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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(2) Aggregate number of securities to which transactions 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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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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(2) Form, Schedule or Registration Statement No.:
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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 2, 2005
The Annual Meeting of Stockholders (the "Annual Meeting") of
1-800-FLOWERS.COM, Inc. (the "Company") will be held at 395 North Service Road,
Melville, NY 11747, Lower Level Media Center (the "Meeting Place"), on Friday,
December 2, 2005 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 2008 Annual Meeting or
until their respective successors shall have been duly elected and
qualified;
(2) To ratify the appointment of Ernst & Young LLP as our independent
registered public accounting firm for the fiscal year ending July 2,
2006; 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 8, 2005
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
October 31, 2005
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD
BE COMPLETED AND RETURNED PROMPTLY
1-800-FLOWERS.COM, INC.
PROXY STATEMENT
October 31, 2005
This Proxy Statement is furnished to stockholders of record of
1-800-FLOWERS.COM, Inc. (the "Company") as of October 8, 2005 (the "Record
Date") 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 395 North
Service Road, Melville, NY 11747, Lower Level Media Center (the "Meeting
Place"), on Friday, December 2, 2005 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
the appointment of Ernst & Young LLP, as the Company's independent registered
public accounting firm, for the fiscal year ending July 2, 2006; and will be
voted in accordance with the discretion of the person appointed as proxy 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. The approximate date this Proxy
Statement and the accompanying form of proxy are being mailed to the
stockholders of the Company is November 1, 2005.
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 8, 2005 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 8, 2005 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 8, 2005,
28,194,116 shares of Class A Common Stock and 36,864,465 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 III Directors of the Company to serve until the 2008 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 nominee.
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 nine
members, three of whom are Class III Directors and each of whose terms expire at
the Annual Meeting. Each of such Class III Directors, except for Mr. Minetti, is
a nominee for election. The Board of Directors does not currently have a
replacement nominee for Mr. Minetti, and the Board of Directors will consist of
eight directors after the Annual Meeting. The nominees for Class III Directors
are Messrs. McCann and McCann, whose terms expire at the 2005 Annual Meeting.
The Class I Directors are Messrs. Walker, O'Connor and Sharma, each of whose
terms expire at the 2006 Annual Meeting. The Class II Directors are Messrs.
Conefry and Elmore and Ms. Quinlan, each of whose terms expire at the 2007
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 III Directors)
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each of the three
nominees during the last five years has been furnished to the Company by such
nominee.
James F. McCann, age 54, 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
Boyds Collections Ltd., GTECH Corporation and Willis Holdings Corp. James F.
McCann is the brother of Christopher G. McCann, a Director and the President of
the Company.
Christopher G. McCann, age 44, 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 boards of Neoware, Inc. and Bluefly.com, and is a member of the Board of
Trustees of Marist College. Christopher G. McCann is the brother of James F.
McCann, the Company's Chairman of the Board and Chief Executive Officer.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF MESSRS.
MCCANN and MCCANN AS CLASS III DIRECTORS TO SERVE IN SUCH CAPACITY UNTIL THE
2008 Annual Meeting.
3
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.
Jeffrey C. Walker, age 50, has been a Director of the Company since
February 1995. Mr. Walker has been Managing Partner of JPMorgan Partners, the
private equity group of J.P. 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 Doane PetCare, as well as, several other private
companies.
Kevin J. O'Connor, age 44, has been a Director of the Company since July
1999. Mr. O'Connor has been involved with venture capital investing from 1995.
Mr. O'Connor co-founded DoubleClick, Inc., a marketing technology company, and
had served as the Chairman of the Board of Directors since its inception in
January 1996 until 2005. From December 1995 until January 2000, Mr. O'Connor
served as Chief Executive Officer of DoubleClick. 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.
John J. Conefry, Jr., age 61, has been a Director of the Company since
October 2002. Mr. Conefry is Vice Chairman of the Board of Directors of Astoria
Financial Corporation and its wholly-owned subsidiary Astoria Federal Savings.
He formerly served as the Chairman of the Board and CEO of Long Island Bancorp
and The Long Island Savings Bank from September 1993 until September 1998. Prior
thereto, Mr. Conefry was a Senior Vice President of Merrill Lynch, Pierce,
Fenner & Smith, Inc., where he served in various capacities, including, Chief
Financial Officer. Mr. Conefry was a partner in the public accounting firm of
Deloitte & Touche, LLP (formerly, Deloitte Haskins & Sells). Mr. Conefry serves
as a member of the Board of Trustees at Hofstra University, and on the boards of
St. Vincent's Services, and Wheel Chair Charities, Inc., among others.
Leonard J. Elmore, age 53, has been a Director of the Company since October
2002. Mr. Elmore is currently Senior Counsel with the law firm of LeBoeuf, Lamb,
Greene & MacRae, LLP in its New York City headquarters. Prior to his appointment
with LeBoeuf Lamb, Mr. Elmore served as the President of Test University, a
leading provider of Internet delivered learning solutions for pre-college
students.
Mary Lou Quinlan, age 52, has been a Director of the Company since May
2002. Ms. Quinlan is the founder and Chief Executive Officer of Just Ask A
Woman, a strategic consultancy dedicated to marketing with women, since its
inception in 1999. Prior to that, Ms. Quinlan served as President and Chief
Executive Officer of N.W. Ayer & Partners, a U.S. advertising firm, from 1994
through 1999, and in executive positions at Avon Products and DDB Needham
Worldwide. In 1995 the Advertising Women of New York named Ms. Quinlan the
Advertising Woman of the Year, and in 1997 New York Women in Communications
recognized her with the Matrix Award. Ms. Quinlan also serves on the Board of
Directors for her alma mater, Saint Joseph's University in Philadelphia, and The
Advertising Council.
T. Guy Minetti, age 54, has been a Director of the Company since December
1993 and became the Company's Vice Chairman in September 2000. Mr. Minetti
serves on the board of directors of American Sports Products Group Inc., a
sporting goods manufacturer that he co-founded in 1993 and Misonix, Inc., a
medical device and industrial product company. In March 1989, Mr. Minetti
founded Bayberry Advisors, an investment banking firm, and, prior thereto, Mr.
Minetti was a Managing Director at Kidder, Peabody & Company.
Deven Sharma, age 51, has been a Director of the Company since May 2005. He
is Executive Vice President for Global Strategy at The McGraw-Hill Companies.
Mr. Sharma joined The McGraw-Hill Companies in January 2002 from Boozo Allen &
Hamilton, a global management consulting company, where he was a partner. During
his 14 years with that firm, he led its U.S. Marketing Board and Customer
Management initiatives. Prior to Boozo Allen, Mr. Sharma worked with
manufacturing companies, Dresser Industries and Anderson Strathclyde. Mr. Sharma
has authored several publications on competitive strategy, customer solutions,
sales and marketing. He is a Board member of The US-China Business Council.
4
Information about the Board and its Committees
Each of our directors, other than Messrs. McCann, McCann and Minetti,
qualifies as an "independent director" as defined under the published listing
requirements of The NASDAQ Stock Market. The NASDAQ independence definition
includes a series of objective tests. For example, an independent director may
not be employed by us and may not engage in certain types of business dealings
with the Company. In addition, as further required by NASDAQ rules, the Board
has made a subjective determination as to each independent director that no
relationship exists which, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director. In making these determinations, the Board reviewed and discussed
information provided by the directors and by the Company with regard to each
director's business and personal activities as they may relate to the Company
and Company's management. In addition, as required by NASDAQ rules, the Board
determined that the members of the Audit Committee each qualify as "independent"
under special standards established by NASDAQ and the U.S. Securities and
Exchange Commission (the "Commission") for members of audit committees.
During Fiscal 2005, all Directors attended at least 75% of the meetings of
the committees on which they served.
The table below provides current membership and meeting information for
each of the Board committees for Fiscal 2005. Committee memberships changed
during Fiscal 2005. In May 2005, Mr. Sharma was appointed to the Audit
Committee, and in June 2005, Ms. Quinlan resigned from the Audit Committee.
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Directors (1) Audit Compensation Nominating and Secondary
Committee Committee Corporate Compensation
(2) Governance Committee
Committee
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James F. McCann X
Christopher G. McCann
Jeffrey C. Walker X*
Kevin J. O'Connor X X
Mary Lou Quinlan X
John J. Conefry, Jr. X* X X
Leonard J. Elmore X*
Deven Sharma X
T. Guy Minetti
--------------
Total Meetings in
Fiscal 2005 7 2 1 3
-----------
* Committee Chairperson
(1) All Directors, except for James F. McCann, Christopher G. McCann
and T. Guy Minetti, are independent Directors of the Company as
that term is defined by the rules and regulations of the National
Association of Securities Dealers (the "NASD").
(2) Acted by unanimous written consent on one occasion.
Audit Committee
The Audit Committee of the Board of Directors reports to the Board
regarding the appointment of the Company's independent registered public
accountants, the scope and results of its annual audits, compliance with
accounting and financial policies and management's procedures and policies
5
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 and
amended in August 2003, which outlines the responsibilities of the Audit
Committee. A current copy of the charter of the Audit Committee is available on
our website located at www.1800flowers.com under the Investor Relations section
of the website.
Each member of the Audit Committee is "financially literate" as required by
NASDAQ rules. The Audit Committee also includes at least one member, John J.
Conefry, Jr., who was determined by the Board to meet the qualifications of an
"audit committee financial expert" in accordance with SEC rules and to meet the
qualifications of "financial sophistication" in accordance with NASDAQ rules.
Stockholders should understand that these designations related to our Audit
Committee members' experience and understanding with respect to certain
accounting and auditing matters do not impose upon any of them any duties,
obligations or liabilities that are greater than those generally imposed on a
member of the Audit Committee or of the Board.
Compensation Committee
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 Section 16 Executive
Officers ("executive officers") and Directors. The Compensation Committee
approves the compensation for the Company's executive officers and administers
the Company's 2003 Long Term Incentive and Share Award Plan under which option
grants, stock appreciation rights, restricted awards and performance awards may
be made to Directors, officers, employees of, and consultants to, the Company
and its subsidiaries. In addition, the Compensation Committee administers the
Section 16 Executive Officers Bonus Plan and the Sharing Success Program under
which annual bonus compensation may be awarded. 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 Awards for
all of the Company's employees, other than its executive officers. The Company's
Board of Directors adopted a written charter for the Compensation Committee in
June 2003, which outlines the responsibilities of the Compensation Committee. A
current copy of the charter of the Compensation Committee is available on our
website located at www.1800flowers.com under the Investor Relations section of
the website.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee identifies and evaluates
individuals qualified to become Board members and recommends to the Board
director nominees for election and re-election, develops and recommends to the
Board the corporate governance guidelines applicable to the Company and to
review and reassess the adequacy of corporate governance guidelines and
practices. The Company Board of Directors adopted a written charter for the
Nominating and Corporate Governance Committee in June 2003, which outlines the
responsibilities of the Committee. A current copy of the charter of the
Nominating and Corporate Governance Committee is available on our website
located at www.1800flowers.com under the Investor Relations section of the
website.
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 the 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 2005.
Attendance at Board Meetings
During Fiscal 2005, the Board of Directors held five (5) meetings and acted
by unanimous written consent on four (4) occasions. During Fiscal 2005, all
Directors attended at least 75% of the meetings of the Board of Directors.
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
6
equity securities, to file reports of ownership and changes in ownership with
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
Messrs. McCann, McCann and Minetti receive no compensation for serving as
directors, except that they, like all directors, are eligible to receive
reimbursement of any expenses incurred in attending Board and committee
meetings. During Fiscal 2005, each director, other than Messrs. McCann, McCann
and Minetti, received compensation for serving on the Board of Directors and
committees of the Board as follows:
o an annual retainer of $12,500 (1);
o for each Board Committee Chairperson, except Audit Committee Chairperson, an
annual retainer of $5,000 (1);
o for the Audit Committee Chairperson, an annual retainer of $10,000 (1);
o a per meeting (Board or Committee) fee of $2,500 for personal attendance, and
a per meeting (Board) fee of $1,000 for telephonic attendance (2);
o an annual stock award grant of 10,000 options or, in lieu thereof, the
equivalent number of restricted shares based upon a 4 to 1 ratio between options
and restricted shares (1);
(1) Payable on the date of the Annual Meeting.
(2) Excludes payment for committee meetings held on the same day as scheduled
meetings of the Board of Directors.
Compensation information on James F. McCann and Christopher G. McCann, 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 8, 2005:
Name Age Position with the Company
James F. McCann ........ 54 Chairman of the Board and Chief Executive Officer
Christopher G. McCann... 44 Director and President
Tim Hopkins............. 51 President of Specialty Brands
William E. Shea......... 46 Senior Vice President of Finance and
Administration, Treasurer,Chief Financial Officer
Gerard M. Gallagher..... 52 Senior Vice President of Business Affairs, General
Counsel, Corporate Secretary
Thomas G. Hartnett...... 42 Senior Vice President of Retail and Fulfillment
Monica L. Woo .......... 47 Chief Marketing Officer
Vincent J. McVeigh...... 45 Senior Vice President
Enzo J. Micali.......... 46 Chief Information Officer
Information Concerning Executive Officers Who Are Not Directors
Tim Hopkins has been our President of the Specialty Brands division since
March 2005. Before holding this position, Mr. Hopkins was employed with Sur La
Table, Inc., a multi-channel upscale specialty retailer of gourmet culinary and
serveware products, and served as its Chief Executive Officer and Director since
7
2001. Prior to joining Sur La Table, Inc., Mr. Hopkins was employed with Le
Gourmet Chef, Inc., a national retailer of gourmet foods and served as its Chief
Executive Officer, President and Director since 2000.
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 of Business Affairs,
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.
Monica L. Woo has been our Chief Marketing Officer, since January 2004.
Prior to joining the Company, Ms. Woo had founded a successful consulting
practice focusing on growth strategies for such multi-national clients as
Deutsche Bank, Northwest Airlines and Campbell's Soup. Prior to that, Ms. Woo
was the President of Bacardi Global Brands, Inc., of Bacardi Limited. Before
holding this position, Ms. Woo had assumed a number of senior executive
positions in the financial services and consumer packaged goods sectors,
including the Global Marketing Director of Citibank On-line and the Citibank
Private Bank, and the Sr. Vice President, European Marketing Director of Diageo
PLC.
Vincent J. McVeigh has been our Senior Vice President since October 2000.
Before holding his current position with Corporate Partnerships, 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.
Enzo J. Micali has been our Chief Information 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.
8
Summary Compensation Table
The following table sets forth the annual and long-term compensation paid
by the Company during fiscal year ended July 3, 2005 ("Fiscal 2005") and fiscal
years ended June 27, 2004 and June 29, 2003 ("Fiscal 2004" and "Fiscal 2003") to
the Company's Chief Executive Officer and the four highest compensated other
executive officers of the Company whose total compensation during Fiscal 2005
exceeded $100,000 (collectively, the "Named Executive Officers"):
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Annual Compensation Long Term Compensation
-----------------------------------------------------------------------------------------------------------------------------
Name and Principal Position Fiscal Salary ($) Bonus ($) Other Annual Restricted Securities All Other Comp ($)
------- ---------- --------- ------------- ----------- ------------------
Year Compensation Stock Underlying
($)(3) Awards Options (#)
($)(4)(5)
2005 $975,000 $248,625 - $139,425 50,000 -
James F. McCann 2004 $975,000 - - - - -
Chairman and Chief Executive Officer 2003 $1,210,000 - - - 400,000 -
Christopher G. McCann 2005 $511,500 $77,492 - $156,234 37,500 -
President 2004 $465,850 - - - 0 -
2003 $423,500 - - - 538,300 -
Monica L. Woo(1) 2005 $350,000 $45,644 - $54,419 12,500 -
Chief Marketing Officer 2004 $157,500 - - - 85,000 -
2003 - - - - - -
Gerard M. Gallagher (2) 2005 $330,000 $49,995 - $86,378 25,000 -
Senior Vice President of Business 2004 $310,000 - - - - -
Affairs, General Counsel, Secretary 2003 $290,000 - - - 120,400 -
William E. Shea 2005 $275,000 $41,662 - $83,599 25,000 -
Senior Vice President, Finance 2004 $240,000 - - - - -
and Administration and Chief 2003 $225,000 - - - 127,300 -
Financial Officer
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(1) Ms. Woo's employment began with 1-800-Flowers.com, Inc. on January 15,
2004.
(2) The compensation listed in the summary compensation table for Mr.
Gallagher for Fiscal 2005, Fiscal 2004 and Fiscal 2003 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".
(3) 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.
(4) Represents the value of restricted stock on the date of grant based on
the number of shares granted multiplied by the closing price of
1-800-Flowers.com, Inc.'s stock on the date of grant. The Named
Executive Officers were awarded the following number of restricted
shares in Fiscal 2005, or in September 2005 related to performance in
Fiscal 2005: Mr. James McCann- 16,500 on December 2, 2004, Mr.
Christopher McCann-12,375 on December 2, 2004 and 7,828 on September
15, 2005; Ms. Woo-4,125 on December 2, 2004 and 2,964 on September 15,
2005; Mr. Gallagher-8,250 on December 2, 2004 and 2,525 on September
15, 2005; and Mr. Shea- 8,250 on December 2, 2004 and 2,104 on
September 15, 2005. The December 2004 restricted stock grants vest four
years from date of grant, while the September 15, 2005 restricted stock
grants vest one year from date of grant, and are then subject to a
one-year holding period.
(5) As of July 3, 2005, based on the closing price on July 1, 2005, the
approximate number and value of restricted stock holdings by the Named
Executive Officers was as follows: Mr. James McCann- 16,500 and
$117,150, Mr. Christopher McCann- 20,203 and $143,441, Ms. Woo- 7,089
and $50,332, Mr. Gallagher- 10,775 and $76,503 and Mr. Shea- 10,354 and
$73,513.
Option Grants in Last Fiscal Year
The following table provides information with respect to the
stock option grants made during Fiscal 2005 to the Named Executive Officers. No
stock appreciation rights were granted during Fiscal 2005.
% of Total Potential Realizable
Number of Options Value at Assumed Rates
Securities Granted to Exercise of Stock Price
Underlying Employees Price Appreciation for
Options in Fiscal ($/Share) Expiration Option Term (4)
Name Granted(#)(1) Year (2) (3) Date 5%($) 10%($)
_______________________ __________ __________ ________ _________ _________ ___________
James F. McCann 50,000 4.2% $8.45 12/2/2014 $265,708 $673,356
Christopher G. McCann 37,500 3.1% $8.45 12/2/2014 $199,281 $505,017
Monica L. Woo 12,500 1.0% $8.45 12/2/2014 $66,427 $168,339
Gerard M. Gallagher 25,000 2.1% $8.45 12/2/2014 $132,854 $336,678
William E. Shea 25,000 2.1% $8.45 12/2/2014 $132,854 $336,678
Total 150,000 12.5% $797,124 $2,020,069
Total Options
Granted in FY05 1,195,630 25%
(1) The options listed in the table become exercisable at a rate of 40% after
the completion of two years of service following the grant date, and 20% at the
completion of each year of service thereafter. Each option has a maximum term of
10 years, subject to earlier termination in the event of the optionee's
cessation of employment with the Company pursuant to the terms of the Company's
2003 Stock Incentive Plan.
(2) Based on an aggregate of 1,195,630 options granted in Fiscal 2005.
(3) The exercise price may be paid in cash, by surrendering shares owned by the
optionee for a sufficient period of time or through a cashless exercise
procedure.
(4) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can be no
assurance provided to any executive officer or any other holder of the Company's
securities that the actual stock price appreciation over the 10-year option term
will be at the assumed 5% and 10% levels. Unless the market price of the Common
Stock appreciates over the option term, no value will be realized from the
option grants made to the executive officers.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth the number of options exercised
during Fiscal 2005 and the number and value of unexercised options held by each
of the Named Executive Officers at July 3, 2005.
Shares Value Number of Securities Underlying Value of Unexercised In-The-
Acquired on Realized Unexercised Options at Fiscal Money Options at Fiscal Year
Exercise (#) ($)(1) Year-End (#) End ($)(2)
------------ ---------- --------------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------------- ---------------- --------------
James F. McCann - - 423,114 358,061 $36,776 $179,224
Christopher G. McCann...... 30,345 $79,538 1,423,812 535,280 $3,001,841 $540,103
Gerard M. Gallagher...... - - 397,880 149,420 $566,033 $141,844
William E. Shea............ - - 239,460 153,540 $467,654 $118,570
Monica L. Woo......... - - 85,000 12,500 - -
(1) Value realized was 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) Valuation 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 $7.10 as reported on the Nasdaq National
Market for the last trading day of Fiscal 2005.
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 stock incentive plans, other
bonus or benefits plans, 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 2005 was $975,000. 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. The Compensation Committee has recommended that Mr.
McCann receive, and Mr. McCann has accepted, a base salary of $975,000 for
Fiscal 2005 in order to enable the Company to comply with Section 162(m) of the
IRS Code of 1986 ("Section 162(m)") as amended, which was enacted into law in
1993.
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 stock incentive
plans, other bonus or benefits plans, 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 2005 was $465,800. 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.
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. 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 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, the compensation of
executive officers and other individuals compensated by the Company, and sets
the compensation for the Section 16 Executive Officers (the "executive
officers"). The Compensation Committee is responsible for the administration of
the Company's 2003 Long Term Incentive and Share Award Plan under which stock
options, share appreciation rights, restricted shares, restricted share units,
performance shares, performance units, dividend equivalents, and other
share-based awards ("Awards") may be made to Directors, consultants, executive
officers and employees of the Company and its subsidiaries. In addition, the
Compensation Committee administers the Section 16 Executive Officers Bonus Plan
and the Company's Sharing Success Program under which annual bonus compensation
may be awarded. The Board of Directors has authorized a Secondary Committee of
the Compensation Committee to also review Awards 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 provide 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 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 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 other factors 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 outside 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 the executive officers is based upon a
combination of primarily the Company's financial performance, as well as, their
individual performances. For certain 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 through grants of Awards, which in Fiscal 2005 was in the form of stock
options and restricted stock. For Fiscal 2006, it is anticipated that long-term
incentives will continue to be provided through a combination of grants of stock
options and/or restricted stock. 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 stock 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.
Each restricted share grant allows the individual to acquire
shares of the Company's Common Stock over a specified period of time without
payment. As in the case of the option grant, the restricted share grant will
provide a return to the executive officer only if the executive officer remains
employed by the Company during the vesting period.
The grant of an Award is set at a level intended to create a
meaningful incentive 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
applicable term of the Award and the individual's personal performance in recent
periods. The Compensation Committee also intends to consider the number of
Awards held by the executive officer in order to maintain an appropriate level
of incentive for that individual. However, the Compensation Committee may use
its discretion in granting Awards to 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 established his initial
base annual salary and eligibility to participate in the Company's stock
incentive plans and other bonus or benefits plans, 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. The Compensation Committee believes that the
compensation paid to Mr. McCann for Fiscal 2005 was fair and reasonable. In
determining the total compensation for Mr. McCann, and that such compensation
was fair and reasonable in Fiscal 2005, 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 during Fiscal 2005; 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 qualifies as performance-based compensation will not have to
be taken into account for purposes of this limitation. The 2003 Long Term
Incentive and Share Award Plan and the Section 16 Executive Officers Bonus Plan
contain certain provisions which are intended to ensure that any compensation
deemed paid in connection with the granting of Awards or bonus compensation 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 2005 will be subject to the deduction limitations of Section
162(m). The Compensation Committee has recommended that Mr. McCann receive, and
Mr. McCann has accepted, a base salary of $975,000 for Fiscal 2006 in order to
enable the Company to comply with 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
Mary Lou Quinlan
John J. Conefry, Jr
October 22, 2005
To the Board of Directors
of 1-800-flowers.com, Inc. (the "Company"):
We, the members of the Audit Committee, assist the Board of Directors in its
oversight of the Company's financial accounting, reporting and controls. We also
evaluate the performance and independence of the Company's independent
registered public accounting firm. We operate under a written charter that both
the Board and we have approved. A current copy of the Audit Committee charter
can be found on the Company's website located at www.1800flowers.com under the
Investor Relations section of the website. We would like to remind our
stockholders that, although the Board has determined that each of us meets
NASDAQ's regulatory requirements for financial literacy and that John J.
Conefry, Jr., is an "audit committee financial expert," and is financially
sophisticated under NASDAQ requirements, we are not professionally engaged in
the practice of auditing or accounting and are not technical experts in auditing
or accounting.
The Company management is responsible for the preparation, presentation and
integrity of the Company's financial statements, including setting the
accounting and financial reporting principles and designing the Company's system
of internal controls over financial reporting. The Company's independent
registered public accounting firm, Ernst & Young LLP, is responsible for
performing an independent audit of the consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report on
the consolidated financial statements. We oversee the processes.
We reviewed and discussed the audited financial statements for the fiscal year
ended July 3, 2005 with management and the independent registered public
accounting firm. We also discussed with the independent registered public
accounting firm the matters required to be discussed by Statement on Auditing
Standards 61, Communications with Audit Committees, as amended. We received the
written disclosures and the letter from the independent registered public
accounting firm required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, and discussed such independence
with Ernst & Young.
Based on the reports, discussions and review described in this report, and
subject to the limitations on our role and responsibilities referred to in this
report and in the charter, we recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-K for Fiscal 2005. We also appointed Ernst & Young LLP as our independent
registered public accounting firm for Fiscal 2006.
Audit Committee
John J. Conefry, Jr., Chairman
Kevin J. O'Connor
Deven Sharma
Stock Performance Graph
The chart below compares the five-year cumulative total return
on the Company's common stock during the period from June 30, 2000 through July
3, 2005, with the cumulative total returns of the Russell 2000 and Nasdaq
Non-Financial indices. The comparison assumes $100 was invested on June 30, 2000
in each of the foregoing indices, and assumes dividends, if any were reinvested.
Note: The Company's management cautions that the stock price performance shown
in the graph below should not be considered indicative of potential future stock
price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Cumulative Total Return
------------------------------------------------------------------------------------
6/00 7/01 6/02 6/03 6/04 6/05
------------------------------------------------------------------------------------
1-800-FLOWERS.COM, INC. 100.00 289.56 217.76 163.71 158.83 137.37
RUSSELL 2000 100.00 100.66 91.93 90.42 120.59 131.98
NASDAQ NON-FINANCIAL 100.00 54.72 35.34 29.47 37.36 38.07
------------------------------------------------------------------------------------
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 8, 2005, 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. 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 8, 2005, but excludes shares of common stock underlying
options held by any other person. Percentage of beneficial ownership is based on
28,194,116 shares of Class A Common Stock and 36,864,465 shares of Class B
Common Stock outstanding as of October 8, 2005.
<
Shares % of Shares
Beneficially Owned Beneficially Owned
------------------- --------------------
Name and Address of Beneficial A Shares B Shares A Shares B Shares
------------------------------ -------- --------- --------- --------
Owner**
______
James F. McCann(1)......................... 423,114 35,920,905 1.5% 97.4%
Christopher G. McCann(2)................... 1,274,637 3,152,763 4.3% 8.5%
T. Guy Minetti(3).......................... 517,340 - 1.8% -
Gerard M. Gallagher(4)..................... 432,490 5,000 1.5% -
Jeffrey C. Walker(5)....................... 3,058,240 - 10.8% -
John J. Conefry, Jr. (6) .................. 27,500 - 0.1% -
Kevin J. O'Connor(7)....................... 123,500 - 0.4% -
Leonard J. Elmore (8) ..................... 25,000 - 0.1% -
Mary Lou Quinlan (9) ...................... 31,000 - 0.1% -
Monica L. Woo (10) 85,000 - 0.3% -
J.P. Morgan Partners (SBIC), LLC (11)...... 3,058,240 - 10.8% -
William E. Shea (12) 247,780 10,000 0.9% -
All directors and executive officers as a 6,718,361 37,035,120 21.1% 99.7%
group (16 persons)(13)..................
- Indicates less than 0.1%.
** Unless otherwise specified, the address of the beneficial owner is c/o
1-800-FLOWERS.COM, Inc., 1600 Stewart Avenue, Westbury, NY 11590.
(1) Includes (a) 423,114 shares of Class A Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
stock options, (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,
(c) 58,548 shares of Class B Common Stock held by The McCann Charitable
Foundation, Inc., of which Mr. McCann is a Director and the President;
and (d) 5,761,972 shares of Class B Common Stock held by three Grantor
Retained Annuity Trusts of which Mr. McCann is the Trustee.
(2) Includes (a) 1,274,637 shares of Class A Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
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, (c) 243,575 shares of Class B Common Stock that may
be acquired within 60 days of October 8, 2005 through the exercise of
stock options, and (d) 58,548 shares of Class B Common Stock held by
The McCann Charitable Foundation, Inc., of which Mr. McCann is a
Director and Treasurer.
(3) Includes 517,340 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options.
(4) Includes (a) 419,140 shares of Class A Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
stock options, and (b) 5,000 shares of Class B Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
stock options.
(5) 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,
39th Floor, New York, New York 10020. Includes 50,000 shares of Class A
Common Stock that may be acquired within 60 days of October 8, 2005
through the exercise of stock options.
(6) Includes 25,000 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options. Mr. Conefry's address is c/o Astoria Federal Savings, One
Astoria Federal Plaza, Lake Success, New York 11042
(7) Includes 60,000 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options. Mr. O'Connor's address is c/o O'Connor Ventures, 1050 Cold
Springs Road, Santa Barbara, California 93108.
(8) Includes 25,000 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options. Mr. Elmore's address is c/o LeBoeuf, Lamb, Greene & MacRae,
LLP, 125 West 55th Street, New York, New York 10019-5389.
(9) Includes 30,000 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options. Ms. Quinlan's address is c/o Just Ask A Woman, 670 Broadway
Suite 301,New York, NY 10012
(10) Includes 85,000 shares of Class A Common Stock that may be acquired
within 60 days of October 8, 2005 through the exercise of stock
options.
(11) The address of J.P. Morgan Partners (SBIC), LLC is 1221 Avenue of the
Americas, 39th Floor, New York, New York 10020.
(12) Includes (a) 244,080 shares of Class A Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
stock options, and (b) 10,000 shares of Class B Common Stock that may
be acquired within 60 days of October 8, 2005 through the exercise of
stock options.
(13) Includes (a) 3,623,871 shares of Class A Common Stock that may be
acquired within 60 days of October 8, 2005 through the exercise of
stock options, and (b) 263,575 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
In Fiscal 2005 the Company and its subsidiaries paid $323,353 to
Abacus, a wholly owned subsidiary of DoubleClick, Inc. for marketing and
advertising services. Kevin J. O'Connor, one of the Company's Directors,
formerly served as Chairman of the Board of DoubleClick, Inc.
In Fiscal 2005, the Company employed Julie Mulligan, the sister of
Directors and executive officers, James F. McCann and Christopher G. McCann, as
a Director of Photography and a Personality Expert Designer. Mrs. Mulligan's
compensation for Fiscal 2005 was $129,522.80, in salary and bonus.
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 2005 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 $448,114.26,
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
RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Upon the recommendation of the Audit Committee, the Board of
Directors has appointed Ernst & Young LLP ("E&Y") to serve as the Company's
independent registered public accounting firm for the year ending July 2, 2006
("Fiscal 2006"), subject to the ratification of such appointment by the
stockholders at the Annual Meeting.
Fees Paid to Ernst & Young LLP
The following table shows the fees that the Company paid or accrued for
audit and other services provided by Ernst & Young LLP for Fiscal Years 2005 and
2004, all of which were approved by the Audit Committee.
----------------------------------------------
2005 2004
----------------------------------------------
(in thousands)
Audit Fees $401,749 $238,536
Audit-Related Fees 253,200 68,000
Tax Fees 18,270 34,540
All Other Fees 0 3,000
---- -----
Total $673,219 $344,076
========= =========
----------------------------------------------
Audit Fees. Fees for audit services include fees associated with the annual
audit, consents and reviews of 1-800-Flowers.com, Inc.'s quarterly reports on
Form 10-Q. These fees also include the audit of management's assessment of
internal control over financial reporting as required by Section 404 of the
Sarbanes-Oxley Act of 2002.
Audit-Related Fees. Fees for audit-related services include audits and assurance
services related to the Company's benefit plans and separate financial
statements for its franchise operations, as well as due diligence services in
connection with acquisitions.
Tax Fees. Fees for tax service include tax compliance, tax advice and tax
planning.
All Other Fees. Consists of other fees not reported in the above categories.
Financial Information Systems Design and Implementation Fees.E&Y did not render
professional services relating to financial information systems design and
implementation for Fiscal 2005 and Fiscal 2004.
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 independent registered accounting firm. Unless otherwise
instructed, the proxy holders will vote the proxies received by them "FOR" the
ratification of E&Y as the Company's independent registered public accounting
firm for Fiscal 2006. A representative of E&Y 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
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2006.
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
Shareholders who, in accordance with Securities and Exchange Commission Rule
14a-8 wish to present proposals for inclusion in the proxy materials to be
distributed in connection with next year's Annual Meeting Proxy Statement must
submit their proposals so that they are received at the Company's principal
executive offices no later than the close of business on August 4, 2006. As the
rules of the SEC make clear, simply submitting a proposal does not guarantee
that it will be included.
In accordance with our Bylaws, in order to be properly brought before the 2006
Annual Meeting, a shareholder's notice of the matter the shareholder wishes to
present, or the person or persons the shareholder wishes to nominate as a
director, must be delivered to the Secretary of the Company at its principal
executive offices not less than 120 nor more than 90 days before the first
anniversary of the date of this Annual Meeting. As a result, any notice given by
a shareholder pursuant to these provisions of our Bylaws (and not pursuant to
the SEC's Rule 14a-8) must be received no earlier than August 4, 2006 and no
later than September 3, 2006, unless the 2006 Annual Meeting date is more than
30 days before or after December 2, 2006. If our 2006 Annual Meeting date is
advanced or delayed by more than 30 days before or more than 70 days from the
one year anniversary of this year's Annual Meeting date, then proposals must be
received no later than the close of business on the later of the 90th day before
the 2006 Annual Meeting or the 10th day following the date on which the 2006
Annual Meeting date is publicly announced.
To be in proper form, a shareholder's notice must include the specified
information concerning the proposal or nominee as described in our Bylaws. A
shareholder who wishes to submit a proposal or nomination is encouraged to seek
independent counsel about our Bylaw and SEC requirements. Company will not
consider any proposal or nomination that does not meet the Bylaw requirements
and the SEC's requirements for submitting a proposal or nomination.
Notices of intention to present proposals at the 2006 Annual Meeting should be
addressed to Secretary, 1-800-FLOWERS.COM, Inc., 1 Old Country Road, Carle
Place, New York 11514. The Company reserves the right to reject, rule out of
order, or take other appropriate action with respect to any proposal that does
not comply with these and other applicable requirements.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each beneficial holder of its Common
Stock on the Record Date who did not receive a copy of the Company's Annual
Report for the fiscal year ended July 3, 2005, on the written request of such
person, a copy of the Company's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission. Any such request should be made in writing
to the Secretary of the Company at the address set forth on the first page of
this Proxy Statement.
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
October 31, 2005
(Form of Proxy)
1-800-FLOWERS.COM, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - December 2, 2005
(This Proxy is solicited by the Board of Directors of the Company)
The undersigned stockholder of 1-800-FLOWERS.COM, Inc. hereby appoints Gerard M.
Gallagher, Senior Vice President, General Counsel with full power of
substitution, as proxy 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 395 North Service Road, Melville, NY 11747, Lower Level Media Center
(the "Meeting Place"), on Friday, December 2, 2005 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
James F. McCann and Christopher G. McCann
INSTRUCTION: To withhold authority to vote for an individual nominee, write
the nominee's name in the space provided below.
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2. RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR AGAINST ABSTAIN WITH RESPECT TO
|_| |_| |_|
proposal to ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for the fiscal year
ending July 2, 2006 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"
RATIFICATION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JULY 2, 2006, AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXY 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:____________________