UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
The Children's Place Retail Stores, Inc.
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(Name of Issuer)
Common Stock, $0.10 par value
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(Title of Class of Securities)
168905107
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(CUSIP Number)
Dennis J. Block, Esq.
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
(212) 504-5555
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 5, 2009
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box |_|.
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The Information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP NO.: 168905107
1 NAMES OF REPORTING PERSONS
Ezra Dabah
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S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,643,250
SHARES ----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 3,359,460
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
1,643,250
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10 SHARED DISPOSITIVE POWER
3,359,460
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,002,710(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.0%(1)
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14 TYPE OF REPORTING PERSON
IN
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(1) Does not include 1,475,327 shares of Common Stock that may be deemed to be
beneficially owned by certain relatives of Mr. Dabah, including (i) 261,697
shares held by Mr. Dabah's father-in law and mother-in-law, Stanley Silverstein
and Raine Silverstein, and certain of their children and grandchildren, (ii)
215,300 shares of Common Stock held by Barbara Dabah, wife of Mr. Dabah's
brother, Haim Dabah, both directly and for the benefit of their children or
(iii) 998,330 shares of Common Stock held by Gila Dweck, Mr. Dabah's sister, and
her children held both directly and in trust. Other members of Mr. Dabah's
family may own additional shares. There is no agreement or understanding with
these parties with respect to the voting or disposition of any shares. The
Reporting Persons disclaim beneficial ownership of any such shares.
CUSIP NO.: 168905107
1 NAMES OF REPORTING PERSONS
Renee Dabah
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S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 104,100
SHARES ----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 4,898,610
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
104,100
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10 SHARED DISPOSITIVE POWER
4,898,610
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,002,710(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.0%(1)
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14 TYPE OF REPORTING PERSON
IN
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This Amendment No. 5 amends and supplements the statement on Schedule 13D
(the "Schedule 13D") originally filed with the Securities and Exchange
Commission on October 15, 2007, as amended by Amendment No. 1 filed on February
7, 2008, Amendment No. 2 filed on February 21, 2008, Amendment No. 3 filed on
May 15, 2008 and Amendment No. 4 filed on April 24, 2009 by Ezra Dabah ("Mr.
Dabah"), Renee Dabah ("Mrs. Dabah" and, together with Mr. Dabah, the "Reporting
Persons") with respect to the shares of Common Stock, $0.10 par value per share
(the "Common Stock"), of The Children's Place Retail Stores, Inc., a Delaware
corporation (the "Company"). Unless otherwise indicated, each capitalized term
used but not defined herein shall have the meaning assigned to such term in the
Schedule 13D. From and after the date hereof, all references in the Schedule 13D
to the Schedule 13D or terms of similar import shall be deemed to refer to the
Schedule 13D as amended and supplemented hereby.
The Reporting Persons have entered into a Second Amended and Restated
Joint Filing Agreement, dated as of April 24, 2009, a copy of which is filed as
Exhibit F to Amendment No. 4 to the Schedule 13D filed on April 24, 2009, and
which is incorporated herein by reference. Neither the fact of this filing nor
anything contained herein shall be deemed an admission by the Reporting Persons
that they constitute a "group" as such term is used in Section 13(d)(1)(k) of
the rules and regulations under the Securities Exchange Act of 1934, as amended.
Items 4, 6 and 7 are hereby amended and supplemented as follows:
Item 4. Purpose of Transaction.
The Reporting Persons, as large, long-term shareholders of the Company,
remain concerned about the ability of the incumbent management and Board of
Directors of the Company to sustain future growth and increase shareholder
value, particularly in light of the need for the Company to introduce and
implement viable strategies which addresses several important growth
opportunities available to the Company. As such, on May 5, 2009, the Reporting
Persons delivered to the Company notice of their intent to nominate certain
persons for election as directors and propose other business at the Company's
2009 Annual Meeting (the "Notice"). A copy of the Notice is filed as Exhibit G
to the Schedule 13D and is incorporated herein by reference. The Notice states
that the Reporting Persons intend to (i) nominate for election as directors of
the Company Raphael Benaroya, Ross Glickman and Jeremy J. Fingerman (each a
"Nominee" and collectively, the "Nominees") at the 2009 Annual Meeting and (ii)
to propose a stockholder resolution that any provision of the Bylaws that is
adopted by the Board and not the shareholders of the Company after March 5, 2009
be repealed (the "Proposal").
The Reporting Persons believe that the Nominees are highly-qualified and
proven executives with extensive experience in key areas of the Company's
business, including specialty apparel retailing, mass consumer marketing and
branding and retail real estate, and that each Nominee will bring much-needed
insight, accountability and fresh and relevant perspectives to the Board. The
Reporting Persons currently intend to conduct a proxy solicitation to elect the
Nominees to the Board and obtain approval of the Proposal at the Company's 2009
Annual Meeting. Pursuant to nominee agreements executed between Mr. Dabah and
each Nominee on May 5, 2009 (each, a "Nominee Agreement" and collectively, the
"Nominee Agreements"), Mr. Dabah has agreed to pay the costs of soliciting
proxies in support of the election of the Nominees to the Board and the adoption
of the Proposal at the Annual Meeting, and to indemnify each
Nominee with respect to certain costs that may be incurred by such Nominee in
connection with his nomination as a candidate for election to the Board at the
Annual Meeting and the solicitation of proxies in support of his election. In
addition, Mr. Dabah has agreed to reimburse Mr. Benaroya for certain costs and
expenses in connection with Mr. Benaroya's nomination, including the fees and
expenses of Mr. Benaroya's counsel, up to a maximum amount of $30,000. A form of
Nominee Agreement is filed as Exhibit H to the Schedule 13D and is incorporated
herein by reference.
In addition, since September 2007, the Board has been searching for a
permanent Chief Executive Officer to replace the Company's interim Chief
Executive Officer, Charles Crovitz. To date, the Board has not identified a
permanent Chief Executive Officer. The Reporting Persons have engaged in
preliminary discussions with Raphael Benaroya regarding the possibility of
proposing that he serve as Chief Executive Officer of the Company. To date, Mr.
Benaroya has not made a determination as to whether he is willing to be
considered for the CEO position. If Mr. Benaroya is willing to serve as Chief
Executive Officer, the Reporting Persons plan to propose to the Board that he be
appointed to that position.
Security holders are advised to read the proxy statement and other
documents related to the solicitation of proxies by the Reporting Persons if and
when they become available, because they will contain important information,
including information relating to the participants in any such proxy
solicitation. If and when completed, a definitive proxy statement and a form of
proxy will be available to stockholders of the Company from the participants at
no charge and will also be available at no charge at the Securities and Exchange
Commission's website at http://www.sec.gov.
The Reporting Persons expect to engage in discussions with the Company,
stockholders of the Company and others regarding matters in connection with the
Notice and the Annual Meeting. The Reporting Persons intend to review their
investment in the Company on a continuing basis. Depending on various factors
including, without limitation, the Company's financial position, results and
strategic direction, price levels of the common stock, conditions in the
securities and credit markets and general economic and industry conditions, the
Reporting Persons may, in addition to the foregoing, take such actions with
respect to their investment in the Company as they deem appropriate, including,
but not limited to: (i) the purchase of additional Common Stock in the open
market, in privately negotiated transactions or otherwise, and (ii) the sale of
all or a portion of the Common Stock now owned or hereafter acquired by the
Reporting Persons, in the open market, in privately negotiated transactions or
otherwise. The Reporting Persons may also transfer shares to or from a Reporting
Person to another Reporting Person.
The Reporting Persons reserve the right to change their plans or
intentions and to take any and all actions that they may deem appropriate to
maximize the value of their investment in the Company in light of market
conditions, subsequent developments affecting the Company and the general
business and future prospects of the Company.
Except as set forth above, the Reporting Persons do not have any current
intention, plan or proposal with respect to the matters referred to in
paragraphs (a) - (j) of Item 4 of Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
6. On May 5, 2009, Mr. Dabah entered into the Nominee Agreements. A form of
Nominee Agreement is filed herewith as Exhibit H and is incorporated herein by
reference.
Item 7. Material to be filed as Exhibits.
Exhibit G Shareholder Notice of Intent to Nominate Persons for
Election as Directors and Other Proposed Business at the
2009 Annual Meeting of Shareholders of The Children's Place
Retail Stores, Inc.
Exhibit H Form of Nominee Agreement
SIGNATURE
After reasonable inquiry and to the best of each of the undersigned's knowledge
and belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
EZRA DABAH
By: /s/ Ezrah Dabah
-----------------------------
Name: Ezra Dabah
RENEE DABAH
By: /s/ Renee Dabah
-----------------------------
Name: Renee Dabah
Dated: May 5, 2009
EXHIBIT G
Ezra Dabah
120 Central Park South
New York, NY 10019
May 5, 2009
Via Hand Delivery
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The Children's Place Retail Stores, Inc.
915 Secaucus Road
Secaucus, New Jersey 07094
Attention: Secretary
Re: Shareholder Notice of Intent to Nominate Persons for Election as
Directors and Other Proposed Business at the 2009 Annual Meeting
of Shareholders of The Children's Place Retail Stores, Inc. (the
"Corporation")
Ladies and Gentlemen:
Ezra Dabah (the "Record Holder") hereby submits this notice (together with
the Annexes hereto, this "Notice") on the date hereof pursuant to the
requirements (the "Bylaw Requirements") set forth in Article I, Section 6(j) of
the Third Amended and Restated Bylaws of the Corporation (the "Bylaws"),
effective as of March 5, 2009, filed as Exhibit 3.1 to the Form 8-K filed by the
Corporation with the Securities and Exchange Commission (the "SEC") on March 6,
2009, and in accordance with applicable provisions of the General Corporation
Law of the State of Delaware, as amended. The Record Holder intends to deliver a
proxy statement and form of proxy to at least the percentage of shareholders
that will be required to carry the matters set forth in this Notice. The purpose
of this Notice, as more fully set forth herein, is to provide notice to the
Corporation of the Record Holder's intent to nominate persons for election to
the Board of Directors of the Corporation (the "Board") and propose certain
business at the 2009 annual meeting of shareholders of the Corporation
(including any adjournment or postponement thereof or any special meeting held
in lieu thereof, the "Annual Meeting").
The address of the Record Holder is 120 Central Park South, New York, New
York 10019. The Record Holder is the record owner of 1,643,250 shares of common
stock, par value $0.10 per share, of the Corporation ("Shares") and the direct
beneficial owner of 1,643,250 Shares (inclusive of the 1,643,250 Shares owned of
record). In addition, the Record Holder, together with his wife, Renee Dabah,
may be deemed to be members of a "group" (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), which
group may be deemed to "beneficially own" (within the meaning of Rule 13d-3
under the Exchange Act) an aggregate of 5,002,710 Shares as more fully described
on Annex A. Share ownership is provided in this Notice as of the close of
business on May 4, 2009. The Holders may acquire additional Shares, although the
Record Holder does not intend to update this Notice to reflect future holdings.
The Record Holder hereby represents that it (i) is a shareholder of record
of Shares entitled to vote at the Annual Meeting and (ii) intends to appear in
person or by proxy at the Annual Meeting and to take the following actions: (a)
to nominate for election as directors of the Corporation Raphael Benaroya, Ross
Glickman and Jeremy J. Fingerman (each a "Nominee"); and (b) to move the
following proposal (the "Bylaw Restoration Proposal"):
Proposal 1: A Bylaw Restoration Proposal to prevent the incumbent
Board of the Corporation from adopting any changes to the
Corporation's Bylaws that could serve to limit the ability of the
Record Holder's nominees to pursue the best interests of the
Corporation and its stockholders once elected to the Board.
The following is the text of the Bylaw Restoration Proposal:
RESOLVED, that any provision of the Bylaws of the Corporation as of
the effectiveness of this resolution adopted by the Board of the
Corporation and not by the shareholders of the Corporation that were
not included in the Bylaws of the Corporation, as amended through
March 5, 2009 and as filed with the Securities and Exchange
Commission on March 6, 2009, be and hereby are repealed.
The purpose of and reason for conducting the business specified in the
Bylaw Restoration Proposal is to prevent the incumbent Board from adopting any
changes to the Corporation's Bylaws that could serve to limit the ability of the
Nominees to pursue the best interests of the Corporation and its stockholders.
If the incumbent Board does not effect any change to the version of the Bylaws
publicly available in a filing by the Corporation with the SEC on March 6, 2009,
the Bylaw Restoration Proposal will have no effect. However, if the incumbent
Board has made changes since that time, the Bylaw Restoration Proposal, if
adopted, will restore the Bylaws to the version that was filed as Exhibit 3.1 to
the Form 8-K filed by the Corporation with the SEC on March 6, 2009, without
considering the nature of any changes the incumbent Board may have adopted. The
Bylaw Restoration Proposal will not preclude the newly-elected Board from
reconsidering any repealed Bylaw changes following the proxy solicitation.
Pursuant to Section 6(f) of the Bylaws, the Bylaw Restoration Proposal may
be passed by the affirmative vote of the holders of majority of the Shares
represented at the annual meeting and entitled to vote.
If, for any reason, more than 3 directors are to be elected at the Annual
Meeting, the Record Holder reserves the right to nominate additional persons to
be so elected (each an "Additional Nominee") in order to seek proportionate
representation. Additionally, if any Nominee or Additional Nominee is unable to
stand for election at the Annual Meeting, the Record Holder reserves the right
to nominate Emanuel R. Pearlman in place of such Nominee(s) or Additional
Nominee(s) (the "Alternate Nominee"). In either event, the Record Holder will
give prompt notice to the Corporation of its intent to nominate any Additional
Nominee or Alternate Nominee at the Annual Meeting. Except where the context
otherwise requires, the term "Nominee" as used in this Notice shall be deemed to
include one or more Additional Nominees or Alternate Nominees, as applicable.
Pursuant to the Bylaw Requirements: (i) certain information relating to
each Nominee is set forth in the body of this Notice and in Annex A, Annex B
(with the written consent of each Nominee to being named in the proxy statement
as a nominee and to serving as a director of the Corporation if elected attached
in Annex C) and Annex D and (ii) certain information relating to the Record
Holder, the other Holders (as defined in Annex A) and certain related parties is
set forth in the body of this Notice and in Annex A and Annex B. Each Nominee is
also party to an agreement (each a "Nominee Agreement") pursuant to which the
Record Holder has agreed to pay the costs of soliciting proxies in support of
the election of the Nominee to the Board and the adoption of the Proposal at the
Annual Meeting, and to indemnify the Nominee with respect to certain costs that
may be incurred by the Nominee in connection with his nomination as a candidate
for election to the Board at the Annual Meeting and the solicitation of proxies
in support of his election. The Nominees will not receive any compensation from
the Holders or their affiliates for their services as directors of the
Corporation if elected. If elected, the Nominees will be entitled to such
compensation from the Corporation as is consistent with the Corporation's
prevailing practices for services of non-employee directors, which is described
in the Corporation's proxy statement furnished to shareholders in connection
with the 2008 annual meeting of shareholders of the Corporation.
In addition, since September 2007, the Board has been searching for a
permanent Chief Executive Officer to replace the Corporation's interim Chief
Executive Officer, Charles Crovitz. To date, the Board has not identified a
permanent Chief Executive Officer. The Record Holder has engaged in preliminary
discussions with Raphael Benaroya regarding the possibility of proposing that he
serve as Chief Executive Officer of the Corporation. To date, Mr. Benaroya has
not made a determination as to whether he is willing to be considered for the
CEO position. If Mr. Benaroya is willing to serve as Chief Executive Officer,
the Record Holder plans to propose to the Board that he be appointed to that
position.
Each Nominee, each Holder and certain related parties have an interest in
the election of directors at the Annual Meeting: (i) indirectly through the
beneficial ownership (if any) of Shares and other securities, as described on
Annex A and Annex B, and (ii) pursuant to the Nominee Agreements. Except as
disclosed in this Notice, no person on whose behalf this Notice is made has any
substantial or material interest, direct or indirect, by security holdings or
otherwise, in the matters to be brought before the Annual Meeting pursuant to
this Notice. If elected, each Nominee would be considered an independent
director of the Corporation under applicable NASDAQ rules.
Except as disclosed in this Notice, there are no arrangements or
understandings between the Record Holder and any Nominee or any other person or
persons with respect to the Record Holder's nomination of the Nominees or
movement of the Bylaw Restoration Proposal.
The Record Holder hereby states with respect to each Nominee that, to the
knowledge of the Record Holder, other than as disclosed in this Notice:
(i) the Nominee is not, nor was within the past year, a party to
any contract, arrangement or understanding with any person
with respect to any securities of the Corporation, including,
but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the
giving or withholding of proxies;
(ii) (a) the Nominee has no position or office with the
Corporation, and has no arrangement or understanding with any
other person pursuant to which he was selected to be a
nominee; (b) neither the Nominee nor any of his "associates"
(which term, for purposes of this Notice, shall have the
meaning ascribed thereto in Rule 14a-1 of Regulation 14A of
the Exchange Act) have any arrangement or understanding with
any person with respect to (1) any future employment by the
Corporation or its affiliates or (2) any future transactions
to which the Corporation or any of its affiliates will or may
be a party; (c) there are no transactions, or series of
similar transactions, since the beginning of the Corporation's
last fiscal year, or any currently proposed transaction, or
series of similar transactions, to which the Corporation or
any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $120,000 and in which the Nominee or
any member of his immediate family had, or will have, a direct
or indirect material interest; (d) there are no material
proceedings to which the Nominee or any of his associates is a
party adverse to the Corporation or any of its subsidiaries or
has a material interest adverse to the Corporation or any of
its subsidiaries; and (e) neither the Nominee nor any member
of his immediate family, nor any corporation or organization
of which the Nominee is an executive officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or
more of any class of equity securities, nor any trust or other
estate in which the Nominee has a substantial beneficial
interest or as to which the Nominee serves as a trustee or in
a similar capacity, has been indebted to the Corporation or
its subsidiaries at any time since the beginning of the
Corporation's last fiscal year in an amount in excess of
$120,000;
(iii) neither the Nominee nor any immediate family member of the
Nominee: (a) is a controlling shareholder or an executive
officer of any organization to which the Corporation made, or
from which the Corporation received, payments for property or
services in an amount which, in the current or any of the last
three fiscal years exceeds the greater of $200,000 or 5% of
the recipient's consolidated gross revenue; (b) was, within
the last three years, employed as an executive officer of
another company during which time any of the Corporation's
present executive officers served on the compensation
committee of such company; or (c) is a current partner or
employee of a firm that is the Corporation's internal or
external auditor or was, within the last three years, a
partner or employee of such firm and personally worked on the
Corporation's audit within that time;
(iv) the Nominee has not received, and does not have an immediate
family member who has received, during any twelve-month period
within the last three years, more than $120,000 in direct
compensation from the Corporation, other than director and
committee fees and pension or other
forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service);
(v) the Nominee has not been, within the last three years, an
employee of the Corporation and does not have an immediate
family member who has been, within the last three years, an
executive officer of the Corporation;
(vi) none of the entities referred to in Annex B with which the
Nominee has been involved during the past five years is a
parent, subsidiary or other affiliate of the Corporation;
(vii) (a) the Nominee and each of his associates is not a record
owner or direct or indirect beneficial owner of any stock of
the Corporation or any parent or subsidiary of the
Corporation; and (b) the Nominee has not purchased or sold any
securities of the Corporation within the past two years;
(viii) neither the Nominee nor any of his associates has received any
cash compensation, cash bonuses, deferred compensation,
compensation pursuant to other plans or other compensation
from, or related to, services rendered on behalf of the
Corporation, or is subject to any arrangement described in
Item 402 of Regulation S-K under the Securities Act of 1933,
as amended ("Regulation S-K"); and
(ix) (a) there are no relationships involving the Nominee or any of
his associates that would have required disclosure under Item
402(j) of Regulation S-K had the Nominee been a director of
the Corporation; (b) there are no events required to be
disclosed under Item 401(f) of Regulation S-K that have
occurred during the past five years and that are material to
an evaluation of the ability or, integrity of the Nominee; (c)
there are no "family relationships" (as defined in Section
401(d) of Regulation S-K) between the Nominee and any director
or executive officer of the Corporation or person known to the
Record Holder to be nominated by the Corporation to become a
director or executive officer; and (d) the Nominee has not
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) in the past ten years.
With respect to each Holder, other than as disclosed in this Notice, (i)
neither Holder is, or was within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
the Corporation, including, but not limited to joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; and (ii)
neither Holder has any arrangement or understanding with any person with respect
to (A) any future employment by the Corporation or its affiliates or (B) any
future transactions to which the Corporation or its affiliates will or may be a
party.
The Record Holder understands that certain information regarding the
Annual Meeting (including, but not limited to, the record date, voting shares
outstanding and date, time and place of the Annual Meeting), the Corporation
(including, but not limited to, its various committees and proposal deadlines)
and the beneficial ownership of the Corporation's securities will be set forth
in the Corporation's proxy statement on Schedule 14A, to be filed with the SEC
by the Corporation with respect to the Annual Meeting, and in certain other SEC
filings made or to be made by the Corporation and third parties under Sections
13 and 16 of the Exchange Act. To the extent the Corporation believes any such
information is required to be set forth herein, the Record Holder hereby refers
the Corporation to such filings. The Record Holder accepts no responsibility for
any information set forth in any such filings not made by the Record Holder.
The Annexes are hereby incorporated into and made a part of this Notice.
Accordingly, all matters disclosed in any part of this Notice, including the
Annexes, shall be deemed disclosed for all purposes of this Notice. All
capitalized terms appearing in one of the Annexes that are not defined in such
Annex shall have the meaning given in the body of this Notice or in another of
the Annexes, as applicable.
The Record Holder believes that this Notice complies with the Bylaw
Requirements. If, however, you believe that this Notice for any reason does not
comply with the Bylaw Requirements or is otherwise defective in any respect, the
Record Holder requests that you so notify it on or prior to 10:00 a.m. (New
York, New York time) on May 7, 2009 by contacting Dennis Block by telephone at
(212) 504-5555 or by facsimile at (212) 504-6666. Please be advised that,
notwithstanding the compliance by the Record Holder with the Bylaw Requirements,
neither the delivery of this Notice in accordance with the terms of the Bylaw
Requirements nor the delivery of additional information, if any, provided by or
on behalf of the Record Holder or any of its affiliates to the Corporation from
and after the date hereof shall be deemed to constitute an admission by the
Record Holder or any of its affiliates that this Notice is in any way defective
or as to the legality or enforceability of any particular provision of the
Bylaws or any other matter or a waiver by the Record Holder or any of its
affiliates of its right to, in any way, contest or challenge the validity or
enforceability thereof or of any other matter (including actions taken by the
Board in anticipation of, or following receipt of, this Notice). In the event
any statement or other information in this Notice is not correct, or to the
extent any applicable information has been omitted from this Notice, the Record
Holder, Holders and Nominees reserve the right to correct and/or supplement any
such statement or other information set forth in this Notice.
Very truly yours,
/s/ Ezra Dabah
-----------------------------------------
Ezra Dabah
ANNEX A
Information about the Holders and certain related parties
---------------------------------------------------------
General
The Record Holder's present principal occupation or employment is serving
as a director of the Corporation. The business address of the Record Holder is
120 Central Park South, New York, NY 10019, and the business address of the
Corporation is 915 Secaucus Road, Secaucus, New Jersey 07094.
The Holders (as defined below) may be deemed to beneficially own, in the
aggregate, 5,002,710 Shares, representing approximately 17.0% of the
Corporation's outstanding Shares (based upon the 29,471,432 Shares reported to
be outstanding as of March 26, 2009 by the Corporation in the Corporation's
Annual Report on Form 10-K for the period ending January 31, 2009 filed with the
SEC on April 1, 2009).
The Record Holder beneficially and directly owns and has sole voting power
and sole dispositive power with regard to 1,643,250 Shares (including Shares
underlying options), respectively, except to the extent that other persons as
described below may be deemed to have shared voting power and shared dispositive
power with regard to such Shares. The Record Holder may be deemed to have shared
voting power and shared dispositive power with regard to, and therefore may be
deemed to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act) 3,359,460 Shares, composed of (i) 2,879,360 Shares held by the Record
Holder and others, as custodians or trustees for the Record Holder's children
and certain other family members, (ii) 376,000 Shares held by the Record Holder
and his wife as joint tenants with right of survivorship and (iii) 104,100
Shares owned by the Record Holder's wife.
Renee Dabah, wife of the Record Holder, beneficially and directly owns and
has sole voting power and sole dispositive power with regard to 104,100 Shares.
Mrs. Dabah may be deemed to have shared voting power and shared dispositive
power with regard to, and therefore may be deemed to beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act) 4,898,610 Shares, composed of
(i) 2,879,360 Shares held by the Record Holder and others, as custodians or
trustees for the Record Holder's children and certain other family members, (ii)
376,000 Shares held by Mrs. Dabah and the Record Holder as joint tenants with
right of survivorship and (iii) 1,643,250 Shares owned by the Record Holder
(including Shares underlying options). The business address of Mrs. Dabah is 120
Central Park South, New York, NY 10019.
The Record Holder and Mrs. Dabah are collectively referred to herein as
the "Holders."
Neither Holder owns beneficially, directly or indirectly, shares of any
class of securities of any parent or subsidiary of the Corporation.
Stanley Silverstein, a member of the Board and Mr. Dabah's father-in-law,
beneficially and directly owns and has sole voting power and sole dispositive
power with regard to 261,697 Shares (including Shares underlying options). Mr.
Silverstein may be deemed to have shared
voting power and shared dispositive power with regard to, and therefore may be
deemed to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act) 2,928,880 Shares, composed of Shares held by Mr. Silverstein's wife, Raine
Silverstein, as custodian or trustee for the benefit of Mr. Silverstein's
children and grandchildren. Mr. Silverstein disclaims beneficial ownership of
the 2,928,880 shares of Common Stock held by Mr. Silverstein's wife, as
custodian or trustee for the benefit of Mr. Silverstein's children and
grandchildren. The business address of Mr. Silverstein is 915 Secaucus Road,
Secaucus, New Jersey 07094.
Each of the Holders disclaims beneficial ownership of the 3,190,577 shares
of Common Stock which Mr. Silverstein and his wife (the "Silverstein Parties")
may be deemed to beneficially own (within the meaning of Rule 13d-3 under the
Exchange Act). There is no agreement, arrangement or understanding between the
Holders and the Silverstein Parties with respect to the voting or disposition of
any shares.
On May 12, 2008, the Record Holder and Golden Gate Private Equity, Inc.
("Golden Gate") entered into a non-binding (other than with respect to
exclusivity) understanding with respect to their mutual participation in a
potential acquisition of the Corporation. The Record Holder and Golden Gate
agreed that, for a period of ninety days from May 12, 2008 (the "Exclusivity
Period"), they would work together exclusively to develop a formal proposal to
acquire the Corporation. The Record Holder and Golden Gate agreed that, during
the Exclusivity Period, neither they nor any of their representatives or agents
would discuss, pursue, enter into any agreement, vote in favor of or participate
in any manner with respect to the acquisition of all or any substantial portion
of the capital stock or assets of the Corporation (a "Business Combination
Transaction") without the participation of the other party in any such
transaction. However, neither the Record Holder nor Golden Gate would be
prevented from participating in (i) any back end merger of the Corporation
following the acquisition by a third party of a majority interest in the capital
stock of the Corporation or (ii) any Business Combination Transaction between
the Corporation and a third party that (A) did not involve the participation of
such party prior to the approval of such transaction by the independent members
of the Board and (B) the Record Holder and Golden Gate mutually agreed not to
attempt to overbid. Under the agreement, if either the Record Holder or Golden
Gate received a proposal, offer or expression of interest to engage in a
Business Combination Transaction during the Exclusivity Period, that party would
be obligated to promptly notify the other of such proposal, offer or expression
of interest and provide the other party with all material information relating
thereto. The Record Holder and Golden Gate have no current agreement or
understanding with respect to a potential acquisition of the Corporation.
On May 14, 2008, the Holders and Golden Gate entered into an Amended and
Restated Joint Filing Agreement in connection with their joint Schedule 13D
filing with the SEC on May 14, 2008, pursuant to which the parties agreed, among
other things, that the Schedule 13D would be filed on behalf of each party to
the Amended and Restated Joint Filing Agreement.
On September 4, 2008, the Holders engaged Moelis & Company ("Moelis") to
act as a financial advisor to the Holders in connection with any potential
acquisition or other transaction involving the Corporation. The Holders agreed
to pay Moelis (i) a transaction fee of $3,300,000 if the Holders consummate an
acquisition of the Corporation, (ii) a fee of $1,250,000 upon certain sales or
transfers of securities or other interests in the Corporation by the Holders and
(iii) a cash fee equal to 7.5% of any "break-up" or "topping fee" or other
payment or consideration that the Holders may receive in connection with the
termination or cancellation of a transaction that is entered into between the
Corporation and the Holders, such cash fee not to exceed $3,300,000. The Holders
also agreed to reimburse Moelis for its expenses and indemnify Moelis and its
affiliates against certain liabilities and expenses, including liabilities under
the federal securities laws, arising out of their performance of services for
the Holders.
On September 4, 2008, the Holders engaged Mr. Ilan Kaufthal to act as a
financial advisor to the Holders in connection with any potential acquisition or
other transaction involving the Corporation. The Holders agreed to pay Mr.
Kaufthal (i) a transaction fee of $3,300,000 if the Holders consummate an
acquisition of the Corporation, (ii) a fee of $1,250,000 upon certain sales or
transfers of securities or other interests in the Corporation by the Holders and
(iii) a cash fee equal to 7.5% of any "break-up" or "topping fee" or other
payment or consideration that the Holders may receive in connection with the
termination or cancellation of a transaction that is entered into between the
Corporation and the Holders, such cash fee not to exceed $3,300,000. The Holders
also agreed to reimburse Mr. Kaufthal for his expenses and indemnify Mr.
Kaufthal and his affiliates against certain liabilities and expenses, including
liabilities under the federal securities laws, arising out of their performance
of services for the Holders.
On April 24, 2009, the Holders entered into a Second Amended and Restated
Joint Filing Agreement in connection with their joint Schedule 13D filing with
the SEC on April 24, 2009, pursuant to which the parties agreed, among other
things, that the Schedule 13D would be filed on behalf of each party to the
Second Amended and Restated Joint Filing Agreement.
Transactions with the Corporation
The Record Holder's father-in-law, Stanley Silverstein, is a member of the
Board. The Record Holder's sister-in-law, Nina Miner, is an officer of the
Corporation. The Record Holder's nephew, Michael Leventhal, is employed by the
Corporation. Each of these individuals has received compensation from the
Corporation for services rendered to the Corporation. Other than as disclosed in
this Notice, neither the Record Holder nor any of his associates have any
arrangement or understanding with any person with respect to (i) any future
employment by the Corporation or its affiliates or (ii) any future transactions
to which the Corporation or any of its affiliates will or may be a party.
Other than as disclosed in this Notice, (i) there are no transactions, or
series of similar transactions, since the beginning of the Corporation's last
fiscal year, or any currently proposed transaction, or series of similar
transactions, to which the Corporation or any of its subsidiaries was or is to
be a party, in which the amount involved exceeds $120,000 and in which the
Holders or any member of their immediate family had, or will have, a direct or
indirect material interest; and (ii) neither the Holders nor any member of their
immediate family, nor any corporation or organization of which the Holders are
executive officers or partners or are, directly or indirectly, the beneficial
owners of ten percent or more of any class of equity securities, nor any trust
or other estate in which the Holders have a substantial beneficial interest or
as to which the Holders serve as a trustee or in a similar capacity, has been
indebted to the Corporation or its subsidiaries at any time since the beginning
of the Corporation's last fiscal year in an amount in excess of $120,000.
ANNEX B
Information about the Nominees
------------------------------
Name: Raphael Benaroya
Age: 61
Business
Address: c/o Biltmore Capital Group, LLC, 365 West Passaic Street, 2nd Floor,
Rochelle Park, New Jersey 07662
Mr. Benaroya is currently the Chairman of the Board of Directors of Russ Berrie
& Company, Inc., a New York Stock Exchange listed company specializing in the
design, import, marketing, and distribution of infant and juvenile consumer
products, and was formerly, until February 2009, Chairman of the Board of
Directors of FAO Schwarz, Inc., a specialty toy retailer. Since April 1, 2008,
Mr. Benaroya has also been acting as a consultant for D. E. Shaw & Co., L.P., a
global investment and technology development firm. Mr. Benaroya is also Managing
Director of American Licensing Group, L.P., a company specializing in consumer
goods' brand name licensing, and a member of the Board of Managers of Biltmore
Capital Group, LLC, a financial company which invests in secured debt. Mr.
Benaroya previously served as Chairman of the Board, President and Chief
Executive Officer of United Retail Group, Inc., which operates a chain of
approximately 500 retail specialty stores, from 1989 until its sale in October
2007 to Redcats USA, a division of PPR, a French public company, and continued
as President and Chief Executive Officer thereafter until March 2008. Mr.
Benaroya also formerly held Chief Executive Officer positions at certain
divisions of The Limited, Inc., from 1984 until 1989. From 1972-1982, Mr.
Benaroya was with General Mills Inc., ultimately becoming Executive Vice
President of the Izod Lacoste Division prior to leaving General Mills. Mr.
Benaroya is a graduate of the University of Minnesota, where he earned an MBA in
the School of Business and a BSc Degree (with Distinction) in Computer Science.
Name: Ross B. Glickman
Age: 60
Business
Address: 900 N. Michigan Ave., Suite 900, Chicago, IL 60611
Mr. Glickman is currently the Chairman of the Board of Directors and Chief
Executive Officer of Urban Retail Properties, LLC, a development, leasing and
management real estate company, specializing in retail shopping centers, a
position he has held since April 2002. Mr. Glickman joined Urban Retail in 1991.
Mr. Glickman also served as a director of United Retail Group Inc. from 2006 to
2007. Prior to joining Urban Retail in 1991, he was President of Glickman
Properties, a shopping center development firm. From 1984 to 1989, Mr. Glickman
was Director of Real Estate for The Limited, Inc., where he was responsible for
expanding the company's divisions, including the Limited Stores, Limited
Express, Victoria's Secret, Lane Bryant, Lerner, and Sizes Unlimited. From 1979
to 1984, Mr. Glickman was Director of Real Estate for General Nutrition Center
(Pittsburgh), where he expanded the company from 500 to 1,500 company-owned
stores nationwide in only four years. From 1973 to 1979, Mr. Glickman was a Vice
President of The Athlete's Foot, where he grew the Pittsburgh division of the
specialty retail athletic footwear chain from one store to 400. Mr. Glickman
holds a Bachelor of Arts degree from The Ohio State University.
Name: Jeremy J. Fingerman
Age: 48
Business
Address: 71 Franklin Street, Englewood, NJ 07631
Jeremy J. Fingerman is founder and Managing Principal of Clairmont Ventures,
a strategic consulting and investment advisory firm focused on transforming
brands and businesses. Mr. Fingerman served as Chief Executive Officer and
President of RAB Food Group, LLC, from May 2005 to September 2007. Prior to
joining RAB, Mr. Fingerman served as President of the U.S. Soup Division of
Campbell Soup Company from 2002 to 2004. Mr. Fingerman joined the Campbell
Soup Company in 1993. During his tenure with the Campbell Soup Company, Mr.
Fingerman served as General Manager of Campbell's Soups Australasia and
Vice-President, Brand Management, of Arnott's-Campbell's Australasia before
ultimately rising to the position of President of the U.S. Soup Division.
Prior to joining the Campbell Soup Company, Mr. Fingerman was Marketing
Manager for the Bisquick and Specialty Products Division of General Mills,
Inc. from 1992 to 1993, and Marketing manager of the Child Cereals division
of General Mills from 1990 to 1992. Mr. Fingerman joined General Mills in
1988. Mr. Fingerman earned an MBA in General Management from Harvard
Business School and an undergraduate degree in English Literature from
Columbia University.
Name: Emanuel R. Pearlman
Age: 49
Business
Address: 900 Third Avenue, Suite #1000, New York, New York 10022
Mr. Pearlman is the founder and Chief Executive Officer of Liberation Investment
Group LLC, a New York-based investment management firm. Mr. Pearlman is also a
director of Multimedia Games, Inc., a position he has held since October 2006.
Prior to founding Liberation, Mr. Pearlman was the Chief Operating Officer of
Vornado Operating Corporation. For 14 years, Mr. Pearlman ran Gemini Partners,
which specialized in strategic block investing and financial consulting. Mr.
Pearlman's experience in the gaming industry includes consulting to Jackpot
Enterprises and to Bally Entertainment Corporation, where he advised the
companies on their business and financial activities. Mr. Pearlman received a
B.A. in Economics from Duke University and an MBA from the Harvard Business
School.
ANNEX C
Written consent of each Nominee
-------------------------------
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a nominee for election as a
director of The Children's Place Retail Stores, Inc. (the "Company") in the
proxy statement to be filed with the Securities and Exchange Commission and
distributed to shareholders of the Company by Ezra Dabah and certain of his
affiliates and other persons (collectively, the "Shareholders") and in other
materials in connection with the solicitation of proxies by the Shareholders
from shareholders of the Company to be voted at the 2009 Annual Meeting of
Shareholders of the Company (including any adjournment or postponement thereof
or any special meeting held in lieu thereof), and further consents to serve as a
director of the Company, if elected.
Dated: May 5, 2009
/s/ Raphael Benaroya
-------------------------------------
Raphael Benaroya
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a nominee for election as a
director of The Children's Place Retail Stores, Inc. (the "Company") in the
proxy statement to be filed with the Securities and Exchange Commission and
distributed to shareholders of the Company by Ezra Dabah and certain of his
affiliates and other persons (collectively, the "Shareholders") and in other
materials in connection with the solicitation of proxies by the Shareholders
from shareholders of the Company to be voted at the 2009 Annual Meeting of
Shareholders of the Company (including any adjournment or postponement thereof
or any special meeting held in lieu thereof), and further consents to serve as a
director of the Company, if elected.
Dated: May 5, 2009
/s/ Ross B. Glickman
-------------------------------------
Ross B. Glickman
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a nominee for election as a
director of The Children's Place Retail Stores, Inc. (the "Company") in the
proxy statement to be filed with the Securities and Exchange Commission and
distributed to shareholders of the Company by Ezra Dabah and certain of his
affiliates and other persons (collectively, the "Shareholders") and in other
materials in connection with the solicitation of proxies by the Shareholders
from shareholders of the Company to be voted at the 2009 Annual Meeting of
Shareholders of the Company (including any adjournment or postponement thereof
or any special meeting held in lieu thereof), and further consents to serve as a
director of the Company, if elected.
Dated: May 5, 2009
/s/ Jeremy J. Fingerman
-------------------------------------
Jeremy J. Fingerman
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a nominee for election as a
director of The Children's Place Retail Stores, Inc. (the "Company") in the
proxy statement to be filed with the Securities and Exchange Commission and
distributed to shareholders of the Company by Ezra Dabah and certain of his
affiliates and other persons (collectively, the "Shareholders") and in other
materials in connection with the solicitation of proxies by the Shareholders
from shareholders of the Company to be voted at the 2009 Annual Meeting of
Shareholders of the Company (including any adjournment or postponement thereof
or any special meeting held in lieu thereof), and further consents to serve as a
director of the Company, if elected.
Dated: May 4, 2009
/s/ Emanuel R. Pearlman
-------------------------------------
Emanuel R. Pearlman
ANNEX D
Two year transaction history of each Nominee and Holder
-------------------------------------------------------
The following table sets forth all transactions with respect to the Shares
effected during the past two years by each of the Nominees and the Holders.
Except as otherwise noted, all such transactions were effected in the open
market.
Name Date No. of Shares Transaction Type
----------------------------------------------- ------------------- ---------------------- ---------------------------
The Renee and Ezra Dabah Charitable 12/21/07 22,000 Sale
Foundation, Inc.
Ezra Dabah 2/2/08 6,000 Grant of Annual Stock
Option Award to
Non-Employee Directors
Ezra Dabah and Renee Dabah 4/1/08 19,600 Gift
The Renee and Ezra Dabah Charitable 4/2/08 19,600 Sale
Foundation, Inc.
Ezra Dabah and Renee Dabah 4/28/2008 50,000 Gift
The Renee and Ezra Dabah Charitable 6/19/2008 50,000 Sale
Foundation, Inc.
Ezra Dabah 6/28/2008 3,143 Transitional Award for
Non-Employee Directors
The Dabah Children Charitable Foundation, Inc. 7/25/2008 20,000 Sale
Ezra Dabah 2/1/2009 5,254 Deferred Stock Award
Liberation Investment Group 8/10/2007 10,000 Purchase(1)
Liberation Investment Group 8/13/2007 10,000 Sale(1)
Liberation Investment Group 8/23/2007 35,000 Purchase(1)
Liberation Investment Group 8/23/2007 35,000 Sale(1)
----------------------
(1) These shares were purchased and sold by Liberation Investment Group, LLC for
a managed account. Mr. Pearlman is the Chief Executive Officer of Liberation
Investment Group. Mr. Pearlman disclaims beneficial ownership of these shares.
EXHIBIT H
May 5, 2009
Dear Mr. _______________:
This will confirm our understanding as follows:
You agree that you are willing to become a member of a slate of nominees
(the "Slate") proposed by me to stand for election as directors of The
Children's Place Retail Stores, Inc. (the "Company") in connection with a proxy
contest for the election of directors at the 2009 Annual Meeting of Stockholders
of the Company (the "Annual Meeting"), or a special meeting of stockholders of
the Company called for a similar purpose (the "Proxy Solicitation").
I will pay the costs of the Proxy Solicitation. You are being supplied
with a questionnaire in which you will provide me with information necessary for
me to make appropriate disclosure both to the Company and for use in creating
the proxy material to be sent to stockholders of the Company and to be filed
with the Securities and Exchange Commission. You have agreed that (i) you will
promptly complete and sign the questionnaire and return it to Dennis J. Block,
Cadwalader, Wickersham & Taft LLP, One World Financial Center, New York, NY
10281, Tel: (212) 504-5555, Fax: (212) 504-6666, Email: dennis.block@cwt.com and
(ii) your responses to the questions contained therein will be true and correct
in all material respects. In addition, you have agreed that, concurrently with
your execution of this letter, you will execute the instrument attached hereto
and directed to the Company informing the Company that you consent to being
nominated by me for election as a director of the Company and, if elected,
consent to serving as a director of the Company. Upon being notified that I have
chosen you, I may forward that consent and your completed questionnaire (or
summaries thereof) to the Company.
I hereby agree that I will defend, indemnify and hold you harmless from
and against any and all losses, claims, damages, suits, actions, penalties,
judgments, awards, liabilities, costs, expenses and disbursements (including,
without limitation, reasonable attorneys' fees, costs, expenses and
disbursements) incurred by you (i) in connection with any civil, criminal,
administrative or arbitrative action, suit or proceeding or any governmental,
administrative, internal or other inquiry, investigation or proceeding (whether
formal or informal), and any appeal of any of the foregoing, regardless of
whether you become a party thereto or are threatened to be made a party thereto,
directly or indirectly, resulting from, based upon, arising out of or relating
to (A) serving as a nominee for director of the Company on the Slate or being a
potential candidate for a position as an officer of, or provider of services to,
the Company, (B) being a "participant in a solicitation" (as defined in the
rules and regulations under the Securities Exchange Act of 1934, as amended) in
connection with the Proxy Solicitation or (C) being otherwise involved in the
Proxy Solicitation, including as my actual or potential representative or
nominee (in each of clauses (A), (B) or (C) whether before or after the date
hereof) (any such action, suit, proceeding, inquiry, investigation or appeal
described in this clause (i), and the investigation, preparation or defense
thereof, is hereinafter referred to as a "Proceeding") or (ii) in the event that
you are called to testify, give a deposition, be interviewed or otherwise be
involved in any Proceeding (whether or not you are a party or are threatened to
be made a party to such Proceeding), including, in each case under (i) and (ii),
the advancement to you of all reasonable costs and expenses (including
attorneys' costs and expenses) incurred by you in connection with any
Proceeding. Your right of indemnification hereunder shall continue (i) in the
event that I determine to withdraw the Slate or remove you from the Slate or in
the event that you determine to withdraw from the Slate and (ii) after the
election has taken place, but only for events which occur prior to such
withdrawal, removal or election. Anything to the contrary herein
notwithstanding, I am not indemnifying you for any action taken by you or on
your behalf which occurs subsequent to certification of the voting results of
the Annual Meeting or such earlier time as you are no longer a nominee of the
Slate for election to the Company's Board of Directors or for any actions taken
by you as a director of the Company, if you are elected. Nothing herein shall be
construed to provide you an indemnity to the extent you are found in a final
judgment by a court, not subject to further appeal to have (x) engaged in a
violation of any provision of state or federal law in connection with the Proxy
Solicitation unless you demonstrate that your action was taken in good faith and
in a manner you reasonably believed to be in or not opposed to the best
interests of electing the Slate; or (y) acted in a manner which constitutes
gross negligence or willful misconduct.
In the event that you shall make any claim for indemnification hereunder,
you shall promptly notify me in the event that you learn of any third-party
claims actually made or threatened against you; provided that the failure to so
provide prompt notice shall not relieve me of my indemnification obligations
hereunder except to the extent that I am materially prejudiced as a result
thereof.
In addition, with respect to any such claim, I shall be entitled to
control your defense with counsel chosen by me, which counsel shall be
reasonably satisfactory to you; provided, however, that if you are the only
defendant or person involved in a Proceeding or if such Proceeding involves
claims or issues relating to you that are not made against any other defendant
or person and, in either case, injunctive or other equitable relief is being
sought against you, you shall be entitled to select your own counsel (reasonably
satisfactory to me) at my expense which counsel shall be co-counsel in the case
and shall be entitled to control your defense solely with respect to the
injunctive or other equitable relief sought; provided, further, however, that if
the defendants or persons involved in any such Proceeding include both you and
me or other parties such that (i) the use of counsel chosen by me to represent
you would present such counsel with an actual or potential conflict of interest,
(ii) there may be one or more legal defenses available to you that are different
from or in addition to those available to me or such other parties, or (iii) any
such representation by such counsel would be precluded under the applicable
standards of professional conduct then prevailing (collectively, a "Conflict
Situation"), then you shall be entitled to retain separate counsel (but not more
than one law firm plus, if applicable, local counsel in respect of any
particular action), reasonably satisfactory to me, at my expense.
I may not enter into any settlement of any claim that would impose any
penalty, obligation or limitation on you (other than monetary damages for which
I agree to be wholly responsible) or that would contain any language that could
reasonably be viewed as an acknowledgement of wrongdoing on your part or
otherwise as detrimental to your reputation, without your consent (which you may
withhold in your sole discretion).
You shall not be required to pursue any other remedies you may have before
you exercise your rights under this letter agreement.
This letter agreement shall be governed by and construed by and enforced
in accordance with the laws of the State of Delaware applicable to contracts to
be performed in such state without giving effect to the principles of conflicts
of law that would cause the law of any other jurisdiction to be applied. This
letter agreement may only be amended or the provisions hereof waived by a
written instrument signed by you and me. Both of us hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the federal
or state courts of the State of Delaware for any litigation arising out of or
relating to this letter agreement, and waive any objection to the laying of
venue of any litigation arising out of this letter agreement in the federal or
state courts of the State of Delaware and hereby further irrevocably and
unconditionally waive and agree not to plead any claim in any such court that
any such litigation brought in any such court has been brought in an
inconvenient forum.
Each of us recognizes that should you be elected to the Board of Directors
of the Company, all of your activities and decisions as a director will be
governed by applicable law and subject to your fiduciary duty to the
stockholders of the Company and, as a result, that there is, and can be, no
agreement between you and me which governs the decisions which you will make as
a director of the Company.
Should the foregoing agree with your understanding, please so indicate in
the space provided below, whereupon this letter agreement will become a binding
agreement between us.
[SIGNATURE PAGE FOLLOWS]
Very truly yours,
--------------------------------------
Ezra Dabah
Agreed to and Accepted as of the date first above written:
--------------------------------------