UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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E COM VENTURES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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E Com Ventures, Inc.
251 International Parkway
Sunrise, Florida 33325
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On December 14, 2005
To our Shareholders:
The Annual Meeting of Shareholders of E Com Ventures, Inc. will be held at
2:00 p.m. on, December 14, 2005, at the E Com Ventures, Inc. Corporate Office,
251 International Parkway, Sunrise, Florida 33325, for the purpose of
considering and acting upon the following:
1. Election of five members to our Board of Directors to hold office
until our 2006 Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
2. Ratification of the appointment of Deloitte & Touche LLP as our
independent public accountants; and
3. Any other matters that properly come before the Annual Meeting.
The Board of Directors is not aware of any other business scheduled for
the Annual Meeting. Any action may be taken on the foregoing proposals at the
Annual Meeting on the date specified above, or on any date or dates to which the
Annual Meeting may be adjourned.
Shareholders of record at the close of business on November 7, 2005 are
entitled to notice of, and to vote at, the Annual Meeting or at any
postponements or adjournments of the Annual Meeting.
By Order of the Board of Directors,
/s/ A. Mark Young
-----------------------------------
A. Mark Young
Chief Financial Officer
Sunrise, Florida
November 22, 2005
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YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.
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TABLE OF CONTENTS
Page
About the Meeting.................................................................................................1
What is the purpose of the Annual Meeting?...............................................................1
Who is entitled to vote at the Annual Meeting?...........................................................1
Who can attend the meeting?..............................................................................1
What constitutes a quorum?...............................................................................1
How do I vote?...........................................................................................2
Can I vote by telephone or electronically?
Can I change my vote after I return my proxy card?.......................................................2
What are the Board's recommendations?....................................................................2
What vote is required to approve each proposal?..........................................................2
Who pays for the preparation of the proxy?...............................................................3
Proposal 1 - Election of Directors................................................................................4
Security Ownership of Certain Beneficial Owners and Management....................................................7
Board of Directors Committees.....................................................................................9
Compensation of Executive Officers and Directors.................................................................11
Report on Executive Compensation.................................................................................16
Report of the Audit Committee....................................................................................17
Certain Relationships and Related Transactions...................................................................19
Performance Graph................................................................................................20
Section 16(a) Beneficial Ownership Reporting Compliance..........................................................21
Proposal 2 - Ratification of the Appointment of Independent Auditors.............................................21
Other Business...................................................................................................23
Contacting the Board of Directors................................................................................23
Shareholder Proposals for the 2006 Annual Meeting................................................................23
i
E COM VENTURES, INC.
ANNUAL MEETING OF SHAREHOLDERS
-----------------------------------
PROXY STATEMENT
-----------------------------------
This Proxy Statement contains information related to our Annual Meeting of
Shareholders to be held on, Wednesday, December 14, 2005, beginning at 2:00
p.m., at the E Com Ventures, Inc. Corporate Office, 251 International Parkway,
Sunrise, Florida 33325, and at any adjournments or postponements thereof. The
approximate date that this Proxy Statement, the accompanying Notice of Annual
Meeting and the enclosed Form of Proxy are first being sent to shareholders is
November 22, 2005. You should review this information in conjunction with our
2004 Annual Report to Shareholders, which accompanies this Proxy Statement.
ABOUT THE ANNUAL MEETING
What is the purpose of the Annual Meeting?
At the Annual Meeting, shareholders will vote on the election of directors
and ratification of the appointment of our independent public accountants. In
addition, we will report on our performance and respond to questions from our
shareholders.
Who is entitled to vote at the Annual Meeting?
Only shareholders of record at the close of business on the record date,
November 7, 2005, are entitled to receive notice of the Annual Meeting and to
vote shares of our common stock that they held on the record date, or any
postponements or adjournments of the Annual Meeting. Each outstanding share of
common stock entitles its holder to cast one vote on each matter to be voted
upon.
Who can attend the Annual Meeting?
All shareholders as of the record date, or their duly appointed proxies,
may attend. If your shares are held in the name of your broker or bank, you will
need to bring evidence of your stock ownership, such as your most recent
brokerage statement, and valid picture identification.
What constitutes a quorum?
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of all of the shares of common stock outstanding on the record
date will constitute a quorum, permitting us to conduct business at the Annual
Meeting. As of the record date, approximately 2,953,000 shares of our common
stock were outstanding. Proxies received but marked as abstentions and broker
non-votes will be included in the calculation of the number of shares considered
to be present at the Annual Meeting for purposes of a quorum, but will not be
counted as votes cast "for" or "against" any given matter.
If less than a majority of outstanding shares entitled to vote are
represented at the Annual Meeting, a majority of the shares present at the
Annual Meeting may adjourn the Annual Meeting to another date, time or place,
and notice need not be given of the new date, time or place if the new date,
time or place is announced at the Annual Meeting before an adjournment is taken.
1
How do I vote?
If you complete and properly sign the accompanying proxy card and return
it to us, it will be voted as you direct. If you are a registered shareholder
and you attend the Annual Meeting, you may deliver your completed proxy card in
person. "Street name" shareholders who wish to vote at the Annual Meeting will
need to obtain a proxy from the institution that holds their shares.
Can I vote by telephone or electronically?
If your shares are held in "street name," please check your proxy card or
contact your broker or nominee to determine whether you will be able to vote by
telephone or electronically.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with our Secretary either a
notice of revocation or a duly executed proxy bearing a later date. You may also
change your vote by attending the Annual Meeting in person and voting. The
powers of the proxy holders will be suspended if you attend the Annual Meeting
in person and vote, although attendance at the Annual Meeting will not by itself
revoke a previously granted proxy.
What are the Board's recommendations?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of our Board of Directors. The recommendation of the Board of
Directors is set forth with the description of each proposal in this Proxy
Statement. In summary, the Board of Directors recommends a vote:
o for the election of the nominated slate of directors; and
o for the ratification of the appointment of Deloitte & Touche LLP, as
our independent public accountants.
The Board of Directors does not know of any other matters that may be
brought before the Annual Meeting, nor does it foresee or have reason to believe
that the proxy holders will have to vote for substitute or alternate Board of
Directors nominees. In the event that any other matter should properly come
before the Annual Meeting or any Board of Directors nominee is not available for
election, the proxy holders will vote as recommended by the Board of Directors
or, if no recommendation is given, in accordance with their best judgment.
What vote is required to approve each proposal?
Election of Directors. The affirmative vote (either in person or by proxy)
of a plurality of the votes cast at the Annual Meeting is required for the
election of directors. This means that candidates who receive the highest number
of votes are elected. Abstentions and broker non-votes are not votes cast and
are not counted in determining whether a nominee is elected. A properly executed
proxy marked to "Withhold Authority" with respect to the election of one or more
directors will not be voted with respect to the director or directors indicated,
although it will be counted for purposes of determining whether there is a
quorum. Shareholders do not have the right to cumulate their votes for
directors.
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Other Proposals. The affirmative vote (either in person or by proxy) of a
majority of the votes cast at the Annual Meeting is required for approval of the
ratification of the appointment of Deloitte & Touche LLP. Abstentions and broker
non-votes are treated as shares present or represented and entitled to vote on
such matters, and thus have the same effect as negative votes. A properly marked
"ABSTAIN" with respect to any such matter will not be voted, although it will be
counted for purposes of determining whether there is a quorum.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such "broker non-votes"
will, however, be counted in determining whether there is a quorum.
Who pays for the preparation of the proxy?
We will pay the cost of preparing, assembling and mailing the Proxy
Statement, Notice of Annual Meeting and enclosed proxy card. In addition to the
use of mail, our employees may solicit proxies personally and by telephone. Our
employees will receive no compensation for soliciting proxies other than their
regular salaries. We may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to the beneficial owners
of our common stock and to request authority for the execution of proxies, and
we may reimburse such persons for their expenses incurred in connection with
these activities.
Our principal executive offices are located at 251 International Parkway,
Sunrise, Florida 33325, and our telephone number is (954) 335-9100. A list of
shareholders entitled to vote at the Annual Meeting will be available at our
offices for a period of ten days prior to the Annual Meeting and at the Annual
Meeting itself for examination by any shareholder.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Directors Standing for Election
At the Annual Meeting, the shareholders will elect five directors, each of
whom will serve for a term expiring at the 2006 Annual Meeting of Shareholders,
or until his or her successor has been duly elected and qualified.
The Board of Directors has no reason to believe that any nominee will
refuse or be unable to serve if elected. However, if any of them should become
unavailable to serve as director, the Board of Directors may designate a
substitute nominee or the number of directors may be reduced in accordance with
our bylaws. If the Board of Directors designates a substitute nominee, the
persons named as proxies will vote for the substitute nominee designated by the
Board of Directors.
The directors standing for election are:
o Stephen Nussdorf
o Michael W. Katz
o Carole Ann Taylor
o Joseph Bouhadana
o Paul Garfinkle
All of our director nominees are currently serving as our directors.
Executive Officers and Directors
The following are our executive officers and directors:
Name Age Position
--------------------------------------- ------ -----------------------------------------------------------
Stephen Nussdorf 54 Chairman of the Board of Directors
Michael W. Katz 57 President, Chief Executive Officer, and Director
A. Mark Young 44 Chief Financial Officer
Donovan Chin 39 Chief Financial Officer of Perfumania, Inc. and Secretary
Leon Geller 50 Vice President of Purchasing, Perfumania, Inc.
Alan Grobman 35 Vice President of Logistics and Distribution, Perfumania,
Inc.
Joel Lancaster 46 Vice President of Stores, Perfumania, Inc.
Carole Ann Taylor(1)(2)(3) 59 Director
Joseph Bouhadana(1)(2)(3) 35 Director
Paul Garfinkle(1) 64 Director
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(1) Member of Audit Committee. Mr. Garfinkle serves as Chairman of the Audit
Committee.
(2) Member of Compensation Committee.
(3) Member of Stock Option Committee.
o Stephen Nussdorf -- was appointed our Chairman of the Board in
February 2004. Mr. Nussdorf is one of the principal shareholders in,
and an executive officer of Quality King Distributors, Inc. (Quality
King"). Quality King is a privately held promotional wholesaler of
pharmaceuticals, health and beauty care products, and fragrances
with annual sales approximating $2.5 billion. Mr. Nussdorf joined
Quality King in 1972 and has served Quality King in various
capacities in all divisions of its business.
o Michael W. Katz -- joined us in February 2004 as our President and
Chief Executive Officer. He was also appointed a director. Mr. Katz
has served in various capacities at Quality King and its affiliated
companies; primarily responsible for overseeing administration,
finance, mergers and acquisitions. Mr. Katz has participated in the
design and implementation of the business strategy that has fostered
the growth of Quality King and its affiliated companies. From 1994
until 1996 he was Senior Vice President of Quality King. Since 1996
he has served as Executive Vice President of Quality King and in the
Office of the Chief Executive and as a director of Model Reorg.,
Inc., an affiliate of Quality King, which sells designer fragrances
at wholesale and retail. Mr. Katz became Executive Vice President,
Chief Financial Officer and Treasurer of QK Healthcare, Inc., a
wholly owned subsidiary of Quality King in 2000. Mr. Katz is a
Certified Public Accountant.
o A. Mark Young -- joined us in February 2000 and became our Chief
Financial Officer in May 2000. He served as one of our directors
from April 2001 until his resignation as a director in September
2002. Prior to February 2000, Mr. Young was employed in the Business
Assurance practice of the Middle Market Group of
PricewaterhouseCoopers LLP. Mr. Young is a Certified Public
Accountant.
o Donovan Chin -- serves as the Chief Financial Officer of Perfumania,
Inc., our wholly owned subsidiary ("Perfumania"). He was appointed
Corporate Secretary in February 1999, director in March 1999
(through February 2004), and Chief Financial Officer of Perfumania
in May 2000. He has also served as our Chief Financial Officer from
February 1999 to May 2000. From May 1995 to February 1999, Mr. Chin
was our Corporate Controller, and from May 1993 to May 1995 he was
Assistant Corporate Controller. Previously, Mr. Chin was employed by
Pricewaterhouse LLP in its Miami audit practice. Mr. Chin is a
Certified Public Accountant.
o Leon Geller -- Leon Geller joined us in March 2001 as Vice President
of Purchasing of Perfumania. Prior to joining us, Mr. Geller was the
Executive Director of a textile distributor in Peru.
o Alan Grobman -- has served as the Vice President of Logistics and
Distribution for Perfumania since February 2003. He also served as
our Director of Fulfillment from November 2000 to February 2003.
From March 1999 to October 2000, Mr. Grobman was Plant Manager of a
Peruvian manufacturer of food and specialty packaging.
5
o Joel Lancaster -- has served as the Vice President of Stores for
Perfumania since July 2000. He also served as our Director of Stores
from August 1997 to July 2000, and as a District Supervisor from
October 1995 to August 1997. Previously, Mr. Lancaster was employed
by Lillie Rubin, Inc. as its National Director of Stores for four
years.
o Carole Ann Taylor -- has been a director since June 1993. She is the
owner of Little Havana to Go, Little Havana's official souvenir
store in historic Little Havana, Miami, Florida, specializing in
art, music, Cuban memorabilia, cigars and clothing. She is also the
owner of Miami To Go, a retail and wholesale Miami souvenir company
and a partner in Miami Airport Duty Free Joint Venture, owners of
the 12 duty free stores at Miami International Airport. Ms. Taylor
is also a board member for the Performing Arts Center Trust of
Miami, the City of Miami International Trade Board, the World Trade
Center, the Academy of Travel and Tourism, the Omni Advisory Board,
the Greater Miami Host Committee, the Visitor Industry Council and
the Miami Dade Community College School of Aviation & Visitor
Services Advisory Committee. She is a member of the Executive
Committee of the Greater Miami Convention & Visitors Bureau. Ms.
Taylor is a member of our Audit, Compensation and Stock Option
Committees.
o Joseph Bouhadana -- was appointed a director in September 2002. Mr.
Bouhadana has served as Corporate Director of Technology for
INTCOMEX, a large distributor of branded computer components,
generic accessories and networking peripherals into the Latin
America and Caribbean regions with thirteen offices in ten
countries, since January 2005. He served as Vice President of
Information Technology of Tutopia.com, a privately owned Internet
service provider with a presence in nine countries in Latin America,
from September 2000 to January 2005. Previously, Mr. Bouhadana was
the Director of Information Technology of Parker Reorder, a publicly
traded company specializing in hospitality business to business
procurement, distribution and logistics systems. Mr. Bouhadana is a
member of our Audit, Compensation and Stock Option Committees.
o Paul Garfinkle -- joined us in February 2004. Mr. Garfinkle retired
from the public accounting firm of BDO Seidman, LLP, in June 2000
after a thirty-six year career. While at BDO Seidman, LLP, Mr.
Garfinkle was an audit partner and client service director for many
of the firm's most significant clients. He also served for many
years as a member of the firm's Board of Directors and, during his
last six years at the firm, as National Director of Real Estate. Mr.
Garfinkle is the Chairman of the Audit Committee.
Our officers serve at the discretion of the Board. Our directors hold
office until the next annual meeting of shareholders and until their successors
have been duly elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED ABOVE TO THE BOARD OF DIRECTORS.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of common stock beneficially owned as
of November 7, 2005 by: (a) each of our directors and nominees for director, (b)
each of our executive officers named in the Executive Compensation Table, as
described below, (c) all of our directors and executive officers as a group and
(d) each person known by us to beneficially own more than 5% of our outstanding
common stock. Unless otherwise provided, the address of each holder is c/o E Com
Ventures, Inc., 251 International Parkway, Sunrise, Florida, 33325.
Common Stock Beneficially Owned
--------------------------------------------------------------------------------------------------------------
Name and Address Total Number of Shares Percent of Shares
of Beneficial Owner Beneficially Owned Outstanding
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Glenn and Stephen Nussdorf 1,557,589 (1)(2)(8)(9) 45.8%
Ilia Lekach 300,000 (1)(3)(4) 10.2%
Michael W. Katz 100,000 (1)(5)(8) 3.3%
A.Mark Young 51,925 (1)(5) 1.7%
Donovan Chin 27,250 (1)(5) *
Joel Lancaster 24,004 (1)(5) *
Alan Grobman 9,400 (1)(5) *
Leon Geller 8,110 (1)(5) *
Carole A. Taylor 4,000 (1)(5) *
Joseph Bouhadana 2,000 (1)(5) *
Paul Garfinkle 0 (1)(8) *
Parlux Fragrances, Inc 378,102 (6) 10.4%
All directors and executive
officers as a group
(11 persons) 1,784,278 (7) 49.3%
-----------------
*Less than 1%.
(1) For purposes of this table, beneficial ownership is computed pursuant to
Rule 13d-3 under the Exchange Act; the inclusion of shares as beneficially
owned should not be construed as an admission that such shares are
beneficially owned for purposes of the Exchange Act. Under the rules of
the Securities and Exchange Commission, a person is deemed to be a
"beneficial owner" of a security if he or she has or shares the power to
vote or direct the voting of such security or the power to dispose of or
direct the disposition of such security. Accordingly, more than one person
may be deemed to be a beneficial owner of the same security.
(2) The principal business address of Messrs. Glenn and Stephen Nussdorf (the
"Nussdorfs") is 2060 Ninth Avenue, Ronkonkoma, New York 11779.
(3) The address of Ilia Lekach is 137 Golden Beach Drive, Golden Beach,
Florida 33160.
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(4) Ilia Lekach jointly owns with his spouse the shares set forth opposite his
respective name.
(5) With respect to the specified beneficial owner, includes shares of common
stock issuable upon the exercise of stock options currently exercisable or
exercisable within 60 days of November 7, 2005 in the following amounts:
Michael W. Katz (100,000); A. Mark Young (50,000); Donovan Chin (27,250);
Joel Lancaster (24,004) Alan Grobman (9,400); Leon Geller (8,110); Carole
A. Taylor (4,000); and Joseph Bouhadana (2,000).
(6) The address of Parlux Fragrances, Inc. is 3725 S.W. 30th Avenue, Ft.
Lauderdale, Florida 33154. Ilia Lekach, our former Chairman and Chief
Executive Officer, is the Chairman of the Board of Parlux Fragrances, Inc.
(7) Includes shares of common stock issuable upon the exercise of stock
options currently exercisable or exercisable within 60 days of November 7,
2005, as set forth in Note 5 above.
(8) Does not include shares issuable upon the exercise of stock options that
are provided for under the Company's 2000 Directors Stock Option Plan as a
result of their appointment to the Board but not granted to each of
Michael Katz, Paul Garfinkle and Stephen Nussdorf. Each of these
directors, who are not employees of the Company, may in the future, be
granted options to acquire shares.
(9) With respect to the beneficial ownership of the Nussdorfs, this includes
444,445 shares of common stock issuable on conversion of a $5,000,000
Subordinated Convertible Note issued by the Company. In March 2004, the
Nussdorfs made a $5,000,000 subordinated secured demand loan to
Perfumania. The demand loan bore interest at the prime rate plus 1%,
required quarterly interest payments and was secured by a security
interest in Perfumania's assets pursuant to a Security Agreement, by and
among Perfumania and the Nussdorfs. There were no prepayment penalties and
the loan was subordinate to all bank related indebtedness. On December 9,
2004 the Company issued a Subordinated Convertible Note (the "Convertible
Note") in exchange for the $5,000,000 subordinated secured demand loan.
The Convertible Note bears interest at the prime rate plus 1%, requires
quarterly interest payments and is secured by a security interest in the
Company's assets pursuant to a Security Agreement, by and among the
Company and the Nussdorfs. There are no prepayment penalties and the
Convertible Note is subordinate to all bank indebtedness. The Convertible
Note is payable in January 2007 and allows the Nussdorfs to convert the
Convertible Note into 444,445 shares of the Company's common stock at a
conversion price of $11.25, which equals the closing market price of the
Company's common stock on December 9, 2004.
Change of Control
Effective January 30, 2004, Ilia Lekach, our former Chairman of the Board
and Chief Executive Officer, IZJD Corp. and Pacific Investment Group, Inc., each
of which are wholly-owned by Mr. Lekach, and Deborah Lekach, Mr. Lekach's wife
(collectively, "Lekach"), entered into an option agreement (the "Nussdorf Option
Agreement"), with Stephen Nussdorf and Glenn Nussdorf (the "Nussdorfs"),
pursuant to which the Nussdorfs were granted options to acquire up to an
aggregate 720,954 shares of the Company's common stock beneficially owned by
Lekach, for a purchase price of $12.70 per share exercisable in specified
installments.
8
Of the 720,954 shares subject to the Nussdorf Option Agreement, an
aggregate 443,750 shares were issuable upon exercise of certain stock options
owned of record by Ilia Lekach. To date, Mr. Lekach had exercised his options to
acquire all of those shares and the Nussdorfs have acquired all 720,954 shares
pursuant to the Nussdorf Option Agreement.
On February 6, 2004, Miles Raper, Donovan Chin and Daniel Bengio resigned
as members of the Company's Board of Directors, and Stephen Nussdorf, Paul
Garfinkle and Michael W. Katz were elected to the Company's Board of Directors.
Effective February 10, 2004, Mr. Lekach's employment with the Company was
terminated and Mr. Lekach ceased serving as an employee and officer of the
Company. In addition, on February 10, 2004, Stephen L. Nussdorf was appointed
the Company's Chairman of the Board and Michael W. Katz was appointed the
Company's President and Chief Executive Officer.
BOARD OF DIRECTORS COMMITTEES
The Board of Directors has determined that the following three individuals
of the five members of the Board of Directors are independent as defined by
Nasdaq Marketplace Rules: Carole Ann Taylor, Joseph Bouhadana and Paul Garfinkle
(the "Independent Board Members"). Our Board of Directors has a standing Audit
Committee, Compensation Committee and Stock Option Committee.
We do not have a nominating or similar committee. The Independent Board
Members perform the functions of a nominating committee including reviewing and
recommending candidates for directors. If a shareholder wishes to recommend a
nominee for director, written notice should be sent to the Corporate Secretary
in accordance with the instructions set forth later in this proxy statement
under "Shareholder Proposals for the 2006 Annual Meeting." All recommendations
should be accompanied by a complete statement of such person's qualifications
(including education, work experience, knowledge of the Company's industry,
membership on the Board of Directors of another corporation, and civic activity)
and an indication of the person's willingness to serve. The Independent Board
Members will evaluate the suitability of potential candidates nominated by
shareholders in the same manner as other candidates identified to the
Independent Board Members. In making its nominations, the Independent Board
Members identify candidates who meet the current challenges and needs of the
Board of Directors. In making such decisions, the Independent Board Members
consider, among other things, an individual's business experience, industry
experience, financial background and experiences and whether the individual
meets the independence requirements of the Nasdaq Stock Market. The Independent
Board Members use multiple sources for identifying and evaluating nominees for
directors including referrals from current directors, recommendations by
stockholders and input from third party executive search firms.
For the fiscal year ended January 29, 2005, Carole Ann Taylor, Joseph
Bouhadana and Paul Garfinkle were the members of our Audit Committee. The Audit
Committee is governed by a written charter adopted by the Board of Directors.
Each of the members of the Audit Committee is independent as defined in the
Marketplace Rules of The Nasdaq Stock Market. The duties and responsibilities of
the Audit Committee include: (a) assisting our Board in its oversight of the
integrity of our financial statements, (b) the selection and retention of our
auditors and any termination of engagement, (c) reviewing the scope and results
of audits and other services provided by our auditors, (d) reviewing our
significant accounting policies and internal controls and (e) having general
responsibility for all related auditing matters. The Board of Directors
designated Paul Garfinkle the "audit committee financial expert" as defined by
SEC rules. The Audit Committee held 4 meetings during the fiscal year ended
January 29, 2005.
9
For the fiscal year ended January 29, 2005, Carole Ann Taylor and Joseph
Bouhadana were the members of our Compensation Committee. The Compensation
Committee reviews and approves the compensation of our executive officers,
including salaries, bonuses and benefit plans. The Compensation Committee met
once during the fiscal year ended January 29, 2005.
For the fiscal year ended January 29, 2005, Carole Ann Taylor and Joseph
Bouhadana were the members of the Stock Option Committee. The Stock Option
Committee administers our 2000 Stock Option Plan and the 2000 Directors Stock
Option Plan. The Stock Option Committee held no meetings during the fiscal year
ended January 29, 2005.
During the fiscal year ended January 29, 2005, our Board of Directors took
certain actions by unanimous written consent and held 8 meetings. During the
last fiscal year, no director attended fewer than 75 percent of (i) the meetings
of our Board of Directors held during the period they served on the Board, and
(ii) the meetings of committees of our Board of Directors held during the period
they served on such committees.
10
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following tables set forth certain information concerning compensation
for the fiscal years ended January 29, 2005 (Fiscal 2004), January 31, 2004
(Fiscal 2003) and February 1, 2003 (Fiscal 2002) of the Chief Executive Officer
and the four most highly compensated executive officers who were serving as
executive officers at the end of the last fiscal year whose total annual salary
and bonus exceeded $100,000 for Fiscal 2004 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation Long-term Compensation
----------------------------------------- -------------------------------------
----------------------------------------- -------------------------------------
Awards Payouts
----------------------------------------- -------------------------------------
----------------------------------------- -------------------------------------
Other Annual
Name and Principal Position Fiscal Compensation Restricted Options LTIP All Other
Year Salary($) Bonus($) ($)(1) Stock Awards($) (#)(2) Payouts($) Compensation($)
------------------------------------------------------------------------------------------------------------------------------------
Michael W. Katz 2004 (3) -- -- -- -- -- --
President and 2003 -- -- -- -- -- -- --
Chief Executive Officer 2002 -- -- -- -- -- -- --
Ilia Lekach (4) 2004 16,962 -- -- -- -- -- --
Formerly Chairman of the Board 2003 509,101 -- 1,012,521 -- 125,000 -- --
and Chief Executive Officer 2002 441,000 -- -- -- -- -- --
A. Mark Young 2004 227,189 -- -- -- -- -- --
Chief Financial Officer 2003 217,640 -- 472,072 -- 25,000 -- --
2002 196,153 -- -- -- -- -- --
Donovan Chin 2004 211,615 -- -- -- -- -- --
Chief Financial Officer, 2003 205,842 -- -- -- -- -- --
Perfumania, Inc. and Secretary 2002 200,857 -- -- -- -- -- --
Leon Geller 2004 206,044 -- -- -- -- -- --
Vice President of Purchasing 2003 181,209 -- 183,899 -- 12,500 -- --
Perfumania, Inc. 2002 173,166 -- -- -- -- -- --
Joel Lancaster 2004 138,298 -- -- -- -- -- --
Vice President of Sales 2003 149,371 -- 145,167 -- 16,252 -- --
Perfumania, Inc. 2002 131,945 -- -- -- -- -- --
11
(1) Amounts included represent payments made to the persons indicated pursuant
to the terms of their then employment agreements as a result of a change
of control, described herein. These payments were made as a consequence of
the determination on February 3, 2004 by the disinterested and independent
members of the Board of Directors that a change of control had occurred
under the terms of such employment agreements, and the subsequent
authorization on such date of such payments by Ilia Lekach, the Company's
then Chairman and the Chief Executive Officer. The column for "Other
Annual Compensation" does not include any amounts for executive
perquisites and any other personal benefits, such as the cost of
automobiles, life insurance and disability insurance because the aggregate
dollar amount per executive does not exceed the lesser of $50,000 or 10%
of their annual salary and bonus.
(2) Our Board of Directors authorized a one-for-four reverse stock-split of
our outstanding shares of common stock for shareholders of record on March
2, 2002. Accordingly, all share and per share data shown in this
information statement have been retroactively adjusted to reflect this
reverse stock-split. Options issued in Fiscal 2003 represent those options
issued as a consequence of the change of control pursuant to the Company's
contractual obligations under existing employment agreements.
(3) Michael W. Katz was not paid by the Company during Fiscal 2004. An
aggregate amount of $325,000 was accrued during Fiscal 2004 and
subsequently contributed to the Company's additional Paid-in-Capital. The
Company began paying Michael W. Katz's salary in the second quarter of
Fiscal 2005.
(4) The employment of Ilia Lekach, our former Chairman and Chief Executive
Officer, was terminated on February 10, 2004.
12
OPTIONS GRANTS TABLE
There were no option grants to any Named Executive Officer in Fiscal 2004.
Total stock option grants during Fiscal 2004 were 5,334.
Options Exercised in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth certain information regarding option
exercises by the Named Executive Officers during Fiscal 2004, and options held
by such executive officers on January 29, 2005:
Value of Unexercised
Number of Unexercised In-The-Money Options at
Options at Fiscal Fiscal Year-End
Number of Shares Year-End (#) Exercisable ($)(1)(2) Exercisable /
Name Acquired on Exercise Value Realized / Unexercisable (1) Unexercisable
---- -------------------- -------------- ------------------- -------------
Michael W. Katz -- -- 0/0 $0/0
Ilia Lekach 443,750 $3,798,977 0/0 $0/0
A. Mark Young -- -- 50,000/0 $442,500/0
Donovan Chin -- -- 27,250/0 $77,353/0
Leon Geller 15,000 $ 93,852 10,000/0 $109,700/0
Joel Lancaster 8,500 $ 67,485 24,004/0 $102,444/0
(1) Includes options issued to such persons as a result of the change in
control discussed in Security Ownership of Certain Beneficial Owners and
Management. Assumes all outstanding options are currently exercisable
based on the change of control.
(2) Based on the spread between the exercise price of the options and the
closing price of $14.49 per share on January 29, 2005.
13
Equity Compensation Plan Information
This table summarizes share and exercise price information about our equity
compensation plans as of January 29, 2005
Weighted Average Number of Securities
Exercise Price Of Available For Future
Number of Securities Outstanding Options, Issuance Under Equity
Plan Category To Be Issued Warrants and Rights Compensation Plans
-------------------------------------- ------------------------ ------------------------ ------------------------
Equity compensation plans approved
by security holders 212,032 $9.46 282,457
Equity compensation plans not
approved by security holders - - -
------------------------ ------------------------ ------------------------
TOTAL 212,032 $9.46 282,457
======================== ======================== ========================
Director Compensation
We pay each non-employee director a $10,000 annual retainer, and
reimburse their expenses in connection with their activities as directors.
In addition, non-employee directors are eligible to receive stock options
under the 2000 Directors Stock Option Plan.
The 2000 Directors Stock Option Plan currently provides for an
automatic grant of an option to purchase 500 shares of our common stock
upon a person's election as director, and an automatic grant of options to
purchase 1,000 shares of our common stock upon re-election to the Board,
in both instances at an exercise price equal to the fair market value of
the common stock on the date of the option grant
Employment and Severance Agreements
Effective February 1, 2002, we entered into a 3-year employment
agreement with Ilia Lekach. Mr. Lekach's employment agreement was
terminated effective as of February 10, 2004. Pursuant to the terms of the
employment agreement, Mr. Lekach was to receive an annual salary of
$460,000, subject to cost-of-living increases or 5% if higher. The
employment agreement provided that Mr. Lekach would continue to receive
his annual salary until the expiration of the term of the agreement if his
employment was terminated by us for any reason other than death,
disability or cause (as defined in the employment agreement). The
employment agreement contained a performance bonus plan, which provided
for additional compensation and grant of stock options, if we met certain
specified net income levels. The employment agreement prohibited Mr.
Lekach from directly or indirectly competing with us during the term of
his employment and for one year after termination of employment except in
the case of our termination of employment without cause. Pursuant to the
terms of the employment agreement, Mr. Lekach received a signing bonus of
$250,000 and was granted 125,000 options to purchase our common stock at
an exercise price of $4.00 per share (the closing market price of our
common stock on January 31, 2002).
14
On February 10, 2004, our Board of Directors terminated without
cause Ilia Lekach's employment with the Company as Chairman of the Board
and Chief Executive Officer. In addition, as a consequence of the Nussdorf
Option Agreement described herein, the Board of Directors determined that
a change of control occurred under the Company's employment agreement with
Mr. Lekach, and that the terms of the employment agreement required the
Company to issue Mr. Lekach 125,000 options. Upon termination of the
employment agreement, and as a consequence of the change of control, Mr.
Lekach was paid approximately $1,012,000 (two times the remaining
compensation under the Agreement).
As a consequence of the change of control described above, Mr.
Young, Mr. Jeffrey Geller, Mr. Leon Geller, Mr. Lancaster and Mr. Alan
Grobman received approximately $469,000, $472,000, $184,000, $125,000 and
$145,000, respectively, under the terms of their employment agreements
with the Company. These payments were made as a consequence of the
determination on February 3, 2004 by the disinterested and independent
members of the Board of Directors that a change of control had occurred
under the terms of such employment agreements, and the subsequent
authorization on such date of such payments by Ilia Lekach, the Company's
then Chairman and Chief Executive Officer.
Compensation Committee Interlocks and Insider Participation
The following directors served as members of the compensation
committee during the 2004 fiscal year: Carole Ann Taylor and Joseph
Bouhadana. None of the members of the compensation committee was, at any
time either during or before such a fiscal year, an officer or employee of
ours or any of our subsidiaries, or has any relationship requiring
disclosure under Certain Relationships and Related Party Transactions.
15
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and approves the compensation of our
executive officers, including salaries, bonuses and benefit plans.
The policy of the Board of Directors is to maintain executive compensation
at levels that will permit us to attract, motivate and retain individuals with
superior managerial abilities. The levels of compensation are intended to reward
individual initiative and achievement, while motivating our executives to
increase shareholder value by improving our performance and profitability.
In reviewing the base salaries of our Chief Executive Officer and all
Named Executive Officers, the Compensation Committee considers factors such as
the responsibilities of the position, corporate progress toward achieving
objectives and individual performance, experience and expertise. As of their
respective anniversary dates of hire, some Named Executive Officers received
nominal salary increases during 2004 based in part on cost of living
adjustments. The Compensation Committee also determined the compensation of our
Chief Executive Officer, appointed in February 2004, based in part on
comparisons with compensation levels paid by other companies. In determining our
Named Executive Officers' overall compensation, the Compensation Committee also
reviews certain compensation levels at other companies because the Compensation
Committee believes that we compete for executive talent with companies in
addition to those in our peer group. Additional criteria reviewed by the
Compensation Committee in determining appropriate compensation levels include
subjective factors related to corporate and individual performance.
Our Stock Option Committee reviews and approves the grant of options
pursuant to our 2000 Stock Option Plan. In furtherance of our executive
compensation policies, stock options are considered an integral part of our
executives' overall compensation. The Compensation Committee believes that as an
executive's level of responsibility increases, a greater portion of the total
compensation opportunity should be based upon share ownership and other
incentives and less upon base salary. Our executives' compensation pursuant to a
stock option grant generally increases only to the extent the value of common
stock underlying the stock options increases, therefore aligning the interest of
our executive officers with our shareholders by tying long-term compensation
with our growth and appreciation of shares. The amount of the grants takes into
consideration such factors as the executives' level of responsibility, their
level of performance, their contribution to Company results and their potential
for growth and ongoing contribution within the Company.
We did not grant any stock options to any Named Executive Officer during
the fiscal year ended January 29, 2005.
The Compensation Committee
Joseph Bouhadana
Carole Ann Taylor
16
REPORT OF THE AUDIT COMMITTEE
The following report concerns the Audit Committee's activities regarding
oversight of our accounting, auditing and financial reporting process.
The Audit Committee is comprised of three independent directors, as
defined in the Marketplace Rules of The Nasdaq Stock Market. It operates under a
written charter adopted by the Board of Directors. The composition of the Audit
Committee, the qualifications of its members and the responsibilities of the
Committee, as reflected in its charter, are intended to be in accordance with
applicable requirements for corporate audit committees. The Committee reviews
and assesses the adequacy of its charter on an annual basis.
As described more fully in its charter, the purpose of the Audit Committee
is to assist the Board of Directors in its general oversight of our internal
control, accounting, auditing and financial reporting functions. Management is
responsible for the preparation, presentation and integrity of our financial
statements, accounting and financial reporting principles and internal controls
and procedures designed to ensure compliance with accounting standards,
applicable laws and regulations. Deloitte & Touche LLP, our independent auditing
firm, is responsible for performing an independent audit of our consolidated
financial statements in accordance with generally accepted auditing standards.
The Audit Committee members are not professional accountants or auditors,
and their functions are not intended to duplicate or to certify the activities
of management and the independent auditor, nor can the Audit Committee certify
that the independent auditor is "independent" under applicable rules. The
Committee serves a board-level oversight role, in which it provides advice,
counsel and direction to management and the auditors on the basis of the
information it receives, discussions with management and the auditors and the
experience of the Committee's members in business, financial and accounting
matters.
Among other matters, and in accordance with the Sarbanes-Oxley Act of
2002, the Audit Committee monitors the activities and performance of our
external auditors, including the audit scope, external audit fees, auditor
independence matters and the extent to which the independent auditor may be
retained to perform non-audit services. The Audit Committee has ultimate
authority and responsibility to select, evaluate and, when appropriate, replace
our independent auditor. The Audit Committee also reviews the results of the
external audit work with regard to the adequacy and appropriateness of our
financial, accounting and internal controls. Management and independent auditor
presentations to and discussions with the Audit Committee also cover various
topics and events that may have significant financial impact or are the subject
of discussions between management and the independent auditor. In addition, the
Audit Committee generally oversees our internal compliance programs.
In fulfilling its oversight responsibilities, the Committee has reviewed
and discussed the audited consolidated financial statements with management and
the independent auditor. Management represented to the Committee that our
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the independent auditor represented that its
presentations included the matters required to be discussed with the independent
auditor by Statement on Auditing Standards No. 61, as amended, "Communication
with Audit Committees." Our independent auditor also provided the Committee with
the written disclosures required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and the Audit Committee
discussed with the independent auditor that firm's independence.
17
Following the Audit Committee's discussions with management and the
independent auditor, the Committee recommended that the Board of Directors
include the audited consolidated financial statements in our annual report on
Form 10-K for the fiscal year ended January 29, 2005.
The Audit Committee
Paul Garfinkle, Chairman
Joseph Bouhadana
Carole Ann Taylor
18
Certain Relationships and Related Party Transactions
Stephen and Glenn Nussdorf (the "Nussdorfs") are officers and principals
of Quality King. Stephen Nussdorf was appointed the Company's Chairman of the
Board, on February 10, 2004. During fiscal year 2004, the Company purchased
approximately $39,317,000 of merchandise from Quality King and sold
approximately $23,570,000 of different merchandise to Quality King. In fiscal
year 2003, there were approximately $5,960,000 of purchases from Quality King
and approximately $11,366,000 of merchandise sold to Quality King. The amounts
due to Quality King and its affiliates at January 29, 2005 and January 31, 2004,
were approximately $13,234,000 and $797,000 respectively.
In March 2004, the Nussdorfs made a $5,000,000 subordinated secured demand
loan to Perfumania. The demand loan bears interest at the prime rate plus 1%,
requires quarterly interest payments and is secured by a security interest in
Perfumania's assets pursuant to a Security Agreement, by and among Perfumania
and the Nussdorfs. There are no prepayment penalties and the loan is subordinate
to all bank related indebtedness. On December 9, 2004 the Company issued a
Subordinated Convertible Note (the Convertible Note") in exchange for the
$5,000,000 subordinated secured demand loan. The Convertible Note bears interest
at the prime rate plus 1%, requires quarterly interest payments and is secured
by a security interest in the Company's assets pursuant to a Security Agreement,
by and among the Company and the Nussdorfs. There are no prepayment penalties
and the Convertible Note is subordinate to all bank indebtedness. The
Convertible Note is payable in January 2007 and allows the Nussdorfs to convert
the Convertible Note into shares of the Company's common stock at a conversion
price of $11.25, which equals the closing market price of the Company's common
stock on December 9, 2004.
Notes receivable from Ilia Lekach, the Company's former Chairman of the
Board of Directors and Chief Executive Officer, was $327,311 as of January 31,
2004. The notes were unsecured, matured in five years and bore interest at prime
plus 1% per annum. Principal and interest were payable in full at maturity.
Total interest income recognized during fiscal years 2004 and 2003 was
approximately $2,000 and $16,000, respectively. Accrued interest receivable was
approximately $27,000 and $12,000 as of January 31, 2004 and February 1, 2003.
The notes and all accrued interest were fully paid in March 2004.
Parlux Fragrances, Inc. ("Parlux") owns approximately 13% of the Company's
outstanding common stock. Purchases of products from Parlux, whose Chairman of
the Board of Directors and Chief Executive Officer is Ilia Lekach, amounted to
approximately $38,360,000, $27,701,000 and $11,613,000 in fiscal years 2004,
2003 and 2002, representing approximately 20%, 23% and 10%, respectively, of the
Company's total purchases. The amount due to Parlux on January 29, 2005 and
January 31, 2004, was approximately $9,994,000 and $14,506,000, respectively.
Accounts payable due to Parlux are non-interest bearing. The amounts due to
Parlux, exclusive of the secured note payable described below, are included in
the accounts payable affiliates in our consolidated balance sheets.
On June 30, 2003, Perfumania signed a $5,000,000 subordinated note
agreement with Parlux. The note was in consideration for the reduction of
$5,000,000 in trade payables due to Parlux in the same year. The note was due on
February 29, 2004, with various periodic principal payments, bore interest at
prime plus 1% and was subordinated to all bank related indebtedness. As of
January 31, 2004 the outstanding principal balance due on the note was $250,000
and included in the amount due Parlux of $14,506,000 at January 31, 2004. The
note was paid in full in February 2004, in accordance with its terms.
19
The Company purchased approximately $6,368,000 and $10,562,000 of
merchandise in fiscal years 2003 and 2002, respectively, from a company owned by
Zalman Lekach, a former director of the Company, and a brother of Ilia Lekach.
The amount due to Zalman Lekach's company at January 31, 2004 was approximately
$1,617,000, and is included in accounts payable affiliates in our consolidated
balance sheets.
The Company purchased approximately $4,305,000 and $6,021,000 of
merchandise in fiscal years 2003 and 2002, respectively, from a company owned by
another brother of Ilia Lekach. The amount due to this company was approximately
$771,000 at January 31, 2004 and is included in accounts payable affiliates in
our consolidated balance sheets.
PERFORMANCE GRAPH
The following graph indicates the total return to our shareholders for the
five fiscal years ending January 29, 2005, as compared to the returns for the
NASDAQ (US Companies) Stock Index and the NASDAQ Retail Trade Stock Index. The
information contained in this graph is based on historical data and is not
necessarily indicative of future performance.
[GRAPH OMITTED]
-----------------------------------------------------------------------
January-00 January-01 February-02 February-03 January-04 January-05
-----------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
E Com Ventures, Inc. 100.00 25.30 20.24 74.70 283.40 293.32
-----------------------------------------------------------------------------------------------------------
NASDAQ US Stock Market Index 100.00 68.17 49.31 34.40 53.54 52.96
-----------------------------------------------------------------------------------------------------------
NASDAQ Retail Trade Stocks 100.00 76.90 91.61 74.52 109.26 130.85
-----------------------------------------------------------------------------------------------------------
20
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and executive officers and beneficial holders of more than 10% of
any class of our equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
such equity securities. Based solely upon a review of such forms furnished to
us, filing deficiencies under Section 16(a) during the fiscal year ended January
29, 2005, included one late report filed by Leon Geller reflecting a stock sale,
one late report filed by each of Glenn and Stephen Nussdorf regarding their
acquisition of a subordinated convertible note and one late report filed by Ilia
Lekach reporting four stock sales and two transactions relating to options
exercised. In addition, Mr. Lekach has not filed, as of this date, a report on
Form 4 regarding four stock purchases which were previously reported in an
amendment to Schedule 13D filed by Mr. Lekach, and with respect to which
transactions Mr. Lekach has disgorged profits to us under Section 16(b). The
following individuals were not timely in meeting the filing requirements with
respect to options exercised under our 2000 Stock Option Plan and filed one late
report each: Leon Geller, Alan Grobman and Joel Lancaster.
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has selected Deloitte & Touche LLP as our independent
certified public accountants for the fiscal year ended January 28, 2006.
Deloitte & Touche LLP has served as our independent certified public accountants
since fiscal year 2000. One or more representatives of Deloitte & Touche LLP are
expected to be present at the Annual Meeting. Such representatives will have the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions from shareholders.
The aggregate fees billed by Deloitte & Touche LLP ("Deloitte") for fiscal
years 2004 and 2003 are as follows:
Fees Fiscal 2004 Fiscal 2003
------------------------------------------- ---------------- ----------------
Audit Fees (1) $ 285,000 $ 289,700
Audit Related Fees (2) 1,500 54,600
Tax Fees (3) 19,005 10,325
---------------- ----------------
Total Fees $ 305,505 $ 354,625
================ ================
(1) "Audit Fees" consist of fees billed for professional services rendered in
connection with the audit of our consolidated annual financial statements
and the review of our interim consolidated financial statements included
in quarterly reports.
(2) "Audit Related Fees" in Fiscal 2004 consist of professional fees for
providing an independent auditors' consent. In Fiscal 2003, charges
represent professional fees rendered in connection with the accounting
treatment of an acquisition.
21
(3) "Tax Fees" consist of fees billed for professional services rendered for
tax compliance and tax service.
There were no fees billed to us by Deloitte for services rendered, other
than the services covered above under "Audit Fees", "Audit Related Fees" and
"Tax Fees" for fiscal years 2004 and 2003.
The Audit Committee has considered and has agreed that the provision of
services as described above are compatible with maintaining Deloitte's
independence.
The Audit Committee pre-approves the engagement of Deloitte for all
professional services. The pre-approval process generally involves the full
Audit Committee evaluating and approving the particular engagement prior to the
commencement of services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP, AS OUR INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING JANUARY 28, 2006.
22
OTHER BUSINESS
We know of no other business to be brought before the Annual Meeting. If,
however, any other business should properly come before the Annual Meeting, the
persons named in the accompanying proxy will vote proxies as in their discretion
they may deem appropriate, unless they are directed by a proxy to do otherwise.
CONTACTING THE BOARD OF DIRECTORS
Shareholders who wish to communicate with the Board of Directors may do so
by writing to Board of Directors, E Com Ventures, Inc., 251 International
Parkway, Sunrise, Florida 33325. Such communications will be reviewed by the
Secretary of the Company, who shall remove communications relating to
solicitations, junk mail, or other correspondence relating to customer service
issues. All other communications shall be forwarded to the Board of Directors or
specific members of the Board, as appropriate or as requested in the shareholder
communication. The Company encourages, but does not require, that all members of
the Board of Directors attend annual meetings of the Company.
SHAREHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING
Shareholder proposals intended to be presented at our 2006 Annual Meeting
of Shareholders pursuant to the provisions of Rule 14a-8 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of 1934, as
amended, must be received by our Corporate Secretary at the address below by
July 21, 2006 for inclusion in our Proxy Statement and form of proxy relating to
such Annual Meeting. Any Shareholder proposal submitted other than for inclusion
in our proxy materials for that meeting must be delivered to us no later than
October 4, 2006, or such proposal will be considered untimely. If a shareholder
proposal is received after October 4, 2006, we may vote in our discretion as to
the proposal all of the shares for which we have received proxies for the 2006
Annual Meeting of Shareholders.
Send all proposals or nominations to Donovan Chin, Secretary, E Com
Ventures, Inc., 251 International Parkway, Sunrise, Florida 33325.
23
E COM VENTURES, INC.
251 International Parkway
Sunrise, Florida 33325
PROXY FOR 2005 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned holder of common stock of E Com Ventures, Inc., a Florida
corporation (the "Company"), hereby appoints A. Mark Young and Donovan Chin, and
each of them, as proxies for the undersigned, each with full power of
substitution, for and in the name of the undersigned to act for the undersigned
and to vote, as designated on the reverse side of this proxy card, all of the
shares of stock of the Company held of record by the undersigned at the close of
business on November 7, 2005 at the Company's 2005 Annual Meeting of
Shareholders, to be held on Wednesday, December 14, 2005, at 2:00 p.m. at the E
Com Ventures, Inc. Corporate Office, 251 International Parkway, Sunrise, Florida
33325, and at any adjournments or postponements thereof.
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
|X| PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Directors.
Vote for all Nominees Listed Below (except as written below)
|_|
Vote Withheld from all Nominees
|_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE DIRECTOR
NOMINEES LISTED IN THIS PROPOSAL NO. 1.
NOMINEES: Stephen Nussdorf
Michael W. Katz
Carole Ann Taylor
Joseph Bouhadana
Paul Garfinkle
(Instruction: To withhold authority for an individual nominee, write that
nominee's name on the line provided below.)
----------------------------------
24
2. Ratification of the appointment of Deloitte & Touche LLP as our
independent public accountants.
|_| For |_| Against |_| Abstain
3. In their discretion, upon such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED HEREIN, AND FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT
PUBLIC ACCOUNTANTS.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED.
DATE
--------------------------------------------
SIGNATURE
----------------------------------------
SIGNATURE (If held jointly)
-------------------------------------------
Note: Please sign exactly as your name appears hereon and mail it promptly even
though you may plan to attend the Annual Meeting. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If
partnership, please sign in the partnership name by authorized person.
25