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
Filed by the Registrant [X]
Filed by the party other than the registrant[ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a -12
L. LURIA & SON, INC.
(Name of Registrant as Specified in its Charter)
L. LURIA & SON, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14-a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules 14-a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
(4) Proposed maximum aggregate value of transaction:
[ ] Checkbox 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>
L. LURIA & SON, INC.
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
-----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 1996
------------------
To Our Shareholders:
A Special Meeting of Shareholders of L. Luria & Son, Inc. (the "Company")
will be held at the Davis Cup Room, Don Shula's Hotel, Main Street, Miami Lakes,
Florida, 33014, on October 30, 1996 at 9:30 A.M., local time, for the following
purposes:
1) To ratify the election of five Directors of the Company appointed by the
Board of Directors since the Company's Annual Meeting of Shareholders held in
June 1996, two of whom will serve until the Annual Meeting of Shareholders to be
held in 1997, one of whom will serve until the Annual Meeting of Shareholders to
he held in 1998, and two of whom will serve until the Annual Meeting of
Shareholders to be held in 1999, and all of whom will serve until their
respective successors are duly elected and qualified; and
2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
All shareholders are cordially invited to attend, although only shareholders of
record at the close of business on September 16, 1996 will be entitled to vote
at the meeting or any adjournment thereof.
NANCY LURIA-COHEN
SECRETARY
Miami Lakes, Florida
September 23, 1996
A FORM OF PROXY IS ENCLOSED. THE ANNUAL REPORT OF L. LURIA & SON, INC.
FOR THE FISCAL YEAR ENDED FEBRUARY 3, 1996 IS AVAILABLE UPON REQUEST TO THE
COMPANY. TO ENSURE THAT YOUR SHARES WILL BE VOTED AT THE SPECIAL MEETING, YOU
ARE REQUESTED TO COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED, POSTAGE PAID ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN THE EVENT YOU ATTEND THE MEETING.
<PAGE>
L. LURIA & SON, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 30, 1996
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of L. Luria & Son, Inc. (the "Company"), to
be voted at a Special Meeting of Shareholders of the Company (the "Meeting") to
be held at 9:30 A.M., local time, October 30, 1996 at the Davis Cup Room, Don
Shula's Hotel, Main Street, Miami Lakes, Florida 33014, for the purposes set
forth in the preceding notice.
You may revoke your proxy at any time prior to its use by delivering a
written notice to the Secretary of the Company, by executing a later-dated proxy
or by attending the Meeting and voting in person. Proxies in the form enclosed,
unless previously revoked, will be voted at the Meeting in accordance with the
specifications made thereon or, in the absence of such specifications, FOR the
ratification of the appointment of the Directors designated by the Directors.
The Board of Directors of the Company has fixed the close of business on
September 16, 1996, as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Meeting and at any adjournment
thereof.
The complete mailing address of the Company's principal executive offices
is 5770 Miami Lakes Drive, Miami Lakes, Florida 33014. The approximate date on
which this proxy statement and the form of proxy were first sent or given to the
shareholders of the Company was September 23, 1996.
OUTSTANDING SHARES AND VOTING RIGHTS
Only the holders of shares of common stock, $.01 par value per share (the
"Common Stock"), and Class B stock, $.01 par value per share ("Class B Stock"),
at the close of business on September 16, 1996 are entitled to vote at the
Meeting. At the close of business on September 16, 1996, there were 5,451,588
shares of Common Stock outstanding and 320 shares of Class B Stock outstanding.
Except for the ratification of the election of Directors where holders of record
of Common Stock and Class B Stock vote together and are entitled to one vote for
each share held, holders of record of Common Stock will be entitled to one vote
for each share held and holders of record of Class B Stock will be entitled to
ten votes for each share held on all other matters presented at the Meeting. The
presence in person or by proxy of a majority of the combined voting power of the
outstanding shares entitled to vote at the Meeting shall constitute a quorum at
the Meeting. The Directors receiving the greatest number of votes of Common
Stock and Class B Stock voting together as one class shall be ratified as
Directors. Abstentions are considered as shares present and entitled to vote for
purposes of determining the presence of a quorum and for purposes of determining
the outcome of any matter submitted to the shareholders for a vote, but are not
counted as votes "for" or "against" any matter. The inspector of elections
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will treat shares referred to as "broker or nominee non-votes" (shares held by
brokers or nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or nominee does not
have discretionary voting power on a particular matter) as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. For purposes of determining the outcome of any matter as to which the
proxies reflect broker or nominee non-votes, shares represented by such proxies
will be treated as not present and not entitled to vote on that subject matter
and therefore would not be considered by the inspectors when counting votes cast
on the matter (even though those shares are considered entitled to vote for
quorum purposes and may be entitled to vote on other matters.) If less than a
majority of the outstanding shares of Common Stock and Class B Stock taken
together are represented at the Meeting, a majority of the shares so represented
may adjourn at the Meeting from time to time without further notice.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 16, 1996, the number of
shares of Common Stock of the Company which were owned beneficially by (i) each
person who is known by the Company to own beneficially more than 5% of its
Common Stock, (ii) each Director, (iii) each of the named executive officers
listed in the Summary Compensation Table (see "Executive Compensation"), and
(iv) the officers and Directors of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER(1) BENEFICIALLY OWNED
- ------------------------------- -------------------------------------------
SHARES PERCENT
------ -------
<S> <C> <C>
Ocean Reef Management, Inc.(2) 1,320,105 24.2%
19495 Biscayne Boulevard
One Turnberry Place
Suite 800
Aventura, Florida 33180
Rachmil Lekach(3) 1,320,105 24.2%
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Ilia Lekach(4) 1,335,105 24.5%
5770 Miami Lakes Drive
Miami Lakes, Drive
Joel Eidelstein(5) 1,320,105 24.2%
19495 Biscayne Boulevard
One Turnberry Place
Suite 800
Aventura, Florida 33180
Leonard Luria(6) 1,050 *
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Peter P. Luria (7) 50,815 *
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Nancy Luria-Cohen (8) 2,112 *
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER(1) BENEFICIALLY OWNED
- ------------------------------- -------------------------------------------
SHARES PERCENT
------ -------
<S> <C> <C>
Harry J. Diven, Jr.(9) 6,333 *
315 West 70th Street
New York, New York 10023
Gerald Nathanson(10) 400,000 6.8%
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Erwin Zafir -0- 0%
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Fred Fuhrmann -0- 0%
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Craig Kurlander 5,000 *
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Richard Loebl -0- 0%
5770 Miami Lakes Drive
Miami Lakes, Florida 33014
Franklin Resources, Inc.(11) 438,630 8.0%
777 Mariners Island Boulevard
San Mateo, California 94404
Dimensional Fund Advisors, Inc. (12) (13) 339,837 6.2%
1299 Ocean Avenue
Santa Monica, California 90401
Tweedy, Browne Company L.P.(13) 331,315 6.1%
52 Vanderbilt Avenue
New York, New York 10017
All Directors and officers as a group 1,395,415 25.3%
(13 persons)(14)
</TABLE>
- --------------------
4
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* Less than 1%.
(1) All shares are owned directly unless otherwise indicated. Does not
include Common Stock vested under the Company's Tax Deferred Savings
Plan.
(2) Includes 660,053 shares of Common Stock held by Ocean Reef, L.P. and
660,052 shares held by Ocean Reef Cayman I, Ltd. Ocean Reef Management,
Inc. is the sole general partner of Ocean Reef, L.P. and has the right
to vote the shares owned by Ocean Reef Cayman I, Ltd. pursuant to a
management agreement.
(3) Includes 660,053 shares of Common Stock held by Ocean Reef, L.P., a
Delaware limited partnership, and 660,052 shares held by Ocean Reef
Cayman I, Ltd., a Cayman Island corporation. Ocean Reef Management, Inc.
is the sole general partner of Ocean Reef, L.P. and has the right to vote
the shares owned by Ocean Reef Cayman I, Ltd. pursuant to a management
agreement. Rachmil Lekach is the Chief Executive Officer of Ocean Reef
Management, Inc. and a director of Ocean Reef Cayman I, Ltd.
(4) Includes 660,053 shares of Common Stock held by Ocean Reef, L.P. and
660,052 shares held by Ocean Reef Cayman I, Ltd. Ocean Reef Management,
Inc. is the sole general partner of Ocean Reef, L.P. and has the right to
vote the shares owned by Ocean Reef Cayman I, Ltd. pursuant to a
management agreement. Ilia Lekach is a principal shareholder of Ocean
Reef Management, Inc.
(5) Includes 660,053 shares of Common Stock held by Ocean Reef, L.P. and
660,052 shares held by Ocean Reef Cayman I, Ltd. Ocean Reef Management,
Inc. is the sole general partner of Ocean Reef, L.P. and has the right to
vote the shares owned by Ocean Reef Cayman I, Ltd. pursuant to a
management agreement. Mr. Eidelstein is the President of Ocean Reef
Management, Inc. and a director of Ocean Reef Cayman I, Ltd.
(6) Does not include (i)299 shares of Common Stock owned by Leonard Luria's
wife, Gloria Luria, or (ii) any shares owned by his three adult children,
Peter and Henry Luria and Nancy Luria-Cohen, as to all of which shares
Mr. Luria, a Director of the Company, disclaims beneficial ownership.
(7) Includes 50,000 shares of Common Stock subject to presently exercisable
options.
(8) Does not include 1,800 shares of Common Stock owned by Dan Cohen, the
husband of Nancy Luria-Cohen, as to which shares Ms. Luria-Cohen
disclaims beneficial ownership.
(9) Includes 6,333 shares of Common Stock subject to presently exercisable
stock options.
(10) Includes 400,000 shares of Common Stock subject to presently exercisable
stock options.
5
<PAGE>
(11) Based upon most recent Schedule 13G filing.
(12) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 339,837 shares of
Common Stock of the Company as of December 31, 1995, all of which shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disdains beneficial ownership of all such
shares.
(13) Based upon most recent Schedule 13D filing.
(14) Includes 56,333 shares of Common Stock subject to presently exercisable
stock options.
RECENT CHANGE IN CONTROL
On August 9, 1996, two companies affiliated with Ocean Reef purchased an
aggregate of 1,320,105 shares of the Company's Class B Stock from certain
members and affiliated entities of the Luria family, including Leonard Luria,
the Chairman of the Board (Emeritus) of the Company, Peter P. Luria, the
President, Treasurer and Director of the Company, and Nancy Luria-Cohen, the
Vice President - General Counsel and Secretary of the Company. Upon such
purchase, the Class B Stock was converted into Common Stock in accordance with
the Company's articles of incorporation. Rachmil Lekach, Ilia Lekach, and Joel
Eidelstein who are current members of the Board of Directors, are affiliates of
Ocean Reef. See "Security Ownership of Certain Beneficial Owners and Managers."
The stock purchase was completed pursuant to the terms of a stock
purchase agreement, dated as of July 15, 1996 (the "Purchase Agreement"). The
Purchase Agreement provided for the purchase of the 1,320,105 shares of Class B
Stock at a price of $6.00 per share, for an aggregate purchase price of
$7,920,630, of which $5.0 million was paid to the sellers in cash and the
remaining $2,920,630 was paid by delivery of promissory notes. The promissory
notes mature in two years and bear interest at the rate of 8% per annum, with
interest payable quarterly commencing on January 1, 1997. The promissory notes
are secured by the shares purchased by Ocean Reef. The source of the $5.0
million paid by Ocean Reef was the working capital of the two purchasing
entities, Ocean Reef, L.P. and Ocean Reef Cayman I, Ltd.
As a result of this transaction, Ocean Reef, through its affiliates, is
now the Company's largest shareholder, holding an aggregate of 24.2% of the
Company's outstanding Common Stock, based on the number of shares of Common
Stock outstanding on September 16, 1996. On August 9, 1996, Edwin D. Marks,
Jorgen Petersen and Jeremy R. Serwer resigned from the Board of Directors of the
Company. Pursuant to the Company's charter documents, the remaining members of
the Board of Directors then voted to fill the vacancies on the Board, including
one vacancy not previously filled as a result of the resignation of Sydney A.
Luria from
6
<PAGE>
the Board in July 1996, and appointed Rachmil Lekach, Ilia Lekach, Erwin Zafir
and Fred Fuhrmann to the Board. Mr. Rachmil Lekach was appointed Chairman of the
Board and Mr. Zafir was appointed Vice Chairman of the Board. Mr. Leonard Luria
was appointed Chairman of the Board (Emeritus). On August 30, 1996, The Board of
Directors accepted the resignation of Gerald Nathanson as an Officer and
Director of the Company and appointed Joel Eidelstein to the Board of Directors
to fill the vacancy. The newly appointed members of the Board were designated by
Ocean Reef.
Pursuant to the Company's articles of incorporation, once the number of
shares of Class B Stock outstanding represents less than 12.5% of the aggregate
number of outstanding shares of Class B Stock and Common Stock, the holders of
Class B Stock no longer have the right to vote as a separate class for election
of directors. As a result of the sale of the shares of the Class B Stock to
Ocean Reef pursuant to the Purchase Agreement, only 320 shares of Class B Stock
remain outstanding. Accordingly, the full Board of Directors will be elected by
the holders of the Common Stock and the Class B Stock voting together as one
class. Previously, the holders of the Class B Stock had the right to elect 75%
of the directors.
7
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
NAME AGE POSITION
- ---- --- --------
Rachmil Lekach 49 Chairman of the Board and Chief Executive Officer
Erwin Zafir 48 Vice Chairman of the Board
Leonard Luria 73 Chairman of the Board (Emeritus)
Peter P. Luria 44 President, Treasurer and Director
Barry Gold 53 Executive Vice President--Store Operations
Thomas A. Floerchinger 52 Senior Vice President--Finance
Stephen L. Higgins 47 Senior Vice President--General
Merchandise
Ron Angelo 49 Vice President--MIS
Nancy Luria-Cohen 40 Vice President--General Counsel and
Secretary
Harry J. Diven, Jr. 72 Director
Ilia Lekach 46 Director
Fred Fuhrmann 46 Director
Joel Eidelstein 29 Director
RACHMIL LEKACH was appointed Chairman of the Board on August 9, 1996, and
Chief Executive Officer on August 30, 1996. Mr. Lekach also serves as Chairman
of the Board and Chief Executive Officer of Ocean Reef, a privately held company
engaged in various investment activities. Ocean Reef is under the common control
of Messrs. R. Lekach, I. Lekach and Eidelstein. From June 1994 to May 1996, Mr.
Lekach was President of Parlux Fragrances, Inc., a publicly traded manufacturer
and global marketer of prestige fragrances and related beauty products
("Parlux"). He served as a director of Parlux from December 1993 to April, 1996.
From September 1990 to June 1994, Mr. Lekach was a director and held various
executive positions with Perfumania, Inc., a publicly traded specialty retailer
and wholesale distributor of a wide range of brand name and designer fragrances
and related products ("Perfumania"), most recently as President of the retail
division. Rachmil Lekach is the brother of Ilia Lekach.
ERWIN ZAFIR was appointed Vice Chairman of the Board on August 9, 1996.
Mr. Zafir has been President and Chief Executive Officer of Blue Spot, Inc., an
importer and distributor of electronics and watches, from 1973 to present.
LEONARD LURIA has been employed by the Company for 44 years and serves as
the Company's Chairman of the Board (Emeritus). Until January 1996, Mr. Luria
served as Chief Executive Officer of the Company and until August 1996, Mr.
Luria also served as the Company's Chairman of the Board.
8
<PAGE>
PETER P. LURIA, a son of Leonard Luria, has been employed by the Company
since 1974 in various capacities at the store, merchandising and management
levels. He was named President of the Company in 1989.
BARRY GOLD, has been employed by the Company since July 1996. Prior to
joining Luria's, Mr. Gold was a consultant, Chief Financial Officer and Chief
Operating Officer of Sam Flax, Inc. and Kate's Art and Design, Inc. from 1994 to
1996. From 1990 to 1996, Mr. Gold was Vice Chairman and Chief Operating Officer
of Fishers Big Wheel, Inc.
THOMAS A. FLOERCHINGER joined the Company in October 1995. Prior to
joining the Company, Mr. Floerchinger was President of Digital Impact. From May
1994 until September 1994, Mr. Floerchinger served as Chief Operating Officer of
Absolute Entertainment, Inc. and from 1992 until May 1994 served as a consultant
and Chief Financial Officer at Sound Advice, Inc. From November 1991 until March
1992, Mr. Floerchinger was Chief Financial Officer of Intellicall, Inc.
STEPHEN L. HIGGINS joined the Company in February 1996. Prior to joining
the Company, Mr. Higgins was President and Chief Executive Officer of Everything
Organized, Inc., a regional specialty retailer in Atlanta, Georgia since
September 1994, and was President and Chief Operating Officer of Tuesday
Morning, Inc., a national specialty retailer in Dallas, Texas for seven years
prior to that time.
RON ANGELO joined the Company as Vice President--MIS in August, 1995.
Prior to that time Mr. Angelo was the Director of MIS for Clothestime, Inc. for
more than five years.
NANCY LURIA-COHEN, daughter of Leonard Luria, has been employed by the
Company since 1988 as General Counsel and became Vice President in 1991.
HARRY J. DIVEN, JR. has been a Certified Public Accountant, private
investor and financial consultant since 1979.
ILIA LEKACH was appointed a Director on August 9, 1996. Mr. Lekach also
serves as Chairman of the Board and Chief Executive Officer of Parlux. Mr.
Lekach has served as a director of Parlux from February 1989 to present,
Chairman of the Board from November 1990 to present and Chief Executive Officer
from December 1993 to present. He served as Chairman of the Board and Chief
Executive Officer of Perfumania from its incorporation in 1988 to April 1994.
Ilia Lekach is the brother of Rachmil Lekach.
FRED FUHRMANN was appointed a Director on August 9, 1996. Mr. Fuhrmann
has been the Managing Director of La Zahav, N.V., a jewelry wholesaler and
distributor operating in the Caribbean and South America, from 1983 to present.
JOEL EIDELSTEIN is President and a director of Ocean Reef. From November
1990 to present, Mr. Eidelstein has served as a director of Jack-Carl 312
Futures, Inc., a publicly traded discount commodities brokerage firm
("Jack-Carl"). From January 1994 to June 1996, Mr.
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Eidelstein was Vice President of Index Futures Group, Inc., a subsidiary of
Jack-Carl, and was responsible for trading operations in foreign currencies and
Eurodollars. From June 1988 to December 1993, engaged in commodities
transactions for his own account. Mr. Eidelstein has been a member of the
International Monetary Market of the Chicago Mercantile Exchange since 1988.
CLASSIFIED BOARD
The Board of Directors is divided into three classes. Generally each
class is elected every third year. Directors who are voted into a class during
the term of the class may serve less than a three year term. The Company is
holding this Special Meeting of Shareholders to ratify the election of the
directors appointed to the Board since the last Annual Meeting of Shareholders.
These directors whose appointment by the Board is to be ratified, include Joel
Eidelstein, Fred Fuhrmann, Ilia Lekach, Rachmil Lekach and Erwin Zafir. The
following table sets forth certain information with respect to each Director of
the Company:
NAME CURRENT TERM EXPIRES(1)
---- -----------------------
Erwin Zafir 1999 Annual Meeting
Fred Fuhrmann (1) 1999 Annual Meeting
Leonard Luria 1999 Annual Meeting
Harry J. Diven, Jr. 1998 Annual Meeting
Rachmil Lekach (1) 1998 Annual Meeting
Peter P. Luria (1) 1998 Annual Meeting
Joel Eidelstein 1997 Annual Meeting
Ilia Lekach 1997 Annual Meeting
(1) member of the Executive Committee of the Board of Directors
Of the five Directors whose appointment by the Board of Directors is to
be ratified, two (Ilia Lekach and Joel Eidelstein) will serve until the Annual
Meeting of Shareholders to be held in 1997, one (Rachmil Lekach) will serve
until the Annual Meeting of Shareholders to be held in 1998 and two (Erwin Zafir
and Fred Fuhrmann) will serve until the Annual Meeting of Shareholders to be
held in 1999, and all of whom will serve until their respective successors are
duly elected and qualified. The persons names in the enclosed proxy will vote
shares of Common stock and Class B Stock for the ratification of the election of
the Directors appointed since the last Annual Meeting of Shareholders, unless
such proxy directs otherwise. The Board of Directors does not expect that any of
the Directors named in this proxy will be unable to stand for ratification of
their appointment, but, in the event that vacancies in the Board of Directors
should occur unexpectedly, the shares represented by the proxies may be voted
for substitutes chosen by the Board of Directors.
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COMMITTEES
The principal standing committees of the Board of Directors include the
following:
AUDIT COMMITTEE. The Audit Committee was established by the Board of
Directors in March 1981 and during the fiscal year ended February 3, 1996 was
comprised of Harry J. Diven, Jr. (Chairman), Sydney A. Luria and Cynthia Cohen
Turk. Mr. Luria and Ms. Cohen Turk have since resigned from the Board. The
current members of the Audit Committee consist of Messrs. Diven (Chairman),
Zafir and Fuhrmann. The Audit Committee meets with management regarding the
internal controls of the Company and the objectivity of its financial reporting.
The Committee also meets with the Company's independent auditors and with
appropriate Company financial personnel concerning these matters. Other
functions of the Audit Committee include recommending to the Directors the
appointment of the independent auditors and reviewing the Company's audited
financial statements and the auditors' report thereon with the auditors and the
Company's management. The Audit Committee met three times during the fiscal year
ended February 3, 1996.
COMPENSATION AND STOCK OPTION COMMITTEE. The Compensation and Stock
Option Committee was established by the Board of Directors in June 1993 and
combines the functions of the Compensation Committee and the Stock Option
Committee, each of which was originally established in March 1981. During the
fiscal year ended February 3, 1996, the Compensation and Stock Option Committee
was comprised of Jeremy Serwer (Chairman), Cynthia Cohen Turk, Edwin D. Marks
and Jorgen Petersen. Ms. Cohen Turk and Messrs. Serwer, Marks and Petersen have
since resigned from the Board. The current members of the Compensation and Stock
Option Committee consist of Erwin Zafir (Chairman) and Joel Eidelstein. The
Compensation and Stock Option Committee's responsibilities consist of
recommending, reviewing and approving the salary and fringe benefits policies of
the Company, reviewing compensation policies for Directors and reviewing and
approving the compensation of officers of the Company. The Compensation and
Stock Option Committee also recommends and approves stock awards and option
grants under the Company's employee benefit plans, including the 1992 Stock
Option Plan and the 1996 Stock Option Plan, and recommends amendments to such
plans, subject to approval by the Board of Directors. The Compensation and Stock
Option Committee met three times during the fiscal year ended February 3, 1996.
The Compensation and Stock Option Committee also took action by unanimous
written consent during the year.
ADDITIONAL INFORMATION CONCERNING DIRECTORS
Each Director who is neither an officer nor employee of the Company
receives a fee of $5,000 per year. In addition, such Directors are reimbursed
for attendance at meetings in an amount of $1,500 per meeting ($500 if
attendance by telephone) and, if not held in connection with a meeting of the
Board, $500 for attendance at committee meetings. The directors also are
reimbursed for out-of-pocket expenses incurred by them in attending Board or
committee meetings. Harry J. Diven, Jr. also received during the fiscal year
ended February 3,1996 an additional $1,000 per quarter as reimbursement for
quarterly visits to the Company. Pursuant to the 1993 Directors' Stock Option
Plan, non-employee directors are granted options to purchase
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1,000 shares of Common Stock, after each annual meeting of the Company, provided
that the Company recognized a net profit during the preceding fiscal year.
The Board of Directors of the Company held a total of six meetings during
the fiscal year ended February 3, 1996. The Board of Directors also took action
by unanimous written consent during the year. Each Director attended at least
75% of the aggregate of the total number of meetings of the Board of Directors
and of the committees on which they serve except Jeremy Serwer and Jorgen
Petersen, who resigned in August 1996 and who were unable to attend two of the
Board meetings and one meeting of the committee on which each of them served.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or paid
to each of the Company's Chief Executive Officer, the four most highly
compensated executive officers during fiscal 1996 other than the Chief Executive
Officer who were serving as executive officers at the end of fiscal 1996.
Information with respect to salary, bonus, other annual compensation, options
and LTIP Payouts is included for the 1994, 1995 and 1996 fiscal years for the
officers who were here during those years. The Company has not granted any stock
appreciation rights, nor paid compensation that would qualify as "All Other
Compensation."
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ---------------------------------
AWARDS PAYOUTS
OTHER ANNUAL RESTRICTED ------- ------------
SALARY BONUS COMPENSATION STOCK OPTIONS LTIP PAYOUTS
NAME AND PRINCIPAL POSITION FISCAL YEAR ($) ($)(1) ($)(2) AWARD(S)($) (#) ($)
- --------------------------- ----------- ------- ------- ------------ ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
LEONARD LURIA 1996 $344,223 $-- $1,746 $-- -- $--
Chairman of the 1995 339,423 -- 2,310 -- -- --
Board(3) 1994 400,000 -- 2,249 -- -- --
GERALD NATHANSON (4) 1996 $23,077 $200,000 -- $-- 400,000 $--
Former Chief 1995 -- -- -- -- -- --
Executive Officer 1994 -- -- -- -- -- --
PETER P. LURIA 1996 $301,930 $-- $4,254 $-- 50,000 $--
President 1995 300,000 -- 4,443 -- 50,000 --
1994 282,692 75,000 2,249 -- -- --
CRAIG KURLANDER( 5) 1996 $196,154 $-- $5,000 $22,500(6) 30,000 $--
Executive Vice 1995 -- -- -- -- -- --
President 1994 -- -- -- -- -- --
RICHARD LOEBL(7) 1996 $170,769 $-- -- $-- 15,000 $--
Senior Vice Present 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
</TABLE>
______________
(1) Reflects bonus earned in the fiscal year.
(2) Represents the Company's matching contributions to the Tax Deferred
Savings Plan in equivalent shares of Common Stock. Does not include the
dollar value of personal benefits, such as the cost of automobiles and
health insurance, the aggregate value of which for each named executive
officer was less than 10% of such executive officer's salary and bonus.
(3) Mr. Luria currently serves as Chairman of the Board (Emeritus).
(4) Mr. Nathanson's employment with the Company commenced in January 1996.
Mr. Nathanson resigned from the Company effective August 30, 1996.
(5) Mr. Kurlander's employment with the Company commenced in February 1995.
(6) Reflects the award of 5,000 shares of Common Stock under the Company's
Stock Bonus Plan. The value of the 5,000 shares is based on the closing
price of $4.50 of the Company's Common Stock on February 3, 1996.
(7) Mr. Loebl's employment with the Company commenced in February 1995.
13
<PAGE>
OPTION GRANTS TABLE
The following table sets forth certain information concerning grants of
stock options made during the 1996 fiscal year to the named executive officers.
All stock options granted to such persons during the 1996 fiscal year were
granted pursuant to the Company's 1992 Stock Option Plan except for the grant to
Gerald Nathanson which was granted pursuant to the Company's 1996 Stock Option
Plan.
<TABLE>
<CAPTION>
OPTION GRANTS DURING 1996 FISCAL YEAR(1)
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATE
OF STOCK PRICE
NUMBER OF SECURITIES APPRECIATION
UNDERLYING % OF TOTAL OPTIONS FOR OPTION TERM(4)
OPTIONS GRANTED GRANTED TO EMPLOYEES EXERCISE PRICE EXPIRATION ------------------
(#) IN FISCAL YEAR 1996(2) PER SHARE DATE (3) 5%($) 10%($)
------------------- ----------------------- -------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Luria 0 0.0% $0.00 N/A $0 $0
Gerald Nathanson(4) 400,000 69.9 5.125 1/2/06 872,000 2,590,000
Peter P. Luria(5) 50,000 8.7 6.125 4/21/05 27,000 186,000
Craig Kurlander 15,000 2.6 8.125 2/6/00 0 0
15,000 2.6 6.50 6/5/00 0 5,000
Richard Loebl 15,000 2.6 7.625 2/27/00 0 0
</TABLE>
______________
(1) No stock appreciation rights were granted.
(2) Does not include options granted during the fiscal year which expired
prior to the end of the fiscal year.
(3) Subject to the provisions of the Stock Option Plans.
(4) The potential realizable value portion of the foregoing table
illustrates value that might be realized
upon exercise of the options immediately prior to the expiration of their
term, assuming the specified compounded rates of appreciation on the
Company's Common Stock over the term of the options. These numbers do not
take into account provisions providing for termination of the option
following termination of employment, nontransferability or vesting or the
potential exercise of options and sale of the underlying shares prior to
expiration of the term. The calculations are not intended to forecast
possible future appreciation, if any, of the market price of the Common
Stock.
(5) Mr. Luria's options were canceled in August 1996. See "-Employment
Contracts" regarding options granted to Mr. Luria in August 1996.
14
<PAGE>
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning the
exercise of stock options and unexercised stock options held by the named
executive officers as of the end of the 1996 fiscal year. No stock appreciation
rights have been granted or are outstanding.
<TABLE>
<CAPTION>
OPTION EXERCISES AND OPTION VALUES DURING 1996 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT 1996 AT 1996
FISCAL YEAR END FISCAL YEAR END
SHARES ACQUIRED (#) ($)(1)
ON EXERCISE VALUE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Luria 0 $0.00 0 0 $0 $0
Gerald Nathanson 0 0.00 400,000 0 0 0
Peter P. Luria 0 0.00 225,000 0 0 0
Craig Kurlander 0 0.00 0 30,000 0 0
Richard Loebl 0 0.00 0 15,000 0 0
</TABLE>
____________
(1) The closing price for the Company's Common Stock as reported by the New
York Stock Exchange on February 3, 1996 was $4.50. All options shown on
this table have an exercise price in excess of $4.50.
EMPLOYMENT CONTRACTS
Effective August 9, 1996, the Company entered into an employment
agreement with Peter P. Luria, with an initial term expiring August 9, 1998. The
employment agreement provides for Mr. Luria's employment as President at a base
salary of $250,000 per year, plus discretionary bonuses if approved by the Board
of Directors. Mr. Luria was granted options to purchase 100,000 shares of Common
Stock on the effective date of the Agreement, 50,000 of which became immediately
exercisable on the effective date and 50,000 of which will become exercisable on
the one-year anniversary of the date of grant. The employment agreement also
provides that in the event of a change in control (as defined therein), Mr.
Luria may terminate his employment and will thereupon be entitled to a lump sum
payment equal to the sum of (x) his base salary through the end of the initial
term, and (y) a severance payment of $250,000. Mr. Luria may also terminate his
employment for Good Reason (as defined therein) and may then be entitled to
receive his base salary and any accrued but unpaid bonus through the end of the
initial term.
Effective January 2, 1996, the Company entered into an employment
agreement with Gerald Nathanson, with an initial term expiring April 30, 1998.
Effective August 30, 1996, Mr. Nathanson resigned as Chief Executive Officer of
the Company and his employment agreement was terminated. In connection with his
resignation, the Company agreed to pay to Mr. Nathanson a total payment of
$472,765, $283,659 of which was paid to Mr. Nathanson on August 30, 1996, and
the remaining payment of $189,106 which will be paid on January 2, 1997.
15
<PAGE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
During the fiscal year ended February 3, 1996, the Company leased its
store facility at 980 S.W. 1st Street, Miami, Florida, from a partnership in
which Leonard Luria, a Director of the Company, has a 60% interest. During the
fiscal year ended February 3, 1996, the Company paid basic rent under the lease
of $87,405. In addition, the Company is obligated to pay real estate taxes,
assessments and other governmental charges and insurance in connection with the
leased premises.
During the fiscal year ended February 3, 1996, the Company leased its
store facility located at 6411 Taft Street, Hollywood, Florida, from a
partnership in which Gloria Luria, the wife of Leonard Luria, has a 70%
interest. During the fiscal year ended February 3, 1996, the Company paid basic
rent under the leases of $117,102. In addition, the Company is obligated to pay
real estate taxes, assessments and other governmental charges and insurance in
connection with the leased premises.
The Company believes that the rent charged and to be charged under each
lease described above is at a rate that is comparable to that paid under leases
of similar properties in the same general location as the properties described
and that the terms of each such lease are at least as favorable to the Company
as could be obtained from an unaffiliated party.
The Company is in the process of negotiating with Perfumania, a
corporation in which Rachmil Lekach, Chief Executive Officer and Chairman of the
Board of the Company, and Ilia Lekach, a Director of the Company, are
affiliates, to purchase an initial order of approximately $400, 000 of
merchandise. The Company believes that the amount to be paid for the merchandise
and the payment terms are atleast as favorable to the Company as could be
obtained from an unaffiliated vendor.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock. Officers, directors and greater than 10 percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ended February 3, 1996 all Section 16(a)
filing requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with, except that one report was filed
late by Thomas Floerchinger.
16
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for executive officers is administered
by the Compensation and Stock Option Committee (the "Committee") of the Board of
Directors, which during the fiscal year ended February 3, 1996, was composed of
Jeremy Serwer, Cynthia Cohen Turk, Edwin D. Marks and Jorgen Petersen. The
current members of the Compensation Committee are Erwin Zafir and Joel
Eidelstein. Compensation of executive officers of the Company, other than the
Chairman of the Board, the Chief Executive Officer and the President, is based
upon recommendations made to the Committee by the Executive Committee. The
Executive Committee currently consists of Rachmil Lekach, the Company's Chairman
of the Board and the Company's Chief Executive Officer, Fred Fuhrman, a Director
of the Company, and Peter P. Luria, the Company's President.
The Committee focuses on (I) attracting and retaining key executive
officer; (ii) individual and Company performance, both short-term and long-term;
(iii) relating performance and responsibilities to compensation; and (iv)
providing incentives to management based upon performance. Benefits provided to
management through stock option incentives are generally consistent with
shareholder return. In reviewing Company performance the Committee gives primary
consideration to sales and earnings and evaluates strategic planning and the
Company's progress in that regard. The Committee also takes into consideration
external economic factors that affect results of operations. The Committee's
analysis of the foregoing factors is by nature subjective. Committee strives to
maintain compensation within the market range.
Salaries of executive officers are based primarily upon position with the
Company, the person's responsibilities and importance to the Company, agreements
with the Company, performance and external comparisons. The general philosophy
of the Committee with respect to compensation of the executive officers is to
offer competitive compensation programs designed to attract and retain key
executives critical to the long-term success of the Company. This analysis is
also subjective. An executive officer's prior salary and history with the
Company is also taken into consideration. In fiscal 1996, there were also
several new executive officers whose salaries were negotiated as part of the
hiring process.
Leonard Luria, the Company's Chief Executive Officer through December 31,
1995, did not receive a bonus for fiscal 1996. Therefore, Leonard Luria's salary
for fiscal 1996 represents all of his compensation. The Company has a formula
for awarding a bonus to the President based upon the Company's profit before
taxes. A bonus is awarded if such profit is equal to or greater than $5 million.
The Committee provides bonuses to each of its executive officers based upon the
Company's results of operations and such officer's performance. This
determination is not subject to specific criteria. In determining bonuses,
consideration is also given to existing salary levels. The Company relates
bonuses to it long-term planning. In fiscal 1996 no cash bonuses were awarded to
the executive officers except a cash bonus was given to Gerald Nathanson when he
was hired by the Company. See "Executive Compensation - Summary Compensation
Table."
The Committee also relates a significant portion of executive officer
compensation to long-term incentives in order to encourage long-term planning.
The 1992 Stock Option Plan and the
17
<PAGE>
1996 Stock Option Plan (being submitted to the shareholders for approval at this
Annual Meeting) provide incentive to management through the award of stock
options at the discretion of the Committee. The amount of options granted to any
executive officer depends, to some extent, on position and salary level,
individual performance, the executive's impact on the Company and the
executive's perceived potential. Stock options that were granted in fiscal 1996
were granted to recognize individual performance or to provide additional
incentive for the future. Options were granted to individuals with fewer or no
options outstanding and as part of compensation packages to retain several new
executive officers. In making the determination with respect to the size of
these grants, the Committee primarily emphasized the perceived role of the
individual in connection therewith or perceived future role in operations.
Further emphasis was given to the individual's present or future role in
strategic planning. The Committee also considered what amount of options would
be necessary to provide adequate incentives to such executive officers. All of
these factors are subjective. See "Executive Compensation - Option Grants During
the 1996 Fiscal Year."
CYNTHIA COHEN TURK; EDWIN D MARKS; JORGEN PETERSEN AND JEREMY SERWER
18
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return on the
Company's Common Stock over the last five fiscal years as compared to the
returns of the Standard & Poor's 500 Composite Index and the Standard & Poor's
Retail Stores-Composite Index. The graph assumes $100 was invested on January
30, 1991 in the Company's Common Stock, the Standard & Poor's Composite Index
and the Standard & Poor's Retail Stores - Composite Index, and assumes
reinvestment of dividends.
<TABLE>
<CAPTION>
INDEXED RETURNS
---------------------------------------------------------------
YEARS ENDING
---------------------------------------------------------------
COMPANY /INDEX JAN 91 JAN 92 JAN 93 JAN 94 JAN 95 JAN 96
-------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
LURIA (L.) & SON INC. 100 117.02 178.72 234.04 119.15 74.47
S&P 500 INDEX 100 122.69 135.67 153.14 153.96 213.48
RETAIL STORES COMPOSITE 100 139.73 166.79 160.75 148.85 160.50
</TABLE>
19
<PAGE>
SHAREHOLDERS PROPOSALS
Any proposal by a shareholder intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company no later than January 3,
1997, for inclusion in the Company's proxy statement and form of proxy relating
to such meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at the
Meeting. Should any unanticipated business properly come before the Meeting,
however, it is intended that the holders of proxies solicited hereby will vote
thereon at their discretion.
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by mail, certain officers and employees of the
Company may solicit proxies in person or by telephone without compensation.
Brokers, banks and other custodians or fiduciaries holding shares in names of
the nominees will be requested to forward copies of the proxy soliciting
materials to the beneficial owners of the shares and the Company will reimburse
them for expenses incurred in doing so. To assist the Company in obtaining
proxies from such brokers, banks and other custodians or fiduciaries, the
Company has engaged Corporate Investors Communications, Inc. for a fee of $5,000
plus out-of-pocket expenses.
The above notice and proxy statement are sent by order of the Board of
Directors.
NANCY LURIA-COHEN
SECRETARY
Miami Lakes, Florida
September 23, 1996
20
<PAGE>
COMMON STOCK PROXY
L. LURIA & SON, INC.
5770 MIAMI LAKES DRIVE, MIAMI LAKES, FLORIDA 33014
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Stock of L. LURIA & SON, INC., A
Florida corporation (the "Company") hereby appoints RACHMIL LEKACH and PETER
LURIA, and each or either of them, the proxy or proxies of the undersigned, with
full power of substitution to such proxy and substitute, to vote all shares of
Common Stock of the Company which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Company to be held at the Davis Cup Room,
Don Shula's Hotel, Main Street, Miami Lakes, Florida 33014, at 9:30 A.M., local
time, October 30, 1996, and at all adjournments thereof with authority to vote
said Common Stock on the matters set forth below:
The shares of Common Stock represented by this Proxy will be voted in
the manner directed herein by the undersigned shareholder, who shall be entitled
to one vote for each share of Common Stock held. Holders of Common Stock and
Class B Stock vote together on the ratification of the election of Directors. If
no direction is made, this Proxy will be voted for each item listed below.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE>
The Board of Directors recommends a vote FOR each proposal.
Please mark your vote as indicated in this example [x]
1. RATIFICATION OF ELECTION OF DIRECTORS. Ratification of Election of
Joel Eidelstein, Fred Fuhrmann, Ilia Lekach, Rachmil Lekach, and Erwin Zafir
as Directors.
FOR all Directors WITHHOLD
listed above (except) AUTHORITY
as marked to the to vote for all
contrary below) Directors listed above
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual Director, write
that Director's name on the space provided below.)
______________________________________________________________________________
2. In their discretion, upon such other business as may be properly brought
before the meeting and each adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED, IF
NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED FOR EACH OF THE MATTERS
MENTIONED.
Dated:____________________________, 1996
________________________________________
Signature
________________________________________
Signature if Held Jointly
PLEASE SIGN YOUR NAME EXACTLY AS IT
APPEARS ON THE LEFT. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS,
ATTORNEYS AND AGENTS SHOULD GIVE THEIR
FULL TITLE AND SUBMIT EVIDENCE OF
APPOINTMENT UNLESS PREVIOUSLY FURNISHED TO
THE COMPANY OR ITS TRANSFER AGENT. ALL
JOINT OWNERS SHOULD SIGN.
PLEASE, MARK, DATE, SIGN AND RETURN USING THE ENCLOSED ENVELOPE.
YOUR PROMPT ATTENTION WILL BE APPRECIATED.
