HOWARD B. WOLF, INC.
3809 Parry Avenue
Dallas,Texas 75226-1753
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 15, 1998
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Howard B. Wolf,
Inc. (the "Company"), a Texas corporation , for use at the Annual
Meeting of Shareholders of the Company to be held in Dallas, Texas on
September 15, 1998 and at any adjournments thereof for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders.
The Company's Annual Report for the year ended May 31, 1998, which
contains the Company's financial statements, is enclosed with this
Proxy Statement and the accompanying Proxy, all of which are first
being sent or given to the shareholders of the Company on August 25,
1998. The Annual Report is not to be regarded as proxy solicitation
material.
REVOCATION OF PROXY
The giving of a proxy does not preclude the right to vote in
person should the person giving the proxy so desire, and the person
giving the proxy has the power to revoke it at any time before it has
been exercised by executing a new proxy or filing a written request to
revoke with the Secretary of the Company.
QUORUM AND VOTING
In accordance with the Bylaws of the Company, the presence, in
person or by proxy, of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is necessary to constitute a
quorum at the meeting. If a quorum is not present or represented at
the meeting the shareholders entitled to vote thereat, present in
person or represented by proxy, have the power to adjourn the meeting
from time to time, without notice other than the announcement at the
meeting, until a quorum is present or represented. At any such
adjournment meeting at which a quorum is present or represented, any
business may be transacted at the meeting as originally notified.
On each matter submitted to a vote of the shareholders at the
meeting or any adjournment thereof , each shareholder shall be entitled
to one vote in person or by proxy for each share of Common Stock owned
of record as of the close of business of August 7, 1998.
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SOLICITATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of
Directors of the Company. The expense of solicitation of the proxies for
the 1998 Annual Meeting, including the cost of mailing, will be borne by
the Company.
In addition to the use of the mails, the Company may request persons
holding stock in their name or custody, or in the name of nominees, to
send proxy materials to their principals and request authority for the
execution of the proxies, and the Company will reimburse such person for
their expense in so doing.
To the extent necessary in order to assure sufficient representation
at the 1998 Annual Meeting, officers and regular employees of the Company
and others regularly retained by the Company, at no additional
compensation, will request the return of the proxies personally, by
telephone or telegram. The extent to which this will be necessary depends
entirely on how promptly proxies are received and shareholders are urged
to send their proxies without delay. In addition, the Company may make
arrangements with brokers, nominees, fiduciaries and other custodians to
reimburse them for their charges and expenses in forwarding proxy
materials to the beneficial owners of the Company's stock. Management has
no knowledge or information that any other person will specially engage
any persons to solicit proxies.
VOTING RIGHTS, ACTION TO BE TAKEN UNDER PROXY
AND PRINCIPAL SHAREHOLDERS
The proxy which is enclosed with this Proxy Statement and Notice of
Meeting, contains a space where each shareholder may indicate whether the
shareholder chooses to vote his or her shares in favor of, against or
withhold his vote in, the election of each of the six persons nominated
for election as director. If the proxy is returned to the Company and the
shareholder specifies how the proxy is to be voted, it will be voted in
accordance with this instruction. If the proxy is returned to the Company
and no indication is given as to how the proxy is to be voted, the proxy
will be voted in the favor of the election as directors of the six persons
nominated. A proxy may be revoked at any time before it is exercised
either by furnishing the Secretary of the Company written notice of
revocation, by properly executing and submitting a subsequently dated
proxy or by attending the meeting and voting in person. There are no
matters to be acted upon which give rise to rights of appraisal or similar
rights of dissenting shareholders under applicable state law.
The close of business on August 7, 1998 has been fixed as the record
date for the determination of shareholders of the Company entitled to
notice of and to vote at the annual meeting of shareholders. On that date
there were outstanding and entitled to vote at the meeting 1,056,191
shares of the Company's common stock, $0.33 1/3 par value (the "Common
Stock"), constituting all of the outstanding voting securities of the
Company. Each share of Common Stock is entitled to one vote. As of that
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date, to the knowledge of the management of the Company the table below
shows the total number of shares and percent beneficially owned by
shareholders owning more than five percent of the Company's common stock.
Amount
Name and Address and Nature of
of Beneficial Beneficial Percent
Title of Class Owner Ownership of Class
Common Stock Howard B. Wolf(1) 254,729 (Direct) 24.1
3809 Parry Avenue
Dallas, Texas 75226-1753
Common Stock Robert D. Wolf 161,289 (Direct) 15.3
3809 Parry Avenue
Dallas, Texas 75226-1753
(1) Mr. Wolf disclaims any beneficial interest in 40,600 shares that are
held of record by him as trustee for certain private charitable
foundations created by him. In addition, Lois C. Wolf (wife of Howard B.
Wolf) owns 42,665 shares over which she has sole voting and investment
powers. (See also footnote page 3).
As of August 7, 1998 the following table shows the number of shares
beneficially owned by each of the directors and nominees and by all
directors and officers of the Company as a group.
Amount and Nature
Name of of Beneficial Percent
Beneficial Owner Ownership (1) of Class
Creed L. Ford III 1,000 (Direct) .1
Eugene K. Friesen 36,580 (Direct) 3.5
Joel Held - -
Juan M. Villamizar - -
Howard B. Wolf (2)(3) 254,729 (Direct) 24.1
Robert D. Wolf (2)(4) 161,289 (Direct) 15.3
All officers and directors as
a group (6 persons)(2)(3)(4) 453,598 42.9
(1) The persons listed have the sole power to vote and dispose of the
shares owned of record by them except as noted below.
(2) Howard B. Wolf is the father of Robert D. Wolf. Each of such persons
wholly disclaims any beneficial ownership of shares owned by the other.
(3) Lois C. Wolf (wife of Howard B. Wolf) owns 42,665 shares over which
she has sole voting and investment powers. In addition to the 254,729
shares 40,600 shares are owned by an "affiliate" of Mr. Wolf as that term
is defined in the General Rules and Regulations under the Securities
Exchange Act of 1934, and are held of record by Mr. Wolf as trustee for
certain private charitable foundations created by him. Mr. Wolf disclaims
any beneficial interest in such shares.
<PAGE>
(4) Includes 1,000 shares held as trustee for his daughter (see also
footnote 2 above).
The Company does not know of any arrangement or pledge of its
securities by persons now considered in control of the Company that might
result in a change in control of the Company.
NOMINEES AND ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, action will be taken at
the annual meeting to elect six Directors to hold office until the annual
meeting of shareholders in 1999 or until their successors have been duly
elected and qualified. The Company recommends that the shareholders elect
each of the following six persons of are management's nominees, to serve
as Directors of the Company, all for whom are presently serving as
directors and whose current terms expire on September 15, 1998. The table
following sets forth the name of each person nominated for election as a
Director, all other positions with the Company presently held, the
principal occupation or employment of the nominee, the period during which
the nominee has served as a Director of the Company and other
directorships of publicly held companies served by the nominees. Each of
the nominees named has been engaged in the principal occupation of
employment indicated during the past five years.
Nominee and Served as
Principal Director Other
Occupation Age Since Directorships
Creed L. Ford III(2) 45 1992 (1992 - 1996)
(1996 - 1998) Brinker International, Inc.
Chief Executive Officer (Operator of Restaurants)
Kona Restaurant Group
(1992 - 1996) (1997 - 1998)
Executive Vice President None
Brinker International, Inc.
Eugene K. Friesen (1) 66 1975 None
Senior Vice President
& Treasurer,
Howard B. Wolf, Inc.
Joel Held (2) 59 1984 None
Attorney at Law
Arter & Hadden
Juan M. Villamizar 45 1985 None
Purchasing Executive,
Howard B. Wolf, Inc.
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Howard B. Wolf (1) 79 1952 None
Chairman of the Board,
Howard B. Wolf, Inc.
Robert D. Wolf (1) 45 1981 None
President,
Howard B. Wolf, Inc.
(1) Member of Executive Committee
(2) Member of Audit Committee.
Employees of the Company who are also Directors do not receive any
fee or remuneration for services as members of the Board of Directors or
of any Committee of the Board of Directors. Non-management Directors
receive per annum a retainer fee of $9,600 and reimbursement of medical
expenses up to $1,620.
During the 1998 fiscal year the Board of Directors held five
meetings. All members attended at least 75 percent of the total number of
meetings. The Executive Committee (which has the authority to act on most
matters in the business and affairs of the Company requiring Board action)
held four meetings during the year which were attended by all members.
The Board of Directors of the Company does not have a standing
compensation or nominating committee or a committee which performs similar
functions.
Audit Committee members appointed by the Board of Directors on
September 16, 1997, consisting of Joel Held, Chairman and Creed L. Ford
III, held two meetings during the 1998 fiscal year, which were attended by
all members. The Audit Committee considered the comments of the
independent auditors with respect to internal accounting controls,
recommended the appointment of the independent auditors and reviewed the
scope of the annual audit.
If any nominee for election as a director named herein becomes unable
or unwilling to accept election, the proxy holders will vote for the
election in his stead of such other person as the Company's Board of
Directors recommends. Management has no reason to believe that any of the
nominees will be unable or unwilling to serve if elected to office, and
each nominee has expressed to management his intention to serve the entire
term for which election is sought. To be elected a director, each nominee
must receive the favorable vote of the majority of the shares of Common
Stock present in person or by proxy at the Annual Meeting.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The following tables set forth compensation paid to or for the benefit of
the executive officers (3) named below in 1998, 1997, 1996
SUMMARY COMPENSATION TABLE
Annual Compensation
(a) (b) (c) (d) (e)
Other Annual
Name and Fiscal Salary Bonus Compensation
Principal Position Year $ $ $
Robert D. Wolf 1998 170,000 3,269 18,102
President (Chief 1997 170,000 62,889 17,750
Executive Officer) 1996 185,000 15,588 16,500
Howard B. Wolf 1998 150,000 2,885 15,600
Chairman of 1997 150,000 55,871 15,600
the Board 1996 170,000 15,269 15,600
Eugene K. Friesen 1998 105,000 2,019 10,650
Senior Vice President 1997 105,000 42,684 10,650
& Treasurer (Chief 1996 110,500 8,115 10,650
Financial Officer)
SUMMARY COMPENSATION TABLE (continued)
Long Term Compensation
Awards Payouts
(a) (b) (f) (g) (h) (i)
All
Restricted Other
Stock LTIP Conpen-
Name and Fiscal Award(s) Options/ Payouts sation
Principal Position Year $ SARs(#) $ ($)(1)
Robert D. Wolf 1998 - - - -
President (Chief 1997 - - - -
Executive Officer) 1996 - - - -
Howard B. Wolf 1998 - - - -
Chairman of 1997 - - - 23,016
the Board 1996 - - - 23,016
16
Eugene K. Friesen 1998 - - - -
Senior Vice President 1997 - - - -
& Treasurer (Chief 1996 - - - -
Financial Officer)
(1) All Other Compensation consists of a premium paid for a life insurance
policy insuring the life of Howard B. Wolf and payable to a
beneficiary designated by him.
<PAGE>
Except as mentioned herein, and as previously discussed elsewhere in
this section, there are no presently outstanding contracts or arrangements
for present or future cash compensation by the Company to any of its
officers or directors.
The Company provides automobiles or allowances to certain of its
officers and executives for use in the performance of their duties.
Personal use of the automobiles, if any, is estimated to be insignificant.
The Company maintains memberships in several private clubs which are
used for sales and business related meetings by certain of its officers
and executives. In those cases where such clubs are used for personal use,
the Company is reimbursed by the individual for any personal charges
incurred.
BOARD REPORT ON EXECUTIVE COMPENSATION
The objectives of the Company's executive compensation policies are
to provide its executives with a competitive compensation package and link
compensation to the achievement of Company business objectives and the
enhancement of shareholder value. The executive compensation program is
composed of (a) base salary, (b) annual incentive bonus, and (c) other
compensation. Base salaries of the executive officers are annually
reviewed. In determining appropriate salary adjustments, consideration is
given to the level of responsibility, experience, individual and company
performance and the competitiveness of the executive's compensation.
Annual incentive bonuses are provided to reward performance against
established objectives. The board of directors selects performance
measures designed to provide executive officers incentives to achieve
certain profitability goals. Other compensation generally consists of tax
assistance, medical reimbursement and normal miscellaneous perks.
In fiscal 1998 the Chief executive Officer's salary remained the
same as the prior year. The incentive bonus was calculated on the basis
of company profits in excess of a set amount. The Board of Directors
determines base salaries, establishes the criteria for incentive bonuses
and sets other compensation each year at their annual meeting in
September. The fiscal 1999 executive compensation program has not yet been
established.
Board of Directors
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STOCK PERFORMANCE GRAPH
The line graph shown below sets forth a comparison of the yearly
percentage change in the cumulative total shareholder return on the
Company's Common Stock during the preceding five fiscal years ending May
31, 1998 compared with the cumulative total returns at the American Stock
Exchange Index and a peer index (women's, misses' & juniors' outerwear).
The peer group includes the following securities: Benetton Group Spa,
Adr., Biscayne Apparel, Inc., Chaus Bernard, Inc., Cherokee, Inc.,
Donna Karan Int. Inc., Donnkenny, Inc., Guess, Inc., Jalate,Ltd.,
JLM Couture, Inc., Jones Apparel Group, Inc., Kellwood Co., Liz Claiborne,
Inc., Nitches, Inc., Retrospettiva, Inc., REXX Enviromental Corp.,
Sirena Apparel Group, Inc., and Wolf, Howard B. Inc.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG HOWARD B. WOLF, INC.
AMEX MARKET INDEX AND SIC CODE INDEX
$400
$350
$300
$250
$200 W S
$150 W WA A WAS A
$100 * A S W
$ 50 S S
$ 0
1994 1995 1996 1997 1998
W-HOWARD B WOLF,INC A-AMEX MARKET INDEX S-SIC CODE INDEX
(*ASSUMES $100 INVESTED ON JUNE 1, 1993. ASSUMES DIVIDENDS
REINVESTED. FISCAL YEAR ENDING MAY 31, 1998)
<PAGE>
RELATIONSHIP WITH INDEPENDENT AUDITORS
Lane Gorman Trubitt, L.L.P. was the independent auditor for the
Company for the fiscal year ended May 31, 1998. The firm has performed the
annual audit for the Company for more than five years. The appointment of
Lane Gorman Trubitt, L.L.P. was recommended by the audit committee.
A representative of Lane Gorman Trubitt, L.L.P. is expected to be
present at the annual meeting of shareholders. The representative will
have the opportunity to make a statement if so desired and will be
available to respond to appropriate questions.
Services performed by Lane Gorman Trubitt, L.L.P. included the
examination and report on the current financial statements, services
related to filings with the Securities and Exchange Commission, meeting
with the Audit Committee and tax review services. All services provided
were approved prior to the rendering of such services, and the Board of
Directors deemed such services to have no effect on the independence of
such firm.
The independent auditor for the Company for the current fiscal year
will be selected by the Board of Directors at their annual meeting, which
will be held immediately following the annual meeting of shareholders.
There were no other relationships or related transactions with
management or any related party.
<PAGE>
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The 1999 Annual Meeting of Shareholders is presently planned to be
held on or about September 21, 1999. A Proxy Statement and Notice of each
such meeting will be mailed to all shareholders of record approximately
one month prior to that date. Any shareholder who desires to present
proposals at said annual meeting and to have such proposals set forth in
the Proxy Statement must submit the proposals in writing to be received by
the Company at its corporate office not later than May 7, 1999. All
shareholders proposals must comply with Rule 14a-8 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934.
GENERAL
As of the date of this statement, the Board of Directors has no
knowledge of any business which will be presented for consideration at the
meeting other than the election of Directors. With respect to any other
business which may properly come before the meeting or any adjournment
thereof, it is intended that proxies will be voted in accordance with the
judgment of the person or persons voting them.
Copies of the Annual Report on Form 10-K to the Securities and
Exchange Commission are available to shareholders upon written request to
the Treasurer, Howard B. Wolf, Inc.,3809 Parry Avenue, Dallas, Texas
75226-1753.
By Order of the Board of Directors
HOWARD B. WOLF
Chairman of the Board
Dallas, Texas
August 25, 1998
