Mr. Goodman said, “As a Director, I look forward to using the experience I gained leading Charlotte Russe and during my time at numerous other retail companies to help Wet Seal stabilize its business, return to a fast fashion merchandising approach and build long-term shareholder value.”Possible Addition of Two Other New Board Members The Wet Seal also announced today that two additional independent Directors have indicated they are prepared to join the Board in the coming months, both of whom have excellent retail backgrounds. The two new Director candidates have been approved by the company’s Nominating and Corporate Governance Committees and have been reviewed by the full Board. One potential new Director is prepared to join the Board as soon as a non-compete agreement with her most recent employer expires or a waiver can be obtained. The other potential new Director is prepared to join the Board after Clinton Group’s consent solicitation is terminated or otherwise resolved. Mr. Kahn and Mr. Horn said, “During the last few weeks we actively pursued a dialogue with our shareholders to listen to their concerns and explain our strategy. We heard from our shareholders that they would like to see an expanded Board with additional retail experience to bolster our effective stewardship of the company. We worked diligently to recruit highly qualified candidates, and we believe that with the immediate addition of Kathy and John, growing to seven members, and the possible near-term addition of two more solid candidates, this Board will contribute a strong combination of retail experience and fresh perspectives to the company. Together with our existing Board members, we will have the necessary stability and continuity to carry out the execution of our strategy to return The Wet Seal to our historically successful fast fashion business model.” Changes to Board Committee Structure and Compensation With the addition of Ms. Bronstein and Mr. Goodman as new Board members, the company announced several changes to Board structure and compensation.
The company announced that it has disbanded the Board’s Strategic Oversight Committee and rescinded previously announced additional compensation for the Committee’s members. The full Board, including the new members, is empowered to determine and execute upon an effective capital allocation plan and evaluate all strategic initiatives to enhance shareholder value.The Board also has reviewed the compensation and responsibilities for Chairman Hal Kahn in his increased role during this interim period while it searches for a CEO. The Board and Mr. Kahn have determined that it is appropriate to reduce Mr. Kahn’s overall compensation to reflect an expectation of a reduced level of Mr. Kahn’s direct oversight during the last 90 days of this fiscal year. Further details on these changes are available in the Form 8-K filed today, which can be found on the company’s website. In addition, each Board member’s annual retainer will be reduced by $25,000 beginning in Fiscal 2013. Shareholder Rights Plan Terminated The Wet Seal also announced today that it has terminated its temporary shareholder rights plan, reflecting feedback from shareholders and the Board’s confidence in the company’s stabilizing share price and its ability to return to strong performance under the fast fashion strategy beginning in the fourth quarter. Timetable for Annual Meeting The Board has decided to move up the next shareholder meeting, which will now be held no later than April 19, 2013. All Board members are elected annually to one year terms. CEO Search Continues The Board is working actively with leading recruiter Korn/Ferry to find a new CEO for The Wet Seal. The Board already has been approached by a number of qualified candidates and is confident it can successfully fill the role in the near-term. Discussions with Clinton Group In a separate filing today, the company referenced recent discussions held between representatives of Clinton Group and the company to determine whether a reasonable compromise could be reached to avoid a long and protracted consent solicitation.
Following these discussions, the Board proposed to:
- Expand the Board to include two new independent Clinton Group nominees and two new independent Wet Seal nominees, all with significant retail expertise;
- Reorganize the CEO Search Committee to include a Clinton Group nominee, a new Wet Seal nominee and a current Board member;
- Reconstruct the Nominating Committee to include Clinton Group nominees; and
- Disband the Strategic Oversight Committee and transfer the responsibilities to the entire Board, including new members.
Other DisclosuresThe Company and certain of its Directors and executive officers may be deemed to be participants in a solicitation of consent revocations from stockholders in connection with the consent solicitation by Clinton Group, Inc. The Company has filed a preliminary consent revocation statement with the Securities and Exchange Commission (the “SEC”) in connection with such consent solicitation (the “Consent Revocation Statement”). Information regarding the names of the Company’s Directors and executive officers and their respective interests in the Company by security holdings or otherwise is set forth in the preliminary Consent Revocation Statement filed with the SEC. This document is available free of charge at the SEC’s website at www.sec.gov. If the Company files a definitive Consent Revocation Statement with the SEC, the Company promptly will mail the definitive Consent Revocation Statement and a form of consent revocation to each stockholder entitled to deliver a written consent in connection with the consent solicitation. WE URGE INVESTORS TO READ THE CONSENT REVOCATION STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of the definitive Consent Revocation Statement and any other documents filed by the Company with the SEC in connection with the consent solicitation at the SEC’s website at www.sec.gov.