Piercing Pagoda, Inc.
P.O. Box 25007
Lehigh Valley, PA 18002-5007
PROXY STATEMENT
for
Annual Meeting of Stockholders
August 23, 2000
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Piercing Pagoda, Inc., a Delaware
corporation (the "Company"), for use at the Company's Annual Meeting of
Stockholders (the "Meeting"), which will be held on Wednesday, August 23, 2000,
at 10:00 a.m. at the Radisson Hotel Bethlehem, 437 Main Street, Bethlehem,
Pennsylvania and any adjournment or postponement thereof. This proxy statement,
the foregoing notice and the enclosed proxy are first being sent to stockholders
of the Company on or about July 24, 2000.
The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice and does not know of
anyone else who intends to do so. If any other matters properly come before the
Meeting, however, the persons named in the enclosed proxy, or their duly
constituted substitutes acting at the Meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment on such matters. If the
enclosed proxy is properly executed and returned prior to voting at the Meeting,
the shares represented thereby will be voted in accordance with the instructions
marked thereon. In the absence of instructions, the shares will be voted "FOR"
the nominees of the Board of Directors in the re-election of two directors whose
term of office will extend until the 2003 Annual Meeting of Stockholders and
until their successors are duly elected and qualified, and "FOR" the approval of
KPMG LLP as the Company's independent auditors for the current fiscal year
ending March 31, 2001.
Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary in writing, by delivering a duly executed proxy bearing a later date,
or by attending the Meeting and voting in person.
<PAGE>
VOTING SECURITIES AND SECURITY OWNERSHIP
Quorum and Voting Requirements
At the close of business on June 27, 2000, the record date for the Meeting,
there were 8,934,148 shares of the Company's Common Stock ("Common Stock")
outstanding. There is no other class of voting securities outstanding. Only
stockholders of record at the close of business on that date are entitled to
vote at the Meeting. The presence at the Meeting, in person or by a proxy
relating to any matter to be acted upon at the Meeting, of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum for the
Meeting. Each outstanding share is entitled to one vote on all matters. For
purposes of the quorum and the discussion below regarding the vote necessary to
take stockholder action, stockholders of record who are present at the Meeting
in person or by proxy and who abstain, including brokers holding customers'
shares of record, who cause abstentions to be recorded at the Meeting, are
considered stockholders who are present and entitled to vote and they count
toward the quorum. In the re-election of the directors, stockholders will not
have cumulative voting rights.
Brokers holding shares of record for customers generally are not entitled
to vote on certain matters unless they receive voting instructions from their
customers. As used herein, "uninstructed shares" means shares held by a broker
who has not received instructions from its customers on such matters and the
broker has so notified the Company on a proxy form in accordance with industry
practice or has otherwise advised the Company that it lacks voting authority. As
used herein, "broker non-votes," means the votes that could have been cast on
the matter in question by brokers with respect to uninstructed shares if the
brokers had received their customers' instructions.
Election of Directors: Directors are elected by a plurality and the nominee
who receives the most votes will be elected. Abstentions and broker non-votes
will not be taken into account in determining the outcome of the election.
Approval of Auditors: To be approved, this matter must receive the
affirmative vote of the majority of the shares present in person or by proxy at
the Meeting and entitled to vote. Uninstructed shares are entitled to vote on
this matter. Therefore, abstentions and broker non-votes have the effect of
negative votes.
<PAGE>
Securities Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock as of June 27, 2000
(except as otherwise noted in footnotes (3), (4), and (5)) by (i) each person
known by the Company to be the beneficial owner of more than 5% of the Company's
outstanding Common Stock, (ii) each director of the Company, (iii) each Named
Officer (as hereinafter defined) and (iv) all directors and Named Officers of
the Company as a group. Information with respect to 5% owners is based solely on
public filings.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Common Stock(1)
<S> <C> <C>
Richard H. Penske(2).................... 3,491,042 38.9 %
Piercing Pagoda, Inc.
P.O. Box 25007
Lehigh Valley, PA 18002-5007
FMR Corp. (3)........................... 911,300 10.2
Emerald Asset Management(4)............. 530,487 5.9
Capital Research and
Management Company
SMALLCAP World Fund, Inc.(5).......... 502,500 5.6
John F. Eureyecko....................... 187,418 2.1
Barry R. Clauser(6)..................... 132,431 1.5
Sharon J. Zondag........................ 98,575 1.1
Gilbert P. Hollander.................... 18,576 *
Brandon R. Lehman....................... 37,225 *
Susan S. Iseminger...................... 20,909 *
Alan R. Hoefer(7)....................... 89,834 1.0
Mark A. Randol.......................... 43,236 *
All directors and Named Officers as a
group (9 persons)(2)(6)(7)............ 4,119,246 46.1 %
</TABLE>
----------
* Less than 1%.
(1) Each stockholder possesses sole voting and investment power with respect
to the shares listed, except as otherwise noted. Shares of Common Stock
subject to options that are exercisable within 60 days of this proxy
statement are deemed beneficially owned by the person holding such options
for the purpose of computing the percentage of ownership of such person,
but are not treated as outstanding for the purpose of computing the
percentage of any other person. Accordingly, the information in the above
table includes the following number of shares of Common Stock underlying
options held by the following individuals, and all directors and Named
Officers as a group, when computing the percentage ownership of such
individual or group: Mr. Richard H. Penske, 38,462 shares; Mr. John F.
Eureyecko, 137,498 shares; Mr. Barry R. Clauser and Ms. Sharon J. Zondag,
67,997 shares each; Mr. Gilbert P. Hollander, 11,300 shares; Mr. Brandon
R. Lehman and Ms. Susan S. Iseminger, 18,800 shares each; Mr. Alan R.
Hoefer, 18,000 shares; Mr. Mark A. Randol, 15,000 shares; and all
directors and Named Officers as a group, 393,854 shares.
(2) Includes 2,000,000 shares of stock held in a Family Limited Partnership of
which Mr. Penske and his wife are the General Partners. Also includes
527,186 shares of Common Stock held in two annuity trusts of which Mr.
Penske's wife is a beneficiary and an aggregate of 505,853 shares of
Common Stock held in three annuity trusts of which Mr. Penske is a
beneficiary (collectively, the "Annuity Trusts"). Victoria L. Penske and
Crislyn A. Penske, Mr. Penske's two oldest children, are the trustees of
the Annuity Trusts. Also includes an aggregate of 205,152 shares of Common
Stock divided equally among eight trusts, two for the benefit of each of
Mr. Penske's four children, of which Victoria L. Penske and Crislyn A.
Penske are the trustees. Mr. Penske disclaims beneficial ownership as to
all of such shares.
<PAGE>
(3) Based solely on the Schedule 13G, dated February 14, 2000, filed with the
Securities and Exchange Commission (the "Commission") by FMR Corp.
("FMR"). The Schedule 13G reports that each of Edward C. Johnson 3d
(Chairman and 12.0% shareholder of FMR) and FMR (through its wholly owned
subsidiary, Fidelity Management & Research Company ("Fidelity"),
investment adviser to various investment companies (the "Funds")
(including Fidelity Low Priced Stock Fund, which directly holds 911,300 of
the shares of Common Stock listed in the table above (the "FMR Shares"))
has sole power to dispose of the FMR Shares. The Schedule 13G also reports
that neither Mr. Johnson nor FMR has sole power to vote the FMR Shares,
which power resides with the Funds' Boards of Trustees. Fidelity votes the
FMR Shares under written guidelines established by such Boards. The
Schedule 13G reports the addresses of FMR, Fidelity and the Funds as 82
Devonshire Street, Boston, Massachusetts 02109.
(4) Based solely on the Schedule 13G dated February 7, 2000, filed with the
Commission by Emerald Advisors Inc. ("Emerald"). The Schedule 13G reports
that Emerald holds the number of shares of Common Stock listed in the
table above. Emerald has sole power to dispose of 530,487 of such shares,
and has sole power to vote 337,092 of such shares. Emerald does not share
voting power with respect to any of such shares. The schedule 13G reports
the address of Emerald as 1857 William Penn Way, Lancaster, Pennsylvania
17601.
(5) Based solely on the Schedule 13G, dated February 10, 2000, filed with the
Commission by Capital Research and Management Company ("Capital") and
SMALLCAP World Fund, Inc. ("SMALLCAP"). The Schedule 13G reports that
Capital has sole power to dispose of 502,500 shares of Common Stock listed
in the table above (the "Capital Shares") and that SMALLCAP has sole power
to vote the Capital Shares. The Schedule 13G reports the addresses of
Capital and SMALLCAP as 333 South Hope Street, Los Angeles, California
90071.
(6) Includes 1,900 shares of Common Stock held by Mr. Clauser as custodian for
his children and seven shares of Common Stock held by his wife, as to all
of which shares he disclaims beneficial ownership.
(7) Includes 450 shares of Common Stock held by Mr. Hoefer's wife, as to all
of which shares he disclaims beneficial ownership.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the regulations thereunder, require the Company's officers
and directors and persons who own more than ten percent of a registered class of
the Company's equity securities (collectively, the "reporting persons") to file
reports of ownership and changes in ownership with the Commission and to furnish
the Company with copies of these reports. Based on the Company's review of the
copies of these reports received by it, and written representations received
from reporting persons, the Company believes that all filings required to be
made by the reporting persons during the 2000 fiscal year and prior fiscal years
were made on a timely basis.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, the stockholders will elect two directors to hold office
until the 2003 Annual Meeting of Stockholders and until their successors have
been duly elected and qualified. The Company's Board of Directors is divided
into three classes serving staggered three-year terms, with the term of one
class of directors expiring each year. The directors whose terms of office
expire at the Meeting are Messrs. Richard H. Penske and Alan R. Hoefer. The
Board of Directors appointed Douglas J. Tigert, Ph.D., in April 2000 to serve as
a Class II Director until the 2002 Annual Meeting of Stockholders.
The Board of Directors has nominated Messrs. Richard H. Penske and Alan R.
Hoefer to serve as directors until the 2003 Annual Meeting of Stockholders and
until their successors have been duly elected and qualified. Such nominees have
indicated a willingness to continue to serve as directors. Should they become
unavailable to accept election as directors, the persons named in the enclosed
proxy will vote the shares, which such proxy represents for the election of such
other person as the Board of Directors may recommend. Unless contrary
instructions are given on the proxy, the shares represented by a properly
executed proxy will be voted "FOR" the election of Messrs. Penske and Hoefer. A
plurality of the votes cast is required for the election of the directors.
The nominees for election as the directors to be elected at the Meeting and
the directors whose terms of office continue after the Meeting, together with
certain information about them, are set forth below:
Term
Name Age Expires Positions with Company
Richard H. Penske.... 57 2000 Chairman of the Board and
Chief Executive Officer
Alan R. Hoefer....... 66 2000 Director +
Mark A. Randol....... 65 2001 Director +
John F. Eureyecko.... 51 2002 President, Chief Operating
Officer, Secretary and
Director
Douglas J. Tigert, Ph.D 62 2002 Director +
+ Member of the Audit and Compensation Committees.
<PAGE>
Richard H. Penske has served the Company and its predecessor in various
capacities for more than 25 years. Mr. Penske served as President of the Company
from 1980 to June 1996, and has served as the Chief Executive Officer since
1986. Mr. Penske has served as a director of the Company since 1978.
Alan R. Hoefer has served as a director of the Company since March 1994.
Since August 1988, Mr. Hoefer has been the Managing General Partner of Alan
Hoefer & Co., a private investment banking firm.
Mark A. Randol has served as a director of the Company since March 1994.
Mr. Randol is currently self-employed as a commercial real estate consultant.
From 1979 to March 1998, Mr. Randol served as the President of Forest City
Management, Inc., a real estate development company.
John F. Eureyecko joined the Company in October 1991 and has served as
President and Chief Operating Officer since June 1996. Mr. Eureyecko had
previously served as Executive Vice President from January 1992 to June 1996 and
as Chief Financial Officer from February 1994 to June 1996. Mr. Eureyecko was
elected as Secretary in January 1992 and as a director in March 1994. Mr.
Eureyecko joined the Company with 18 years experience at Triangle Building
Supplies and Lumber Co., a building materials retailer, where he last served as
Senior Vice President and General Manager.
Douglas J. Tigert, Ph.D. has served as a Director of the Company since
April 2000. Dr. Tigert is a Professor of Retail Marketing at Babson College,
Wellesley, MA, and specializes in consumer research, strategic planning, and
financial and productivity analysis in the retailing arena. His academic
research, writing and consulting activities focus on issues which cross over a
number of retailing sectors, including food, category killers, supermarkets,
mass merchandisers department stores, warehouse clubs, specialty fashion chains
and home improvement stores. Dr. Tigert earned his Ph.D. in Marketing from
Purdue University in West Lafayette, Indiana, in 1966.
<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors has an Audit Committee and a Compensation Committee.
Messrs. Hoefer, Randol and Dr. Tigert serve as members of both the Audit
Committee and the Compensation Committee. The functions of the Audit Committee,
which held one meeting during fiscal 2000, include reviewing the scope and
results of the annual audit, internal accounting procedures and certain other
questions of accounting policy. The functions of the Compensation Committee,
which acted by unanimous consent in writing on nine occasions during fiscal
2000, include considering and determining all compensation matters relating to
the Company's executive officers.
The Board of Directors held three meetings, and acted by unanimous consent
in writing on ten occasions, during fiscal 2000. Each director attended at least
75% of the aggregate number of meetings of the Board of Directors and committees
on which the director served.
Compensation of Directors
Members of the Board of Directors who are not employees of the Company are
compensated at the annual rate of $8,000. Non-employee directors will also
receive $1,000 for each meeting of the Board of Directors which they attend and,
if not held in conjunction with a Board meeting, a fee of $1,000 for each
meeting of a committee of the Board of Directors which they attend. The Company
also reimburses all directors for their expenses in connection with their
activities as directors of the Company. Directors who are also employees of the
Company do not receive any compensation for serving on the Board of Directors.
Pursuant to the Company's 1994 Stock Option Plan, each director who is a member
of the Compensation Committee also receives an annual grant of 10 year options
to purchase 3,000 shares of Common Stock at the fair market value on the date of
grant, becoming exercisable on the first anniversary of the date of grant.
THE BOARD OF DIRECTORS RECOMMENDS
VOTING "FOR" THE NOMINEES FOR DIRECTOR
PROPOSAL TWO
APPROVAL OF THE COMPANY'S INDEPENDENT AUDITORS
The Company's Board of Directors recommends that the stockholders consider
and approve a proposal to select KPMG LLP, which served as the Company's
independent public auditors for the last fiscal year, to serve as the Company's
independent public auditors for the current fiscal year. If the stockholders
fail to approve the selection of such auditors, the Board of Directors will
reconsider the selection.
A representative of KPMG LLP is expected to be present at the Meeting. Such
representative will have the opportunity to make a statement if he desires to do
so and will be available to respond to appropriate questions of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS
VOTING "FOR" THE PROPOSAL TO APPROVE
KPMG LLP AS THE
COMPANY'S INDEPENDENT AUDITORS
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during fiscal 1998, fiscal 1999 and fiscal 2000 for the Chief
Executive Officer of the Company, the Company's four other most highly
compensated officers and two individuals for whom disclosures would have been
provided but for the fact that the individuals were not serving as executive
officers as of the end of fiscal 2000 (the "Named Officers"):
<TABLE>
<CAPTION>
Long-Term
Compensation
Shares
Name and Principal Annual Compensation Underlying All Other
Position Fiscal Year Salary Bonus Options Compensation
<S> <C> <C> <C> <C> <C>
Richard H. Penske...... 2000 $ 336,234 $110,000 5,000 $49,337(1)
Chief Executive 1999 277,500 -0- -0- 46,618(1)
Officer 1998 199,235 100,000 25,000 51,396(1)
John F. Eureyecko...... 2000 $ 333,753 $110,000 10,000 $6,982 (2)
President 1999 285,534 130,000 -0- 2,082(3)
1998 222,057 105,000 25,000 7,255(3)
Sharon J. Zondag....... 2000 $ 167,051 $ 40,000 5,000 $ 7,352(3)
Senior Vice 1999 148,586 55,000 -0- 3,744(3)
President-- 1998 128,050 45,000 15,000 5,405(3)
Store Operations
Barry R. Clauser....... 2000 $ 166,668 $ 36,000 5,000 $6,746 (3)
Senior Vice 1999 148,470 50,000 -0- 3,622(3)
President-- 1998 128,495 38,000 15,000 5,247(3)
Merchandise
Operations
Gilbert P. Hollander... 2000 $ 155,192 $ 20,000 25,000 $5,932 (3)
Senior Vice 1999 110,673 15,000 -0- 2,570(3)
President-- 1998 74,615 15,000 12,000 -0-
Merchandise Buying
Susan S. Iseminger..... 2000 $114,525 $ 32,600 2,000 $4,852 (3)
Vice President-- 1999 105,095 25,000 -0- 2,910(3)
Store Operations 1998 93,983 28,000 -0- 3,520(3)
Brandon R. Lehman...... 2000 $ 98,627 $ 15,000 2,000 $4,187 (3)
Treasurer 1999 89,397 20,000 -0- 2,558(3)
1998 81,695 15,500 -0- 3,249(3)
</TABLE>
----------
(1) The compensation reported represents: (i) the Company's contributions and
matching payments under the Company's Retirement and Savings Plan in the
aggregate amounts of $7,716 in fiscal 2000, $2,244 in fiscal 1999, and
$6,601 in fiscal 1998; (ii) the premiums on a life insurance policy on the
life on Mr. Penske, of which Mr. Penske's wife is the sole beneficiary,
which were $2,559 in fiscal 2000, $3,959 in fiscal 1999, and $3,409 in
fiscal 1998; and (iii) the amount, on a term loan approach, of the benefit
of the whole-life portion of the premiums for a split dollar life
insurance policy paid by the Company projected on an actuarial basis,
which amount was $39,062 in fiscal 2000, $40,415 in fiscal 1999, and
$41,386 in fiscal 1998.
(2) The compensation reported represents: (i) the Company's contributions and
matching payments under the Company's Retirement and Savings Plan in the
aggregate amount of $6,397; (ii) the premium on a life insurance policy on
the life on Mr. Eureyecko, of which Mr. Eureyecko's family trust is the
sole beneficiary, which was $136; and (iii) the premium on a life
insurance policy on the life on Mr. Eureyecko, of which Mr. Eureyecko's
wife and family trust are equal beneficiaries, which was $450.
(3) The compensation reported represents the Company's contribution and
matching payments under the Company's Retirement and Savings Plan.
<PAGE>
Stock Option Exercises and Holdings
The following table contains information concerning the stock option grants
made to each of the Named Officers in fiscal 2000:
<TABLE>
<CAPTION>
Option Grants in Fiscal 2000
Individual Grants
% of Total Potential Realizable
Number of Options Value at Assumed
Securities Granted to Annual Rates of Stock
Underlying Employees Exercise Price Appreciation
Options in Fiscal Price Per Expiration for Option Term(2)
Named Officer Granted(1) 2000 Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Richard H. Penske 5,000(3) 3 % $ 9.00 April 9, 2009 $28,300 $71,718
John F. Eureyecko 10,000(3) 7 9.00 April 9, 2009 56,601 143,437
Sharon J. Zondag 5,000(3) 3 9.00 April 9, 2009 28,300 71,718
Barry R. Clauser 5,000(3) 3 9.00 April 9, 2009 28,300 71,718
Gilbert P. Hollander 25,000(3) 17 8.8125 April 1, 2009 138,553 351,121
Susan S. Iseminger 2,000(3) 1 9.00 April 9. 2009 11,320 28,687
Brandon R. Lehman 2,000(3) 1 9.00 April 9. 2009 11,320 28,687
</TABLE>
----------
(1) Numbers shown represent options granted under the 1994 Stock Option Plan
to purchase Common Stock.
(2) Future value of current-year grants assuming appreciation in the market
value of the Common Stock of 5% and 10% per year over the ten-year option
period. The actual value realized may be greater than or less than
potential realizable values set forth in the table.
(3) All options are exercisable one year from date of grant.
The following table provides information related to options exercised
during fiscal 2000 by each of the Named Officers and the number and value of
options held at March 31, 2000 by such individuals:
<TABLE>
<CAPTION>
Aggregate Option Exercises in Fiscal 2000 and Option Values at March 31, 2000
Number of Shares
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Value March 31, 2000 March 31, 2000
Named Officer on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Richard H. Penske... -- -- 31,443 11,057 -- $ 21,875
John F. Eureyecko.... -- -- 112,500 67,498 $342,937 54,066
Sharon J. Zondag...... -- -- 58,498 26,502 301,687 21,875
Barry R. Clauser...... -- -- 58,498 26,502 301,687 21,875
Gilbert P. Hollander... -- -- 4,800 37,200 -- 114,062
Susan S. Iseminger... -- -- 16,800 3,200 96,540 18,000
Brandon R. Lehman... -- -- 16,800 3,200 96,540 18,000
</TABLE>
<PAGE>
Report of the Compensation Committee
The Compensation Committee of the Board of Directors, consisting entirely
of non-employee directors, is responsible for reviewing and approving the
Company's compensation policies and the compensation paid to executive officers.
The Company's compensation policies are structured to enable the Company to
attract, retain and motivate highly qualified executive officers to contribute
to the Company's goals and objectives and its overall financial success. In
determining executive compensation, the Compensation Committee reviews and
evaluates information supplied by management and bases decisions both on the
Company's performance and on the individual's contribution and performance. The
compensation of executive officers includes salary and incentive compensation.
The Chief Executive Officer's compensation for fiscal 2000 was based on the same
guidelines set forth in this report for executive officers in general.
Salary
The Compensation Committee reviews the salary of each executive officer in
relation to the salary paid to him or her in the previous year and with regard
to general industry conditions or trends. The salaries are set at levels
intended to reward achievement of individual and Company goals and to motivate
and retain highly qualified executives whom the Compensation Committee believe
are important to the continued success of the Company. While the Compensation
Committee's decisions are largely subjective rather than based on formulas, the
Compensation Committee does consider various measures of the financial condition
of the Company in absolute terms and in relation to internal performance goals.
Incentive Compensation
The Compensation Committee believes that incorporating annual incentive
compensation into the total compensation of executive officers encourages the
executives to have the common goal of achieving the Company's economic and
strategic objectives. As with salary considerations, the Compensation Committee
bases its decisions regarding incentive compensation, which may take the form of
cash bonuses, grants of stock options or grants of restricted stock, on both
corporate and individual performance. Decisions are made on a subjective basis
and are not based on formulas.
Summary
As described above, the Compensation Committee believes that its policies
and actions have motivated and rewarded, and will continue to motivate and
reward, the executive officers who contribute to the Company's financial
performance and increase the Company's value to stockholders.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Alan R. Hoefer, Mark A. Randol and Douglas J. Tigert, Ph.D.
<PAGE>
Stock Performance Graph
The following graph compares the percentage change in the cumulative total
stockholder return on the Common Stock for the last five fiscal years, and the
cumulative total return on the S & P 500 Index and the Dow Jones Specialty
Retail Index during such period. The comparison assumes $100 was invested on
March 31, 1995 in the Company's Common Stock and in each of the foregoing
indices and assumes the reinvestment of any dividends.
<TABLE>
<CAPTION>
Piercing S&P 500 Dow Jones
Pagoda, Inc. Specialty Retail
<S> <C> <C> <C>
3/31/1995 $100.00 $100.00 $100.00
3/31/1996 $179.41 $132.11 $118.75
3/31/1997 $297.06 $158.30 $118.95
3/31/1998 $367.65 $234.27 $179.11
3/31/1999 $157.64 $277.52 $250.20
3/31/2000 $235.91 $327.32 $309.66
</TABLE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 Annual Meeting
of Stockholders must be received by the Company at the address appearing on the
first page of this proxy statement by March 26, 2001 in order to be considered
for inclusion in the Company's proxy statement and form of proxy relating to
that Meeting.
A stockholder of the Company may wish to have a proposal presented at the
2001 Annual Meeting of Stockholders, but not to have such proposal included in
the Company's proxy statement and form of proxy relating to that Meeting. If
notice of any such proposal is not received by the Company at the address
appearing on the first page of this proxy statement by a date falling between,
May 14, 2001 and June 14, 2001 inclusive, then such proposal shall be deemed
"untimely" for purposes of Rule 14a-4(c) promulgated under the Exchange Act and,
therefore, the Company will have the right to exercise discretionary voting
authority with respect to such proposal.
<PAGE>
SOLICITATION OF PROXIES
The enclosed form of proxy is being solicited on behalf of the Company's
Board of Directors. The Company will bear the cost of the solicitation of the
Board of Directors' proxies for the Meeting, including the cost of preparing,
assembling and mailing proxy materials, the handling and tabulation of proxies
received, and charges of brokerage houses and other institutions, nominees and
fiduciaries in forwarding such materials to beneficial owners.
In addition to the mailing of the proxy material, such solicitation may be
made in person or by telephone, telegraph or telecopy by directors, officers or
regular employees of the Company, or by a professional proxy solicitation
organization engaged by the Company.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY
OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES THERETO) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO
INVESTOR RELATIONS, AT THE ADDRESS OF THE COMPANY SET FORTH ON THE FIRST PAGE OF
THIS PROXY STATEMENT.
PAGE>
Piercing Pagoda, Inc.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of Piercing Pagoda, Inc. (the "Company") hereby
appoints Richard H. Penske and John F. Eureyecko, and each of them acting
individually, with full power of substitution, to act as attorneys and proxies
for the undersigned and to vote all shares of stock of the Company which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at the Radisson Hotel
Bethlehem, 437 Main Street, Bethlehem, Pennsylvania, on August 23, 2000 at
10:00 a.m., and at any adjournment or postponement thereof, provided that said
proxies are authorized and directed to vote as indicated with respect to the
matters set forth on the opposite side of this Proxy.
UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE NOMINEES OF
THE BOARD OF DIRECTORS IN THE ELECTION OF TWO DIRECTORS WHOSE TERMS OF OFFICE
WILL EXTEND UNTIL THE 2003 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR
SUCCESSORS ARE DULY ELECTED AND QUALIFIED, AND "FOR" THE APPROVAL OF KPMG LLP AS
THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR ENDING MARCH 31,
2001.
This Proxy also delegates discretionary authority to vote with respect to
any other business which may properly come before the meeting and any
adjournment or postponement thereof.
(Please sign and date on reverse side)
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1. Election of Directors.
Richard H. Penske FOR WITHHOLD
/___/ /___/
Alan R. Hoefer FOR WITHHOLD
/___/ /___/
2. Ratification of the appointment of
KPMG LLP as the Company's independent
public auditors. FOR AGAINST ABSTAIN
/---/ /---/ /---/
The undersigned hereby acknowledges receipt of Notice of Annual Meeting,
Proxy Statement and Annual Report.
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Signature(s)______________________________________Dated:________________, 2000
NOTE: Please sign this proxy exactly as name(s) appears in address. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your titles as such and, if the signer is a corporation, please sign
with full corporate name by duly authorized officer or officers and affix the
corporate seal. Where stock is issued in the name of two or more persons, all
such persons should sign.
