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, as amended.
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box: |_|
Preliminary proxy statement |_|
Definitive proxy statement |X|
Definitive additional materials |_|
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 |_|
1-800-FLOWERS.COM, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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):
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o 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:
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(4) Date Filed:
1-800-FLOWERS.COM, INC.
1600 Stewart Avenue
Westbury, New York 11590
Notice of Annual Meeting of Stockholders
December 4, 2001
The Annual Meeting of Stockholders (the "Annual Meeting") of
1-800-FLOWERS.COM, Inc. (the "Company") will be held at the Company's Bethpage
Fulfillment Center, which is located at 700 Hicksville Road, Bethpage, NY 11714
(the "Meeting Place"), on Tuesday, December 4, 2001 at 9:00 a.m. eastern
standard time or any adjournment thereof for the following purposes, as more
fully described in the Proxy Statement accompanying this notice:
(1) To elect two Directors to serve until the 2004 Annual Meeting or until
their respective successors shall have been duly elected and qualified;
(2) To ratify the selection of Ernst & Young LLP, independent public
accountants, as auditors of the Company for the fiscal year ending June 30,
2002; and
(3) To transact such other matters as may properly come before the Annual
Meeting.
Only stockholders of record at the close of business on October 12, 2001
will be entitled to notice of, and to vote at, the Annual Meeting. A list of
stockholders eligible to vote at the Annual Meeting will be available for
inspection at the Annual Meeting, and for a period of ten days prior to the
Annual Meeting, during regular business hours at the Meeting Place.
All stockholders are cordially invited to attend the Annual Meeting in
person. Whether or not you expect to attend the Annual Meeting, your proxy vote
is important. To assure your representation at the Annual Meeting, please sign
and date the enclosed proxy card and return it promptly in the enclosed
envelope, which requires no additional postage if mailed in the United States.
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.
By Order of the Board of Directors
/s/ Gerard M. Gallagher
Gerard M. Gallagher
Corporate Secretary
Westbury, New York
November 1, 2001
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD
BE COMPLETED AND RETURNED PROMPTLY
1-800-FLOWERS.COM, INC.
PROXY STATEMENT
November 1, 2001
This Proxy Statement is furnished to stockholders of record of
1-800-FLOWERS.COM, Inc. (the "Company") as of October 12, 2001 in connection
with the solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors" or the "Board") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") which will be held at the Company's Bethpage
Fulfillment Center, which is located at 700 Hicksville Road, Bethpage, NY 11714
(the "Meeting Place"), on Tuesday, December 4, 2001 at 9:00 a.m. eastern
standard time or any adjournment thereof.
Shares cannot be voted at the Annual Meeting unless the owner is present in
person or by proxy. All properly executed and unrevoked proxies in the
accompanying form that are received in time for the Annual Meeting will be voted
at the Annual Meeting or any adjournment thereof in accordance with instructions
thereon, or if no instructions are given, will be voted "FOR" the election of
the named nominees as Directors of the Company, and "FOR" the ratification of
Ernst & Young LLP, independent public accountants, as auditors of the Company
for the fiscal year ending June 30, 2002, and will be voted in accordance with
the discretion of the persons appointed as proxies with respect to other matters
which may properly come before the Annual Meeting. Any person giving a proxy may
revoke it by written notice to the Company at any time prior to the exercise of
the proxy. In addition, although mere attendance at the Annual Meeting will not
revoke the proxy, a stockholder who attends the Annual Meeting may withdraw his
or her proxy and vote in person. Abstentions and broker non-votes will be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business at the Annual Meeting. Abstentions will be counted in
tabulations of the votes cast on each of the proposals presented at the Annual
Meeting, whereas broker non-votes will not be counted for purposes of
determining whether a proposal has been approved.
The Annual Report of the Company (which does not form a part of the proxy
solicitation materials) is being distributed concurrently herewith to
stockholders.
The mailing address of the principal executive office of the Company is
1600 Stewart Avenue, Westbury, New York 11590. This Proxy Statement and the
accompanying form of proxy are being mailed to the stockholders of the Company
on November 1, 2001.
VOTING SECURITIES
The Company has two classes of voting securities issued and outstanding,
its Class A common stock, par value $0.01 per share (the "Class A Common
Stock"), and its Class B common stock, par value $0.01 per share (the "Class B
Common Stock", and with the Class A Common Stock, the "Common Stock"), which
generally vote together as a single class on all matters presented to the
stockholders for their vote or approval. At the Annual Meeting, each stockholder
of record at the close of business on October 12, 2001 of Class A Common Stock
will be entitled to one vote for each share of Class A Common Stock owned on
that date as to each matter presented at the Annual Meeting and each stockholder
of record at the close of business on October 12, 2001 of Class B Common Stock
will be entitled to ten votes for each share of Class B Common Stock owned on
that date as to each matter presented at the Annual Meeting. On October 12,
2001, 26,703,289 shares of Class A Common Stock and 37,661,665 shares of Class B
Common Stock were outstanding. A list of stockholders eligible to vote at the
Annual Meeting will be available for inspection at the Annual Meeting, and for a
period of ten days prior to the Annual Meeting, during regular business hours at
the Meeting Place.
PROPOSAL 1
ELECTION OF DIRECTORS
Unless otherwise directed, the persons appointed in the accompanying form
of proxy intend to vote at the Annual Meeting "FOR" the election of the nominees
named below as Class II Directors of the Company to serve until the 2004 Annual
Meeting or until their successors are duly elected and qualified. If any nominee
is unable to be a candidate when the election takes place, the shares
represented by valid proxies will be voted in favor of the remaining nominees.
The Board of Directors does not currently anticipate that any of the nominees
will be unable to be a candidate for election.
Pursuant to the Company's Third Amended and Restated Certificate of
Incorporation, the Board of Directors has been divided into three classes,
denominated Class I, Class II and Class III, with members of each class holding
office for staggered three-year terms or until their respective successors are
duly elected and qualified. The Board of Directors currently consists of eight
members, two of whom are Class II Directors whose terms expire at the Annual
Meeting. Each of such Class II Directors is a nominee for election. The Class II
Directors are Messrs. David M. Beirne and Charles R. Lax. Messrs. Jeffrey C.
Walker, Lawrence V. Calcano and Kevin J. O'Connor are Class I Directors whose
terms expire at the 2003 Annual Meeting. Messrs. James F. McCann, Christopher G.
McCann and T. Guy Minetti are Class III Directors whose terms expire at the 2002
Annual Meeting. At each Annual Meeting, the successors to the Directors whose
terms have expired are elected to serve from the time of their election and
qualification until the third Annual Meeting following the election or until a
successor has been duly elected and qualified. The Company's Third Amended and
Restated Certificate of Incorporation authorizes the removal of Directors under
certain circumstances.
The affirmative vote of a plurality of the Company's outstanding Common
Stock present in person or by proxy at the Annual Meeting is required to elect
the nominees for Directors.
Information Regarding Nominees for Election as Directors (Class II Directors)
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each of the two
nominees during the last five years has been furnished to the Company by such
nominee.
David M. Beirne, age 38, has been a Director of the Company since July
1999. Mr. Beirne is a Managing Member of Benchmark Capital Management Co. II,
L.L.C., a venture capital firm, since June 1997. Prior to joining Benchmark, Mr.
Beirne founded Ramsey/Beirne Associates, an executive search firm, and served as
its Chief Executive Officer from October 1987 to June 1997. Mr. Beirne also
serves as a director on the boards of ePhysician, Scient Corporation and 12
Entrepreneuring, Inc.
Charles R. Lax, age 42, has been a Director of the Company since July 1999.
Mr. Lax is a general partner of SOFTBANK Capital Partners, a firm he co-founded
in July 1999. Mr. Lax is also managing director of SOFTBANK Venture Capital,
which he co-founded in November 1997. Mr. Lax is also a director of SOFTBANK
Investment America Corporation. Mr. Lax founded GrandBanks Capital, a venture
capital partnership, sponsored by SOFTBANK Venture Capital in January 2001. He
is its Managing General Partner and its Chief Investment Officer. Prior to
joining SOFTBANK, Mr. Lax was previously a venture partner at VIMAC Partners
LLC, a venture capital firm specializing in investments in the information
technology and Internet-related industries, from June 1993 to July 1996. Mr. Lax
also serves on the public boards of Interliant, Inc., an Internet hosting and
services company and Webhire, Inc., a human resources staffing software company.
Mr. Lax also serves on the board of a number of private companies, currently
including Clearcross, Inc. and Coradiant, Inc.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF
MESSRS. DAVID M. BEIRNE AND CHARLES R. LAX AS CLASS II DIRECTORS
TO SERVE IN SUCH CAPACITY UNTIL THE 2004 ANNUAL MEETING.
Information Regarding Directors Who Are Not Nominees for Election at this Annual
Meeting
The following information with respect to the principal occupation or
employment, other affiliations and business experience during the last five
years of each Director who is not a nominee for election at this Annual Meeting
has been furnished to the Company by such Director.
James F. McCann, age 50, has served as the Company's Chairman of the Board
and Chief Executive Officer since inception. Mr. McCann has been in the floral
industry since 1976 when he opened his retail chain of flower shops in the New
York metropolitan area. Mr. McCann is a member of the board of directors of
Gateway, OfficeMax, Boyd's Bears and Very Special Arts, as well as the board of
Hofstra University and Winthrop-University Hospital. James F. McCann is the
brother of Christopher G. McCann, a Director and the President of the Company.
Christopher G. McCann, age 40, has been the Company's President since
September 2000 and prior to that was the Company's Senior Vice President. Mr.
McCann has been a Director of the Company since inception. Mr. McCann serves on
the board of directors of Neoware, Inc. and is a member of the Board of Trustees
of Marist College. Christopher G. McCann is the brother of James F. McCann, the
Chief Executive Officer and Chairman of the Board of the Company.
Jeffrey C. Walker, age 46, has been a Director of the Company since
February 1995. Mr. Walker has been Managing Partner of JPMorgan Partners, the
private equity group of JP Morgan Chase & Co., since 1988, and a General Partner
thereof since 1984. He is also a Vice Chairman of J.P. Morgan Chase & Co. Mr.
Walker is a director of iXL, Guitar Center, House of Blues and Doane PetCare as
well as several other private companies.
Kevin J. O'Connor, age 40, has been a Director of the Company since July
1999. Mr. O'Connor co-founded DoubleClick, Inc., an Internet advertising
network, and has served as the Chairman of the Board of Directors since its
inception in January 1996. From December 1995 until January 1996, Mr. O'Connor
served as Chief Executive Officer of Internet Advertising Network, an Internet
advertising company, which he founded. From September 1994 to December 1995, Mr.
O'Connor served as director of Research for Digital Communications Associates, a
data communications company (now Attachmate Corporation), and from April 1992 to
September 1994, as its Chief Technical Officer and Vice President, Research.
Lawrence V. Calcano, age 38, has been a Director of the Company since
August 1999. Mr. Calcano is a Managing Director and Co-Chief Operating Officer
of the High Technology Department at Goldman, Sachs & Co., a worldwide
investment banking firm. Prior to this appointment in July 1999, Mr. Calcano
managed the East Coast High Technology Group for Goldman from April 1993. Mr.
Calcano also serves on Goldman's Firmwide Technology Operating Committee as well
as the Investment Banking Division's Technology Committee.
T. Guy Minetti, age 50, has been a Director of the Company since December
1993 and became the Company's Vice Chairman of Corporate Development in
September 2000. Mr. Minetti serves as President of Bayberry Advisors, an
investment banking firm, which he founded in March 1989. In September 1993, Mr.
Minetti co-founded American Sports Products Group Inc., which is a holding
company that acquired nine niche sporting goods manufacturers. Mr. Minetti
currently serves as Vice Chairman for American Sports. Prior to forming
Bayberry, Mr. Minetti was a Managing Director at Kidder, Peabody & Company.
Committees of the Board
The Audit Committee of the Board of Directors reports to the Board
regarding the appointment of the Company's independent public accountants, the
scope and results of its annual audits, compliance with accounting and financial
policies and management's procedures and policies relative to the adequacy of
internal accounting controls. The Company's Board of Directors adopted a written
charter for the Audit Committee in January 2000, which outlines the
responsibilities of the Audit Committee. During the fiscal year ended July 1,
2001 ("Fiscal 2001"), the Audit Committee consisted of Messrs. Beirne, Lax
(Chairman) and O'Connor, who are all independent Directors of the Company as
defined by the rules and regulations of the Nasdaq National Market.
The Compensation Committee of the Board of Directors reviews and makes
recommendations to the Board regarding the Company's compensation policies and
all forms of compensation to be provided to the Company's executive officers and
Directors. In addition, the Compensation Committee administers the Company's
1999 Stock Incentive Plan under which option grants, stock appreciation rights,
restricted awards and performance awards may be made to Directors and executive
officers of the Company and its subsidiaries. The Board of Directors has
authorized a secondary committee of the Compensation Committee (the "Secondary
Committee"), which consists of Mr. James F. McCann, to also review stock
compensation options for all of the Company's employees, other than its
executive officers. The current members of the Compensation Committee are
Messrs. Walker (Chairman), Beirne and Lax, who are all independent Directors of
the Company.
Compensation Committee Interlocks and Insider Participation
No interlocking relationships exist between the Board of Directors or the
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past. No member of the Compensation Committee was an officer or employee of the
Company at any time during Fiscal 2001.
Attendance at Board and Committee Meetings
During Fiscal 2001, the Board of Directors held five meetings and acted by
unanimous written consent on five occasions. During Fiscal 2001, each Director
attended at least 75% of the meetings of the Board of Directors. The Audit
Committee held two meetings during Fiscal 2001 and did not act by unanimous
written consent. All members of the Audit Committee were present at such
meetings. The Compensation Committee, including its Secondary Committee, held
six meetings in Fiscal 2001 and acted by unanimous consent once. All members of
the Compensation Committee were present at such meetings.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and Directors, and persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission (the "Commission") and the Nasdaq Stock
Market. Officers, directors, and greater than 10% stockholders are required by
Commission regulations to furnish us with copies of all reports they file
pursuant to Section 16(a).
Based solely on a review of the copies of such reports furnished to us, we
believe that, since the Company's initial public offering, all Section 16(a)
filing requirements applicable to our officers, Directors and greater than 10%
stockholders have been satisfied.
Compensation of Directors
Directors currently do not receive a stated salary from the Company for
their service as members of the Board of Directors, although by resolution of
the Board they may receive a fixed sum and reimbursement for expenses in
connection with their attendance at Board and committee meetings. The Company
currently does not provide additional compensation for committee participation
or special assignments of the Board of Directors.
In December 2000, the Company granted to each of Messrs. Beirne, Calcano,
Lax, O'Connor and Walker, options to purchase 25,000 shares of Class A Common
Stock at an exercise price equal to $3.65 per share; these options vested
immediately. In addition, in December 2000, the Company granted Mr. Minetti
options for 333,700 shares of Class A Common Stock at an exercise price of
$3.65, of which 300,000 vests equally over a three year period, and the balance
vests equally over a five year period, measured from December 6, 2000.
Each individual who first becomes a non-employee member of the Board of
Directors will automatically receive an option grant for 10,000 fully vested
shares of Class A Common Stock on the date such individual joins the Board. In
addition, on the date of each Annual Meeting, each non-employee Board member who
is to continue to serve as a non-employee Board member will automatically be
granted a fully vested option to purchase 5,000 shares of Class A Common Stock,
if such individual has served on the Board for at least six months.
Compensation information on James F. McCann, Christopher G. McCann and T.
Guy Minetti, who are Directors, as well as executive officers of the Company, is
contained under the section titled "Executive Compensation and Other
Information."
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following individuals were serving as executive officers of the Company and
certain of its subsidiaries on October 12, 2001:
Name Age Position with the Company
---- --- -------------------------
James F. McCann ....................... 50 Chairman of the Board and Chief Executive Officer
Christopher G. McCann.................. 40 Director and President
T. Guy Minetti......................... 50 Director and Vice Chairman of Corporate Development
Peter G. Rice.......................... 56 President of The Plow & Hearth, Inc.
William E. Shea........................ 42 Senior Vice President of Finance and Administration, Treasurer,
Chief Financial Officer
Gerard M. Gallagher.................... 48 Senior Vice President, General Counsel, Corporate Secretary
Thomas G. Hartnett..................... 38 Senior Vice President of Retail and Fulfillment
Vincent J. McVeigh..................... 41 Senior Vice President
Enzo J. Micali......................... 42 Senior Vice President of Information Technology
Pamela Knox............................ 43 Senior Vice President of Marketing
Information Concerning Executive Officers Who Are Not Directors
Peter G. Rice, President of The Plow & Hearth, Inc., was co-founder of The
Plow & Hearth, Inc. and served as its President and Chairman of the Board since
its inception in November 1980. Mr. Rice was founder of Blue Ridge Mountain
Sports, a chain of retail backpacking/outdoor stores, and co-founder of Phoenix
Products, a manufacturer of kayaks. He is a member of the Catalog Advisory
Committee of the Direct Marketing Association and a past director of the New
England Mail Order Association and of the U.S. Senate Productivity and Quality
Award Board for Virginia.
William E. Shea has been our Senior Vice President of Finance and
Administration and Chief Financial Officer since September 2000. Before holding
his current position, Mr. Shea was our Vice President of Finance and Corporate
Controller after joining us in April 1996. From 1980 until joining us, Mr. Shea
was a certified public accountant with Ernst & Young LLP.
Gerard M. Gallagher has been our Senior Vice President, General Counsel and
Corporate Secretary since August 1999 and has been providing legal services to
the Company since its inception. Mr. Gallagher is the founder and a managing
partner in the law firm Gallagher, Walker, Bianco and Plastaras, based in
Mineola, New York, specializing in corporate, litigation and intellectual
property matters since 1993. Mr. Gallagher is duly admitted to practice before
the New York State Courts and the United States District Courts of both the
Eastern District and Southern District of New York.
Thomas G. Hartnett has been our Senior Vice President of Retail and
Fulfillment since September 2000. Before holding this position, Mr. Hartnett
held various positions within the Company since joining the Company in 1991,
including Controller, Director of Store Operations, Vice President of Retail
Operations and most recently as Vice President of Strategic Development.
Vincent J. McVeigh has been our Senior Vice President since October 2000.
Before holding this position, Mr. McVeigh held various positions within the
Company since joining the Company in 1991, including Bloomnet Manager, Director
of Call Center Operations and, most recently, as Vice President of
Merchandising.
Pamela Knox has been our Senior Vice President of Marketing since October
2000. Prior to joining the Company, Ms. Knox served as Vice President of the
Marketing Delivery Group of Citigroup Inc. since March 1997. Prior to Citigroup
Inc., formerly Citibank, Ms. Knox held several Marketing Director positions with
SBC Communications Inc., formerly Ameritech, since March 1995.
Enzo J. Micali has been our Senior Vice President of Information Technology
and Chief Technology Officer since December 2000. Prior to joining the Company,
Mr. Micali served as Chief Technology Officer for InsLogic. Prior to joining
InsLogic, Mr. Micali spent 12 years in various technology management positions
with J.P. Morgan Chase & Co., formerly Chase Manhattan Bank.
Summary Compensation Table
The following table sets forth the annual and long-term compensation paid
by the Company during Fiscal 2001 and the fiscal years ended July 2, 2000 and
June 27, 1999 ("Fiscal 2000" and "Fiscal 1999") to the Company's Chief Executive
Officer and the four highest compensated other executive officers of the Company
whose total compensation during Fiscal 2001 exceeded $100,000 (collectively, the
"Named Executive Officers"):
Long-Term
Annual Compensation Compensation
--------------------------------------- ------------
Securities
Other Annual Underlying All Other
Fiscal Salary Bonus Compensation Options Compensation
Name and Principal Position Year ($) ($) ($)(1) (#)(2) ($)
--------------------------- ------ ---------- ----------- ------------- ------------- ------------
James F. McCann................... 2001 $1,000,000 $170,000 - - -
Chief Executive Officer 2000 $1,000,000 $196,000 - 80,000 -
1999 $1,230,000 - - - -
Christopher G. McCann............. 2001 $ 330,220 $ 89,000 - 433,700 -
President 2000 $ 250,000 $ 86,000 - 451,000 -
1999 $ 217,000 $ 36,000 - 353,000 -
T. Guy Minetti.................... 2001 $ 291,000 $ 77,000 - 333,700 -
Vice Chairman (3) 2000 $ 189,000 $ 74,000 - 123,000 -
1999 - - -
Peter G. Rice..................... 2001 $ 233,000 $ 52,000 - 122,550 -
President of The Plow & Hearth, 2000 $ 211,000 $ 65,000 - 169,000 -
Inc. 1999 $ 200,000 $ 26,000 - - -
Gerard M. Gallagher............... 2001 $ 282,000 $ 70,000 - 110,900 -
Senior Vice President, General 2000 $ 188,000 $ 74,000 - 148,000 -
Counsel, Secretary (4) 1999 - - - -
---------------
(1) Other compensation in the form of perquisites and other personal benefits
has been omitted as the aggregate amount of such perquisites and other
personal benefits constituted the lesser of $50,000 or 10% of the total
annual salary and bonus for the executive officer for such year.
(2) The Company did not grant any stock appreciation rights or make any
long-term incentive plan payments to any Named Executive Officers in Fiscal
2001, Fiscal 2000 or Fiscal 1999.
(3) Of the amount listed in the summary compensation table for Mr. Minetti as
compensation paid, the Company paid all of Fiscal 2000, and $50,000 of Mr.
Minetti's Fiscal 2001 compensation to Bayberry Advisors, Inc. ("Bayberry")
More information regarding Mr. Minetti's affiliation with Bayberry may be
found under the section titled "Related Party Transactions".
(4) The compensation listed in the summary compensation table for Mr. Gallagher
for Fiscal 2000 and Fiscal 2001 was paid by the Company to the law firm of
Gallagher, Walker, Bianco and Plastaras. More information regarding Mr.
Gallagher's affiliation with Gallagher, Walker, Bianco and Plastaras may be
found under the section titled "Related Party Transactions".
Option Grants in Last Fiscal Year
The following table provides information with respect to the stock option
grants made during Fiscal 2001 to the Named Executive Officers. No stock
appreciation rights were granted during Fiscal 2001.
Potential Realizable
% of Total Value at Assumed Rates
Number of Options of Stock Price
Securities Granted to Exercise Appreciation for
Underlying Employees Price Option Term (4)
Options in Fiscal ($/Share) Expiration
Name Granted (1) 2001 (2) (3) Date 5% 10%
------------------------------ ----------- ----------- ---------- ----------- ----------- -----------
James F. McCann............... - - - - - -
Christopher G. McCann......... 433,700 20.2% $3.65 12/6/10 $995,394 $2,522,835
T. Guy Minetti................ 333,700 15.6% $3.65 12/6/10 $765,882 $1,941,135
Peter G. Rice................. 122,550 5.7% $3.65 12/6/10 $281,267 $ 712,874
Gerard M. Gallagher........... 110,900 5.2% $3.65 12/6/10 $254,529 $ 645,106
(1) The options listed in the table, except for 300,000 of Mr. Minetti's
options, become exercisable at a rate of 20% upon the completion of the
first year of service and 20% at the completion of each year of service
thereafter. In regard to 300,000 of Mr. Minetti's options, such options
become exercisable with respect to one third (33%) of the option shares
upon Mr. Minetti's completion of each year of service over a three (3) year
period measured from December 6, 2000. Each option has a maximum term of
ten years, subject to earlier termination in the event of the optionee's
cessation of employment with the Company pursuant to the terms of the
Company's 1999 Stock Incentive Plan.
(2) Based on an aggregate of 2,143,925 options granted in Fiscal 2001.
(3) The exercise price may be paid in cash, by surrendering shares owned by the
optionee for a sufficient period of time or through a cashless exercise
procedure.
(4) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance provided to any executive officer or any other holder of
the Company's securities that the actual stock price appreciation over the
10-year option term will be at the assumed 5% and 10% levels. Unless the
market price of the Common Stock appreciates over the option term, no value
will be realized from the option grants made to the executive officers.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth the number of options exercised during
Fiscal 2001 and the number and value of unexercised options held by each of the
named executive officers at July 1, 2001.
Shares Value Number of Securities Underlying
Acquired on Realized Unexercised Options at Fiscal Value of Unexercised In-The-Money
Exercise (#) ($)(1) Year-End (#) Options at Fiscal Year End ($)(2)
------------ -------- ----------- ------------- -------------- --------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- -------------- --------------
James F. McCann............ - - 16,000 64,000 $ 28,353 $ 113,410
Christopher G. McCann...... - - 876,200 784,500 $10,738,514 $6,767,399
T. Guy Minetti............. - - 84,600 392,100 $ 389,502 $4,264,911
Peter G. Rice.............. 15,000 $53,000 35,300 256,250 $ 250,134 $2,371,871
Gerard M. Gallagher........ - - 89,600 189,300 $ 441,202 $1,978,579
---------------------------
(1) Amounts calculated by subtracting the exercise price of the options from
the market value of the underlying Class A Common Stock using the closing
selling price as reported on the Nasdaq National Market on the date of
exercise of these options.
(2) Amounts calculated by subtracting the exercise price of the options from
the market value of the underlying Class A Common Stock using the closing
selling price of $14.84 as reported on the Nasdaq National Market for the
last trading day of Fiscal 2001.
Employment Agreements
Mr. James F. McCann's employment agreement became effective as of July 1,
1999. The agreement provides for a five year term, and on each anniversary of
the agreement, the term is extended for one additional year. Mr. McCann is
eligible to participate in the Company's management incentive plan, other bonus
or benefits plans, stock option plan, and is entitled to health and life
insurance coverage for himself and his dependents. The agreement provides for an
annual base salary with provisions allowing for annual increases. Mr. McCann's
annual salary for Fiscal 2001 was $1,000,000. Upon termination without good
cause or resignation for good reason, including a change of control, Mr. McCann
is entitled to severance pay in the amount of $2,500,000, plus the base salary
otherwise payable to him for the balance of the then current employment term and
any base salary, bonuses, vacation and unreimbursed expenses accrued but unpaid
as of the termination date, and health and life insurance coverage for himself
and his dependents for the balance of the then current employment term. Upon
termination due to death, or for good cause or a voluntary resignation, Mr.
McCann is not entitled to any compensation from the Company, except for the
payment of any base salary, bonuses, benefits or unreimbursed expenses accrued
but unpaid as of the date of termination.
Mr. Christopher G. McCann's employment agreement became effective as of
July 1, 1999. The agreement provides for a five year term, and on each
anniversary of the agreement, the term is extended for one additional year. Mr.
McCann is eligible to participate in the Company's management incentive plan,
other bonus or benefits plans, stock option plan, and is entitled to health and
life insurance coverage for himself and his dependents. The agreement provides
for an annual base salary with provisions allowing for annual increases. Mr.
McCann's annual salary for Fiscal 2001 was $330,220. Upon termination without
good cause or resignation for good reason, including a change of control, Mr.
McCann is entitled to severance pay in the amount of $500,000, plus the base
salary otherwise payable to him for the balance of the then current employment
term and any base salary, bonuses, vacation and unreimbursed expenses accrued
but unpaid as of the termination date, and health and life insurance coverage
for himself and his dependents for the balance of the then current employment
term. Upon termination due to death, or for good cause, or a voluntary
resignation, Mr. McCann is not entitled to any compensation from the Company,
except for the payment of any base salary, bonuses, benefits or unreimbursed
expenses accrued but unpaid as of the date of such termination.
Mr. Peter G. Rice's employment agreement with The Plow & Hearth, Inc.
became effective as of April 3, 1998 and has been automatically renewed through
April 3, 2002. The agreement contains automatic one-year renewals unless prior
notice of termination is given. Mr. Rice's annual salary for Fiscal 2001 was
$233,000 and he was eligible to participate in the Company's management
incentive plan. Upon termination without cause, Mr. Rice is entitled to an
amount equal to his salary through the end of the agreement, any amounts earned,
accrued or owing but not yet paid as of the date of the termination and other
benefits, if any, as are payable to or for the benefit of Mr. Rice as of the
date of his termination until the end of the agreement.
Under their employment agreements, Messrs. James F. McCann and Christopher
G. McCann are each restricted from participating in a competitive floral
products business for a period of one year after a voluntary resignation or
termination for good cause. Mr. Rice has agreed not to compete with the Company
or solicit its clients or employees during his term of employment and for two
years immediately following his termination. Each of these executives is also
bound by confidentiality provisions, which prohibit the executive from, among
other things, disseminating or using confidential information about the
Company's clients in any way that would be adverse to the Company.
COMPENSATION COMMITTEE REPORT
The Compensation Committee advises the Board of Directors on issues
concerning the Company's compensation philosophy, and the compensation of
executive officers and other individuals compensated by the Company. The
Compensation Committee is responsible for the administration of the Company's
1999 Stock Incentive Plan under which option grants, stock appreciation rights,
restricted awards and performance awards may be made to Directors, executive
officers and employees of the Company and its subsidiaries. The Board of
Directors has authorized a secondary committee of the Compensation Committee to
also review stock compensation options for all of the Company's employees other
than its executive officers.
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 fundamental policy of the Compensation
Committee is to advise the Board of Directors on information which will aid the
Board of Directors in providing the Company's executive officers with
competitive compensation opportunities based upon their contribution to the
development and financial success of the Company and their personal performance.
It is the Compensation Committee's philosophy to advise the Board of Directors
that a portion of each executive officer's compensation should be contingent
upon the Company's performance as well as upon such executive officer's own
level of performance. Accordingly, the compensation package for each executive
officer should be comprised of two elements: (i) base salary and bonus which
reflects experience and individual and Company performance and is designed to be
competitive with salary levels in the industry, and (ii) long-term stock-based
incentive awards which strengthen the mutuality of interests between the
executive officers and the Company's stockholders.
Factors. The principal factors which the Compensation Committee considers
in reviewing the components of each executive officer's compensation package are
summarized below. The Compensation Committee may, however, in its discretion
apply entirely different factors in advising the Board of Directors with respect
to executive compensation for future years.
o Base Salary. The suggested base salary for each executive officer is
determined on the basis of the following factors: experience, personal
performance, the salary levels in effect for comparable positions within and
without the industry and internal base salary comparability considerations. The
weight given to each of these factors shall differ from individual to individual
as the Compensation Committee deems appropriate and subject to any applicable
employment agreements.
o Bonus. The bonus for Messrs. James F. McCann, Christopher G. McCann, T.
Guy Minetti, Gerard M. Gallagher, and William E. Shea is determined by the
Company's financial performance. For other executive officers, consideration is
also given to performance of the specific areas of the Company under the
executive officer's direct control. This balance supports the accomplishment of
the Company's overall financial objectives and rewards the individual
contributions of our executive officers.
o Long-Term Incentive Compensation. Long-term incentives are provided
primarily through grants of stock options. The grants are designed to align the
interests of each 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 Company. Each option grant
allows the individual to acquire shares of the Company's Common Stock at a fixed
price per share over a specified period of time. Each option generally becomes
exercisable in installments over a fixed period, contingent upon the executive
officer's continued employment with the Company. Accordingly, the option grant
will provide a return to the executive officer only if the executive officer
remains employed by the Company during the vesting period, and then only if the
market price of the underlying shares appreciates.
The number of shares subject to each option grant is set at a level
intended to create a meaningful opportunity for stock ownership based on the
executive officer's current position with the Company, the base salary
associated with that position, the size of comparable awards made to individuals
in similar positions within the industry, the individual's potential for
increased responsibility and promotion over the option term and the individual's
personal performance in recent periods. The Compensation Committee also intends
to consider the number of unvested options held by the executive officer in
order to maintain an appropriate level of equity incentive for that individual.
However, the Compensation Committee has not and will not adhere to any specific
guidelines as to the relative option holdings of the Company's executive
officers.
CEO Compensation. In July 1999, the Board of Directors approved the
Employment Agreement between the Company and James F. McCann, its Chairman of
the Board and Chief Executive Officer, which initially provided for an annual
salary of $1,000,000 and eligibility to participate in the Company's management
incentive plan, or other bonus or benefits plans, stock option plan, and which
is discussed in further detail under "Employment Agreements". The Board
determined it to be in the best interests of the Company to enter into the
Employment Agreement with Mr. McCann as of such date and believes that the
agreement with Mr. McCann and the compensation paid thereunder for Fiscal 2001
was fair and reasonable. In determining the total compensation for Mr. McCann,
and that such compensation was fair and reasonable in Fiscal 2001, a number of
factors were taken into account. These factors included: the key role Mr. McCann
has performed with the Company from its inception; the benefit to the Company in
assuring the retention of his services; the performance of the Company compared
to its budgeted performance during Fiscal 2001; the competitive market
conditions for executive compensation; and the objective evaluation of Mr.
McCann's performance of his duties as Chairman of the Board and Chief Executive
Officer.
Compliance with Internal Revenue Code Section 162(m). As a result of
Section 162(m) of the Internal Revenue Code of 1986 ("Section 162(m)"), as
amended, which was enacted into law in 1993, the Company will not be allowed a
federal income tax deduction for compensation paid to certain executive
officers, to the extent that compensation exceeds $1 million per officer in any
one year. This limitation will apply to all compensation paid to the covered
executive officers which is not considered to be performance based. Compensation
which does qualify as performance-based compensation will not have to be taken
into account for purposes of this limitation. The 1999 Stock Incentive Plan
contains certain provisions which are intended to ensure that any compensation
deemed paid in connection with the exercise of stock options granted under that
plan with an exercise price equal to the market price of the option shares on
the grant date will qualify as performance-based compensation.
The Compensation Committee does not expect that the non-performance based
compensation to be paid to any of the Company's executive officers for Fiscal
2002 will be subject to the deduction limitations of Section 162(m). Further, in
accordance with issued Treasury Regulations relating to the $1 million
limitation, the Committee may in the future determine to restructure one or more
components of the compensation paid to the executive officers so as to qualify
those components as performance-based compensation that will not be subject to
the $1 million limitation.
THE COMPENSATION COMMITTEE
Jeffrey C. Walker, Chairman
David M. Beirne
Charles R. Lax
AUDIT COMMITTEE REPORT
September 6, 2001
To the Board of Directors
of 1-800-flowers.com, Inc. (the "Company"):
Our Audit Committee has reviewed and discussed the audited financials of the
Company for the year ended July 1, 2001 (the "Audited Financial Statements"). In
addition, we have discussed with Ernst & Young LLP, the independent auditing
firm for the Company, the matters required by Codification of Statements on
Auditing Standards No. 61.
The Committee also has received the written disclosures and the letter from
Ernst & Young LLP required by Independence Standards Board Standard No. 1 and we
have discussed with that firm its independence from the Company. We also have
discussed with management of the Company and the auditing firm such other
matters and reviewed such assurances from them as we deemed appropriate.
Based on the foregoing review and discussions and relying thereon, we have
recommended to the Company's Board of Directors the inclusion of the Audited
Financial Statements in the Company's Annual Report for the year ended July 1,
2001 on Form 10-K.
THE AUDIT COMMITTEE
Charles R. Lax, Chairman
David M. Beirne
Kevin J. O'Connor
---------------
1 This report is not deemed to be "soliciting material" or deemed to be
filed with the Securities and Exchange Commission or subject to
Regulation 14A of the 1934 Act, except to the extent specifically
requested by the Company or incorporated in documents otherwise filed.
Stock Performance Graph
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's common stock during the period from the
Company's initial public offering in August 3, 1999, through July 1, 2001, with
the cumulative total returns of the Russell 2000 and Nasdaq Non-Financial
indices. The comparison assumes $100 was invested on the close of business of
August 3, 1999 in each of the foregoing indices, and assumes dividends, if any
were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Cumulative Total Return
-----------------------------
8/3/99 6/00 6/01
1-800-FLOWERS.COM, INC. 100.00 28.18 81.59
RUSSELL 2000 100.00 119.83 120.51
NASDAQ NON-FINANCIAL 100.00 159.92 81.50
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to beneficial ownership
of the Company's Class A Common Stock and Class B Common Stock, as of October
12, 2001, for (i) each person known by the Company to beneficially own more than
5% of each class; (ii) each Director; (iii) each Named Executive Officer; and
(iv) all of the Company's executive officers and Directors as a group.
Information provided regarding Named Executive Officers no longer employed by
the Company is based on the Company's best knowledge of the ownership of each of
such individuals on October 12, 2001. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and includes
voting or investment power with respect to the securities. Unless otherwise
indicated, the address for those listed below is c/o 1-800-FLOWERS.COM, Inc.,
1600 Stewart Avenue, Westbury, New York 11590. Except as indicated by footnote,
and subject to applicable community property laws, the persons named in the
table have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them. The number of shares of common stock
outstanding used in calculating the percentage for each listed person includes
the shares of common stock underlying options held by such persons that are
exercisable within 60 days of October 12, 2001, but excludes shares of common
stock underlying options held by any other person. Percentage of beneficial
ownership is based on 26,703,289 shares of Class A Common Stock and 37,661,665
shares of Class B Common Stock outstanding as of October 12, 2001.
Shares % of Shares
Beneficially Owned Beneficially Owned
------------------ ------------------
Name of Beneficial Owner A Shares B Shares A Shares B Shares
------------------------ -------- -------- -------- --------
James F. McCann(1)......................... 32,000 36,605,105 0.1% 97.2%
Christopher G. McCann(2)................... 292,040 3,689,140 1.1% 9.6%
T. Guy Minetti(3).......................... 183,240 20,000 0.7% 0.1%
Peter G. Rice (4).......................... 88,179 - 0.3% -
Gerard M. Gallagher(5)..................... 107,430 20,000 0.4% 0.1%
Jeffrey C. Walker(6)....................... 3,986,589 - 14.9% -
David M. Beirne(7)......................... 5,424,080 - 20.3% -
Charles R. Lax(8).......................... 3,861,560 - 14.4% -
Kevin J. O'Connor(9)....................... 98,500 - 0.4% -
Lawrence V. Calcano(10).................... 40,000 - 0.1% -
J.P. Morgan Partners (SBIC), LLC (11)...... 3,986,589 - 14.9% -
Benchmark Capital Partners(12)............. 5,424,080 - 20.3% -
SOFTBANK America Inc.(13).................. 3,861,560 - 14.4% -
All directors and executive officers as a
group (15 persons)(14).................. 14,290,378 38,334,245 51.9% 99.5%
---------------
* Indicates less than 1%.
(1) Includes (a) 16,000 shares of Class A Common Stock issuable upon the
exercise of options which vest within 60 days and 16,000 shares of Class A
Common Stock issuable upon the exercise of currently exercisable stock
options, and (b) 5,875,000 shares of Class B Common Stock held by limited
partnerships, of which Mr. McCann is a limited partner and does not
exercise control and of which he disclaims beneficial ownership.
(2) Includes (a) 91,840 shares of Class A Common Stock issuable upon the
exercise of options which vest within 60 days and 200,200 shares of Class A
Common Stock issuable upon the exercise of currently exercisable stock
options, (b) 2,000,000 shares of Class B Common Stock held by a limited
partnership, of which Mr. McCann is a general partner and exercises control
and (c) 776,000 shares of Class B Common Stock issuable upon the exercise
of currently exercisable stock options.
(3) Includes (a) 109,040 shares of Class A Common Stock issuable upon the
exercise of options which vest within 60 days and 64,600 shares of Class A
Common Stock issuable upon the exercise of currently exercisable stock
options, and (b) 20,000 shares of Class B Common Stock issuable upon the
exercise of currently exercisable stock options.
(4) Includes (a) 3,874 shares of Class A Common Stock held by Mr. Rice's wife,
of which he disclaims beneficial ownership, (b) 25,790 shares of Class A
Common Stock issuable upon the exercise of options which vest within 60
days and 42,800 shares of Class A Common Stock issuable upon the exercise
of currently exercisable stock options, and (c) 335 shares of Class A
Common Stock issuable upon the exercise of options held by Mr. Rice's wife
which vest within 60 days, of which he disclaims beneficial ownership and
2,980 shares of Class A Common Stock issuable upon the exercise of
currently exercisable stock options of which he disclaims beneficial
ownership. Mr. Rice's address is c/o The Plow & Hearth, Inc., State Road
230 West, Madison, VA 22727.
(5) Includes (a) 24,480 shares of Class A Common Stock issuable upon the
exercise of options which vest within 60 days and 69,600 shares of Class A
Common Stock issuable upon the exercise of currently exercisable stock
options, and (b) 20,000 shares of Class B Common Stock issuable upon the
exercise of currently exercisable stock options.
(6) The general partner of J.P. Morgan Partners (SBIC), LLC is J.P. Morgan
Partners (BHCA), L.P. Mr. Walker disclaims beneficial ownership of all
shares owned by J.P. Morgan Partners (SBIC), LLC. Mr. Walker's address is
c/o J.P. Morgan Partners (SBIC), LLC, 1221 Avenue of the Americas, 40th
Floor, New York, New York 10020. Includes 25,000 shares of Class A Common
Stock issuable to Mr. Walker, for his services as a Director of the
Company, upon the exercise of currently exercisable stock options because
of Mr. Walker's affiliation with J.P. Morgan Partners (SBIC), LLC.
(7) Mr. Beirne disclaims beneficial ownership of all shares owned by the
Benchmark entities. Mr. Beirne's address is c/o Benchmark Capital Partners,
2480 Sand Hill Road, Suite 200, Menlo Park, California 94025. Includes
25,000 shares of Class A Common Stock issuable to Mr. Beirne, for his
services as a Director of the Company, upon the exercise of currently
exercisable stock options because of Mr. Beirne's affiliation with the
Benchmark entities.
(8) Mr. Lax disclaims beneficial ownership of all shares owned by Softbank. Mr.
Lax's address is c/o Softbank America Inc., 10 Langley Road, Suite 202,
Newton Center, Massachusetts 02459. Includes 25,000 shares of Class A
Common Stock issuable to Mr. Lax, for his services as a Director of the
Company, upon the exercise of currently exercisable stock options because
of Mr. Lax's affiliation with Softbank.
(9) Includes 35,000 shares of Class A Common Stock issuable upon the exercise
of currently exercisable stock options. Mr. O'Connor's address is c/o
DoubleClick, Inc., 41 Madison Ave., 32nd Floor, New York, New York, 10010.
(10) Includes 35,000 shares of Class A Common Stock issuable upon the exercise
of currently exercisable stock options. Mr. Calcano's address is c/o
Goldman Sachs & Co., 85 Broad Street, New York, New York 10004.
(11) The address of J.P. Morgan Partners (SBIC), LLC is 1221 Avenue of the
Americas, 40th Floor, New York, New York 10020.
(12) Consists of (a) 694,574 shares of Class A Common Stock owned by Benchmark
Capital Partners II, L.P., (b) 1,855,742 shares of Class A Common Stock
owned by Benchmark Capital Partners III, L.P., and (c) 2,848,764 shares of
Class A Common Stock owned by Benchmark Investors III, L.P. Benchmark
Capital Management Co. II, L.L.C. is the general partner of Benchmark
Capital Partners II, L.P. and directs its investment decisions, and
Benchmark Capital Management Co. III, L.L.C. is the general partner of
Benchmark Capital Partners III, L.P. and Benchmark Investors III, L.P. and
controls their investment decision. Both Benchmark Capital Management Co.
II and Benchmark Capital Management Co. III are controlled by David M.
Beirne, Bruce W. Dunlevie, J. William Gurley, Kevin R. Harvey, Robert C.
Kagel, Andrew S. Rachleff and Steven M. Spurlock. The address of the
Benchmark entities is 2480 Sand Hill Road, Suite 200, Menlo Park,
California 94025. Includes 25,000 shares of Class A Common Stock issuable
to Mr. Beirne, for his services as a Director of the Company, upon the
exercise of currently exercisable stock options because of Mr. Beirne's
affiliation with the Benchmark entities.
(13) SOFTBANK America Inc. is an indirect wholly-owned subsidiary of SOFTBANK
Corp. Approximately 43.3% of the outstanding common stock of SOFTBANK Corp.
is owned by Masayoshi Son. SOFTBANK's address is 10 Langley Road, Suite
202, Newton Center, Massachusetts 02459. Includes 25,000 shares of Class A
Common Stock issuable to Mr. Lax, for his services as a Director of the
Company, upon the exercise of currently exercisable stock options because
of Mr. Lax's affiliation with Softbank.
(14) Includes (a) 326,845 shares of Class A Common Stock issuable upon exercise
of a currently exercisable stock options and options which vest within 60
days, and 650,180 shares of Class A Common Stock issuable upon the exercise
of currently exercisable stock options, and (b) 868,825 shares of Class B
Common Stock issuable upon the exercise of currently exercisable stock
options and options which vest within 60 days.
RELATED PARTY TRANSACTIONS
Certain Business Relationships with Directors and officers
The Company terminated as of September 13, 2000 an agreement with Bayberry
Advisors, Inc., under which Bayberry provided consulting and advisory services.
These consulting and advisory services included advice on capital raising,
business expansion and acquisitions, product line expansion, and on our business
plan in general. T. Guy Minetti, one of the Company's Directors, serves as
Bayberry's President and owns 70% of its outstanding stock, and James F. McCann,
the Company's Chairman of the Board and Chief Executive Officer, owns 30% of its
outstanding stock. Bayberry was paid $50,000, inclusive of expenses, for these
services for Fiscal 2001.
The Company pays Gallagher, Walker, Bianco and Plastaras, a law firm in
which our Senior Vice President and General Counsel, Gerard M. Gallagher, is a
partner, a fee for Mr. Gallagher's services to the Company. The Company, with
the approval of the Board, also pays Gallagher, Walker fees for services
rendered by other members of the firm on the Company's behalf. The fees paid in
Fiscal 2001 by the Company to the firm for services provided by Mr. Gallagher
are set forth under the section titled "Summary Compensation Table" and for
legal services provided by other members of the firm in the sum of $352,276,
inclusive of disbursements; which fees the Company believes are fair and
reasonable.
The Company maintains life insurance for each of its executive officers,
except Mr. Gallagher, in the amount of $50,000 and also maintains a directors'
and officers' insurance policy.
General
The Company has a policy providing that all material transactions between
it and its officers, Directors and other affiliates must be on fair terms and be
approved by either a majority of the disinterested members of the Board or the
stockholders.
PROPOSAL 2
----------
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
appointed Ernst & Young LLP, independent public accountants and auditors of the
Company since 1993, as auditors of the Company to serve for the year ending June
30, 2002 (the "Fiscal 2002"), subject to the ratification of such appointment by
the stockholders at the Annual Meeting. The aggregate fees for professional
services rendered for (i) the audit of the Company's annual financial statements
set forth in the Company's Annual Report on Form 10-K for the fiscal year ended
July 1, 2001, and (ii) the review of the Company's quarterly financial
statements set forth in the Company's Quarterly Report on Form 10-Q were
approximately $159,000. The aggregate fees for services other than those
described above for the fiscal year ended July 1, 2001 were approximately
$124,000. The affirmative vote of a plurality of the Company's outstanding
Common Stock present in person or by proxy is required to ratify the appointment
of the auditors. Unless otherwise instructed, the proxy holders will vote the
proxies received by them "FOR" the ratification of Ernst & Young LLP to serve as
the Company's auditors for Fiscal 2002. A representative of Ernst & Young LLP
will attend the Annual Meeting with the opportunity to make a statement if he or
she so desires and will also be available to answer inquiries.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION
AND APPROVAL OF THE SELECTION OF ERNST & YOUNG LLP TO SERVE AS
THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL 2002.
OTHER MATTERS
Management knows of no matters that are to be presented for action at the
meeting other than those set forth above. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy will vote
the shares represented by proxies in their discretion on such matters.
Proxies will be solicited by mail and may also be solicited in person or by
telephone by some regular employees of the Company. The Company may also
consider the engagement of a proxy solicitation firm. Costs of the solicitation
will be borne by the Company.
STOCKHOLDER PROPOSALS
In accordance with regulations issued by the Securities and Exchange
Commission by certified mail-return receipt requested, stockholder proposals
intended for presentation at the 2002 Annual Meeting of Stockholders must be
delivered to the Secretary of the Company at the principal executive office of
the Company by July 3, 2002 if such proposals are to be considered for inclusion
in the Company's Proxy Statement for the 2002 Annual Meeting of Stockholders. If
a stockholder desires to bring business before an annual meeting which is not
the subject of a proposal timely submitted for inclusion in the Proxy Statement,
written notice of such business must be received by September 16, 2002.
By Order of the Board of Directors
/s/ James F. McCann
James F. McCann
Chairman of the Board and Chief
Executive Officer
Westbury, New York
November 1, 2001
(Form of Proxy)
1-800-FLOWERS.COM, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - December 4, 2001
(This Proxy is solicited by the Board of Directors of the Company)
The undersigned stockholder of 1-800-FLOWERS.COM, Inc. hereby appoints James F.
McCann, Chairman of the Board and Chief Executive Officer, and Gerard M.
Gallagher, Senior Vice President, General Counsel, or any one of them, with full
power of substitution in each, as proxies to vote the shares of stock, in
accordance with the undersigned's specifications, which the undersigned could
vote if personally present at the Annual Meeting of Stockholders of
1-800-FLOWERS.COM, Inc. to be held at the Company's Bethpage Fulfillment Center,
which is located at 700 Hicksville Road, Bethpage, NY 11714 (the "Meeting
Place"), (the "Meeting Place"), on Tuesday, December 4, 2001 at 9:00 a.m.
eastern standard time or any adjournment thereof.
1. ELECTION OF DIRECTORS (for terms as described in the Proxy Statement)
FOR all nominees below WITHHOLD AUTHORITY
|_| (except as marked to the contrary) |_| to vote for all nominees below
David M. Beirne and Charles R. Lax
INSTRUCTION: To withhold authority to vote for an individual nominee, write
the nominee's name in the space provided below.
--------------------------------------------------------------------------------
2. RATIFICATION OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN WITH RESPECT TO
|_| |_| |_|
proposal to ratify the selection of Ernst & Young LLP, independent public
accountants, as auditors of the Company for the fiscal year ending June 30,
2002 as described in the Proxy Statement.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
THE PERSONS NOMINATED BY THE BOARD OF DIRECTORS AS DIRECTORS, "FOR"
PROPOSAL 2, AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES AS TO
OTHER MATTERS WHICH PROPERLY COME BEFORE THE ANNUAL MEETING.
All of the proposals set forth are proposals of the Company. None of the
proposals is related to or conditioned upon approval of any other proposal.
Please date and sign exactly as your name appears on the envelope in which this
material was mailed. If shares are held jointly, each stockholder should sign.
Executors, administrators, trustees, etc. should use full title and, if more
than one, all should sign. If the stockholder is a corporation, please sign full
corporate name by an authorized officer. If the stockholder is a partnership,
please sign full partnership name by an authorized person.
----------------------------------
----------------------------------
Signature(s) of Stockholder
Dated:____________________