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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 Use of
[x] Definitive Proxy Statement the Commission Only (as
[ ] Definitive Additional Materials permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Under 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:
80289.0001
<PAGE>
WEINER'S STORES, INC.
6005 WESTVIEW DRIVE
HOUSTON, Texas 77055
(713) 688-1331
- --------------------------------------------------------------------------------
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
May 25, 2000
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 Drive, Houston, Texas, on Thursday, May 25, 2000 at
8:30 A.M. local time (the "Annual Meeting"), for the following purposes:
1. To elect the five 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
February 3, 2001; 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 March 27, 2000 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 17, 2000
<PAGE>
WEINER'S STORES, INC.
6005 WESTVIEW DRIVE
HOUSTON, TEXAS 77055
(713) 688-1331
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PROXY STATEMENT
For 2000 Annual Meeting of Stockholders to be held May 25, 2000
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, Texas 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 May 25, 2000, at
8:30 A.M. local time at the executive offices of the Company, 6005 Westview
Drive, 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 March 27, 2000 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 18,509,710 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 five 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 THE NOMINEES FOR
DIRECTOR SET FORTH IN PROPOSAL 1 AND FOR PROPOSAL 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 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 17, 2000.
The date of this Proxy Statement is April 17, 2000.
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 27, 2000 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 27, 2000 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.
Name of Number of Shares Percentage
Beneficial Owner Beneficially Owned Ownership
---------------- ------------------ ---------
Chase Bank of Texas 8,609,017 46.51%
707 Travis Street
Houston, Texas 77002
Sol B. Weiner 1,843,674 9.96%
434 Hunterwood
Houston, Texas 77024
Herbert R. Douglas (1) 560,000 3.03%
Raymond J. Miller (2) 198,333 1.07%
James L. Berens (2) 90,000 *
Joseph J. Kassa (2) 90,000 *
Michael S. Marcus (2) 10,000 *
Randall L. Lambert __ __
Gasper Mir __ __
Melvyn L. Wolff __ __
F. Hall Webb (3) (3) (3)
All directors and executive
officers as a group (9 persons)
(1),(2),(3) 9,557,350 51.63%
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*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 "1997 Stock
Plan") and 400,000 shares of Common Stock issuable pursuant to
options granted pursuant to the 1997 Stock Plan and the Weiner's
Stores, Inc. 1999 Stock Incentive Plan (the "1999 Stock Plan") which
are currently exercisable. Does not include 150,000 shares of Common
Stock issuable pursuant to options granted Mr. Douglas pursuant to
the 1999 Stock Plan, none of which options are currently exercisable
or will become exercisable within 60 days of the date of this Proxy
Statement.
(2) Includes shares of Common Stock issuable pursuant to options granted
to members of management, including Messrs. Miller (83,333), Berens
(50,000), Kassa (50,000) and Marcus (10,000), respectively, in each
case pursuant to the 1997 Stock Plan and/or 1999 Stock Plan, which
are currently exercisable. Also includes shares of Common Stock
granted pursuant to the 1997 Stock Plan to Messrs. Miller (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 (141,667), Berens (125,000), Kassa (125,000)
and Marcus (55,000), respectively, in each case pursuant to the 1997
Stock Plan and/or the 1999 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, and in addition, Melvyn L. Wolff has
declined to stand for re-election as a director of the Company. No nominees have
been named to fill such two vacancies. The Company and its Board of Directors
are in the process of considering potential candidates who may be suitable to
fill these positions, and the board may appoint one or more director prior to
the 2001 Annual Meeting of Stockholders to fill such vacancies. Proxies cannot
be voted for a greater number of persons than the five 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 and F. Hall Webb. The directors to be
elected at the Annual Meeting will serve until the 2001 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 and Webb. 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 27, 2000, see "Ownership
of Common Stock by Directors, Officers and Certain Beneficial Owners."
Directors and Executive Officers
The following table sets forth the names, ages and positions with the
Company of its executive officers and nominees for election to the Board of
Directors, as well as the year each joined the Company and/or its Board:
Year
Joined
Name Age Company Position Held
---- --- ------- -------------
Herbert R. Douglas 58 1995 Chairman of the Board of Directors,
President and Chief Executive Officer
Raymond J. Miller 48 1995 Executive Vice President, Chief
Operating Officer, Chief Financial
Officer, Secretary and Director
James L. Berens 51 1996 Senior Vice President, Stores and
Operations
Joseph J. Kassa 44 1996 Senior Vice President, General
Merchandise Manager
Michael S. Marcus 45 1997 Vice President, Controller, Treasurer
and Assistant Secretary
Randall L. Lambert 42 1997 Director
Gasper Mir 53 1997 Director
F. Hall Webb 51 1997 Director
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 of the Board 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 10, 1999. 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.
Raymond J. Miller, Executive Vice President, Chief Operating Officer,
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 June 1999. Mr. Miller served as Vice President, Chief Financial Officer
and Secretary from January 1996 to June 1999 and as Chief Financial Officer from
February 1995 until January 1996.
James L. Berens, Senior Vice President, Stores and Operations. Mr.
Berens has held his current position since June 1999. Mr. Berens served as Vice
President, Stores from January 1996 until June 1999. Mr. Berens served as Vice
President Regional Store Management of Jamesway Corporation, a New Jersey-based
discount store chain, in 1995.
Joseph J. Kassa, Senior Vice President, General Merchandise Manager.
Mr. Kassa has held his current position since June 1999. Mr. Kassa served as
Vice President, Marketing, Sales Promotion and Real Estate from April 1997 until
June 1999. 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.
Michael S. Marcus, Vice President, Controller, Treasurer and
Assistant Secretary. Mr. Marcus has held his current position since June 1999.
Mr. Marcus served as Controller and Treasurer from November 1997 until June
1999. Mr. Marcus served in various executive positions with Catherines Stores
Corporation, a Tennessee-based specialty retail chain, from 1989 to 1997, most
recently as Controller and Assistant Treasurer.
Randall L. Lambert, Director. Mr. Lambert has served as a director of
the Company since August 1997. Mr. Lambert is the Managing Director of Chanin
Capital Partners, a financial advisory/investment banking firm based in New York
and Los Angeles. Prior to his service with Chanin Capital Partners, 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.
Director Compensation
The Company pays directors of the Company who are not employees of
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
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 29,
2000 and took action by unanimous written consent on two occasions. Further
information concerning the Board's standing committees appears below.
5
<PAGE>
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 two times in fiscal 1999.
Compensation Committee
The Compensation Committee consists of three directors independent of
management and its function includes administration of the 1997 Stock Plan and
the 1999 Stock Plan and other management compensation matters. The Compensation
Committee currently consists of Messrs. Wolff, as its chairman, Webb and Mir.
During fiscal 1999, 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 1999.
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 1999, 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 three 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 29, 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
-----------------------
Annual Compensation Awards
------------------------------------------ -----------------------
Restricted Securities
Other Annual Stock Underlying All Other
Compensation Awards Options/ Compensation
Salary($) Bonus($) ($) ($)(1) SARS(#) ($)(2)
------------------------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert R. Douglas 1999 $454,738 $300,000 $ 4,657 $ -- 300,000 $ 1,118
Chairman, President and Chief 1998 450,000 -- 4,036 -- -- 53,084(3)
Executive Officer 1997 450,000 100,000 3,681 184,000 250,000 995
Raymond J. Miller 1999 222,152 -- -- -- 100,000 44,746(3)
Executive Vice President, 1998 220,000 25,000 -- -- -- 545
Chief Operating Officer, Chief 1997 200,000 -- -- 92,000 125,000 525
Financial Officer and Secretary
James L. Berens 1999 170,585 -- -- -- 100,000 22,802(3)
Senior Vice President, Stores 1998 167,509 -- -- -- -- 545
and Operations 1997 156,928 -- -- 46,000 75,000 525
Joseph J. Kassa 1999 150,999 -- 19,120 -- 100,000 22,324(3)
Senior Vice President, 1998 150,000 -- 15,274 -- -- 545
General Merchandise Manager 1997 131,986 -- 17,676 46,000 75,000 308
Michael S. Marcus 1999 101,634 -- -- -- 50,000 412
Vice President, Controller,
Treasurer and Assistant Secretary
</TABLE>
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(1) As of January 29, 2000, the executive officers of the Company held, in
aggregate, 320,000 shares of Common Stock constituting grants of restricted
stock under the 1997 Stock Plan. The aggregate value of all 320,000 such shares,
based on a valuation of $0.375 per share, which is the Company's estimate of the
fair market value per share of Common Stock as of January 29, 2000, was $
120,000. Of such 320,000 shares (the "Stock Awards"), as of January 29, 2000,
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 $ 60,000; Mr. Miller held 80,000 shares valued at $
30,000; Mr. Berens held 40,000 shares valued at $15,000; and Mr. Kassa held
40,000 shares valued at $15,000. The Stock Plan Committee (as hereinafter
defined) granted the restricted stock awards hereinabove set forth (i.e., a
total of 320,000 shares of Common Stock) to such 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 became transferable on
January 15, 2000, except that one hundred percent of the stock award granted to
Mr. Douglas became transferable on January 15, 1999.
(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.
(3) Also reflects an amount equal to the total federal, state and local income
taxes resulting from the vesting of the Stock Awards and the reimbursement of
all such taxes which the named executive officer is obligated to pay in
accordance with the respective Restrictive Stock Agreements between the named
executive officer of the Company. Such tax payment and reimbursement amount was,
in the case of Mr. Douglas, $52,529; Mr. Miller, $44,176; and Messrs. Berens and
Kassa, $22,088 each.
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 100% - 137% 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 1, 2000, the Company entered into an
employment agreement with Mr. Miller as Executive Vice President, Chief
Operating Officer and Chief Financial Officer (the "Miller Agreement"). Pursuant
to the Miller Agreement, Mr. Miller's base salary is $250,000 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 for "good reason,"
including a "change in control" (as such terms are defined in the Miller
Agreement). Such severance payment equals 100% of Mr. Miller's then current
annual base salary. The Miller Agreement terminates on January 31, 2003.
Further, the Miller Agreement provides that in the event that Mr. Miller's
employment terminates on January 31, 2003, Mr. Miller shall be entitled to a
lump sum payment equal to 100% of Mr. Miller's then current annual base salary.
James L. Berens. On February 1, 2000, the Company entered into an
employment agreement with Mr. Berens as Senior Vice President, Stores and
Operations (the "Berens Agreement"). Pursuant to the Berens Agreement, Mr.
Berens' base salary is $200,000 per year. The Berens Agreement further provides
a severance payment for Mr. Berens 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 Berens Agreement). Such severance payment equals 100%
of Mr. Berens' then current annual base salary. The Berens Agreement terminates
on January 31, 2003. Further, the Berens Agreement provides that in the event
that Mr. Berens' employment terminates on January 31, 2003, Mr. Berens shall be
entitled to a lump sum payment equal to 100% of Mr. Berens' then current annual
base salary.
Joseph J. Kassa. On February 1, 2000, the Company entered into an
employment agreement with Mr. Kassa as Senior Vice President, General
Merchandise Manager (the "Kassa Agreement"). Pursuant to the Kassa Agreement,
Mr. Kassa's base salary is $200,000 per year. The Kassa Agreement further
provides a severance payment for Mr. Kassa 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 Kassa Agreement). Such severance payment
equals 100% of Mr. Kassa's then current annual base salary. The Kassa Agreement
terminates on January 31, 2003. Further, the Kassa Agreement provides that in
the event that Mr. Kassa's employment terminates on January 31, 2003, Mr. Kassa
shall be entitled to a lump sum payment equal to 100% of Mr. Kassa's then
current annual base salary.
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. In addition, with respect to certain of
its officers, other than Messrs. Douglas, Miller, Berens and Kassa, the Company
has, 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, Berens and Kassa, 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
8
<PAGE>
cases of Messrs. Miller, Kassa and Berens. In the case of Mr. Douglas, the lump
sum or salary continuation severance payments range from 100% - 137% 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 $1,493,000.
Option Grants in Fiscal Year 1999
The following table sets forth information concerning the stock
options granted during fiscal 1999 under the 1997 Stock Plan and the 1999 Stock
Plan to the named executive officers:
<TABLE>
<CAPTION>
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Granted Stock Price
Underlying to Employees Exercise - -----------------------
Options in Fiscal Price Expiration Appreciation for Option Term
Name Granted (#)(1) Year 1999 ($/Sh) (2) Date 5% ($) 10% ($)
---- -------------- --------- ---------- ---- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Herbert R. Douglas 300,000 33.7 $0.88 08/05/2009 $165,000 $420,000
Raymond J. Miller 100,000 11.2 $0.88 08/05/2009 $ 55,000 $140,000
James L. Berens 100,000 11.2 $0.88 08/05/2009 $ 55,000 $140,000
Joseph J. Kassa 100,000 11.2 $0.88 08/05/2009 $ 55,000 $140,000
Michael S. Marcus 20,000 2.3 $0.81 06/10/2009 $ 10,200 $ 25,800
Michael S. Marcus 30,000 3.4 $0.88 08/05/2009 $ 16,500 $ 42,000
</TABLE>
(1) One-half of the options for Mr. Douglas vested on January 15, 2000
and the remainder will vest on January 15, 2001. All other options
vest equally, at a rate of one-half of such options on January 15,
2002 and the remainder on January 15, 2003. All options expire in ten
years. The 1997 Stock Plan and the 1999 Stock Plan provide for an
acceleration of the vesting in the event of a change in control (as
therein defined).
(2) Pursuant to the 1997 Stock Plan and the 1999 Stock Plan, the exercise
price of the options shall not be less than 100% of the Fair Market
Value (as therein defined) on the date the stock option is granted.
Fiscal Year End Option Values
The following table summarizes exercises of stock options by the named executive
officers during fiscal 1999 as well as the number of shares of Common Stock
underlying unexercised options and the value of all unexercised in-the-money
options, held by the named executive officers at the end of 1999:
<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 - - 400,000 150,000 - -
Raymond J. Miller - - 83,333 141,667 - -
James L. Berens - - 50,000 125,000 - -
Joseph J. Kassa - - 50,000 125,000 - -
Michael S. Marcus - - 10,000 55,000 - -
</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 a
pre-determined earnings before depreciation and amortization, interest, taxes
and reorganization items amount. No cash awards were earned during fiscal 1999.
The Company intends to continue the Incentive Compensation Plan.
Pension Plan
The Company terminated its profit sharing plan for its employees
effective December 31, 1998. Contributions to the profit sharing plan were at
the discretion of the Board of Directors and were limited to the amount
deductible under the Internal Revenue Code of 1986, as amended (the "Tax Code").
9
<PAGE>
The Company 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 1997 Stock Plan, which became
effective on August 26, 1997, and the 1999 Stock Plan, which became effective
June 24, 1999 (collectively the "Stock Plans"), and which are 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 Plans are 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 39 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 Plans. Pursuant to the Stock Plans, the Stock Plan
Committee in June 1999 and August 1999 granted Eligible Employees, subject to
vesting, incentive and non-qualified stock options to purchase 890,000 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 28, 2000 (the last trading day of fiscal 1999). 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.
TOTAL SHAREHOLDER RETURNS
<TABLE>
<CAPTION>
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
Months Ending Weiner's Stores, Inc. S&P Smallcap 600 Index Retail (Specialty)-Small
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
<S> <C> <C> <C>
Base Period (May 19, 1998) $100 $100 $100
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
May 1998 100 97.04 98.82
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
June 1998 100 97.33 104.82
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
July 1998 100 89.88 96.81
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
August 1998 100 72.53 73.23
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
September 1998 68.00 76.98 72.47
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
October 1998 50.00 80.55 76.60
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
November 1998 25.00 85.08 85.10
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
December 1998 21.90 90.52 89.08
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
January 1999 25.00 89.39 84.86
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
February 1999 25.00 81.33 80.58
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
March 1999 37.50 82.38 85.54
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
April 1999 28.00 87.82 87.07
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
May 1999 65.60 89.96 88.93
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
June 1999 112.50 95.08 95.11
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
July 1999 87.50 94.24 92.34
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
August 1999 87.50 90.09 81.89
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
September 1999 68.80 90.48 87.09
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
October 1999 56.30 90.25 88.13
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
November 1999 50.00 94.02 89.22
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
December 1999 37.50 101.75 82.58
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
January 2000 40.70 98.60 65.94
- ----------------------------- ------------------------------- ------------------------------- ------------------------------
</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 Plans 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 1999 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.
10
<PAGE>
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 1999 was determined pursuant to the employment agreement between the
Company and Mr. Douglas dated February 1, 1999. 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 (subject to the provisions of any
employment agreements between the Company and such officers) 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 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, Kassa and Berens
and 30% base salary in the case of Mr. Marcus. No such performance-based
compensation was earned during fiscal 1999. 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.
11
<PAGE>
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 such 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
2000 ending February 3, 2001. 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. 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
manner of the disagreements in connection with its report(s).
12
<PAGE>
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 ended January 30, 1999.
The Company's decision to change 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 2000
ENDING FEBRUARY 3, 2001.
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 2001 Annual Meeting of Stockholders must be
received by the Company no later than December 18, 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 December 18, 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 March 26, 2001. If a proposal
or notice of nomination is received after such respective date, the Company's
proxy for the 2001 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 2001 Annual Meeting of Stockholders.
By Order of the Board of Directors
Raymond J. Miller
Secretary
13
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
WEINER'S STORES, INC.
MAY 25, 2000
<TABLE>
<CAPTION>
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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 FOR AGAINST ABSTAIN
DIRECTORS | | | | Gasper Mir
F. Hall Webb (2) PROPOSAL NO. 2 | | | | | |
FOR, EXCEPT VOTE WITHHELD FROM THE
FOLLOWING NOMINEES:
- -------------------------------------
SIGNATURE_______________________ DATE_________, 2000 __________________________ DATE_______, 2000
SIGNATURE IF HELD JOINTLY
</TABLE>
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 March 27, 2000, at the Annual Meeting of Stockholders to be held
on May 25, 2000 or any adjournments or postponements thereof.
(TO BE SIGNED ON REVERSE SIDE)
