def14a
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 þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ Preliminary Proxy Statement
¨ Confidential, For Use of the Commission Only (as permitted by Rule 14a6(e)(2))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨
Soliciting Material Pursuant to §240.14a12
FTD Group, Inc.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Check box if any part
of the fee is offset as provided by Exchange Act Rule 011(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. |
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FTD
Group, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
October 11, 2006
Dear Fellow Stockholder:
You are cordially invited to attend the 2006 Annual Meeting of
Stockholders of FTD Group, Inc. to be held on Wednesday,
November 15, 2006 at 10:00 a.m., local time, at our
principal executive office, 3113 Woodcreek Drive, Downers
Grove, Illinois 60515.
The following pages include a formal notice of the meeting and
the proxy statement. The proxy statement describes various
matters on the agenda for the meeting.
You are encouraged to attend the meeting in person. If that is
not possible, please sign, date and return the enclosed proxy
card as soon as possible. Otherwise, your vote cannot be counted.
Sincerely,
MICHAEL J. SOENEN
Director, President and Chief Executive Officer
TABLE OF CONTENTS
FTD
Group, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
NOTICE OF
2006 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 15, 2006
To Our Stockholders:
The 2006 Annual Meeting of Stockholders (the Annual
Meeting) of FTD Group, Inc., a Delaware corporation
(the Company), will be held at
10:00 a.m., local time, on Wednesday, November 15,
2006, at the Companys principal executive office,
3113 Woodcreek Drive, Downers Grove, Illinois 60515, for
the purpose of considering and acting upon the following:
Proposal 1. The election of 10 directors to the
Board of Directors of the Company.
Proposal 2. The ratification of the appointment of
Ernst & Young LLP as the Companys independent
registered public accounting firm for the fiscal year ending
June 30, 2007.
Proposal 3. The transaction of any other business that
is properly brought before the meeting or any continuations,
adjournments or postponements thereof.
Stockholders of record at the close of business on
September 27, 2006 are entitled to receive notice of and to
vote at the meeting and any continuations, adjournments or
postponements thereof. You may vote your shares by completing,
signing, dating and returning the enclosed proxy card or by
attending the meeting in person and voting by ballot at that
time. Submitting your instructions by proxy will not affect your
right to attend the meeting and vote.
By Order of the Board of Directors,
JON R. BURNEY
Secretary
Dated: October 11, 2006
Downers Grove, Illinois
If you plan to attend the Annual Meeting in Person:
An admission ticket and picture identification will be
required to enter the Annual Meeting. If you are a stockholder
of record, you will find an admission ticket attached to the
proxy card sent to you. If you plan to attend the meeting in
person, please retain the admission ticket and bring it with you
to the meeting along with picture identification. Stockholders
holding stock in a bank or brokerage account will find an
admission ticket attached to the proxy card sent to you by your
bank or broker. In the event you have not received an admission
ticket or have misplaced it, you can obtain an admission ticket
in advance by sending a written request to your bank or broker,
or you may present yourself at the meeting along with such proof
of ownership (such as a brokerage statement) as of the record
date and picture identification. Cameras, recording devices and
other electronic devices will not be permitted at the Annual
Meeting.
FTD Group, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
We are providing these proxy materials because the Board of
Directors of FTD Group, Inc. (the Company) is
soliciting your proxy to vote at the Companys 2006 Annual
Meeting of Stockholders (the Annual Meeting)
to be held at 10:00 a.m., local time, on Wednesday,
November 15, 2006, at the Companys principal
executive office, 3113 Woodcreek Drive, Downers Grove, Illinois
60515, and at any continuations, adjournments or postponements
of this meeting. This Proxy Statement contains information about
the items being voted on at the Annual Meeting and information
about the Company. Commencing on or about October 13, 2006,
copies of this Proxy Statement and the proxy card, together with
a copy of the Companys Annual Report for the fiscal year
ended June 30, 2006 (the 2006 Annual
Report), are being mailed to stockholders.
QUESTIONS
AND ANSWERS
Who is
entitled to vote?
Stockholders who owned the Companys common stock (NYSE
symbol: FTD), par value $0.01 per share (the
Common Stock), as of the close of business on
September 27, 2006 will be entitled to vote at the Annual
Meeting. On that date there were 28,334,856 shares of
Common Stock outstanding and entitled to vote. Each share is
entitled to one vote on each matter properly brought before the
meeting.
How do
I vote?
The Company is offering you two methods of voting:
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you may indicate your vote on the enclosed proxy card by signing
and dating the card and returning the card in the enclosed
prepaid envelope; or
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you may attend the meeting and vote in person.
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All shares entitled to vote and represented by a properly
completed and executed proxy received before the meeting and not
revoked will be voted at the meeting as you instruct in such
proxy. If you do not indicate how your shares should be voted on
a matter, the shares represented by your properly completed and
executed proxy will be voted as the Board of Directors
recommends.
What
do I need to know in order to attend the Annual
Meeting?
You are invited to attend the Annual Meeting, which will begin
at 10:00 a.m., local time, on Wednesday, November 15,
2006, in person. The meeting will be held at the Companys
principal executive office located at 3113 Woodcreek Drive,
Downers Grove, Illinois 60515. Stockholders will be admitted
beginning at 9:30 a.m., local time.
You will need an admission ticket and picture identification
to enter the Annual Meeting. If you are a stockholder of
record, you will find an admission ticket attached to the proxy
card sent to you. If you plan to attend the meeting in person,
please retain the admission ticket and bring it with you to the
meeting along with picture identification. Stockholders holding
stock in a bank or brokerage account will find an admission
ticket attached to the proxy card sent to you by your bank or
broker. In the event you have not received an admission ticket,
you can obtain an admission ticket in advance by sending a
written request to your bank or broker, or you may present
yourself at the meeting along with such proof of ownership (such
as a brokerage statement) as of the record date and picture
identification.
What
can I vote on?
At the Annual Meeting, you will be able to vote on the:
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election of 10 directors to the Board of Directors of the
Company to serve for a term of one year;
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ratification of the appointment of Ernst & Young LLP as
the Companys independent registered public accounting firm
for the fiscal year ending June 30, 2007; and
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transaction of any other business that is properly brought
before the meeting or any continuations, adjournments or
postponements thereof.
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How
does the Board recommend I vote on the proposals?
The Board recommends a vote:
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FOR each of the nominees for the Board of Directors; and
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FOR the ratification of the appointment of Ernst &
Young LLP as the Companys independent registered public
accounting firm for the fiscal year ending June 30, 2007.
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May I
change my vote?
You can revoke your proxy at any time before it is voted by
delivery of a properly completed and executed, later-dated proxy
card or by voting in person by ballot at the Annual Meeting.
How
many votes are required to hold a meeting?
A quorum is necessary to hold a valid meeting of stockholders.
The presence, in person or by proxy, of stockholders
representing a majority of the shares of the Common Stock
outstanding and entitled to vote constitutes a quorum. Shares
represented by proxies that reflect abstentions or broker
non-votes are counted as present and entitled to
vote for determination of a quorum.
An abstention is a properly executed proxy marked ABSTAIN for
any matter. A broker non-vote occurs when you hold
your shares in street name through a broker or other
nominee and you do not give your broker or nominee instructions
on how to vote on matters over which your broker or nominee does
not have voting discretion. If you do not provide voting
instructions, your shares may not be voted on these matters.
How
many votes are required to pass a proposal?
A favorable vote of a plurality of the shares present in person
or represented by proxy and entitled to vote is required for the
election of directors. This means that the nominees who receive
the greatest number of votes for each open seat will be elected.
Abstentions, votes withheld and broker non-votes are
not counted for purposes of electing directors and will not
affect the election of nominees receiving a plurality of votes.
The affirmative vote of a majority of the shares present in
person or represented by proxy and entitled to vote is required
for the ratification of the appointment of Ernst &
Young LLP as the Companys independent registered public
accounting firm for the fiscal year ending June 30, 2007.
Abstentions and votes withheld will have the effect of a
negative vote, while broker non-votes will be
treated as not entitled to vote for purposes of determining the
approval of these proposals and will not affect the outcome of
the vote.
How
will voting on any other business be conducted?
We do not know of any business or proposals to be considered at
the Annual Meeting other than the items described in this Proxy
Statement. If any other business is properly brought before the
Annual Meeting or any continuations, adjournments or
postponements thereof, the signed proxies received from you and
other stockholders give the proxies the authority to vote on the
matter according to their judgment.
2
Who
receives proxy materials?
This Proxy Statement and enclosed proxy card are first being
mailed to stockholders on or about October 13, 2006. Each
registered owner of Common Stock as of the close of business on
September 27, 2006 is entitled to receive a copy of the
Companys 2006 Annual Report and to vote at the Annual
Meeting.
The Securities and Exchange Commission (the
SEC) has adopted rules that permit companies
and intermediaries such as brokers to satisfy delivery
requirements for proxy statements with respect to two or more
stockholders sharing the same address by delivering a single
proxy statement addressed to those stockholders. This process,
which is commonly referred to as householding,
potentially provides extra convenience for stockholders and cost
savings for companies. The Company and some brokers household
proxy materials, delivering a single proxy statement to multiple
stockholders sharing the same last name and address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker or
the Company that they or we will be householding materials to
your address, householding will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you
no longer wish to participate in householding and would prefer
to receive a separate proxy statement, or if you are receiving
multiple copies of the proxy statement and wish to receive only
one, please notify your broker, if your shares are held in a
brokerage account, or the Company, if you hold registered
shares. You can notify the Company by sending a written request
to the address set forth below under the heading
How can I contact the Company to request
materials or information referred to in these questions and
answers? If you revoke your consent, you will be sent
separate copies of documents mailed within 30 days after
receipt of your revocation.
If you have not received the Companys 2006 Annual
Report, please contact the Company as directed below under the
heading How can I contact the Company to
request materials or information referred to in these questions
and answers? and the Company will send a copy without
exhibits at no expense to you. The Company will provide any
exhibit requested upon payment of a specified reasonable fee
limited to the Companys reasonable expenses in furnishing
such exhibit.
May I
inspect the stockholder list?
In accordance with Delaware law and the Companys Amended
and Restated Bylaws (the Bylaws), a complete
list of stockholders entitled to vote at the Annual Meeting,
arranged in alphabetical order, and showing the address of each
stockholder of record and the number of shares registered in the
name of each stockholder, will be available for examination by
any stockholder, for any purpose germane to the Annual Meeting,
for 10 days prior to the meeting at the location of the Annual
Meeting, the Companys principal executive office located
at 3113 Woodcreek Drive, Downers Grove, Illinois 60515,
during ordinary business hours.
Who
bears the costs of soliciting proxies?
The Company pays the costs of soliciting proxies. We have also
made arrangements with brokerage houses and other custodians,
nominees and fiduciaries of shares to send proxy materials to
stockholders of record on September 27, 2006. We will, upon
request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the
beneficial owners of Common Stock as of the record date. Certain
of the Companys officers and directors may solicit the
submission of proxies authorizing the voting of shares in
accordance with the Board of Directors recommendations,
but no additional remuneration will be paid by the Company for
the solicitation of proxies by the Companys officers and
directors.
3
How
can I contact the Company to request materials or information
referred to in these questions and answers?
You may contact us by:
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mail addressed to:
FTD Group, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
Attention: Investor Relations
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e-mail
addressed to investor_relations@ftdi.com;
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calling Jandy Tomy, Investor Relations Contact, at
(630) 719-7800; or
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visiting our Web site at
www.ftd.com1,
clicking on Investor Relations, then FAQ
and then filling out the request form under the link
information request form.
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Stockholder
Proposals and Nominations
The deadline for eligible stockholders to submit a proposal
under
Rule 14a-8
of the SECs proxy rules for inclusion in the
Companys proxy statement for the 2007 Annual Meeting is
August 17, 2007. Any such proposals submitted under
Rule 14a-8
must be received by the Company on or before that date. Please
send proposals to the Secretary of the Company at the
Companys principal executive office, 3113 Woodcreek
Drive, Downers Grove, Illinois 60515.
Eligible stockholders may submit proposals for consideration at
the 2007 Annual Meeting (aside from a stockholder proposal under
Rule 14a-8
to be included in the Companys proxy statement, as
discussed above) in accordance with the provisions of the
Bylaws. If a stockholder intends to submit a proposal in this
manner, he or she must give the Company written notice
containing the information specified in the Bylaws. Such written
notice must be received by the Secretary of the Company at the
Companys principal executive office, 3113 Woodcreek Drive,
Downers Grove, Illinois 60515, not later than the close of
business on the 90th day nor earlier than the close of
business on the 120th day prior to the first anniversary of
the preceding years Annual Meeting. For the 2007 Annual
Meeting, such notice must be received between July 18, 2007
and August 17, 2007. In the event that the date of the 2007
Annual Meeting is more than 30 days before or more than
70 days after November 15, 2007, notice by the
stockholder must be delivered not earlier than the close of
business on the 120th day prior to the meeting and not
later than the close of business on the later of the
90th day prior to the meeting or the tenth day following
the day on which public announcement of the date of such meeting
is first made by the Company. Eligible stockholders may also
nominate persons for election to the Board of Directors at the
2007 Annual Meeting in accordance with the Bylaws. Stockholders
who wish to propose a candidate for the Companys Board of
Directors to the Nominating and Corporate Governance Committee
must send written notice to the committee containing all of the
information relating to such proposed candidate as is required
to be disclosed in solicitations of proxies for elections of
directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the Exchange
Act). Such written notice must be sent to the
Nominating and Corporate Governance Committee of FTD Group,
Inc.,
c/o the
Secretary of the Company at the Companys principal
executive office located at 3113 Woodcreek Drive, Downers Grove,
Illinois 60515, generally not more than 120 days and not
less than 90 days before the date of the next Annual
Meeting.
* * *
NO PERSON IS AUTHORIZED ON BEHALF OF THE COMPANY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS WITH RESPECT TO THE
PROPOSALS TO BE VOTED ON
1 Web
site addresses referred to in this Proxy Statement are not
intended to function as hyperlinks, and the information
contained on our Web site is not a part of this Proxy Statement.
4
AT THE ANNUAL MEETING, OTHER THAN THE INFORMATION AND
REPRESENTATIONS CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN
OR MADE, SUCH INFORMATION AND/OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED, AND THE DELIVERY OF THIS
PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
The Companys principal executive offices are located at
3113 Woodcreek Drive, Downers Grove, Illinois 60515, our
telephone number is
(630) 719-7800
and our Web site is located at www.ftd.com. As used in
this Proxy Statement, unless the context requires otherwise, the
term the Company refers to FTD Group, Inc.
and its consolidated subsidiaries, including FTD, Inc.
(FTD). FTD, Inc. is a Delaware corporation
that commenced operations in 1994 and includes the operations of
its principal operating subsidiary, Florists Transworld
Delivery, Inc., a Michigan corporation (FTDI)
and FTD UK Holdings Limited, a corporation organized under the
laws of England and Wales (FTD UK). The
operations of FTDI include those of its subsidiaries, FTD.COM
INC. (FTD.COM) and FTD Canada, Inc. (formerly
known as Florists Transworld Delivery Association of
Canada, Ltd.). The operations of FTD UK consist of those of
Interflora Holdings Limited and its direct and indirect
subsidiaries.
* * *
The date of this Proxy Statement is October 11, 2006.
5
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Common Stock as of August 31, 2006 by: (i) those
persons known by us to own beneficially more than 5% of the
outstanding Common Stock; (ii) each current executive
officer named in the Summary Compensation Table below;
(iii) each director and (iv) all current directors and
executive officers, as a group.
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Amount and Nature of
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% of Common
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Name of Individual or Identity of Group
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Beneficial Ownership(1)
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Stock
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Green Equity Investors IV,
L.P.
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15,406,249
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54.4
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%
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11111 Santa Monica Boulevard
Suite 2000
Los Angeles, CA
90025
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Viking Global Investors L.P.
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2,492,700
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8.8
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%
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55 Railroad Ave.
Greenwich, CT 06830
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Michael J. Soenen
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633,992
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(2)
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2.2
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%
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Lawrence W. Johnson
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73,335
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(3)
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George T. Kanganis
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73,335
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(3)
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*
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William J. Van Cleave
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134,448
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(4)
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*
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Robert S. Apatoff
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183,113
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(5)(6)
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*
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Adam M. Aron
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16,667
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(7)
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William J. Chardavoyne
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8,334
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(8)
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*
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Ted C. Nark
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173,113
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(5)(7)
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*
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Thomas M. White
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8,334
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(8)
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*
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Carrie A. Wolfe
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Peter J. Nolan
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15,577,695
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(9)
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55.0
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%
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John M. Baumer
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15,567,695
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(9)
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54.9
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%
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Timothy J. Flynn
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15,562,695
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(5)(9)
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54.9
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%
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All current executive officers and
directors as a group (consisting of 15 individuals)
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16,647,809
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(10)
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58.8
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%
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The amounts shown are the number of shares of the Common Stock
owned beneficially (as determined in accordance with
Rule 13d-3(d)(1)
of the Exchange Act) as of August 31, 2006. The persons
identified in this table have sole voting and investment power
over the shares of the Common Stock stated above, except as
stated otherwise in these footnotes. This chart was prepared
from information the directors and executive officers have given
to us and from publicly available documents filed or furnished
to the SEC. |
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(2) |
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This number includes 475,558 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
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This number includes 53,334 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
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(4) |
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This number includes 97,780 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
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(5) |
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This number includes 156,446 shares of Common Stock held by
FTD Co-Investment LLC. Messrs. Apatoff, Nark and Flynn hold
membership interests in FTD Co-Investment LLC.
Messrs. Apatoff, Nark and Flynn disclaim beneficial
ownership of the shares of Common Stock held by FTD
Co-Investment LLC. |
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(6) |
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This number includes 26,667 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
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(7) |
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This number includes 16,667 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
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(8) |
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This number includes 8,334 shares that may be acquired upon
the exercise of options within 60 days of August 31,
2006. |
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(9) |
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This numbers includes 15,406,249 shares of Common Stock
held by Green Equity Investors IV, L.P. and 156,446 shares
of Common Stock held by FTD
Co-Investment
LLC. Green Equity Investors IV, L.P. is a Delaware limited
partnership managed by Leonard Green & Partners, L.P.
FTD Co-Investment LLC is a Delaware limited liability company
managed by Leonard Green & Partners, L.P. Each of
Messrs. John G. Danhakl, Peter J. Nolan, Jonathan D.
Sokoloff, John M. Baumer, Jonathan A. Seiffer and Timothy J.
Flynn, either directly (whether through ownership interest or
position) or through one or more intermediaries, may be deemed
to control Leonard Green & Partners, L.P. As such,
Messrs. Danhakl, Nolan, Sokoloff, Baumer, Seiffer and Flynn
may be deemed to have shared voting and investment power with
respect to all shares held by Green Equity Investors IV, L.P.
and FTD Co-Investment LLC. These individuals disclaim beneficial
ownership of the securities held by Green Equity Investors IV,
L.P. and FTD Co-Investment LLC. Each of these individuals
address is c/o Leonard Green & Partners, L.P.,
11111 Santa Monica Boulevard, Suite 2000, Los Angeles,
California 90025. |
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(10) |
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This number includes 818,343 shares that may be acquired
upon the exercise of options within 60 days of
August 31, 2006. |
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors
and executive officers (as defined therein), and persons who
beneficially own more than 10% of a registered class of the
Companys equity securities, to file reports of holdings
and transactions in the Companys equity securities and
derivative securities with the SEC and The New York Stock
Exchange (the NYSE) and to furnish us with
copies of all Section 16(a) forms they file. Based solely
on a review of the copies of the forms and amendments received
by the Company, we believe that, during the fiscal year ended
June 30, 2006, all executive officers, directors and
persons who beneficially own more than 10% of the Companys
equity securities during this period complied with all
Section 16(a) filing requirements applicable to them.
7
GOVERNANCE
OF THE COMPANY
Who
are the current members of the Board of Directors and on what
committees of the Board of Directors do they
serve?
The members of the Board of Directors on the date of this Proxy
Statement, and the committees of the Board of Directors on which
they serve, are identified below.
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Nominating and
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Corporate
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Audit
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Governance
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Compensation
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Committee
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Committee
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Committee
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Peter J. Nolan, Chairman
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Robert S. Apatoff
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*
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Adam M. Aron
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*
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John M. Baumer
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William J. Chardavoyne
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*
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Timothy J. Flynn
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*
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Ted C. Nark
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*
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Michael J. Soenen
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Thomas M. White
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*
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Carrie A. Wolfe
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* Member
Chair
What
are the Board of Directors committees and what are their
roles?
The Board of Directors has a standing Executive Committee, Audit
Committee, Nominating and Corporate Governance Committee and
Compensation Committee.
Executive Committee. The Executive Committee
consists of Messrs. Baumer, Flynn, Nolan and Soenen and has
all the powers and authority of the Board of Directors to manage
the Companys business and affairs, except in respect of:
(i) approving or adopting, or recommending to stockholders,
any action or matter expressly required by Delaware law to be
submitted to stockholders for approval and (ii) amending or
repealing the Bylaws. The Executive Committee has the power and
authority to submit recommendations to the Board of Directors
with respect to all matters requiring action by the full Board
of Directors prior to the Board of Directors taking any action,
except those matters that applicable NYSE listing standards or
SEC regulations require to be within the purview of the
Companys independent directors or that are otherwise in
conflict with such standards or regulations.
Audit Committee. The Audit Committee consists
of Messrs. Aron (Chairman), Chardavoyne and White and its
functions are described below under the heading Report of
the Audit Committee. The Audit Committees charter is
available in the Investor Relations section of the
Companys Internet Web site at www.ftd.com. The
Audit Committee met five times during the fiscal year ended
June 30, 2006.
The Board of Directors has determined that the Audit Committee
meets the NYSE composition requirements, including the
requirements dealing with financial literacy and financial
sophistication, as well as the enhanced independence standards
applicable to audit committees pursuant to
Rule 10A-3(b)(i)
under the Exchange Act, the NYSEs listing standards and
the Companys Corporate Governance Guidelines. The
Board of Directors has also determined that each of
Messrs. White and Chardavoyne qualify as an audit
committee financial expert as defined by the rules of the
SEC.
Nominating and Corporate Governance
Committee. The Nominating and Corporate
Governance Committee consists of Messrs. Apatoff
(Chairman), Aron and Nark and, as described in more detail below
under How does the Board of Directors select
director nominees, is responsible for the identification
of
8
qualified candidates to become Board members, the selection of
nominees for election as directors at each Annual Meeting, the
selection of candidates to fill any vacancies on the Board of
Directors, the development and recommendation to the Board of
Directors of the Companys Corporate Governance
Guidelines and oversight of the evaluation of the Board of
Directors. The charter of the Nominating and Corporate
Governance Committee is available in the Investor Relations
section of the Companys Internet Web site at
www.ftd.com. The Nominating and Corporate Governance
Committee met once during the fiscal year ended June 30,
2006.
Compensation Committee. The Compensation
Committee consists of Messrs. Nolan (Chairman), Apatoff and
Flynn and its functions are described below under the heading
Compensation Committee Report on Executive
Compensation. The charter of the Compensation Committee is
available in the Investor Relations section of the
Companys Internet Web site at www.ftd.com. The
Compensation Committee met twice during the fiscal year ended
June 30, 2006.
Who is
the chair of the Board of Directors?
The Board of Directors selects its chair in accordance with the
Bylaws. Peter J. Nolan has served as the Chairman of the Board
of Directors since February 7, 2005. Mr. Nolan
presides over all executive sessions of the non-management
directors.
How
does the Board of Directors select director
nominees?
The Nominating and Corporate Governance Committee considers
candidates for Board of Directors membership suggested by its
members and the other members of the Board of Directors, as well
as by management and the Companys stockholders. As set
forth in the Companys Corporate Governance
Guidelines, the Nominating and Corporate Governance
Committee will annually review with the Board of Directors the
appropriate characteristics, skills and experience for the Board
of Directors as a whole and its individual members, and will
recommend to the Board of Directors candidates for membership in
accordance with the characteristics, skills and experience set
forth by the committee, the Corporate Governance Guidelines
and the selection criteria outlined in the committees
charter. The Nominating and Corporate Governance Committee, in
evaluating the suitability of individual candidates and
recommending candidates to stand for election, takes into
account many factors, including a candidates ability to
make independent analytical inquiries, general understanding of
marketing, finance and other elements relevant to the success of
the Company in todays business environment, experience in
the Companys industry and with relevant social policy
concerns, understanding of the Companys business on a
technical level and other board service and educational and
professional background. Each candidate nominee must also
possess fundamental qualities of intelligence, honesty, good
judgment, high ethics and standards of integrity, fairness and
responsibility.
The Nominating and Corporate Governance Committee evaluates each
individual in the context of the Board of Directors as a whole,
with the objective of assembling a group that can best advance
the success of the Company and represent stockholder interests
through the exercise of sound judgment and calling upon the
groups diversity of experience in these various areas. In
searching for qualified director candidates to stand for
election to the Board of Directors and to fill vacancies on the
Board of Directors, the Board of Directors solicits current
directors for the names of potential qualified candidates and
may ask directors to pursue their own business contacts for the
names of potentially qualified candidates. The Nominating and
Corporate Governance Committee may use search firms or consult
with outside advisors to assist in the search for qualified
candidates in the future.
In addition, the Nominating and Corporate Governance Committee
will consider candidates proposed by stockholders. Stockholders
who wish to propose a candidate to the Nominating and Corporate
Governance Committee must send written notice to the committee
containing all of the information relating to such proposed
candidate as is required to be disclosed in solicitations of
proxies for elections of directors pursuant to
Regulation 14A under the Exchange Act. Such written notice
must be sent to the Nominating and Corporate Governance
Committee, c/o the Secretary of the Company at the
Companys principal executive office located at 3113
Woodcreek Drive, Downers Grove, Illinois 60515, generally not
more than 120 days and not less than
9
90 days before the date of the next Annual Meeting. See
Questions and Answers Stockholder Proposals
and Nominations, above. The Nominating and Corporate
Governance Committee will use the same evaluation criteria in
considering the suitability of stockholder candidates as for
candidates proposed by the Company, the Board of Directors or
the Nominating and Corporate Governance Committee.
Once the Nominating and Corporate Governance Committee has
identified a prospective nominee, the committee will make a
determination as to whether to conduct a full evaluation of the
candidate. This initial determination is based on whatever
information is provided to the committee at the time of the
recommendation of the prospective candidate, as well as the
committees own knowledge of the prospective candidate,
which may be supplemented by inquiries to the person making the
recommendation or others. This initial determination is based
primarily on the need for additional Board members to fill
vacancies or expand the size of the Board and the likelihood
that the prospective nominee can satisfy the evaluation factors
described below. If the Nominating and Corporate Governance
Committee determines, in consultation with the Chairman of the
Board and other Board members, as appropriate, that additional
consideration is warranted, it may request a third-party search
firm to gather additional information about the prospective
nominees background and experience and to report its
findings to the committee. The committee will then evaluate the
prospective nominee against the standards and qualifications set
forth in the Nominating and Corporate Governance
Committees charter and as set forth in the Companys
Corporate Governance Guidelines, including:
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the prospective nominees personal and professional
integrity, ethics and values;
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the prospective nominees experience in corporate
management, such as serving as an officer or former officer of a
publicly-held company;
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the prospective nominees experience in the Companys
industry and with relevant social policy concerns;
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the prospective nominees experience as a board member of
another publicly-held company;
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the prospective nominees academic expertise in an area of
the Companys operations; and
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the extent of the prospective nominees practical and
mature business judgment.
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The Nominating and Corporate Governance Committee also considers
such other relevant factors as it deems appropriate, including
the current composition of the Board of Directors, the balance
of management and independent directors, the need for business
expertise in additional or different areas and the evaluations
of other prospective nominees. After completing this evaluation
and interview, the Nominating and Corporate Governance Committee
makes a recommendation to the full Board of Directors as to the
persons who should be nominated by the Board of Directors, and
the Board of Directors determines the nominees after considering
the recommendation and report of the committee.
How
does the Board of Directors determine which directors are
considered independent?
The Board regularly reviews the Companys Corporate
Governance Guidelines to ensure their compliance with SEC
and NYSE regulations. The Companys Corporate Governance
Guidelines meet or exceed the listing standards adopted by
the NYSE. The full text of the Corporate Governance
Guidelines can be found in the Investor Relations section of
the Companys Internet Web site at www.ftd.com. A
copy may also be obtained upon written request from the
Companys Secretary at the Companys principal
executive office located at 3113 Woodcreek Drive, Downers
Grove, Illinois 60515.
The Company is a controlled company under the rules
promulgated by the NYSE because Green Equity Investors IV, L.P.
and an affiliate, both of which are affiliates of Leonard
Green & Partners, L.P., beneficially own more than 50%
of outstanding shares of the Common Stock. As a controlled
company, the Company is exempt from certain independence
requirements of the NYSE with respect to the composition of the
Board of Directors and committees of the Board of Directors,
including the requirements that a majority of the Board of
Directors be comprised of independent directors, and that the
Compensation Committee and the Nominating and Corporate
Governance Committee be comprised solely of independent
directors. Accordingly, a majority
10
of the Companys Board of Directors is not comprised of
independent directors and the Compensation Committee and
Nominating and Corporate Governance Committee include directors
who are not independent.
Pursuant to the Companys Corporate Governance
Guidelines, the Board undertook its annual review of
director independence beginning in August 2006. During this
review, the Board considered transactions and relationships
between each director or any member of his immediate family and
the Company and its subsidiaries and affiliates. The Board also
examined transactions and relationships between directors or
their affiliates and members of the Companys senior
management or their affiliates. As provided in the Corporate
Governance Guidelines, the purpose of this review was to
determine whether any such relationships or transactions were
inconsistent with a determination that the director is
independent.
As a result of this review, the Board affirmatively determined
that Messrs. Aron, Chardavoyne and White are independent of
the Company and its management under the standards set forth in
the Companys Corporate Governance Guidelines, the
NYSE listing standards and the enhanced independence standards
applicable to audit committees pursuant to
Rule 10A-3(b)(i)
under the Exchange Act. The independent directors meet regularly
in closed meetings without the attendance of management or other
directors. The person presiding at such closed executive
sessions is rotated among the independent directors.
How
often did the Board of Directors meet during the fiscal year
ended June 30, 2006?
The Board of Directors met five times during the fiscal year
ended June 30, 2006. The number of meetings for each
committee of the Board of Directors is set forth above under the
heading What are the Boards committees
and what are their roles?
Each director attended 100% of the aggregate total number of
meetings held in the fiscal year ended June 30, 2006 by the
Board and meetings of the committees thereof on which he was a
member, except for Mr. Aron, who attended approximately 90%
of the meetings held, including meetings of the Audit and
Nominating and Corporate Governance committees, during this
period. Under the Companys Corporate Governance
Guidelines, each director is expected to dedicate sufficient
time, energy and attention to ensure the diligent performance of
his or her duties, including by regularly attending meetings of
the Board and committees of which he or she is a member, with
the understanding that, on occasion, a director may be unable to
attend a meeting.
How
are directors compensated?
Directors who are not members of the Companys management
or principals of Leonard Green & Partners, L.P. receive
a $25,000 annual retainer, $5,000 per Board meeting
attended in person ($1,000 per meeting attended by phone),
a one-time grant of an option to purchase 25,000 shares of
Common Stock upon joining the Board of Directors (one-third to
vest on the grant date, one-third to vest one year from the
grant date and one-third to vest two years from the grant date)
and an annual grant of an option to purchase 2,500 shares
of Common Stock on the date of each annual meeting (vesting one
year from the grant date). The members of the Audit Committee
receive a $7,500 annual retainer ($20,000 for the Audit
Committee Chairman) and $2,000 per meeting attended in
person ($1,000 per meeting attended by phone). The members
of the Compensation Committee and Nominating and Corporate
Governance Committee who are not members of management of the
Company or principals of Leonard Green & Partners, L.P.
also receive $2,000 per meeting attended in person
($1,000 per meeting attended by phone). In addition, if a
director is Chairman of the Compensation Committee or Nominating
and Corporate Governance Committee and is not a member of
management of the Company or a principal of Leonard
Green & Partners, L.P., that individual receives an
annual retainer of $5,000. Directors who are employees do not
receive additional compensation for serving as directors or for
attending Board of Directors or committee meetings. The Company
reimburses all directors for their expenses in connection with
attending meetings of the Board of Directors or committees of
the Board of Directors.
The compensation of directors may be modified from time to time
by the Compensation Committee if it determines such modification
is necessary or appropriate in light of the Companys
needs, best market practices or applicable legal and regulatory
changes.
11
How do
stockholders communicate with the Board of
Directors?
Stockholders and other parties interested in communicating
directly with the Chairman of the Board of Directors, with the
non-management directors as a group or with individual members
of the Board of Directors may do so by writing to:
Name of Director(s) or Board of Directors or
Non-Management Directors
c/o General Counsel
FTD Group, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
Mr. Jon R. Burney, the Companys General Counsel, will
review all correspondence addressed to the Board of Directors,
or any individual Board member, for any inappropriate
correspondence and correspondence more suitably directed to the
Companys management. Mr. Burney will summarize all
correspondence not forwarded to the applicable addressee and
make the correspondence available to the Board of Directors for
its review at the Board of Directors request.
Mr. Burney will forward stockholder communications to the
Board of Directors prior to the next regularly scheduled meeting
of the Board of Directors following the receipt of the
communication as appropriate. Such communications will be
distributed to specific director(s) as directed by the
stockholder in the communication or, if addressed generally to
the Board of Directors, to specific members of the Board of
Directors as may be appropriate. For example, if a communication
relates to accounting, internal accounting controls or auditing
matters, unless otherwise specified, the communication will be
forwarded to the Chairman of the Audit Committee.
Does
the Company have a Code of Ethics?
The Company has adopted a Code of Business Conduct and Ethics
that is applicable to all employees of the Company,
including the principal executive officer, principal financial
officer, controller and other persons performing similar
functions, as well as the Companys directors. The Code
of Business Conduct and Ethics is available in the Investor
Relations section of the Companys Internet Web site at
www.ftd.com. A copy may also be obtained upon
written request from the Companys Secretary at FTD Group,
Inc., 3113 Woodcreek Drive, Downers Grove, Illinois 60515. The
Company intends to post amendments to or waivers from its
Code of Business Conduct and Ethics (to the extent
applicable to the Companys chief executive officer,
principal financial officer, controller or any director) on its
Internet Web site.
12
EXECUTIVE
OFFICERS
The following sets forth certain current information with
respect to the Companys current executive officers:
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Name
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Age
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Position(s)
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Michael J. Soenen
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Director, President and Chief
Executive Officer
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Becky A. Sheehan
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40
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Chief Financial Officer
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Jon R. Burney
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64
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Vice President, General Counsel
and Secretary
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Lawrence W. Johnson
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Executive Vice President of
Mercury Technology
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George T. Kanganis
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50
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Executive Vice President of Sales
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William J. Van Cleave
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42
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Executive Vice President of Member
Services and FTD.COM
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Biographical information for Michael J. Soenen appears under the
heading Proposal 1 Election of
Directors Nominees for Election.
Becky A. Sheehan. Ms. Sheehan
joined the Company as Chief Financial Officer in July 2006 and
has 19 years experience in public accounting with
Deloitte & Touche LLP and Arthur Andersen LLP.
Ms. Sheehan served as the partner in-charge of the Consumer
Business and Manufacturing audit practice for the Chicago office
of Deloitte & Touche LLP. She also served as the
partner responsible for delivery of audit services for a number
of consumer business companies. Ms. Sheehan is a Certified
Public Accountant and a member of the American Institute of
Certified Public Accountants. She received her Bachelors degree
in Accounting from Illinois State University in 1987.
Jon R. Burney. Mr. Burney has
served as Vice President, General Counsel and Secretary of FTDI
and as Secretary of FTD since October 2000. Since June 28,
2002, he has also served as Vice President and General Counsel
of FTD as well as Vice President, General Counsel and Secretary
of FTD.COM. In November 2004, Mr. Burney was appointed Vice
President, General Counsel and Secretary of the Company. Prior
to joining FTD, Mr. Burney practiced law with the firm of
Burney and Herthneck in Cleveland, Ohio for 18 years and he
has been a member of the Ohio State Bar since 1968. Prior to
that time, he was Vice President and General Counsel for Apcoa
Inc. and counsel for the Apcoa division of ITT. Mr. Burney
received a Bachelor of Arts degree from Denison University in
1964 and a Juris Doctor from The Ohio State University College
of Law in 1967.
Lawrence W. Johnson. Mr. Johnson
was appointed as the Executive Vice President of Mercury
Technology in October 2003. From 1997 to October 2003,
Mr. Johnson served in various positions, including Vice
President-Human Resources, the Director of Administration and
Tax Manager. Prior to joining FTD in 1997, Mr. Johnson
worked as a Tax Manager for Culumber and Scanlan, Ltd., an
independent public accounting firm. Mr. Johnson received a
Bachelor of Science degree in Accounting from DePaul University
in 1989 and is a Certified Public Accountant.
George T. Kanganis. Mr. Kanganis
was appointed as the Executive Vice President of Sales of FTD in
December 2002. From October 2000 until December 2002,
Mr. Kanganis served as the Vice President of Sales and the
Vice President of National Accounts. Prior to joining FTD,
Mr. Kanganis served in various sales positions, including
the Vice President of National Accounts, for Teleflora LLC from
1989 to September 2000. Mr. Kanganis worked in his
familys New York based flower shop from 1979 to 1989.
Mr. Kanganis received a Bachelor of Science degree in
Business Administration from Manhattan College and currently
serves on the Society of American Florists National
Convention Committee.
William J. Van Cleave. Mr. Van
Cleave was appointed as the Executive Vice President of Member
Services in March 2002 and the Executive Vice President of
FTD.COM in June 2006. In addition, he served as Executive Vice
President of Mercury Technology from May 2002 to December 2002.
From August 1999 through March 2002, Mr. Van Cleave served
as Vice President-Marketing of FTD.COM. Prior to joining the
Company in August 1999, he was the Marketing Director of
americangreetings.com, the Internet marketing division of
American Greetings Corporation, from November 1995 to July 1999.
From August 1990 to October 1995, Mr. Van Cleave served in
various other capacities at American Greetings Corporation.
Mr. Van Cleave received a Bachelor of Science degree from
Miami University in 1986 and a Masters of Business
Administration from Case Western Reserve University in 1990.
13
COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following Compensation Committee Report on Executive
Compensation and the performance charts included elsewhere in
this Proxy Statement do not constitute soliciting material and
should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933, as
amended (the Securities Act), or the Exchange
Act, except to the extent the Company specifically incorporates
this report or the performance charts by reference therein.
The function of the Compensation Committee is to develop and
maintain the Companys compensation strategies and
policies. The Compensation Committee is responsible for
monitoring and administering the Companys compensation and
employee benefit plans and reviewing, among other things, base
salary levels, incentive awards and bonus awards for officers
and key executives, and such other matters as are specifically
delegated to the Compensation Committee by applicable law or
regulation, or by the Board of Directors from time to time. The
Compensation Committee operates under a charter approved by the
Board of Directors on February 7, 2005, which is available
in the Investor Relations section of the Companys Internet
Web site at www.ftd.com.
The Compensation Committee of the Board of Directors has
furnished this report on executive compensation for the fiscal
year ended June 30, 2006.
Compensation
Philosophy
The general philosophy of the Compensation Committee is to
provide executive compensation designed to attract and retain
world-class talent in a highly competitive industry while at the
same time delivering sustained value to the Companys
stockholders. In furtherance of these goals, the Companys
executive compensation programs are designed to link a
meaningful portion of compensation opportunity to
the performance of the Company and the executive, with an
appropriate balance between retention and risk. The
Companys executive compensation programs comprise annual
compensation, consisting of salary and bonus awards, and
long-term compensation, consisting of stock options and other
equity-based compensation. Lastly, the Compensation Committee is
committed to the concept of significant ownership of the Common
Stock by executive officers.
In making decisions affecting executive compensation, the
Compensation Committee reviews the nature and scope of the
executive officers responsibilities as well as his or her
effectiveness in supporting the Companys long-term goals.
The Compensation Committee also considers the compensation
practices of companies that are of similar size to the Company
as well as the compensation practices of companies providing
similar services and products as the Company. The Company does
not have a policy to predetermine specific compensation relative
to the compensation paid by other companies.
There are two primary types of compensation provided to the
Companys executive officers:
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annual compensation, which includes base salary intended to
provide a stable annual salary at a level consistent with
individual contributions, and annual performance bonuses
intended to link each officers compensation to the
Companys performance as well as the performance of such
officer; and
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long-term compensation, which may include stock options,
restricted stock awards and other equity-based compensation
intended to encourage actions to maximize stockholder value.
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Base
Salary
Pursuant to the Compensation Committees charter, the
Compensation Committee reviews and approves, on an annual basis,
the compensation of all executive officers, directors and other
employees of the Company or its subsidiaries with a base salary
of at least $150,000.
Incentive
Bonus Plan
The Board of Directors has adopted the Incentive Bonus Plan of
FTD Group, Inc. (the Bonus Plan).
Messrs. Soenen, Johnson, Kanganis and Van Cleave and
Ms. Sheehan (beginning in the fiscal year ending
14
June 30, 2007), along with other executive officers, are
participants in the Bonus Plan. In addition, Ms. Wolfe
participated in the Bonus Plan until June 30, 2006. The
Bonus Plan covers approximately 40 key employees and provides
additional compensation based on a percentage of the
employees base salaries in the event that (i) the
Company achieves one or more targets based on the Companys
earnings before interest, taxes, depreciation and amortization,
deferred compensation, management fees and other non-recurring
items and (ii) the individual achieves specified goals.
Mr. Soenen received bonuses of $1,000,000, $823,643 and
$22,631 related to the fiscal years ended June 30, 2006,
2005 and 2004, respectively, pursuant to the Bonus Plan.
Mr. Johnson received bonuses of $200,000, $161,511 and
$25,017 related to the fiscal years ended June 30, 2006,
2005 and 2004, respectively, pursuant to the Bonus Plan.
Mr. Kanganis received bonuses of $200,000, $179,457 and
$29,038 related to the fiscal years ended June 30, 2006,
2005 and 2004, respectively, pursuant to the Bonus Plan.
Mr. Van Cleave received bonuses of $226,600, $203,325 and
$34,632 related to the fiscal years ended June 30, 2006,
2005 and 2004, respectively, pursuant to the Bonus Plan.
Ms. Wolfe received bonuses of $250,000 and $196,794 related
to the fiscal years ended June 30, 2006 and 2005,
respectively, pursuant to the Bonus Plan, but did not receive a
bonus related to the fiscal year ended June 30, 2004. The
Board of Directors may amend or terminate the Bonus Plan at any
time in its sole discretion.
Equity-Based
Compensation
The Board of Directors has adopted, and the Companys
stockholders have approved, the FTD Group, Inc. 2005 Amended and
Restated Equity Incentive Award Plan (the 2005
Plan). The 2005 Plan is described below under the
heading Executive Compensation Equity
Incentive Award Plan.
During fiscal year 2006, the Company granted 137,500 options to
employees and directors of the Company. Options granted to
employees during the fiscal year ended June 30, 2006 vest
equally each year over an approximate five-year period. Options
granted to directors during the fiscal year ended June 30,
2006 either vest equally in thirds, one-third on the date of
grant, one-third on the first anniversary of the date of grant
and the remaining one-third on the second anniversary of the
date of grant or vest in full on the first anniversary of the
date of grant.
Compensation
of the Chief Executive Officer
For the fiscal year ended June 30, 2006,
Mr. Soenens base salary was $500,000, based on a year
with 26 pay periods. In consideration of the Companys
performance and his individual performance for the fiscal year
ended June 30, 2006, Mr. Soenen received a bonus of
$1,000,000 pursuant to the Bonus Plan.
Internal
Revenue Code Section 162(m)
In determining executive compensation, the Compensation
Committee considers, among other factors, the possible tax
consequences to the Company and to the Companys executive
officers, including the potential impact of Section 162(m)
of the Internal Revenue Code of 1986, as amended
(Section 162(m)). Section 162(m)
disallows a tax deduction for any publicly held corporation for
individual compensation exceeding $1 million in any taxable
year for the Chief Executive Officer and the other senior
executive officers, other than compensation that is
performance-based under a plan that is approved by the
stockholders of the Company and that meets certain other
technical requirements. However, tax consequences, including but
not limited to tax deductibility by the Company, are subject to
many factors (such as changes in the tax laws and regulations or
interpretations thereof and the timing and nature of various
decisions by executives regarding options and other rights) that
are beyond the control of either the Compensation Committee or
the Company. In addition, the Compensation Committee believes
that it is important for it to retain maximum flexibility in
designing compensation programs that meet its stated objectives.
For all of the foregoing reasons, the Compensation Committee,
while considering tax deductibility as one of its factors in
determining compensation, will not limit compensation to those
levels or types of compensation that will be deductible. The
Compensation Committee will, of course, consider alternative
forms of compensation, consistent with its compensation goals,
that preserve deductibility.
15
Conclusion
The Compensation Committee believes that the compensation
policies and plans of the Company are generally properly
integrated with the Companys business plan and aligned
with the best interests of the Companys stockholders. The
Compensation Committee will continue to review and revise the
Companys compensation policies and plans in light of the
Companys needs, best market practices and legal and
regulatory changes.
Compensation
Committee of the Board of Directors
Peter
J. Nolan, Chairman
Robert S. Apatoff
Timothy J. Flynn
Compensation
Committee Interlocks and Insider Participation
Messrs. Nolan, Apatoff and Flynn became members of the
Compensation Committee in February 2005. Since then none has
been an officer or employee of the Company. None of the
Companys executive officers currently serves, or in the
past has served, on the board of directors or compensation
committee (or committee performing equivalent functions) of any
other company that has or had one or more executive officers
serving on the Companys Board of Directors or Compensation
Committee.
16
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following summary compensation table sets forth information
concerning total compensation earned or paid to (i) our
Chief Executive Officer during the fiscal year ended
June 30, 2006 and (ii) the four other most highly
compensated executive officers of the Company who served in such
capacities as of June 30, 2006, in each case for services
rendered to the Company during each of the past three fiscal
years.
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Long-Term
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Compensation
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Awards
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Securities
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Fiscal
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Annual Compensation
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Underlying
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All Other
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Name and Principal Position(s)
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Year
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Salary
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Bonus(1)
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Options (#)
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Compensation
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Michael J. Soenen
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2006
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$
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519,231
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(2)
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$
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1,000,000
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$
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4,193
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(3)
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Director, President
and
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2005
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500,000
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823,643
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925,001
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(4)
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8,540
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(5)
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Chief Executive
Officer
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2004
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256,731
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272,631
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(6)
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1,427,585
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(7)
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Lawrence W. Johnson
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2006
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206,923
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200,000
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3,556
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(8)
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Executive Vice President
of
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2005
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180,000
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161,511
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100,000
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(9)
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5,776
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(10)
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Mercury Technology
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2004
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161,462
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125,017
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(11)
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6,653
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(12)
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George T. Kanganis
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2006
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207,692
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200,000
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2,636
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(13)
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Executive Vice President of
Sales
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2005
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200,000
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179,457
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100,000
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(14)
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5,825
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(15)
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2004
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199,231
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179,038
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(16)
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3,158
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(17)
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William J. Van Cleave
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2006
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235,316
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226,600
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3,368
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(18)
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Executive Vice President
of
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2005
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226,600
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203,325
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183,334
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(19)
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6,153
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(20)
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Member Services and
FTD.COM
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2004
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226,346
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134,632
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(21)
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8,487
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(22)
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Carrie A. Wolfe
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2006
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259,616
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250,000
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3,644
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(23)
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Former Chief Financial
Officer
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2005
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205,860
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196,794
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250,000
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(24)
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4,385
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(23)
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2004
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240,485
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500,000
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(25)
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718,205
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(26)
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(1) |
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Includes cash bonuses paid in the fiscal year following the
referenced fiscal year with respect to services rendered in the
referenced fiscal year. See Compensation Committee Report
on Executive CompensationIncentive Bonus Plan. |
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(2) |
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As noted in Compensation Committee Report on Executive
Compensation Compensation of the Chief Executive
Officer, Mr. Soenens annual salary is $500,000,
based on a year with 26 pay periods. However, because of the
Companys bi-weekly pay cycle there were 27 (rather than
26) pay periods during fiscal year 2006 and, consequently,
Mr. Soenen received a total of $519,231 during this period. |
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(3) |
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Represents $405 in flexible dollars for use in connection with
FTDIs benefit plan and $3,788 in matching contributions to
FTDIs 401(k) Retirement Savings Plan (the 401(k)
Plan). |
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(4) |
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Includes 529,167 options, 20% of which vested on June 30,
2005, 20% of which vested on June 30, 2006 and the
remaining 60% of which vest in 20% increments on June 30 of
each of the next three fiscal years. Also includes 395,834
options which vest in full on June 30, 2011 and are subject
to earlier vesting in the event that certain performance targets
are met by the Company. |
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(5) |
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Represents $1,405 in flexible dollars for use in connection with
FTDIs benefit plan and $7,135 in matching contributions to
the 401(k) Plan. |
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(6) |
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Represents a bonus of $22,631 for the fiscal year ended
June 30, 2004 and a bonus of $250,000 related to the
February 24, 2004 going private transaction, in which
Nectar Merger Corporation, which was a wholly owned subsidiary
of the Company, merged with and into FTD with FTD continuing as
the surviving corporation (the 2004 Going Private
Transaction). |
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(7) |
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Represents $1,421,875 in severance payment, $1,758 in flexible
dollars for use in connection with FTDIs benefit plan and
$3,952 in matching contributions to the 401(k) Plan. |
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(8) |
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Represents $675 in flexible dollars for use in connection with
FTDIs benefit plan and $2,881 in matching contributions to
the 401(k) Plan. |
17
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(9) |
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Includes 50,000 options, 20% of which vested on June 30,
2005, 20% of which vested on June 30, 2006 and the
remaining 60% of which vest in 20% increments on June 30 of
each of the next three fiscal years. Also includes 50,000
options which vest in full on June 30, 2011 and are subject
to earlier vesting in the event that certain performance targets
are met by the Company. |
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(10) |
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Represents $1,630 in flexible dollars for use in connection with
FTDIs benefit plan and $4,146 in matching contributions to
the 401(k) Plan. |
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(11) |
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Represents a bonus of $25,017 for the fiscal year ended
June 30, 2004 and a bonus of $100,000 related to the 2004
Going Private Transaction. |
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(12) |
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Represents $2,155 in flexible dollars for use in connection with
FTDIs benefit plan and $4,498 in matching contributions to
the 401(k) Plan. |
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(13) |
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Represents $405 in flexible dollars for use in connection with
FTDIs benefit plan and $2,231 in matching contributions to
the 401(k) Plan. |
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(14) |
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Includes 50,000 options, 20% of which vested on June 30,
2005, 20% of which vested on June 30, 2006 and the
remaining 60% of which vest in 20% increments on June 30 of
each of the next three fiscal years. Also includes 50,000
options which vest in full on June 30, 2011 and are subject
to earlier vesting in the event that certain performance targets
are met by the Company. |
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(15) |
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Represents $1,440 in flexible dollars for use in connection with
FTDIs benefit plan and $4,385 in matching contributions to
the 401(k) Plan. |
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(16) |
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Represents a bonus of $29,038 for the fiscal year ended
June 30, 2004 and a bonus of $150,000 related to the 2004
Going Private Transaction. |
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(17) |
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Represents $2,235 in flexible dollars for use in connection with
FTDIs benefit plan and $923 in matching contributions to
the 401(k) Plan. |
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(18) |
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Represents $405 in flexible dollars for use in connection with
FTDIs benefit plan and $2,963 in matching contributions to
the 401(k) Plan. |
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(19) |
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Includes 91,667 options, 20% of which vested on June 30,
2005, 20% of which vested on June 30, 2006 and the
remaining 60% of which vest in 20% increments on June 30 of
each of the next three fiscal years. Also includes 91,667
options which vest in full on June 30, 2011 and are subject
to earlier vesting in the event that certain performance targets
are met by the Company. |
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(20) |
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Represents $1,440 in flexible dollars for use in connection with
FTDIs benefit plan and $4,713 in matching contributions to
the 401(k) Plan. |
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(21) |
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Represents a bonus of $34,632 for the fiscal year ended
June 30, 2004 and a bonus of $100,000 related to the 2004
Going Private Transaction. |
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(22) |
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Represents $2,305 in flexible dollars for use in connection with
FTDIs benefit plan and $6,182 in matching contributions to
the 401(k) Plan. |
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(23) |
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Represents matching contributions to the 401(k) Plan. |
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(24) |
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Includes 125,000 options, 20% of which vested on June 30,
2005, 20% of which vested on June 30, 2006 and the
remaining 60% of which vest in 20% increments on June 30,
of each of the next three fiscal years. Also includes 125,000
options which vest in full on June 30, 2011 and are subject
to earlier vesting in the event that certain performance targets
are met by the Company. |
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(25) |
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Represents a bonus related to the 2004 Going Private Transaction. |
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(26) |
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Represents $712,500 in severance payment, $484 in flexible
dollars for use in connection with FTDIs benefit plan and
$5,221 in matching contributions to the 401(k) Plan. |
Option
Grants in Last Fiscal Year
No stock option grants or stock appreciation rights were granted
to the individuals named above in the Summary Compensation Table
during the fiscal year ended June 30, 2006.
18
Option
Exercises and Fiscal Year-End Values
The following table shows information about unexercised options
to purchase Common Stock as of June 30, 2006 held by the
individuals named in the Summary Compensation Table. No stock
options or stock appreciation rights were exercised by these
individuals during the fiscal year ended June 30, 2006. No
stock appreciation rights were held by these individuals as of
June 30, 2006.
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Number of Securities
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Number of
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Underlying Unexercised
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Value of Unexercised
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Shares
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Options Held at
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In-The-Money Options
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Acquired on
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Value
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June 30, 2006
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Held at June 30, 2006(a)
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Exercise in 2006
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Realized
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Exercisable
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Unexercisable
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Exercisable
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Unexercisable
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Michael J. Soenen
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343,613
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581,388
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$
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4,638,776
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$
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7,848,738
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Lawrence W. Johnson
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36,667
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63,333
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495,005
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854,996
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George T. Kanganis
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36,667
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63,333
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495,005
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854,996
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William J. Van Cleave
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67,224
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116,110
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907,524
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1,567,485
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Carrie A. Wolfe
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91,667
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158,333
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1,237,505
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2,137,496
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(a) |
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Options were
in-the-money
as of June 30, 2006 if the market value of the Common Stock
on that date exceeded the exercise price of the options. The
amounts listed represent the difference between the closing
price of the Common Stock on the NYSE on June 30, 2006
($13.50) and the exercise price payable for those shares. |
Long-Term
Incentive Plan Awards in Last Fiscal Year
No long-term incentive awards were granted to the Companys
named executive officers during the fiscal year ended
June 30, 2006.
Employment
Agreements With Named Executive Officers
Pursuant to employment agreements between FTDI and each of
Messrs. Johnson, Kanganis and Van Cleave, each dated
as of May 20, 2003, and amended as of October 5, 2003
and February 24, 2004, each executive has agreed to serve
as an officer of FTDI or in a substantially similar position
with any entity that acquires FTDI through May 31, 2004,
with the term of each agreement renewing automatically for one
year periods thereafter unless terminated as provided in the
agreement prior to the end of the term. None of these agreements
has been terminated. Each executive has agreed to the following
minimum base salaries or such greater amount as determined by
the Board of Directors or the Compensation Committee plus a
performance bonus as set by the Board of Directors or the
Compensation Committee: Mr. Johnson, $122,000;
Mr. Kanganis, $180,000 and Mr. Van Cleave, $220,000.
The employment agreements also provide that each executive is
entitled to four weeks of paid vacation per year, reimbursement
for all reasonable and necessary travel expenses and other
disbursements incurred by each executive for or on FTDIs
behalf and additional employment-related benefits that are made
available from time to time to FTDIs employees who are at
comparable levels to each executive. In addition, each
executives employment agreement provides that if:
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FTDI fails to renew the executives employment agreement at
the end of its term;
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FTDI terminates the executives employment without cause
(other than upon a change of control ); or
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the executive resigns following his or her assignment to a
position that represents a material diminution in the
executives operating responsibilities (other than upon a
change of control);
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then the executive is entitled to receive certain termination
benefits, which include the continuation of his or hers most
recent base salary for one year from the effective date of any
such termination and any pro rata bonus to which the executive
may be entitled pursuant to the agreement.
In addition, each employment agreement provides that the
executive is entitled to receive certain severance benefits upon
a change of control if, during the two years following a change
of control, the
19
executives employment is terminated or not renewed (other
than for cause, death or permanent disability) or the executive
resigns because:
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FTDI fails to elect or re-elect or otherwise to maintain the
executive in the office or the position, or a substantially
equivalent office or position, which the executive held
immediately prior to the change of control;
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there is (i) a material adverse change in the nature or
scope of the authorities, powers, functions, responsibilities or
duties attached to the position that the executive held
immediately prior to the change of control (except for changes
resulting from the Company ceasing to be a public company or the
executive no longer having the duties held by an officer of a
public company); (ii) a reduction in the executives
base salary or a material modification in the scope of the
executives right to participate in any bonus program
offered to similarly-situated employees as in effect immediately
prior to the change of control; or (iii) the termination,
denial or reduction in scope or value of the executives
rights to certain additional employment-related benefits at
least as great in the aggregate as those payable immediately
prior to the change of control;
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a change in the scope of the business or other activities for
which the executive is responsible, which has rendered the
executive unable to carry out any material portion of the duties
attached to the executives position immediately prior to
the change of control (except for changes resulting from the
Company ceasing to be a public company or the executive no
longer having the duties held by an officer of a public company;
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FTDIs liquidation, dissolution, merger, consolidation or
reorganization or transfer of all or substantially all of
FTDIs business
and/or
assets; or
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the executives principal location of work changed to any
location that is more than 50 miles from his or her current
principal location of work immediately prior to a change of
control.
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These benefits include, among other things, a lump sum payment
equal to the sum of (i) the executives base salary
for two years at the highest rate during the three years prior
to termination, (ii) two times the executives target
performance bonus for the fiscal year in which the change of
control or termination occurs, whichever is higher and
(iii) any pro rata performance bonus to which the executive
may be entitled for the fiscal year in which the change of
control or termination occurs, whichever is higher. For two
years after the date of termination, each executive is entitled
to certain health benefits, life insurance and disability
insurance and reasonable and customary executive outplacement
services not to exceed $20,000.
A change of control is defined in each
executives employment agreement to include:
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the acquisition by any person of more than 50% of FTDIs
voting stock or the voting stock of FTD;
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a change in a majority of FTDIs directors or the directors
of FTD;
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the consummation of a reorganization, merger or consolidation or
sale of all or substantially all of FTDIs assets or the
assets of FTD; or
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the approval by FTDIs stockholders or the stockholders of
FTD of a complete liquidation or dissolution of FTDI or FTD.
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Each executives employment agreement also provides that
any of the executives outstanding stock options or
restricted stock awards will become immediately exercisable or
vest in full, as the case may be, upon a change of control.
Under the terms of a confidentiality and non-competition
agreement between FTDI and each of the executives, the
executives have agreed not to engage in any business activity if
such activity constitutes the sale or provision of floral
products or services that are similar to, or competitive with,
floral products or services then being sold or provided by FTDI
or any of its subsidiaries or affiliated companies, while the
executive is employed by FTDI and for a period of one year
thereafter. In addition, under the agreement, each
20
executive has agreed to certain provisions regarding the
non-disclosure of confidential information and non-solicitation
of employees of FTDI.
Other than Messrs. Johnson, Kanganis and Van Cleave, none
of the Companys named executive officers are party to an
employment agreement with the Company.
Equity
Incentive Award Plan
2005 Plan. The Board of Directors has
adopted, and the Companys stockholders have approved, the
2005 Plan. The 2005 Plan amended and restated the Companys
Stock Option Plan originally adopted on September 30, 2004
(the Original Plan). The principal purpose of
the 2005 Plan is to attract, retain and motivate selected
employees, consultants and directors through the granting of
stock-based compensation awards. The 2005 Plan provides for a
variety of such awards, including non-qualified stock options,
incentive stock options (within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended), stock
appreciation rights, restricted stock awards, restricted stock
unit awards, deferred stock awards, dividend equivalents,
performance share awards, performance stock unit awards, stock
payment awards, performance-based awards and other stock-based
awards. A total of 4,592,778 shares of Common Stock are
reserved for issuance under the 2005 Plan, which may be used for
any of the types of awards permitted under the 2005 Plan. A
maximum of 1,500,000 shares of Common Stock may be granted
to any one participant during a one-year period (measured from
the date of any grant). The 2005 Plan does not apply to stock
options that were granted under the Original Plan prior to the
effective date of the 2005 Plan, which continue to be subject to
the terms and conditions of the Original Plan.
Administration. The 2005 Plan is
administered by the Compensation Committee. The Compensation
Committee has the power to interpret the 2005 Plan and to adopt
such rules for the administration, interpretation and
application of the 2005 Plan according to its terms. To the
extent permitted by applicable law, the Board of Directors or
the Compensation Committee may also delegate to one or more
members of the Board of Directors or one or more of the
Companys officers the power, among other things, to
designate which of our non-officer employees shall receive stock
awards, and the number of shares of the Common Stock that will
be subject to each award, subject to a maximum aggregate number
of shares specified by the Board of Directors or the
Compensation Committee at the time the delegation to the
director(s) or officer(s) is made.
Grant of Awards. Certain employees,
consultants and directors are eligible to be granted awards
under the 2005 Plan. The Compensation Committee determines:
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which employees, consultants, and directors are to be granted
awards;
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the type of award that is granted;
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the number of shares subject to the awards; and
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the terms and conditions of the awards, consistent with the 2005
Plan.
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Limitation on Incentive Stock Option
Treatment. Only the Companys employees
may be granted incentive stock options. Even if an option is
designated as an incentive stock option, no option will qualify
as an incentive stock option if the aggregate fair market value
of the Common Stock (as determined as of the date of grant) with
respect to all of a holders incentive stock options
exercisable for the first time during any calendar year exceeds
$100,000. Any option failing to qualify as an incentive stock
option will be deemed to be a non-qualified stock option.
Stock Option Exercise Prices. The
Compensation Committee sets the per share exercise price of
stock options granted under the 2005 Plan. However, the per
share option exercise price may not be less than 100% of the
fair market value of shares of the Common Stock on the grant
date and, with respect to an incentive stock option granted to
any individual who, at the date of grant, owns stock possessing
more than 10 percent of the total combined voting power of all
classes of the Companys capital stock, may not be less
than 110% of the fair market value of shares of the Common Stock
on the grant date.
21
Expiration of Stock Options. The term
of an option is set by the Compensation Committee subject to the
following conditions: (i) no option term may be longer than
ten years from the date of grant and (ii) the option term
for an incentive stock option granted to a person owning more
than 10% of the total combined voting power of all classes of
the Companys capital stock may not exceed five years from
the date of grant.
Other Equity Awards. In addition to
stock options, the Compensation Committee may also grant to
certain employees, consultants and directors stock appreciation
rights, shares of restricted stock, restricted stock units,
dividend equivalents, performance share awards, performance
stock unit awards, stock payment awards, deferred stock awards,
performance-based awards, or other stock-based awards, with such
terms and conditions as the Compensation Committee may, subject
to the terms of the 2005 Plan, establish. Such awards may be
settled in cash, stock or a combination thereof. Under the 2005
Plan, performance share awards, performance stock unit awards
and performance-based stock awards are intended to comply with
the requirements of Section 162(m) of the Internal Revenue
Code of 1986, as amended, and its underlying regulations, in
order to allow these awards, when payable, to be fully tax
deductible by the Company.
Adjustments of Awards. If the
Compensation Committee determines that a stock dividend, stock
split, combination or exchange of shares, merger, consolidation,
spin-off, recapitalization, distribution of company assets to
stockholders (other than normal cash dividends), or any other
corporate event affecting the stock or the share price of the
stock affects the Common Stock in a manner that causes dilution
or enlargement of benefits or potential benefits under the 2005
Plan, then the Compensation Committee may appropriately and
equitably adjust:
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|
the aggregate number of, and kind of, shares of the Common Stock
subject to the 2005 Plan;
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|
|
the number of, and kind of, shares of the Common Stock subject
to the outstanding awards;
|
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|
|
the price per share of the Common Stock upon exercise of
outstanding options; and
|
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|
|
the financial or other performance targets specified in each
option agreement for determining the exercisability of options.
|
In such a case, the Compensation Committee may, subject to the
terms of the 2005 Plan, take the following actions:
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|
provide for either termination of any award in exchange for an
amount of cash
and/or other
property, if any, equal to the amount that would have been
attained upon the exercise of such award or realization of the
holders rights or the replacement of an award with other
rights or property;
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provide that an award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering
the stock of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices;
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provide that an award will be exercisable or payable or fully
vested with respect to all shares covered thereby,
notwithstanding anything to the contrary in the 2005 Plan or the
applicable award agreement; and
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|
provide that the award cannot vest, be exercised or become
payable after such an event.
|
The Compensation Committee (or the Board of Directors, in the
case of options granted to independent directors) may, in its
sole discretion, include such further provisions and limitations
in any award agreement as it may deem equitable and in our best
interests.
Amendment and Termination. The Board of
Directors or the Compensation Committee (with board approval)
may amend, suspend and terminate the 2005 Plan anytime from time
to time. However, the Company must generally obtain approval of
the Companys stockholders to: (i) increase the number
of shares available under the 2005 Plan; (ii) grant options
with an exercise price that is below 100% of the fair market
value of shares of the Common Stock on the grant date;
(iii) extend the exercise period for an option beyond 10
years from the date of grant; (iv) take any action that
results in a material increase in benefits or a change
22
in eligibility requirement; or (v) the extent required by
applicable law, rule or regulation (including any applicable
stock exchange rule).
Absent approval of the Companys stockholders, no option
may be amended to reduce the per share exercise price of the
shares subject to such option below the per share exercise price
of such option on the grant date and no option may be granted in
exchange for, or in connection with, the cancellation or
surrender of an option having a higher per share exercise price.
In addition, the Company may not terminate, amend, or modify the
2005 Plan in a manner that adversely affects in any material way
any previously granted award without the participants
prior written consent.
Effective and Expiration Date. The 2005
Plan was effective as of February 7, 2005, the date it was
approved by the Companys stockholders. The 2005 Plan will
expire on, and no option or other award may be granted pursuant
to the 2005 Plan after, the earlier of the tenth anniversary of
the date it is approved by the (i) Companys
stockholders and (ii) Board of Directors. Any awards that
are outstanding on February 7, 2015 will remain in force
according to the terms of the 2005 Plan and the applicable award
agreement.
Incentive
Bonus Plan
The Bonus Plan is described above under the heading
Compensation Committee Report on Executive
Compensation.
401(k)
Plan
The Company sponsors a 401(k) savings plan for all of its
eligible employees. All eligible employees may contribute
between 1% and 75% of their gross annual salary up to $14,000
annually and $15,000 annually, on a pre-tax basis, for calendar
year 2005 and 2006, respectively. As of January 1, 2005,
the Company matches an amount equal to 25% of each
participants pre-tax contribution up to 6% of the
participants compensation. Prior to January 1, 2005,
the Company matched an amount equal to 50% of each
participants pre-tax contribution up to 6% of the
participants compensation. Company contributions to the
401(k) plan for the years ended June 30, 2006 and 2005, for
the period from February 24, 2004 through June 30,
2004 and for the period from July 1, 2003 through
February 23, 2004, were $267,000, $346,000, $181,000 and
$289,000, respectively.
EQUITY
COMPENSATION PLAN INFORMATION
AS OF JUNE 30, 2006
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(C)
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(B)
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Number of Securities
|
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|
(A)
|
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|
Weighted-Average
|
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|
Remaining Available for
|
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|
Number of Securities
|
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|
Exercise Price of
|
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Future Issuance Under
|
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to Be Issued Upon
|
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|
Outstanding
|
|
|
Equity Compensation Plans
|
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|
Exercise of Outstanding
|
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Options, Warrants
|
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|
(Excluding Securities
|
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Plan Category
|
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Options, Warrants and Rights
|
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and Rights
|
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Reflected in Column (A))
|
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Equity compensation plans approved
by security holders
|
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|
2,105,876
|
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$
|
3.89
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2,415,991
|
|
Equity compensation Plans not
approved by security holders
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|
|
|
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Total
|
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|
2,105,876
|
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|
$
|
3.89
|
|
|
|
2,415,991
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23
STOCKHOLDER
RETURN COMPARISON
The following performance chart and table provide a comparison
of cumulative total stockholder return for the period from
February 9, 2005 (the date on which the Common Stock began
publicly trading) through June 30, 2006, for an investment
in the Company, the Russell 2000 Index and a peer group, which
consists of
1-800-Flowers.com
(the Peer Group). The chart and table assume
an investment of $100.00 in each of the Company and the two
indices, and the reinvestment of any dividends. The historical
information set forth below is not necessarily indicative of
future performance. Data for the Company, the Russell 2000 Index
and the Peer Group were provided to the Company by Research Data
Group, Inc. The data shown is based on the closing share prices
or index values, as applicable, at the end of the last day of
each quarter shown (except for the initial date,
February 9, 2005).
COMPARISON
OF CUMULATIVE TOTAL RETURN*
AMONG FTD GROUP, INC., THE RUSSELL 2000 INDEX AND A PEER
GROUP
* $100 invested on 2/9/05 in stock or index
including reinvestment of dividends. Fiscal year ending
June 30.
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2/9/05
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3/31/05
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6/30/05
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9/30/05
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12/31/05
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3/31/06
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6/30/06
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FTD GROUP, INC.
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100.00
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89.12
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83.46
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|
76.10
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76.40
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71.25
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99.26
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RUSSELL 2000
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100.00
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|
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|
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98.49
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|
|
|
|
102.74
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|
|
|
|
107.56
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|
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|
|
108.78
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|
|
|
|
123.94
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|
|
|
|
117.72
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PEER GROUP
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100.00
|
|
|
|
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99.61
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|
|
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|
92.63
|
|
|
|
|
92.24
|
|
|
|
|
84.47
|
|
|
|
|
93.42
|
|
|
|
|
75.92
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 2006, there were no
relationships or transactions required to be reported by the
Company pursuant to Item 404 of
Regulation S-K.
24
REPORT OF
THE AUDIT COMMITTEE
The following Report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other filing made by the
Company under the Securities Act or the Exchange Act, except to
the extent the Company specifically incorporates this report by
reference therein.
As more fully described in its charter, the Audit Committee
oversees the Companys financial reporting process on
behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and internal control
over financial reporting. The Companys independent
registered public accounting firm, Ernst & Young LLP,
is responsible for (i) performing an audit in accordance
with the standards of the Public Company Accounting Oversight
Board (United States) to obtain reasonable assurance that the
Companys consolidated financial statements are free from
material misstatement and for expressing an opinion on the
conformity of the financial statements with accounting
principles generally accepted in the United States and
(ii) performing an audit in accordance with the standards
of the Public Company Accounting Oversight Board (United States)
to obtain reasonable assurance that managements assessment
that the Company maintained effective internal control over
financial reporting as of June 30, 2006, is fairly stated,
in all material respects and to obtain reasonable assurance that
the Company maintained effective internal control over financial
reporting as of June 30, 2006, in all material respects.
The internal auditor is responsible to the Audit Committee and
the Board of Directors for testing the integrity of the
financial accounting and reporting control systems and such
other matters as the Audit Committee and the Board of Directors
determine from time to time.
The Audit Committee of the Company hereby reports as follows:
1. The Audit Committee has reviewed and discussed the
Companys audited financial statements for the fiscal year
ended June 30, 2006 with the Companys management,
including a discussion of the quality, not just the
acceptability, of the Companys accounting principles, the
reasonableness of significant estimates and judgments and the
clarity of disclosures in the financial statements.
2. The Audit Committee has discussed with Ernst &
Young LLP the matters required to be discussed by Statement of
Auditing Standards No. 61, as amended by Statement of
Auditing Standards No. 90 (Audit Committee Communications).
3. The Audit Committee has received and reviewed the
written disclosures and the letter from Ernst & Young
LLP required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), has discussed
with Ernst & Young LLP their independence and
considered whether the provision of non-audit services is
compatible with maintaining Ernst & Young LLPs
independence.
4. Based on the review and discussion referred to in
paragraphs (1) through (3) above, the Audit
Committee recommended to the Board of Directors, and the Board
of Directors has approved, that the audited financial statements
be included in the Companys Annual Report on
Form 10-K
for the fiscal year ended June 30, 2006.
Audit
Committee of Our Board of Directors
Adam M. Aron, Chairman
William J. Chardavoyne
Thomas M. White
25
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The aggregate fees to the Company for each of the last two
fiscal years for professional services rendered by the
Companys principal accounting firm, Ernst & Young
LLP, as of and for the fiscal years ended June 30, 2006 and
2005, respectively, are set forth in the table below. All such
fees were approved, or pre-approved as the case may be, by our
Audit Committee as discussed under the heading
Pre-Approval Policies and Procedures below.
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Fiscal Year Ended June 30,
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2006
|
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2005
|
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Audit Fees(1)
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|
$
|
846,500
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|
|
$
|
653,500
|
|
Audit-Related Fees(2)
|
|
|
24,325
|
|
|
|
44,000
|
|
Tax Fees(3)
|
|
|
333,272
|
|
|
|
68,750
|
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|
|
|
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Total
|
|
$
|
1,204,097
|
|
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$
|
766,250
|
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(1) |
|
Audit Fees represent the aggregate fees incurred for
professional services necessary to perform an audit or review in
accordance with the standards of the Public Company Accounting
Oversight Board, including services rendered for the audit of
the Companys annual financial statements (including
services incurred with rendering an opinion under
Section 404 of the Sarbanes-Oxley Act of 2002) and
review of quarterly financial statements. Also includes fees for
services that are normally incurred in connection with statutory
and regulatory filings or engagements, such as comfort letters,
statutory audits, attest services, consents, and review of
documents filed with the SEC. |
|
(2) |
|
Audit-related fees represent the aggregate fees incurred for
assurance and related services that are reasonably related to
the performance of the audit or review of the Companys
financial statements and are not reported under Audit
Fees. |
|
(3) |
|
Tax fees represent the aggregate fees billed for professional
services for tax compliance, tax advice and tax planning. |
26
PRE-APPROVAL
POLICIES AND PROCEDURES
The Audit Committee has a policy that, as of February 7,
2005, requires the pre-approval of audit and non-audit services
rendered by the Companys independent registered public
accounting firm. Audit Committee pre-approval of audit and
non-audit services is not required if the engagement for the
services is entered into pursuant to pre-approval policies and
procedures established by the Audit Committee regarding the
Companys engagement of the independent registered public
accounting firm, provided the policies and procedures are
detailed as to the particular service, the Audit Committee is
informed of each service provided and such policies and
procedures do not include delegation of the Audit
Committees responsibilities under the Exchange Act to the
Companys management. The Audit Committee may delegate to
one or more designated members of the Audit Committee the
authority to grant pre-approvals, provided such approvals are
presented to the Audit Committee at a subsequent meeting. If the
Audit Committee elects to establish pre-approval policies and
procedures regarding non-audit services, the Audit Committee
must be informed of each non-audit service provided by the
Companys independent registered public accounting firm.
Audit Committee pre-approval of non-audit services (other than
review and attest services) also is not required if such
services fall within available exceptions established by the SEC.
* * *
It is important that your shares be represented at the meeting.
If you are unable to be present in person, you are respectfully
requested to sign the enclosed proxy and return it in the
enclosed stamped and addressed envelope as promptly as possible.
By Order of the Board of Directors,
JON R. BURNEY
Secretary
Dated: October 11, 2006
Downers Grove, Illinois
27
THE
PROPOSALS
PROPOSAL 1
ELECTION
OF DIRECTORS
NOMINEES
FOR ELECTION
Directors serve one-year terms and are elected annually. The
current term of office of all of the Companys directors
expires at the Annual Meeting. The Board of Directors proposes
that the following nominees, all of whom are currently serving
as directors, be re-elected for a new term of one year and until
their successors are duly elected and qualified. Each of the
nominees has consented to be named and to serve if elected. If
any of them becomes unavailable to serve as a director, the
Board of Directors may designate a substitute nominee. In that
case, the persons named as proxies will vote for the substitute
nominee designated by the Board of Directors. The following
information is supplied about the nominees for election as
directors of the Company:
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PETER J. NOLAN
Director and Chairman of the Board of
Directors since 2004
Age: 48 |
|
Mr. Nolan has served as a director of the Company since the
consummation of the 2004 Going Private Transaction in February
2004 and was named Chairman in November 2004. Mr. Nolan is
a Managing Partner of Leonard Green & Partners, L.P.
Mr. Nolan is also a Manager of GEI Capital IV, LLC, an
affiliate of Leonard Green & Partners, L.P. Prior to
joining Leonard Green & Partners, L.P., Mr. Nolan
was a Managing Director and Co-Head of Donaldson,
Lufkin & Jenrettes Los Angeles Investment Banking
Division, which he joined in 1990. Prior to 1990, Mr. Nolan
was a First Vice President in corporate finance at Drexel
Burnham Lambert from 1986 to 1990, and a Vice President at
Prudential Securities, Inc. from 1982 to 1986. Mr. Nolan
presently serves on the Board of Directors of AsianMedia Group
LLC, Claim Jumper Restaurants, LLC, Rand McNally &
Company, Werner Holding Co., Inc. and Activision, Inc.
Mr. Nolan is a Trustee of Cornell University where he
received a Bachelor of Science and an M.B.A. from the Johnson
Graduate School of Management at Cornell University. |
|
ROBERT S. APATOFF
Director since 2004
Age: 48 |
|
Mr. Apatoff has served as a director of the Company since
May 2004. Mr. Apatoff has been President and Chief
Executive Officer of Rand McNally & Company since July
2003. From 1999 to 2003, he was Senior Vice President and Chief
Marketing Officer of Allstate Insurance Company and a member of
Allstates senior management team. Prior to Allstate,
Mr. Apatoff held senior marketing positions at Aetna,
Anheuser-Busch, L.A. Gear, Inc. and Reebok International, Ltd.
Mr. Apatoff presently serves on the Board of Directors of
Rand McNally & Company, Intercontinental Art, Inc. and
Students in Free Enterprise. In addition, Mr. Apatoff
serves on the Board of Trustees of the Goodman Theatre and the
Board of Visitors of DePauw University. Mr. Apatoff
received a B.A. in Communications from DePauw University. |
|
ADAM M. ARON
Director since 2005
Age: 52 |
|
Mr. Aron has served as a director of the Company since
April 2005. Mr. Aron has served as Chairman and Chief
Executive Officer of World Leisure Partners since June 2006.
From July 1996 through February 2006, Mr. Aron served as
Chairman and Chief Executive Officer of Vail Resorts, Inc. Prior
to joining Vail Resorts, Mr. Aron was the President and
Chief Executive Officer of Norwegian Cruise Lines Ltd. from 1993
to 1996. From 1990 to 1993, he |
28
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|
|
|
|
held the position of Senior Vice President of Marketing for
United Airlines and from 1987 to 1990, he was Senior Vice
President of Marketing for Hyatt Hotels Corporation.
Mr. Aron is also a Director of Starwood Hotels and Resorts
Worldwide, Inc., Marathon Acquisition Corp., where he also
serves as the Chairman of the Audit Committee, and Rewards
Network, Inc. Mr. Aron also serves on the boards of several
non-profit and community organizations. Mr. Aron is a
member of the Council on Foreign Relations, Business Executives
for National Security, the Travel Business Roundtable.
Mr. Aron received a Bachelor of Arts from Harvard College
and an M.B.A. from the Harvard Business School. |
|
JOHN M. BAUMER
Director since 2004
Age: 39 |
|
Mr. Baumer has served as a director of the Company since
the consummation of the 2004 Going Private Transaction in
February 2004. Mr. Baumer has been a partner of Leonard
Green & Partners, L.P. since January 2001. Prior to
becoming a partner, Mr. Baumer had been a Vice President at
Leonard Green & Partners, L.P. since May 1999.
Mr. Baumer is a member of GEI Capital IV, LLC, an affiliate
of Leonard Green & Partners, L.P. Prior to joining
Leonard Green & Partners, L.P., Mr. Baumer was a
vice president in the corporate finance division of Donaldson,
Lufkin & Jenrette in Los Angeles since 1995.
Mr. Baumer presently serves on the Board of Directors of
Intercontinental Art, Inc., Leslies Poolmart, Inc., VCA
Antech, Inc. and Rand McNally & Company.
Mr. Baumer received a Bachelor of Business Administration
from the University of Notre Dame and an M.B.A. from the Wharton
School at the University of Pennsylvania. |
|
WILLIAM J. CHARDAVOYNE
Director since 2006
Age: 54 |
|
Mr. Chardavoyne has served as a director of the Company
since July 2006. Mr. Chardavoyne has over 30 years of
finance and management experience. From 2000 to 2006,
Mr. Chardavoyne held the position of Chief Financial
Officer for Santa Monica-based Activision, Inc., an
international publisher of interactive entertainment software
products. Prior to this, Mr. Chardavoyne was Chief
Financial Officer for Movietown.com and held several senior
management positions in operations and finance at Columbia Tri
Star Home Video, a subsidiary of Sony Pictures Entertainment. In
addition, Mr. Chardavoyne presently serves on the Board of
Directors and the Audit Committee of AVP, Inc.
Mr. Chardavoyne received a BBA in accounting from Hofstra
University and is a Certified Public Accountant. |
|
TIMOTHY J. FLYNN
Director since 2004
Age: 34 |
|
Mr. Flynn has served as a director since the consummation
of the 2004 Going Private Transaction in February 2004.
Mr. Flynn has been a partner of Leonard Green &
Partners, L.P. since January 2005. Prior to becoming a partner,
Mr. Flynn had been a Vice President of Leonard
Green & Partners, L.P. from March 2003. Prior to
joining Leonard Green & Partners, L.P., Mr. Flynn
was a Director in the Investment Banking Division of Credit
Suisse First Boston in Los Angeles, which he joined in 2000
following Credit Suisse First Bostons acquisition of
Donaldson, Lufkin & Jenrette. Prior to the acquisition,
Mr. Flynn worked in the Investment Banking Division of
Donaldson, Lufkin & Jenrette from 1996. From 1994 to
1996, Mr. Flynn worked in the Mergers and Acquisitions
group at Paine |
29
|
|
|
|
|
Webber Incorporated. Mr. Flynn also serves on the Board of
Directors of Claim Jumper Restaurants, LLC and Sagittarius
Brands, Inc. Mr. Flynn earned a dual Bachelor of Arts
degree in Economics and Political Science from Brown University. |
|
TED C. NARK
Director since 2005
Age: 48 |
|
Mr. Nark has served as a director since February 2005.
Since July 2006, Mr. Nark has served as an Operating
Partner of Leonard Green & Partners, L.P. Previously,
Mr. Nark served as the Chief Executive Officer of White Cap
Industries, Inc., a former Leonard Green & Partners,
L.P. portfolio company, since April 2002. From 1998 until 2002,
Mr. Nark was the Chief Executive Officer and Managing
Director of Corporate Express Australia, a publicly traded,
business-to-business
office products distribution company in Australia. From 1992
until 1998, Mr. Nark worked for Corporate Express, Inc., as
Northwest Division President (from 1992 until
1995) and then as Group President (from 1995 until 1998).
Mr. Nark also serves on the Board of Directors of Gaiam,
Inc. and Leslies Poolmart, Inc. Mr. Nark received a
Bachelor of Business Administration from Washington State
University. |
|
MICHAEL J. SOENEN
Director since 2004
Age: 36 |
|
Mr. Soenen has served as the President and Chief Executive
Officer and a director of FTD, and has served as a director and
Chief Executive Officer of the Company, since May 2004, and was
appointed President of the Company in November 2004. Previously,
Mr. Soenen served as the President and Chief Operating
Officer of FTD and FTDI from October 2002 to February 2004 and a
director of FTD from November 2002 to February 2004. From May
1999 until October 2002, Mr. Soenen served as the President
and Chief Executive officer of FTD.COM. From January 1997
through May 1999, he served as Vice President-Marketing of FTD
and Director of Sales Promotion for FTD. Mr. Soenen was an
associate at Perry Corp. from August 1996 to December 1996. From
July 1993 to July 1996, Mr. Soenen worked for Salomon
Brothers Inc., an investment banking firm. Mr. Soenen
received a Bachelor of Arts from Kalamazoo College in 1992. |
|
THOMAS M. WHITE
Director since 2006
Age: 49 |
|
Mr. White has served as a director since January, 2006.
Mr. White is the Senior Vice President, Chief Financial
Officer and Treasurer of Hub Group, Inc. (NASDAQ: HUBG). Prior
to joining the Hub Group in 2002, Mr. White was a partner
with Arthur Andersen LLP, which he joined in 1979.
Mr. White received a Masters degree in Business
Administration from Purdue University in 1985 and a Bachelor of
Business Administration degree in Accountancy from Western
Michigan University in 1979. Mr. White is a Certified
Public Accountant and serves on the Board of Directors of
Landauer, Inc. as the Audit Committee Chairman and a member of
the Compensation Committee. |
|
CARRIE A. WOLFE
Director since 2006
Age: 36 |
|
Ms. Wolfe has served as a director since June 2006.
Ms. Wolfe previously served as the Companys Principal
Accounting Officer from July 2006 through September 2006, as the
Companys Chief Financial Officer from August 2004 to July
2006 and as FTDs Chief Financial Officer and Treasurer
between March 2002 to April 2004. Ms. Wolfe also served as
Chief Financial Officer of FTD from November 2004 through July
2006. From November 1999 to |
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March 2002, Ms. Wolfe served in various positions with
FTD.COM, including Chief Financial Officer, Vice
President-Finance and Accounting and Controller. Prior to
joining FTD in November 1999, she was Director of Finance and
Director of Financial Reporting, as well as serving in various
other capacities, at Whitman Corporation, from October 1995 to
November 1999. From June 1992 to September 1995, Ms. Wolfe
worked in the auditing group at Price Waterhouse (now
PricewaterhouseCoopers LLP), an independent public accounting
firm. Ms. Wolfe received a Bachelor of Science degree in
Accounting from the University of Illinois in 1992 and is a
Certified Public Accountant. |
THE BOARD
OF DIRECTORS RECOMMENDS THAT THE COMPANYS STOCKHOLDERS
VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS OF
EACH OF THE
FOREGOING PERSONS.
31
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF CERTIFIED INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed
Ernst & Young LLP as the Companys independent
registered public accounting firm for the fiscal year ending
June 30, 2007, subject to ratification by the
Companys stockholders. The Company expects that
representatives of Ernst & Young LLP will be present at
the Annual Meeting. They will have an opportunity to make a
statement at the meeting if they so desire and will be available
to respond to appropriate questions raised orally by
stockholders. The Board of Directors has put this proposal
before the stockholders because the Board believes that seeking
stockholder ratification of the selection of the Companys
independent registered public accounting firm is good corporate
practice. If the appointment of Ernst & Young LLP is
not ratified, the Audit Committee will evaluate the basis for
the stockholders vote in determining whether to continue
Ernst & Young LLPs engagement.
THE BOARD
RECOMMENDS A VOTE FOR THE RATIFICATION OF
ERNST & YOUNG LLP AS THE COMPANYS INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE 30,
2007.
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FTD Group, Inc
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FTD GROUP, INC. FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 15, 2006.
The undersigned stockholder of FTD Group, Inc. hereby appoints MICHAEL J. SOENEN and JON
R. BURNEY, and each of them, proxies, with full power of substitution in each, to vote all of
the shares of FTD Group, Inc. common stock, par value $0.01 per share, which the undersigned
would be entitled to vote at the Annual Meeting of stockholders to be held on November 15, 2006
and at any continuations, adjournments or postponements thereof, as indicated on the reverse
side, and in their discretion upon any other business that may properly come before the meeting
or at any continuations, adjournments or postponements thereof.
This proxy, when properly executed, will be voted in the manner directed herein by the
undersigned stockholder. If no direction is given, this proxy will be voted FOR proposals 1 and
2 and will grant discretionary authority pursuant to Item 3. The undersigned acknowledges
receipt of the accompanying Proxy Statement dated October 11, 2006.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.
THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
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6DETACH ALONG
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ADMISSION TICKET
FTD Group, Inc.
ANNUAL MEETING OF STOCKHOLDERS
November 15, 2006 - 10:00 a.m. local time
3113 Woodcreek Drive
Downers Grove, Illinois 60515
You must present this portion of the card in order to be admitted to the FTD Group, Inc.
Annual Meeting of stockholders on November 15, 2006 at 10:00 a.m., local time.
Cameras, recording devices and other electronic devices will not be permitted at the
Annual Meeting.
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Proxy FTD Group, Inc.
A. Election of Directors
The Board of Directors recommends a vote FOR the listed nominees.
1. Election of ten directors
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For |
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01 Peter J. Nolan
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05 William J. Chardavoyne
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09 Thomas M. White
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02 Robert S. Apatoff
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06 Timothy J. Flynn
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10 Carrie A. Wolfe
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03 Adam M. Aron
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07 Ted C. Nark
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04 John M. Baumer
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08 Michael J. Soenen
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B. Issues
The Board of Directors recommends a vote FOR the following proposal.
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HOUSEHOLDING ELECTION |
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2.
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The ratification
of the appointment
of Ernst & Young
LLP as the
Companys
independent
registered public
accounting firm for
the fiscal year
ending June 30,
2007.
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Please indicate if
you consent to receive
certain future
investor
communications in a
single package per
household.
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3.
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In their
discretion, the
proxies are
authorized to vote
for the election
of such substitute
nominee(s) for
directors as such
proxies may select
in the event any
nominee(s) named in
this proxy become
unable to serve,
and upon any other
business which may
properly come
before the 2006
Annual Meeting or
any continuations,
adjournments or
postponements
thereof.
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If you plan to
attend the Annual
Meeting please mark
the notification box
to the right.
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C.
Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
Please sign exactly as name or names appear on this proxy. When signing as attorney,
executor, administrator, trustee, custodian, guardian or corporate officer, give full title.
If more than one trustee, all should sign. Joint owners must each sign. If the signer is a
corporation, please sign full corporate name by a duly authorized officer, giving title as
such. If signer is a partnership, please sign in partnership name by an authorized person.
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Signature 1 - Please keep signature within the box
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Signature 2 - Please keep signature within the box |
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