<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant / X /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
National Convenience Stores Incorporated
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
A.J. Gallerano
100 Waugh Drive
Houston, Texas 77007
- - --------------------------------------------------------------------------------
(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), 14a-6(i)(2), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-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:(1)
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
NATIONAL CONVENIENCE STORES INCORPORATED
100 Waugh Drive
Houston, Texas 77007
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, NOVEMBER 10, 1994
To the Holders of Common Stock, $.01 par value per share, of
National Convenience Stores Incorporated:
The Annual Meeting of Stockholders of National Convenience Stores
Incorporated ("Company") will be held in the George R. Brown
Convention Center, 1001 Avenida de las Americas, Room 306, Houston,
Texas, on Thursday, November 10, 1994, at 10:00 a.m. Houston time, for
the following purposes:
(1) To elect Class II directors to serve until their respective
successors have been elected and qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as independent
accountants for the Company for the fiscal year ending June 30,
1995; and
(3) To transact such other business as may properly come before the
meeting and any adjournment thereof.
Holders of Common Stock of record at the close of business on
September 12, 1994, are entitled to vote at the meeting and any
adjournment thereof.
Stockholders are cordially invited to attend the meeting in person. To
obtain an admission ticket, please complete and return the enclosed
admission ticket request card.
By Order of the Board of Directors
A. J. Gallerano, Secretary
September 27, 1994
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE SIGN, DATE AND
MAIL THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE> 3
NATIONAL CONVENIENCE STORES INCORPORATED
100 Waugh Drive
Houston, Texas 77007
Proxy Statement
1994 Annual Meeting of Stockholders
________________________________________________________________________________
INTRODUCTION
________________________________________________________________________________
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of National Convenience Stores Incorporated (the "Company")
of proxies for use at the Annual Meeting of Stockholders of the Company to be
held on Thursday, November 10, 1994, in the George R. Brown Convention Center,
1001 Avenida de las Americas, Room 306, Houston, Texas, at 10:00 a.m. Houston
time, and at any adjournment thereof (the "Annual Meeting"), for the purposes
set forth herein.
This Proxy Statement and accompanying proxy card are being mailed on or about
October 3, 1994, to stockholders of record as of September 12, 1994.
Unless otherwise marked, proxies in the form enclosed that are properly signed
and dated, returned and not revoked will be voted: (1) for the Board of
Directors' slate of two nominees as Class II directors of the Company; and (2)
for the ratification of the appointment of Deloitte & Touche LLP as
independent accountants for the Company. Should any additional matters be
properly brought before the Annual Meeting, the persons named in the proxy
card will vote such proxies in accordance with their best judgment.
Information regarding the vote required for election of directors, the method
by which votes will be counted, procedures for revoking proxies and related
matters is set forth below under "Voting Procedures".
Please sign, date and return the enclosed proxy card in the postage-paid
envelope. You may revoke it at any time prior to its exercise as described
below under "Voting Procedures". It is very important that your shares be
voted at the Annual Meeting. Please ensure that your shares will be voted by
signing, dating and returning the proxy card.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE THE
ENCLOSED ADMISSION TICKET REQUEST CARD AND RETURN IT PROMPTLY SO YOUR TICKET
CAN BE MAILED TO YOU IN ADVANCE. Stockholders of record who do not have
admission tickets will be admitted upon verification of ownership at the
Admissions Counter at the meeting. Beneficial owners will be admitted if they
obtain evidence of ownership in advance from the stockholder of record and
present such evidence at the Admissions Counter.
________________________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________________________
The Board of Directors of the Company has fixed the close of business on
September 12, 1994, as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting (the "Record Date").
On the Record Date, the outstanding voting securities of the Company consisted
of 6,050,075 shares of common stock, par value $.01 per share ("Common
Stock"). Each share of Common Stock is entitled to one vote with respect to
each matter to be voted upon at the Annual Meeting. The presence in person or
by proxy of the holders of a majority of the shares of Common Stock
outstanding on the Record Date will be necessary to constitute a quorum at the
Annual Meeting.
Pursuant to the Company's Revised Fourth Amended and Restated Joint Plan of
Reorgan-
<PAGE> 4
ization, which was confirmed by order of the United States Bankruptcy Court
for the Southern District of Texas (Houston Division) (the "Bankruptcy Court")
entered on February 25, 1993, and which became effective on March 9, 1993 (the
"Plan of Reorganization"), a number of shares of Common Stock beneficially
owned by certain of the Company's creditors were issued to Boatmen's Trust
Company ("Boatmen's"), as agent for the beneficial owners of such shares
pending the determination of the number of shares properly allocable to each
such creditor (such shares issued to Boatmen's as agent for such creditors
being herein called the "Creditors' Shares"). On the Record Date, Boatmen's
held 750,429 of the Creditors' Shares, constituting approximately 12% of the
outstanding Common Stock. Boatmen's has informed the Company that it intends
to attend the Annual Meeting (by means of a limited proxy) for the limited
purpose of helping to establish a quorum; however, Boatmen's has also informed
the Company that it does not intend to vote the Creditors' Shares in the
absence of instructions from the beneficial owners thereof. Because the number
of shares owned by individual beneficial owners cannot be determined at
present and is unlikely to be determined prior to the date of the Annual
Meeting, it is unlikely that Boatmen's will vote any of the Creditors' Shares.
If, as anticipated, Boatmen's attends the Annual Meeting solely to help
establish the existence of a quorum and declines to vote any of the Creditors'
Shares, the Creditors' Shares will not be counted in determining the results
of votes taken at the Annual Meeting. See "Voting Procedures".
Based on public filings made with the Securities and Exchange Commission, the
Company is not aware of any person holding beneficial ownership of five
percent or more of the outstanding Common Stock as of the Record Date.
________________________________________________________________________________
ELECTION OF DIRECTORS
________________________________________________________________________________
The Company's Restated Certificate of Incorporation provides for three classes
of directors, and also provides that the total number of directors shall be
fixed by, or in the manner provided in, the By-Laws. The By-Laws provide that
the number of directors shall be fixed from time to time exclusively by
resolution of a majority of the total number of directors, but shall not be
greater than eight. Class I consists of two directors (Mr. Van Horn and Mr.
Oeland), Class II consists of two directors (Mr. Stobaugh and Mr. Chambers),
and Class III consists of four directors (Messrs. Wilde, Steadman, Sosa and
Luellen). The Class I directors were reelected for a three-year term at the
1993 Annual Stockholders Meeting. The Class II directors will stand for
election for a three-year term at the upcoming Annual Meeting, and the Class
III directors will stand for election for a three-year term at the 1995 Annual
Meeting.
The Nominating Committee, consisting of Mr. Stobaugh and Mr. Luellen, has
proposed Mr. Stobaugh and Mr. Chambers for reelection to the Board as Class II
directors. The Class II directors will be elected by the affirmative vote of
the holders of a majority of shares of Common Stock present in person or by
proxy and voting at the Annual Meeting. Proxies in the form of the enclosed
proxy card will be voted in favor of the nominees listed below unless a
contrary instruction appears on the proxy card. Each of the nominees has
consented to be named in this Proxy Statement and to serve if elected. While
the Board has no reason to believe that either of the nominees will be unable
or unwilling to serve if elected, should either of the nominees become unable
or unwilling to serve as a director, shares represented by the proxies will be
voted for the election of such other person or persons as may be nominated by
the Nominating Committee.
2
<PAGE> 5
Certain additional information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
Positions with Director
Name Age the Company since
---- --- -------------- --------
<S> <C> <C> <C>
Robert B. Stobaugh, DBA (1).............. 66 Director; Member of the Audit and 1973
Nominating Committees
Dunbar N. Chambers, Jr. (2).............. 59 Director; Member of the Compensation 1964
Committee
</TABLE>
________________________________________________________________________________
(1) FOR MORE THAN THE LAST FIVE YEARS, MR. STOBAUGH HAS BEEN A PROFESSOR OF
BUSINESS ADMINISTRATION AT THE HARVARD UNIVERSITY GRADUATE SCHOOL OF
BUSINESS ADMINISTRATION. MR. STOBAUGH IS ALSO A DIRECTOR OF ASHLAND OIL,
INC., ASHLAND, KENTUCKY, AND OF AMERICAN INTERNATIONAL PETROLEUM
CORPORATION, NEW YORK, NEW YORK.
(2) FOR MORE THAN THE LAST FIVE YEARS, MR. CHAMBERS HAS BEEN CHAIRMAN OF THE
BOARD OF DIRECTORS OF CHAMBCO, INC. CHAMBCO, INC., THROUGH ITS
SUBSIDIARIES AND RELATED INVESTMENTS, ENGAGES IN REAL ESTATE INVESTMENT,
DEVELOPMENT AND MANAGEMENT; RANCHING AND OTHER INVESTMENTS.
________________________________________________________________________________
See "Information Regarding Directors and Officers" for certain additional
information regarding the nominees and information regarding the other members
of the Company's Board of Directors.
During fiscal 1994, the Company's Board of Directors held ten regularly
scheduled and special meetings. The Board of Directors has designated an Audit
Committee, composed of Messrs. Stobaugh, Oeland and Sosa; a Compensation
Committee, composed of Messrs. Chambers, Luellen, Steadman and Wilde, and a
Nominating Committee, consisting of Messrs. Stobaugh and Luellen. The function
of the Audit Committee, which met four times during fiscal 1994, is to review
the Company's financial statements periodically with the Company's independent
public accountants; to determine the effectiveness of the audit effort through
meetings with the Company's independent accountants; to monitor the
effectiveness of the Company's internal controls and financial accounting
functions; and to report to the Board of Directors on its activities and its
recommendations. The function of the Compensation Committee is to evaluate on
an annual basis the performance of the Company's senior management; to
structure appropriate compensation arrangements for senior management; and to
make reports to the Board of Directors as to its findings and formulations of
compensation arrangements for senior management. During fiscal 1994, the full
Board of Directors (excluding Mr. Van Horn) performed the functions normally
delegated to the Compensation Committee. The Nominating Committee, which was
formed in March 1993 pursuant to the Plan of Reorganization and operates
pursuant to the provisions of the Plan of Reorganization, nominates candidates
for election to the Board. The Nominating Committee met once during the year
ended June 30, 1994.
________________________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________________________
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Deloitte & Touche LLP as the Company's independent public
accountants for the fiscal year ending June 30, 1995, subject to ratification
by the stockholders. Deloitte & Touche LLP has served as the Company's
independent public accountants for several years.
Management has invited representatives of Deloitte & Touche LLP to be present
at the Annual Meeting. They will have an opportunity to make a statement, if
they desire to do so, and are expected to be available to respond to
appropriate questions. The appointment of Deloitte & Touche LLP as the
Company's independent accountants is subject to approval by a majority of the
shares of Common Stock represented at the Annual Meeting in person or by
proxy. The Board of Directors recommends such approval, and, unless marked to
the contrary, proxies received from stockholders will be voted for the
approval of Deloitte & Touche LLP as the Company's independent accountants for
the fiscal year ending June 30, 1995.
3
<PAGE> 6
_______________________________________________________________________________
INFORMATION REGARDING DIRECTORS AND OFFICERS
________________________________________________________________________________
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of August 31, 1994, by (i) all
directors and nominees, (ii) each of the executive officers named in the
Summary Compensation Table and (iii) all officers and directors of the Company
as a group. All information with respect to beneficial ownership has been
furnished to the Company by the respective directors and officers.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Classifi- Positions with Director Beneficial of
Name cation Age the Company Since Ownership(1) Class
---- --------- --- -------------- -------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
V. H. Van Horn........................ I 56 Director; President and Chief 1975 51,345(2) *
Executive Officer
Raymond W. Oeland, Jr. ............... I 59 Director; Member of the Audit 1959 5,000(3) *
Committee
Robert B. Stobaugh, DBA............... II 66 Director; Member of the Audit 1973 5,864(4) *
and Nominating Committees
Dunbar N. Chambers, Jr. .............. II 59 Director; Member of the 1964 5,139(5) *
Compensation Committee
William Key Wilde..................... III 61 Director; Member of the 1959 8,061(6) *
Compensation Committee
Richard C. Steadman................... III 61 Director; Chairman of the 1969 36,543(7) *
Board of Directors; Member of
the Compensation Committee
Charles J. Luellen.................... III 64 Director; Member of the 1993 5,000(8) *
Compensation and Nominating
Committees
Lionel Sosa........................... III 55 Director; Member of the Audit 1993 5,000(9) *
Committee
A. J. Gallerano....................... -- 52 Senior Vice President, General -- 20,192(10) *
Counsel and Secretary
C. R. Wortham......................... -- 55 Senior Vice President -- Real -- 20,078(11) *
Estate/Gasoline
Arnold Van Zanten..................... -- 52 Senior Vice President -- -- 20,155(12) *
Administration
M. David Wishard...................... -- 36 Vice President -- Stores -- 10,038(13) *
All directors and officers as a group
(13 persons)........................ -- -- -- -- 202,417 3.3
</TABLE>
________________________________________________________________________________
* LESS THAN ONE PERCENT.
(1) EXCEPT AS OTHERWISE INDICATED, ALL SUCH SHARES ARE OWNED WITH SOLE VOTING
POWER AND SOLE INVESTMENT POWER. INFORMATION WITH RESPECT TO BENEFICIAL
OWNERSHIP IS BASED ON INFORMATION FURNISHED TO THE COMPANY BY THE
INDIVIDUALS NAMED OR INCLUDED IN THE GROUP, AND INCLUDES SHARES THAT SUCH
PERSONS HAVE, OR WITHIN 60 DAYS AFTER AUGUST 31, 1994 WILL HAVE, THE
RIGHT TO ACQUIRE PURSUANT TO STOCK OPTIONS OR OTHERWISE.
(2) INCLUDES (A) 64 SHARES HELD BY MERRILL LYNCH TRUST COMPANY OF TEXAS AS
TRUSTEE UNDER THE COMPANY'S ESOP (THE "ESOP TRUSTEE"), (B) 319 SHARES
HELD BY MERRILL LYNCH TRUST COMPANY OF TEXAS AS TRUSTEE UNDER THE
COMPANY'S PROFIT SHARING PLAN (THE "PROFIT SHARING TRUSTEE") FOR MR. VAN
HORN'S ACCOUNT AND AS TO WHICH HE HAS SOLE VOTING POWER, (C) SEVEN SHARES
OWNED BY MR. VAN HORN'S FAMILY MEMBERS, AS TO WHICH BENEFICIAL OWNERSHIP
IS DISCLAIMED, (D) AN AGGREGATE OF 833 WARRANTS EXERCISABLE TO ACQUIRE
ONE SHARE OF COMMON STOCK EACH AT AN EXERCISE PRICE OF $17.75 PER WARRANT
("WARRANTS"), OF WHICH 107 WARRANTS ARE HELD BY THE ESOP TRUSTEE, 507
WARRANTS ARE HELD BY THE PROFIT SHARING TRUSTEE AND 14 WARRANTS ARE HELD
BY MEMBERS OF MR. VAN HORN'S FAMILY, AS TO WHICH BENEFICIAL OWNERSHIP IS
DISCLAIMED, AND (E) EXERCISABLE OPTIONS TO ACQUIRE 50,000 SHARES AT AN
EXERCISE PRICE OF $10.50 PER SHARE.
(3) INCLUDES EXERCISABLE OPTIONS TO ACQUIRE 5,000 SHARES AT AN EXERCISE PRICE
OF $10.50 PER SHARE.
(4) INCLUDES 84 SHARES AND 140 WARRANTS HELD BY MR. STOBAUGH AS TRUSTEE FOR
THE BENEFIT OF HIS FAMILY AND EXERCISABLE OPTIONS TO ACQUIRE 5,000 SHARES
AT AN EXERCISE PRICE OF $10.50 PER SHARE.
(5) INCLUDES 6 WARRANTS AND EXERCISABLE OPTIONS TO ACQUIRE 5,000 SHARES AT AN
EXERCISE PRICE OF $10.50 PER SHARE.
(6) INCLUDES 1,147 SHARES AND 1,914 WARRANTS HELD BY GRAYSTONE INVESTMENTS, A
PARTNERSHIP IN WHICH MR. WILDE IS A PARTNER, AND EXERCISABLE OPTIONS TO
ACQUIRE 5,000 SHARES AT AN EXERCISE PRICE OF $10.50 PER SHARE.
(7) INCLUDES (A) 168 SHARES AND 281 WARRANTS HELD BY MR. STEADMAN'S WIFE, AS
TO WHICH BENEFICIAL OWNERSHIP IS DISCLAIMED, (B) 20,292 WARRANTS HELD BY
MR. STEADMAN, (C) 10,009 SHARES AND 16 WARRANTS HELD BY OYSTERCATCHER
DEVELOPMENT,
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
4
<PAGE> 7
WHICH IS WHOLLY OWNED BY MR. STEADMAN AND HIS WIFE AND (D) EXERCISABLE
OPTIONS TO ACQUIRE 5,000 SHARES AT AN EXERCISE PRICE OF $10.50 PER SHARE.
(8) INCLUDES EXERCISABLE OPTIONS TO ACQUIRE 5,000 SHARES AT AN EXERCISE PRICE
OF $10.50 PER SHARE.
(9) INCLUDES EXERCISABLE OPTIONS TO ACQUIRE 5,000 SHARES AT AN EXERCISE PRICE
OF $10.50 PER SHARE.
(10) INCLUDES (A) 33 SHARES HELD BY THE ESOP TRUSTEE, (B) 33 SHARES HELD BY
THE PROFIT SHARING PLAN TRUSTEE, (C) AN AGGREGATE OF 120 WARRANTS OF
WHICH 55 WARRANTS ARE HELD BY THE ESOP TRUSTEE AND 55 WARRANTS ARE HELD
BY THE PROFIT SHARING TRUSTEE, AND (D) EXERCISABLE OPTIONS TO ACQUIRE
20,000 SHARES AT AN EXERCISE PRICE OF $10.50 PER SHARE.
(11) INCLUDES (A) 27 SHARES HELD BY THE ESOP TRUSTEE, (B) THREE SHARES HELD BY
THE PROFIT SHARING TRUSTEE, (C) 44 WARRANTS HELD BY THE ESOP TRUSTEE, (D)
FOUR WARRANTS HELD BY THE PROFIT SHARING TRUSTEE AND (E) EXERCISABLE
OPTIONS TO ACQUIRE 20,000 SHARES AT AN EXERCISE PRICE OF $10.50 PER
SHARE.
(12) INCLUDES (A) SEVEN SHARES HELD BY THE ESOP TRUSTEE, (B) THREE SHARES HELD
BY THE PROFIT SHARING TRUSTEE, (C) AN AGGREGATE OF 155 WARRANTS OF WHICH
11 WARRANTS ARE HELD BY THE ESOP TRUSTEE AND FIVE WARRANTS ARE HELD BY
THE PROFIT SHARING TRUSTEE, AND (D) EXERCISABLE OPTIONS TO ACQUIRE 20,000
SHARES AT AN EXERCISE PRICE OF $10.50 PER SHARE.
(13) INCLUDES (A) 11 SHARES HELD BY THE ESOP TRUSTEE, (B) THREE SHARES HELD BY
THE PROFIT SHARING TRUSTEE, (C) 19 WARRANTS HELD BY THE ESOP TRUSTEE, (D)
FIVE WARRANTS HELD BY THE PROFIT SHARING TRUSTEE AND (E) EXERCISABLE
OPTIONS TO ACQUIRE 10,000 SHARES AT AN EXERCISE PRICE OF $10.50 PER
SHARE.
________________________________________________________________________________
Each director and each officer of the Company who is subject to Section 16 of
the Securities Exchange Act of 1934 (the "Act") is required by Section 16(a)
of the Act to report to the Securities and Exchange Commission, by a specified
date, his or her beneficial ownership of or transactions in the Company's
securities. Reports received by the Company indicate that all such officers
and directors filed all requisite reports with the Securities and Exchange
Commission on a timely basis during the year ended June 30, 1994, with the
exception of one report Mr. Wilde filed in February 1994 rather than December
1993 relating to three transactions effected by Graystone Investments, a
partnership in which Mr. Wilde is a partner.
As set forth in the Company's 1993 Proxy Statement, at September 13, 1993 the
Company's stock transfer records indicated that Republic Money Order Company
("RMO") was the record holder of in excess of 10% of the outstanding Common
Stock. The Company has not received copies of any Section 16(a) reports from
RMO.
Certain additional information with respect to the directors listed above is
set forth below.
DUNBAR N. CHAMBERS, JR. For more than the last five years, Mr. Chambers has
been Chairman of the Board of Directors of Chambco, Inc. Chambco, Inc.,
through its subsidiaries and related investments, engages in real estate
investment, development and management; ranching and other investments.
CHARLES J. LUELLEN. For more than the past five years until his retirement in
January 1992, Mr. Luellen served as President and Chief Operating Officer of
Ashland Oil, Inc., Ashland, Kentucky. Mr. Luellen is a director of Tosco Corp.
RAYMOND W. OELAND, JR. For more than the last five years, Mr. Oeland has been
a private investor.
LIONEL SOSA. For more than the last five years, Mr. Sosa has been Chairman of
the Board of Directors and Chief Executive Officer of Sosa, Bromley, Aguilar &
Associates, San Antonio, Texas. Since January 1994 Mr. Sosa has also served as
Chairman of the Board of Directors of DMBRB Americas, an advertising firm
headquartered in San Antonio, Texas.
RICHARD C. STEADMAN. For more than the last five years, Mr. Steadman has been
a private investor. Mr. Steadman is also a director of Storage Technology
Corporation, Louisville, Colorado.
ROBERT B. STOBAUGH, DBA. For more than the last five years, Mr. Stobaugh has
been a Professor of Business Administration at the Harvard University Graduate
School of Business Administration. Mr. Stobaugh is also a director of Ashland
Oil, Inc., Ashland, Kentucky, and of American International Petroleum
Corporation, New York, New York.
V. H. VAN HORN. For more than the last five years, Mr. Van Horn has been
President and Chief Executive Officer of the Company. Mr. Van Horn is also a
director of Southdown, Inc., Houston, Texas.
WILLIAM KEY WILDE. For more than the last five years, Mr. Wilde has been a
partner of Bracewell & Patterson, L.L.P., Houston, Texas, a law firm retained
by the Company from time to time.
5
<PAGE> 8
________________________________________________________________________________
EXECUTIVE COMPENSATION AND OTHER INFORMATION
________________________________________________________________________________
BOARD OF DIRECTORS REPORT ON
EXECUTIVE COMPENSATION*
Although the Board of Directors has designated a Compensation Committee,
during fiscal 1994 the full Board (with Mr. Van Horn, the only member of the
Board who is also an officer of the Company, abstaining from voting on
compensation decisions), rather than the Compensation Committee, made
decisions regarding executive compensation.
COMPENSATION POLICIES GENERALLY. The Board believes that the total
compensation of the Company's executive officers should be at levels that
enable the Company to attract and retain a high-quality management team, but
that a significant portion of the executive officers' earnings opportunities
should be in the form of bonus opportunities related to each individual's
performance and to the Company's performance. The Company's salary levels and
bonus opportunities for executive officers are intended to achieve these
objectives. The Board also believes that it is important to ensure that
management's economic self-interest in the value of the Company's common stock
is closely aligned with the stockholders' interest in the value of the common
stock.
1994 BASE SALARY ADJUSTMENTS. During fiscal 1993 the Company retained the
Actuarial, Benefits and Compensation Consulting group of Deloitte & Touche LLP
(the "Consultant") to provide advice to the Board regarding the reasonableness
of the Company's executive compensation packages. The Consultant's report
dated March 1993 compared the Company's executive compensation packages to (i)
those of 27 publicly-held companies having primary SIC codes in the retail
industry and annual revenues between $750 million and $1.25 billion (all as
shown in their most recent proxy statements) (the "Retail Survey"), and (ii)
certain summaries of different surveys of executive compensation prepared by
various consulting and industry groups. The Board considered the Retail Survey
to be more useful for comparison purposes than the other summaries provided by
the Consultant, and based its comparisons on the Retail Survey. The companies
included in the peer group line of the graphs set forth under the caption
"Performance Graph" elsewhere in this proxy statement were not included in the
Retail Survey because their annual revenues were not within the parameters
described above.
Based on the Retail Survey, the Board concluded that the cash compensation of
most of the executive officers was slightly below the market average for their
respective positions, but that (i) the cash compensation of three of the
executive officers was significantly below the market average for their
respective positions, and (ii) the total compensation packages for the
executive officers was consistently less than the market averages for
comparable positions. Based on these conclusions, the Board determined to
raise the base salaries of the three executive officers, one of whom is a
named executive officer, and to continue the other executive officers at their
prior year's salaries, which salaries are set forth in Employment Agreements
between such officers and the Company. In addition, based on these
conclusions, the Board determined to increase the total compensation package
for all of the executive officers by implementing a retirement plan as
described below. In reaching its decisions to increase the base salaries of
the three executive officers as described herein, the Board also considered
its subjective evaluation of the performance and responsibilities of each of
the officers, and determined that such officers' performances and
responsibilities merited the increases.
1994 BONUSES. In July 1993 the Board implemented a bonus program for the
executive officers for fiscal 1994 which allowed the officers the opportunity
to earn up to 56% of their base salary. However, the bonus opportunities were
available only if the Company's pre-tax earnings for fiscal 1994 were at least
$10 million. Based on the Company's fiscal 1994 pre-tax earnings of $11.1
million, the Board
________________________________________________________________________________
* This Report on Executive Compensation shall not be deemed to be incorporated
by reference into any of the Company's reports under the Securities Exchange
Act of 1934, as amended.
6
<PAGE> 9
awarded bonuses which, for the named executive officers, ranged from 19% to
48% of their respective base salaries. The actual amount of the bonus awarded
to each officer was determined by the Board based on the Board's subjective
evaluation of each officer's performance, and was not based on any
quantifiable measure of such officer's performance.
In addition to the bonus opportunities based on the Company's 1994 pre-tax
earnings, during the first three months of fiscal 1994 the Company completed
the payment of the Restart Bonus Program bonuses described in the Board's 1993
Report on Executive Compensation. The Restart Bonus Program, which was in
effect for six months ending with September 1993, was established by the Board
in fiscal 1993 in an effort to retain approximately 42 officers and other key
employees of the Company to implement the Company's Plan of Reorganization,
which became effective in March 1993. Under the Restart Bonus Program,
officers (excluding Mr. Van Horn) and other key employees were paid monthly
bonuses for each month they remained with the Company after the effective date
of the Plan of Reorganization up to a maximum of six months. Amounts paid to
the named executive officers during fiscal 1994 under the Restart Bonus
Program are included in the Summary Compensation Table.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER ("CEO") IN 1994. The CEO's salary
for fiscal 1994 was unchanged from his salary from 1991 through 1993, and was
the minimum salary provided for by his employment contract with the Company.
The CEO's salary is not tied to the Company's performance. Although the CEO's
employment contract also entitles him to a minimum bonus opportunity of
$200,000 annually (based on the Company's performance), it does not assure him
of any actual bonus, and is not specifically tied to any quantifiable measure
of the Company's performance. As was the case with the other executive
officers of the Company as described above, the CEO's opportunity to earn a
bonus for fiscal 1994 was dependent on the Company's achieving pre-tax
earnings of at least $10 million during fiscal 1994. Based on the Company's
pre-tax earnings of $11.1 million, the Board awarded the CEO a bonus of
approximately 33% of his base salary. The actual amount of the bonus, while
subject to the limitation imposed by the Board as described above, was based
on the Board's subjective evaluation of the CEO's performance, and was not
based on any quantifiable measure of the CEO's performance. The CEO did not
receive any bonus under the Restart Bonus Program described above.
IMPLEMENTATION OF RETIREMENT PLAN. During fiscal 1994, as a result of the
Board's analysis of the Retail Survey, the Board determined that it was
appropriate to provide retirement benefits for its officers and members of the
Board. Based on advice from Towers Perrin, an independent benefits and
compensation consulting firm, the Board adopted separate retirement plans for
officers and directors of the Company, which are described under "Officers'
Retirement Plan" and "Compensation of Directors."
OTHER MATTERS. Under Section 162(m) of the Internal Revenue Code of 1986, as
amended, certain deductions that would otherwise be available to the Company
by reason of the incurrence of executive compensation expenses might not be
available if (i) the aggregate of such amounts otherwise deductible in a
single year by the Company with respect to one executive exceeds $1,000,000,
(ii) the executive officer is the Company's chief executive officer or one of
the four other most highly compensated officers (determined in each case as of
the last day of the year), and (iii) there is not available an exception or
exemption which would exclude the compensation from the limitation. Based on
its discussions with its consultants, the Board considers it unlikely that the
limitation will apply to the Company during fiscal 1995. The Board has not yet
determined whether it would take any action if the Section 162(m) limitation
were to appear likely to apply to the Company.
Dunbar N. Chambers, Jr.
Charles J. Luellen
Raymond W. Oeland, Jr.
Lionel Sosa
Richard C. Steadman
Robert B. Stobaugh
V. H. Van Horn
William Key Wilde
7
<PAGE> 10
________________________________________________________________________________
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term
------------------------------------- Compensation
Fiscal Other Annual ------------ All Other
Name and Principal Position Year Salary Bonus(1) Compensation Options(4) Compensation(5)
--------------------------- ------ --------- --------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
V. H. Van Horn....................... 1994 $ 400,000 $ 133,000 (2) 0 $ 20,578
President and CEO 1993 400,000 200,000 (2) 150,000 0
1992 400,000 0 (3) 0 (3)
A. J. Gallerano...................... 1994 182,000 67,760 (2) 0 5,759
Senior Vice President, 1993 182,000 103,980 (2) 60,000 0
General Counsel and 1992 182,000 0 (3) 0 (3)
Secretary
C. R. Wortham, Jr. .................. 1994 175,000 81,500 (2) 0 7,500
Senior Vice President -- 1993 172,405 99,750 (2) 60,000 0
Real Estate/Gasoline 1992 160,000 0 (3) 0 (3)
Arnold Van Zanten.................... 1994 155,000 102,900 (2) 0 11,685
Senior Vice President -- 1993 155,000 88,350 (2) 60,000 0
Administration 1992 138,840 0 (3) 0 (3)
M. David Wishard..................... 1994 148,269 71,600 (2) 0 8,028
Vice President -- 1993 120,000 68,400 (2) 30,000 0
Stores 1992 113,846 0 (3) 0 (3)
</TABLE>
________________________________________________________________________________
(1) THE AMOUNTS SHOWN INCLUDE BONUSES PAID TO THE OFFICERS (OTHER THAN MR. VAN
HORN) UNDER THE COMPANY'S RESTART BONUS PROGRAM DURING FISCAL 1994
RELATING TO THE IMPLEMENTATION OF THE COMPANY'S PLAN OF REORGANIZATION.
THE AMOUNTS PAID TO SUCH OFFICERS UNDER THE RESTART BONUS PROGRAM DURING
FISCAL 1994 WERE AS FOLLOWS: MR. GALLERANO: $32,760, MR. WORTHAM: $31,500,
MR. VAN ZANTEN: $27,900, AND MR. WISHARD: $21,600. THE BALANCES OF THE
AMOUNTS SHOWN WERE PAID BASED ON THE COMPANY'S 1994 PRE-TAX EARNINGS.
(2) THE OFFICERS RECEIVE CERTAIN PERQUISITES SUCH AS CAR ALLOWANCES AND
INSURANCE BENEFITS; HOWEVER, THE VALUE OF SUCH PERQUISITES DID NOT EXCEED
THE LESSER OF $50,000 OR 10% OF THE OFFICER'S SALARY AND BONUS.
(3) PURSUANT TO APPLICABLE RULES, OTHER ANNUAL COMPENSATION AND ALL OTHER
COMPENSATION ARE REPORTED FOR 1994 AND 1993 ONLY.
(4) ALL OPTIONS GRANTED DURING FISCAL 1993 WERE GRANTED PURSUANT TO THE
COMPANY'S 1993 NON-QUALIFIED OPTION PLAN, WHICH WAS IMPLEMENTED PURSUANT
TO THE PLAN OF REORGANIZATION.
(5) THE AMOUNTS PRESENTED AS ALL OTHER COMPENSATION INCLUDE THE AMOUNTS THE
COMPANY CONTRIBUTED OR ACCRUED FOR THE ACCOUNTS OF THE NAMED EXECUTIVE
OFFICERS IN CONNECTION WITH (I) THE DEFINED CONTRIBUTION FEATURE OF THE
COMPANY'S OFFICERS' RETIREMENT PLAN (SEE "OFFICERS' RETIREMENT PLAN"), AND
(II) THE COMPANY'S 401(k) PROFIT SHARING PLAN (SEE "PROFIT SHARING PLAN").
________________________________________________________________________________
OPTION GRANTS IN 1994
No options were granted to any of the officers named in the Summary
Compensation Table during fiscal 1994.
AGGREGATED OPTION EXERCISES IN FISCAL 1994 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the exercise in
fiscal 1994 of options to purchase Common Stock by the individuals named in
the Summary Compensation Table and the unexercised options to purchase Common
Stock held by such individuals at June 30, 1994.
________________________________________________________________________________
<TABLE>
<CAPTION>
Value of Unexercised
Number of Number of Unexercised In-the-Money Options at
Shares Options at 6/30/94 6/30/94 (1)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
V. H. Van Horn....................... 0 $ 0 50,000/100,000 $25,000/$50,000
A. J. Gallerano...................... 0 $ 0 20,000/40,000 $10,000/$20,000
C. R. Wortham, Jr.................... 0 $ 0 20,000/40,000 $10,000/$20,000
Arnold Van Zanten.................... 0 $ 0 20,000/40,000 $10,000/$20,000
M. David Wishard..................... 0 $ 0 10,000/20,000 $ 5,000/$10,000
</TABLE>
________________________________________________________________________________
(1) THE VALUE HAS BEEN CALCULATED BASED ON THE CLOSING PRICE OF THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET SYSTEM ON JUNE 30, 1994 AS REPORTED IN
THE WALL STREET JOURNAL ($11.00) LESS THE EXERCISE PRICE OF $10.50 PER
SHARE, MULTIPLIED BY THE RELEVANT NUMBER OF SHARES.
________________________________________________________________________________
8
<PAGE> 11
OFFICERS' RETIREMENT PLAN
During fiscal 1994 the Company implemented an Officers' Retirement Plan,
participation in which is limited to management personnel who have a
significant impact upon the formulation of the Company's policies and its
profitability. Benefits under the Officers' Retirement Plan are determined
primarily by average final compensation and credited years of service, up to a
maximum of 30 years. The following Pension Plan Table shows estimated annual
benefits payable upon retirement in specified compensation and years of
service classifications, assuming retirement at age 65.
________________________________________________________________________________
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Average Years of Service
Base ---------------------------------------------------------------------------
Earnings 5 10 15 20 25 30
-------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$100,000............................. $ 10,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000
150,000............................. 15,000 30,000 45,000 60,000 75,000 90,000
200,000............................. 20,000 40,000 60,000 80,000 100,000 120,000
250,000............................. 25,000 50,000 75,000 100,000 125,000 150,000
300,000............................. 30,000 60,000 90,000 120,000 150,000 180,000
350,000............................. 35,000 70,000 105,000 140,000 175,000 210,000
400,000............................. 40,000 80,000 120,000 160,000 200,000 240,000
450,000............................. 45,000 90,000 135,000 180,000 225,000 270,000
</TABLE>
________________________________________________________________________________
The compensation covered by the Officers' Retirement Plan is the officers'
base salary as reported in the Summary Compensation Table. The estimated
credited years of service for each of the named executive officers are as
follows: Mr. Van Horn: 28 years; Mr. Gallerano: 14 years; Mr. Wortham: 15
years; Mr. Van Zanten: 12 years; and Mr. Wishard: 12 years. The basis on which
benefits are computed is joint-life annuity amounts. The benefits shown in the
table are not subject to any deduction for Social Security or other offset
amounts. The Officers' Retirement Plan permits participants to elect, in
advance, to receive a lump sum distribution at retirement in lieu of the
benefits otherwise payable over a period of time to such participant.
The Officers' Retirement Plan includes a defined contribution feature pursuant
to which the Company has committed to contribute an annual amount for the
benefit of each participant equal to 15% of such participant's annual bonus,
if any. For the year ended June 30, 1994, the amounts which the Company
contributed for the named executive officers were as follows: Mr. Van
Horn -- $19,950; Mr. Gallerano -- $5,250; Mr. Wortham -- $7,500; Mr. Van
Zanten -- $11,250; and Mr. Wishard -- $7,500.
COMPENSATION OF DIRECTORS
The Company pays each outside director of the Company an annual fee of
$36,300. An additional fee of $42,350 is paid to Mr. Steadman for serving as
Chairman of the Board. Fees payable to directors serving less than the entire
fiscal year are prorated. The Company also reimburses travel and related
expenses incurred by directors in attending meetings of the Board. No director
receives additional compensation for serving on committees of the Board or for
attending meetings of the Board or such committees.
During fiscal 1994 the Company implemented a Directors' Retirement Plan,
pursuant to which non-employee directors will be paid an annual retirement
benefit equal to two-thirds of the annual fee paid by the Company to its
directors for serving on the Company's Board. Benefits under the Directors'
Retirement Plan commence on the later to occur of a director's retirement from
service on the Board or his seventieth birthday, and continue, in general, for
a period of time equal to the period of time he served as a director of the
Company.
The Company's 1993 Non-Qualified Stock Option Plan provided that each outside
director of the Company who was serving as such on the date 180 days after
confirmation of the Company's Plan of Reorganization was to receive options
covering 15,000 shares of
9
<PAGE> 12
Common Stock at an exercise price of $10.50 per share, and such options were
granted to such persons on August 25, 1993. One-third of such options vested
and became exercisable on August 25, 1994. Half of the remaining options will
vest and become exercisable on each of August 25, 1995 and 1996.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into Employment Agreements (the "Employment
Agreements") with each of the individuals named in the Summary Compensation
Table.
In 1994 the Company renewed its Employment Agreement with Mr. Van Horn
relating to his service as President and Chief Executive Officer of the
Company. The Employment Agreement, which expires in 1999, provides that the
Company will pay Mr. Van Horn a salary of $420,000 annually and provides for
an annual bonus opportunity of not less than $200,000, the payment of which is
based on the performance of the Company. If the Company terminates the
agreement or otherwise removes Mr. Van Horn from his positions as President
and Chief Executive Officer of the Company for any reason other than Mr. Van
Horn's gross or willful breach of his duties, the Company will be obligated to
continue to pay Mr. Van Horn annually through 1999 (i) a salary of $420,000
and (ii) a bonus of $166,500. Additionally, Mr. Van Horn is entitled to
participate in other bonus, profit sharing, stock option, stock ownership and
other plans offered to other employees of the Company.
The Company has entered into Employment Agreements with Messrs. Gallerano,
Wortham, Van Zanten and Wishard (the "Executives"), pursuant to which
(effective August 1, 1994) the Company employs Mr. Gallerano as Senior Vice
President, General Counsel and Secretary at an annual salary of $191,100, Mr.
Wortham as Senior Vice President -- Gasoline/Real Estate at an annual salary
of $183,750, Mr. Van Zanten as Senior Vice President -- Administration at an
annual salary of $162,750 and Mr. Wishard as Vice President -- Stores at an
annual salary of $157,500.
Pursuant to the Employment Agreements, each Executive is entitled to
participate in any bonus plan, profit sharing plan, stock option plan,
vacation, retirement benefit, medical and dental insurance and individual or
group life insurance plan as are or may be normally and customarily provided
by the Company to its employees of similar experience and position.
The Employment Agreements for the Executives each expire on May 18, 1996, but
may be terminated by the Company or by the Executive on 30 days' notice. If
the Company terminates an Employment Agreement with Cause (as defined below),
or if an Executive terminates an Employment Agreement without Cause, the
Executive is not entitled to any severance payment upon such termination. If
an Executive terminates his Employment Agreement within 90 days after a Change
in Control (as defined below), the Company will be required to pay the
Executive a severance payment equal to one week's salary for each year the
Executive has then worked for the Company, plus all accrued benefits. If an
Executive terminates his Employment Agreement with Cause or if the Company
terminates his Employment Agreement without Cause, the Company will be
required to pay the Executive a severance payment equal to the full amount
that otherwise would have been paid to the Executive for the remaining term of
the Employment Agreement.
As used above, with respect to a termination of an Employment Agreement by an
Executive, the term "Cause" means the breach of a material provision of the
Employment Agreement by the Company which is not cured within 30 days after
notice from the Executive, or the occurrence of any Change in Control. With
respect to any termination of an Employment Agreement by the Company, the term
"Cause" means willful misconduct by the Executive, gross neglect by the
Executive of his duties which continues for more than 30 days after notice
from the Company, the commission by the Executive of a felony or the
commission by the Executive of an act not in good faith, which is directly
detrimental to the Company and exposes the Company to material liability. As
used above, the term "Change in Control" means the time at which individuals
who were directors of the Company immediately prior to May 18, 1993
10
<PAGE> 13
cease to constitute a majority of the Board of Directors of the Company.
The Employment Agreements provide that the Executive will not be liable for
any damages resulting from the Executive's actions if the Executive acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company.
PROFIT SHARING PLAN
The Company has a Section 401(k) profit sharing plan available to
substantially all employees. The Company did not make any contributions to the
plan from October 1991 to June 1993, but in July 1993 resumed matching
contributions at a level equal to 100% of employees' before-tax contributions,
up to 3% of salary. Beginning in July 1993 employees were permitted to have
amounts allocated to their accounts invested in one or more of a variety of
investment funds. Amounts deferred by the named executive officers, if any, as
well as the Company's matching contributions relating thereto, are included in
the Summary Compensation Table. For the year ended June 30, 1994, the
Company's matching contributions for the named executive officers were as
follows: Mr. Van Horn -- $628, Mr. Gallerano -- $509, Mr. Wortham -- $0, Mr.
Van Zanten -- $435, and Mr. Wishard -- $528.
EMPLOYEE STOCK OWNERSHIP PLAN
In 1985 the Company established an Employee Stock Ownership Plan (the "ESOP").
Pursuant to the Plan of Reorganization, the ESOP Trustee received 9,706 shares
of Common Stock and 16,179 Warrants.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the year ended June 30, 1994
were Messrs. Chambers, Luellen, Steadman and Wilde, none of whom is an
employee of the Company. Mr. Wilde is a member of Bracewell & Patterson,
L.L.P, Houston, Texas, a law firm retained by the Company from time to time.
As described elsewhere in this Proxy Statement, during fiscal 1994, the full
Board (with Mr. Van Horn, who serves as President and Chief Executive Officer
of the Company, abstaining from voting on compensation decisions) performed
the functions normally delegated to the Compensation Committee.
During fiscal 1994 the Company extended a three-year $300,000 unsecured loan
with interest payable at 8 1/2% annually to Mr. V.H. Van Horn. The loan is
payable in 35 monthly installments of $2,500 and a final payment of the then
unpaid principal and interest, and requires that any bonus compensation earned
by Mr. Van Horn while the loan is outstanding be applied as a mandatory
prepayment of the loan. The largest aggregate amount of indebtedness
outstanding in connection with the loan at any time during fiscal 1994 was
$302,323, and the amount of outstanding indebtedness at August 31, 1994 was
$204,859.
11
<PAGE> 14
PERFORMANCE GRAPH
PREBANKRUPTCY -- OLD COMMON STOCK
The following graph compares the yearly percentage change in the Company's
common stock, $.41 2/3 par value per share ("Old Common Stock") prior to the
effective date of the Company's Plan of Reorganization on March 9, 1993. The
graph assumes that $100 was invested on June 30, 1989 in the Company's Old
Common Stock, the S&P 500 Index and the peer group and that dividends were
reinvested quarterly. Upon confirmation of the Plan of Reorganization, all of
the Old Common Stock was canceled and exchanged for an aggregate of 90,000
shares of New Common Stock (as defined below).
________________________________________________________________________________
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
National Convenience Stores 100.00 78.15 130.82 11.05 0.00
S & P 500 100.00 119.28 136.45 151.53 174.65
Peer Group 100.00 80.12 82.56 130.07 132.11
</TABLE>
* PEER GROUP IS COMPOSED OF CASEYS GENERAL STORES, INC., DAIRY MART
CONVENIENCE STORES, INC. AND UNI-MARTS INC. ALTHOUGH THE COMPANY CONSIDERS
ITS PRINCIPAL COMPETITORS TO BE THE SOUTHLAND CORPORATION ("SOUTHLAND") AND
THE CIRCLE K CORPORATION ("CIRCLE K"), THE PEER GROUP DOES NOT INCLUDE SUCH
COMPANIES BECAUSE SOUTHLAND HAS NOT MAINTAINED A SINGLE PUBLICLY-TRADED
EQUITY SECURITY FOR THE PAST FIVE YEARS AND BECAUSE CIRCLE K'S PLAN OF
REORGANIZATION CONFIRMED IN JULY 1993 RESULTED IN THE CANCELLATION OF ALL OF
ITS EXISTING PUBLICLY-TRADED EQUITY ISSUES.
12
<PAGE> 15
POST CONFIRMATION -- NEW COMMON STOCK
The following graph compares the percentage change in the Company's common
stock, $.01 par value per share ("New Common Stock") from March 10, 1993 (the
first date on which the New Common Stock traded) to June 30, 1994. The graph
assumes that $100 was invested on March 10, 1993 in the Company's New Common
Stock, the S&P 500 Index and the peer group and that dividends were reinvested
quarterly.
________________________________________________________________________________
<TABLE>
<CAPTION>
3/10/93 6/30/93 6/30/94
------- ------- -------
<S> <C> <C> <C>
National Convenience Stores 100.00 97.67 68.22
S & P 500 100.00 102.61 104.05
Peer Group 100.00 106.34 132.50
</TABLE>
* PEER GROUP IS COMPOSED OF CASEYS GENERAL STORES, INC., DAIRY MART
CONVENIENCE STORES, INC. AND UNI-MARTS INC. ALTHOUGH THE COMPANY CONSIDERS
ITS PRINCIPAL COMPETITORS TO BE THE SOUTHLAND CORPORATION ("SOUTHLAND") AND
THE CIRCLE K CORPORATION ("CIRCLE K"), THE PEER GROUP DOES NOT INCLUDE SUCH
COMPANIES BECAUSE SOUTHLAND HAS NOT MAINTAINED A SINGLE PUBLICLY-TRADED
EQUITY SECURITY FOR THE PAST FIVE YEARS AND BECAUSE CIRCLE K'S PLAN OF
REORGANIZATION CONFIRMED IN JULY 1993 RESULTED IN THE CANCELLATION OF ALL OF
ITS EXISTING PUBLICLY-TRADED EQUITY ISSUES.
________________________________________________________________________________
VOTING PROCEDURES
________________________________________________________________________________
The accompanying proxy is solicited on behalf of the Board of Directors of the
Company and is revocable at any time before it is exercised. A proxy may be
revoked by written notice of revocation or by a later proxy, in either case
delivered to the Secretary of the Company. Attendance at the Annual Meeting
will not automatically revoke a proxy, but a stockholder in attendance may
request a ballot and vote in person, thereby revoking a prior granted proxy.
All outstanding shares of Common Stock represented by properly executed and
unrevoked proxies received in the accompanying form in time for the Annual
Meeting will be voted. A stockholder may, with respect to the election of
directors (i) vote for the election of both nominees named herein as
directors, (ii) withhold authority to vote for such nominees or (iii) vote for
the election of such nominees, other than any nominee with respect to whom the
stockholder withholds authority to vote by so indicating in the appropriate
space on the proxy. Withholding authority to vote for a nominee will not
prevent such nominee from being elected. A stockholder may, with respect to
the proposal to ratify the appointment of the Com-
13
<PAGE> 16
pany's accountants, (i) vote "FOR" the matter, (ii) vote "AGAINST" the matter
or (iii) "ABSTAIN" from voting on the matter. A vote to abstain from voting on
ratification of the Company's independent accountants will have the effect of
a vote against the proposal. Shares will be voted as instructed in the
accompanying proxy on each matter submitted to stockholders. If no
instructions are given, the shares will be voted for the election of both
nominees named herein as directors and for the ratification of Deloitte &
Touche LLP as independent accountants for 1995.
A proxy submitted by a stockholder may indicate that all or a portion of the
shares represented by such proxy are not being voted by such stockholder with
respect to a particular matter. This could occur, for example, when a broker
is not permitted to vote stock held in street name on certain matters in the
absence of instructions from the beneficial owner of the stock. The shares
subject to any such proxy which are not being voted with respect to a
particular matter (the "non-voted shares") will be considered shares not
present or entitled to vote on such matter, although such shares may be
considered present and entitled to vote for other purposes and will count for
purposes of determining the presence of a quorum. (Shares voted to abstain as
to a particular matter will not be considered non-voted shares.) Ratification
of the election of the accountants and the election of directors each requires
the vote of a majority of the shares of Common Stock present in person or by
proxy at the meeting and entitled to vote on such matter.
Pursuant to the Plan of Reorganization, the Company issued a number of shares
of Common Stock beneficially owned by certain of the Company's creditors to
Boatmen's, as agent for the beneficial owners of such shares pending the
determination of the number of such shares properly allocable to each such
creditor (such shares issued to Boatmen's as agent for such creditors being
herein called the "Creditors' Shares"). Boatmen's has informed the Company
that it intends to attend the Annual Meeting (by means of a limited proxy)
solely to help establish a quorum, and that it does not intend to vote any of
the Creditors' Shares. Consequently, the Creditors' Shares will be non-voted
shares, and will be considered not present or entitled to vote on the matters
considered at the Annual Meeting.
________________________________________________________________________________
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 1995 ANNUAL MEETING
________________________________________________________________________________
Proposals of stockholders intended to be presented at the 1995 Annual Meeting
of Stockholders must be received by the Company no later than May 30, 1995 to
be considered for inclusion in the Company's Proxy Statement relating to that
meeting, and must comply with applicable rules promulgated by the Securities
and Exchange Commission.
The Nominating Committee will consider nominees recommended by stockholders as
candidates for election to the Board of Directors. The By-Laws of the Company
provide that a stockholder wishing to nominate a candidate for election to the
Board is required to give written notice to the Secretary of the Company of
his or her intention to make such a nomination. The notice of nomination must
be received by the Company not later than August 14, 1995. The notice of
nomination is required to contain certain information about the nominee, and
must include a consent of the person nominated to serve if elected.
Any such proposals or nominations should be addressed to A. J. Gallerano,
Senior Vice President, General Counsel and Secretary, National Convenience
Stores Incorporated, 100 Waugh Drive, Houston, Texas 77007.
14
<PAGE> 17
________________________________________________________________________________
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
________________________________________________________________________________
The Board does not now intend to bring before the Annual Meeting any matters
other than those specified in the notice of the meeting, and it does not know
of any business which persons other than the Board intend to present at the
meeting. Should any other matter requiring a vote of the stockholders properly
come before the meeting, the persons named in the accompanying proxy card
intend to vote the shares represented by them in accordance with their best
judgment.
________________________________________________________________________________
OTHER MATTERS
________________________________________________________________________________
Proxies will be solicited by mail, telephone, telegram and personal interview.
Brokers, custodians and other nominees will be requested to forward copies of
this Proxy Statement and enclosed proxy card to the beneficial owners of
Common Stock and will be reimbursed for their reasonable out-of-pocket
expenses. Additionally, the Company has retained the services of Morrow & Co.,
Inc. to aid in the solicitation of proxies, for which it will be paid a fee of
approximately $3,500. All costs with respect to the solicitation will be borne
by the Company.
By Order of the Board of Directors
A. J. Gallerano, Secretary
Houston, Texas
September 27, 1994
15
<PAGE> 18
FRONT SIDE OF PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NATIONAL CONVENIENCE STORES INCORPORATED
Annual Meeting of Stockholders
November 10, 1994
<TABLE>
<S> <C> <C>
The undersigned hereby appoints each of Messrs. Richard C. Steadman, V. H. Van Horn and William Key Wilde as Proxies, each
with full power of substitution, and hereby authorizes each of them to represent and to vote as designated below, on behalf of the
undersigned, all the shares of common stock of National Convenience Stores Incorporated ('Company') held of record by the
undersigned at the close of business on September 12, 1994, at the Annual Meeting of Stockholders to be held at 10:00 a.m. in the
George R. Brown Convention Center, Meeting Room 306, 1001 Avenida de las Americas, Houston, Texas, on Thursday, November 10, 1994,
and any adjournment thereof.
1. ELECTION OF CLASS II DIRECTORS / / FOR all nominees listed below (except / / WITHHOLD AUTHORITY
as noted below) to vote for all nominees listed
below
Dunbar N. Chambers, Jr. and Robert B. Stobaugh, DBA
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below.)
____________________________________________________________________________________________________________________________________
2. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP as independent auditors for the Company for the next fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, Proxies are authorized to vote upon such other business as may properly come before the meeting and any
adjournment thereof.
(Continued, and to be signed, on the other side)
</TABLE>
BACK SIDE OF PROXY
<TABLE>
<S> <C>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS IN 1 AND 2, AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES
NAMED HEREIN WITH RESPECT TO ANY MATTER TO IN 3.
The undersigned hereby acknowledges receipt of the Company's 1994 Annual Report.
Dated: ___________________ 1994. PLEASE SIGN EXACTLY AS
NAME(S) APPEAR ON STOCK CERTIFICATES. A corporation is
requested to sign its name by its President or other
authorized officer, with the office held so designated. A
partnership should sign in the partnership name by an
authorized person. Executors, trustees, administrators, etc.
are requested to indicate the capacity in which they are
signing. JOINT TENANTS SHOULD BOTH SIGN.
____________________________________________________________
____________________________________________________________
(Signature(s) of Stockholder(s))
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE
POSTAGE-PAID ENVELOPE
</TABLE>
<PAGE> 19
FRONT SIDE OF PROXY
CONFIDENTIAL VOTING INSTRUCTIONS
REGARDING SHARES OF COMMON STOCK HELD IN THE
NATIONAL CONVENIENCE STORES INCORPORATED
EMPLOYEE STOCK OWNERSHIP PLAN AND/OR PROFIT SHARING PLAN
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 10, 1994
<TABLE>
<S> <C> <C>
The undersigned hereby directs Merrill Lynch Trust Company of Texas, as trustee under the National Convenience Stores
Incorporated ('Company') Employee Stock Ownership Plan ('ESOP') and the Company's Profit Sharing Plan ('Profit Sharing Plan'), to
vote in the manner designated below all the shares of common stock of the Company ('Common Stock') held in the ESOP, the Profit
Sharing Plan, or both, as the case may be, for the account of the undersigned at the close of business on September 12, 1994, at the
Annual Meeting of Stockholders to be held at 10:00 a.m. in the George R. Brown Convention Center, Room 306, Houston, Texas, on
Thursday, November 10, 1994, and any adjournment thereof.
1. ELECTION OF CLASS II / / FOR all nominees listed / / WITHHOLD AUTHORITY
DIRECTORS below (except as noted to vote for all nominees listed below
in the space provided below)
Dunbar N. Chambers, Jr. and Robert B. Stobaugh, DBA
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
____________________________________________________________________________________________________________________________________
2. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP
as independent auditors for the Company for the next fiscal year. / / FOR / / AGAINST / / ABSTAIN
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
</TABLE>
BACK SIDE OF PROXY
<TABLE>
<S> <C>
3. In their discretion, Messrs. Richard C. Steadman, V.H. Van Horn and William Key Wilde, as Proxies and each, with full power of
substitution, are authorized to vote upon such other business as may properly come before the meeting and any adjournment
thereof.
IF THESE CONFIDENTIAL VOTING INSTRUCTIONS ARE PROPERLY EXECUTED AND RETURNED IN THE ACCOMPANYING ENVELOPE, BUT NO DIRECTION IS MADE
AS TO THE VOTING OF SHARES, SHARES OF COMMON STOCK HELD FOR THE ACCOUNT OF THE UNDERSIGNED IN THE ESOP, THE PROFIT SHARING PLAN, OR
BOTH, AS THE CASE MAY BE, WILL BE VOTED FOR EACH OF THE MATTERS INDICATED IN 1 AND 2, AND WILL BE VOTED IN THE DISCRETION OF THE
PROXIES NAMED HEREIN WITH RESPECT TO ANY MATTER REFERRED TO IN 3.
DATED: _________________________ 1994.
______________________________________________________
(Signature of Participant)
PLEASE SIGN, DATE AND RETURN THESE CONFIDENTIAL VOTING
INSTRUCTIONS IN THE POSTAGE-PAID ENVELOPE. THESE
CONFIDENTIAL VOTING INSTRUCTIONS WILL BE SEEN ONLY BY
AUTHORIZED PERSONNEL AND AGENTS OF THE TRUSTEE.
</TABLE>
