-
<PAGE>
Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- ----------------------- ---------------- ------------------
Jane Saul Berkey
Cache, Inc.
1460 Broadway
New York, NY 10036 (5) 494,046 5.43%
Roy C. Smith
Cache, Inc.
1460 Broadway
New York, NY 10036 (6) 202,500 2.20%
Mae Soo Hoo
Cache, Inc.
1460 Broadway
New York, NY 10036 (7) 165,231 1.79%
Thomas E. Reinckens
Cache, Inc.
1460 Broadway
New York, NY 10036 (8) 136,500 1.49%
Mark E. Goldberg
225 Broadway
New York, NY 10067 4,225 Less than 1%
Morton J. Schrader
733 Park Avenue
New York, NY 10021 5,000 Less than 1%
All Current
Executive Officers
and Directors as a
Group (seven persons) 6,896,135 73.15%
_________________
(1) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts (defined below) according to a
Schedule 13D, as amended, filed by the group with the
Securities and Exchange Commission. Andrew M. Saul may be
deemed to own beneficially 2,891,218 shares of Common
Stock (31.8%), if all shares owned by him or issuable
pursuant to rights owned by him are deemed outstanding
including the shares owned by the Trusts of which Andrew
Saul is a trustee, and the shares owned by the A. Saul
Foundation, of which Andrew Saul is a director, but
excluding all shares issuable pursuant to rights held by
persons other than Andrew Saul, the Trusts of which
Andrew Saul is a trustee and the A. Saul Foundation),
-13-
<PAGE>
consisting of (i) 2,585,158 shares of Common Stock owned
by Andrew Saul, (ii) 140,530 shares of Common Stock owned
by the 85 J. Saul Trust of which Andrew Saul is a
trustee, (iii) 140,530 shares of Common Stock owned by
the 84 K. Saul Trust of which Andrew Saul is a trustee,
and (iv) 25,000 shares of Common Stock owned by the A.
Saul Foundation of which A. Saul is a director. Andrew
Saul, his wife Denise, and Sidney Silberman comprise the
Board of Directors of the A. Saul Foundation and Andrew
Saul is its President. Andrew Saul, in his capacity as
one of the trustees of the trusts referenced in (ii) and
(iii) above, may be deemed to have shared voting power
and disposition power over the shares of Common Stock
owned by such trusts. Andrew Saul, in his capacity as
one of the directors of the A. Saul Foundation, may be
deemed to have shared voting power and disposition power
over the shares held by such foundation. Andrew Saul
disclaims beneficial ownership of the shares not directly
owned or under rights owned by him.
(2) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Joseph E. Saul may be deemed to own
beneficially 2,591,061 shares of Common Stock (28.5%), if
all shares owned by him or issuable pursuant to rights
owned by him are deemed outstanding (including the shares
owned by the Trusts of which Joseph Saul is a trustee,
and the shares owned by the J. Saul Foundation, of which
Joseph Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Joseph Saul, the Trusts of which Joseph Saul is a trustee
and the J. Saul Foundation), consisting of (i) 970,933
shares of Common Stock owned by Joseph Saul, (ii) 756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Joseph Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which
Joseph Saul is a trustee and (iv) 107,500 shares of
Common Stock owned by the J. Saul Foundation of which J.
Saul is a director. Joseph Saul, his wife Norma, and
Sidney Silberman comprise the Board of Directors of the
J. Saul Foundation and Joseph Saul is its President.
Joseph Saul, in his capacity as one of the trustees of
the trusts referenced in (ii) and (iii) above, may be
deemed to have shared voting power and disposition power
over the shares of Common Stock owned by such trusts.
Joseph Saul, in his capacity as one of the directors of
the J. Saul Foundation, may be deemed to have shared
voting power and disposition power over the shares held
by such foundation. Joseph Saul disclaims beneficial
ownership of the shares not directly owned or under
rights owned by him.
-14-
<PAGE>
(3) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Norma Saul may be deemed to own
beneficially 2,505,028 shares of Common Stock (27.6%), if
all shares owned by her or issuable pursuant to rights
owned by her are deemed outstanding (including the shares
owned by the Trusts of which Norma Saul is a trustee and
the shares owned by the J. Saul Foundation, of which
Norma Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Norma Saul, the Trusts of which Norma Saul is a trustee
and the J. Saul Foundation), consisting of (i) 884,900
shares of Common Stock owned by Norma Saul, (ii) 756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Norma Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which Norma
Saul is a trustee and (iv) 107,500 shares of Common Stock
owned by the J. Saul Foundation of which Norma Saul is a
director. Norma Saul, in her capacity as one of the
trustees of the trusts referenced in (ii) and (iii)
above, may be deemed to have shared voting power and
disposition power over the shares of Common Stock owned
by such trusts. Norma Saul, in her capacity as one of
the directors of the J. Saul Foundation, may be deemed to
have shared voting power and disposition power over the
shares held by such foundation. Norma Saul disclaims
beneficial ownership of the shares not directly owned or
under rights owned by her.
(4) The trust f/b/o Jennifer B. Saul and the Trust f/b/o
Kimberly E. Saul each own 756,314 shares of Common Stock,
according to a Schedule 13D, as amended, filed with the
Securities and Exchange Commission. Joseph E. Saul, his
wife Norma Saul and Sidney J. Silberman, Esq., are
trustees of such trusts.
(5) Represents shares beneficially owned by Jane Saul Berkey
according to a Schedule 13D, as amended, filed by Ms.
Berkey with the Securities and Exchange Commission. Jane
Saul Berkey is the daughter of Mr. Joseph Saul and the
sister of Mr. Andrew Saul.
(6) Consists of 85,000 shares of Common Stock and options to
acquire 117,500 shares of Common Stock.
(7) Consists of 41,731 shares of Common Stock and options to
acquire 123,750 shares of Common Stock.
(8) Consists of 41,500 shares of Common Stock and options to
acquire 95,000 shares of Common Stock.
-15-
<PAGE>
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS
(Proposal 2)
Board of Directors has appointed the firm of Arthur Andersen LLP
to examine the financial statements of the Company for the year ending
January 1, 2000, subject to ratification by shareholders. Arthur
Andersen LLP was employed by the Company as its independent auditors
for Fiscal 1998. Shareholders are asked to ratify the action of the
Board of Directors in making such appointment.
Representatives of Arthur Andersen LLP will attend the Annual
Meeting. They also will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate
questions.
The Board of Directors recommends a vote for ratification. The
affirmative vote of a majority of the votes cast with respect to this
proposal is required for the ratification of the appointment of
auditors. The Sauls intend to vote shares of Common Stock they own in
favor of Proposal 2 and the vote of such shares will be sufficient to
obtain the required shareholder approval.
OTHER BUSINESS
Management knows of no business to be brought before the meeting
other than Proposals 1 and 2 in the Notice of Annual Meeting. If any
other proposals come before the meeting, it is intended that the
shares represented by Proxies shall be voted in accordance with the
judgment of the person or persons exercising the authority conferred
by the Proxies.
Financial statements of the Company, the Company's certified
public accountants' report thereon and management's discussion and
analysis of the Company's financial condition and results of
operations are contained in the Company's 1998 Annual Report to
Shareholders, a copy of which has been sent to each shareholder of
record along with a copy of this Proxy Statement. The Annual Report
is not to be regarded as proxy soliciting material or a communication
by means of which any solicitation is to be made.
-16-
<PAGE>
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the next
Annual Meeting (to be held in 2000) must be received by the Company on
or before February 4, 2000 in order to be included in the Proxy
Statement and Proxy for that meeting. The mailing address of the
Company for submission of any such proposal is given on the first page
of the Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD AS
SOON AS POSSIBLE, WHETHER OR NOT THEY EXPECT TO ATTEND THE 1999 ANNUAL
MEETING IN PERSON.
By Order of the Board of Directors,
/s/ Victor J. Coster
-----------------
VICTOR J. COSTER
Secretary
<PAGE>
PROXY PROXY
CACHE INC.
ANNUAL MEETING OF SHARE HOLDERS OCTOBER 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby apppoints Andrew M. Saul and Thomas E. Reinckens,
and each of them, with full power of substitution, Proxies of the undersigned
to vote all shares of Common Stock of Cache, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on October 19, 1999, and all adjournments thereof, with all the powers the
undersigned would possess if personally present, and particularly, without
limiting the generality of the foregoing, to vote and act as follows:
1. Election of seven directors of the Company.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary below) listed below
Andrew M. Saul, Joseph E. Saul, Mae Soo Hoo, Roy C. Smith,
Thomas E. Reinckens, Mark E. Goldberg, Morton J. Schrader.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space below.)
----------------------------------------------------------------------------
2. Ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending January 1, 2000.
/ / FOR / / AGAINST / / ABSTAIN
CONTINUED AND TO BE SIGNED ON REVERSE
<PAGE>
3. In their discretion, upon such other matters as may properly come before
the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH DIRECTOR NAMED HEREIN
AND "FOR" ITEM 2.
DATED______________________, 1999
(Please fill in date)
NOTE: Please sign as name appears.
Joint owners should each sign
--------------------------------
Signature of Shareholder
--------------------------------
Signature of Shareholder
When signing as Attorney, Executor,
Administrator, Trustee or Guardian,
please give full title as such. If
signer is a corporation, please
sign with the full corporation name
by duly authorized officer or
officers.
