<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
RESTORATION HARDWARE, 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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
N/A
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(2) Form, Schedule or Registration Statement no.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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RESTORATION HARDWARE, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 2000
TO THE STOCKHOLDERS OF RESTORATION HARDWARE, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Restoration Hardware, Inc., a Delaware corporation (the "Company"), will be held
on June 16, 2000, at 1:00 p.m. Pacific Daylight Saving Time at Paradise Park
located at 3450 Paradise Drive, Tiburon, California 94925, for the following
purposes, as more fully described in the Proxy Statement accompanying this
Notice:
1. To elect three directors to serve for a three-year term ending in
the year 2003 or until their successors are duly elected and
qualified;
2. To ratify the appointment of Deloitte & Touche LLP as our
independent auditors for the fiscal year ending February 3, 2001;
and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on April 17, 2000, are
entitled to notice of and to vote at the Annual Meeting. The stock transfer
books of the Company will remain open between the record date and the date of
the meeting. A list of stockholders entitled to vote at the Annual Meeting will
be available for inspection at the executive offices of the Company.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the enclosed proxy as
promptly as possible in the envelope enclosed for your convenience. Should you
receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be signed and returned to assure that all
your shares will be voted. You may revoke your proxy at any time prior to the
Annual Meeting. If you attend the Annual Meeting and vote by ballot, your proxy
will be revoked automatically and only your vote at the Annual Meeting will be
counted.
Sincerely,
Thomas Christopher
Assistant Secretary
Corte Madera, California
May 5, 2000
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE> 3
RESTORATION HARDWARE, INC.
15 KOCH ROAD, SUITE J
CORTE MADERA, CALIFORNIA 94925
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 2000
GENERAL
The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of Restoration Hardware, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders to be held on June 16, 2000 (the
"Annual Meeting") at 1:00 p.m. The Annual Meeting will be held at 3450 Paradise
Drive, Tiburon, California, 94925. These proxy solicitation materials were
mailed on or about May 5, 2000, to all stockholders entitled to vote at the
Annual Meeting.
VOTING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice and are described in more
detail in this Proxy Statement. On April 17, 2000, the record date for
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, 17,004,842 shares of the Company's common stock, par value $.0001
("Common Stock"), were issued and outstanding. No shares of the Company's
preferred stock, par value $.0001, were outstanding. Each stockholder is
entitled to one vote for each share of Common Stock held by such stockholder on
April 17, 2000. Stockholders may not cumulate votes in the election of
directors.
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. Abstentions and broker non-votes are counted
as present for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions will be counted towards the tabulations
of votes cast on proposals presented to the stockholders and will have the same
effect as negative votes. Broker non-votes will not be counted for purposes of
determining whether a proposal has been approved.
PROXIES
If the enclosed form of Proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the Proxy does not specify how the shares
represented thereby are to be voted, the Proxy will be voted FOR the election of
the directors proposed by the Board unless the authority to vote for the
election of such directors is withheld and, if no contrary instructions are
given, the Proxy will be voted FOR the ratification of the appointment of
Deloitte & Touche LLP as independent auditors of the Company for the fiscal year
ending February 3, 2001. You may revoke or change your Proxy at any time before
the Annual Meeting by filing with the Assistant Secretary of the Company at the
Company's principal executive offices at 15 Koch Road, Suite J, Corte Madera,
California 94925, a notice of revocation or another signed Proxy with a later
date. You may also revoke your Proxy by attending the Annual Meeting and voting
in person.
SOLICITATION
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 solicitation materials furnished to the
<PAGE> 4
stockholders. Copies of solicitation materials 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. In addition, the Company may reimburse such persons
for their costs in forwarding the solicitation materials to such beneficial
owners. The original solicitation of Proxies by mail may be supplemented by a
solicitation by telephone, telegram or other means by directors, officers or
employees 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.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting must be received no
later than January 4, 2001, in order that they may be included in the proxy
statement and form of proxy relating to that meeting. In addition, the Proxy
solicited by the Board of Directors for the 2000 Annual Meeting will confer
discretionary authority to vote on any stockholder proposal presented at that
meeting, unless the Company receives notice of such proposal not later than
March 21, 2001.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE: ELECTION OF DIRECTORS
GENERAL
The Company's Certificate of Incorporation provides for a classified Board
of Directors consisting of three classes of directors with staggered three-year
terms, with each class consisting, as nearly as possible, of one-third of the
total number of directors. The Board currently consists of seven persons. The
class whose term of office expires at the Annual Meeting currently consists of
three directors. The directors elected to this class will serve for a term of
three years, expiring at the 2003 annual meeting of stockholders or until their
successors have been duly elected and qualified. All of the nominees listed
below are currently directors of the Company.
The nominees for election have agreed to serve if elected, and management
has no reason to believe that such nominees will be unavailable to serve. In the
event the nominees are unable or decline to serve as directors at the time of
the Annual Meeting, the proxies will be voted for any nominee who may be
designated by the present Board of Directors to fill the vacancy. Unless
otherwise instructed, the Proxy holders will vote the Proxies received by them
FOR the nominees named below.
DIRECTORS TO BE ELECTED AT THE 2000 ANNUAL MEETING
Robert Camp, 56, joined the Board of Directors in June 1994. He is the
former CEO of Pier 1, Inc. and was associated with that firm from 1967 to 1985.
In 1971, Mr. Camp co-founded Import Bazaar Ltd., a Canadian based import
business, which was subsequently sold to Pier 1. In 1986, he founded Simpson and
Fisher Companies, Inc., a specialty retail holding company. He owns and operates
Hero's Welcome Inc., a general store and mail order operation, which he and his
wife founded in 1993. In addition, Mr. Camp is currently the Chairman and Chief
Executive Officer of Kitchen Etc., Inc. He is a graduate of the University of
Washington.
Marshall Payne, 43, joined the Board of Directors in June 1994. He has been
with Cardinal Investment Company, Inc. since 1983 and is currently Vice
President. Mr. Payne also serves on the board of several private and the
following public companies: Ace Cash Express, Inc., a chain of retail
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financial services stores, and Leslie Building Products, Inc., a building
products manufacturer. Mr. Payne received his B.A. from Stanford University and
his M.B.A. from Harvard Business School.
Ann Rhoades, 55, joined the Board of Directors in August 1999. Since March
1999, Ms. Rhoades has been the President of People Ink, a consulting company.
Since April 1999, she has been an Executive Vice President of JetBlue Airways, a
private airline company. From January 1995 to March 1999, Ms. Rhoades was an
Executive Vice President for Promus/Doubletree Hotels. From July 1989 to January
1995, she was a Vice President for Southwest Airlines. Ms. Rhoades received her
B.A. from The College of Santa Fe and her M.B.A. from the University of New
Mexico.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Stephen Gordon, 49, founded the Company in 1980 and is currently the Chief
Executive Officer and Chairman of the Board. Until the recruitment of a
professional management team in 1994 and 1995, Mr. Gordon actively managed all
aspects of the business. He obtained his B.A. at Drew University and his M.A. in
Psychology from Humboldt State University.
Thomas Christopher, 52, is currently the President, Chief Operating Officer
and a Director. Mr. Christopher joined the Company in June 1994 as Executive
Vice President, Chief Operating Officer and Director. Prior to joining
Restoration Hardware, Mr. Christopher was with Barnes & Noble, Inc. for five
years where he served in various capacities, including Chief Executive Officer
of Bookstop Inc. and President of Barnes & Noble Superstores. Previously, Mr.
Christopher worked for 19 years at Pier 1 Imports, a national chain of home
furnishing retail stores, where he served in a variety of roles, including
Executive Vice President of Operations. He obtained his B.A. in Economics from
Kent State University.
DIRECTORS WHOSE TERMS EXPIRE IN 2002
Damon Ball, 42, has been a director of the Company since May 1997. Since
May 1999, Mr. Ball has served as Managing Director of Sextant Capital Advisors,
LLC, a venture fund and financial advisory company formed by Mr. Ball.
Previously Mr. Ball was with Desai Capital Management Incorporated ("DCMI") for
nine years where he served as a Senior Vice President from 1993 to 1999, and as
a Vice President prior thereto. Mr. Ball received his B.A. in Economics and
Political Science from the University of Pennsylvania and his M.B.A. degree from
the Harvard Business School.
Raymond Hemmig, 50, joined the Board of Directors in June 1994. He has
served as Chairman of the Board of Ace Cash Express, Inc., a chain of retail
financial services stores, since 1988 and Chairman, Chief Executive Officer and
General Partner of Retail & Restaurant Growth Capital, L.P., a private
investment partnership since 1995. Mr. Hemmig served as Chief Executive Officer
of ACE from 1988 to 1994. Previously, Mr. Hemmig was a foodservice, retail and
franchise industries consultant from 1985 to 1988. He served as Executive Vice
President of Grandy's Inc., a subsidiary of Saga Corp., from 1983 to 1985, and
was Vice President and Chief Operating Officer of Grandy's Country Cookin', the
predecessor restaurant company, from 1980 to 1983. He also worked with Hickory
Farms of Ohio, Inc. from 1973 to 1980 in various operational and executive
positions. He is a director at Elizabeth Arden Red Door Salons, Inc., an
operator of day spas, America's Service Station, a cab repair company, and
Landlock Seafood, a seafood supply company.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held five meetings and acted by unanimous written
consent one time during the fiscal year ended January 29, 2000. The Board of
Directors has an Audit Committee, a Compensation Committee, a Real Estate
Committee, a Nominating Committee, a Stock Option Plan Secondary Committee, and
a Finance Committee. Each director attended or participated in 75% or
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<PAGE> 6
more of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board on which such director served during the fiscal year ended January 29,
2000.
The Audit Committee currently consists of three directors, Mr. Ball, Mr.
Camp and Mr. Hemmig, and is primarily responsible for approving the services
performed by the Company's independent auditors and reviewing their reports
regarding the Company's accounting practices and systems of internal accounting
controls. The Audit Committee held six meetings during the fiscal year ended
January 29, 2000.
The Compensation Committee currently consists of three directors, Ms.
Rhoades, Mr. Hemmig and Mr. Payne, and is primarily responsible for reviewing
and approving the Company's general compensation policies and recommending
compensation levels for the Company's executive officers. The Compensation
Committee also has the authority to administer the Company's 1998 Stock
Incentive Plan and to make option grants thereunder. The Compensation Committee
held two meetings and acted by unanimous written consent two times during the
fiscal year ended January 29, 2000.
The Real Estate Committee currently consists of four directors, Mr. Ball,
Mr. Camp, Mr. Christopher and Mr. Hemmig, and is primarily responsible for
evaluating and approving potential store locations. The Real Estate Committee
held eight meetings during the fiscal year ended January 29, 2000.
The Nominating Committee currently consists of three directors, Mr. Ball,
Mr. Gordon and Ms. Rhoades, and is primarily responsible for nominating new
members to the Company's Board of Directors. The Nominating Committee is willing
to consider nominees recommended by our stockholders. The Nominating Committee
did not hold any meetings during the fiscal year ended January 29, 2000.
The Stock Option Plan Secondary Committee currently consists of two
directors, Mr. Gordon and Mr. Christopher, and has concurrent authorization with
the Compensation Committee to make option grants under the 1998 Stock Incentive
Plan to eligible individuals other then executive officers of the Company. The
Stock Option Plan Secondary Committee did not hold any meetings and acted by
written consent once during the fiscal year ended January 29, 2000.
The Finance Committee was established in August 1999 and currently consists
of Mr. Ball, Mr. Hemmig, and Mr. Payne, and is primarily responsible for
reviewing the financial strategies of the Company. The Finance Committee held
five meetings during the fiscal year ended January 29, 2000.
DIRECTOR COMPENSATION
Under the Automatic Option Grant Program in effect under the Company's 1998
Stock Incentive Plan (the "1998 Plan"), each individual who first joins the
Board as a non-employee director, will receive, at the time of his or her
initial election or appointment, an option to purchase 7,000 shares of Common
Stock, provided such person has not previously been in the Company's employ. In
addition, on the date of each annual stockholders meeting, each individual who
is to continue to serve as a non-employee Board member, whether or not such
individual is standing for re-election at that particular Annual Meeting, will
be granted an option to purchase 3,500 shares of Common Stock, provided such
individual has not received an option grant under the Automatic Option Grant
Program within the preceding six months. Each grant under the Automatic Option
Grant Program will have an exercise price per share equal to the fair market
value per share of the Company's Common Stock on the grant date, and will have a
maximum term of 10 years, subject to earlier termination should the optionee
cease to serve as a member of the Board of Directors.
Each of Messrs. Ball, Camp, Hemmig and Payne, received an automatic option
grant on June 18, 1999 for 3,500 shares of the Company's Common Stock. The
exercise price per share in effect under
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each such option is $12.38, the fair market value per share of Common Stock on
the grant date. Ms. Rhoades received an automatic option grant on August 13,
1999, for 7,000 shares of the Company's Common Stock at an exercise price of
$9.06 per share the fair market value per share of Common Stock on the grant
date. Each option granted under the Automatic Option Grant Program is
immediately exercisable for all the option shares, but any shares purchased
under the option will be subject to repurchase by the Company, at the exercise
price paid per share, upon the optionee's cessation of Board service prior to
vesting in those shares. The shares subject to each option grant will vest in a
series of three (3) successive equal annual installments upon the optionee's
completion of each of the three (3) years of service with the Company after the
grant date.
Directors who are not employees of the Company or one of its subsidiaries
receive an annual retainer fee of $5,000, payable in $1,250 increments at the
end of each calendar quarter. In addition, for each Board of Directors meeting
attended in such year over and above four (4) Board meetings, each non-employee
Board member receive an additional fee of $1,000, and for each meeting of a
committee of the Board of Directors attended in a calendar year over and above
two (2) committee meetings, each non-employee Board member receive an additional
fee of $500.
Under the Director Fee Option Grant Program in effect under the Company's
1998 Stock Incentive Plan (the "1998 Plan"), each non-employee Board member has
the opportunity to apply all or a portion of any annual $5,000 retainer fee
otherwise payable in cash to the acquisition of a below-market option grant. The
option grant will automatically be made on the first trading day in January in
the year for which the meeting fees would otherwise be payable in cash. The
option will have an exercise price per share equal to one-third of the fair
market value of the option shares on the grant date, and the number of shares
subject to the option will be determined by dividing the amount of the meeting
fee applied to the program by two-thirds of the fair market value per share of
Common Stock on the grant date. The option will become exercisable for the
option shares in a series of twelve (12) equal monthly installments over the
calendar year for which the election is to be in effect. However, the option
will become immediately exercisable for all the option shares upon (i) certain
changes in the ownership or control of the Company or (ii) the death or
disability of the optionee while serving as a Board member.
Ms. Rhodes received an option grant under the Director Fee Option Grant
Program on January 3, 2000, for 1,016 shares of the Company's Common Stock. The
exercise price per share in effect under each such option is $2.23 or one-third
of the fair market value per share of Common Stock on the grant date.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES LISTED ABOVE.
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte & Touche LLP,
independent auditors for the Company during the fiscal year ended January 29,
2000, to serve in the same capacity for the fiscal year ending February 3, 2001,
and is asking the stockholders to ratify this appointment. The affirmative vote
of a majority of the shares represented and voting at the Annual Meeting is
required to ratify the selection of Deloitte & Touche LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the
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appointment of a different independent auditing firm at any time during the year
if the Board of Directors believes that such a change would be in the best
interests of the Company and its stockholders.
A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP TO SERVE AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING FEBRUARY 3, 2001.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
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OWNERSHIP OF SECURITIES
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
April 17, 2000, by (i) all persons who are beneficial owners of five percent
(5%) or more of the Company's Common Stock, (ii) each director and nominee for
director, (iii) the executive officers named in the Summary Compensation Table
of the Executive Compensation and Related Information section of this Proxy
Statement, and (iv) all current directors and executive officers as a group.
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable.
<TABLE>
<CAPTION>
PERCENTAGE
SHARES OF SHARES
BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER OWNED OWNED(1)
---------------- ------------ ------------
<S> <C> <C>
Stephen Gordon(2)........................................... 3,418,605 20.1%
Chase Venture Capital Associates, L.P....................... 1,430,030 8.4%
E.W. Rose III............................................... 1,263,858 7.4%
Thomas Christopher(3)....................................... 1,136,849 6.6%
Capital Group International, Inc............................ 1,053,700 6.2%
Desai Funds(4).............................................. 911,452 5.4%
Marshall Payne(5)........................................... 560,341 3.3%
Raymond Hemmig(6)........................................... 222,202 1.3%
Robert Camp(7).............................................. 72,351 *
Thomas Low.................................................. 66,418 *
Damon Ball(8)............................................... 14,666 *
Cornelia Hunter............................................. 6,500 *
Ann Rhoades(9).............................................. 5,461 *
Walter Parks................................................ -- *
All directors and executive officers as a group (9
persons).................................................. 5,503,393 32.4%
</TABLE>
- ---------------
* Less than one percent of the outstanding Common Stock.
(1) Percentage of ownership is based on 17,004,842 shares of Common Stock
outstanding on April 17, 2000. Shares of Common Stock subject to stock
options which are currently exercisable or will become exercisable within 60
days after April 17, 2000 are deemed outstanding for computing the
percentage of the person or group holding such options, but are not deemed
outstanding for computing the percentage of any other person or group.
(2) Includes 251,297 shares of Common Stock subject to options exercisable
within 60 days of April 17, 2000 held by Mr. Gordon. Also includes 140,000
shares of Common Stock held by the Christine B. Gordon 1998 Qualified
Grantor Retained Annuity Trust, of which Christine Gordon, the spouse of
Stephen J. Gordon, is the sole trustee, and 140,000 shares held by the
Stephen J. Gordon 1998 Qualified Grantor Retained Annuity Trust, of which
Stephen J. Gordon is the sole trustee.
(3) Includes 90,533 shares of Common Stock subject to options exercisable within
60 days of April 17, 2000 held by Mr. Christopher. Includes 109,375 shares
of Common Stock held by the Barbara Christopher 1997 Qualified Grantor
Retained Annuity Trust, of which Barbara Christopher, the spouse of Thomas
A. Christopher, is the sole trustee, 2,625 shares held directly by Barbara
Christopher and 109,375 shares of Common Stock held by the Thomas A.
Christopher 1997 Qualified Grantor Annuity Trust, of which Thomas A.
Christopher is the sole trustee.
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(4) Includes shares of Common Stock held by Equity Linked Investors II and
Private Equity Investors III, L.P.
(5) Includes 43,166 shares of Common Stock subject to options exercisable within
60 days of April 17, 2000 held by Mr. Payne.
(6) Includes 43,492 shares of Common Stock subject to options exercisable within
60 days of April 17, 2000 held by Mr. Hemmig.
(7) Includes 43,492 shares of Common Stock subject to options exercisable within
60 days of April 17, 2000 held by Mr. Camp.
(8) Includes 11,666 shares of Common Stock subject to options exercisable within
60 days of April 17, 2000 held by Mr. Ball.
(9) Includes 461 shares of Common Stock subject to options exercisable within 60
days of April 17, 2000 held by Ms. Rhoades.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned, by the Company's Chief Executive Officer and each of the
four other most highly compensated executive officers of the Company whose
salary and bonus for the fiscal year ended January 29, 2000 was in excess of
$100,000, for services rendered in all capacities to the Company and its
subsidiaries for the fiscal years ended January 31, 1998, January 30, 1999, and
January 29, 2000. No executive officer who would have otherwise been includable
in such table on the basis of salary and bonus earned for the fiscal year ended
January 29, 2000 has been excluded by reason of his or her termination of
employment or change in executive status during that year. The listed
individuals shall be hereinafter referred to as the "Named Executive Officers".
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
NUMBER OF
ANNUAL COMPENSATION OTHER ANNUAL SECURITIES
--------------------------- COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#)(2) COMPENSATION(3)
--------------------------- ---- --------- -------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Gordon................ 1999 $272,115 -- $11,400 -- $ 808
Chairman of the Board and 1998 250,000 125,000 11,400 67,900 810
Chief Executive Officer 1997 153,077 33,456 21,346 28,000 183
Thomas Christopher............ 1999 $221,414 -- $11,400 -- $ 804
President and Chief 1998 200,000 80,000 11,400 58,100 558
Operating Officer 1997 133,038 23,862 11,400 28,000 157
Thomas Low.................... 1999 $150,000 -- $11,400 -- $ 840
Senior Vice President 1998 150,000 60,000 11,400 48,300 672
and Chief Financial Officer 1997 103,562 17,712 9,700 28,000 116
Cornelia Hunter............... 1999 $ 17,308 125,000 $29,000 80,000 $ --
Executive Vice President,
Merchandise
Walter Parks.................. 1999 $ 71,154 $50,000 $ 5,963 120,000 --
Chief Administrative Officer
</TABLE>
- ---------------
(1) "Other Annual Compensation" includes: (i) for 1997 a $4,273 relocation
allowance and a $4,273 medical allowance provided to Mr. Gordon, (ii) for
each of 1997 and 1998 car allowances provided
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to Messrs. Gordon, Christopher and Low, (iii) compensation paid to Ms.
Hunter prior to employment as an outside consultant, and (iv) relocation
expenses paid on behalf of Mr. Parks.
(2) The options listed in the table were granted under the Company's 1995, 1996
and 1998 Stock Option Plans. See "Management -- Option/SAR Grants in Last
Fiscal Year" for a description of the terms of these options.
(3) Represents contributions by the Company to the Company's 40l(k) Plan which
was implemented in November l997.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the stock options
granted to the Named Executive Officers during the fiscal year ended January 29,
2000. All the grants were made under the Company's 1998 Stock Incentive Plan. No
stock appreciation rights were granted to the Named Executive Officers during
such fiscal year.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------------------ ANNUAL RATES OF STOCK
NUMBER OF PERCENTAGE OF PRICE APPRECIATION FOR
SECURITIES TOTAL OPTIONS GRANTED OPTION TERM(3)
UNDERLYING TO EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME OPTIONS GRANTED(1) FISCAL YEAR PRICE(2) DATE 5% 10%
---- ------------------ --------------------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stephen Gordon...... -- --% $ -- -- $ -- $ --
Thomas
Christopher....... -- --% $ -- -- $ -- $ --
Thomas Low.......... -- --% $ -- -- $ -- $ --
Walter Parks........ 120,000 12.0% 9.94 11/1/09 749,995 1,900,634
Cory Hunter......... -- -- -- -- -- --
</TABLE>
- ---------------
(1) The options become exercisable in a series of three equal annual
installments upon the optionee's completion of each of the three years of
service with the Company after the grant date. The options have a maximum
term of ten years measured from the grant date, subject to earlier
termination following the optionee's cessation of service. The shares
subject to each option will vest in full in the event the Company is
acquired by merger or asset sale, unless the options are assumed by the
successor corporation.
(2) The exercise price may be paid in cash or in shares of Common Stock valued
at fair market value on the exercise date. Alternatively, the option may be
exercised through a cashless exercise procedure pursuant to which the
optionee provides irrevocable instructions to a brokerage firm to sell the
purchased shares and to remit to the Company, out of the sale proceeds, an
amount equal to the exercise price plus all applicable withholding taxes.
The Compensation Committee may also assist an optionee in the exercise of an
option by (i) authorizing a loan from the Company in a principal amount not
to exceed the aggregate exercise price plus any tax liability incurred in
connection with the exercise or (ii) permitting the optionee to pay the
option price in installments over a period of years upon terms established
by the Compensation Committee.
(3) There can be no assurance provided to any executive officer or other holder
of the Company's securities that the actual stock appreciation over the ten
year option term will be at the assumed 5% and 10% levels or at any other
defined level. Unless the market price of the Common Stock appreciates over
the option term, no value will be realized from the options granted to the
Named Executive Officers.
9
<PAGE> 12
AGGREGATED OPTION\SAR EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information, with respect to the Named
Executive Officers, concerning the exercise of options during the fiscal year
ended January 29, 2000 and the unexercised options held by them at the year
ended January 29, 2000. Both Mr. Christopher and Mr. Low exercised options
during the year ended January 29, 2000. No stock appreciation rights were
exercised by any such individual during the fiscal year ended January 29, 2000,
and no stock appreciation rights were outstanding at the end of such fiscal
year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(3)
SHARES ACQUIRED VALUE ------------------------------- ----------------------------
ON EXERCISE(#) REALIZED(1) EXERCISABLE(2) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ----------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Gordon....... -- -- 251,297 54,603 $883,750 --
Thomas Christopher... 377,265 4,254,795 90,533 48,067 $193,988 --
Thomas Low........... 43,750 736,750 76,766 41,534 $155,190 --
Walter Parks......... -- -- -- 120,000 -- --
Cory Hunter.......... -- -- -- -- -- --
</TABLE>
- ---------------
(1) Based upon the market price of the purchased shares on the exercise date
less the option price paid for those shares.
(2) Certain of the options held by the Named Executive Officers are immediately
exercisable, for all of the option shares but the shares purchasable
thereunder are subject to repurchase by the Company, at the exercise price
paid per share, upon the optionee's termination of service with the Company
prior to vesting in the shares. The table includes under the column titled
"Exercisable" the vested portion of the option shares and under the column
titled "Unexercisable" the unvested portion of the option shares.
(3) Based upon the fair market value of the option shares as of January 29, 2000
($5.125 per share), less the option exercise price payable for those shares.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company does not presently have any employment contracts in effect with
the Chief Executive Officer or any of the other Named Executive Officers.
The Compensation Committee of the Board of Directors, as Plan Administrator
of the 1998 Stock Incentive Plan, has the authority to provide for accelerated
vesting of the shares of Common Stock subject to any outstanding options held by
the Chief Executive Officer or any other executive officer or any unvested share
issuances actually held by such individual, in connection with certain changes
in control of the Company or the subsequent termination of the officer's
employment following the change in control event.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are currently Ms. Rhoades and Messrs. Hemmig and Payne. None of these
individuals was an officer or employee of the Company at any time during the
fiscal year ended January 29, 2000 or at any other time.
No current executive officer of the Company serves as a member of the Board
of Directors or Compensation Committee of any other entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
10
<PAGE> 13
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to review and determine the
salaries and bonuses of executive officers of the Company, including the Chief
Executive Officer, and to establish the general compensation policies for such
individuals. The Compensation Committee also has the sole and exclusive
authority to make discretionary option grants to the Company's executive
officers under the Company's 1998 Stock Incentive Plan.
The Compensation Committee believes that the compensation programs for the
Company's executive officers should reflect the Company's performance and the
value created for the Company's stockholders. In addition, the compensation
programs should support the short-term and long-term strategic goals and values
of the Company and should reward individual contribution to the Company's
success. The Company is engaged in a very competitive industry, and the
Company's success depends upon its ability to attract and retain qualified
executives through the competitive compensation packages it offers to such
individuals.
General Compensation Policy. The Compensation Committee's policy is to
provide the Company's executive officers with compensation opportunities which
are based upon their personal performance, the financial performance of the
Company and their contribution to that performance and which are competitive
enough to attract and retain highly skilled individuals. Each executive
officer's compensation package is comprised of three elements: (i) base salary
that is competitive with the market and reflects individual performance, (ii)
annual variable performance awards payable in cash and tied to the Company's
achievement of annual financial performance goals and (iii) long-term stock-
based incentive awards designed to strengthen the mutuality of interests between
the executive officers and the Company's stockholders. As an officer's level of
responsibility increases, a greater proportion of his or her total compensation
will be dependent upon the Company's financial performance and stock price
appreciation rather than base salary.
The Company retains the services of an independent compensation consulting
firm to advise the Committee as to how the Company's executive compensation
levels compare to those of companies within and outside of the industry.
Factors. The principal factors that were taken into account in establishing
each executive officer's compensation package for the fiscal year ended January
29, 2000 are described below. However, the Compensation Committee may in its
discretion apply entirely different factors, such as different measures of
financial performance, for future fiscal years.
Base Salary. In setting base salaries, the Compensation Committee reviewed
published compensation survey data for its industry. The Committee also
identified a group of companies for comparative compensation purposes for which
it reviewed detailed compensation data incorporated into their Proxy Statements.
This group was comprised of approximately eight companies considered to be
"peer" group retailers. The base salary for each officer reflects the salary
levels for comparable positions in the published surveys and the comparative
group of companies, as well as the individual's personal performance and
internal alignment considerations. The relative weight given to each factor
varies with each individual in the sole discretion of the Compensation
Committee. Each executive officer's base salary is adjusted each year on the
basis of (i) the Compensation Committee's evaluation of the officer's personal
performance for the year and (ii) the competitive marketplace for persons in
comparable positions. The Company's performance and profitability may also be a
factor in determining the base salaries of executive officers. For the fiscal
year ended January 29, 2000, the base salary of the Company's executive officers
ranged from the 40th percentile to the 60th percentile of the base salary levels
in effect for comparable positions in the surveyed compensation data.
11
<PAGE> 14
Annual Incentives. The annual incentive bonus for the executive officers is
discretionary in nature and is determined by the Compensation Committee. No
annual incentive bonuses were paid for the fiscal year ended January 29, 2000.
Long Term Incentives. Generally, stock option grants are made annually by
the Compensation Committee to each of the Company's executive officers. Each
grant is designed to align the interests of the executive officer with those of
the stockholders and provide each individual with a significant incentive to
manage the Company from the perspective of an owner with an equity stake in the
business. Each grant allows the officer to acquire shares of the Company's
Common Stock at a fixed price per share (the market price on the grant date)
over a specified period of time (up to ten years). Each option becomes
exercisable in a series of installments over a three-year period, contingent
upon the officer's continued employment with the Company. Accordingly, the
option will provide a return to the executive officer only if he or she remains
employed by the Company during the vesting period, and then only if the market
price of the shares appreciates over the option term.
The size of the option grant to each executive officer, including the Chief
Executive Officer, is set by the Compensation Committee at a level that is
intended to create a meaningful opportunity for stock ownership based upon the
individual's current position with the Company, the individual's personal
performance in recent periods and his or her potential for future responsibility
and promotion over the option term. The Compensation Committee also takes into
account the number of unvested options held by the executive officer in order to
maintain an appropriate level of equity incentive for that individual. The
relevant weight given to each of these factors varies from individual to
individual. The Compensation Committee has established certain guidelines with
respect to the option grants made to the executive officers, but has the
flexibility to make adjustments to those guidelines at its discretion.
CEO Compensation. The Compensation Committee adjusted Mr. Gordon's base
salary for the fiscal year ended January 30, 1999 in recognition of his personal
performance and with the objective of maintaining his base salary at a
competitive level when compared with the base salary levels in effect for
similarly situated chief executive officers. With respect to Mr. Gordon's base
salary, it is the Compensation Committee's intent to provide him with a level of
stability and certainty each year and not have this particular component of
compensation affected to any significant degree by Company performance factors.
For the fiscal year ended January 29, 2000, Mr. Gordon's base salary was
approximately at the median of the base salary levels of other chief executive
officers at the surveyed companies.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code disallows a tax deduction to publicly held companies for
compensation paid to certain of their executive officers, to the extent that
compensation exceeds $1 million per covered officer in any fiscal year. The
limitation applies only to compensation which is not considered to be
performance-based. Non-performance based compensation paid to the Company's
executive officers for the fiscal year ended January 29, 2000 did not exceed the
$1 million limit per officer, and the Compensation Committee does not anticipate
that the non-performance based compensation to be paid to the Company's
executive officers for the fiscal year ending February 3, 2001 will exceed that
limit. The Company's 1998 Stock Incentive Plan has been structured so that any
compensation deemed paid in connection with the exercise of option grants made
under that plan with an exercise price equal to the fair market value of the
option shares on the grant date will qualify as performance-based compensation
which will not be subject to the $1 million limitation. Because it is unlikely
that the cash compensation payable to any of the Company's executive officers in
the foreseeable future will approach the $1 million limit, the Compensation
Committee has decided at this time not to take any action to limit or
restructure the elements of cash compensation payable to the Company's executive
officers. The
12
<PAGE> 15
Compensation Committee will reconsider this decision should the individual cash
compensation of any executive officer ever approach the $1 million level.
It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration program
to properly align the Company's performance and the interests of the Company's
stockholders through the use of competitive and equitable executive compensation
in a balanced and reasonable manner, for both the short and long-term.
Submitted by the Compensation Committee of the Company's Board of Directors
for the fiscal year ended January 29, 2000:
Ann Rhoades
Raymond Hemmig
Marshall Payne
13
<PAGE> 16
STOCK PERFORMANCE GRAPH
The graph depicted below shows a comparison of cumulative total stockholder
returns for the Company, the NASDAQ Retail Trade Stocks and the NASDAQ Index.
Performance Graph
<TABLE>
<CAPTION>
RESTORATION NASDAQ STOCK NASDAQ RETAIL
HARDWARE, INC. MARKET (U.S.) TRADE
-------------- ------------- -------------
<S> <C> <C> <C>
6/18/98 100 100 100
6/98 132 107 104
7/98 166 106 97
8/98 136 91 72
9/98 109 96 76
10/98 106 104 84
11/98 147 111 96
12/98 141 117 104
1/99 108 122 106
2/99 109 118 98
3/99 116 123 104
4/99 82 127 104
5/99 63 124 97
6/99 70 131 100
7/99 57 127 97
8/99 41 127 87
9/99 39 123 90
10/99 52 131 93
11/99 43 134 102
12/99 36 141 92
1/00 27 134 87
</TABLE>
- ---------------
(1) The graph covers the period from June 19, 1998, the commencement date of the
Company's initial public offering of shares of its Common Stock to January
29, 2000.
(2) The graph assumes that $100 was invested in the Company on June 19, 1998, in
the Company's Common Stock and in each index, and that all dividends were
reinvested. No cash dividends have been declared on the Company's Common
Stock.
(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings made under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings made by the Company under those statutes, neither the preceding Stock
Performance Graph nor the Compensation Committee Report is to be incorporated by
reference into any such prior filings, nor shall such graph or report be
incorporated by reference into any future filings made by the Company under
those statutes.
14
<PAGE> 17
CERTAIN TRANSACTIONS
In addition to the indemnification provisions contained in the Company's
Restated Certificate of Incorporation and Bylaws, the Company has entered into
separate indemnification agreements with each of its directors and officers.
These agreements require the Company, among other things, to indemnify such
director or officer against expenses (including attorneys' fees), judgments,
fines and settlements (collectively, "Liabilities") paid by such individual in
connection with any action, suit or proceeding arising out of such individual's
status or service as a director or officer of the Company (other than
Liabilities arising from willful misconduct or conduct that is knowingly
fraudulent or deliberately dishonest) and to advance expenses incurred by such
individual in connection with any proceeding against such individual with
respect to which such individual may be entitled to indemnification by the
Company.
The Company leases its store at 417 Second Street, Eureka, California from
Mr. and Mrs. Gordon. Pursuant to a written lease, the Company pays rent annually
to Mr. and Mrs. Gordon for use of the store. In 1997, 1998, and 1999 such lease
payments totaled $33,600, $41,400, and $46,522, respectively.
Pursuant to a Restated Investors Rights Agreement (the "Investor Rights
Agreement") between the Company and certain holders of common stock and
warrants, including all Directors and Officers (collectively, the "Holders"),
the Holders have registration rights. If (A) the Holders of at least 40% of
Registrable Securities then outstanding or (B) any Holder who purchased at least
$10,000,000 of the Company's Series D Preferred Stock, request in writing that
the Company file a registration statement for all or a portion of the
Registrable Securities then outstanding, providing that the aggregate offering
price to the public would exceed $10,000,000, the Company will, subject to
certain limitations, use its best efforts to cause such shares to be registered
within 90 days of receipt of such a request. "Registrable Securities" consist of
Common Stock that was issued upon conversion of the Company's Series A, B, C and
D Preferred Stock and outstanding warrants. The Company is not obligated to
effect more than three registrations under this demand registration provision.
In addition, if the Company receives from (A) Holders of at least 40% of
the Registrable Securities then outstanding or (B) any Holder who purchased at
least $10,000,000 of the Company's Series D Preferred Stock, a written request
or requests that the Company effect a registration on Form S-3, providing the
anticipated aggregate offering price would exceed $500,000, the Company will,
subject to certain limitations, cause such shares to be registered as soon as
practicable. Holders also have unlimited "piggyback" registration rights which
are exercisable within 20 days of notice of the Company's proposal to register
any of its stock or other securities under the Securities Act in connection with
the public offering of such securities solely for cash. All registration
expenses, exclusive of underwriting discounts and commissions, of demand
registrations, S-3 registrations, or piggyback registrations, shall be borne by
the Company.
All registration rights terminate upon an occurrence of either (i) June 18,
2002 or (ii) when all shares held by a Holder can be sold within a given three
month period, without compliance with the registration requirements of the
Securities Act, pursuant to Rule 144 thereunder.
All future transactions between the Company and its officers, directors,
principal stockholders and affiliates will be approved by a majority of the
independent and disinterested members of the Board of Directors, and will be on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties.
15
<PAGE> 18
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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 which require them to file reports with respect
to their ownership of the Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their transactions during the fiscal year ended
January 29, 2000 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 fiscal year
ended January 29, 2000, the Company believes that all reporting requirements
under Section 16(a) for such fiscal year were met in a timely manner by its
directors, executive officers and greater than ten percent beneficial owners
except as set forth below.
<TABLE>
<CAPTION>
NUMBER OF
TRANSACTIONS
NUMBER OF NOT REPORTED
LATE FILINGS ON A TIMELY BASIS
------------ ------------------
<S> <C> <C>
Thomas Christopher.......................... 2 2
Thomas Low.................................. 2 2
Stephen Gordon.............................. 1 1
Damon Ball.................................. 2 2
Marshall Payne.............................. 1 1
</TABLE>
ANNUAL REPORT
A copy of the Annual Report of the Company for the fiscal year ended
January 29, 2000 has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual Meeting. The Annual
Report is not incorporated into this Proxy Statement and is not considered proxy
solicitation material.
FORM 10-K
The Company filed an Annual Report on Form 10-K with the Securities and
Exchange Commission on or about April 27, 2000. Stockholders may obtain a copy
of this report, without charge, by writing to Walter Parks, Chief Administrative
Officer, at the Company's principal executive offices located at 15 Koch Road,
Suite J, Corte Madera, California 94925.
THE BOARD OF DIRECTORS OF
RESTORATION HARDWARE, INC.
Dated: May 5, 2000
16
<PAGE> 19
RESTORATION HARDWARE, INC.
PROXY
Annual Meeting of Stockholders, June 16, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
RESTORATION HARDWARE, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held June 16, 2000 and
the Proxy Statement and appoints Stephen Gordon and Thomas Christopher, and each
of them, the Proxy of the undersigned, with full power of substitution, to vote
all shares of Common Stock or Preferred Stock of Restoration Hardware (the
"Company") which the undersigned is entitled to vote, either on his or her own
behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders of the Company to be held at 3450 Paradise Drive, Tiburon,
California 94925 on June 16, 200, at 1:00 p.m. Pacific Time (the "Annual
Meeting"), and at any adjournment or postponement thereof, with the same force
and effect as the undersigned might or could do if personally present thereat.
The shares represented by this Proxy shall be voted in the manner set forth on
the reverse side.
1. To elect directors to serve for a three-year term ending in the year
2003 or until their successors are duly elected and qualified;
WITHHOLD
AUTHORITY
FOR TO VOTE
Robert Camp
--------- ----------
Marshall Payne
--------- ----------
Ann Rhoades
--------- ----------
2. FOR AGAINST ABSTAIN To ratify the appointment of Deloitte &
Touche LLP as independent auditors of
the Company for the fiscal year ending
February 3, 2001.
3. FOR AGAINST ABSTAIN In accordance with the discretion of the
proxy holders, to act upon all matters
incident to the conduct of the meeting
and upon other matters as may properly
come before the meeting.
The Board of Directors recommends a vote IN FAVOR OF the director
listed above and a vote IN FAVOR OF each of the listed proposals. This Proxy,
when properly executed, will be voted as specified above. IF NO SPECIFICATION IS
MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE ELECTION OF THE DIRECTOR LISTED
ABOVE AND IN FAVOR OF THE OTHER PROPOSALS.
Please print the name(s) appearing
on each share certificate(s) over
which you have voting authority:
------------------------------------------------
(Print name(s) on certificate)
Please sign your name: Date:
---------------------------------- -------------------
(Authorized Signature(s))
