UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-12
The Children's Place Retail Stores, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
EZRA DABAH
RENEE DABAH
RAPHAEL BENAROYA
JEREMY J. FINGERMAN
ROSS B. GLICKMAN
EMANUEL R. PEARLMAN
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------
PRELIMINARY COPY DATED MAY 15, 2009 - SUBJECT TO COMPLETION
ANNUAL MEETING OF SHAREHOLDERS OF
THE CHILDREN'S PLACE RETAIL STORES, INC.
--------------------------------------------------------------------------------
PROXY STATEMENT OF
EZRA DABAH
Fellow Children's Place Shareholders:
This proxy statement and the enclosed GOLD proxy card are being
furnished to shareholders of The Children's Place Retail Stores, Inc. ("The
Children's Place" or the "Company") in connection with the solicitation of
proxies by Ezra Dabah to be used at the 2009 annual meeting of shareholders of
The Children's Place, including any adjournments or postponements thereof and
any meeting held in lieu thereof. The 2009 Annual Meeting is scheduled to be
held at 10:00 a.m., New York time, on June 26, 2009, at [_] located at [_]. This
proxy statement and the GOLD proxy card are first being furnished to
shareholders on or about [_], 2009.
THIS SOLICITATION IS BEING MADE BY EZRA DABAH AND NOT ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY.
Mr. Dabah is soliciting your proxy for the 2009 Annual Meeting in
support of the following proposals:
1. To elect Raphael Benaroya, Jeremy J. Fingerman and Ross B.
Glickman (each a "Nominee" and collectively, the "Nominees") to serve as
directors of the Company.
2. To adopt a resolution recommended by the Board and included in
the Company's proxy statement for the 2009 Annual Meeting ratifying the
Company's Audit Committee's selection of BDO Seidman LLP as the Company's
independent auditors for fiscal 2009.
3. To adopt a stockholder resolution that any provision of the
Bylaws of the Company that is adopted by the Board and not the shareholders of
the Company after March 5, 2009 be repealed.
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 26, 2009: the proxy materials
are available at http://www.eproxyaccess.com/plce.
More information about the Nominees can be found under "PROPOSAL 1 -
ELECTION OF DIRECTORS" beginning on page [_] of this proxy statement and
"INFORMATION ABOUT EZRA DABAH AND PARTICIPANTS" beginning on page [_] of this
proxy statement.
The Company has disclosed that the record date for determining
shareholders entitled to notice of and to vote at the 2009 Annual Meeting is May
1, 2009 (the "Record Date"). Shareholders of record at the close of business on
the Record Date will be entitled to vote at the 2009 Annual Meeting. According
to the Company's proxy statement, as of the Record Date, there were 29,559,643
shares of common stock, $.10 par value per share, outstanding and entitled to
vote at the 2009 Annual Meeting. Each share has one vote.
Ezra Dabah, the former Chairman and Chief Executive Officer and the
largest shareholder of the Company, has been a director of the Company since
1989. Mr. Dabah, together with his wife, Renee Dabah (together with Mr. Dabah,
the "Dabahs"), may be deemed to beneficially own, in the aggregate, 5,002,710
shares, representing approximately 16.9% of the Company's outstanding common
stock. Details of the Dabahs' beneficial ownership of the Company's common stock
can be found under "INFORMATION ABOUT EZRA DABAH AND PARTICIPANTS" beginning on
page [_] of this proxy statement.
The Dabahs intend to vote their shares FOR the election of the
Nominees, FOR the resolution ratifying the Company's Audit Committee's selection
of BDO Seidman LLP as the Company's independent auditors for fiscal 2009 and FOR
the bylaw restoration proposal. If one of the Nominees is unable to stand for
election at the 2009 Annual Meeting, the proxies named on the attached GOLD
proxy card will vote for Emanuel R. Pearlman (the "Alternate Nominee"), in place
of such Nominee.
MESSRS. BENAROYA, FINGERMAN AND GLICKMAN ARE COMMITTED TO ACTING IN
THE BEST INTERESTS OF ALL SHAREHOLDERS. VOTE YOUR GOLD PROXY CARD FOR THE
NOMINEES AND FOR THE BYLAW RESTORATION PROPOSAL.
As explained in the detailed instructions on your GOLD proxy card,
there are four ways you may vote. You may:
1. Vote via the Internet by following the voting instructions on the
GOLD proxy card or the voting instructions provided by your broker, bank or
other holder of record. Internet voting procedures are designed to authenticate
your identity, allow you to vote your shares and confirm that your instructions
have been properly recorded. Your Internet vote authorizes the named proxies to
vote your shares in the same manner as if you had signed and returned a proxy
card. If you submit your vote by Internet, you may incur costs associated with
electronic access, such as usage charges from Internet access providers and
telephone companies;
2. Vote by telephone by following the voting instructions on the
GOLD proxy card or the instructions provided by your broker, bank or other
holder of record. Your telephone vote authorizes the named proxies to vote your
shares in the same manner as if you had signed and returned a proxy card;
3. Sign, date and return the enclosed GOLD proxy card in the
enclosed postage paid provided; or
-2-
4. Vote in person by attending the 2009 Annual Meeting. Written
ballots will be distributed to shareholders who wish to vote in person at the
2009 Annual Meeting. If you hold your shares through a bank, broker or other
custodian, you must obtain a legal proxy from such custodian in order to vote in
person at the meeting.
DO NOT SIGN ANY WHITE PROXY CARD SENT TO YOU BY THE COMPANY. IF YOU
HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PREVIOUSLY SIGNED WHITE PROXY BY
SIGNING AND RETURNING A LATER-DATED GOLD PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE, BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO MR. DABAH OR TO THE
SECRETARY OF THE COMPANY, OR BY INSTRUCTING MR. DABAH BY TELEPHONE OR VIA THE
INTERNET AS TO HOW YOU WOULD LIKE YOUR SHARES VOTED (INSTRUCTIONS ARE ON YOUR
GOLD PROXY CARD).
HOLDERS OF SHARES AS OF THE RECORD DATE ARE URGED TO SUBMIT A GOLD
PROXY CARD EVEN IF YOUR SHARES WERE SOLD AFTER THE RECORD DATE.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER INSTITUTION ON THE RECORD DATE, ONLY THAT INSTITUTION CAN VOTE
THOSE SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY,
PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON
TO SIGN AND RETURN ON YOUR BEHALF THE GOLD PROXY CARD AS SOON AS POSSIBLE.
Mr. Dabah has retained Innisfree M&A Incorporated to assist in
communicating with shareholders in connection with the proxy solicitation and to
assist in efforts to obtain proxies. If you have any questions about executing
your GOLD proxy, voting by telephone or via the Internet or if you require
assistance, please contact:
Innisfree M&A Incorporated
501 Madison Avenue
New York, New York 10022
Shareholders Call Toll-Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
-3-
BACKGROUND AND REASONS FOR THE SOLICITATION
Ezra Dabah is the Company's largest shareholder, owning, together
with his wife, approximately 16.9% of the Company's outstanding shares. Mr.
Dabah has been a director of the Company since 1989. He also served as Chairman
and Chief Executive Officer from 1991 to 2007.
Following his departure as CEO in September 2007, Mr. Dabah became
concerned about the future of the Company and a possible decline in shareholder
value. He therefore began to consider alternatives with respect to his
significant investment in the Company. Among the alternatives Mr. Dabah
considered was the possibility of making an offer to acquire the Company. Mr.
Dabah then began to discuss with potential private equity sponsors the possible
acquisition of the Company. However, Section 203 of the Delaware General
Corporation Law (the "DGCL"), which applies to the Company, restricted Mr.
Dabah's ability to partner with a third party to acquire the Company, without
the Board's prior authorization.
In October 2007, the Company announced that it had engaged Lehman
Brothers to act as its financial advisor in undertaking a review of the
Company's strategic alternatives to improve operations and enhance shareholder
value, including potential organizational and operational improvements, a
recapitalization, or other transactions.
In February 2008, Mr. Dabah requested that the Board authorize,
pursuant to Section 203 of the DGCL, Mr. Dabah to enter into an agreement with
Golden Gate Private Equity, Inc. ("Golden Gate") for the purpose of making a
proposal to the Board to acquire the Company's outstanding shares.
Without addressing Mr. Dabah's request, on February 19, 2008, the
Company announced that it had scheduled its 2008 annual meeting of shareholders
for June 27, 2008. At the time of the announcement, the Company had not held an
annual meeting since June 22, 2006, a period of nearly 20 months, and the date
set by the Board represented an additional delay of over four months. Given the
slow pace at which the Board was conducting its review of strategic alternatives
and his interest in making a proposal to acquire the Company, Mr. Dabah
determined that delaying the annual meeting until late June was not in the best
interests of the Company or its shareholders. Therefore, on February 21, 2008,
Mr. Dabah filed a complaint in Delaware court requesting that the court order
the Company to hold its 2008 annual meeting within 45 days from the filing of
the complaint. Mr. Dabah and the Company eventually reached a settlement of the
matter which was announced on May 9, 2008. Pursuant to the settlement, Mr. Dabah
agreed to dismiss his complaint and vote for the Company's slate of six
directors (Louis Lipschitz, Dr. Joseph Alutto, Mr. Dabah, Charles Crovitz,
Robert Fisch and Stanley Silverstein) at the 2008 annual meeting, and the Board
agreed to conduct a bona fide sales process and approve Mr. Dabah's request for
a waiver under Section 203 of the DGCL.
Mr. Dabah and Golden Gate thereafter participated in the Company's
sales process and conducted a due diligence review of the Company. Despite Mr.
Dabah's numerous requests for the Company to conduct a prompt process and
respond to basic due diligence requests in a timely manner, the Company's sale
process lasted for over nine months. Ultimately
-4-
Mr. Dabah and Golden Gate determined not to submit a formal, binding acquisition
proposal, mainly due to the weak debt markets, which had deteriorated while the
Board extended its sales process over a nine month period. On February 5, 2009,
the Company announced that its Board had completed its previously announced
review of strategic alternatives. The review did not result in a sale of the
Company. Mr. Dabah does not have any current plan or intention to acquire the
Company.
On March 5, 2009, over Mr. Dabah's objection, the directors
increased the size of the Board from eight to nine directors and appointed
Norman Matthews to fill the vacancy created by the increase. Mr. Dabah objected
to the appointment of Mr. Matthews to the Board because Mr. Dabah believed the
unilateral expansion of the Board was inconsistent with the agreement between
Mr. Dabah and the Company regarding the election of six directors at the 2008
annual meeting.
As the largest long-term shareholder of the Company, Mr. Dabah is
concerned about the future of the Company and the ability of the incumbent
senior management team and Board to sustain future growth and increase
shareholder value. In particular, Mr. Dabah remains concerned with (1) the
misalignment of the current Board's interests with those of the Company's
shareholders, (2) the lack of certain core competencies and experience on the
Board, (3) the Board's failure to attract a permanent Chief Executive Officer,
(4) the loss of key talent over the last 19 months and (5) senior management's
inability to develop, put in place and focus on short and long-term growth
opportunities for the Company.
In stark contrast to Mr. Dabah, who, as the Company's largest
shareholder, owns approximately 16.9% of the Company's outstanding common stock,
the other directors, excluding Mr. Silverstein, own less than 1% of the
Company's outstanding stock. Therefore, in Mr. Dabah's opinion, the current
directors' economic incentives are not aligned with those of the Company's
shareholders. Moreover, Interim CEO Charles Crovitz's total compensation for his
role as interim CEO in fiscal year 2008 was $3,904,865 (including $519,416 in
perquisites), which Mr. Dabah believes is excessive given his role as interim
CEO and his lack of experience as a CEO of a specialty retailer or even as a CEO
of a public company. In Mr. Dabah's opinion, the interests of a majority of the
current directors and Mr. Crovitz in building a new leadership team are not
aligned with the interests of the Company's shareholders.
Mr. Dabah is proposing the election of Messrs. Benaroya, Fingerman
and Glickman as directors because he believes they will bring to the Board the
experience and talent necessary to help position the Company to sustain future
growth and increase shareholder value. In contrast, Sally Frame Kasaks, Norman
Matthews and Malcolm Elvey, the Board's nominees, in Mr. Dabah's opinion, lack
the fresh perspective and vision that Mr. Dabah believes is necessary to guide a
specialty apparel retailer such as the Company.
Ms. Kasaks, 64, was appointed Chair of the Board on an interim basis
on January 31, 2007. Since that time, the Board has failed to identify and
appoint a non-executive Chairperson to replace Ms. Kasaks. Mr. Dabah believes
that in her interim role Ms. Kasaks has not provided the Board with the
direction, leadership and time necessary to resolve many of the difficulties
that the Company has faced during her tenure, including identifying a permanent
Chief Executive Officer to replace interim CEO Charles Crovitz. In addition,
Ms. Kasaks
-5-
currently serves as Chair and CEO of Pacific Sunwear of California, Inc.,
a West Coast-based lifestyle specialty retailer facing significant operational
challenges. During fiscal 2008, Pacifc Sunwear liquidated approximately 150 of
its fashion-focused streetwear demo stores due to poor performance and recently
announced that it anticipated closing an additional 35 to 50 underperforming
stores each year over the course of the next three years. Since the appointment
of Ms. Kasaks as Chair and CEO of Pacific Sunwear in May 2007 (she previously
served as interim CEO beginning in October 2006), the stock has declined
approximately 81%. Pacific Sunwear was recently engaged in a proxy contest in
which shareholders cited "disastrous performance" and called for Ms. Kasaks'
immediate resignation.
Mr. Matthews, 76, joined the Board less than two months ago. Mr.
Dabah does not believe that Mr. Matthews brings to the Company the forward
outlook and fashion perspective necessary to understanding and preserving the
youthful and contemporary image unique to "The Children's Place" brand. In
addition, Mr. Matthews served on the boards of several entities that filed for
bankruptcy, including Levitz and Loehmann's, Inc. Mr. Matthews is also a
director of Finlay Enterprises, Inc., which recently announced that it had
substantial doubt about its ability to continue as a going concern.
Mr. Elvey, 67, has served as a director of the Company since 2002.
Mr. Elvey is a venture capitalist focused on technology companies and his
primary retail experience stems from his tenure at Metro Cash and Carry over 30
years ago.
We therefore question whether the Board's nominees are the right
nominees for the Company and whether as a group they add value to the Company
when compared to our Nominees. Each of Messrs. Benaroya, Fingerman and Glickman
are highly-qualified and proven executives with extensive experience in key
areas of the Company's business, including specialty apparel retailing, mass
consumer marketing and branding and retail real estate. Mr. Dabah believes each
of these individuals will bring much-needed insight, accountability and new and
relevant perspectives to the Board for continued profitable growth.
Mr. Benaroya is currently Chairman of the Board of Directors of Russ
Berrie Inc., a company that specializes in the design, import, marketing and
distribution of infant and juvenile consumer products, and was formerly, until
February 2009, Chairman of the Board of Directors of FAO Schwarz, Inc., a
specialty toy retailer. Mr. Benaroya was also the Chairman of the Board,
President and Chief Executive Officer of United Retail Inc., a specialty
retailer of women's fashions, from 1989 until its successful sale in 2007.
During Mr. Benaroya's tenure, United Retail grew to 494 stores in fiscal 2006
with $462.1 million in net sales. Through his experiences as Chairman of the
Board of Russ Berrie and FAO Schwarz, Mr. Benaroya has developed meaningful
exposure to and understanding of the children's marketplace and the consumers
that the Company targets.
Mr. Fingerman has over 20 years of marketing and brand management
experience. He is currently the Managing Principal of Clairmont Ventures, a
strategic consulting and investment advisory firm focused on transforming brands
and businesses. Most recently, Mr. Fingerman served as President and Chief
Executive Officer of privately-held R.A.B. Food Group, LLC (Manishewitz), one of
America's leading specialty foods companies. Prior to joining R.A.B., Mr.
Fingerman served as President of the U.S. Soup Division at Campbell Soup
-6-
Company, the world's largest maker and marketer of soup. As President, Mr.
Fingerman was responsible for the company's largest division, which generated
three consecutive years of consumption growth for the first time in 18 years.
Mr. Glickman has over 35 years of specialty retail and real estate
experience. He is currently Chairman and Chief Executive Officer of Urban Retail
Properties, LLC, a development, leasing and management real estate company,
specializing in retail shopping centers. Urban Retail Properties is the
developer of over 75 domestic and international premier shopping destinations
and mixed use products including Water Tower Place and 900 North Michigan Shops
in Chicago, Copley Place in Boston, and the redevelopment of the Houston
Galleria and Old Orchard Center in Skokie, Illinois.
More information about the Nominees can be found under "Proposal 1 -
Election of Directors," beginning on page [_] of this proxy statement and
"Information About Ezra Dabah and Participants," beginning on page [_] of this
proxy statement.
If elected, Messrs. Benaroya, Fingerman and Glickman will, subject
to their fiduciary duties as directors, work with the other members of the Board
to take those steps that they deem necessary to maximize shareholder value.
Specifically, if elected, the Nominees are expected to urge the Board to execute
the following plan of action:
1. Appoint a permanent CEO.
Since September 2007, the Board has claimed to be conducting a
search for a permanent CEO to replace the Company's Interim CEO, Mr. Crovitz. In
September 2007, a CEO search committee was formed to undertake the task of
finding a new CEO. Mr. Dabah is a member of the search committee, but over the
last 19 months no potential CEO candidate has been recommended by the committee
for him to interview. Moreover, Mr. Crovitz has commented that he has planned to
be Interim CEO for 16 to 18 months, and some analysts believe the CEO search
could take another 6 to 12 months. In Mr. Dabah's opinion, given his large
compensation package, Mr. Crovitz has little incentive to speed up the process
of hiring his successor.
The leadership void at The Children's Place has created uncertainty
about the future direction of the Company, distracted management and, with no
visionary leadership, caused the Company to underperform its potential. Mr.
Dabah believes the Board must act immediately to appoint a permanent CEO who
will, among other things, take all measures to retain key management personnel,
reestablish the culture that made the Company successful, articulate a future
vision for the Company and position the Company to sustain future growth. Mr.
Dabah has engaged in preliminary discussions with Raphael Benaroya regarding the
possibility of proposing that the Board appoint Mr. Benaroya as Chief Executive
Officer of the Company. Mr. Benaroya has over 25 years of experience in
successfully leading public specialty apparel retail stores, and Mr. Dabah
believes Mr. Benaroya is well positioned to gain the respect and loyalty of the
Company's employees. To date, Mr. Benaroya has not made a determination as to
whether he is willing to be considered for the CEO position. If Mr. Benaroya
determines that he is willing to serve as the Company's CEO, Messrs. Benaroya,
Fingerman and Glickman, if elected, and Mr. Dabah will recommend to the Board
that Raphael Benaroya be appointed
-7-
Chief Executive Officer. Mr. Dabah believes that Mr. Benaroya would be a
candidate of exceptional integrity and accomplishment with extensive corporate
management experience in the retail industry. Mr. Benaroya has experience as a
director of public companies, and based on his experiences has developed
meaningful exposure to and understanding of the children's marketplace. Mr.
Dabah is confident that Mr. Benaroya would provide the Company with the vision
and leadership to ensure that the Company leverages its strong brand name and
achieves its full growth potential. There can be no assurance that Mr. Benaroya
would accept the CEO position if it were offered to him nor can there be any
assurance that the Board would agree to appoint Mr. Benaroya as CEO. Moreover,
there can be no assurance that the Board and Mr. Benaroya would agree to the
terms of Mr. Benaroya's service as CEO.
2. Attract and retain key talent.
The Company has been in a transitional state for more than 19
months. Since the appointment of Mr. Crovitz as Interim CEO, the Company has
experienced a number of senior level departures, all talented individuals who
had long tenures with and expertise in The Children's Place brand. Some of these
individuals left voluntarily and others left at the behest of Mr. Crovitz and
Susan Riley, an Executive Vice President and Chief Financial Officer of the
Company. Mr. Dabah believes that these departures have been in-large part due to
the deterioration of the Company's energetic and collaborative culture
established during Mr. Dabah's tenure as Chairman and CEO. The current Board has
not been successful in filling these vacated positions and the Company is
currently operating without a President, General Merchandise Manager and General
Counsel. The Company's merchandising strategy is built on the offering of key
basic items at exceptional values, complemented by fashion items and accessories
to create a fully coordinated look. The success of a product-driven company like
The Children's Place depends on its ability to attract and retain creative and
enterprising individuals. Under Mr. Crovitz's leadership, the Company has
suffered a loss of key management and creative talent, and the Company's
remaining creative talent has had to endure a leadership void in inspiration and
creativity. In addition, under Mr. Dabah's leadership, the Company developed a
strong sourcing base for its products. By failing to retain key talent in this
area, the Board and management are jeopardizing the Company's ability to
continue to capitalize on the long-term relationships and efficient chain of
supply that the Company has developed and which is known to be one of the
Company's core competencies. The Board and senior management must initiate
efforts to retain key team employees, rehire key talent that has left, and
restore the stimulating, energetic and creative culture for which the Company
was formerly known.
3. Position the Company for growth.
Since Mr. Dabah's departure, the Company has not introduced new
initiatives for the future growth of the Company. Mr. Dabah believes that the
Board's inability and unwillingness to articulate future growth initiatives will
have a long term negative effect on shareholder value. In order to maximize
shareholder value, Messrs. Benaroya, Fingerman and Glickman are expected to urge
the Board to:
o Aggressively roll out the shoe concept and pursue The
Children's Place's brand potential. In Mr. Dabah's opinion,
this will allow the Company to ultimately gain high
single-digit market share in a fragmented shoe market.
-8-
o Focus on eCommerce growth by setting the online store on a
growth trajectory to exceed $250 million in sales by 2011,
including the introduction of international shipping.
o Roll out the small market store concept, which we believe can
yield an additional 300 to 400 stores in North America, over
and above the Company's 1,100 to 1,200 store potential.
o Develop Mr. Dabah's Big Box (18,000 square feet) vision. Under
this new concept, The Children's Place will offer vertically
integrated, related and matching apparel, shoes, home
furnishings and accessories, with a selection of toys, all
under one roof.
Mr. Dabah and the Nominees believe the above actions will greatly
improve the Company's short-term and long-term prospects and put the Company in
the best position to achieve maximum value for all shareholders.
Mr. Dabah urges you to vote your GOLD proxy card FOR Raphael
Benaroya, Jeremy J. Fingerman and Ross B. Glickman and FOR the bylaw restoration
proposal.
-9-
PROPOSAL 1: ELECTION OF DIRECTORS
According to the Company's proxy statement, three Class III
directors are to be elected to the Board at the 2009 Annual Meeting. Mr. Dabah
recommends that shareholders elect Raphael Benaroya, Jeremy J. Fingerman and
Ross B. Glickman as Class III directors at the 2009 Annual Meeting. Each of the
Nominees has consented to being named as a Nominee and to serving as a director
if elected. Mr. Dabah has no preexisting social, business or professional
relationship with any of the Nominees. If elected, each Nominee will serve for a
three-year term and until his successor shall have been duly elected and
qualified or until his earlier death, resignation or removal. If elected, each
of the Nominees will be considered an independent director of the Company under
applicable NASDAQ rules, other than, in the case of Mr. Benaroya, in the event
that he is appointed as Chief Executive Officer of the Company.
The Nominees will not receive any compensation from Mr. Dabah or his
affiliates for their services as directors of the Company if elected. If
elected, the Nominees will be entitled to such compensation from the Company as
is consistent with the Company's prevailing practices for services of
non-employee directors, which is described in the Company's proxy statement.
Biographical Information
Background information about the Nominees, including the present
principal occupation or employment and material occupations, positions and
offices or employment for the past five years of each Nominee, is set forth
below. Please see "INFORMATION ABOUT EZRA DABAH AND PARTICIPANTS" and Annex A
for additional information about the Nominees, such as their beneficial
ownership, purchases and sales of shares of the Company's common stock (if any).
Principal Occupation
Name and Business Address Age For Past Five Years and Directorships
--------------------------- --- --------------------------------------------
Raphael Benaroya 61 Mr. Benaroya is currently the Chairman of
the Board of Directors of Russ Berrie &
c/o Biltmore Capital Company, Inc., a New York Stock Exchange
Group, LLC listed company specializing in the design,
365 West Passaic Street import, marketing, and distribution of
2nd Floor infant and juvenile consumer products, and
Rochelle Park, NJ 07662 was formerly, until February 2009, Chairman
of the Board of Directors of FAO Schwarz,
Inc., a specialty toy retailer. Since April
1, 2008, Mr. Benaroya has also been acting
as a consultant for D. E. Shaw & Co., L.P.,
a global investment and technology
development firm. Mr. Benaroya is also
Managing Director of American Licensing
Group, L.P., a company specializing in
consumer goods' brand name licensing, and a
member of the Board of Managers of Biltmore
Capital Group, LLC, a financial company
which invests in secured debt. Mr. Benaroya
previously served as Chairman of the Board,
President and Chief Executive Officer
-10-
of United Retail Group, Inc., which operates
a chain of approximately 500 retail
specialty stores, from 1989 until its sale
in October 2007 to Redcats USA, a division
of PPR, a French public company, and
continued as President and Chief Executive
Officer thereafter until March 2008. Mr.
Benaroya also formerly held Chief Executive
Officer positions at certain divisions of
The Limited, Inc., from 1984 until 1989.
From 1972 to 1982, Mr. Benaroya was with
General Mills Inc., ultimately becoming
Executive Vice President of the Izod Lacoste
Division. Mr. Benaroya is a graduate of the
University of Minnesota, where he earned an
MBA in the School of Business and a BSc
Degree (with Distinction) in Computer
Science.
Jeremy J. Fingerman 48 Mr. Fingerman is Founder and Managing
Principal of Clairmont Ventures, a strategic
71 Franklin Street, consulting and investment advisory firm
Englewood, NJ 07631 focused on transforming brands and
businesses. Mr. Fingerman served as Chief
Executive Officer and President of R.A.B.
Food Group, LLC, from May 2005 to September
2007. Prior to joining R.A.B., Mr. Fingerman
served as President of the U.S. Soup
Division of Campbell Soup Company. With
responsibility for the company's
largest division, Mr. Fingerman revitalized
Campbell's U.S. Soup franchise, generating
three consecutive years of consumption
growth for the first time in eighteen years.
Mr. Fingerman joined the Campbell Soup
Company in 1993. During his tenure with
Campbell, Mr. Fingerman served as General
Manager of Campbell's Soups Australasia and
Vice-President, Brand Management, of
Arnott's-Campbell's Australasia before
ultimately rising to the position of
President of the U.S. Soup Division. Prior
to joining Campbell, Mr. Fingerman
progressed rapidly through key brand
management assignments at General Mills,
Inc., including Marketing Manager for
Bisquick and Specialty Products, and
Marketing Manager for Child Cereals. Mr.
Fingerman joined General Mills in 1988. Mr.
Fingerman earned an MBA in General
Management from Harvard Business School and
an undergraduate degree in English
Literature from Columbia University.
Ross B. Glickman 60 Mr. Glickman is currently the Chairman of
the Board of Directors and Chief Executive
900 N. Michigan Ave. Officer of Urban Retail Properties, LLC, a
Suite 900 development, leasing and management real
Chicago, IL 60611 estate company, specializing in retail
shopping centers, a position he has held
since April 2002. Mr. Glickman joined
-11-
Urban Retail in 1991. Mr. Glickman also
served as a director of United Retail Group
Inc. from 2006 to 2007. Prior to joining
Urban Retail in 1991, he was President of
Glickman Properties, a shopping center
development firm. From 1984 to 1989, Mr.
Glickman was Director of Real Estate for The
Limited, Inc., where he was responsible for
expanding the company's divisions, including
the Limited Stores, Limited Express,
Victoria's Secret, Lane Bryant, Lerner, and
Sizes Unlimited. From 1979 to 1984, Mr.
Glickman was Director of Real Estate for
General Nutrition Center (Pittsburgh), where
he expanded the company from 500 to 1,500
company-owned stores nationwide in only four
years. From 1973 to 1979, Mr. Glickman was a
Vice President of The Athlete's Foot, where
he grew the Pittsburgh division of the
specialty retail athletic footwear chain
from one store to 400. Mr. Glickman holds a
Bachelor of Arts degree from The Ohio State
University.
If any of the Nominees is unable to stand for election at the 2009
Annual Meeting, the proxies named on the attached GOLD card will vote for the
following Alternate Nominee:
Emanuel R. Pearlman 49 Mr. Pearlman is the founder and Chief
Executive Officer of Liberation Investment
900 Third Avenue Group LLC, a New York-based investment
Suite #1000 management firm. Mr. Pearlman is also a
New York, New York 10022 director of Multimedia Games, Inc., a
position he has held since October 2006.
Prior to founding Liberation, Mr. Pearlman
was the Chief Operating Officer of Vornado
Operating Corporation. For 14 years, Mr.
Pearlman ran Gemini Partners, which
specialized in strategic block investing and
financial consulting. Mr. Pearlman's
experience in the gaming industry includes
consulting to Jackpot Enterprises and to
Bally Entertainment Corporation, where he
advised the companies on their business and
financial activities. Mr. Pearlman received
a B.A. in Economics from Duke University and
an MBA from Harvard Business School.
MR. DABAH STRONGLY URGES YOU TO VOTE FOR THE ELECTION OF THE
NOMINEES BY SIGNING, DATING AND RETURNING YOUR GOLD PROXY CARD TODAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
-12-
PROPOSAL 2: RATIFY AUDIT COMMITTEE'S SELECTION OF INDEPENDENT AUDITORS
According to the Company's proxy statement, the Company is
soliciting proxies to ratify the Audit Committee's selection of BDO Seidman LLP
as the Company's independent auditors for fiscal 2009. Please refer to the
Company's proxy statement under "Matters Requiring Stockholder Attention:
Proposal No. 2 -- Ratification of the Appointment of Independent Registered
Public Accounting Firm" for a discussion of this proposal. Mr. Dabah does not
object to the ratification of the Company's Audit Committee's selection of BDO
Seidman LLP as the Company's independent auditors.
You can vote for the ratification of BDO Seidman LLP as the
Company's independent auditors for fiscal 2009 by signing, dating and returning
your GOLD proxy card today in the enclosed postage paid envelope.
PROPOSAL 3: BYLAW RESTORATION PROPOSAL
Mr. Dabah plans to present the bylaw restoration proposal for
consideration at the 2009 Annual Meeting. The bylaw restoration proposal states:
"RESOLVED, that any provision of the Bylaws of the Corporation as of
the effectiveness of this resolution adopted by the Board of the Corporation and
not by the shareholders of the Corporation that were not included in the Bylaws
of the Corporation, as amended through March 5, 2009 and as filed with the
Securities and Exchange Commission on March 6, 2009, be and hereby are
repealed."
The purpose of and reason for the bylaw restoration proposal is to
prevent the incumbent Board from adopting any changes to the Company's Bylaws
that could serve to limit the ability of the Nominees to pursue the best
interests of the Company and its stockholders. If the incumbent Board does not
effect any change to the version of the Bylaws publicly available in a filing by
the Company with the Securities and Exchange Commission on March 6, 2009, the
bylaw restoration proposal will have no effect. However, if the incumbent Board
has made changes since that time, the bylaw restoration proposal, if adopted,
will restore the Bylaws to the version that was filed as Exhibit 3.1 to the Form
8-K filed by the Company with the SEC on March 6, 2009, without considering the
nature of any changes the incumbent Board may have adopted. The bylaw
restoration proposal will not preclude the newly-elected Board from
reconsidering any repealed Bylaw changes following the proxy solicitation.
MR. DABAH STRONGLY URGES YOU TO VOTE FOR THE BYLAW RESTORATION
PROPOSAL BY SIGNING, DATING AND RETURNING YOUR GOLD PROXY CARD TODAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
-13-
OTHER PROPOSALS
The Participants (as defined below) and their affiliates know of no
other business to be presented at the 2009 Annual Meeting. If any other matters
should properly come before the 2009 Annual Meeting, it is intended that the
persons named on the enclosed GOLD proxy card will vote that proxy on such other
matters in accordance with their judgment.
INFORMATION ABOUT EZRA DABAH AND PARTICIPANTS
This proxy solicitation is being conducted by Ezra Dabah. Mr. Dabah
is the beneficial owner of approximately 16.9% of the outstanding common stock
of The Children's Place. Each of Mr. Dabah, Mrs. Dabah, the Nominees and the
Alternate Nominee (each, a "Participant" and collectively, the "Participants")
may be deemed to be participants in this proxy solicitation.
The Dabahs
Ezra Dabah is the former Chairman of the Board and Chief Executive
Officer of the Company. He currently serves as a member of the Company's Board
of Directors. Mr. Dabah's business address is 120 Central Park South, New York,
NY 10019.
Renee Dabah's business address is 120 Central Park South, New York,
NY 10019 and her present principal occupation is personal investor. Mrs. Dabah
is a citizen of the United States.
Nominees and Alternate Nominee
Please see "Proposal 1: Election of Directors" for additional
information about the Nominees and the Alternate Nominee.
Beneficial Ownership of Common Stock
The following table shows the beneficial ownership of each
Participant of shares of the Company's outstanding common stock as of the Record
Date. Except as described below, each of the individuals in the table directly
owns and has sole voting power and sole dispositive power with regard to the
number of shares beneficially owned. Please see Annex A for additional
information about the Participants' purchases and sales of shares of the
Company's common stock.
Number of Shares Percent of Outstanding
Entity Beneficially Owned Common Stock (1)
------------ ------------------ ----------------------
Ezra Dabah 5,002,710 16.9%
Renee Dabah 5,002,710 16.9%
Total 5,002,710 16.9%
(1) Calculated on the basis of 29,559,643 shares outstanding as of May 1, 2009.
-14-
Ezra Dabah is the beneficial owner of 5,002,710 shares, representing
16.9% of the Company's common stock outstanding as of May 1, 2009.(1) Mr. Dabah
(i) has the sole power to vote or to direct the vote and to dispose or direct
the disposition of 1,643,250 of such shares (which includes 272,000 shares that
are issuable upon the exercise of outstanding vested options), (ii) has shared
power to vote or to direct the vote and to dispose or direct the disposition of
2,879,360 of such shares held by Mr. Dabah and others, as custodians or trustees
for Mr. Dabah's children and certain other family members, (iii) has shared
power to vote or to direct the vote and to dispose or direct the disposition of
376,000 of such shares held by Mr. Dabah and his wife as joint tenants with
right of survivorship and (iv) may be deemed to have shared power to vote or to
direct the vote and to dispose or direct the disposition of 104,100 of such
shares owned by Mr. Dabah's wife.
Renee Dabah, wife of Ezra Dabah, is the beneficial owner of
5,002,710 shares, representing 16.9% of the total number of the Company's
outstanding common stock as of May 1, 2009.(1) Mrs. Dabah (i) has the sole power
to vote or to direct the vote and to dispose or direct the disposition of
104,100 of such shares, (ii) has shared power to vote or to direct the vote and
to dispose or direct the disposition of 2,879,360 of such shares held by Mrs.
Dabah and others, as custodians or trustees for Mrs. Dabah's children and
certain other family members, (iii) has shared power to vote or to direct the
vote and to dispose or direct the disposition of 376,000 of such shares held by
Mrs. Dabah and her husband as joint tenants with right of survivorship and (iv)
may be deemed to have shared power to vote or to direct the vote and to dispose
or direct the disposition of 1,643,250 of such shares (which includes 272,000
shares that are issuable to Mrs. Dabah's husband upon the exercise of vested
stock options) owned by Mrs. Dabah's husband.
Neither of the Dabahs owns beneficially, directly or indirectly,
shares of any class of securities of any parent or subsidiary of the Company.
Stanley Silverstein, a member of the Board and Mr. Dabah's
father-in-law, beneficially and directly owns and has sole voting power and sole
dispositive power with regard to 261,697 shares (including shares underlying
options). Mr. Silverstein may be deemed to have shared voting power and shared
dispositive power with regard to, and therefore may be deemed to beneficially
own (within the meaning of Rule 13d-3 under the Securities and Exchange Act of
1934 (the "Exchange Act")) 2,928,880 shares, composed of shares held by Mr.
Silverstein's wife, Raine Silverstein, as custodian or trustee for the benefit
of Mr. Silverstein's children and grandchildren. Mr. Silverstein disclaims
beneficial ownership of the 2,928,880 shares held by Mr. Silverstein's wife, as
custodian or trustee for the benefit of Mr. Silverstein's children and
grandchildren. The business address of Mr. Silverstein is 915 Secaucus Road,
Secaucus, New Jersey 07094.
----------
(1) Does not include 1,475,327 shares of Common Stock that may be deemed to be
beneficially owned by certain relatives of Mr. Dabah, including (i) 261,697
shares held by Mr. Dabah's father-in law and mother-in-law, Stanley Silverstein
and Raine Silverstein, and certain of their children and grandchildren, (ii)
215,300 shares of Common Stock held by Barbara Dabah, wife of Mr. Dabah's
brother, Haim Dabah, both directly and for the benefit of their children or
(iii) 998,330 shares of Common Stock held by Gila Dweck, Mr. Dabah's sister, and
her children held both directly and in trust. Other members of Mr. Dabah's
family may own additional shares. There is no agreement or understanding with
these parties with respect to the voting or disposition of any shares. The
Dabahs disclaim beneficial ownership of any such shares.
-15-
Each of the Dabahs disclaims beneficial ownership of the 3,190,577
shares which Mr. Silverstein and his wife (the "Silverstein Parties") may be
deemed to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act). There is no agreement, arrangement or understanding between any of the
Dabahs and the Silverstein Parties with respect to the voting or disposition of
any shares of the Company's common stock.
Except as disclosed in this proxy statement, none of the Nominees
nor any of their associates is a record owner or direct or indirect beneficial
owner of any stock of the Company or any parent or subsidiary of the Company.
Nominee Agreements
Each Nominee is a party to an agreement (each a "Nominee Agreement")
pursuant to which each nominee has consented to being named as a nominee for
election as a director of the Company by Mr. Dabah, and Mr. Dabah has agreed to
pay the costs of soliciting proxies in support of the election of the Nominees
to the Board and the adoption of the bylaw restoration proposal at the 2009
Annual Meeting, and to indemnify each Nominee with respect to certain costs that
may be incurred by such Nominee in connection with his nomination as a candidate
for election to the Board at the 2009 Annual Meeting and the solicitation of
proxies in support of his election. In addition, Mr. Dabah has agreed to
reimburse Mr. Benaroya for certain costs and expenses in connection with Mr.
Benaroya's nomination, including the fees and expenses of Mr. Benaroya's
counsel, up to a maximum amount of $30,000.
Transactions with the Company
Mr. Dabah is the son-in-law of Stanley Silverstein, a member of the
Board. Mr. Dabah's nephew, Michael Leventhal, is employed by the Company. Nina
Miner, Mr. Silverstein's daughter and Mr. Dabah's sister-in-law, is employed by
the Company as Senior Vice President, Chief Creative Officer. For fiscal 2008,
Ms. Miner received cash compensation of $641,702 in base salary, $10,000 in car
allowance, $624 in insurance premiums paid by the Company with respect to life
insurance for the benefit of Ms. Miner and $4,993 in matching contributions
under the Company's 401(k) Plan. On July 14, 2008, the Company granted Ms. Miner
a performance award for 2008 with a target number of 14,428 shares, subject to
the terms and conditions of a performance award agreement between Ms. Miner and
the Company. Under the terms of Ms. Miner's 2008 performance award, Ms. Miner
earned 4,810 shares for fiscal year 2008, and, if Ms. Miner is employed by the
Company on the delivery date in fiscal 2011, she will receive the shares on the
delivery date. In addition, Ms. Miner may earn an additional 4,810 performance
shares for fiscal year 2008 if the Company achieves the three year cumulative
operating income target. On July 14, 2008, Ms. Miner was also granted a deferred
stock award for 2008 with a target number of 14,428 shares, subject to the terms
and conditions of a deferred stock award agreement between Ms. Miner and the
Company.
During fiscal 2008, the Company purchased approximately $400,000 of
footwear from Nina Footwear Corporation. Stanley Silverstein, who is a member of
the Board and the father-in-law of Mr. Dabah, owns Nina Footwear Corporation
with his brother. Mr. Silverstein is not actively involved in the Nina Footwear
business. The Company's Compensation
-16-
Committee determined that the transactions with Nina Footwear Corporation were
on terms no less favorable than could have been obtained from an unaffiliated
third party.
Other than as disclosed in this proxy statement, (i) there are no
transactions, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transaction, or series of
similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $120,000 and in which the
Participants or any immediate family member of any Participant had, or will
have, a direct or indirect material interest; and (ii) neither the Participants
nor any member of their immediate family, nor any corporation or organization of
which the Participants are executive officers or partners or are, directly or
indirectly, the beneficial owners of ten percent or more of any class of equity
securities, nor any trust or other estate in which the Participants have a
substantial beneficial interest or as to which the Participants serve as a
trustee or in a similar capacity, has been indebted to the Company or its
subsidiaries at any time since the beginning of the Company's last fiscal year
in an amount in excess of $120,000.
Interests of the Participants
Each Participant has an interest in the election of directors: (i)
indirectly through the beneficial ownership (if any) of shares and other
securities and/or (ii) pursuant to the Nominee Agreements. In addition, since
September 2007, the Board has been searching for a permanent Chief Executive
Officer to replace the Company's interim Chief Executive Officer, Charles
Crovitz. To date, the Board has not identified a permanent Chief Executive
Officer. Mr. Dabah has engaged in preliminary discussions with Raphael Benaroya
regarding the possibility of proposing that he serve as Chief Executive Officer
of the Company. To date, Mr. Benaroya has not made a determination as to whether
he is willing to be considered for the CEO position. If Mr. Benaroya is willing
to serve as Chief Executive Officer, Mr. Dabah plans to propose to the Board
that he be appointed to that position.
On May 12, 2008, Mr. Dabah and Golden Gate entered into a
non-binding (other than with respect to exclusivity) understanding with respect
to their mutual participation in a potential acquisition of the Company. Mr.
Dabah and Golden Gate agreed that, for a period of ninety days from May 12, 2008
(the "Exclusivity Period"), they would work together exclusively to develop a
formal proposal to acquire the Company. Mr. Dabah and Golden Gate agreed that,
during the Exclusivity Period, neither they nor any of their representatives or
agents would discuss, pursue, enter into any agreement, vote in favor of or
participate in any manner with respect to the acquisition of all or any
substantial portion of the capital stock or assets of the Company (a "Business
Combination Transaction") without the participation of the other party in any
such transaction. However, neither Mr. Dabah nor Golden Gate would be prevented
from participating in (i) any back end merger of the Company following the
acquisition by a third party of a majority interest in the capital stock of the
Company or (ii) any Business Combination Transaction between the Company and a
third party that (A) did not involve the participation of such party prior to
the approval of such transaction by the independent members of the Board and (B)
Mr. Dabah and Golden Gate mutually agreed not to attempt to overbid. Under the
agreement, if either Mr. Dabah or Golden Gate received a proposal, offer or
expression of interest to engage in a Business Combination Transaction during
the Exclusivity Period, that party would be obligated to promptly notify the
other of such proposal, offer or expression of
-17-
interest and provide the other party with all material information relating
thereto. Mr. Dabah and Golden Gate have no current agreement or understanding
with respect to a potential acquisition of the Company.
On September 4, 2008, the Dabahs engaged Moelis & Company ("Moelis")
to act as a financial advisor to the Dabahs in connection with any potential
acquisition or other transaction involving the Company. The Dabahs agreed to pay
Moelis (i) a transaction fee of $3,300,000 if the Dabahs consummate an
acquisition of the Company, (ii) a fee of $1,250,000 upon certain sales or
transfers of securities or other interests in the Company by the Dabahs and
(iii) a cash fee equal to 7.5% of any "break-up" or "topping fee" or other
payment or consideration that the Dabahs may receive in connection with the
termination or cancellation of a transaction that is entered into between the
Company and the Dabahs, such cash fee not to exceed $3,300,000. The Dabahs also
agreed to reimburse Moelis for its expenses and indemnify Moelis and its
affiliates against certain liabilities and expenses, including liabilities under
the federal securities laws, arising out of their performance of services for
the Dabahs. On May 14, 2009, Mr. Dabah terminated this engagement. However,
Moelis will continue to be entitled to the full amount of any compensation
payable pursuant to the terms of the engagement for a period of 12 months
following its termination. In addition, Mr. Dabah has engaged Moelis to act as
his financial advisor in connection with the proxy solicitation and Moelis will
receive a customary retainer fee for its services.
On September 4, 2008, the Dabahs engaged Mr. Ilan Kaufthal to act as
a financial advisor to the Dabahs in connection with any potential acquisition
or other transaction involving the Company. The Dabahs agreed to pay Mr.
Kaufthal (i) a transaction fee of $3,300,000 if the Dabahs consummate an
acquisition of the Company, (ii) a fee of $1,250,000 upon certain sales or
transfers of securities or other interests in the Company by the Dabahs and
(iii) a cash fee equal to 7.5% of any "break-up" or "topping fee" or other
payment or consideration that the Dabahs may receive in connection with the
termination or cancellation of a transaction that is entered into between the
Company and the Dabahs, such cash fee not to exceed $3,300,000. The Dabahs also
agreed to reimburse Mr. Kaufthal for his expenses and indemnify Mr. Kaufthal and
his affiliates against certain liabilities and expenses, including liabilities
under the federal securities laws, arising out of their performance of services
for the Dabahs. On May 14, 2009, Mr. Dabah terminated this engagement. In
addition, Mr. Dabah has engaged Mr. Kaufthal to act as his financial advisor in
connection with the proxy solicitation and Mr. Kaufthal will receive a customary
retainer fee for his services.
Other than as disclosed in this proxy statement, there are no
arrangements or understandings between the Participants and any Nominee or any
other person or persons with respect to the nomination of the Nominees or
adoption of Mr. Dabah's other proposals.
Other than as disclosed in this proxy statement, neither Mr. Dabah,
any of the other Participants nor any of their respective affiliates, associates
or immediate family members, directly or indirectly:
o is, and was not within the past year, party to any contract,
arrangement or understanding with any person with respect to
any securities of the Company, including, but not limited to,
joint ventures, loan or option
-18-
arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the
giving or withholding of proxies;
o has had any relationship with the Company in any capacity
other than as a shareholder that would require disclosure
herein;
o has any agreement, arrangement or understanding with respect
to any future employment by the Company or its affiliates;
o has any agreement, arrangement or understanding with respect
to future transactions to which the Company or any of its
affiliates will or may be a party; or have any material
interest, direct or indirect, in any transaction that has
occurred since February 2, 2008, or any currently proposed
transaction, or series of similar transactions, which the
Company or any of its affiliates was or is to be a party and
in which the amount involved exceeds $120,000; or
o is a party adverse to the Company or any of its subsidiaries
or has a material interest adverse to the Company or any of
its subsidiaries in any material legal proceeding.
The Dabahs have filed with the SEC a statement on Schedule 13D,
which contains information in addition to that furnished herein. The Schedule
13D, including amendments thereto, may be inspected at, and copies may be
obtained from, the public reference facilities maintained at the SEC at 100 F
Street, N.E., Washington, DC 20549. Copies of such material can also be obtained
upon written request addressed to the SEC, Public Reference Section, 100 F
Street, N.E., Washington, DC 20549, at prescribed rates. You may obtain
information on the operation of the SEC's Public Reference Room by calling the
SEC at (800) SEC-0330. The SEC also maintains a web site on the Internet
(http://www.sec.gov) where reports, proxy and information statements and other
information regarding issuers and others that file electronically with the SEC
may be obtained free of charge.
PROXY INFORMATION
The enclosed GOLD proxy card may be executed only by holders of
record of shares of the Company's common stock on the Record Date. If you were a
shareholder of record on the Record Date, you will retain your voting rights at
the 2009 Annual Meeting even if you sell your shares after the Record Date.
Accordingly, it is important that you vote the shares held by you on the Record
Date, or grant a proxy to vote your shares on the GOLD proxy card, even if you
sell your shares after the Record Date. The shares represented by each GOLD
proxy card that is properly executed and returned to Mr. Dabah will be voted at
the 2009 Annual Meeting in accordance with the instructions marked thereon. If
you have signed the GOLD proxy card and no marking is made, you will be deemed
to have given a direction to vote all of the shares represented by the GOLD
proxy card (i) FOR the election of all of the Nominees (or, if applicable, the
Alternate Nominee), (ii) FOR the approval of Proposal 2 set forth in this proxy
statement and (iii) FOR the approval of Proposal 3 set forth in this proxy
statement.
-19-
If you hold your shares in the name of one or more brokerage firms,
banks or nominees, only they can vote your shares and only upon receipt of your
specific instructions. Accordingly, you should contact the person responsible
for your account and give instructions for a GOLD proxy card representing your
shares to be signed and returned. Mr. Dabah urges you to confirm in writing your
instructions to the person responsible for your account and to provide a copy of
those instructions to Ezra Dabah, c/o Innisfree M&A Incorporated, 501 Madison
Avenue, 20th Floor, New York, New York 10022, so that we will be aware of all
instructions given and can attempt to ensure that those instructions are
followed.
REVOCATION OF PROXIES
Any shareholder of record may revoke or change his or her proxy
instructions at any time prior to the vote at the 2009 Annual Meeting by:
o submitting a properly executed, subsequently dated GOLD proxy
card that will revoke all prior proxy cards, including any
White proxy cards you have executed;
o voting your GOLD proxy card by telephone or via the Internet
(instructions are on your GOLD proxy card);
o attending the 2009 Annual Meeting and withdrawing his or her
proxy by voting in person (although attendance at the 2009
Annual Meeting will not in and of itself constitute revocation
of a proxy); or
o delivering written notice of revocation either to Ezra Dabah
c/o Innisfree M&A Incorporated, 501 Madison Avenue, 20th
Floor, New York, New York 10022, or the Corporate Secretary of
The Children's Place at 915 Secaucus Road, Secaucus, New
Jersey 07094, or any other address provided by the Company.
Although a revocation is effective if delivered to the Company, Mr.
Dabah requests that either the original or a copy of any revocation be mailed to
Ezra Dabah c/o Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New
York, New York 10022, so that Mr. Dabah will be aware of all revocations and can
more accurately determine if and when the requisite proxies for the election of
the Nominees as directors and the other proposals set forth herein have been
received. Mr. Dabah may contact shareholders who have revoked their proxies.
IF YOU PREVIOUSLY SIGNED AND RETURNED A WHITE PROXY CARD TO THE
COMPANY, MR. DABAH URGES YOU TO REVOKE IT BY (1) SIGNING, DATING AND RETURNING
THE GOLD PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE, (2) VOTING YOUR GOLD
PROXY CARD BY TELEPHONE OR VIA THE INTERNET, (3) ATTENDING THE 2009 ANNUAL
MEETING AND VOTING IN PERSON OR (4) DELIVERING A WRITTEN NOTICE OF REVOCATION TO
MR. DABAH OR TO THE SECRETARY OF THE COMPANY.
-20-
QUORUM AND VOTING
Based on the Company's proxy statement, there were 29,559,643 shares
of the Company's common stock outstanding and entitled to vote on the Record
Date. Only shareholders of record at the close of business on the Record Date
will be entitled to vote at the 2009 Annual Meeting. Each share has one vote.
Shareholders of the Company will not have rights of appraisal or similar
dissenter's rights with respect to any matter to be acted upon at the 2009
Annual Meeting. The presence, in person or by proxy, of holders of shares
representing a majority of the outstanding shares eligible to vote at the 2009
Annual Meeting will constitute a quorum. Abstentions and broker non-votes will
be counted as present for purposes of determining whether a quorum is present at
the 2009 Annual Meeting. Assuming a quorum is present or otherwise represented
at the 2009 Annual Meeting, the three nominees receiving the highest number of
votes cast will be elected. Assuming a quorum is present or otherwise
represented at the 2009 Annual Meeting, each of the other proposals set forth in
this proxy statement will be approved by the majority of the votes cast by the
shareholders entitled to vote. Broker non-votes will not have any effect on the
outcome of the vote on the election of directors or on any of the proposals.
Abstentions will not affect the outcome of the vote on the election of
directors, but will have the same practical effect as a negative vote on the
proposal ratifying the appointment of BDO Seidman, LLP and the bylaw restoration
proposal. Delaware law expressly provides for the authorization of proxies by
electronic means. Accordingly, you may submit your proxy by telephone or the
Internet. To submit a proxy with voting instructions by telephone please call
the telephone number listed on the GOLD proxy card. Proxies may also be
submitted over the Internet. Please refer to the GOLD proxy card for the website
information. In each case shareholders will be required to provide the unique
control number which has been printed on each shareholder's GOLD proxy card. In
addition to the instructions that appear on the GOLD proxy card, step-by-step
instructions will be provided by a recorded telephone message for those
shareholders submitting proxies by telephone, or at the designated website for
those shareholders submitting proxies over the Internet.
YOUR VOTE IS EXTREMELY IMPORTANT. MR. DABAH URGES YOU TO SIGN, DATE
AND RETURN THE ENCLOSED GOLD PROXY CARD TODAY OR INSTRUCT MR. DABAH BY TELEPHONE
OR VIA THE INTERNET TO VOTE FOR THE ELECTION OF THE NOMINEES.
COST AND METHOD OF SOLICITATION
Mr. Dabah has retained Innisfree M&A Incorporated to serve as an
advisor and to provide consulting and analytic services and solicitation
services in connection with the solicitation of proxies. For these services,
Innisfree M&A Incorporated is to receive a fee not to exceed [_], plus
reimbursement for its reasonable out-of-pocket expenses. Mr. Dabah has agreed to
indemnify Innisfree M&A Incorporated against certain liabilities and expenses.
Proxies may be solicited by mail, courier services, e-mail, internet,
advertising, telephone, facsimile or in person. It is anticipated that Innisfree
M&A Incorporated will employ approximately 100 people to solicit proxies from
shareholders for the 2009 Annual Meeting. Innisfree M&A Incorporated does not
believe that any of its directors, officers, employees, affiliates or
controlling persons, if any, is a "participant" in this proxy solicitation or
that Schedule 14A requires the disclosure of certain information concerning
Innisfree M&A Incorporated.
-21-
In addition, it is anticipated that Messrs. Benaroya, Fingerman and
Glickman will participate in the solicitation of proxies in support of the
Nominees and the other proposals set forth in this proxy statement. Although no
precise estimate can be made at the present time, the total expenditures in
furtherance of, or in connection with, the solicitation of shareholders is
estimated to be $[_]. As of the date hereof, Mr. Dabah has incurred
approximately $[_] of solicitation expenses.
Costs related to this solicitation of proxies, including
expenditures for attorneys, accountants, public relations and financial
advisors, proxy solicitors, advertising, printing, transportation and related
expenses will be borne by Mr. Dabah. To the extent legally permissible, Mr.
Dabah will seek reimbursement from the Company for those expenses if any of the
Nominees is elected.
Mr. Dabah intends to deliver a proxy statement and form of proxy to
at least the percentage of shareholders that will be required to carry the
matters set forth in this proxy statement.
OTHER INFORMATION
Certain information regarding the compensation of directors and
executive officers and certain other matters regarding the Company and its
officers and directors is required to be contained in the Company's proxy
statement. Certain other information regarding the 2009 Annual Meeting, as well
as procedures for submitting proposals for consideration at the 2010 annual
meeting of shareholders, is also required to be contained in the Company's proxy
statement. Please refer to the Company's proxy statement to review this
information. Please note that because the Participants were not involved in the
preparation of the Company's proxy statement, the Participants cannot reasonably
confirm the accuracy or completeness of certain information contained in the
Company's proxy statement.
Sincerely,
Ezra Dabah
Dated: [_], 2009
-22-
Annex A
Two year transaction history of each Participant
The following table sets forth all transactions with respect to the
shares of the Company's common stock effected by each of the Participants during
the two year period ended May 14, 2009. Except as otherwise noted, all such
transactions were effected in the open market.
No. of
Name Date Shares Transaction Type
---------------------------------------------------- -------- ------ ------------------------------------------------------------
The Renee and Ezra Dabah Charitable Foundation, Inc. 12/21/07 22,000 Sale
Ezra Dabah 2/2/08 6,000 Grant of Annual Stock Option Award to Non-Employee Directors
Ezra Dabah and Renee Dabah 4/1/08 19,600 Gift
The Renee and Ezra Dabah Charitable Foundation, Inc. 4/2/08 19,600 Sale
Ezra Dabah and Renee Dabah 4/28/08 50,000 Gift
The Renee and Ezra Dabah Charitable Foundation, Inc. 6/19/08 50,000 Sale
Ezra Dabah 6/28/08 3,143 Transitional Award for Non-Employee Directors
The Dabah Children Charitable Foundation, Inc. 7/25/08 20,000 Sale
Ezra Dabah 2/1/09 5,254 Deferred Stock Award
Liberation Investment Group 8/10/07 10,000 Purchase
Liberation Investment Group 8/13/07 10,000 Sale
Liberation Investment Group 8/23/07 35,000 Purchase
Liberation Investment Group 8/23/07 35,000 Sale
A-1
SPECIAL INSTRUCTIONS
Please review this proxy statement and the enclosed materials
carefully. YOUR VOTE IS VERY IMPORTANT, no matter how many or how few shares you
own.
1. If your shares are registered in your own name, please sign, date
and mail the enclosed GOLD proxy card today to Ezra Dabah, c/o Innisfree M&A
Incorporated, in the postage-paid envelope provided or vote your shares by
telephone or via the Internet (instructions are on your GOLD proxy card).
2. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a GOLD proxy card with respect to
your shares and only after receiving your specific instructions. Vote your
shares today by following the instructions on the enclosed GOLD proxy card as
soon as possible.
3. After signing and returning the enclosed GOLD proxy card, Mr.
Dabah urges you NOT to return any White proxy card to the Company, even as a
protest, because only your latest dated proxy card will be counted.
4. If you have previously signed and returned a White proxy card to
The Children's Place, you have every right to change your vote. Only your latest
dated proxy card will count. You may revoke any proxy card already sent to The
Children's Place by signing, dating and returning the enclosed GOLD proxy card
in the postage-paid envelope provided. Proxies may also be revoked at any time
prior to exercise by: (i) attending the 2009 Annual Meeting and voting in person
(although attendance at the 2009 Annual Meeting will not in and of itself
constitute revocation of a proxy), (ii) voting your GOLD proxy card by telephone
or via the Internet (instructions are on your GOLD proxy card) or (iii)
delivering a written notice of revocation. The written notice of revocation may
be delivered either to Ezra Dabah c/o Innisfree M&A Incorporated, 501 Madison
Avenue, 20th Floor, New York, New York 10022, or to the Corporate Secretary of
the Company at 915 Secaucus Road, Secaucus, New Jersey 07094, or any other
address provided by the Company.
If you have any questions concerning this proxy statement, would
like to request additional copies of this proxy statement or need help voting
your shares, please contact Mr. Dabah's proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders Call Toll-Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
PLEASE VOTE TODAY!
SEE REVERSE SIDE
FOR THREE EASY WAYS TO VOTE.
v TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE AND SIGN, DATE
AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED v
GOLD PROXY
PRELIMINARY COPY DATED MAY 15, 2009 -SUBJECT TO COMPLETION
PROXY SOLICITED BY EZRA DABAH
2009 Annual Meeting of Shareholders of The Children's Place Retail Stores, Inc.
June 26, 2009
The undersigned hereby appoints each of Ezra Dabah ("Mr. Dabah") and Renee Dabah
("Mrs. Dabah") (acting alone or together), with full power of substitution, as
proxies for the undersigned and authorizes either of them to represent and vote,
as designated, all of the shares of common stock of The Children's Place Retail
Stores, Inc. (the "Company" or "The Children's Place") that the undersigned
would be entitled to vote if personally present at the 2009 annual meeting of
shareholders of The Children's Place, including any adjournments, postponements,
reschedulings or continuations of such meeting or any meeting held in lieu
thereof (the "2009 Annual Meeting") with discretionary authority as to any and
all other matters that may properly come before the meeting.
IF YOU VALIDLY EXECUTE AND RETURN THIS PROXY CARD WITHOUT INDICATING YOUR VOTE
ON ONE OR MORE OF THE FOLLOWING PROPOSALS, YOU WILL BE DEEMED TO HAVE VOTED FOR
SUCH PROPOSALS (EXCEPT YOU WILL NOT BE DEEMED TO VOTE FOR THE ELECTION OF ANY
CANDIDATE WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED UNDER PROPOSAL 1). THIS
PROXY WILL REVOKE ANY PREVIOUSLY EXECUTED PROXY WITH RESPECT TO ALL PROPOSALS.
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 26, 2009: the proxy materials are
available at http://www.eproxyaccess.com/plce.
(Continued and to be signed on the reverse side)
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of The Children's Place Retail
Stores, Inc. common stock for the upcoming Annual Meeting of Shareholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1. Vote by Telephone -- Please call toll-free in the U.S. or Canada at
1-866-594-5268, on a touch-tone telephone. If outside the U.S. or Canada,
call 1-215-521-4898. Please follow the simple instructions. You will be
required to provide the unique control number printed below.
OR
2. Vote by Internet -- Please access https://www.proxyvotenow.com/plce, and
follow the simple instructions. Please note you must type an "s" after
http. You will be required to provide the unique control number printed
below.
________________________________________________
You may vote by telephone or Internet 24 hours a day, 7 days a week.
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you had marked, signed and returned a proxy card.
OR
3. Vote by Mail -- If you do not wish to vote by telephone or over the
Internet, please sign, date and return the proxy card in the envelope
provided, or mail to: Ezra Dabah, c/o Innisfree M&A Incorporated, FDR
Station, P.O. Box 5155, New York, NY 10150-5155.
v TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE AND SIGN, DATE
AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED v
MR. DABAH STRONGLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES
LISTED IN PROPOSAL 1, MAKES NO RECOMMENDATION ON PROPOSAL 2 AND STRONGLY
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 3.
PROPOSAL 1 - To elect (01) Raphael Benaroya, (02) Jeremy J. Fingerman and (03)
Ross B. Glickman to the Board.
FOR ALL NOMINEES [__] WITHHOLD FROM ALL NOMINEES [__] FOR ALL EXCEPT [__]
Mr. Dabah intends to use this proxy to vote FOR Messrs. Benaroya, Fingerman and
Glickman (and if any of these nominees is unable to stand for election, for
Emanuel R. Pearlman in place of such nominee).
NOTE: If you do not wish your shares to be voted "FOR" a particular nominee of
Mr. Dabah, mark the "FOR ALL EXCEPT" box and write the name(s) of the nominee(s)
you do not support on the line below.
________________________________________________
PROPOSAL 2 - To ratify The Children's Place Audit Committee's selection of BDO
Seidman LLP as the Company's independent auditors for fiscal 2009.
FOR [__] AGAINST [__] ABSTAIN [__]
PROPOSAL 3 - To repeal any provision of the Bylaws of the Company as of the
effectiveness of this resolution adopted by the Board of the Company and not by
the shareholders of the Company that were not included in the Bylaws of the
Company, as amended through March 5, 2009 and as filed with the Securities and
Exchange Commission on March 6, 2009.
FOR [__] AGAINST [__] ABSTAIN [__]
Dated
________________________________________
Signature(s)
________________________________________
Signature (if held jointly)
________________________________________
Title(s) or Authority (if any)
Please sign exactly as name appears hereon. If shares are registered in more
than one name, the signature of all such persons should be provided. A
corporation should sign in its full corporate name by an authorized officer,
stating his or her title. Trustees, guardians, executors and administrators
should sign in their official capacity, giving their full title as such. If a
partnership, please sign in the partnership name by an authorized person. The
proxy card votes all shares in all capacities.