SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. __)
[x] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for the Use of
[x] Definitive Proxy Statement the Commission Only (as
[ ] Definitive Additional Materials permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
WEINER'S STORES, INC.
---------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
WEINER'S STORES, INC.
6005 WESTVIEW DRIVE
HOUSTON, TX 77055
(713) 688-1331
------------------------------------------------------------------------
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JUNE 10, 1999
----------------------------
TO THE STOCKHOLDERS OF
WEINER'S STORES, INC. :
Notice is hereby given that the Annual Meeting of Stockholders of
Weiner's Stores, Inc. (the "Company") will be held at the executive offices of
the Company, 6005 Westview Dr., Houston, Texas, on Thursday, June 10, 1999 at
8:30 A.M. local time (the "Annual Meeting"), for the following purposes:
1. To elect the six members of the Board of Directors, each to serve
until the next annual meeting of stockholders and until their
respective successors are elected and qualified or until their earlier
resignation or removal;
2. To ratify the appointment of independent auditors for the Company and
its subsidiary for the fiscal year ending January 29, 2000; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The accompanying Proxy Statement contains further information with respect to
these matters.
The Company has fixed the close of business on April 15, 1999 as the record date
for determining stockholders entitled to notice of, and to vote at, the Annual
Meeting and any adjournments thereof. Stockholders who execute proxies solicited
by the Board of Directors of the Company retain the right to revoke them at any
time; unless so revoked, the shares of Common Stock of the Company represented
by such proxies will be voted at the Annual Meeting in accordance with the
directions given therein. If a stockholder does not specify a choice on such
stockholder's proxy, the proxy will be voted FOR the nominees for director named
in the attached Proxy Statement and FOR the ratification of the appointment of
the independent auditors for the Company and its subsidiary named in such Proxy
Statement. The list of stockholders of the Company may be examined at the
offices of the Company at 6005 Westview Drive, Houston, Texas 77055.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED
FOR MAILING IN THE UNITED STATES. THE PROXY IS REVOCABLE AND WILL NOT BE USED IF
YOU ARE PRESENT AT THE ANNUAL MEETING AND PREFER TO VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
Raymond J. Miller
Secretary
April 30, 1999
1
<PAGE>
WEINER'S STORES, INC.
6005 WESTVIEW DRIVE
HOUSTON, TX 77055
(713) 688-1331
---------------------------------------------------------
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 10, 1999
This Proxy Statement is being furnished by the Board of Directors (the
"Board" or "Board of Directors") of Weiner's Stores, Inc., a Delaware
corporation (the "Company"), 6005 Westview Drive, Houston, TX 77055, in
connection with the solicitation of proxies by the Board from stockholders for
the Annual Meeting of Stockholders of the Company to be held on June 10, 1999,
at 8:30 A.M. local time at the executive offices of the Company, 6005 Westview
Dr., Houston, Texas, or any adjournments or postponements thereof (the "Annual
Meeting"). At the Annual Meeting, the presence in person or by proxy of the
holders of a majority of the total number of outstanding shares of the Company's
common stock, par value $.01 per share ("Common Stock"), entitled to vote
thereat will be necessary to constitute a quorum.
The Company has fixed the close of business on April 15, 1999 as the
record date (the "Record Date") for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting. On that date there were
outstanding and entitled to vote 18,476,830 shares of Common Stock, which is the
Company's only class of voting securities. Abstentions and broker non-votes will
be counted in determining whether a quorum is present. Each stockholder is
entitled to one vote for each share of Common Stock held of record. A plurality
of the shares of Common Stock present in person or represented by proxy and
entitled to vote at the Annual Meeting is required for the election of
directors. Accordingly, the six nominees for election as directors at the Annual
Meeting who receive the greatest number of votes cast for election by the
holders of record of Common Stock on the Record Date shall be the duly elected
directors upon completion of the vote tabulation at the Annual Meeting. The
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the Annual
Meeting is required for approval of all other items being submitted to the
stockholders for their consideration. Abstentions will be considered present for
purposes of calculating the vote, but will not be considered to have been voted
in favor of the matter voted upon. Broker non-votes will not be considered
present for purposes of calculating the vote.
Votes will be tabulated by American Stock Transfer & Trust Company, the
transfer agent and registrar for the Common Stock, and the results will be
certified by one or more inspectors of election who are required to resolve
impartially any interpretive questions as to the conduct of the vote (the
"Inspector(s) of Election"). In tabulating votes, a record will be made of the
number of shares voted for each nominee or other matter voted upon, the number
of shares with respect to which authority to vote for that nominee or such other
matter has been withheld, and the number of shares held of record by
broker-dealers and present at the Annual Meeting but not voting.
All shares of Common Stock represented by properly executed proxies in
the accompanying form will be voted at the Annual Meeting in accordance with the
instructions indicated thereon unless such proxies previously have been revoked.
If any such proxies do not contain voting instructions, the shares of Common
Stock represented by such proxies will be voted FOR PROPOSALS 1 AND 2. The Board
of Directors is not aware of any business to be brought before the Annual
Meeting other than as indicated in the accompanying notice, but it is intended
that, as to any other such business properly coming before the Annual Meeting,
votes may be cast pursuant to such proxies in accordance with the judgment of
the persons acting thereunder.
Any stockholder who executes and delivers a proxy may revoke it at any
time prior to its use upon (a) receipt by the Secretary of the Company at the
address above of written notice of such revocation; (b) receipt by the Secretary
of the Company at the address above of a duly executed proxy bearing a later
<PAGE>
date; or (c) appearance by the stockholder at the Annual Meeting and notice by
such stockholder of revocation of such proxy given to the Inspector(s) of
Election.
This Proxy Statement is expected to be first mailed or delivered to
stockholders of the Company entitled to notice of the Annual Meeting on or about
April 30, 1999.
The date of this Proxy Statement is April 30, 1999.
2
<PAGE>
OWNERSHIP OF COMMON STOCK
BY DIRECTORS,
OFFICERS AND CERTAIN BENEFICIAL OWNERS
To the best knowledge of the Company, the following table sets forth
certain information concerning the beneficial ownership as of March 31, 1999 of
Common Stock by (a) each stockholder known by the Company, based on information
filed by such stockholder with the Securities and Exchange Commission (the
"Commission") as of March 31, 1999 and the Company's stock transfer records, to
own beneficially in excess of five percent of the Common Stock, (b) each
executive officer named in "Executive Compensation -- Summary Compensation
Table" and each member of the Board of Directors and (c) all executive officers
and members of the Board of Directors as a group. Except as otherwise indicated,
to the best knowledge of the Company, all persons listed below have (i) sole
voting power and sole investment power, except to the extent that authority is
shared by spouses under applicable law, and (ii) both record and beneficial
ownership with respect to the shares of Common Stock indicated as being
beneficially owned by them.
<TABLE>
<CAPTION>
Name of Number of Shares
Beneficial Owner Beneficially Owned Percentage Ownership
- --------------------------------------------------- ------------------------- -------------------------
<S> <C> <C>
Chase Bank of Texas ............................... 8,609,017 46.59%
707 Travis Street
Houston, Texas 77002
Sol B. Weiner...................................... 1,843,674 9.98%
434 Hunterwood
Houston, Texas 77024
Herbert R. Douglas (1)............................. 410,000 2.19%
Raymond J. Miller (2).............................. 146,667 *
Jerome L. Feller (2)............................... 121,667 *
James L. Berens (2)................................ 65,000 *
Joseph J. Kassa (2)................................ 65,000 *
Randall L. Lambert................................. -- --
Gasper Mir......................................... -- --
F. Hall Webb (3)................................... (3) (3)
Melvyn L. Wolff.................................... -- --
All directors and executive officers as a
group (9 persons) (1),(2),(3)................ 9,417,351 49.93%
</TABLE>
- --------------------------------------
* Less than one percent of the Common Stock.
(1) Includes 160,000 shares of Common Stock granted pursuant to the Weiner's
Stores, Inc. 1997 Stock Incentive Plan (the "Stock Plan") and 250,000
shares of Common Stock issuable pursuant to options granted pursuant to
the Stock Plan which are currently exercisable.
(2) Includes shares of Common Stock issuable pursuant to options granted to
members of management, including Messrs. Miller (41,667), Feller (41,667),
Berens (25,000) and Kassa (25,000), respectively, in each case pursuant to
the Stock Plan, which are currently exercisable. Also includes the
following numbers of shares of restricted Common Stock, over which the
respective member of management exercises sole voting power: Messrs.
Miller (80,000); Feller (80,000); Berens (40,000); and Kassa (40,000).
Does not include shares of Common Stock issuable pursuant to options
granted to members of management, including Messrs. Miller (83,333),
Feller (83,333), Berens (50,000) and Kassa (50,000), respectively, in each
case pursuant to the Stock Plan, none of which options are currently
exercisable or will become exercisable within 60 days of the date of this
Proxy Statement.
(3) Mr. Webb, who is a Director of the Company, is Senior Vice President of
Chase Bank of Texas and may therefore be deemed to share beneficial
ownership of the 8,609,017 shares of Common Stock shown as beneficially
owned by Chase Bank of Texas. Mr. Webb disclaims beneficial ownership of
such shares of Common Stock.
3
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Board currently consists of six directors. One vacancy
currently exists on the Board of Directors, due to the death of Merwin F.
Kaminstein, and no nominee has been named to fill such vacancy. The Company and
its Board of Directors are in the process of considering potential candidates
who may be suitable to fill this position. Proxies cannot be voted for a greater
number of persons than the six nominees for director named in this Proxy
Statement. The terms of all directors named below expire at the Annual Meeting,
and all such directors are standing for re-election. Accordingly, the nominees
for director are Herbert R. Douglas, Raymond J. Miller, Randall L. Lambert,
Gasper Mir, F. Hall Webb and Melvyn L. Wolff. The directors to be elected at the
Annual Meeting will serve until the 2000 Annual Meeting of Stockholders and
until their respective successors are elected and qualified or until their
earlier resignation or removal.
It is intended that the proxies received from the holders of Common Stock,
in the absence of contrary instructions, will be voted at the Annual Meeting for
the election of Messrs. Douglas, Miller, Lambert, Mir, Webb and Wolff. If, for
any reason, any of the nominees for director shall become unavailable for
election, the individuals named in the enclosed proxy may exercise their
discretion to vote for any substitutes chosen by the Board of Directors, unless
the Board of Directors should decide to reduce the number of directors to be
elected at the Annual Meeting. The Company has no reason to believe that any
nominee will be unable to serve as a director.
For information concerning the number of shares of the Company's Common
Stock owned by each director, each nominee for director, and all directors and
executive officers as a group as of March 31, 1999, see "Ownership of Common
Stock by Directors, Officers and Certain Beneficial Owners." There are no family
relationships between any directors and executive officers of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages, and positions with the
Company of its executive officers and members of the Board of Directors, as well
as the year each joined the Company and/or its Board:
<TABLE>
<CAPTION>
Year Joined
Name Age Company Position Held
- -------------------------- ------- ----------- -----------------------------------------------------------
<S> <C> <C> <C>
Herbert R. Douglas........ 57 1995 Chairman of the Board of Directors, President and Chief
Executive Officer
Raymond J. Miller......... 47 1995 Vice President, Chief Financial Officer, Secretary and
Director
Jerome L. Feller.......... 58 1995 Vice President, General Merchandise Manager
James L. Berens........... 50 1996 Vice President, Stores
Joseph J. Kassa........... 43 1996 Vice President, Marketing, Sales Promotion and Real Estate
Randall L. Lambert........ 41 1997 Director
Gasper Mir................ 52 1997 Director
F. Hall Webb.............. 50 1997 Director
Melvyn L. Wolff........... 68 1997 Director
</TABLE>
Messrs. Douglas and Miller are the only members of the Board who are
also officers of the Company. Each of the remaining directors listed below
became a member of the Board of Directors on August 26, 1997.
The Board of Directors elects officers to hold office until the next
annual meeting of the Board of Directors or until their successors are elected,
or until their resignation or removal. The Chairman may appoint additional
officers to hold office until their successors are appointed, or until their
resignation or removal. The current officers were most recently elected by the
Board of Directors on June 25, 1998. No family relationships exist among the
directors and executive officers of the Company.
4
<PAGE>
Herbert R. Douglas, Chairman of the Board of Directors, President and
Chief Executive Officer. Mr. Douglas has served as a Director of the Company and
as Chief Executive Officer and President since December 1995 and was elected as
Chairman of the Board of Directors in September 1997. Mr. Douglas served as
President and Chief Executive Officer of Jamesway Corporation, a New
Jersey-based discount store chain, from 1994, beginning after the commencement
of its bankruptcy proceedings under Chapter 11 of the Bankruptcy Code, and
continuing through its emergence from Chapter 11 reorganization and until its
liquidation under Chapter 11 in 1995. Mr. Douglas served in various executive
positions in merchandising for Bradlees, Inc., a Massachusetts-based discount
store chain, from 1986 to 1994, most recently as Senior Vice President for
Merchandising.
Raymond J. Miller, Vice President, Chief Financial Officer, Secretary
and Director. Mr. Miller has served as a Director of the Company since August
1997 and has held his current position since January 1996. Mr. Miller served as
Chief Financial Officer from February 1995 until January 1996. Mr. Miller served
as Executive Vice President Finance and Operations of Carlisle Retailers, Inc.,
an Ohio-based specialty retail store chain, from 1988 to 1995. Carlisle
Retailers, Inc. commenced bankruptcy proceedings under Chapter 11 of the
Bankruptcy Code in 1993 and emerged from Chapter 11 reorganization in 1994.
Jerome L. Feller, Vice President, General Merchandise Manager. Mr.
Feller has served as Vice President, General Merchandise Manager since December
1995. Mr. Feller served as Senior Vice President, General Merchandise Manager of
Jamesway Corporation, a New Jersey-based discount store chain, in 1995. From
1992 to 1994, Mr. Feller was owner and Chief Executive Officer of More For Less,
Inc., a women's specialty clothing store in Florida.
James L. Berens, Vice President, Stores. Mr. Berens has served as Vice
President, Stores since January 1996. Mr. Berens served as Vice President
Regional Store Management of Jamesway Corporation, a New Jersey-based discount
store chain, in 1995. Mr. Berens served in various management positions for
Caldor Corporation, a Connecticut-based discount store chain, from 1991 to 1994,
most recently as District Store Manager.
Joseph J. Kassa, Vice President, Marketing, Sales Promotion and Real
Estate. Mr. Kassa has served as Vice President, Marketing, Sales Promotion and
Real Estate since April 1997. Prior thereto, Mr. Kassa served as Vice President,
Marketing and Sales Promotion since February 1996. Mr. Kassa served as Senior
Vice President of Advertising, Marketing and Sales Promotion of Jamesway
Corporation, a New Jersey-based discount store chain, from 1991 to 1995.
Randall L. Lambert, Director. Mr. Lambert has served as a Director of
the Company since August 1997. Mr. Lambert is the Senior Managing Director of
Chanin Kirkland Messina LLC, a financial advisory/investment banking firm based
in New York and Los Angeles. Mr. Lambert is currently a director of Today's Man
Inc., a publicly traded retailer of men's apparel. Prior to his service with
Chanin Kirkland Messina LLC, he served as Managing Director of Private
Transactions of BDS Securities, LLC, a distressed and specialty situation
brokerage firm based in New York, from 1995 to 1997. Mr. Lambert served as Vice
President of Brian M. Enterprises, Inc., an investment banking firm in Millburn,
New Jersey, from 1987 to 1995.
Gasper Mir, Director. Mr. Mir has served as a Director of the Company
since August 1997. Mr. Mir is the founder of the professional accounting firm of
Mir-Fox & Rodriguez, P.C., based in Houston, Texas, and has served as its
President since 1983.
F. Hall Webb, Director. Mr. Webb has served as a Director of the
Company since August 1997. Mr. Webb has served as Senior Vice President with
Chase Bank of Texas based in Houston, Texas, since 1987. Mr. Webb held various
executive positions with Chemical Bank/Chase Bank from 1973 to present.
Melvyn L. Wolff, Director. Mr. Wolff has served as a Director of the
Company since August 1997. Mr. Wolff is the Chairman of the Board and Chief
Executive Officer of Star Furniture Company, a furniture retailer based in
Texas. He has held both positions for over five years, prior to which he was its
owner and President for over 30 years.
DIRECTOR COMPENSATION
Directors of the Company who are not employees of the Company are paid
by the Company compensation which consists of (i) a $25,000 annual retainer,
(ii) a $2,000 per meeting fee for attendance in person and (iii) a $3,000
Committee Chairman retainer. The annual retainer is designed to cover the annual
5
<PAGE>
stockholders meeting, regular Board meetings, and up to six telephonic meetings.
Separate compensation is not payable for committee meetings, although directors
are entitled to reimbursement for expenses incurred in attending Board and
committee meetings, including expenses for travel, food and lodging.
BOARD OF DIRECTORS
The Board met five times during the fiscal year ended January 30, 1999
and took action by unanimous written consent on two occasions. Further
information concerning the Board's standing committees appears below.
AUDIT COMMITTEE
The Audit Committee consists of three directors independent of
management and free of any relationship that, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment as a
committee member. The Audit Committee recommends the selection of the Company's
independent auditors, periodically reviews the adequacy of the Company's
internal financial controls, reviews with the Company's independent auditors the
annual audit, and periodically reviews the terms of material transactions
between the Company and its affiliates and subsidiaries. The Audit Committee
currently consists of Messrs. Mir, as its chairman, Webb and Lambert. The Audit
Committee met five times in fiscal 1998.
COMPENSATION COMMITTEE
The Compensation Committee consists of three directors independent of
management, and its function includes administration of the Stock Plan and other
management compensation matters. The Compensation Committee currently consists
of Messrs. Wolff, as its chairman, Webb and Mir. During fiscal 1998, the
Compensation Committee met three times.
EXECUTIVE COMMITTEE
The Executive Committee consists of three directors and functions such
that, between meetings of the Board of Directors, it has and may exercise,
except as otherwise provided by law, all the powers of the Board of Directors in
the management of the property, business and affairs of the Company. The
Executive Committee currently consists of Messrs. Douglas, as its chairman, Webb
and Wolff. The Executive Committee met one time in fiscal 1998.
NOMINATING COMMITTEE
The Company has no Nominating Committee, and such functions are
performed by the Executive Committee, which recommends to the Board of Directors
the names of persons to be nominated for election as members of the Board of
Directors of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Common Stock was registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in May 1998.
Section 16(a) of the Exchange Act requires that each director and executive
officer of the Company and each person owning more than 10% of the Common Stock
report his or its initial ownership of the Common Stock and any subsequent
changes in that ownership to the Commission. The Company is required to disclose
in this Proxy Statement any late filings of such reports with respect to the
most recent fiscal year.
Based solely upon a review of copies of forms furnished to the Company
or written representations from certain reporting persons that no Form 5 filings
were required, the Company believes that during fiscal 1998, all such Section
16(a) filing requirements were timely satisfied.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation
for the Company's last two completed fiscal years, to the extent applicable,
earned by (i) the Chairman, President and Chief Executive Officer and (ii) the
four other most highly compensated executive officers of the Company who were
serving as executive officers of the Company on January 30, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
----------------------
Annual Compensation Awards
--------------------------------------- ----------------------
Restricted Securities
Other Stock Underlying
Annual Awards Options/ All Other
Salary($) Bonus($) Compensation($) ($)(1) SARS(#) Compensation($)(2)
--------- --------- --------------- --------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert R. Douglas.................... 1998 $ 450,000 $ - $ 4,036 $ - - $ 545
Chairman, President and Chief 1997 450,000 100,000 3,681 184,000 250,000 995
Executive Officer
Raymond J. Miller..................... 1998 220,000 25,000 - - - 545
Vice President, Chief Financial 1997 200,000 - - 92,000 125,000 525
Officer and Secretary
Jerome L. Feller....................... 1998 220,000 - - - - 545
Vice President, General 1997 200,000 - - 92,000 125,000 525
Merchandise Manager
James L. Berens........................ 1998 167,509 - - - - 545
Vice President, Stores 1997 156,928 - - 46,000 75,000 525
Joseph J. Kassa........................ 1998 150,000 - 15,274 - - 545
Vice President, Marketing, Sales 1997 131,986 - 17,676 46,000 75,000 308
Promotion and Real Estate
</TABLE>
- --------------------------------
(1) As of January 30, 1999, the executive officers of the Company held, in
aggregate, 400,000 shares of Common Stock constituting grants of restricted
stock under the Stock Plan. The aggregate value of all 400,000 such shares,
based on a valuation of $0.25 per share, which is the Company's estimate of
the fair market value per share of Common Stock as of January 30, 1999, was
$100,000. Of such 400,000 shares, as of January 30, 1999, the named
executive officers held the following numbers of shares of Common Stock,
the value of which as of such date was as follows: Mr. Douglas held 160,000
shares valued at $40,000; Mr. Miller held 80,000 shares valued at $20,000;
Mr. Feller held 80,000 shares valued at $20,000; Mr. Berens held 40,000
shares valued at $10,000; and Mr. Kassa held 40,000 shares valued at
$10,000. All of such shares were restricted Common Stock as of January 30,
1999 except the 160,000 shares held by Mr. Douglas. The Stock Plan
Committee (as hereinafter defined) granted the restricted stock awards
hereinabove set forth (i.e., a total of 400,000 shares of Common Stock) to
the named executive officers in September 1997 pursuant to the Company's
Amended Plan of Reorganization under Chapter 11 of the Bankruptcy Code
dated June 24, 1997, as amended (the "Plan of Reorganization"). One hundred
percent of each stock award will become transferable on January 15, 2000,
except that one hundred percent of the stock award granted to Mr. Douglas
became transferable on January 15, 1999. In addition, such stock awards
will become transferable upon a "change in control" of the Company, as
defined in the Stock Plan. The respective named executive officers have the
right to receive, in respect of their restricted Common Stock as set forth
above, any dividends paid with respect to Common Stock.
(2) Reflects the dollar value of insurance payments by the Company with respect
to term life insurance for the benefit of each named executive officer.
7
<PAGE>
EMPLOYMENT AGREEMENTS
Herbert R. Douglas. On February 1, 1999, the Company entered into an
employment agreement with Mr. Douglas as President and Chief Executive Officer
of the Company (the "Douglas Agreement"). The Douglas Agreement will terminate
on January 31, 2001. The Douglas Agreement provides that Mr. Douglas will
receive a base salary of not less than $450,000 per year. In addition, Mr.
Douglas was entitled to receive, and was paid, a bonus of $300,000 in February
1999. The Douglas Agreement further provides severance payments for Mr. Douglas
if he is terminated for any reason other than "cause" or resigns for "good
reason", including a "change in control" (as such terms are defined in the
Douglas Agreement). The severance payments may, at the election of Mr. Douglas,
be "lump-sum payments" (as defined in the Douglas Agreement), or a combination
of a "lump-sum payment" (as defined in the Douglas Agreement) and salary
continuation through the termination of the Douglas Agreement (at the then
"annual rate" as defined in the Douglas Agreement). These severance payments
approximate 150% - 200% of Mr. Douglas's base salary. Further, the Douglas
Agreement provides that in the event that Mr. Douglas's employment terminates on
January 31, 2001, Mr. Douglas shall be entitled to salary continuation for one
calendar year at the annual rate of $617,000 or a "lump-sum payment" equal to
the present value of the salary continuation.
Raymond J. Miller. On February 24, 1995, the Company entered into an
employment agreement with Mr. Miller as Chief Financial Officer of the Company
which was subsequently amended on April 7, 1995, May 1, 1997 and March 25, 1999
(the "Miller Agreement"). Pursuant to the Miller Agreement, Mr. Miller's base
salary is $220,000 per year. The Miller Agreement further provides a severance
payment for Mr. Miller if he is terminated for any reason other than "cause" or
resigns under certain circumstances following a "change in control" (as such
terms are defined in the Miller Agreement). Such severance payment approximates
100% of Mr. Miller's annual base salary. The Miller Agreement terminates on
January 31, 2000.
Jerome L. Feller. On December 13, 1995, the Company entered into an
employment agreement with Jerome L. Feller as General Merchandise Manager and
Vice President which was subsequently amended May 1, 1997 (the "Feller
Agreement"). The Feller Agreement terminates on January 31, 2000. Pursuant to
the Feller Agreement, Mr. Feller's base salary is $220,000 per year.
Other Employment Agreements. The Company has entered into agreements
with certain key employees in an effort to retain the continuity of the core
management team for a meaningful period following the effective date of the Plan
on August 26, 1997. In addition, with respect to certain of its officers, other
than Messrs. Douglas, Miller and Feller, the Company has, while not in any way
altering such employees' employment-at-will status, provided for a separation
payment equal to twelve months base salary in the event of their termination
other than for cause. The Company has also in respect to certain key employees,
while not in any way altering such employees' employment-at-will status,
provided for a separation payment equal to six months base salary in the event
of their termination other than for cause. The purpose of such agreements is to
provide the Company with continuity of management by providing its officers and
key employees with appropriate assurances of employment security sufficient to
allow them to concentrate on their duties for the Company without distraction.
The above-mentioned agreements, including the employment agreements of
Messrs. Douglas, Miller and Feller, provide for lump-sum or salary continuation
severance payments if the executives or key employees are terminated for other
than cause (as such term is defined in each respective agreement). The lump-sum
severance payment equals 100% of base salary in the cases of Messrs. Miller,
Feller, Kassa and Berens. In the case of Mr. Douglas, the lump-sum or salary
continuation severance payments range from 100 - 200% of base salary. In the
event that all of the executives and key employees were terminated the Company's
maximum aggregate lump-sum severance payment obligation would be approximately
$1,946,000.
OPTION GRANTS IN FISCAL YEAR 1998
There were no grants under the Stock Plan to any named executive
officer of the Company during fiscal 1998.
8
<PAGE>
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at Fiscal Year End(#) Options at Fiscal Year End($)
On Value ----------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
-------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert R. Douglas - - 250,000 - - -
Raymond J. Miller - - 41,667 83,333 - -
Jerome L. Feller - - 41,667 83,333 - -
James L. Berens - - 25,000 50,000 - -
Joseph J. Kassa - - 25,000 50,000 - -
</TABLE>
INCENTIVE COMPENSATION PLAN
In January 1996, the Company adopted a Management Incentive
Compensation Plan (the "Incentive Compensation Plan") for the purpose of
maximizing operating results of the Company by instilling in key employees a
sense of participation in the Company's success. Pursuant to the Incentive
Compensation Plan, cash awards are payable based upon the Company meeting
pre-determined earnings before depreciation and amortization, interest, taxes
and reorganization items amount. No cash awards were earned during fiscal 1998.
The Company intends to continue the Incentive Compensation Plan.
PENSION PLAN
The Company sponsors a profit sharing plan for its employees.
Contributions to the profit sharing plan are at the discretion of the Board of
Directors and are limited to the amount deductible under the Internal Revenue
Code of 1986, as amended (the "Tax Code"). On December 2, 1998, the Board of
Directors of the Company resolved that it was in the best interest of the
Company to terminate the profit sharing plan. The Company is in the process of
complying with this resolution.
The Company also sponsors a 401(k) defined contribution plan. This plan
allows participants to defer up to 15% of their compensation for any year.
Company contributions are at the discretion of the Board of Directors.
STOCK INCENTIVE PLAN
The Board of Directors has adopted the Stock Plan, which became
effective on August 26, 1997, and which is administered by the Compensation
Committee of the Board of Directors (the "Stock Plan Committee"), which
consisted of at least three Board members who were "disinterested persons" (as
such term is defined in the rules and regulations under Section 16 of the
Exchange Act). The Stock Plan is intended to provide incentives to eligible
employees to remain employed by the Company and achieve the performance goals
and objectives of the Company. The Chief Executive Officer and 42 other officers
and other management employees (collectively, the "Eligible Employees") were
deemed by the Stock Plan Committee to be eligible to participate in the Stock
Plan. Pursuant to the Stock Plan, the Stock Plan Committee in March 1998 granted
Eligible Employees, subject to vesting, incentive stock options to purchase
51,500 shares of Common Stock.
COMMON STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return
on the Company's Common Stock over the period during which the Common Stock has
been registered pursuant to Section 12(g) of the Exchange Act (assuming a $100
investment in the Common Stock at the beginning of such period and the
reinvestment of all dividends). Such period begins on May 19, 1998 and ends on
January 29, 1999 (the last trading day of fiscal 1998). Also presented are the
cumulative total stockholder returns for the same period (assuming a $100
investment in each at the beginning of the period and the reinvestment of all
dividends) of the Standard & Poor's Small Cap 600 Stock Index and the Standard &
Poor's Retail Stores Index.
9
<PAGE>
[The following table represents the Common Stock Performance Graph]
TOTAL STOCKHOLDER RETURN
MONTHS ENDING
<TABLE>
<CAPTION>
BASE
PERIOD
COMPANY / INDEX 19MAY98 MAY98 JUN98 JUL98 AUG98 SEP98 OCT98 NOV98 DEC98 JAN99
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WEINER'S STORES, INC 100 100.00 100.00 100.00 100.00 68.00 50.00 25.00 22.00 25.00
S&P SMALLCAP 600 INDEX 100 97.04 97.33 89.88 72.53 76.98 80.55 85.08 90.52 89.39
RETAIL (SPECIALTY)-SMALL 100 98.82 104.82 96.81 73.23 72.47 76.60 85.10 89.08 84.86
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of three directors, all of whom are
independent of management, and its function includes administration of the Stock
Plan and other management compensation matters. The Compensation Committee
currently consists of Mr. Wolff, as its chairman, Mr. Webb and Mr. Mir, none of
whom was, during fiscal 1998 or prior thereto, an officer or employee of the
Company or of its subsidiary.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board reviews and approves officers'
salaries, stock option grants, and other executive and Company employee benefit
plans and established policies relating to employee compensation.
Recommendations regarding compensation of the Company's executive officers
(other than the Chief Executive Officer) are prepared by Herbert R. Douglas and
submitted to the Compensation Committee of the Board of Directors for approval.
Herbert R. Douglas and Raymond J. Miller, who are ad hoc members of the
Compensation Committee, do not participate in the preparation of
recommendations, or the review, modification or approval thereof, with respect
to their own compensation, and do not vote on proposals before the Compensation
Committee.
With regard to the Chief Executive Officer, such compensation for
fiscal 1998 was determined pursuant to the employment agreement between the
Company and Mr. Douglas dated December 5, 1995, as amended on May 1, 1997, which
expired on January 31, 1999. On February 1, 1999, the Company, at the
recommendation of the Compensation Committee of the Board of Directors, entered
into a new employment agreement with Mr. Douglas as President and Chief
Executive Officer of the Company. See "- Employment Agreements - Herbert R.
Douglas." All future decisions regarding compensation of the Company's Chief
Executive Officer will be made by the Compensation Committee subject to and in
accordance with the Douglas Agreement. Such decisions may be determined
subjectively, and not necessarily tied to corporate performance, with
consideration given to the Chief Executive Officer's level of responsibility and
importance to the Company relative to other executives of the Company, his time
served with the Company, individual performance and contributions to the
successful implementation of significant initiatives that are expected to
benefit the Company in the future. No fixed, relative weights are assigned to
these subjective factors.
The objectives of the Company's executive compensation policy are to
align the interests of the stockholders and management while motivating and
retaining key employees. The Company's executive compensation policies combine
annual base compensation, incentive bonuses based on operating performance, and
long term equity based incentives in order to achieve their overall objective.
The Company believes that its programs, taken together, will attract and retain
qualified executives who have a significant stake in the long term success of
the Company.
All compensation for the other executive officers will be determined
annually by the Compensation Committee and may be increased based on (a) the
contribution of the individual to the Company, (b) increases in the scope and
complexity of the individual's primary responsibilities, (c) increases in the
cost of living, (d) increases in competitive salaries and (e) individual
performance and contributions to the successful implementation of significant
initiatives that are expected to benefit the Company. Such decisions may be
10
<PAGE>
determined subjectively, and not necessarily tied to corporate performance. No
fixed, relative weights are assigned to these subjective factors.
The Compensation Committee believes that a significant portion of the
key executives' total compensation should be performance-based. The Compensation
Committee has focused on earnings before interest, taxes, depreciation and
amortization ("EBITDA") as the performance measurement upon which incentive
compensation should be based. The Compensation Committee believes growth in this
measurement is ultimately the key determinant of stockholder value and allows
management to make investment decisions that will provide long-term benefits to
the stockholders. Target levels of EBITDA are set each year by the Compensation
Committee based on the prior year's performance. Incentive compensation earned
can be up to 60% of base salary in the cases of Messrs. Miller and Feller and
45% of base salary in the cases of Messrs. Kassa and Berens. No such
performance-based compensation was earned during fiscal 1998. The Compensation
Committee reserves the right to make discretionary bonuses in unusual
circumstances.
Long-term incentives are provided by the grant of stock options. The
purposes of these equity based incentives are to retain these employees and to
align the long-term interests of management with the stockholders. Stock options
are granted at their fair market value. Options vest over a period of time, as
determined by the Compensation Committee. Factors determining stock option
grants are similar to the factors determining increases in base pay.
The Compensation Committee believes that the Company's overall
compensation policies are appropriate to align the interests of management and
the stockholders and to retain key executives.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Melvyn L. Wolff, Chairman
F. Hall Webb
Gasper Mir
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions and Settlements with Chase Bank of Texas. In respect of
claims of Chase Bank of Texas ("Chase") against the Company, pursuant to the
Plan of Reorganization, Chase was issued 8,558,252 shares of Common Stock in
August 1997 and was issued an additional 50,765 shares of Common Stock in
September 1998 as its pro rata share of certain unclaimed distributions, also
pursuant to the Plan of Reorganization. In August 1997, the Company and Chase
entered into a Registration Rights Agreement and the Company executed and
delivered a General Release to Chase. In consideration of such release, Chase
agreed to waive its claims, if any, for an administration expense on account of
having made a substantial contribution pursuant to section 503(b) of the
Bankruptcy Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR
AS SET FORTH IN THIS PROPOSAL 1.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee of the Board of
Directors, none of whose members is an officer of the Company, the Board of
Directors has appointed Ernst & Young LLP, independent auditors, as the
principal independent auditors of the Company and its subsidiary for fiscal year
1999 ending January 29, 2000. Ernst & Young LLP has no investment in the Company
or its subsidiary. It is intended that such appointment be submitted to the
stockholders for ratification at the Annual Meeting. If the appointment of Ernst
& Young LLP is not approved or if that firm shall decline to act or their
employment is otherwise discontinued, the Board of Directors will consider
whether to appoint other independent auditors.
It is expected that one or more representatives of Ernst & Young LLP
will be present at the Annual Meeting with an opportunity to make a statement
should they desire to do so and will be available to respond to appropriate
questions from stockholders.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On May 20, 1998, the Company dismissed the accounting firm of Deloitte
& Touche LLP, which had previously been engaged as the Company's independent
auditors to audit the Company's financial statements.
11
<PAGE>
Deloitte & Touche LLP's reports on the Company's financial condition for balance
sheets as of January 31, 1998 and January 25, 1997, and the related statements
of operations, changes in stockholders' equity (deficiency) and of cash flows
for the twenty-three weeks ended January 31, 1998, the thirty weeks ended August
25, 1997, and the years ended January 25, 1997 and January 27, 1996 did not
contain any adverse opinion or disclaimer of opinion, and such reports were not
modified or qualified as to uncertainty, audit scope or accounting principles,
except that Deloitte & Touche LLP's reports on the Company's financial condition
for the fiscal years ended January 25, 1997 and January 27, 1996 contained a
going concern qualification. Furthermore, during the aforementioned periods, the
Company had no disagreements with Deloitte & Touche LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Deloitte & Touche LLP, would have caused it to make reference to the subject
matter of the disagreements in connection with its report(s).
On May 20, 1998, the Company retained the accounting firm of Ernst &
Young LLP as its new independent auditors to audit the Company's financial
statements for fiscal year 1998 ending January 30, 1999.
The decision to change accounting firms was recommended by the Audit
Committee of the Company's Board of Directors and approved by the Company's
Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR FISCAL YEAR 1999
ENDING JANUARY 29, 2000.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no matters to be presented for consideration at the Annual Meeting other than
the proposals set forth in this Proxy Statement. If any other matters properly
come before the Annual Meeting, it is intended that the persons named in the
proxy will act in respect thereof in accordance with their best judgment.
SOLICITATION EXPENSES
The Company will bear the cost of preparing, printing and mailing this
Proxy Statement and the accompanying proxy card and of this solicitation of
proxies on behalf of the Company's Board of Directors. In addition to
solicitation by mail, proxies may be solicited personally, by telephone or other
means. Brokerage houses and other custodians and nominees will be asked whether
other persons are beneficial owners of the shares of Common Stock which they
hold of record and, if so, they will be supplied with additional copies of the
proxy materials for distribution to such beneficial owners. The Company will
reimburse banks, nominees, brokers and other custodians for the reasonable costs
of sending the proxy materials to the beneficial owners of the Common Stock.
STOCKHOLDER PROPOSALS
Stockholder proposals intended for inclusion in the Proxy Statement to
be issued in connection with the 2000 Annual Meeting of Stockholders must be
received by the Company no later than January 1, 2000 and the proposals must
meet certain eligibility requirements under the rules of the Commission.
Proposals must be addressed to Weiner's Stores, Inc., 6005 Westview Drive,
Houston, TX 77055, to the attention of the Corporate Secretary.
Stockholder proposals submitted outside of the Commission's procedures
for including such proposals in the Company's Proxy Statement must be mailed or
delivered to the attention of the Corporate Secretary at the address above and
must be received by the Company no later than January 1, 2000, except that, with
respect to nominations of one or more persons for election as directors, written
notice of the stockholder's intent to make such nomination(s), which notice must
comply in all respects with the requirements therefor set forth in the Company's
bylaws, must be mailed or delivered to the attention of the Corporate Secretary
at the address above and must be received by the Company's Corporate Secretary
no later than April 11, 2000. If a proposal or notice of nomination is received
after such respective date, the Company's proxy for the 2000 Annual Meeting of
Stockholders may confer discretionary authority to vote on such matter without
any discussion of such matter in the Proxy Statement for the 2000 Annual Meeting
of Stockholders.
By Order of the Board of Directors
Raymond J. Miller
Secretary
12
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
WEINER'S STORES, INC.
JUNE 10, 1999
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
PLEASE MARK YOUR
A |X| VOTES AS IN THIS
EXAMPLE.
WITHHOLD NOMINEES: Herbert R. Douglas
FOR AUTHORITY Raymond J. Miller
(1) ELECTION OF Randall L. Lambert
DIRECTORS [ ] [ ] Gasper Mir
F. Hall Webb
Melvyn L. Wolff
FOR, EXCEPT VOTE WITHHELD FROM THE
FOLLOWING NOMINEES:
- -------------------------------------
FOR AGAINST ABSTAIN
(2) PROPOSAL
NO. 2 [ ] [ ] [ ]
SIGNATURE_________________ DATE______, 1999 _________________DATE____, 1999
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears on the certificates representing
shares to be voted by this proxy, as shown on the label above. When
signing as an executor, administrator, attorney, trustee or guardian,
please give full name as such. If a corporation, please sign full
corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person(s).
<PAGE>
WEINER'S STORES, INC.
6005 WESTVIEW DRIVE, HOUSTON, TEXAS 77055
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Raymond J. Miller and Michael S.
Marcus, and anyone of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated on
the reverse, all shares of Common Stock of Weiner's Stores, Inc. held of record
by the undersigned on April 15, 1999, at the Annual Meeting of Stockholders to
be held on June 10, 1999 or any adjournments or postponements thereof.
(TO BE SIGNED ON REVERSE SIDE)
