<PAGE> 1
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
FTD CORPORATION
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement or
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
FTD CORPORATION
3113 Woodcreek Drive
Downers Grove, Illinois 60515
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, NOVEMBER 12, 1997
The Annual Meeting of the Stockholders of FTD Corporation (the "Meeting")
will be held at the offices of FTD Corporation located at 3113 Woodcreek Drive,
Downers Grove, Illinois 60515 on Wednesday, November 12, 1997 at 10:00 a.m. CST
for the following purposes:
1. To elect a board of five directors to serve until the next meeting
or until their successors are duly elected and qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 17, 1997
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Meeting.
Each stockholder is entitled to one vote for each share of Class A Common
Stock held by him or her at the close of business on the Record Date. All
stockholders are encouraged to attend the Meeting and vote his or her shares of
Class A Common Stock in person as the Company is not providing proxies herewith
or soliciting any proxies.
By Order of the Board of
Directors,
SCOTT D. LEVIN
Secretary
October 22, 1997
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
<PAGE> 3
FTD CORPORATION
3113 Woodcreek Drive
Downers Grove, Illinois 60515
-------------------------
INFORMATION STATEMENT
FOR
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, NOVEMBER 12, 1997
INTRODUCTION
This Information Statement is furnished by the Board of Directors of FTD
Corporation (the "Company"), in connection with the Annual Meeting of
Stockholders of the Company (the "Meeting") to be held on Wednesday, November
12, 1997 to elect a board of five directors. The Board of Directors has no
knowledge of any other business to come before the Meeting.
The holders of record of the Company's Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), as of the close of business on October
17, 1997 (the "Record Date"), are entitled to vote on all matters brought before
the Meeting. As of October 17, 1997, there were 6,065,160 shares of Class A
Common Stock outstanding.
Each stockholder is entitled to one vote for each share of Class A Common
Stock held by him or her at the close of business on the Record Date. All
stockholders are encouraged to attend the Meeting and vote his or her shares in
person as the Company is not providing proxies herewith or soliciting any
proxies.
This Information Statement is first being mailed to stockholders on or
about October 22, 1997. A copy of the Company's Annual Report for the year ended
June 30, 1997 is being mailed to all stockholders with this Information
Statement.
PROPOSAL 1 -- ELECTION OF DIRECTORS
Five directors are to be elected at the Meeting to hold office until the
next meeting or until their successors have been duly elected and qualified. The
election of directors requires the affirmative vote of at least a plurality of
shares of Class A Common Stock present or represented at a meeting at which a
quorum (a majority of the outstanding shares of Class A Common Stock entitled to
vote) is present or represented. For purposes of the election of directors,
abstentions and other shares not voted will not be counted as votes cast and
will have no effect on the result of the vote.
DIRECTORS
The following table sets forth the name and age of each nominee for
director, the year first elected a director and the positions held by them with
the Company.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AGE ELECTED POSITION
---- --- ---------- --------
<S> <C> <C> <C>
Richard C. Perry............................ 42 1994 Chairman of the Board of Directors
Veronica K. Ho.............................. 37 1994 Director
Gary K. Silberberg.......................... 37 1994 Director
Geoffrey Rehnert............................ 40 1994 Director
Habib Y. Gorgi.............................. 41 1997 Director
</TABLE>
<PAGE> 4
Set forth below is certain biographical information about each of the
Company's directors.
RICHARD C. PERRY
Chairman of the Board of Directors
Mr. Perry has been Chairman of the Board of Directors of the Company since
December 1994. Mr. Perry is also Chairman of the Board of Directors of Florists'
Transworld Delivery, Inc., a Michigan company and wholly owned subsidiary of the
Company (the "Operating Company"). Mr. Perry is the President and founder of
Perry Corp., a private money management firm. Prior to forming Perry Corp. in
1988, Mr. Perry was with Goldman, Sachs & Co. Mr. Perry is an Adjunct Associate
Professor at the New York University Stern School of Business Administration. He
is also a director of Radio & Records, Inc. and a trustee of the Allen Stevenson
School and the Board of Facing History and Ourselves. Mr. Perry received a B.S.
from the Wharton School of the University of Pennsylvania in 1977 and an M.B.A.
from New York University Graduate School of Business Administration in 1980.
VERONICA K. HO
Director
Ms. Ho has been a member of the Board of Directors of the Company since
December 1994. Ms. Ho served as Vice President of the Company from December 1994
to September 1997. Ms. Ho is a member of the Board of Directors of the Operating
Company and a Managing Director of Perry Corp. Before joining Perry Corp. in
April 1993, Ms. Ho was Chief Financial Officer of Whitehall Corporation, a
producer of defense, electronics, and technology systems, from April 1991 to
March 1993. From 1986 to 1991, she was with several private merchant banking
firms specializing in management buyouts. Ms. Ho is also a member of the Board
of Directors of Radio & Records, Inc. and the New York Advisory Board of Facing
History and Ourselves. She received a B.A. from Brown University in Economics
and Applied Mathematics in 1982 and an M.B.A. from the Harvard Graduate School
of Business Administration in 1986. Ms. Ho is married to Mr. Silberberg.
GARY K. SILBERBERG
Director
Mr. Silberberg has been a member of the Board of Directors of the Company
since December 1994. Mr. Silberberg is also a member of the Board of Directors
of the Operating Company. Mr. Silberberg is a Managing Director of Perry Corp.
Prior to joining Perry Corp. in April 1994, Mr. Silberberg was a principal of
Baker Nye Investments, where he managed an investment portfolio for seven years.
Before that time, Mr. Silberberg practiced corporate law with Skadden, Arps,
Slate, Meagher & Flom, where he worked on a variety of transactions, including
strategic mergers and restructurings. Mr. Silberberg received an Sc.B. in
Economics and Applied Mathematics from Brown University in 1982 and a J.D. from
Yale Law School in 1985. Mr. Silberberg is married to Ms. Ho.
GEOFFREY REHNERT
Director
Mr. Rehnert has been a member of the Board of Directors of the Company
since December 1994. Mr. Rehnert has been a General Partner and Managing
Director of Bain Capital, Inc. ("Bain") since 1986. He is a director of ICON
Health & Fitness, Inc., GT Bicycles, Inc., and Kollmorgen Corporation. Mr.
Rehnert received a B.A. from Duke University and a J.D. from Stanford Law
School.
2
<PAGE> 5
HABIB Y. GORGI
Director
Mr. Gorgi has been a member of the Board of Directors of the Company since
January 1997. Mr. Gorgi is also a member of the Board of Directors of the
Operating Company. Mr. Gorgi is a Managing Director of Fleet Private Equity
Company (Fleet Equity Partners), a private equity capital firm which is a
subsidiary of Fleet Financial Group, Inc. ("FFG"). Mr. Gorgi serves on the Board
of Directors of several non-public companies. Mr. Gorgi earned an B.A. from
Brown University in 1978, and an M.B.A. from Columbia University in 1983.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
In the fiscal year ending June 30, 1997, the Board of Directors held two
meetings. Mr. Rehnert was not able to attend one of the two meetings. In
addition, a number of actions were approved by unanimous written consents of the
directors. There were no committees of the Board of Directors. All decisions
pertaining to audit, compensation and option grants were under the direct
jurisdiction of the full Board of Directors.
DIRECTORS FEES
Directors of the Company do not receive any fees in connection with their
services as members of the Board of Directors. All directors are reimbursed for
the reasonable expenses incurred in connection with each meeting attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company currently does not have a compensation committee. All matters
which would otherwise be determined by the compensation committee are considered
by the entire Board of Directors.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Information Statement, in whole or in part, the following report
and the Performance Graph which follows shall not be deemed to be incorporated
by reference into any such filings.
The Board of Directors of the Company traditionally performs the functions
of a compensation committee, including the review and approval of compensation
and terms of employment for all officers of the Company and its subsidiaries.
The members of the Board of Directors in fiscal 1997 were Richard C. Perry,
Veronica K. Ho, Geoffrey Rehnert, Gary K. Silberberg and Habib Y. Gorgi.
The Company's executive compensation is intended to attract high-caliber
executives at the Company and Operating Company levels and to reward, retain and
motivate management based on corporate and individual annual and long-term
business performance. The primary component of compensation has been base
salary, however approximately 30 key employees of the Company and the Operating
Company are covered by the Key Management Incentive Plan ("KMIP"), which
provides bonuses in the event that (i) the Company achieves one or more targets
based on the Company's EBITDA (earnings before interest, taxes, depreciation and
amortization), and (ii) the individual achieves specified goals. The Company
also awards stock options to its officers and other employees pursuant to the
FTD Corporation 1994 Stock Award and Incentive Plan (the "Option Plan"). Such
awards are designed to provide incentives to the participating officers and key
employees that are linked directly to increases in stockholder value and that
will therefore inure to the benefit of all stockholders of the Company. The
Board of Directors believes that the Company's executive compensation
arrangements are reasonable in light of the needs of the Company, competitive
compensation levels and the goals of retention and motivation of management. In
determining salary and other
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<PAGE> 6
compensation levels for the executive officers, primary consideration is given
to each executive's level of responsibility and individual performance.
At the beginning of the Company's fiscal year, the Board of Directors
reviews the Company's near and long-term strategies and objectives with the
President. These form the basis for adopting or modifying corporate annual
operating income and net income plan goals recommended by the President. Based
on this review, the Board of Directors establishes the Company's total
compensation structure for the year, including the elements and level of
compensation opportunities and the variable portion of "at risk" pay for
performance and equity participation. The Board of Directors considers, among
other matters, marketplace pay levels and practices, as well as the Company's
need to continue to attract, retain and motivate employees. Such compensation
structure is discussed with the Board of Directors, which is asked to ratify
base salary amounts and bonuses for officer level employees, including the
Company's executive officers.
At year-end, the Board of Directors in consultation with the President
assess results achieved and strategic progress relative to previously approved
goals, taking into consideration prevailing economic and business conditions and
opportunities, performance by comparable organizations, and stockholder value.
No particular weightings are assigned by the Board of Directors to any such
factors. Based on this assessment, the Board reviews and considers the
President's year-end compensation proposals.
Mr. Norton, President of the Company and President and Chief Executive
Officer of the Operating Company, received a base salary of $185,096 for
services rendered from the commencement of his employment with the Company
through June 30, 1997, and received a cash bonus of $275,000 in fiscal 1998 with
respect to services rendered from the commencement of his employment with the
Company through September 30, 1997. In connection with the commencement of Mr.
Norton's employment, he was granted Non-Qualified Stock Options to purchase (i)
60,000 shares of Class A Common Stock at an exercise price of $7.50 per share
and (ii) 50,000 shares of Class A Common Stock at an exercise price of $25.00
per share. In fiscal 1997 Mr. Norton purchased 30,000 shares of Class A Common
Stock. In fiscal 1998 the Company issued Mr. Norton 20,000 additional shares of
Class A Common Stock, which are subject to restrictions on transfer and
forfeiture in the event of termination of employment prior to the expiration of
a specified period of time. The Board of Directors believes that Mr. Norton's
compensation is competitive with that of Chief Executive Officers of comparable
companies and deems such compensation to be fair and appropriate.
The Board of Directors
Richard C. Perry
Veronica K. Ho
Gary K. Silberberg
Geoffrey Rehnert
Habib Y. Gorgi
4
<PAGE> 7
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return of
the Company's Class A Common Stock with the Standard & Poor's MidCap 400 Stock
Index and the cumulative total return on the index for the standard industrial
classification code, Business Services. The cumulative total returns for each
index were prepared by Media General Financial Services. Each case assumes an
initial investment of $100 after the close of the market on August 25, 1996, as
well as the reinvestment of any dividends.
COMPARE CUMULATIVE TOTAL RETURN
AMONG FTD CORPORATION,
S&P MID-CAP INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD FTD SIC CODE
(FISCAL YEAR COVERED) CORPORATION(1) INDEX S&P MID-CAP
<S> <C> <C> <C>
1996 100.00 100.00 100.00
1997 206.67 98.81 125.06
</TABLE>
ASSUMES $100 INVESTED ON AUG. 25, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JUNE 30, 1997
- -------------------------
(1) Because no established public trading market exists for the Company's Class
A Common Stock, values were based on an assumed stock price of $7.50 and
$15.50 per share at August 25, 1996 and June 30, 1997, respectively. The
foregoing prices were used by FTD for purposes of granting stock options to
employees under the FTD Corporation 1994 Stock Award and Incentive Plan.
There can be no assurance that such price per share represents the actual
fair market value of a Share of Class A Common Stock.
5
<PAGE> 8
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, for the Company's last three fiscal years,
the compensation of those persons who were, at June 30, 1997, the chief
executive officer and the other four most highly compensated officers of the
Company, the Company's former chief executive officer and two persons who would
have been one of the four most highly compensated executive officers during
fiscal 1997 but were not serving on June 30, 1997 (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
--------------------------
ANNUAL COMPENSATION(1) SECURITIES
---------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION
--------------------------- ---- ------ ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Robert L. Norton(2)........................ 1997 $185,096 $ -- 110,000 $ 2,147(3)
President -- FTD Corporation
President and Chief Executive Officer --
Operating Company
Margaret C. Whitman(4)..................... 1997 160,115 99,500 -- 130,421(5)
Former President and Chief Executive
Officer 1996 258,038 -- -- 100,517(6)
1995 85,600 100,000 255,000 7,018(7)
Rock A. Davis.............................. 1997 152,788 6,000 5,000 2,800(3)
Vice President Marketplace -- 1996 125,288 11,000 30,000 2,693(3)
Operating Company 1995 2,404 -- -- 52(3)
Scott D. Levin............................. 1997 137,885 25,000 30,000 18,127(8)
Secretary -- FTD Corporation 1996 17,788 -- -- 11,271(9)
Vice President Administration, General
Counsel and Secretary -- Operating
Company
Douglas L. Hagemann(10).................... 1997 149,730 -- -- 11,808(11)
Former Vice President of Finance and 1996 149,730 -- -- 2,859(3)
Stockholder Relations -- 1995 144,422 16,500 -- 17,136(12)
Operating Company
Louis E. Nagy, Jr.(13)..................... 1997 153,004 -- -- 100,054(14)
Former Vice President Marketing and
Product 1996 125,192 -- 30,000 14,516(15)
Development -- Operating Company 1995 40,866 17,500 -- 777(3)
</TABLE>
- -------------------------
(1) Includes cash bonuses paid in the referenced fiscal year with respect to
services rendered in the prior fiscal year. Excludes cash bonuses paid in
the following fiscal year with respect to services rendered in the
referenced fiscal year, which cash bonuses paid in fiscal 1998 with respect
to services rendered in fiscal 1997 are as follows: Rock A. Davis
($80,000), Scott D. Levin ($75,000) and Douglas L. Hagemann ($10,000). The
bonuses for Mr. Davis and Mr. Levin were paid pursuant to the KMIP. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -- Key Management Incentive
Plan."
(2) Excludes a cash bonus paid to Mr. Norton in the first quarter of fiscal
1998 with respect to services rendered by Mr. Norton from the commencement
of his employment with the Company through September 30, 1997, pursuant to
certain employment arrangements between Mr. Norton and the Company. The
amount of such bonus is $275,000. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS -- Norton Employment Arrangements."
(3) Represents flexible dollars for use in connection with the Company's
benefit plans.
(4) Ms. Whitman was President and Chief Executive Officer from March 1995 until
the termination of her employment agreement on January 3, 1997.
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<PAGE> 9
(5) Reflects $128,419 for the forgiveness of debt, and $ 2,002 for flexible
dollars for use in connection with the Company's benefits plans.
(6) Reflects $3,461 for flexible dollars for use in connection with the
Company's benefit plans and $97,056 for the forgiveness of debt used to
purchase shares of Class A Common Stock.
(7) Reflects $1,370 for flexible dollars for use in connection with the
Company's benefit plans and $5,648 for the forgiveness of debt used to
purchase shares of Class A Common Stock.
(8) Reflects $2,424 for flexible dollars for use in connection with the
Company's benefit plans and $15,703 for moving expenses.
(9) Reflects $275 for flexible dollars for use in connection with the Company's
benefit plans and $10,996 for moving expenses.
(10) Mr. Hagemann was Vice President Finance and Stockholder Relations of the
Operating Company from July 1996 until September 1997.
(11) Reflects $8,874 for Universal Life Insurance and $2,934 for flexible
dollars for use in connection with the Company's benefit plans.
(12) Reflects $14,327 for Universal Life Insurance and $2,809 for flexible
dollars for use in connection with the Company's benefit plans.
(13) Mr. Nagy was Vice President Marketing and Product Development of the
Operating Company from March 1995 until April 1997.
(14) Reflects $8,062 as part of severance arrangement with the Company, $89,552
for moving and related expenses and $2,440 for flexible dollars for use in
connection with the Company's benefit plans.
(15) Reflects $2,963 for flexible dollars for use in connection with the
Company's benefit plans and $11,553 for moving expenses.
The following table sets forth individual grants of stock options made to
the Named Officers during the fiscal year ended June 30, 1997. Options are
exercisable for Class A Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------ VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5% 10%
---- -------------- ------------ ----------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Robert L. Norton........ 60,000(2) 23.5% $ 7.50 6/6/2007 $248,078 $611,076
50,000(2) 19.6 25.00 6/6/2007
Rock A. Davis........... 5,000(2) 2.0 7.50 3/20/2007 20,675 50,923
Scott D. Levin.......... 10,000(3) 3.9 7.50 10/1/2006 41,350 101,846
15,000(3) 5.9 25.00 10/1/2006
5,000(4) 2.0 7.50 3/20/2007 20,675 50,923
</TABLE>
- -------------------------
(1) Options granted under the Option Plan.
(2) Such options vest and become exercisable in four equal, cumulative
installments, with the first vesting date being September 30, 1998 for Mr.
Norton, and February 1, 1999 for Mr. Davis.
(3) Such options vest and become exercisable in four equal, cumulative
installments, with the first vesting date being April 18, 1998.
(4) Such options vest and become exercisable in four equal, cumulative
installments, with the first vesting date being February 1, 1999.
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<PAGE> 10
The following table sets forth the June 30, 1997 aggregate value of
unexercised options held by each of the Named Officers.
FISCAL YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT FISCAL YEAR-END VALUE OF UNEXERCISED
------------------------------------------------------- IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END
ACQUIRED ON VALUE ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Norton............ -- -- 0 110,000 $ -- $480,000
Rock A. Davis............... -- -- 7,500 27,500 38,063 154,188
Scott D. Levin.............. -- -- 0 30,000 -- 120,000
</TABLE>
- -------------------------
(1) Because no established public trading market exists for the underlying
securities, fiscal year-end option values were based on an assumed stock
price of $15.50 per share, which price is currently used by the Company for
purposes of granting additional options under the Option Plan. There can be
no assurance that such price per share represents the actual fair market
value of a Share.
No options were exercised during the fiscal year ended June 30, 1997.
1994 Stock Award and Incentive Plan. The Option Plan was adopted by the
Board of Directors of the Company and approved by the Company's stockholders on
December 9, 1994 and amended on June 12, 1995. The maximum number of shares of
Class A Common Stock and Class B Common Stock, par value $.0005 per share (the
"Class B Common Stock" and, together with the Class A Common Stock, the "Common
Stock"), authorized for issuance under the Option Plan is equal to 15% of the
initial equity capital of the Company upon the consummation of the acquisition
by the Company on December 19, 1994, of all of the outstanding equity of
Florists' Transworld Delivery Association. The Option Plan is not subject to any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
nor is the Option Plan a qualified plan within meaning of Section 401(a) of the
Code.
The Option Plan is designed to enable the Company to attract and retain
highly qualified personnel who will contribute to the Company's success by their
ability, ingenuity and industry and to provide incentives to the participating
officers, other key employees, directors, consultants and advisors that are
linked directly to increases in stockholder value and will therefore inure to
the benefit of all stockholders of the Company.
Options may be granted to officers, other key employees of the Company
(collectively, the officers and key employees are referred to as "Eligible
Employees"), directors of the Company (other than members of the Compensation
Committee of the Board of Directors), and consultants and advisors to the
Company who are responsible for or contribute to the management, growth and/or
profitability of the business of the Company (each, a "Participant"). As of June
30, 1997, stock options to purchase an aggregate of 217,000 shares of Class A
Common Stock were outstanding (209,500 of which have not yet vested).
The Option Plan is administered by the Board of Directors or, if appointed
by the Board, the Compensation Committee (as applicable, the "Administrator").
The Company currently does not have a Compensation Committee. The Option Plan
permits the Administrator to determine which Participants shall receive awards,
the times when awards are to be granted and the number of shares, terms and
conditions on which the awards will be granted (not inconsistent with the terms
of the Option Plan). The Administrator is entitled to determine whether and to
what extent stock options, Stock Appreciation Rights ("SARs"), Limited Stock
Appreciation Rights ("LSARs"), Restricted Stock, Deferred Stock, Performance
Shares or a combination of the foregoing, are to be granted thereunder.
The Option Plan provides for grants of "Incentive Stock Options," meeting
the requirements of Section 422 of the Code and "Non-qualified Stock Options,"
which do not qualify as ISOs. Eligible Employees may be granted Incentive Stock
Options, Non-qualified Stock Options, or both, while all other Participants may
only be granted Non-qualified Stock Options, although all awards may be with or
without Stock Appreciation Rights or Limited Stock Appreciation Rights. The
option price per share under each
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<PAGE> 11
Incentive Stock Option or Non-qualified Stock Option is to be determined by the
Administrator in its sole discretion at the time of grant but shall not, in the
case of Incentive Stock Options, be less than 100% of the Fair Market Value (as
defined therein) of the stock on such date. If an employee owns or is deemed to
own (by reason of the attribution rules applicable under Section 425(d) of the
Code) more than 10% of the combined voting power of all classes of stock of the
Company and an Incentive Stock Option is granted to such employee, the option
price of such Incentive Stock Option (to the extent required by the Code at the
time of grant) shall be no less than 110% of the Fair Market Value of the Stock
on the date such Incentive Stock Option is granted. The Company is authorized to
make loans available to Participants in connection with the exercise of
outstanding options granted under the Option Plan as the Administrator, in its
sole discretion, may determine appropriate.
Unless otherwise determined by the Administrator, the options shall not be
transferable and shall only be exercisable during the optionee's lifetime by the
optionee. In the event that an employee is terminated for any reason, the Stock
Option may thereafter be exercised to the extent provided in the applicable
subscription or award agreement.
SARs and LSARs may be granted either alone ("Free Standing") or in
conjunction with all or part of any option granted under the Option Plan
("Related Rights"). LSARs may only be exercised within the 30-day period
following a Change of Control (as defined by the Administrator in the agreement
evidencing such LSAR), and, with respect to LSARs that are Related Rights, only
to the extent that the stock options to which they relate shall be exercisable
in accordance with the provisions of the Option Plan.
SARs that are Related Rights are exercisable only at such time or times and
to the extent that the stock options to which they relate shall be exercisable.
Upon the exercise of a SAR that is a Related Right, an optionee shall be
entitled to receive up to, but not more than, an amount in cash or that number
of shares of Common Stock (or in some combination of cash and shares of Common
Stock) equal in value to the excess of the Fair Market Value of one share of
Common Stock as of the date of exercise over the option price per share
specified in the related stock option multiplied by the number of shares of
Common Stock in respect of which such Related Right SAR is being exercised. The
Administrator has the right to determine the form of payment.
SARs that are Free Standing are exercisable at such time or times and
subject to such terms and conditions as are determined by the Administrator at
or after the grant thereof. Upon the exercise of a SAR that is Free Standing, a
recipient shall be entitled to receive up to, but not more than, an amount in
cash or that number of shares of Common Stock (or any combination of cash or
shares of Common Stock) equal in value to the excess of the Fair Market Value of
one share of Common Stock as of the date of exercise over the price per share
specified in the grant thereof (which price shall be no less than 100% of the
Fair Market Value of the Common Stock on the date of grant) multiplied by the
number of shares of Common Stock in respect to which the right is being
exercised. The Administrator has the right to determine the form of payment.
Restricted Stock, Deferred Stock or Performance Share awards may be issued
either alone or in addition to other awards granted under the Option Plan. Such
awards are generally subject to restrictions on transfer and termination
determined in the discretion of the Administrator. Such restrictions may be
accelerated or waived in whole or in part based on such factors and such
circumstances as the Administrator may determine, in its sole discretion,
including, but not limited to, the attainment of certain performance related
goals, the Participant's termination of employment or service, death or
disability or the occurrence of a Change of Control (as defined in the agreement
evidencing such award).
Upon the award of any restricted stock or performance shares, the
participant will have the rights of a stockholder with respect to the shares,
including dividend rights, subject to the conditions and restrictions generally
applicable to restricted stock specifically set forth in the award agreement for
the participant's restricted stock or performance shares. Upon an award of
deferred stock, the participant will not have any rights of a stockholder, other
than the right to receive dividends, during the specified deferral period.
The Administrator may amend, alter or discontinue the Option Plan, provided
that any amendment which would (i) increase the total number of shares of stock
reserved for the purpose of the Option Plan,
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<PAGE> 12
(ii) change the class of employees, directors, consultants and advisors eligible
to participate in the Option Plan or (iii) extend the maximum option period must
be approved by the stockholders to the extent such amendment would affect the
qualified status of the Option Plan under Rule 16b-3 of the Act.
Pension Plan. Prior to January 1, 1997, the Company provided a qualified
defined benefit pension plan (the "Pension Plan") which covered all employees
who received a regular stated salary and who did not work a varied schedule for
purposes of meeting the peak demand requirements of the Company's business
(provisional employees). Effective January 1, 1997, amendments to the Pension
Plan were adopted, including the elimination of the accrual of future benefits
under the Pension Plan.
The following table shows the estimated annual pension benefits payable to
a covered participant upon normal retirement at age 65 under the Pension Plan,
based on the remuneration that is covered under the Pension Plan and years of
service with the Company and its subsidiaries:
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------
5 10 15 20 25 30
REMUNERATION - -- -- -- -- --
- ------------ --------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000............................. $ 4,150 $ 8,300 $12,450 $16,600 $20,750 $24,900
60,000............................. 5,025 10,050 15,075 20,100 25,125 30,150
70,000............................. 5,900 11,800 17,700 23,600 29,500 35,400
80,000............................. 6,775 13,550 20,325 27,100 33,875 40,650
90,000............................. 7,650 15,300 22,950 30,600 38,250 45,900
100,000............................. 8,625 17,050 25,575 34,100 42,625 51,150
110,000............................. 9,400 18,800 28,200 37,600 47,000 56,400
120,000............................. 10,275 20,550 30,825 41,100 51,375 61,650
130,000............................. 11,150 22,300 33,450 44,600 55,750 66,900
140,000............................. 12,025 24,050 36,075 48,100 60,125 72,150
150,000 to 270,000.................. 12,900 25,600 38,700 51,600 64,500 77,400
</TABLE>
Pension Plan benefits, as shown above, are calculated based upon total
years of services to a maximum of 30 years and the average of the five highest
consecutive calendar years' salary, bonus and certain elements of other
compensation and assume that participants have contributed all years to the Tax
Deferred Account-Mandatory under the Company's 401(k) Retirement Savings Plan
(as amended, the "401(k) Plan"). The annual pension benefits shown are computed
as a straight life annuity with ten years certain period beginning at age 65,
and assume that participants will transfer the balance of the Tax Deferred
Account-Mandatory from the 401(k) Plan to the Pension Plan. The amounts paid
under the Pension Plan are not offset by any social security payments. Mr.
Hagemann is the only Named Officer eligible to receive benefits under the
Pension Plan. Mr. Hagemann's covered compensation and the estimated years of
service as of June 30, 1997 is $158,604 and 15.75 years.
401(k) Plan. The Company has amended, effective January 1, 1997, its 401(k)
Plan for all of its eligible employees to replace certain benefits eliminated
under the Pension Plan. Generally, any employee who has completed 12 months of
service and is over 21 years of age is eligible to participate in the 401(k)
Plan. Each eligible employee may elect to contribute to the 401(k) Plan, through
payroll deductions, up to 15% of his or her compensation for services rendered
in any year, not to exceed a statutorily prescribed annual limit. Participants
in the 401(k) Plan are always fully vested in their own contributions. The
401(k) Plan provides that the Company may make matching contributions to the
401(k) Plan based on the Company's net income and at the discretion of the Board
of Directors. Each participant becomes fully vested in the Company's
contributions allocated to his or her account upon completion of five years of
service. The Company's contributions are tax-deductible to the Company. Company
contributions to the 401(k) Plan for fiscal 1997 were not significant, and no
contributions were made by the Company to the accounts of any of the Named
Officers.
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<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the ownership
of the Company's Common Stock as of October 17, 1997, by: (i) each person who is
known to the Company to own beneficially more than 5% of the outstanding shares
of Class A Common Stock or Class B Common Stock; (ii) each director and Named
Officer owning equity securities of the Company; and (iii) all executive
officers and directors of the Company as a group. To the knowledge of the
Company, each of such stockholders has sole voting and dispositive power as to
the shares beneficially owned unless otherwise noted.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
(VOTING) (NONVOTING)
---------------------- ---------------------
NUMBER PERCENT NUMBER PERCENT
OF SHARES OF CLASS OF SHARES OF CLASS
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Perry Partners(1)...................................... 3,729,431 61.49 -- --
599 Lexington Avenue
New York, NY 10022
Bain Funds(2).......................................... 770,802 12.71 -- --
Two Copley Place
Boston, MA 02116
Richard C. Perry(3).................................... 3,729,431 61.49 -- --
Habib Y. Gorgi(4)...................................... 148,766 2.45 310,944 19.85
Geoffrey Rehnert(5).................................... 770,802 12.71 -- --
Robert L. Norton(6).................................... 50,000 * -- --
Rock A. Davis(7)....................................... 12,500 * -- --
Scott D. Levin(8)...................................... 3,333 * -- --
All executive officers and directors of FTD as a group
(10 people)(9)....................................... 4,714,832 77.74 310,944 19.85
</TABLE>
- -------------------------
* Represents less than 1%
(1) Perry Acquisition Partners, L.P. ("Perry Partners").
(2) A group of five investment funds (the "Bain Funds") controlled by Bain.
(3) The address of Mr. Perry is c/o the Company, 3113 Woodcreek Drive, Downers
Grove, Illinois 60515. All of the shares shown are held by Perry Partners.
Mr. Perry has a controlling interest in Perry Investors, L.L.C., the general
partner of Perry Partners. Accordingly, Mr. Perry may be deemed to have
voting and dispositive power with respect to the shares held by Perry
Partners. Mr. Perry disclaims beneficial ownership of such shares.
(4) The address of Mr. Gorgi is c/o Fleet Equity Partners, 50 Kennedy Place,
Providence, Rhode Island 02903. Includes shares owned by Fleet Financial
Group, Inc. ("FGR"), Fleet Equity Partners VII, L.P. ("FEP"), and Chisholm
Partners II, L.P. ("CPII") (the "Fleet Funds"). Two of the Fleet Funds are
controlled by FFG, and one of the Fleet Funds is controlled by an affiliate
of a FFG subsidiary. Mr. Gorgi is the President of FGR, Silverado V Corp.
("SVC") and Silverado II Corp. ("SIIC"). FGR and SVC are general partners of
FEP, and SIIC is the general partner of Silverado II L.P. ("SIILP"), which
is the general partner of CPII. Mr. Gorgi is also a limited partner of FEP
and SIILP. As President of FGR, SVC and SIIC, Mr. Gorgi may be deemed to
share voting and dispositive power with Robert M. Van Degna, Chairman & CEO
of those entities. Mr. Gorgi disclaims beneficial ownership of all shares
which are directly owned by FGR and those shares which are directly owned by
FEP and CPII, except for his pecuniary interest therein.
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<PAGE> 14
(5) The address of Mr. Rehnert is c/o Bain Capital, Inc., Two Copley Place,
Boston, Massachusetts 02116. All of the shares shown are owned by the Bain
Funds. Mr. Rehnert is a Managing Director of Bain, which is a general
partner of the Bain Funds. Accordingly, Mr. Rehnert may be deemed to share
voting and dispositive power as to the shares held by the Bain Funds. Mr.
Rehnert disclaims beneficial ownership of such shares. In addition, the
other Managing Directors of Bain, Joshua Bekenstein, Edward Conrad, David
Dominik, Paul Edgerley, Robert Gay, Adam Kirsch, Mark Nunnelly, Mitt Romney,
Stephan Pagliuca, Mark B. Wolpow and Robert White, may also be deemed to
share voting and dispositive power as to, and also disclaim beneficial
ownership of, such shares.
(6) The address of Mr. Norton is c/o the Company, 3113 Woodcreek Drive, Downers
Grove, Illinois 60515. Includes 20,000 restricted shares which will vest in
three equal annual installments commencing September 30, 1999. The shares
owned by Mr. Norton are subject to certain restrictions on transfer.
(7) The address of Mr. Davis is c/o the Company, 3113 Woodcreek Drive, Downers
Grove, Illinois 60515. Includes 7,500 shares issuable upon exercise of
outstanding options which are currently exercisable. The shares owned by Mr.
Davis are subject to certain restrictions on transfer.
(8) The address of Mr. Levin is c/o the Company, 3113 Woodcreek Drive, Downers
Grove, Illinois 60515. The shares owned by Mr. Levin are subject to certain
restrictions on transfer.
(9) Includes 20,000 restricted shares which will vest in three annual
installments commencing September 30, 1999 and includes 7,500 shares
issuable upon exercise of outstanding options which are currently
exercisable.
Except as described above, no directors or executive officers of the
Company beneficially own any shares of Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Consulting Services Agreement. Parties related to each of Perry
Partners, the Bain Funds and the Fleet Funds (the "Principal Stockholders") have
entered into an agreement for management consulting services (the "Management
Consulting Services Agreement") with the Company pursuant to which they will
make management, financial and other corporate advisory services available to
the Operating Company. Subject to certain limitations contained in the credit
agreement dated December 19, 1994, as amended, between the Company, Banker's
Trust Company, as agent, and other institutions party thereto (the "Bank Credit
Agreement") and the indenture with respect to the Operating Company's $60.0
million aggregate principal amount of 14% Senior Subordinated Notes, due 2001
(the "Notes"), for each fiscal year of the Company, the Operating Company will
pay dividends to the Company sufficient to allow the Company to pay such
affiliates $400,000 per year plus up to an additional $1.6 million per year
conditioned upon the achievement of certain levels of operating income, and
reimbursement of reasonable out-of-pocket expenses. Subject to certain
conditions, such fee will be shared by the parties thereto in proportion to
their relative ownership interests in the Company. Pursuant to the Management
Consulting Services Agreement, the Principal Stockholders received $1.0 million
for the year ended June 30, 1997.
Certain directors of the Company will receive indirectly a portion of the
management fee as a result of their ownership interest in or other relationship
with the entities providing services to the Operating Company. Mr. Rehnert, a
director of the Company designated by the Bain Funds, is a Managing Director of
Bain Capital, Inc. Mr. Gorgi, a director of the Company also designated by the
Bain Funds, is the President of certain entities which own shares of Class A
Common Stock, directly or indirectly through general partnership interests. Mr.
Perry, Ms. Ho and Mr. Silberberg, directors of the Company designated by Perry
Partners, have an interest in Perry Investors, L.L.C. Assuming the relative
ownership interest among the Principal Stockholders remains unchanged, Bain, FGR
and Perry Investors, L.L.C. will be entitled to 23.33%, 11.67% and 65%,
respectively, of the fees to be paid by the Company under the Management
Consulting Services Agreement. The portion of such fee each of such directors
will receive, if any, is discretionary.
Stockholders' Agreement. Pursuant to the Stockholders' Agreement, dated
December 19, 1994, among the Company and the Principal Stockholders (the
"Stockholders' Agreement"), each of the Principal
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<PAGE> 15
Stockholders has agreed, among other things, (i) to vote its shares of Class A
Common Stock in order to elect and maintain a board of directors of the Company
and each of its subsidiaries (including the Operating Company), which consists
of six nominees of Perry Partners and the three nominees Bain Funds and, in the
case of the Operating Company, FTD Association, an Ohio non-profit corporation,
nominees as well, (ii) that certain actions taken by the Company, including (A)
amending the certificate of incorporation or by-laws of the Company, (B)
entering into acquisitions of assets or stock exceeding $4 million or any
merger, consolidation or sale of the Company and (C) declaring or paying
dividends to Stockholders, require the approval of two of the directors
nominated by Perry Partners and two of the directors nominated by the Bain Funds
and (iii) to certain restrictions on transferring its shares of Class A Common
Stock, including grants to the other Principal Stockholders of certain rights
with respect to the sale of its Class A Common Stock.
Norton Employment Arrangements. The Company and the Operating Company have
entered into employment arrangements with Mr. Norton to serve as President of
the Company and President and Chief Executive Officer of the Operating Company.
Although Mr. Norton does not have an employment agreement with the Company,
pursuant to the terms of letters from the Operating Company to Mr. Norton dated
October 17, 1996 and June 6, 1997 (collectively, the "Norton Employment
Arrangements"), Mr. Norton received an annual base salary of $275,000 plus an
annual bonus and salary increase based on performance criteria established by
the Board of Directors. Effective October 1, 1997, Mr. Norton's annual base
salary was increased to $300,000 pursuant to the terms of the Norton Employment
Arrangements. Mr. Norton's annual bonus is paid at the end of the first quarter
of the fiscal year based upon performance criteria met as of the end of the
immediately preceding fiscal year.
Pursuant to the Norton Employment Arrangements, Mr. Norton was granted
Non-Qualified Stock Options to purchase (i) 60,000 shares of Class A Common
Stock at an exercise price of $7.50 per share and (ii) 50,000 shares of Class A
Common Stock at an exercise price of $25.00 per share. Also, pursuant thereto,
Mr. Norton purchased 30,000 shares of Class A Common Stock at a price of $7.50
per share and the Company issued Mr. Norton 20,000 additional shares of Class A
Common Stock, which are subject to restrictions on transfer and forfeiture in
the event of termination of employment prior to the expiration of a specified
period of time.
The Norton Employment Arrangements provide that Mr. Norton shall be paid an
amount equal to twelve month's salary if his employment is terminated (other
than for cause) by the Operating Company at any time after October 28, 1997.
Levin Note. The Company loaned $150,000 to Mr. Levin pursuant to a
five-year, interest bearing recourse note dated June 30, 1997 (the "Levin
Note"), with accrued interest and principal due and payable at maturity. The
Levin Note bears interest at 7% per annum. At October 31, 1997, $153,530 in
principal and interest was outstanding under the Levin Note.
Key Management Incentive Plan. Mr. Davis and Mr. Levin are participants in
the Company's Key Management Incentive Plan which covers approximately 30 key
employees of the Company and provide bonuses in the event that (i) the Company
achieves one or more targets based on the Company's EBITDA (earnings before
interest, taxes, depreciation and amortization), and (ii) the individual
achieves specified goals.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE:
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the United States Securities and Exchange Commission
("SEC"). Executive officers, directors and greater than 10% stockholders are
required to furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such Forms it has received
and written representations from certain reporting persons that they were not
required to file Form 5 for specified fiscal years, the Company believes that
all of its executive officers, directors and greater than 10% stockholders
complied with all Section 16(a) filing requirements applicable to them during
the Company's fiscal year ended June 30, 1997.
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<PAGE> 16
APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to audit the
books and financial records of the Company for the year ending June 30, 1998.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting, will be available to respond to appropriate questions, and will be
afforded the opportunity to make a statement if they desire to do so.
ANNUAL REPORT/FORM 10-K
The Company's 1997 Annual Report to its stockholders is a reproduction of
its Form 10-K filed with the SEC, excluding the Index to Exhibits and any filed
exhibits, and is being mailed to all stockholders concurrently with this
Information Statement. Copies of the Company's Form 10-K (without exhibits) as
filed with the SEC may be obtained by writing to Attention: Secretary, FTD
Corporation, 3113 Woodcreek Drive, Dowers Grove, Illinois 60515.
STOCKHOLDERS PROPOSALS
To be considered for presentation at the annual meeting of the Company's
stockholders to be held in 1998, a stockholder proposal must be received by
Scott D. Levin, Secretary, FTD Corporation, 3113 Woodcreek Drive, Downers Grove,
Illinois 60515, no later than June 24, 1998.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
at the Meeting.
INCORPORATION BY REFERENCE
The Financial Statements contained in the Annual Report accompanying this
Information Statement are incorporated herein by reference.
By Order of the Board of
Directors,
ROBERT L. NORTON
President
Downers Grove, Illinois
October 22, 1997
14
