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<SEC-DOCUMENT>0000096287-03-000007.txt : 20030418
<SEC-HEADER>0000096287-03-000007.hdr.sgml : 20030418
<ACCEPTANCE-DATETIME>20030418165942
ACCESSION NUMBER: 0000096287-03-000007
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20030201
FILED AS OF DATE: 20030418
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOMBAY COMPANY INC
CENTRAL INDEX KEY: 0000096287
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FURNITURE STORES [5712]
IRS NUMBER: 751475223
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0128
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-07288
FILM NUMBER: 03655973
BUSINESS ADDRESS:
STREET 1: 550 BAILEY AVE STE 700
CITY: FORT WORTH
STATE: TX
ZIP: 76107
BUSINESS PHONE: 8173478200
MAIL ADDRESS:
STREET 1: 550 BAILEY AVENUE
STREET 2: SUITE 700
CITY: FORT WORTH
STATE: TX
ZIP: 76107
FORMER COMPANY:
FORMER CONFORMED NAME: TANDY BRANDS INC
DATE OF NAME CHANGE: 19901114
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>final10-ktextfile.txt
<DESCRIPTION>FISCAL 2002 10-K
<TEXT>
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]
For the fiscal year ended February 1, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ___________________
Commission file number 1-7288
THE BOMBAY COMPANY, INC.
(Exact name of registrant as specified in its charter)
A Delaware Corporation 75-1475223
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
550 Bailey Avenue
Fort Worth, Texas 76107
(Address of principal executive (Zip Code)
offices)
(Registrant's telephone number, including area code)
(817) 347-8200
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, Par Value, New York Stock Exchange
$1 Per Share
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.____
The aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the closing price of the stock on August 3, 2003 was
approximately $92,359,634.
Shares outstanding at April 5, 2003: Common Stock, $1 Par Value: 33,629,036
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Definitive Proxy Statement for the Annual Meeting to be held
May 15, 2003 (as expressly incorporated by reference in Part III).
Page 1 of 41
<PAGE> 2
FORM 10-K
PART I
ITEM 1. BUSINESS.
(a) General Development of Business
The Bombay Company, Inc. and its wholly-owned subsidiaries (the "Company" or
"Bombay") design, source and market a unique line of fashionable home
accessories, wall decor and furniture through a network of retail locations
throughout the United States and Canada, through specialty catalogs, over the
Internet and internationally through licensing arrangements.
Bombay's unique position in the market place is a result of its core
competencies in design, sourcing and importing. Approximately 90% of its
product is sourced from approximately 20 foreign countries. Over 95% of the
product has been designed or styled to Bombay's specifications.
The Company is taking the opportunity to expand its product offering to a line
of children's furniture, textiles and accessories. Following its introduction
through catalog and Internet in Fiscal 2001, the Company opened its first five
BombayKIDS stores during Fiscal 2002. Four of these stores reflect a
combination format with a BombayKIDS store adjacent to a core Bombay store.
The Company intends to open 25 to 30 BombayKIDS stores in the next year, and
grow this portion of the business to over 100 stores over the next three years.
In addition to its primary retail operations, the Company has other operating
initiatives underway which contributed incrementally to profitability but which
were not significant to the Company's operations in Fiscal 2002. Unless
specified otherwise, the discussions in this Annual Report on Form 10-K relate
to the Bombay retail operations, including BombayKIDS and outlets.
(b) Financial Information About Segments
The Company operates primarily in one business segment as a multi-channel
retailer selling decorative home furnishings, furniture and related items.
(c) Narrative Description of Business
Merchandise Sales, Purchasing and Distribution
Bombay operates a chain of stores, located primarily in regional shopping
malls, certain secondary malls and selected urban and suburban locations. As
of February 1, 2003, there were 370 Bombay stores in 42 states in the United
States and 52 stores in nine Canadian provinces. Bombay also markets its
products through its mail order operations in the United States and Canada and
through e-commerce over the Internet at www.bombaycompany.com and
www.bombay.ca.
The Company offers a diverse selection of products consisting of approximately
4,400 stock keeping units ("SKUs") of which over 95% of the product has been
designed or styled to Bombay's specifications. Bombay's proprietary product
offers unique design, quality and exceptional value to a wide audience of
consumers. The Company regularly updates its merchandise assortment by
introducing new products while discontinuing others. The Company has a fashion
component to its product offerings, primarily in the accessory and wall
d{e'}cor areas, which is introduced seasonally. Other products with longer
lives are discontinued as they approach the end of their life cycles.
Approximately 2,600 new SKUs were introduced in both Fiscal 2002 and Fiscal
2001. Typically, new product introductions are concentrated during the
Company's spring, fall and Christmas marketing periods. The principal
categories of merchandise include the following:
Furniture - The Company sells two broad categories of furniture as described
below. Bombay's furniture is manufactured by contract manufacturers located
principally in China, Taiwan, Malaysia, the Philippines, Indonesia and India.
Occasional Furniture - This category includes wood and metal hall
tables, end and coffee tables, plant stands and other small accent tables,
stands and curios that are ready-to-assemble, take home products.
Occasional furniture represented 12%, 12% and 8% of total sales in Fiscal
2002, 2001 and 2000, respectively.
Large Furniture - This category includes both wood and metal
furniture focusing on the bedroom, living room, dining room and home
office. Many of the larger items are displayed in store and stocked in
the Company's distribution centers, available for store delivery typically
within ten days. Large furniture represented 32%, 31% and 37% of total
sales in Fiscal 2002, 2001 and 2000, respectively.
<PAGE> 3
Accessories - This is the broadest category and represented 43%, 43% and 41% of
total sales in Fiscal 2002, 2001 and 2000, respectively. This category
includes both functional and decorative accessories including lamps, jewelry
and memorabilia boxes, baskets, crystal, ceramics, frames and desktop items,
textiles, floral, candles and holiday. The items are imported from over 15
countries in Asia, North America and Europe.
Wall Decor - This category includes prints, mirrors and wall
accessories, which represented 13%, 14% and 14% of total sales in Fiscal 2002,
2001 and 2000, respectively. This merchandise is sourced primarily from the
United States, various countries in Asia and Canada.
Merchandise is manufactured to Company specifications through a network of
contract manufacturers located principally in Asia and North America.
Approximately 90% of production needs are sourced from foreign countries. The
Company has branch offices located in Taiwan, Malaysia, Indonesia, China and
Vietnam and utilizes agents in various countries to locate prospective vendors,
coordinate production requirements with manufacturers and provide technical
expertise and quality control.
Bombay is not dependent on any particular supplier and has had long standing
relationships with many of its vendors. Over 65% of the Company's merchandise
requirements are supplied by 35 contract manufacturers in 11 countries. No
long-term production agreements are in place; however, agreements are generally
in place with major manufacturers that prohibit the production of proprietary
product for other parties. Additional manufacturing capacity and alternative
sources, both domestic and international, continue to be added through new
vendors and plant expansions by existing vendors. The Company does business
with its vendors principally in United States currency and has not historically
experienced any material disruptions as a result of any foreign political,
economic or social instabilities.
Usually it takes several months from the time a merchandise order is placed
with a manufacturer until the goods are received at regional distribution
centers in the United States and Canada. Depending on the category, the source
country and whether an item is new or a reordered product, lead times can vary
from as little as two months to as much as twelve months from order placement
until arrival at the stores. Order times are slightly less for North American
manufacturers principally due to shorter shipping times. Lead times may also
be impacted by seasonality factors especially in months when manufacturers are
producing at or near peak capacity to meet seasonal demands. As a result,
Bombay strives to maintain an adequate inventory position in its distribution
centers to ensure a sufficient supply of products to its customers.
Store inventories are replenished from regional distribution centers located in
Fort Worth, Texas; McDonough, Georgia; Gilbertsville, Pennsylvania; Mira Loma,
California and Mississauga, Ontario. The Company plans to open a 300,000 square
foot distribution center in Plainfield, Indiana during the third quarter of
Fiscal 2003. The distribution centers are strategically located and provide
the capability to replenish the majority of store inventories within 48 hours
of when the order is processed. The Company uses dedicated trucks and less-
than-truckload carriers to transport its product from its distribution centers
to the stores.
Channels of Distribution
RETAIL
Stores and Real Estate
Historically, the Company has located its stores primarily in regional shopping
malls, certain secondary malls and selected urban and suburban locations that
satisfy its demographic and financial return criteria. Over the next two
years, 188 of the Company's store leases will come up for renewal. The Company
is currently pursuing an off-mall strategy focusing on open-air lifestyle
centers, high-end strip and to a lesser extent street locations. Such
locations offer the opportunity to lower occupancy costs, improve operating
efficiencies and provide a more convenient shopping experience for our
customer. The Company's preference is to identify locations where it can
operate a combined Bombay and BombayKIDS store, thereby realizing economies
that come with a larger location while attracting a new and younger customer to
Bombay.
In selecting store locations, the Company's real estate department conducts
extensive analyses of potential store sites and bases its selection on the
performance of other specialty retail tenants, the size of the market and the
demographics of the surrounding area. In evaluating a store location,
placement of the store relative to retail traffic patterns and customer base of
other retailers in the nearby vicinity are important considerations.
Significant attention is given to visual merchandising opportunities to
maximize the ability to display product in the most attractive setting.
Currently 79% of the stores are mall based. The Company will seek out the most
potentially profitable locations for the opening of new stores regardless of
the venue. The Company is currently targeting 8,500 square foot locations where
it can construct a Bombay store of approximately 4,500 square feet and a
BombayKIDS store of approximately 4,000 square feet. Bombay mall stores are
slightly smaller in size currently averaging approximately 3,600 square feet.
New Bombay off-mall locations are expected to be in the 4,000 to 5,000 square
<PAGE> 4
foot range while mall stores are expected to be in the 3,500 to 4,500 square
foot range. In addition to building new stores, the Company will continue to
selectively convert its existing regular stores, which average approximately
1,800 square feet to the larger format. As of February 1, 2003, there were 37
regular stores left in the chain.
At February 1, 2003, the store chain included a total of 46 outlet stores. The
Company views the use of outlets as an opportunity to increase sales to a
different customer base, to assist in the orderly clearance of merchandise and
to further capitalize on its strength in designing and sourcing proprietary
product.
Following is a table summarizing the Company's store activity and composition:
<TABLE>
<CAPTION>
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Number of stores:
Beginning of year... 419 408 415
Opened.............. 28 32 10
Closed.............. 25 21 17
End of year......... 422 419 408
Store composition:
Large format....... 334 324 291
Regular............ 37 59 93
Outlet............. 46 36 24
BombayKIDS......... 5 - -
Retail square footage:*
Large format....... 1,297 1,244 1,116
Regular............ 68 107 163
Outlet............. 193 151 92
BombayKIDS......... 20 - -
Total.............. 1,578 1,502 1,371
<FN>
* In thousands.
</TABLE>
During Fiscal 2003, the Company plans to open approximately 75 to 85 new
stores, which includes 25 to 30 BombayKIDS stores and two outlet locations.
The Company plans to close 30 to 35 stores, ending the year with approximately
465 to 475 stores. For store count purposes, a combined Bombay and BombayKIDs
location represents two stores.
The Company's average cost of leasehold improvements, furniture, fixtures and
machinery for stores (excluding outlets) opened or converted in Fiscal 2002,
net of landlord allowances, was approximately $250,000 per store or $55 per
square foot. In addition, other investments, which consist primarily of
inventory in the store location, averaged approximately $95,000 per large
format store. The Company expects the average net cost of a BombayKIDs store to
be slightly higher than a Bombay large format store, in total and on a per
square foot basis due to higher fixturing costs. Inventory investment is
expected to average $100,000 for a BombayKIDs store. The average cost of
leasehold improvements, furniture, fixtures and machinery for outlet stores
opened in Fiscal 2002, net of landlord allowances, was approximately $105,000
per store while the inventory investment averaged approximately $75,000 per
store. Inventory physically in store is approximately 40% of the total
inventory investment on a per store basis. Bombay stores typically achieve
store level operating profitability during their first full year of operations
and reach maturity in three years.
<PAGE> 5
As of February 1, 2003, 370 stores were operating in 42 states in the United
States and 52 stores were operating in nine provinces in Canada as illustrated
in the map below.
{The paper version of the Annual Report on Form 10-K contains herein a map
of the United States and Canada with states and provinces outlines, labeled
with the appropriate number of Bombay stores located in each, as follows:
UNITED STATES:
AL - 6 KY - 3 NY - 17
AR - 1 LA - 7 OH - 13
AZ - 5 MA - 11 OK - 5
CA - 48 MD - 10 OR - 2
CO - 6 MI - 10 PA - 16
CT - 7 MN - 4 RI - 1
DE - 2 MO - 5 SC - 6
FL - 36 MS - 3 TN - 11
GA - 18 NC - 12 TX - 30
IA - 1 NE - 1 UT - 3
ID - 1 NH - 4 VA - 15
IL - 14 NJ - 17 WA - 4
IN - 5 NM - 1 WI - 2
KS - 3 NV - 3 WV - 1
CANADA:
AB - 3 NB - 1 ON - 28
BC - 8 NF - 1 PQ - 7
MB - 1 NS - 2 SK - 1 }
<PAGE> 6
Internet
The Company offers virtually all its retail SKUs for electronic commerce
through its websites for Bombay, BombayKIDS, Bombay Outlets and Bombay Canada,
which was launched in 2003. The Company continues to pursue various online
marketing partnerships to broaden its reach to additional customers. Business
to consumer revenues over the Internet were approximately $8 million in Fiscal
2002. The Company also maintains websites supporting its wholesale activities.
WHOLESALE
Bailey Street Trading Company - During Fiscal 2000, the Company created a
wholesale division, Bailey Street Trading Company ("Bailey Street"). The brand
is separate from Bombay and allows the Company to capitalize on its strengths
in product design, sourcing and importing. Current product offerings are
focused on furniture but may be expanded to include wall decor and accessories
in the future. Bailey Street distributes its merchandise to a variety of
customers including independent gift stores, catalogers, department stores,
furniture stores and mass merchants through a network of independent regional
sales representatives. During Fiscal 2002, Bailey Street exceeded its revenue
goals, reaching $8.4 million compared to $2.2 million in Fiscal 2001.
International - Bombay International, Inc. ("International") is the Company's
international licensing distribution channel. International operations have
extended to ten licensed stores as of the end of Fiscal 2002 operating in the
Middle East and the Caribbean. International revenues more than doubled to $3.5
million. In the short-term, the Company plans to continue expansion abroad
through licensing and distribution agreements in existing markets or with
current partners. During Fiscal 2003, approximately six to eight additional
International stores are planned to open by our licensees.
Intangibles
The Company owns a number of the trademarks and service marks used in its
business, including federal registrations for the marks "The Bombay Company"
and "Bombay", and the palm tree logo. The Company's trademarks are also
registered or are the subject of pending applications in a number of foreign
countries. Each registration is renewable indefinitely if the mark is still
in use at the time of renewal. Appropriate applications are on file for the
new wholesale business.
The Company believes that its trademarks have significant value and that these
marks enhance the Bombay{reg-trade-mark} brand and are instrumental in the
Company's ability to create, sustain demand for and market its product. From
time to time, the Company discovers products in the marketplace that are
counterfeit reproductions of the Company's product or that otherwise infringe
upon trademark or tradedress rights held by the Company. The Company has and
will continue to vigorously defend it rights under the marks as necessary.
Seasonality
Operating results are subject to seasonal variation. Historically, the largest
proportion of sales and substantially all of the income occurs in the fiscal
quarter that includes the Christmas season. Inventory balances are generally
built to their highest levels prior to the Christmas selling season.
Inventories decline and cash balances increase significantly in December due to
the Christmas business.
Competition
The home furnishings and decorative accessories market is highly fragmented.
The Company faces competition from furniture stores, department stores and
other specialty retailers. The Company believes that it competes primarily on
the basis of style, selection, quality and value of merchandise.
Employees
The Company has approximately 5,000 employees, which include approximately
3,000 part-time employees, and is not a party to any union contract. Employee
relations are considered to be good.
<PAGE> 7
Risks and Uncertainties
All statements in this Annual Report on Form 10-K, including those incorporated
herein by reference, that do not reflect historical information are forward-
looking statements made in reliance upon the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: downward pressure in retail due to economic
pessimism and declining consumer sentiment; competition; seasonality; success
of operating initiatives; new product development and introduction schedules;
uninterrupted flow of product from overseas sources; acceptance of new product
offerings including children's merchandise; inherent safety of product
offerings; advertising and promotional efforts; adverse publicity; expansion of
the store chain; availability, locations and terms of sites for store
development; ability to renew leases on an economic basis; changes in business
strategy or development plans; availability and terms of borrowings or capital
for operating purposes; labor and employee benefit costs; ability to obtain
insurance at a reasonable cost; reliance on technology; security of the
technological infrastructure; changes in government regulations; risks
associated with international business; potential travel or import restrictions
due to communicable diseases; terrorism; war or threat of war; regional weather
conditions; hiring and retention of key management personnel and other risks
and uncertainties.
(d) Financial Information About Geographic Areas
The Company operates in one industry segment, specialty retailing.
Substantially all revenues result from the sale of home furnishings and
accessories through retail stores, mail order and Internet in the United States
and Canada. The Company's wholesale operations have been immaterial to the
operations and financial results of the Company to date. Long-lived assets
include all non-current assets except deferred taxes.
The following table shows net revenues and long-lived assets by geographic area
(in thousands):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Net revenues:
United States $442,339 $388,789 $375,275
Canada 51,661 48,668 48,184
Total $494,000 $437,457 $423,459
Long-lived assets:
United States $46,201 $51,367 $53,448
Canada 4,040 4,226 4,006
Total $50,241 $55,593 $57,454
</TABLE>
(e) Available Information
The Company makes available free of charge through its website,
http://www.bombaycompany.com, all materials that it files electronically with
the SEC, including the Company's annual report on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K, and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as soon as reasonably practicable after electronically
filing such materials with, or furnishing them to, the SEC. During the period
covered by this Form 10-K, the Company made all such materials available
through its website as soon as reasonably practicable after filing or
furnishing such materials with the SEC.
Any materials filed by the Company with the SEC may also be read and copied at
the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
website, http://www.sec.gov, that contains reports, proxy and information
statements and other information which the Company files electronically with
the SEC.
<PAGE> 8
ITEM 2. PROPERTIES.
The Company owns its United States headquarters office complex of which it
occupies approximately 87,000 square feet. The Company leases stores,
distribution centers, regional and Canadian offices under numerous operating
leases. Owned and leased facilities are summarized following:
<TABLE>
<CAPTION>
Square Feet
Description Owned Leased
<S> <C> <C>
Stores:
Outlet -- 193,000
Regular -- 103,000
Large format -- 1,282,000
Distribution centers:
Mira Loma, CA -- 156,000
McDonough, GA -- 254,000
Gilbertsville, PA -- 300,000
Fort Worth, TX -- 350,000
Mississauga, ON, CAN -- 114,000
Offices and storage:
Mississauga, ON, CAN... -- 9,000
Regional sites... -- 2,000
Fort Worth, TX 121,000 24,000
121,000 2,787,000
</TABLE>
Leases generally have 10 year terms, expiring between 2003 and 2013. Rents
under the store leases are generally based upon a minimum rental plus a
percentage of the store sales in excess of specified levels. Store lease terms
generally require additional payments covering taxes, common area charges and
certain other costs. Rental expense for Fiscal 2002, Fiscal 2001 and Fiscal
2000 totaled $50,669,000, $47,366,000 and $45,137,000, respectively.
As of the end of Fiscal 2002, the minimum rental commitments for future fiscal
years related to real estate properties totaling $206,508,000. Subsequent to
the end of the year, the Company entered into leases with an aggregate
commitment of $21,301,000. Commitments by year are as follows (in thousands):
<TABLE>
<CAPTION>
Subsequent Total at
February 1 to April 15
Fiscal 2003 Year End 2003
<S> <C> <C> <C>
2003 $43,388 $858 $44,246
2004 32,642 1,958 34,600
2005 25,417 1,958 27,375
2006 23,502 2,030 25,533
2007 22,043 2,119 24,162
Thereafter in total 59,516 12,378 71,893
$206,508 $21,301 $227,809
</TABLE>
Bombay believes that the insurance coverage maintained on all properties is
adequate.
ITEM 3. LEGAL PROCEEDINGS.
The Company has certain contingent liabilities resulting from litigation and
claims incident to the ordinary course of business. Management believes that
the probable resolution of such contingencies will not materially affect the
financial position or results of operations of the Company.
On February 13, 2003, the Company agreed to settle a wage and hour lawsuit in
California. The action alleged that the Company had improperly classified its
California store managers as exempt from overtime pay and sought to recoup such
pay on behalf of the class. In order to avoid the expense of the litigation,
the Company agreed to settle the action for approximately $1,350,000, subject
to final documentation and judicial approval in due course. The settlement was
included in selling, general and administrative expenses during the Company's
Fiscal 2002 fourth quarter.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the fourth
quarter of Fiscal 2002.
<PAGE> 9
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
(a) The principal market for the registrant's common stock is the New York
Stock Exchange. The high and low trading prices, quoted by fiscal quarter,
follow:
<TABLE>
<CAPTION>
Year ended Year ended
February 1, 2003 High Low February 2, 2002 High Low
<S> <C> <C> <C> <C> <C>
First quarter $4.45 $2.14 First quarter $3.29 $2.26
Second quarter 5.25 2.61 Second quarter 3.65 2.50
Third quarter 3.10 2.15 Third quarter 3.13 2.01
Fourth quarter 5.95 2.96 Fourth quarter 2.88 2.10
</TABLE>
(b) The approximate number of record holders of common stock on March 31,
2003 was 2,000.
(c) The Company has bank credit agreements with restrictions related to
payment of dividends. The Company has not paid dividends the past two
years and will continue to utilize available funds primarily for the
expansion of its retail stores and operating purposes.
(d) The information required by this item appears under the caption "Approval
of the Executive Management Incentive Compensation Plan, as
Amended Proposal 2)" in the Definitive Proxy Statement of The Bombay
Company, Inc. relating to the Company's Annual Meeting of Shareholders,
which information is incorporated by reference.
<PAGE> 10
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data has been derived from the consolidated
financial statements of The Bombay Company, Inc. The data set forth below
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's consolidated
financial statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended
Financial Data: February 1 February 2 February 3 January 29 January 30
2003 2002 2001 2000 1999
<S> <C> <C> <C> <C> <C>
Net revenues* $494,000 $437,457 $423,459 $392,578 $358,565
Net revenues
increase 13% 3% 8% 9% 7%
Same store sales
increase(decrease) 5% (2)% 5% 5% 6%
Net income* $7,217 $3,724 $8,645 $7,342 $4,010
Basic and diluted
earnings per share $.22 $.11 $.26 $.20 $.11
Total assets* $236,189 $206,889 $206,651 $201,872 $193,519
Stockholders'
equity* $169,408 $158,707 $154,727 $156,248 $156,143
Return on average
assets 3.3% 1.8% 4.2% 3.7% 2.1%
Return on average
equity 4.4% 2.4% 5.6% 4.7% 2.6%
Operating Data:
Average sales per
store open for
full fiscal year* $1,098 $1,012 $1,012 $926 $863
Average sales per
square foot $296 $288 $306 $288 $278
Number of stores:
Beginning of year 419 408 415 412 415
Opened 28 32 10 19 15
Closed 25 21 17 16 18
End of year 422 419 408 415 412
Store composition:
Large format 334 324 291 270 251
Regular 37 59 93 125 148
Outlet 46 36 24 20 13
BombayKIDS 5 - - - -
Retail square
footage:*
Large format 1,297 1,244 1,116 1,049 989
Regular 68 107 163 216 253
Outlet 193 151 92 72 50
BombayKIDS 20 - - - -
Total 1,578 1,502 1,371 1,337 1,292
<FN>
The Company has paid no cash dividends during the periods presented.
* In thousands.
</TABLE>
<PAGE> 11
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
The Bombay Company, Inc. ("Company" or "Bombay") designs, sources and markets a
unique line of fashionable home accessories, wall d{e'}cor and furniture
through 422 retail stores in 42 states in the United States and nine Canadian
provinces, through specialty catalogs and over the Internet principally in the
U.S. and Canada. Merchandise is manufactured to Company specification through a
network of contract manufacturers in approximately 20 countries located
principally in Asia and North America.
In addition to its primary retail operations, the Company has several other
operating initiatives underway, all of which contributed incrementally to
profitability but which were not significant to the Company's operations in
Fiscal 2002.
Following its introduction through catalog and Internet in Fiscal 2001, the
first BombayKIDS stores, featuring children's furniture, textile and accessory
collections, were opened in Fiscal 2002. Four of these stores reflect a
combination format with a BombayKIDS store adjacent to a core Bombay store.
Sales of BombayKIDS product, both through store locations as well as direct
marketing, increased to $8.2 million from $1.9 million last year. With the
success and potential of this product line, the Company intends to open 25 to
30 BombayKIDS stores in the next year, and grow this portion of the business to
over 100 stores over the next three years.
Bailey Street Trading Company ("Bailey Street"), which represents the Company's
wholesale operations, began in Fiscal 2000. During Fiscal 2002, Bailey Street
exceeded its revenue goals, reaching $8.4 million in Fiscal 2002 compared to
$2.2 million in Fiscal 2001. Bailey Street continues to expand its customer
base which includes independent gift stores, catalogers, department stores,
furniture stores and mass merchants.
Bombay International, Inc. ("International") has expanded to ten licensed
stores currently operating in the Middle East and the Caribbean. International
revenues more than doubled in Fiscal 2002, to $3.5 million. By partnering with
strong licensees in opportunistic markets, International continues to offer the
Company the potential for growth with limited capital investment. During Fiscal
2003, approximately six to eight additional International stores are planned to
open.
The largest percentage of the Company's sales and operating income is realized
in the fiscal quarter that includes December (Christmas season).
Because the majority of the Company's products are proprietary, the impact of
inflation on operating results is typically not significant. The Company
attempts to alleviate inflationary pressures by improving designs, finding
alternative production sources in lower cost countries and increasing selling
prices (subject to competitive conditions).
The Company has a retail (52-53 week) fiscal year that ends on the Saturday
nearest January 31. Fiscal 2002 and Fiscal 2001 represent 52 week periods while
Fiscal 2000 included 53 weeks.
Special Note Regarding Forward-Looking Statements
Certain statements in this Annual Report to Shareholders under "Management's
Discussion and Analysis" constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: downward pressure in retail due
to economic pessimism and declining consumer sentiment; competition;
seasonality; success of operating initiatives; new product development and
introduction schedules; uninterrupted flow of product from overseas sources;
acceptance of new product offerings including children's merchandise; inherent
safety of product offerings; advertising and promotional efforts; adverse
publicity; expansion of the store chain; availability, locations and terms of
sites for store development; ability to renew leases on an economic basis;
changes in business strategy or development plans; availability and terms of
borrowings or capital for operating purposes; labor and employee benefit costs;
ability to obtain insurance at a reasonable cost; reliance on technology;
security of the technological infrastructure; changes in government
regulations; risks associated with international business; potential travel or
import restrictions due to communicable diseases; terrorism; war or threat of
war; regional weather conditions; hiring and retention of key management
personnel and other risks and uncertainties.
<PAGE> 12
NET REVENUES
Net revenues consist of sales to retail customers and wholesale sales through
Bailey Street and to our international licensees as well as shipping fees.
Shipping fees reflect revenue from customers for delivery of merchandise.
<TABLE>
<CAPTION>
(In millions)
Fiscal Fiscal Fiscal
2002 2001 2000
<S> <C> <C> <C>
Sales................. $489.4 $434.7 $421.5
Shipping.............. 4.6 2.8 2.0
Total.............. $494.0 $437.5 $423.5
</TABLE>
Fiscal 2002
Net revenues increased $56.5 million, or 13%, to $494.0 million, compared to
$437.5 million in Fiscal 2001. Revenues from retail operations increased $48.3
million, or 11%, from the prior year. Same store sales (stores in existence for
one year or more) increased 5% for the year. New stores also contributed to
revenue growth, as the Company opened 14 large format stores, 9 outlets and 5
BombayKIDS stores while expanding 2 stores from the regular to the large
format. Sales growth from new real estate activity was partially offset by
store closures. Internet and mail order revenues grew 73% to $20.6 million from
$11.9 million last year, fueled by sales of BombayKIDS product and improvement
made to the Company's website. The remainder of the increase was the result of
growth in the Company's wholesale operations. Bailey Street revenues increased
to $8.4 million in Fiscal 2002 from its prior year level of $2.2 million.
International revenues more than doubled to approximately $3.5 million in the
current year.
From a merchandise mix standpoint, all categories increased in dollars.
However, growth in furniture outpaced the other categories due to the improved
in-stock position and the improved selling environment for big ticket items
compared to last year. Sales in Fiscal 2002 consisted of 44% furniture, 43%
accessories and 13% wall decor. In Fiscal 2001, the sales mix was 43%
furniture, 43% accessories and 14% wall decor. The number of retail
transactions for the year increased 7% and the average ticket increased 4% to
$82 from $79 last year.
All regions of the U.S. and Canada reported mid single-digit same store sales
increases. At the end of Fiscal 2002, the Company had 334 large stores, 37
regular stores, 46 outlets and five BombayKIDS stores. During the year, 25
stores were closed. Total retail square footage increased 5% compared to year-
end Fiscal 2001, while the number of stores increased by a net 3 units.
Fiscal 2001
Net revenues increased $14.0 million, or 3%, to $437.5 million, compared to
$423.5 million in Fiscal 2000 primarily due to new store openings. During the
year, the Company opened 32 new stores, including 12 outlets, and 18 regular
stores were converted to the large store format. These increases were partially
offset by the closure of 21 stores. Same store sales declined 2% for the year.
The lack of a 53rd week during Fiscal 2001 adversely impacted sales comparisons
by approximately 2%. At the end of Fiscal 2001, the Company had 324 large
stores, 59 regular stores and 36 outlets resulting in a 10% increase in retail
square footage.
Our customers' resistance to big-ticket purchases during the year resulted in a
shift in the overall product mix. Furniture sales were 43% of the total during
Fiscal 2001 compared to 45% in Fiscal 2000. Accessories represented 43%
compared to 41% in the prior year, while wall d{e'}cor (principally prints,
mirrors and sconces) accounted for 14% in both years. Total transactions for
the year increased 2% while the average ticket remained constant at $79. The
growth in the accessories business resulted in an increase in the average
number of items per transaction year over year, offsetting the impact of shifts
in the product mix.
All regions of the U.S. and Canada reported low single-digit same store sales
declines for the year. Outlet stores continued to perform well during Fiscal
2001, reporting low single-digit same store sales gains.
<PAGE> 13
COST OF SALES, BUYING AND STORE OCCUPANCY COSTS
<TABLE>
<CAPTION>
(In millions)
Fiscal Fiscal Fiscal
2002 2001 2000
<S> <C> <C> <C>
Cost of sales, buying
and occupancy costs $344.0 $309.6 $291.7
Shipping 5.6 3.9 2.3
Total $349.6 $313.5 $294.0
</TABLE>
Fiscal 2002
Cost of sales, including buying and store occupancy costs, for Fiscal 2002 was
$349.6 million or 70.8% of revenues. As a percentage of revenues, these costs
declined from 71.7% in Fiscal 2001. Product margins declined 40 basis points as
the Company targeted key price points to drive volume. Buying and occupancy
costs were 19.1% of revenues, a 130 basis points decline, as a result of
leveraging costs against the stronger sales levels. Buying and occupancy costs
included impairment charges totaling $.7 million to write down the fixed assets
related to six unprofitable stores.
Fiscal 2001
Cost of sales, including buying and store occupancy costs, for Fiscal 2001 was
$313.5 million or 71.7% of revenues. As a percentage of revenues, these costs
increased from 69.4% in Fiscal 2000. Product margins declined 130 basis points
as a result of the more promotionally driven retail environment. Same store
sales declines, which contributed to lower sales per square foot, resulted in
negative leverage of the buying and occupancy costs.
These costs were 20.4% of revenues, an increase of 90 basis points compared to
the prior year. Buying and occupancy costs included an impairment charge of $.7
million to write down the fixed assets related to eleven unprofitable stores.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Fiscal 2002
Selling, general and administrative expenses were $132.3 million compared to
$117.6 million in Fiscal 2001. As a percentage of sales, expenses were slightly
lower at 26.8% in Fiscal 2002 compared to 26.9% in Fiscal 2001. Fiscal 2002
included a charge of $1.1 million relating to the departure of the Chief
Executive Officer and a $1.3 million charge related to the settlement of a
California wage and hour lawsuit. Excluding these charges, selling, general
and administrative costs were 26.3% of revenues. The Company was able to
leverage costs such as store payroll, depreciation and other fixed costs
against the higher revenue base. However, this leverage was somewhat offset by
increases in other areas including investments made in marketing, higher
insurance costs and higher credit card costs as a result of a change in private
label credit card provider.
Fiscal 2001
Selling, general and administrative expenses were $117.6 million compared to
$115.6 million in Fiscal 2000. Although the dollars increased $2.0 million or
1.8%, as a percentage of revenues, selling, general and administrative costs
declined from 27.3% in Fiscal 2000 to 26.9% in Fiscal 2001. The 40 basis point
decline is the result of strong controls over expenses throughout the year.
INTEREST
Fiscal 2002
During Fiscal 2002, the Company had interest income of $331,000 and interest
expense of $152,000, compared to interest income of $248,000 and interest
expense of $566,000 in Fiscal 2001. Improvement resulted from higher average
cash balances generated through higher sales and profits, lower capital
expenditures and lower average inventory levels, resulting in lower utilization
of the credit facility. In addition, borrowings were at lower interest rates.
Fiscal 2001
The Company had interest income of $248,000 and interest expense of $566,000,
compared to interest income of $967,000 and interest expense of $424,000 in
Fiscal 2000. Changes in interest amounts resulted from lower average cash
balances and greater utilization of credit facilities due to the Company's
lower operating profits, higher average inventory levels and capital
expenditures.
<PAGE> 14
INCOME TAXES
The Company provided income taxes of $5.1 million, $2.3 million and $5.8
million in Fiscal 2002, Fiscal 2001 and Fiscal 2000, respectively. The
effective rates were 41.2%, 38.6% and 40.0% in the respective periods.
Fluctuations in the effective rate were primarily related to foreign taxes that
change in accordance with earnings in the Canadian subsidiary and in state tax
expenses that have not changed proportionately to income before income taxes.
The increased effective rate during Fiscal 2002 was due primarily to a multi-
year tax settlement in Canada.
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of liquidity and capital resources are cash flows from
operations and a line of credit with banks. The Company has an unsecured,
revolving credit agreement with a group of banks, with an aggregate commitment
of up to $50.0 million for working capital and letter of credit purposes. The
bank commitment is limited to 45% of saleable inventory. At February 1, 2003,
the bank commitment was $46.0 million, and $38.3 million was available for
borrowings or additional letters of credit. The credit facility expires July 5,
2005.
Fiscal 2002
At February 1, 2003, cash and short-term investments were $56.6 million, $18.2
million higher than at February 2, 2002. The primary sources of cash were net
income including non-cash depreciation and amortization expense, increases in
payables including those related to higher inventory purchases, taxes, payroll
and insurance as well as proceeds from the exercise of stock options. These
sources were partially offset by higher inventory levels and capital
expenditures for store construction and routine equipment purchases.
At February 1, 2003, inventory levels were $13.0 million higher than at the
previous year end due to improved flow of product to support the strong sales
trend experienced during the second half of Fiscal 2002, and to support
continued growth into Fiscal 2003.
Capital expenditures totaled $10.2 million and included the costs of 28 new
stores and the conversion of two regular stores to the larger format, as well
as continued investments in software and equipment. The capital expenditures
program for Fiscal 2003 is planned at approximately $30 to $35 million with the
majority relating to the Company's store opening plans. The Company plans to
open approximately 75 to 85 new stores including 25 to 30 BombayKIDS stores.
Generally, a new or converted store is profitable in its first full year of
operations. Approximately $4 to $5 million of the capital expenditures program
relates to improvement in information systems including the point-of-sale
software and communication infrastructure upgrades. Another $4 million of the
program has been allocated for distribution center investment to support
Company growth. A 300,000 square foot leased facility in the Midwest is
expected to open in the early fall, and the Company also plans to expand its
East Coast distribution center and replace outdated scanning devices. The
remainder relates to other routine purchases required in the normal course of
business.
In connection with continuing operations, the Company has various contractual
obligations and commercial commitments requiring payment in future periods,
summarized in the table below.
<TABLE>
<CAPTION>
(In thousands)
Payments Due by Period
Less than 1-3 4-5 After 5
Total 1 Year Years Years Years
CONTRACTUAL OBLIGATIONS
<S> <C> <C> <C> <C> <C>
Real estate operating
leases $206,508 $43,388 $81,561 $41,371 $40,188
Unconditional purchase
orders 170,025 170,025 - - -
Equipment operating
leases 1,216 614 602 - -
Employment
contracts 960 960 - - -
Other contractual
obligations 9,106 6,000 3,062 44 -
Total contractual
cash obligations $387,815 $220,987 $85,225 $41,415 $40,188
COMMERCIAL COMMITMENTS
Import letters of
credit $5,736 $5,736 $ - $ - $ -
Standby letters of
credit 1,957 1,957 - - -
Guarantees of travel
cards 75 75 - - -
Total commercial
commitments $7,768 $7,768 $ - $ - $ -
</TABLE>
The Company intends to fund its operations and planned capital expenditures
program through its current cash position, cash flows from operations and
credit facility. With its current growth plans, the Company may have a need to
increase its credit facility or obtain alternative financing arrangements given
the current, favorable interest rate environment.
<PAGE> 15
Fiscal 2001
At February 2, 2002, cash and short-term investments were $38.4 million, $16.3
million higher than at February 3, 2001. The primary sources of cash were net
income, including non-cash depreciation and amortization expense, and decreases
in inventory levels. These sources were partially offset by capital
expenditures for store construction and routine equipment purchases.
At February 2, 2002, inventory levels were $15.1 million lower than at the
previous year end reflecting the Company's conservative balance sheet
management during the second half of the year in light of economic
uncertainties and the events of September 11th. Capital expenditures totaled
$14.1 million and included the costs of 32 new stores and the conversion of 18
regular stores to the larger format, as well as continued investments in
software and equipment.
CRITICAL ACCOUNTING POLICIES
In the course of preparing the financial statements, management makes certain
judgments relative to accounting policies that are appropriate in the
circumstances and the application of those policies. The following policies
are those deemed to be most critical.
Inventory Valuation Policy
Inventories are valued at the lower of cost or market, cost being determined
based upon the weighted average inventory method. Cost is calculated based upon
the actual landed cost of an item at the time it is received in the warehouse
based upon actual vendor invoices or estimates of costs for which an invoice is
not present or for which an allocation of shared costs is required. In
addition, the Company includes the cost of warehousing and transporting product
to the stores in its costs.
The Company regularly evaluates its compliance with the lower of cost or market
principle. Items are evaluated by stock keeping unit ("SKU") and to the extent
that the cost of the item exceeds the current selling price, provision is made
to reduce the carrying cost of the item. Additionally, the Company reviews the
aging of its inventory by SKU. The carrying cost of the item is reduced based
upon certain age criteria and product category. Since the determination of
carrying value of inventory involves both estimation and judgment of cost and
market value, differences in these estimates could result in valuations that
vary from the recorded asset.
Each month, the Company records an allowance for shrinkage to provide for the
cost of lost or stolen inventory. The amount of the allowance is determined
based upon the historical shrinkage results and is adjusted at least annually
to reflect current circumstances. Inventory is physically counted at all
locations at least once each year, at which time actual results are reflected
in the financial statements. Physical counts were taken at all stores and all
the distribution centers during January 2003.
Impairment of Long-Lived Assets
Long-lived assets with definite lives are reviewed at least annually and
whenever events or changes in circumstances indicate that the carrying value of
the asset may not be recoverable. This review includes the evaluation of
individual under-performing retail stores and assessing the recoverability of
the carrying value of the fixed assets related to the store. Future cash flows
are projected for the remaining lease life using a probability-weighted
approach to estimate the fair value of the store assets. These projections
consider such factors as future sales levels, gross margins, changes in rent
and other expenses as well as the overall operating environment specific to
that store. If the estimated future cash flows are less than the carrying value
of the assets, a charge equal to the difference between the assets' fair value
and carrying value is recorded as an impairment. Since the projection of future
cash flows involves judgment and estimates, differences in circumstances or
estimates could produce different results.
Deferred Taxes
The Company currently has recorded $11.2 million of deferred tax assets
representing the difference between the timing of deductions taken for
financial statement purposes and for tax purposes. Underlying the assumption
that the benefit of those assets will be recoverable in some future period is
the concept that the Company will have future taxable income. If future
conditions indicate that the benefit of the deferred tax assets will not be
fully realized, a valuation allowance will be recorded to reduce the assets to
their estimated realizable value.
Insurance
The Company is self-insured with respect to medical and dental insurance
coverage offered to its eligible employees, up to a maximum of $125,000 per
claim. Above that amount, medical insurance coverage is in place. In
connection with the self-insured portion, the Company maintains a liability for
claims that are in the process of being paid and those that have been incurred
but not yet reported to the Company's insurance carrier. The amount of the
liability is estimated based upon historical claims experience and actuarial
estimates regarding the exposure for claims incurred but not yet reported. At
February 1, 2003, the balance of the medical and dental liability was $1.1
million.
<PAGE> 16
Beginning in Fiscal 2001, the Company also maintains workers' compensation
insurance coverage with a deductible of $100,000 per claim. At February 1,
2003, the Company had recorded a liability of $2.3 million representing the
estimated amount that will have to be paid in future periods related to the
settlement of claims under the insurance policies for Fiscal 2002 and Fiscal
2001. The amount of the liability reflects expected remaining workers'
compensation claims based upon actuarial estimates made by the Company's
insurance carrier, utilizing historical claims experience and other relevant
information and trends. Prior to Fiscal 2001, the Company's workers'
compensation insurance was not subject to a deductible.
If circumstances change or if information becomes available that would indicate
that future payments with respect to insurance liabilities would be different
than what was previously estimated, such liabilities will be adjusted
accordingly. Since the amounts recorded for insurance liabilities are based
upon various estimates, actual future requirements could vary from the recorded
liabilities.
New Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement
Obligations ("FAS 143"). FAS 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The standard is
effective for the Company's financial statements beginning in the first quarter
of Fiscal 2003, and its adoption is not expected to have a significant impact
on the Company's consolidated financial position or results of operations.
In December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation
- - Transition and Disclosure - an amendment of FASB Statement No. 123 ("FAS
148"). FAS 148 requires additional disclosure regarding stock-based
compensation both in annual and interim financial statements. The Company has
adopted the disclosure provisions of FAS 148.
<PAGE> 17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As of February 1, 2003 the Company had no market risk sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The index to the consolidated financial statements is found on page 23. The
Company's consolidated financial statements and notes to the consolidated
financial statements follow the index.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
There have been no changes in or disagreements with accountants on accounting
or financial disclosures.
<PAGE> 18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this item appears under the captions "Election of
Directors", "Executive Officers of the Company" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Definitive Proxy Statement of The Bombay
Company, Inc. relating to the Company's Annual Meeting of Shareholders, which
information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item appears under the captions "Executive
Compensation" and "Compensation of Directors" in the Definitive Proxy Statement
of The Bombay Company, Inc. relating to the Company's Annual Meeting of
Shareholders, which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The information required by this item appears under the captions "Approval of
the Executive Management Incentive Compensation Plan, as Amended (Proposal 2)"
and "Security Ownership" and in the Definitive Proxy Statement of The Bombay
Company, Inc. relating to the Company's Annual Meeting of Shareholders, which
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item appears under the caption "Certain
Transactions" in the Definitive Proxy Statement of The Bombay Company, Inc.
relating to the Company's Annual Meeting of Shareholders, which information is
incorporated herein by reference.
ITEM 14. CONTROLS AND PROCEDURES.
Within 90 days prior to the date of this filing, an evaluation was performed
under the supervision and with the participation of the Company's management,
including the Executive Committee and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Rule 13a-14 under the Securities Exchange Act of
1934. Based upon that evaluation, the Chair of the Executive Committee and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective in timely alerting them to material information
relating to the Company that is required to be included in periodic filings
with the Securities and Exchange Commission. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to the date of the
evaluation.
<PAGE> 19
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)The following documents are filed as a part of this Annual Report for The
Bombay Company, Inc. and its
subsidiaries:
(1)Financial Statements:
Report of Independent Accountants
Consolidated Statements of Income for the Years Ended February 1,
2003, February 2, 2002 and February 3, 2001
Consolidated Balance Sheets at February 1, 2003 and February 2, 2002
Consolidated Statements of Cash Flows for the Years Ended February 1,
2003, February 2, 2002 and February 3, 2001
Consolidated Statements of Stockholders' Equity for the Years Ended
February 1, 2003, February 2, 2002 and February 3, 2001
Notes to Consolidated Financial Statements
(2)Financial statement schedules not included in this Form 10-K Annual
Report have been omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
(3) Exhibits:
A list of exhibits required to be filed as part of this report is set
forth in the Index to Exhibits, which immediately precedes such
exhibits, and is incorporated herein by reference.
(b) Reports on Form 8-K.
The Securities and Exchange Commission requires the filing of a Form 8-K
for certain events specified under Sections 13 or 15(d) of the Securities
Exchange Act of 1934, for nonpublic information required to be disclosed
by Regulation FD, or for any other information which the Company deems of
importance to security holders. No reports on Form 8-K were filed during
the quarter ended February 1, 2003.
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE BOMBAY COMPANY, INC.
(Registrant)
Date: April 16, 2003 /s/ BRIAN N. PRIDDY
Brian N. Priddy
Executive Vice President, Operations
Chairman, Executive Committee*
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Name Position Date
/s/ JAMES D. CARREKER Chairman of the Board April 17, 2003
James D. Carreker
Director
John H. Costello
/s/ GLENN E. HEMMERLE Director April 16, 2003
Glenn E. Hemmerle
/s/ JULIE L. REINGANUM Director April 17, 2003
Julie L. Reinganum
Bruce R. Smith Director
/s/ NIGEL TRAVIS
Nigel Travis Director April 17, 2003
/s/ ELAINE D. CROWLEY Senior Vice President, April 16, 2003
Elaine D. Crowley Chief Financial Officer
and Treasurer
* On August 20, 2002, the Company announced the resignation of its Chairman,
President and Chief Executive Officer. An Executive Committee of management
has been appointed to direct the Company's business until a new Chief Executive
Officer is named.
<PAGE> 21
CERTIFICATION
I, Brian N. Priddy, certify that:
1. I have reviewed this annual report on Form 10-K of The Bombay Company,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operation and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Date: April 15, 2003
/s/ BRIAN N. PRIDDY
Brian N. Priddy
Executive Vice President, Operations
Chair, Executive Committee
<PAGE> 22
CERTIFICATION
I, Elaine D. Crowley, certify that:
1. I have reviewed this annual report on Form 10-K of The Bombay Company,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operation and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Date: April 16, 2003
/s/ ELAINE D. CROWLEY
Elaine D. Crowley
Senior Vice President, Chief
Financial Officer and Treasurer
<PAGE> 23
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page No.
Report of Independent Accountants 24
Consolidated Statements of Income for the Years Ended
February 1, 2003, February 2, 2002 and February 3, 2001 25
Consolidated Balance Sheets at February 1, 2003 and February 2, 2002
Consolidated Statements of Stockholders' Equity for the Years Ended
February 1, 2003, February 2, 2002 and February 3, 2001 27-28
Consolidated Statements of Cash Flows for the Years Ended February 1,
2003, February 2, 2002 and February 3, 2001 29
Notes to Consolidated Financial Statements 30-38
Unaudited Quarterly Financial Data 39
<PAGE> 24
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
The Bombay Company, Inc.
In our opinion, the consolidated financial statements listed in the
accompanying index on page 23 present fairly, in all material respects, the
financial position of The Bombay Company, Inc. and its subsidiaries at February
1, 2003 and February 2, 2002, and the results of their operations and their
cash flows for each of the three years in the period ended February 1, 2003, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Fort Worth, Texas
March 11, 2003
<PAGE> 25
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
The Bombay Company, Inc. and Subsidiaries
(In thousands, except per share amounts)
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Net revenues $494,000 $437,457 $423,459
Costs and expenses:
Cost of sales, buying and store
occupancy costs 349,599 313,484 294,043
Selling, general and
administrative expenses 132,305 117,589 115,559
Interest expense (income), net (179) 318 (543)
481,725 431,391 409,059
Income before income taxes 12,275 6,066 14,400
Provision for income taxes 5,058 2,342 5,755
Net income $7,217 $3,724 $8,645
Basic earnings per share $.22 $.11 $.26
Diluted earnings per share $.22 $.11 $.26
Average common shares outstanding 33,048 32,967 33,262
Average common shares outstanding
and dilutive potential common
shares 33,298 32,992 33,292
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 26
<TABLE>
CONSOLIDATED BALANCE SHEETS
The Bombay Company, Inc. and Subsidiaries
(In thousands, except shares)
<CAPTION>
February 1 February 2
2003 2002
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents (short-term investments
of $46,622 and $31,437 respectively) $56,608 $38,415
Inventories, at lower of cost or market 102,768 89,798
Other current assets 21,123 16,893
Total current assets 180,499 145,106
Property and equipment, at cost:
Land 892 892
Building 5,198 5,198
Leasehold improvements 81,827 80,291
Furniture and equipment 33,345 30,622
121,262 117,003
Accumulated depreciation (75,961) (68,290)
Net property and equipment 45,301 48,713
Deferred taxes and other assets 9,966 12,640
Goodwill, less amortization of $611 and $604,
respectively 423 430
Total assets $236,189 $206,889
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $37,202 $24,825
Income taxes payable 6,673 3,220
Accrued payroll and bonuses 7,192 5,015
Gift certificates redeemable 5,923 5,724
Accrued Insurance 3,609 2,456
Total current liabilities 60,599 41,240
Accrued rent and other liabilities 6,182 6,942
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par value, 1,000,000 shares
authorized
Common stock, $1 par value, 50,000,000 shares
authorized, 38,149,646 shares issued 38,150 38,150
Additional paid-in capital 75,446 75,267
Retained earnings 76,361 69,144
Accumulated other comprehensive income (loss) (1,394) (1,776)
Common shares in treasury, at cost, 4,621,440
and 5,112,696 shares, respectively (18,918) (20,861)
Stock purchase loans and accrued interest (950)
Deferred compensation (237) (267)
Total stockholders' equity 169,408 158,707
Commitments and contingencies (Note 5)
Total liabilities and stockholders' equity $236,189 $206,889
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 27 AND 28
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
The Bombay Company, Inc. and Subsidiaries
(In thousands)
<CAPTION> Accumulated
Common Stock Treasury Stock Additional Stock Other Annual
Paid-In Purchase Deferred Retained Comprehensive Comprehensive
Shares Amount Shares Amount Capital Loans Comp. Earnings Income(Loss) Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total,
January 29, 2000 38,150 $38,150 (2,677) $(13,129) $76,082 $(617) $ - $56,775 $(1,013)
Purchases of
treasury shares - - (3,040) (10,303) - - - - -
Shares contributed
or sold to
employee benefit
plans - - 130 541 (250) - - - -
Director fee
distributions - - 2 7 (1) - - - -
Restricted stock
distributions - - 28 130 24 - - - -
Shares sold to
officers with stock
purchase loans - - 101 434 (120) (314) - - -
Interest charged on
stock purchase
loans - - - - - (60) - - -
Net income - - - - - - - 8,645 - $8,645
Foreign currency
translation
adjustments - - - - - - - - (254) (254)
Total,
February 3, 2001 38,150 38,150 (5,456) (22,320) 75,735 (991) - 65,420 (1,267) $8,391
Purchases of
treasury shares - - (39) (103) - - - - -
Shares contributed or
sold to employee
benefit plans - - 102 418 (225) - - - -
Director fee
distributions - - 30 123 (48) - - - -
Restricted stock
distributions - - 250 1,021 (195) - (552) - -
Deferred compensation
expense - - - - - - 285 - -
Collections of stock
purchase loans - - - - - 86 - - -
Interest (charges)
collections on
stock purchase
loans, net - - - - - (45) - - -
Net income - - - - - - - 3,724 - $3,724
Foreign currency
translation
adjustments - - - - - - - - (509) (509)
Total,
February 2, 2002 38,150 38,150 (5,113) (20,861) 75,267 (950) (267) 69,144 (1,776) $3,215
Purchases of
treasury shares - - (202) (895) - 864 - - -
Shares contributed
or sold to employee
benefit plans - - 66 271 (89) - - - -
Exercise of stock
options - - 596 2,438 45 - - - -
Director fee
distributions - - 77 313 3 - - - -
Restricted stock
distributions - - (45) (184) 220 - (44) - -
Deferred compensation
expense - - - - - - 74 - -
Net repayments of
stock purchase
loans - - - - - 103 - - -
Interest charges on
stock purchase
loans, net - - - - - (17) - - -
Net income - - - - - - - 7,217 - $7,217
Foreign currency
translation
adjustments - - - - - - - - 382 382
Total,
February 1, 2003 38,150 $38,150 (4,621) $(18,918) $75,446 $ - $(237) $76,361 $(1,394) $7,599
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 29
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Bombay Company, Inc. and Subsidiaries
(In thousands)
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $7,217 $3,724 $8,645
Adjustments to reconcile net income to
net cash from operations:
Depreciation 12,740 13,000 11,748
Amortization 2,743 3,472 3,003
Restricted stock compensation 66 298 98
Deferred taxes and other (1,543) (707) 248
Change in assets and liabilities:
(Increase) decrease in inventories (12,430) 14,090 (14,692)
(Increase) decrease in other current
assets (2,033) (807) (2,113)
Increase in accounts payable and
accrued expenses 13,624 50 256
Increase (decrease) in income taxes
payable 3,608 (2,700) 764
Increase (decrease) in accrued payroll
and bonuses 2,156 (607) 1,137
(Increase) decrease in noncurrent
assets 13 74 62
Increase in noncurrent liabilities (535) (563) 9
Net cash provided by operations 25,626 29,324 9,165
Cash flows from investing activities:
Purchases of property, equipment and
other (10,224) (14,127) (16,721)
Proceeds from sale of property and
equipment 289 614 375
Net cash used by investing activities (9,935) (13,513) (16,346)
Cash flows from financing activities:
Purchases of treasury stock (31) (103) (10,303)
Sale of stock to employee benefit plans 182 193 291
(Issuance) collection of stock purchase
loans 104 86 -
Exercise of stock options 2,328 - -
Net cash provided (used) by financing
activities 2,583 176 (10,012)
Effect of exchange rate change on cash (81) 271 176
Net increase (decrease) in cash and cash
equivalents 18,193 16,258 (17,017)
Cash and cash equivalents at beginning of
year 38,415 22,157 39,174
Cash and cash equivalents at end of year $56,608 $38,415 $22,157
Supplemental disclosures of cash flow
information:
Interest paid $152 $566 $424
Income taxes paid 2,298 5,687 4,254
Non-cash financing activities:
Distributions of director fees 316 75 6
Distributions of restricted stock 368 826 154
Loans issued to purchase Company stock - - 314
Repurchase of shares from stock purchase
loans 864 - -
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - STATEMENT OF ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany transactions,
balances and profits have been eliminated. The Company has a retail (52-53
week) fiscal year which ends on the Saturday nearest January 31. The periods
ended February 1, 2003 ("Fiscal 2002") and February 2, 2002 ("Fiscal 2001")
represent 52 weeks. The period ended February 3, 2001 ("Fiscal 2000")
represents 53 weeks.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates. These estimates
affect reported amounts of assets, liabilities, revenues, expense and related
disclosures. Actual results could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The functional currency of the Company's Canadian operations is the Canadian
dollar. Fiscal year end exchange rates are used to translate assets and
liabilities to U.S. dollars. Monthly average exchange rates are used to
translate income and expenses. The cumulative effect of foreign currency
translation adjustments is reported in accumulated other comprehensive income
(loss) within stockholders' equity.
CASH AND CASH EQUIVALENTS
Cash in stores, deposits in banks and short-term investments with original
maturities of three months or less are considered as cash and cash equivalents
for the purposes of the financial statements. Short-term investments are
recorded at the lower of cost or fair market value.
INVENTORIES
Inventories are primarily finished merchandise and are valued at the lower of
cost or market, cost being determined based upon the weighted average inventory
method.
PROPERTY AND EQUIPMENT
Property and equipment are depreciated over the estimated useful lives of the
assets using the straight-line method over the lives shown:
Building Forty years
Furniture and equipment Two to ten years
Leasehold improvements The lesser of the life of the lease or asset
Maintenance and repairs are charged to expense as incurred. Renewals and
betterments which materially prolong the useful lives of the assets are
capitalized. The cost and related accumulated depreciation of property retired
or sold are removed from the accounts, and gains or losses are recognized in
the statements of income.
CAPITALIZED SOFTWARE COSTS
The Company capitalizes certain external and internal costs associated with
computer software and significant enhancements to software features of existing
products. The costs are amortized utilizing the straight-line method over the
estimated economic lives of the software, which range from three to seven
years. Total costs capitalized were $19,500,000 and $18,703,000 at February 1,
2003 and February 2, 2002, respectively. Accumulated amortization related to
these assets was $15,236,000 and $12,517,000 in Fiscal 2002 and Fiscal 2001,
respectively.
IMPAIRMENT OF LONG-LIVED ASSETS
During Fiscal 2002, the Company adopted the provisions of Financial Accounting
Standards No. 144, Accounting for Impairment or Disposal of Long-Lived Assets
("FAS 144"). FAS 144 requires that long-lived assets with definite lives be
evaluated for impairment whenever conditions indicate that the carrying value
of the assets may not be recoverable. In determining if an impairment exists,
assets must be grouped at the lowest level for which there are identifiable
cash flows that are largely independent of cash flows from other groups of
assets. In performing this impairment test, the Company groups its assets at
the store level. If an impairment exists, the amount of the impairment is
measured as the difference between the carrying value and the estimated fair
value of the assets. The adoption of FAS 144 did not have a significant impact
on the Company's financial statements.
For periods prior to Fiscal 2002, assessment of impairment of long-lived assets
was determined in accordance with the provisions of Financial Accounting
Standards No. 121, which were similar to the provisions of FAS 144.
<PAGE> 31
GOODWILL
During Fiscal 2002, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 142, Accounting for Goodwill and Other
Intangibles ("FAS 142"). FAS 142 provides that goodwill should no longer be
amortized, but should be tested for impairment at least annually, and whenever
conditions indicate that such an impairment could exist. Goodwill is tested for
impairment by comparing the estimated fair value of the Company's net assets to
their carrying value. If the carrying value exceeds the estimated fair value,
the implied value of goodwill will be calculated and an impairment loss will be
recognized. No impairment was recorded in Fiscal 2002. The adoption of FAS 142
did not have a significant impact on the Company's financial statements, nor
would it have had a significant impact on prior years if the provisions of FAS
142 had been applied.
REVENUE RECOGNITION
Revenue is recognized when delivery has occurred, the sales price is fixed or
determinable, and collectibility is reasonably assured. Revenues are net of
returns and exclude sales tax.
The Company includes in revenues amounts collected from customers for shipping
and handling orders. In Fiscal 2002, Fiscal 2001 and Fiscal 2000, these
revenues totaled $4,626,000, $2,779,000 and $1,945,000, respectively. The
associated shipping and handling expenses are included in cost of sales.
GIFT CERTIFICATES
Proceeds from the sale of gift cards and certificates are recorded as a
liability at the time they are received. When the holder of the card or
certificate redeems it for merchandise, the liability is relieved and revenue
is recognized.
ADVERTISING COSTS
Advertising costs are expensed the first time the advertising takes place.
During Fiscal 2002, Fiscal 2001 and Fiscal 2000, advertising expense was
$20,258,000, $14,597,000 and $14,701,000, respectively.
INCOME TAXES
The Company uses the liability method of computing deferred income taxes on all
material temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases. The
Company assesses realizability of deferred tax assets and, if necessary, a
valuation allowance is provided.
All unremitted earnings of the foreign subsidiary are considered to be
permanently reinvested. Accordingly, no U.S. deferred taxes have been provided
on such earnings.
COMPREHENSIVE INCOME
Comprehensive income represents the change in equity (net assets) of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period
except those resulting from investments by owners and distributions to owners.
Such amounts are included in accumulated other comprehensive income (loss)
within stockholders' equity and consist of the cumulative effect of foreign
currency translation adjustments.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement
Obligations ("FAS 143"). FAS 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The standard is
effective for the Company's financial statements beginning in the first quarter
of Fiscal 2003, and its adoption is not expected to have a significant impact
on the Company's consolidated financial position or results of operations.
In December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation
- - Transition and Disclosure - an amendment of FASB Statement No. 123 ("FAS
148"). FAS 148 requires additional disclosure regarding stock-based
compensation both in annual and interim financial statements. The Company has
adopted the disclosure provisions of FAS 148.
EARNINGS PER SHARE
Basic earnings per share are based upon the weighted average number of shares
outstanding. Diluted earnings per share are based upon the weighted average
number of shares outstanding plus the shares that would be outstanding assuming
exercise of dilutive stock options, unissued restricted stock and distribution
of deferred director compensation.
<PAGE> 32
The computation for basic and diluted earnings from continuing operations per
share are as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Numerator:
Net income $7,217 $3,724 $8,645
Denominator for basic earnings per share:
Average common shares outstanding 33,048 32,967 33,262
Denominator for diluted earnings per share:
Average common shares outstanding 33,048 32,967 33,262
Stock options 227 1 -
Restricted stock 11
Deferred director compensation 23 24 19
33,298 32,992 33,292
Basic earnings per share $.22 $.11 $.26
Diluted earnings per share $.22 $.11 $.26
</TABLE>
STOCK-BASED COMPENSATION
The Company applies the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations and the disclosure-only provisions of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation ("FAS
123") in accounting for its stock-based incentive plans. No compensation
expense related to grants of stock options has been reflected in net income, as
all options granted under the plans had an exercise price equal to the market
price of the Company's common stock on the date of grant. Compensation expense
related to grants of restricted stock is measured as the quoted market price of
the Company's common stock at the measurement date, amortized to expense over
the vesting period. The following table illustrates the effect on net income
and earnings per share if the Company had applied the fair value recognition
provisions of FAS 123 to stock-based compensation (in thousands):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Net income as reported $7,217 $3,724 $8,645
Stock-based compensation expense
determined under FAS 123, net of tax (925) (964) (1,124)
Net income, pro forma $6,292 $2,760 $7,521
Basic earnings per share, as reported .22 .11 .26
Diluted earnings per share, as reported .22 .11 .26
Basic earnings per share, pro forma .19 .08 .23
Diluted earnings per share, pro forma .19 .08 .23
</TABLE>
NOTE 2 - STORE IMPAIRMENTS AND CLOSING LIABILITY
Following the holiday selling season, the Company reviewed its real estate
portfolio for impairment, focusing on store locations with operating losses. Of
the 422 Company owned stores open as of February 1, 2003, six stores were
identified for which the carrying amount of the store assets were not expected
to be recoverable. As a result of the review, the Company recorded an
impairment charge to buying and occupancy costs of $693,000. A similar review,
performed in Fiscal 2001, in accordance with FAS 121, resulted in a charge to
buying and occupancy costs of $715,000.
The Company previously had accrued a liability for obligations associated with
closing under-performing stores. At February 1, 2003 and February 2, 2002, the
liability was $0 and $342,000, respectively. Costs of $80,000 and $373,000 were
charged against the liability in Fiscal 2002 and Fiscal 2001, respectively, and
the remaining balance of $262,000 was credited to buying and occupancy costs in
Fiscal 2002.
<PAGE> 33
NOTE 3 - DEBT
The Company has an unsecured, revolving credit agreement with a group of banks,
with an aggregate commitment of up to $50,000,000. The Company has the option
to request an increase in the aggregate commitment to $75,000,000, subject to
approval by the banks, through the addition of another lending bank or
increased commitment by the existing lending banks. The facility, which expires
July 5, 2005, is for working capital, inventory financing and letter of credit
purposes. Borrowings under the facility can be made, at the Company's option
and subject to certain limitations, in the form of loans or by the issuance of
bankers' acceptances with respect to inventory purchases. Loans under the
facility bear interest, at the Company's option, at either the lead bank's
prime lending rate plus a margin of .5% to 1.0% or the LIBOR rate plus a margin
of 1.25% to 2.0%, with the margin depending on the Company's leverage ratio.
Under the terms of the agreement, the Company is required to maintain certain
financial ratios and other financial conditions. The agreement prohibits the
Company from making certain investments, advances or loans, and limits the
dollar amounts of capital expenditures, purchases of treasury shares, cash
dividends and asset sales. In the event that the Company is in default of
certain provisions of the agreement, the lenders would be permitted to file
liens against the Company's inventory located in the United States and perfect
the pledge of 65% of the stock of the Company's Canadian subsidiary, thereby
securing the indebtedness.
The bank commitment is limited to 45% of saleable inventory. At February 1,
2003, the bank commitment was $46,020,000. Letters of credit totaling
$7,694,000 were outstanding under the facility, and $38,326,000 was available
for borrowings or additional letters of credit. Interest expense and negotiated
fees for Fiscal 2002, Fiscal 2001 and Fiscal 2000, totaled $617,000, $884,000
and $610,000, respectively.
NOTE 4 - INCOME TAXES
The components of the provision for domestic and foreign income taxes are shown
below (in thousands):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Income before income taxes:
Domestic $11,146 $5,447 $12,503
Foreign 1,129 619 1,897
$12,275 $6,066 $14,400
Provision (benefit) for income taxes:
Current:
Federal $5,065 $2,290 $3,950
Foreign 884 339 919
State and local 498 147 387
6,447 2,776 5,256
Deferred (prepaid):
Federal (1,303) (423) 389
Foreign 57 29 44
State and loca (143) (40) 66
(1,389) (434) 499
Total provision for income taxes $5,058 $2,342 $5,755
</TABLE>
The effective tax rate differs from the federal statutory tax rate for the
following reasons:
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2001 2003 2002
<S> <C> <C> <C>
Federal statutory tax rate 34.0% 34.0% 35.0%
Increase in effective tax rate
rate due to:
Foreign income taxes 4.5 2.6 2.1
State and local taxes,
net of federal income tax benefit 1.9 1.1 2.2
Other, net .8 .9 .7
Effective tax rate 41.2% 38.6% 40.0%
</TABLE>
<PAGE> 34
Deferred taxes reflect the net tax impact of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
amounts used for income tax purposes. Deferred tax assets (liabilities) are
comprised of the following (in thousands):
<TABLE>
<CAPTION>
February 1 February 2
2003 2002
<S> <C> <C>
Deferred tax liabilities ($1,426) ($1,279)
Deferred tax assets:
Accrued rent 2,374 2,617
Depreciation 2,998 2,391
Inventory valuation 1,625 2,014
Accrued insurance 1,270 813
Other 2,930 1,826
11,197 9,661
Net deferred tax assets $9,771 $8,382
Deferred tax assets, net of liabilities:
Current $4,322 $2,192
Non-current 5,449 6,190
Total $9,771 $8,382
</TABLE>
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Store, distribution and field office facilities and equipment are leased under
operating leases expiring through 2013. The store leases are generally based
upon a minimum rental plus a percentage of the store sales in excess of
specified levels. Store lease terms generally require additional payments
covering taxes, common area changes and certain other costs. Rental expense
for Fiscal 2002, Fiscal 2001 and Fiscal 2000 totaled $50,669,000, $47,366,000
and $45,137,000, respectively.
The minimum rental commitments for future fiscal years are as follows (in
thousands):
Fiscal
2003 $44,002
2004 33,224
2005 25,437
2006 23,502
2007 22,043
Thereafter 59,516
$207,724
On February 13, 2003, the Company agreed to settle a wage and hour lawsuit in
California. The action alleged that the Company had improperly classified its
California store managers as exempt from overtime pay and sought to recoup such
pay on behalf of the class. In order to avoid the expense of the litigation,
the Company agreed to settle the action for approximately $1,350,000, subject
to final documentation and judicial approval in due course. The settlement was
included in selling, general and administrative expenses during the Company's
Fiscal 2002 fourth quarter.
The Company has certain contingent liabilities resulting from litigation and
claims incident to the ordinary course of business. Management believes that
the probably resolution of such contingencies will not materially affect the
financial position or results of operations of the Company.
The Company is party to employment agreements with certain executives which
provide for compensation and certain other benefits. The agreements also
provide for severance payments under certain circumstances.
<PAGE> 35
NOTE 6 - EMPLOYEE BENEFIT PLANS
The Bombay Company, Inc. Employee 401(k) Savings and Stock Ownership Plan
("401(k) Plan") is open to substantially all employees who have been employed
for one year and who work at least 1,000 hours per year. Under the 401(k) Plan,
a participant may contribute up to 75% of earnings with the Company matching
100% of the initial 3% contribution, and 50% of the next 2% contributed by the
participant. Participant contributions and Company match are paid to a
corporate trustee and invested in various funds or Company stock, as directed
by the participant. Company matching contributions made to participants'
accounts are fully vested immediately. Similar benefit plans are in effect for
eligible foreign employees.
To the extent employees are unable to contribute up to 5% of their earnings to
the 401(k) Plan because of limitations imposed by IRS regulations, a
Supplemental Stock Program was adopted. Under this program, employee
contributions in excess of IRS limitations, along with Company matching
contributions, are distributed annually in the form of Company common stock.
The Bombay Company, Inc. Stock Purchase Program ("SPP") is open to all full-
time employees who have at least 90 days of service. Each participant may
contribute 1% to 10% of qualifying compensation, to a maximum annual
contribution of $21,250. Contributions are used to purchase shares of Company
common stock at a discount of 15% from current market rates. The participants'
shares are fully vested upon purchase. Participants` shares are held by a
third-party administrator until the respective participant requests a
distribution.
Total Company contributions to these plans for Fiscal 2002, Fiscal 2001 and
Fiscal 2000 were $723,000, $644,000 and $738,000, respectively.
NOTE 7 - COMMON STOCK AND STOCK OPTIONS
The Company's Board of Directors has authorized a stock repurchase program to
purchase up to an aggregate of $30 million of the Company's stock. The shares
may be purchased from time to time, through open market purchases and privately
negotiated transactions. During Fiscal 2002, Fiscal 2001 and Fiscal 2000,
13,000, 39,000 and 3,039,550 shares, respectively, were acquired at an
aggregate cost of $31,000, $103,000 and $10,303,000, respectively. Treasury
shares are used for various employee and director stock plans as the need
arises.
The Bombay Company, Inc. 1986 Stock Option Plan and 1996 Long Term Incentive
Stock Plan ("Employee Plans") provide for the granting of options (and other
types of stock-related awards under the 1996 plan) to officers and key
management employees. At February 1, 2003, the option shares reserved for the
Employee Plans were 5,678,763. The option price is fixed at the market price or
higher on the date of the grant. Options are generally exercisable annually at
a rate of 33% per year beginning one year after the grant date. Shares
available for additional grants were 2,432,019; 1,459,552 and 1,732,538 at
February 1, 2003, February 2, 2002 and February 3, 2001, respectively.
During Fiscal 2001, restricted stock aggregating 200,000 shares was granted
under the 1996 Long Term Incentive Stock Plan to three key executives. The
respective shares were to become vested in designated increments contingent
upon continued employment of the respective executive after 12 months, 24
months and 36 months. During Fiscal 2002, 40,000 of the shares became vested
and were distributed. Also in Fiscal 2002, two of the executives left the
employment of the Company and 120,000 restricted shares expired unvested. If
the third executive remains employed by the Company under the terms of the
grant, 15,000 and 25,000 shares will be vested in Fiscal 2003 and Fiscal 2004,
respectively. Compensation expense of $285,000 was recognized during Fiscal
2001, and in Fiscal 2002 net expenses of $87,000 were reversed in connection
with the restricted stock.
During Fiscal 2002, 75,000 shares of restricted stock were granted and issued
to the Chairman of the Board. One third of the shares vested upon his
acceptance of the position. Contingent upon continued Board service, one third
of the shares will become vested after 12 months and 24 months, respectively.
Compensation expense of $153,000 was recognized during Fiscal 2002 in
connection with the restricted stock. The Bombay Company, Inc. Non-Employee
Director Equity Plan ("Director Plan") provides for the granting of options to
members of the Board of Directors who are neither employees nor officers of the
Company. At February 1, 2003, the option shares reserved for the Director Plan
were 626,585. The option price is fixed at the market price on the date of the
grant. For Fiscal 2002, the option grant, initial and annual, was the lesser
of 8,000 shares or $75,000 in face value. The initial grant becomes exercisable
at a rate of 20% per year beginning one year after the grant date. Each
additional annual grant becomes fully exercisable six months after the grant
date. Shares available for additional grants were 325,196; 354,210 and 481,696
at February 1, 2003, February 2, 2002 and February 3, 2001 respectively.
<PAGE> 36
The Director Plan also allows directors the option to receive retainer and
meeting fees in the form of Company common stock or to defer receipt of such
fees. Deferred amounts are credited to an account for such director in units
equivalent to Company common stock.
The following table includes option information for the Employee Plans and
Director Plan:
<TABLE>
<CAPTION>
Weighted
Number Option Price Average
Stock Option Activity Of Shares Per Share Option Price
<S> <C> <C> <C>
January 29 , 2000 2,857,385 $3.60-25.75 $5.67
Options granted 1,027,500 1.75-5.00 3.77
Options cancelled (207,644) 2.50-15.88 4.61
February 3, 2001 3,677,241 1.75-25.75 5.20
Options granted 1,157,200 2.35-4.00 2.77
Options cancelled (603,856) 2.31-25.75 4.83
February 2, 2002 4,230,585 1.75-25.75 4.59
Options granted 1,200,388 2.38-5.02 2.71
Options exercised (595,703) 2.65-5.44 3.91
Options cancelled (1,547,000) 2.38-25.75 4.55
February 1, 2003 3,288,270 1.75-25.75 4.05
Exercisable at:
February 3, 2001 2,100,473 3.60-25.75 5.60
February 2, 2002 2,502,548 1.75-25.75 5.27
February 1, 2003 1,821,900 1.75-25.75 4.96
</TABLE>
The following table summarizes stock options outstanding at February 1, 2003:
<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
Weighted Weighted Weighted
Exercise Average Average Average
Price Remaining Exercise Exercise
Range Shares Life Price Shares Price
<S> <C> <C> <C> <C> <C>
$ 1.75-2.48 637,700 9.0 $2.37 30,343 $ 2.18
2.55-2.94 730,153 8.2 2.77 280,644 2.76
3.00-3.94 940,376 7.1 3.75 635,871 3.81
4.00-4.95 469,341 5.7 4.54 372,675 4.53
5.00-5.94 105,963 5.9 5.40 99,630 5.42
6.00-6.75 264,380 5.5 6.52 262,380 6.52
7.25-25.75 140,357 1.5 12.99 140,357 12.99
3,288,270 7.1 $4.05 1,821,900 $ 4.96
</TABLE>
The exercise of non-qualified stock options in Fiscal 2002 resulted in income
tax benefits of $155,000 which were credited to additional paid-in capital. The
income tax benefits are the tax effect of the difference between the market
price on the date of exercise and the option price.
<PAGE> 37
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock - Based
Compensation ("FAS 123"). Accordingly, no compensation cost has been recognized
for options granted. Had compensation cost for the Company's stock option plans
been determined based on the fair value at the grant date for awards in Fiscal
1995 through Fiscal 2002 in accordance with the provisions of FAS 123, the
Company's net income and earnings per share would have been reduced to the pro
forma amounts indicated below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Net income, as reported $7,217 $3,724 $8,645
Net income, pro forma 6,292 2,760 7,521
Basic earnings per share, as reported .22 .11 .26
Diluted earnings per share, as reported .22 .11 .26
Basic earnings per share, pro forma .19 .08 .23
Diluted earnings per share, pro forma .19 .08 .23
</TABLE>
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model based upon the following assumptions:
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Expected volatility 63.9% 59.9% 59.8%
Expected life years 6 6 6
Expected dividends
Risk-free interest rate 3.8-5.8% 5.0-5.5% 5.2-6.8%
</TABLE>
The weighted average fair value of options granted during Fiscal 2002, Fiscal
2001 and Fiscal 2000 was $1.71, $1.69 and $2.34, respectively.
NOTE 8 - SHAREHOLDERS' RIGHTS PLAN
The Company has a shareholders' rights plan under which each share of Company
common stock includes one Preferred Share Purchase Right ("Right") entitling
the holder to buy one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company at an exercise price of $50. The
Rights, which have ten year terms expiring in 2005, are exercisable if a person
or group acquires 15% or more of the common stock of the Company or announces a
tender offer for 15% or more of the common stock. If a person or group acquires
15% or more of the outstanding common stock of the Company, each Right will
entitle the holder to purchase, at the Right's exercise price, a number of
shares of Company common stock having a market value of twice the Right's
exercise price. If the Company is acquired in a merger or other business
combination transaction after a person or group acquires 15% or more of the
Company's common stock, each Right will entitle its holder to purchase, at the
Right's exercise price, a number of shares of the acquiring company's common
stock having a market value of twice the Right's exercise price. The Rights are
redeemable at one cent per Right at any time before they become exercisable.
<PAGE> 38
NOTE 9 - STOCK PURCHASE LOANS
On May 16, 2002, the Board of Directors elected to abolish the Company's
Executive Stock Loan Program, which originated in August 1999. Under the
program, certain executive officers were given the opportunity to borrow funds
for up to specified amounts to be used to purchase shares of Company common
stock at current market prices. All principal and accrued interest on the loans
were payable at the end of a three year term. The loans were not collateralized
by the common stock, but the program provided that if any of the shares were
sold within three years following the date of purchase, any sales proceeds per
share over the purchase price per share would be payable to the Company unless
at the time of the sale all principal and accrued interest on the loan used to
purchase the common stock had been paid to the Company.
As of May 16, 2002, participants owned 189,031 shares of Company common stock
purchased under the program. The Company reacquired, at current market prices
aggregating $864,000, the Company common stock that was previously purchased by
the executive officers under the program, and the notes were extinguished.
Amounts owed to the Company or the participants as a result of the difference
between the market value of the stock and the loan balance plus accrued
interest have been paid in full.
During Fiscal 2002, Fiscal 2001 and Fiscal 2000, $17,000, $53,000 and $60,000
respectively, in interest income was recognized related to the loans.
NOTE 10 - GEOGRAPHIC AREAS
The Company operates primarily in one industry segment, specialty retailing.
Substantially all revenues result from the sale of home furnishings and
accessories through retail stores in the United States and Canada. Long-lived
assets include all non-current assets except deferred taxes.
The following table shows net revenues and long-lived assets by geographic area
(in thousands):
<TABLE>
<CAPTION>
Year Ended
February 1 February 2 February 3
2003 2002 2001
<S> <C> <C> <C>
Net revenues:
United States $442,339 $388,789 $375,275
Canada 51,661 48,668 48,184
Total $494,000 $437,457 $423,459
Long-lived assets
United States $46,201 $51,367 $53,448
Canada 4,040 4,226 4,006
Total $50,241 $55,593 $57,454
</TABLE>
<PAGE> 39
<TABLE>
UNAUDITED QUARTERLY FINANCIAL DATA
The Bombay Company, Inc. and Subsidiaries
(In thousands, except per share amounts)
Unaudited quarterly financial data for the quarters ended:
<CAPTION>
February 1 November 2 August 3 May 4
2003 2002 2002 2002
<S> <C> <C> <C> <C>
Net sales $189,264 $113,841 $100,040 $90,855
Gross profit 65,266 32,870 23,885 22,380
Net income (loss) 13,841 84 (3,276) (3,432)
Basic earnings (loss)
per share .41 - (.10) (.10)
Diluted earnings (loss)
per share .41 - (.10) (.10)
<CAPTION>
February 2 November 3 August 4 May 5
2002 2001 2001 2001
<S> <C> <C> <C> <C>
Net sales $152,506 $96,945 $97,030 $90,976
Gross profit 51,150 25,156 24,180 23,487
Net income (loss) 11,673 (2,233) (2,680) (3,036)
Basic earnings (loss)
per share .35 (.07) (.08) (.09)
Diluted earnings (loss)
per share .35 (.07) (.08) (.09)
</TABLE>
<PAGE> 40
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Filed with the Annual Report on Form 10-K for the fiscal year ended
February 1, 2003.
Number Description
3(a) - Restated Certificate of Incorporation dated January 1, 1993 and
Certificate of Amendment of the Restated Certificate of Incorporation
dated March 31, 1993. (1)
3(b) - Bylaws, as amended and restated effective May 21, 1997. (9)
4(a) - Preferred Stock Purchase Rights Plan. (2)
4(b) - Amendment to Preferred Stock Purchase Rights Plan.
10(a) - Form of Indemnification Agreement.
10(b) - The Bombay Company, Inc. Supplemental Stock Program. (3)
10(c) - Executive Long Term Disability Plan. (4)
10(d) - The Bombay Company, Inc. 1996 Long-Term Incentive Stock Plan. (5)
10(e) - Form of Award Agreement under the 1996 Long-Term Incentive Stock
Plan. (7)
10(f) - The Bombay Company, Inc. Amended and Restated 2001 Non-Employee
Directors' Equity Plan. (9)
10(g) - Form of Agreement used to evidence stock option grants under The
Bombay Company, Inc. Amended and Restated 2001 Non-Employee
Directors' Equity Plan. (9)
10(h) - Executive Management Incentive Compensation Plan. (11)
10(i) - Employment Contract with Executive Officer. (7)
10(j) - Employment Letters with Executive Officers. (8)
10(k) - Employment Letter with Executive Officer. (10)
10(l) - Employment Letter with Executive Officer. (10)
10(m) - Employment Letter with Executive Officer. (10)
10(n) - Agreement with Chairman of the Board of Directors.
10(o) - Restricted Stock Agreement with the Chairman of the Board of
Directors.
10(p) - Amended and Restated Credit Agreement among The Bombay Company, Inc.,
as Borrower, Bank of America, N.A., as Administrative Agent, Swing
Line Lender, and L/C Issuer, and the Other Lenders Party Hereto,
dated July 5, 2002. (10)
21 - Subsidiaries of the Registrant. (8)
<PAGE> 41
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS (CONT.)
Number Description
22 - Definitive Proxy Statement of the Company relating to Annual Meeting
of Shareholders (certain portions of such Proxy Statement are
incorporated herein by reference and are identified by reference to
caption in the text of this report). (11)
23 - Consent of Independent Accountants.
99 - Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
________________
<FN>
(1)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended July 4, 1993. Such Exhibit is incorporated
herein by reference.
(2)Filed with the Commission as an Exhibit to the Company's Registration
Statement on Form 8A filed June 12, 1995. Such Exhibit is incorporated
herein by reference.
(3)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended June 28, 1992. Such Exhibit is incorporated
herein by reference.
(4)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended July 3, 1994. Such Exhibit is incorporated
herein by reference.
(5)Filed with the Commission as an Exhibit to the Company's Definitive Proxy
Statement dated April 3, 1996, which Proxy
Statement was filed with the Commission as an Exhibit to the Company's
Annual Report on
Form 10-K for the year ended February 3, 1996. Such Exhibit is incorporated
herein by reference.
(6)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 31, 1998. Such Exhibit is incorporated
herein by reference.
(7)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 30, 1999. Such Exhibit is incorporated
herein by reference.
(8)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 29, 2000. Such Exhibit is incorporated
herein by reference.
(9)Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 2, 2002. Such Exhibit is incorporated
herein by reference.
(10)Filed with the Commission as an Exhibit to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended August 3, 2002.
(11)Filed with the Commission on April 10, 2003.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>ex4b-amendmnttorightsagrmt.txt
<DESCRIPTION>EX 4(B) - AMENDMENT TO STOCK PURCHASE RIGHTS PLAN
<TEXT>
EXHIBIT 4(b)
AMENDMENT TO RIGHTS AGREEMENT
1. GENERAL BACKGROUND. In accordance with Section 27 of the Rights
Agreement between FLEET BANK, N.A. F/K/A BANKBOSTON, N.A. (the "Rights
Agent") and THE BOMBAY COMPANY, INC. ("COMPANY") dated June 1, 1995
(the "Agreement"), the Rights Agent and The Bombay Company desire to
amend the Agreement to appoint EquiServe Trust Company, N.A.
2. EFFECTIVENESS. This Amendment shall be effective as of
February 21, 2002 (the "Amendment") and all defined terms and
definitions in the Agreement shall be the same in the Amendment except
as specifically revised by the Amendment.
1. REVISION. The section in the Agreement entitled "Change of Rights Agent"
is hereby deleted in its entirety and replaced with the following:
Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred shares by registered or
certified mail and to the holders of the Right Certificates by first-
class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-
class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit such
holder's Right Certificate for inspection by the company), then the
registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation or trust company organized and doing
business under the laws of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has individually or combined with an affiliate at
the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million dollars. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
4. Except as amended hereby, the Agreement and all schedules or exhibits
thereto shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in their names and on their behalf by and through their duly
authorized officers, as of this 22nd day of February, 2002.
THE BOMBAY COMPANY, INC. FLEET BANK, N.A. F/K/A BANK BOSTON, N.A.
/s/ MICHAEL J. VEITENHEIMER /s/ CAROL MULVEY-EORI
___________________________ ___________________________
By: Michael J. Veitenheimer By: Carol Mulvey-Eori
Title: Vice President, Secretary Title: Managing Director,
and General Counsel Client Administraton
EQUISERVE TRUST COMPANY, N.A.
/s/ CAROL MULVEY-EORI
__________________________
By:
Title: Managing Director,
Client Administration
C:\WINDOWS\Temporary Internet Files\OLK22D0\EquiServe--Amendmnt to Rights
Agrmt.doc
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10a-indemnificationagmt.txt
<DESCRIPTION>EX 10(A) - FORM OF INDEMNIFICATION AGREEMENT
<TEXT>
EXHIBIT 10(a)
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of
______________, 2003 ("Agreement"), by and between The Bombay Company, Inc., a
Delaware corporation ("Company"), and ________________________________
("Indemnitee").
RECITALS:
WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or officers or in other capacities
unless they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to, and activities on behalf of, the corporation;
this is because such persons in service to corporations are being increasingly
subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the
corporation or business enterprise itself; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that, to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities; and
WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the
future; and
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance expenses on
behalf of, such persons to the fullest extent permitted by applicable law so
that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of the
Bylaws of the Company and any resolutions adopted pursuant thereto, and shall
not be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder; and
WHEREAS, each of Section 145 of the General Corporation Law of the State
of Delaware ("DGCL") and the Bylaws is nonexclusive, and therefore contemplates
that contracts may be entered into with respect to indemnification of
directors, officers and employees; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee hereby covenant and agree as
follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to continue to serve as
a director or officer of the Company. Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual obligation
or any obligation imposed by operation of law), in which event the Company
shall have no obligation under this Agreement to continue Indemnitee in such
position. This Agreement shall not be deemed an employment contract between
the Company (or any of its subsidiaries) and Indemnitee. This Agreement shall
continue in force after Indemnitee has ceased to serve as a director or officer
of the Company.
2. INDEMNIFICATION - GENERAL. The Company shall indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (i) as provided in
this Agreement and (ii) to the fullest extent permitted by applicable law in
effect on the date hereof and as amended from time to time. The rights of
Indemnitee provided under the preceding sentence shall include, but shall not
be limited to, the rights set forth in the other Sections of this Agreement.
3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY. Indemnitee shall be indemnified under this Section 3 if, by reason of
Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to
be made, a party to or a participant in any threatened, pending, or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified
against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on behalf of
Indemnitee in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in Good Faith and in a manner reasonably believed
to be in or not opposed to the best interests of the Company and, with respect
to any criminal Proceeding, had no reasonable cause to believe the conduct was
unlawful.
4. PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. Indemnitee shall be
indemnified under this Section 4 if, by reason of Corporate Status, Indemnitee
is, or is threatened to be made, a party to or a participant in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection with such Proceeding if
Indemnitee acted in Good Faith and in a manner reasonably believed to be in or
not opposed to the best interests of the Company; provided that if applicable
law so provides, no indemnification against such Expenses shall be made in
respect of any claim, issue or matter in such Proceeding as to which Indemnitee
shall have been adjudged to be liable to the Company unless and to the extent
that the Court of Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine that such
indemnification may be made.
5. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in any
Proceeding (including dismissal without prejudice), Indemnitee shall be
indemnified to the maximum extent permitted by law against all Expenses
actually and reasonably incurred by Indemnitee or on behalf of Indemnitee in
connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection with each successfully
resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
6. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on behalf of Indemnitee in connection
therewith; provided that Indemnitee shall not be paid for time spent as such.
7. ADVANCEMENT OF EXPENSES. Notwithstanding any provision of this
Agreement to the contrary, the Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding in
which Indemnitee is involved by reason of Indemnitee's Corporate Status within
10 days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee. Indemnitee
hereby undertakes to repay any Expenses advanced if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 7
shall be unsecured and interest free.
8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 8(a), a determination, if required by applicable
law, with respect to Indemnitee's entitlement thereto shall be made in the
specific case, unless Indemnitee and the Company agree otherwise, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board,
a copy of which shall be delivered to Indemnitee; and, if it is determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within 10 days after such determination. Indemnitee shall cooperate with the
person, persons or firm making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
firm upon reasonable advance request any documentation or information that is
not privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or firm making such
determination shall be paid by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) The Independent Counsel referred to in Section 8(b) shall be
selected as provided in this Section 8(c). The Independent Counsel shall be
selected by the Board, and the Company shall give written notice to Indemnitee
advising of the identity of the Independent Counsel so selected. Within 10
days after such written notice of selection shall have been given, Indemnitee
may deliver to the Company a written objection to such selection; provided that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of "Independent Counsel" as defined
in Section 17, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If such written objection is so
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 8(a),
no Independent Counsel shall have been selected and not objected to, Indemnitee
may petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection that shall have been
made by Indemnitee to the Company's selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person with respect to
whom all objections are so resolved or the person so appointed shall then act
as Independent Counsel under Section 8(b). Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 10(a), Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).
(d) The Company shall not be required to obtain the consent of
Indemnitee to the settlement of any Proceeding the Company has undertaken to
defend if the Company assumes full and sole responsibility for such settlement
and the settlement grants Indemnitee a complete and unqualified release in
respect of the potential liability. The Company shall not be liable for any
amount paid by the Indemnitee in settlement of any Proceeding that is not
defended by the Company, unless the Company has consented to such settlement,
which consent shall not be unreasonably withheld.
9. PRESUMPTIONS; RELIANCE AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or firm making such
determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a), and the Company shall have the burden of proof
to overcome that presumption by clear and convincing evidence in connection
with the making by any person, persons or firm of any determination contrary to
that presumption. Neither the failure of Independent Legal Counsel to have
made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination thereby that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or firm empowered under Section 8 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within 60 days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law; provided that
such 60-day period may be extended for a reasonable time, not to exceed an
additional 30 days, if the person, persons or firm making the determination
with respect to entitlement to indemnification in good faith requests in
writing such additional time for the obtaining or evaluating of documentation
and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in Good
Faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe the conduct was unlawful.
(d) For purposes of any determination of Good Faith, Indemnitee shall
be deemed to have acted in Good Faith if Indemnitee's action is based on the
records or books of account of the Enterprise, including financial statements,
or on information supplied to Indemnitee by the officers, agents or employees
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made
to the Enterprise by an independent certified public accountant or by an
appraiser, financial advisor or other expert or professional selected with
reasonable care by the Enterprise. The provisions of this Section 9(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
10. REMEDIES OF INDEMNITEE.
(a) If (i) a determination is made pursuant to Section 8 that
Indemnitee is not entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 7, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 8(b) within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Section 5, Section 6, the last sentence of Section 8(b) or the last sentence of
Section 17(f) within 10 days after receipt by the Company of a written request
therefor, or (v) payment of indemnification pursuant to Section 3 or Section 4
is not made within 10 days after a determination has been made that Indemnitee
is entitled to indemnification, Indemnitee shall be entitled to an adjudication
by the Court of Chancery of the State of Delaware of entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to
this Section 10(a); provided that the foregoing clause shall not apply in
respect of a proceeding brought by Indemnitee to enforce rights under Section
5. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
(b) If a determination shall have been made pursuant to Section 8(b)
that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee shall
not be prejudiced by reason of that adverse determination.
(c) If a determination shall have been made pursuant to Section 8(b)
that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Section 10, absent (i) a misstatement by Indemnitee of a material fact,
or an omission of a material fact necessary to make Indemnitee's statements not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 17 of this Agreement) actually and reasonably incurred by Indemnitee in
such judicial adjudication or arbitration unless it shall be finally determined
by the court or arbitrator before which such claim was brought that it was
brought in bad faith. Even if it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advancement of Expenses sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be paid in full.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and hereby stipulates, and shall so stipulate in any such court or
before any such arbitrator, that the Company is bound by all the provisions of
this Agreement.
11. NONEXCLUSIVITY; INSURANCE; SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Company's Certificate of Incorporation, the Company's Bylaws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise.
No amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee with respect to Corporate
Status prior to such amendment, alteration or repeal. To the extent that a
change in the DGCL, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded currently
under the Company's Certificate of Incorporation, Bylaws and this Agreement, it
is the agreement and intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change. No right or
remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy
or policies.
(c) In the event of any payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and take all action
necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is
provided hereunder) hereunder if and to the extent that Indemnitee has
otherwise theretofore actually received such payment under any insurance
policy, contract, agreement or otherwise.
(e) The Company's obligation to indemnify or advance Expenses hereunder
to Indemnitee who is or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise shall be
reduced by any amount Indemnitee has actually theretofore received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
12. DURATION OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of: (i) 10 years after the date that Indemnitee shall
have ceased to serve as a director or officer of the Company (or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee served at the request of the Company); or (ii) the
final termination of any Proceeding then pending in respect of which Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and
of any proceeding commenced by Indemnitee pursuant to Section 10 relating
thereto. This Agreement shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of Indemnitee and his or her heirs,
executors and administrators.
13. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (i) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation each portion of any
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (ii) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including without limitation each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
14. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES.
Notwithstanding any other provision of this Agreement, but subject to Section
10, Indemnitee shall not be entitled to indemnification or advancement of
Expenses under this Agreement with respect to any Proceeding brought by
Indemnitee, or any claim therein, unless the bringing of such Proceeding or
making of such claim shall have been approved by the Board.
15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
16. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
17. DEFINITIONS. For purposes or this Agreement:
(a) "Affiliate" means with respect to any person or entity, any other
person or entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with,
such person or entity.
(b) "Corporate Status" describes the status of a person who is or was a
director, officer, employee or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the request of the Company.
(c) "Enterprise" shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel and
lodging expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, supersedeas bonds, and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a Proceeding.
(e) "Good Faith" shall mean Indemnitee having acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding, having
had no reasonable cause to believe Indemnitee's conduct was unlawful.
(f) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or any
Affiliate thereof or Indemnitee (other than with respect to matters concerning
the Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term "Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement. The Company shall promptly
pay the reasonable fees and expenses of the Independent Counsel referred to
above and shall fully indemnify such counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(g) "Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Company or otherwise and
whether civil, criminal, administrative or investigative, in which Indemnitee
was, is or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any
action taken by Indemnitee or of any inaction on the part of Indemnitee while
acting as director or officer of the Company, or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, in each case whether or not Indemnitee is acting or
serving in any such capacity at the time any liability or expense is incurred
for which indemnification or advancement of expenses can be provided under this
Agreement; except one initiated by a Indemnitee pursuant to Section 10 to
enforce his or her rights under this Agreement.
(h) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Company" shall include any service as a director, officer, employee or agent of
the Company that imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, as
participants or beneficiaries; and a person who acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in Good Faith.
1. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to continue to serve as a director and/or officer of the
Company, and to serve upon any committee of the Board as requested by the
Board, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director and/or officer of the Company and a member
of any such committee.
(a) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the
parties hereto with respect to the subject matter
hereof.
(b) The right to be indemnified or to receive advancement
of Expenses under this Agreement (i) is a contract
right based upon good and valuable consideration,
pursuant to which Indemnitee may sue, (ii) is and is
intended to be retroactive to the date Indemnitee
became a director or officer of the Company and shall
be available as to events occurring prior to the date
of this Agreement and (iii) shall continue after any
rescission or restrictive modification of this
Agreement as to events occurring prior thereto.
19. MODIFICATION AND WAIVER. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver.
20. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation it may have to the Indemnitee under
this Agreement or otherwise, except to the extent the Company is materially
prejudiced by such failure.
21. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
(i) delivered by hand and receipted for by the party to whom the notice or
other communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
with a copy to:
(b) If to the Company, to:
The Bombay Company, Inc.
550 Bailey Avenue, Suite 700
Fort Worth, Texas 76107
Attention: Corporate Secretary
or to such other address as may have been furnished to the Company by
Indemnitee or to Indemnitee by the Company, as the case may be.
22. CONTRIBUTION. To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as
a result of the event(s) and/or transaction(s) giving rise to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
23. GOVERNING LAW; SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR
SERVICE OF PROCESS. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware, without regard to its conflict of laws rules. Except
with respect to any arbitration commenced by Indemnitee pursuant to Section
10(a), the Company and Indemnitee hereby irrevocably and unconditionally (i)
agree that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Chancery Court of the State of Delaware
(the "Delaware Court"), and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to and
submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii)
agree that service to their respective addresses referenced herein, as amended
from time to time, is good service of process, (iv) waive any objection to the
laying of venue of any such action or proceeding in the Delaware Court, and (v)
waive, and agree not to plead or to make, any claim that any such action or
proceeding brought in the Delaware Court has been brought in an improper or
otherwise inconvenient forum.
24. MISCELLANEOUS. All references in this Agreement to Sections shall
be deemed to be references to Sections of this Agreement unless the context
indicates otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
The Bombay Company, Inc.
/s/ Michael J. Veitenheimer
By:
Name: Michael J. Veitenheimer
Title: Vice President, Secretary and
General Counsel
Indemnitee:
Exhibit "A"
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10n-jdcemploymentagrmt.txt
<DESCRIPTION>EX 10(N) - AGREEMENT WITH CHAIRMAN OF BOD
<TEXT>
1 EXHIBIT 10(n)
December 10, 2002
Mr. James D. Carreker
5930 Desco Drive
Dallas, TX 75225
Dear Jim:
I am very pleased and excited by our conversations to date and would like to
offer you the opportunity to join The Bombay Company, Inc. ("Bombay" or
"Company") as Non-Executive Chairman of the Board. We believe Bombay has
tremendous potential, and that you have skill sets complementary to the
existing Board of Directors and management team that would help maximize the
potential of the Company. With this letter, I would like to formalize the
offered terms of employment we have discussed.
1. Title - Non-Executive Chairman of the Board of Directors, The
Bombay Company, Inc.
2. Reporting - This role will report into the Board of Directors.
3. Term and Commitment - Three years based upon shareholder election
in May 2003, plus the interim period prior to the shareholder vote.
It is expected that this position will require an initial
commitment of approximately two days per week.
4. Annual Cash Retainer - $100,000 paid quarterly in arrears.
5. Restricted Stock Grant - 75,000 shares of Bombay stock, to be
awarded at the rate of 25,000 shares at the time of election and
25,000 shares per year on each of the next two anniversaries of
this agreement.
6. Annual Stock Option Grant - 20,000 stock options will be awarded on
election to the Board and thereafter annually in March of each year
during service on the Board. The option grant at election vests
20% per year over a five-year period and the annual option grant
vests six months following the grant.
As we have discussed, we would like to see you start as soon as possible in
December 2002, with an understanding that you will need to terminate your
position as Director of Pier1 Imports.
To indicate your agreement with and acceptance of the terms of our offer,
please sign this letter and return to me at your earliest convenience. We will
then work through a complete contract as a next step.
On behalf of The Bombay Company, we look forward to working with you to build
an exciting value proposition for our customers and wealth creation for our
shareholders.
Sincerely,
/s/ Nigel Travis
Nigel Travis
Chairman, Governance and Nominations
Committee of the Board of Directors,
The Bombay Company, Inc.
ACCEPTED AND AGREED TO IN ITS ENTIRETY:
/s/ James D. Carreker 12-11-02
Signature Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>ex10o-jdcresstockagrmt.txt
<DESCRIPTION>EX 10(O) - RESTRICTED STOCK AGREEMENT WITH CHAIRMAN OF BOD
<TEXT>
EXHIBIT 10(o)
THE BOMBAY COMPANY, INC.
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement"), is made as of the 16th
day of December, 2002 (the "Effective Date"), by and between The Bombay
Company, Inc., a Delaware corporation (the "Company"), and James D. Carreker
("Director");
RECITALS:
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is desirable to award shares of the Company's common stock,
par value $1.00 per share ("Common Stock"), held in the Company's treasury to
Director in connection with Director's appointment as Chairman of the Board;
and
WHEREAS, the Board has determined that the Common Stock so awarded shall
be subject to the restrictions, terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. RESTRICTED STOCK AWARD.
(a) On the terms and conditions of this Agreement, the Company shall
issue to Director 75,000 shares of Common Stock (the "Shares") from the
treasury stock of the Company; provided that 50,000 of the Shares shall be
subject to the restrictions on transfer hereinafter set forth (the "Restricted
Shares"). The remaining 25,000 Shares shall not be restricted (the
"Unrestricted Shares") and Director shall be free to sell, transfer, assign,
pledge or otherwise dispose of such Shares, subject to applicable securities
laws and the policies of the Company then in effect.
(b) Director hereby agrees that the certificates representing the
Restricted Shares shall be held in escrow by the Company until the restrictions
on transfer hereinafter set forth lapse as set forth herein.
2. VESTING/FORFEITURE.
(a) Director shall not have the right to sell, transfer, assign, pledge
or otherwise dispose of the Restricted Shares (the "Restrictions"), except that
the Restrictions shall be removed as to 25,000 of the Restricted Shares on each
anniversary of the Effective Date until the Restrictions have been removed as
to all Restricted Shares; provided that the removal of the Restrictions on any
such anniversary date shall occur if and only if Director is on such date a
director of the Company. Following removal of the Restrictions on any
Restricted Shares, the Company shall deliver to Director from escrow a
certificate representing such Restricted Shares and Director shall be free to
sell, transfer, assign, pledge or otherwise dispose of such Restricted Shares,
subject to applicable securities laws and the policies of the Company then in
effect.
(b) Subject to the provisions of paragraph (c) of this Section, upon
termination of Director's service on the Board for any reason whatsoever, (i)
Director shall have no rights whatsoever in and to any of the Restricted Shares
as to which the Restrictions have not by that time been removed pursuant to the
foregoing paragraph, (ii) all such Restricted Shares shall revert to the
Company at no cost and (iii) neither Director nor any of his heirs,
beneficiaries, executors, administrators or other personal representatives
shall have any rights with respect thereto.
(c) All Restrictions with respect to the Restricted Shares shall
terminate upon (i) Director's death while serving on the Board or (ii) the
occurrence of a Change of Control (as defined below).
(d) For purposes of this Agreement, a "Change of Control" of the
Company, unless otherwise determined by the Board, shall be deemed to have
occurred upon the happening of any of the following events:
(i) the acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (the "Exchange Act")) of beneficial
ownership of 20% or more of either the then outstanding shares of Common Stock
of the Company or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; provided, however, that any acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of the Company or
its subsidiaries, or any corporation with respect to which following such
acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Common Stock and voting securities of
the Company immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
then outstanding shares of Common Stock of the Company or the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors, as the case may be, shall not
constitute a Change of Control; or
(ii) individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to such date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company (as such terms are used in rule 14a-11
of Regulation 14A promulgated under the Exchange Act); or
(iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation of the Company, in each case, with
respect to which the individuals and entities who were the respective
beneficial owners of the Common Stock and voting securities of the Company
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of Common Stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the Company or of
the sale or other disposition of all or substantially all of the assets of the
Company.
3. RIGHTS AS STOCKHOLDER. Subject to the terms hereof, Director is
for all purposes the record and beneficial owner of the Shares. Director is
entitled to vote the Shares at all meetings of stockholders and is entitled to
receive and retain all dividends that may be paid with respect to the Shares.
If and to the extent the Company shall effect a stock split, stock dividend or
similar distribution with respect to the Common Stock, (i) the stock
distributed pursuant thereto shall be held by the Company with respect to those
Restricted Shares as to which the Restrictions have not yet been removed
pursuant to Section 2; (ii) such additional stock shall enjoy the privileges
and be subject to the Restrictions applicable to the Restricted Shares; and
(iii) Director shall be entitled to sell, transfer, assign, pledge or otherwise
dispose of such additional stock when the Restrictions on the Restricted Shares
to which the distribution relates have been removed pursuant to Section 2.
4. ADJUSTMENTS. In the event of any reorganization, recapitalization,
stock split, stock dividend, merger, consolidation, combination of shares or
other change affecting the Common Stock, the Board shall make such adjustments
as it may deem appropriate with respect to the Shares. Any such adjustment
made by the Board shall be conclusive.
5. WITHHOLDING TAXES.
(a) No later than the date of the issuance of the Unrestricted Shares,
Director will pay to the Company, or make arrangements satisfactory to the
Company with respect to the payment of, any federal, state or local taxes of
any kind required by law to be withheld with respect to the Unrestricted
Shares.
(b) Director may make an election under Section 83(b) of the Internal
Revenue Code (an "83(b) Election"), within 30 days after the Effective Date, to
realize income for federal income tax purposes equal to the fair market value
of the Restricted Shares as of the Effective Date. In such event, Director
shall make arrangements satisfactory to the Company to pay in the calendar year
that includes the Effective Date any federal, state or local taxes required to
be withheld with respect to the Restricted Shares. If Director makes an 83(b)
Election, he shall provide notice to the Company by providing the Secretary of
the Company a copy of the Section 83(b) Election filed with the Internal
Revenue Service concurrently with the filing of same.
(c) In the event that Director does not make an 83(b) Election, then no
later than the date of the removal or termination of the Restrictions on any of
the Restricted Shares as set forth herein, Director will pay to the Company, or
make arrangements satisfactory to the Company with respect to the payment of,
any federal, state or local taxes of any kind required by law to be withheld
with respect to the Restricted Shares with respect to which the Restrictions
have been removed or have terminated.
(d) Any provision of this Agreement to the contrary notwithstanding, if
Director does not satisfy his obligation under paragraphs (a), (b) or (c) of
this Section, the Company shall, to the extent permitted by law, have the right
to deduct from any payments of any kind otherwise due from the Company or its
subsidiaries to or with respect to Director, whether or not pursuant to this
Agreement or otherwise and regardless of the form of payment, any federal,
state or local taxes of any kind required by law to be withheld with respect to
the Shares.
6. NO RIGHT TO CONTINUE AS A DIRECTOR. This Agreement does not
constitute evidence of any agreement or understanding, express or implied, that
the Company will retain Director as a director for any period of time or at any
particular rate of compensation.
7. INVESTMENT REPRESENTATIONS.
(a) The Shares are being received for Director's own account with the
intent of holding them and without the intent of participating, directly or
indirectly, in a distribution of such Shares and not with a view to, or for
resale in connection with, any distribution of such Shares or any portion
thereof.
(b) Director understands that the offering and issuance of the Shares
will not have been registered pursuant to the Securities Act of 1933 (the
"Securities Act") or any applicable state securities laws, that the Shares will
be characterized as "restricted securities" under federal securities laws, and
that under such laws and applicable regulations the Shares cannot be sold or
otherwise disposed of without registration under the Securities Act or an
exemption therefrom. In this regard, Director represents that he is familiar
with Rule 144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
(c) A legend indicating that the offering and issuance of the Shares
have not been registered under applicable federal and state securities laws and
referring to the restrictions on transferability of the Shares pursuant to this
Agreement may be placed on any certificate(s) or other document delivered to
Director or any substitute therefor and any transfer agent of the Company shall
be instructed to require compliance therewith.
8. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns; provided that Director shall
not assign or otherwise transfer this Agreement or any of Director's rights or
obligations hereunder.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, whether written or
oral, between the parties with respect to the subject matter hereof. To the
fullest extent provided by applicable law, this Agreement may be amended,
modified and supplemented by mutual consent of the parties hereto at any time,
with respect to any of the terms contained herein, in such manner as may be
agreed upon in writing by such parties.
11. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.
12. COUNTERPARTS. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the Company and Director have executed this Agreement
as of the date first above written.
THE BOMBAY COMPANY, INC.
/s/ MICHAEL J. VEITENHEIMER
By:
Name: Michael J. Veitenheimer
Title:Vice President, Secretary & General
Counsel
/s/ JAMES D. CARREKER
James D. Carreker
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>7
<FILENAME>ex23-consent.txt
<DESCRIPTION>EX 23 - CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statementson Form S-8 (No. 33-02028, 33-32610, 33-40736, 33-40743, 33-51076,
33-55306, 333-39057, 333-82758, 333-96357 and 333-99561) of The Bombay
Company, Inc. of our report dated March 11, 2003 relating to the financial
statements, which appears in this Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Fort Worth, Texas
April 17, 2003
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>8
<FILENAME>ex99-906certifications.txt
<DESCRIPTION>EX 99 - SECTION 906 CERTIFICATIONS
<TEXT>
EXHIBIT 99
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of The Bombay Company, Inc. (the
"Company") on Form 10-K for the year ended February 1, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), each of
the undersigned, certify, pursuant to 18 U.S.C. section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
their knowledge:
(1) The Report fully complies with the requirements of section 13(a)or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ BRIAN N. PRIDDY /s/ ELAINE D. CROWLEY
- ----------------------------- ------------------------------
Brian N. Priddy Elaine D. Crowley
Executive Vice President, Operations Senior
Vice President, Chief Financial
Chairman, Executive Committee* Officer and Treasurer
Date: April 16, 2003 Date: April 16, 2003
A signed original of this written statement required by Section 906 has been
provided to The Bombay Company, Inc. and will be retained by The Bombay
Company, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.
* On August 20, 2002, the Company announced the resignation of its Chairman,
President and Chief Executive Officer. An Executive Committee of management
has been appointed to direct the Company's business until a new Chief Executive
Officer is named.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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