<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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
Edison Brothers Stores, Inc.
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Edison Brothers Stores, Inc.
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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:
N/A
---------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
N/A
---------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:_/
N/A
---------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
N/A
---------------------------------------------------------------------
_/ 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:
N/A
---------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
N/A
---------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------
4) Date Filed:
N/A
---------------------------------------------------------------------
<PAGE> 2
EDISON BROTHERS STORES, INC.
EXECUTIVE OFFICES
501 NORTH BROADWAY
P.O. BOX 14020
ST. LOUIS, MISSOURI 63178
NOTICE OF 1994 ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock of
EDISON BROTHERS STORES, INC.
Notice is hereby given that the annual meeting of the stockholders
of Edison Brothers Stores, Inc. will be held at the headquarters of
the Corporation, 501 North Broadway, St. Louis, Missouri, on the 8th
day of June, 1994, at 11 o'clock A.M. for the following purposes:
(1) To elect twelve directors;
(2) To consider and act upon a proposal to approve the
Corporation's Executive Performance-Based Bonus Plan; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has set the close of business on April 13,
1994, as the record date for the determination of the stockholders
entitled to notice of and to vote at the annual meeting.
Your attention is directed to the Proxy Statement which appears on
the following pages.
By Order of the Board of Directors
ALAN A. SACHS
Secretary
April 27, 1994
St. Louis, Missouri
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN,
DATE AND RETURN PROMPTLY THE PROXY ENCLOSED HEREWITH. A POSTPAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 3
EDISON BROTHERS STORES, INC.
EXECUTIVE OFFICES
501 NORTH BROADWAY
P.O. BOX 14020
ST. LOUIS, MISSOURI 63178
1994 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors
of the Corporation. A stockholder giving a proxy may revoke it by
written communication delivered to the Secretary of the Corporation
at any time before the proxy is exercised. All proxies not so revoked
will be voted as instructed therein. In addition to solicitations by
mail, officers and regular employees of the Corporation may, in a
limited number of instances, solicit proxies in person or by
telephone, at no additional compensation. When appropriate, banks,
brokerage firms and other fiduciaries holding shares of record are
requested to forward proxy material to the beneficial owners of such
shares for the purpose of obtaining authorization for the execution
of proxies. All costs of solicitation of proxies, including
reimbursement to such fiduciaries for their reasonable expenses
incurred therefor, will be borne by the Corporation. This Proxy
Statement and accompanying materials are first being mailed to
stockholders on April 27, 1994.
The total number of outstanding shares of common stock entitled to
vote at the annual meeting is 21,986,472. Stockholders are entitled
to one vote for each share of common stock held. Only holders of
record of common stock at the close of business on April 13, 1994 are
entitled to vote at the annual meeting or any adjournments thereof.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of common stock entitled to vote at the annual
meeting will constitute a quorum for the transaction of business.
Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum. (A broker non-vote
occurs when shares held in the name of a broker or other nominee are
voted on some matters but not others because, as to the latter, the
nominee does not have discretionary authority to vote the shares and
has not received instructions from the beneficial owner.) Since
directors will be elected by a plurality of the votes cast at the
meeting, any shares not voted (whether by abstention, broker non-vote
or otherwise) will not affect the results of the election. With
respect to the proposal for approval of the Corporation's Executive
Performance-Based Bonus Plan, which requires the affirmative vote of
a majority of the shares present in person or by proxy and entitled
to vote, abstentions will be counted as present and thus will have
the same effect as a negative vote; broker non-votes will not be
considered present for purposes of the proposal and therefore will
have no effect on the outcome.
Other than as set forth in the Notice of Meeting, the Corporation
is unaware of any matter to be presented to the stockholders for
action at the annual meeting. If any other matters do come before the
meeting, the proxies solicited hereby will be exercised in accordance
with the discretion of the persons named therein.
PROPOSAL ONE
ELECTION OF DIRECTORS
A board consisting of twelve directors is to be elected, each to
serve until the next annual meeting of stockholders and until his or
her successor is elected and qualifies.
It is the intention of the persons named in the enclosed form of
proxy to vote such proxy for the election as directors of the
nominees hereinafter named, unless authority to do so is withheld. In
the event a nominee hereinafter named is unable to stand for election
because of some unexpected occurrence, the persons named in the
enclosed form of proxy will vote such proxy for such substitute
nominee(s), if any, as may be designated by the Board of Directors.
1
<PAGE> 4
<TABLE>
<CAPTION>
COMMON SHARES BENEFICIALLY OWNED
AS OF MARCH 1, 1994 (2)
--------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
Name of Nominee(1) Age Director With Fiduciary Total Percent
Since Economic Control Beneficially Beneficially
Benefit(3)(4)(5) Only(6) Owned Owned(7)
<S> <C> <C> <C> <C> <C> <C>
Julian I. Edison 64 1965 747,238 96,000(8) 843,238 3.8%
Eric P. Newman 82 1966 34,178(9) 1,554,024(10) 1,588,202 7.2%
Andrew E. Newman 49 1978 229,748 584,629(8)(9)(10)(11) 814,377 3.7%
Martin Sneider 51 1978 100,845 19 100,864 -
Michael H. Freund 54 1984 91,229 766,350 857,579 3.9%
Karl W. Michner 46 1989 27,049 - 27,049 -
Peter A. Edison 38 1990 41,011 459,307(11) 500,318 2.2%
Jane Evans 49 1990 100 - 100 -
Alan A. Sachs 47 1990 19,148 - 19,148 -
Craig D. Schnuck 46 1990 1,000 - 1,000 -
Alan D. Miller 41 1993 23,422 - 23,422 -
Robert W. Staley 59 1993 1,000 - 1,000 -
<FN>
(1) Further information about the nominees for director, including
the previous five years' experience of each of them, is as
follows:
Julian I. Edison, Chairman of the Executive Committee of the
Board, was Chairman of the Corporation from 1974 to 1987. He is
a director of The Boatmen's National Bank of St. Louis, St.
Louis, MO.
Eric P. Newman was Secretary and Director of Legal Matters for
the Corporation from 1951 to 1987 and Executive Vice President
from 1968 to 1987.
Andrew E. Newman is Chairman of the Corporation. He is a
director of Sigma-Aldrich Corporation and Boatmen's Bancshares,
Inc., both of St. Louis, MO, and Lee Enterprises of Davenport,
IA.
Martin Sneider is President of the Corporation. He is a director
of Angelica Corporation, St. Louis, MO.
Michael H. Freund is Executive Vice President and Director of
Corporate Administration of the Corporation.
Karl W. Michner is President of the Corporation's Menswear
Group.
Peter A. Edison is Executive Vice President and Director of
Corporate Development of the Corporation. He also is President
of the Corporation's Big & Tall men's apparel division, having
previously served as General Manager of the Corporation's Repp
Ltd. men's apparel chain from August 1991 to March 1994. From
December 1986 to April 1990, he served as President of the
Corporation's Sacha London shoe chain. From 1986 through 1989,
he was also President of the Corporation's Chandlers store
group.
Jane Evans is Vice President and General Manager, Home and
Personal Services, of U.S. West Communications, Inc. From 1989
through March 1991, she served as President and Chief Executive
Officer of InterPacific Retail Group. From 1987 to 1989, she was
a General Partner of Montgomery Securities. She is a director of
Philip Morris Companies Inc., New York, NY, Kaufman and Broad
Home Corporation, Los Angeles, CA, and Banc One-Arizona, N.A.,
Phoenix, AZ.
Alan A. Sachs is Executive Vice President, General Counsel and
Secretary of the Corporation.
Craig D. Schnuck is Chairman of the Board and Chief Executive
Officer of Schnuck Markets, which operates 63 supermarkets in
the Midwest. He is a director of Mercantile Bancorporation Inc.
and General American Life Insurance Company, both of St. Louis,
MO.
Alan D. Miller is President of the Corporation's Footwear Group.
From February 1991 through February 1993, he served as President
of the Corporation's Bakers/Leeds/Precis store group. From 1987
to February 1991, he was President of the Corporation's 5-7-9
Shops apparel chain.
Robert W. Staley is Vice Chairman of Emerson Electric Co., a
manufacturer of electrical and electronic products. He is a
director of Emerson Electric Co. and Mercantile Bancorporation
Inc., both of St. Louis, MO, and ACE Limited of Hamilton,
Bermuda.
(2) None of the Cumulative Preferred Stock of the Corporation was
beneficially owned as of March 1, 1994 by any nominee for
director.
(3) Sole voting and dispositive power with economic benefit, except
for the following shares as to which the named individual has
shared voting and dispositive power, with economic benefit:
Martin Sneider, 30 shares; Eric P. Newman, 34,178 shares;
Michael H. Freund, 28,500 shares; and Peter A. Edison, 29,421
shares.
(4) Includes shares which were not owned by the named individual as
of March 1, 1994 but which such individual could acquire on or
before April 30, 1994 under options granted pursuant to the
Corporation's 1986 Stock Option Plan, as follows: Andrew E.
Newman, 20,000 shares; Karl W. Michner, 5,000 shares; Peter A.
Edison, 3,200 shares; Alan A. Sachs, 4,700 shares; and Alan D.
Miller, 12,100 shares.
2
<PAGE> 5
(5) Includes shares allocated to the account of the named individual
under the Edison Brothers Stores Savings Plan, as follows:
Andrew E. Newman, 251 shares; Martin Sneider, 266 shares;
Michael H. Freund, 85 shares; Karl W. Michner, 207 shares; Alan
A. Sachs, 188 shares; and Alan D. Miller, 206 shares.
(6) Shared voting and dispositive power, but without economic
benefit, except for the following shares as to which the named
individual has sole voting and dispositive power, without
economic benefit: Julian I. Edison, 72,000 shares; Eric P.
Newman, 181,747 shares; Andrew E. Newman, 10,638 shares; Martin
Sneider, 19 shares; Michael H. Freund, 12,534 shares; and Peter
A. Edison, 43,062 shares.
(7) Percentages are calculated based on common shares outstanding as
of March 1, 1994, and only percentages of beneficial ownership
of 1% or more are shown.
(8) Includes 24,000 shares held in trust for the economic benefit of
Peter A. Edison, with Julian I. Edison and Andrew E. Newman
among those sharing voting and dispositive power as to such
shares.
(9) Includes 34,178 shares held in trust, with Eric P. Newman and
Andrew E. Newman among those sharing voting and dispositive
power as to such shares.
(10) Includes 417,377 shares held in trust, with Eric P. Newman and
Andrew E. Newman among those sharing voting and dispositive
power as to such shares.
(11) Includes 48,000 shares held in trust, with Andrew E. Newman and
Peter A. Edison among those sharing voting and dispositive power
as to such shares.
</TABLE>
Eric P. Newman and Julian I. Edison are brothers-in-law. Andrew E.
Newman is the son of Eric P. Newman and the nephew of Julian I.
Edison.
The Audit Committee of the Board has responsibility for evaluating
the internal control and audit procedures of the Corporation. The
Committee recommends annually to the entire Board of Directors a firm
of independent accountants to audit the financial statements of the
Corporation, reviews the audit program with the firm selected and
reviews reports and recommendations of the auditors. In addition, the
Audit Committee reviews in advance the non-audit services that may be
provided by the independent accountants during the year, including
the effect that performing such services might have on audit
independence, approves guidelines, including dollar limits, for such
non-audit services and reviews the services performed to see that
they are consistent with its guidelines. The Audit Committee consists
of Julian I. Edison, Jane Evans and Craig D. Schnuck.
The committees of the Board that perform functions relating to
compensation were restructured in March 1994. Prior to that time, and
for the fiscal year ended January 29, 1994, the Executive Committee,
consisting of Julian I. Edison, Eric P. Newman, Andrew E. Newman and
Martin Sneider, among its other responsibilities, determined the
compensation of all executives of the Corporation other than those
who were members of the Committee. The Special Compensation
Committee, comprised of Julian I. Edison, Jane Evans and Robert W.
Staley, determined the compensation of those officers who were
members of the Executive Committee. The Special Compensation
Committee also administered the Corporation's 1986 Stock Option Plan
with respect to employees who were members of the Board, and the 1992
Stock Option Plan with respect to employees who were officers of the
Corporation (as such term is defined in Rule 16a-1(f) under the
Securities Exchange Act of 1934, as amended). The 1986 and 1992 Stock
Option Plans were administered with respect to all other eligible
employees by the Stock Option Committee of the Board, which was
comprised of Julian I. Edison, Eric P. Newman, Andrew E. Newman and
Martin Sneider. Effective March 3, 1994, the Stock Option Committee
has been dissolved and compensation functions withdrawn from the
Executive Committee. A new Compensation Committee has been formed,
consisting of Julian I. Edison, Jane Evans, Craig D. Schnuck and
Robert W. Staley, with the authority to determine the compensation of
all executives of the Corporation, except as specifically delegated
or reserved to another committee or subcommittee of the Board. There
has also been appointed a Special Compensation Subcommittee of the
Compensation Committee, consisting of Jane Evans, Craig D. Schnuck
and Robert W. Staley. The Subcommittee has exclusive authority to
determine the compensation of the Chairman and the President of the
Corporation, to administer the Corporation's 1986 and 1992 Stock
Option Plans with respect to all persons who are members of the Board
and/or officers of the Corporation (as the term "officers" is defined
in Rule 16a-1(f) under the Securities Exchange Act of 1934, as
amended) and to make certain other determinations under the 1986
Stock Option Plan. The Subcommittee has also been granted exclusive
authority to administer the Corporation's proposed Executive
Performance-Based Bonus Plan (see Proposal Two at pages 10-11 of this
Proxy Statement).
The Board does not have a separate Nominating Committee.
Directors who are employees of the Corporation receive no
additional compensation for their attendance at meetings of the Board
or any of its committees of which they are members. Directors who are
not employees of the Corporation receive an annual retainer of
$17,500, and $1,200 for participation in each Board meeting and
$1,000 for participation in each committee meeting. When
participation in a Board or committee meeting is by telephone, the
fee paid is one-half of the amount reported above.
3
<PAGE> 6
In 1989, the Corporation adopted a non-qualified retirement plan
for outside directors. Under this plan, outside directors (other than
those who were employees of the Corporation and are eligible for
benefits under the Corporation's pension plan) who attain age 70 and
have at least five years of continuous Board service are entitled
upon retirement from the Board to an annual benefit equal to the
annual retainer being paid at that time to the Corporation's
directors.
During the 52 weeks ended January 29, 1994, there were four
meetings of the Board of Directors, two of the Audit Committee, one
of the Executive Committee and two of the Special Compensation
Committee. All incumbent directors attended at least 75% of the total
of all Board meetings and all meetings of committees of which they
were members, except Craig D. Schnuck.
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of
outstanding shares of the Corporation's common stock beneficially
owned as of March 1, 1994 (except as otherwise noted) by (i) each
person known by management to be the beneficial owner of more than 5%
of the outstanding common stock (except for those individuals who are
nominees for director and named executive officers, as to whom such
information is set forth at page 2 above and in footnote 7 below) and
(ii) all directors and executive officers of the Corporation as a
group.
<CAPTION>
Name and Address Amount Percent
of Beneficial Owner Beneficially Beneficially
or Identity of Group Owned Owned
------------------------------ ------------ ------------
<S> <C> <C>
FMR Corp. 2,475,700(1) 11.2%
Edward C. Johnson 3d
82 Devonshire Street
Boston, MA 02109
Scudder, Stevens & Clark, Inc. 1,216,090(2) 5.5%
345 Park Avenue
New York, NY 10154
Boatmen's Bancshares, Inc. 1,199,284(3) 5.4%
One Boatmen's Plaza
St. Louis, MO 63101
Bernard Edison 2,405,455(4) 10.8%
501 North Broadway
St. Louis, MO 63102
All directors and executive officers
as a group of 24 4,376,164(5)(6)(7) 19.7%
<FN>
(1) The information presented is derived from Schedule 13G (Amendment
No. 3) dated March 10, 1994 with respect to holdings of common
stock of the Corporation as of February 28, 1994. The number
shown includes (a) 2,219,400 shares held by Fidelity Management &
Research Company and (b) 256,300 shares held by Fidelity
Management Trust Company. FMR Corp. has sole voting power as to
172,400 shares, shared voting power as to no shares, sole
dispositive power as to 2,475,700 shares and shared dispositive
power as to no shares. Edward C. Johnson 3d, Chairman of FMR
Corp., has sole voting power as to no shares, shared voting power
as to no shares, sole dispositive power as to 2,475,700 shares
and shared dispositive power as to no shares.
(2) The information presented is derived from Schedule 13G dated
February 4, 1994 with respect to holdings of common stock of the
Corporation as of December 31, 1993. Scudder, Stevens & Clark,
Inc. has sole voting power as to 183,500 shares, shared voting
power as to 729,800 shares, sole dispositive power as to
1,216,090 shares and shared dispositive power as to no shares.
(3) The information presented is derived from Schedule 13G (Amendment
No. 7) dated January 28, 1994 with respect to holdings of common
stock of the Corporation as of December 31, 1993. The number
shown includes (a) 1,191,554 shares held by Boatmen's Trust
Company, (b) 6,500 shares held by Boatmen's First National Bank
of Kansas City, (c) 630 shares held by Sunwest Bank of
Albuquerque and (d) 600 shares held by other Boatmen's Banks.
Boatmen's Bancshares, Inc. has sole voting power as to 654,863
shares, shared voting power as to 263,753 shares, sole
dispositive power as to no shares and shared dispositive power as
to 1,121,997 shares. Boatmen's Trust Company has sole voting
power as to 647,133 shares, shared voting power as to 263,753
shares, sole dispositive power as to 574,140 shares and shared
dispositive power as to 540,127 shares. Of the total reported,
350,140 shares are also attributable to a nominee for director or
to Bernard Edison.
(4) Includes 1,548,840 shares the ownership of which is also
attributable to one or more nominees for director.
(5) When ownership of the same shares is attributable to more than
one person, any duplication is eliminated in the totals set
forth.
(6) Includes 102,600 shares which were not owned by a member of the
group as of March 1, 1994, but which may be acquired within sixty
days thereafter under options granted pursuant to the
Corporation's 1986 Stock Option Plan or 1992 Stock Option Plan.
(7) Includes 11,234 shares owned by Lee G. Weeks, who is currently a
director but is not standing for reelection as a director at the
1994 Annual Stockholders Meeting.
</TABLE>
4
<PAGE> 7
In addition to those shares listed above, the widows, descendants,
spouses of descendants and widows of descendants of the five Edison
brothers who founded Edison Brothers Stores, Inc. have economic
ownership of, are economic beneficiaries of, or are fiduciaries of
trusts, estates or not-for-profit corporations holding (after the
elimination of duplications) approximately 1,792,676 shares of the
common stock of the Corporation, or 8.1% of the outstanding shares.
Data as to such ownership is provided for information purposes only
and shall not be deemed to imply that such individuals are acting as
a "group" as such term is used in the Securities Exchange Act of
1934, as amended, and the regulations thereunder.
The mailing address of those individuals who are nominees for
director is: c/o Edison Brothers Stores, Inc., P.O. Box 14020,
St. Louis, MO 63178.
Section 16(a) of the Securities Exchange Act of 1934 requires the
officers and directors of the Corporation and any persons owning more
than ten percent of the Corporation's common stock to report their
ownership of the Corporation's common stock to the Securities and
Exchange Commission and the New York Stock Exchange. Based on its
review of the reports filed by such persons, and on written
representations by certain of such persons that no reports on Form 5
were required to be filed by them, the Corporation believes that all
Section 16(a) reporting requirements for its 1993 fiscal year were
complied with by its officers, directors and greater than ten percent
shareholders, except that one report, covering one transaction, was
filed late by Roger L. Koehnecke, an officer of the Corporation.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to each of the
five most highly compensated executive officers of the Corporation
(the "named executive officers") for services rendered to the
Corporation and its subsidiaries for the last three fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------- ------------------------------------
Long-
Securities Term
Other Restricted Underlying Incentive
Name and Principal Fiscal Annual Stock Options/ Plan All Other
Position Year Salary(1) Bonus Compensation Award(s) SARS(#) Payouts Compensation(2)
------------------ ------ --------- ----- ------------ ---------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Andrew E. Newman 1993 $1,014,589 - - - - - $3,231,940
Chairman of 1992 927,087 - - - - - 1,949
the Board 1991 866,660 - - - - - 2,394
Martin Sneider 1993 1,014,589 - - - - - 3,449,809
President 1992 927,087 - - - - - 1,949
1991 866,660 - - - - - 2,394
Lee G. Weeks 1993 366,669 - - - - - 2,182
Executive Vice President 1992 346,501 - - - - - 1,949
and Chief Financial 1991 325,829 - - - - - 2,394
Officer
Karl W. Michner 1993 328,835 - - - - - 2,182
President of the 1992 304,334 - - - - - 1,946
Corporation's 1991 283,338 - - - - - 2,340
Menswear Group
Alan D. Miller 1993 279,168 - - - - - 1,838
President of the 1992 246,674 - - - - - 1,949
Corporation's 1991 226,667 - - - - - 2,394
Footwear Group
<FN>
(1) Includes all amounts contributed by the named individuals to the
Edison Brothers Stores Savings Plan. The Savings Plan is
available to all employees of the Corporation who have attained
the age of 21 and completed one year of service. An employee may
elect to contribute, through payroll deduction, up to 15% of his
or her annual cash compensation (subject to certain limitations
imposed by the Internal Revenue Code). Income tax is deferred on
all amounts contributed by the employee pursuant to Section
401(k) of the Internal Revenue Code. The Corporation contributes,
on a matching basis, between 10% and 50% of the first 6% of
compensation contributed by the employee. The amount of the
Corporation's matching contribution is determined each year based
upon the return on stockholders' equity achieved by the
Corporation in the prior year.
(2) Except as indicated below, the amounts shown are the amounts
contributed by the Corporation to the Edison Brothers Stores
Savings Plan for the accounts of these named individuals during
such fiscal year. (See Note 1 above.) In the case of Messrs.
Newman and Sneider, the amounts shown for fiscal 1993 are
comprised of two elements: (a) amounts contributed by the
Corporation to the Edison Brothers Stores Savings Plan for their
accounts ($2,182 and $2,182, respectively), and (b) lump sum
payments made to these individuals representing the actuarial
present value of their accrued benefits under the Corporation's
Pension Restoration Plan. (See pages 7-8 and 9 of this Proxy
Statement for a further explanation of these payments.)
</TABLE>
5
<PAGE> 8
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to stock
option exercises during the 1993 fiscal year by the named executive
officers and the value of such officers' unexercised options as of
the end of the fiscal year.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Year-End Options/SARs at Fiscal Year-End(2)
------------------------------- ----------------------------------
Shares Acquired
Name on Exercise (#) Value Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew E. Newman - - 20,000 40,000 $241,250 $482,500
Martin Sneider 20,000 $245,000 - 40,000 - 482,500
Lee G. Weeks 6,600 97,562 - 10,000 - 120,625
Karl W. Michner 4,130 139,388 5,000 10,000 60,312 120,625
Alan D. Miller 10,000 173,750 12,100 7,400 130,916 85,502
<FN>
(1) Aggregate value based on the average of the high and low selling
prices of the Corporation's common stock on the date of exercise
less the exercise price.
(2) Aggregate value based on the average of the high and low selling
prices of the Corporation's common stock on the last trading day
of the fiscal year less the exercise price.
</TABLE>
TERMINATION AGREEMENTS
The Corporation has termination agreements with certain of its key
executives, including each of the named executive officers. The
purpose of these agreements is to encourage these executives to
remain with the Corporation, and thereby assure the Corporation of
the continued availability of their services and their advice, in the
event of an attempted change in control of the Corporation. Each of
these agreements is for a two-year term (except those of Messrs.
Newman and Sneider which are for three-year terms). Each agreement
becomes operative only upon a "change in control" of the Corporation,
as defined in the agreements. If, within the term of the agreement,
the executive's employment is terminated by the Corporation other
than for cause or is terminated by the executive for "good reason"
(such as a reduction in salary or benefits, diminution in duties or
mandatory geographic transfer), the executive will be entitled to a
lump sum payment equal to (i) the executive's monthly salary at the
highest rate in effect during the twelve months immediately preceding
the date of termination, multiplied by (ii) the number of months
remaining under the agreement. The Corporation is also to maintain
for the executive's continued benefit through the unexpired term of
the agreement (or until the executive commences full-time employment
with a new employer, if earlier) all life insurance, health and
disability plans in which the executive was entitled to participate
immediately prior to the termination of the executive's employment
(or, alternatively, provide benefits substantially similar to those
which the executive would otherwise have been entitled to receive
under such plans). In addition, the Corporation is to pay to the
executive (or the executive's beneficiary upon his or her death) an
amount equal to the benefits the executive would have been entitled
to receive under the Edison Brothers Stores Pension Plan and any
supplemental or successor plans then in effect had the executive
remained employed by the Corporation through the term of the
agreement less the benefits actually payable to the executive under
such plans, such amount to be determined, and payment thereof to
commence, in accordance with the provisions of such plans. The
agreement further provides that if any payments or benefits payable
by the Corporation to the executive pursuant to the agreement or any
other agreement or arrangement of the Corporation are determined to
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code or any successor or comparable tax, the Corporation will
pay the executive an additional amount so that the net amount
actually retained by the executive after payment of the excise tax is
the same amount which would have been retained if no such excise tax
had been imposed. Legal fees or other expenses incurred by the
executive to enforce his or her rights under the agreement are to be
reimbursed by the Corporation if the executive prevails on such
claim.
RETIREMENT PLANS
The Corporation maintains a Pension Plan for itself and its
subsidiaries under which participation begins when a regular employee
has attained the age of 21 and completed one year of service. Vesting
of rights to a pension occurs upon the completion of five years of
service.
Retirement benefits are based on a participant's average annual
compensation during the highest five consecutive calendar years of
compensation within the last fifteen years of credited service prior
to retirement. Compensation includes
6
<PAGE> 9
all salary and commissions, but does not include distributions under
any stock option plan. For years after 1993, compensation and average
compensation for determining retirement benefits is limited to
$150,000, subject to annual adjustments for changes in the cost of
living.
Retirement benefits at age 65 are equal to 0.9% of average annual
compensation up to a breakpoint, plus 0.6% of average annual
compensation in excess of the breakpoint, all multiplied by years of
credited service (not exceeding 30). The breakpoint, which is
specified by law, is an amount equal to the average of the maximum
wages subject to Social Security taxes during the 35-year period
ending in the year prior to a participant's Social Security
retirement date. If retirement occurs prior to age 65, benefits may
be reduced to reflect the earlier payment date. Benefits may also be
reduced if survivor benefits are to be paid to an eligible spouse,
based on age differentials.
In March 1986 the Pension Plan was amended so as to protect its
assets in the event of a potential change in control of the
Corporation. The amendment provides that in the event the Pension
Plan is terminated within ten years following such a potential change
in control (as therein defined), the accrued retirement benefits of
all employees who were participants in the Pension Plan during that
ten-year period will be nonforfeitable, and will be increased in the
aggregate by an amount equal to the excess of the value of the assets
then in the Pension Plan over the then-present value of such accrued
retirement benefits.
For some individuals, the amounts payable under the Pension Plan
are limited by certain provisions of the Internal Revenue Code. The
Corporation maintains an unfunded excess benefits plan ("Pension
Restoration Plan") to pay out of its general assets to designated
employees that portion of the benefits that would otherwise be
payable to them under the Pension Plan were it not for such
limitations.
For eligible employees reaching the age of 65 during 1994 and
retiring during that year, the following are the approximate total
annual retirement benefits payable under the Pension Plan and the
Pension Restoration Plan based on their average annual compensation
as outlined above and their years of service:
<TABLE>
PENSION TABLE
Years of Service
<CAPTION>
Remuneration 15 20 25 30
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 100,000 $ 20,456 $ 27,274 $ 34,093 $ 40,911
200,000 42,956 57,274 71,593 85,911
300,000 65,456 87,274 109,093 130,911
400,000 87,956 117,274 146,593 175,911
500,000 110,456 147,274 184,093 220,911
600,000 132,956 177,274 221,593 265,911
700,000 155,456 207,274 259,093 310,911
800,000 177,956 237,274 296,593 355,911
900,000 200,456 267,274 334,093 400,911
1,000,000 222,956 297,274 371,593 445,911
1,100,000 245,456 327,274 409,093 490,911
1,200,000 267,956 357,274 446,593 535,911
1,300,000 335,456 447,274 559,093 670,911
</TABLE>
The preceding table is based on the assumption that the employee
was subject to the maximum aggregate social security tax during each
year of his or her employment. The benefits shown are in the form of
a single life annuity to the participant.
As of January 29, 1994, the years of credited service under the
Pension Plan for each of the named executive officers were as
follows: Andrew E. Newman, 21; Martin Sneider, 23; Lee G. Weeks, 7;
Karl W. Michner, 19; and Alan D. Miller, 14.
In January 1994, Andrew E. Newman and Martin Sneider received from
the Corporation lump sum payments representing the value of the
benefits to which they would have been entitled under the terms of
the Pension Restoration Plan assuming they had terminated their
employment with the Corporation as of December 31, 1993. These
payments were made to Messrs. Newman and Sneider on the condition
that they relinquish all rights to any payments which they would
7
<PAGE> 10
otherwise thereafter be entitled to receive under the Pension
Restoration Plan as respects their service with the Corporation
through December 31, 1993. Accordingly, future payments from the
Pension Restoration Plan, if any, to these two individuals will be
calculated in accordance with the provisions of the Pension
Restoration Plan but reduced to reflect the lump sum payments
referred to above (subject to certain interest rate limitations on
the discount factor to be applied).
REPORTS OF THE COMPENSATION COMMITTEES
As noted above at page 3, there were three committees of the Board
of Directors that performed functions relating to compensation for
the last fiscal year. The Executive Committee determined compensation
for all executives of the Corporation other than those who were
members of the Committee. The Special Compensation Committee
determined compensation for officers who were members of the
Executive Committee, and also had administrative authority under the
Corporation's Stock Option Plans with respect to specified groups of
employees. The Stock Option Committee administered the Corporation's
Stock Option Plans with respect to all other eligible employees.
The following report discusses the compensation policies applied by
each of these committees in performing its respective compensation
functions. The use of the word "committee" in the following report
refers to each of these committees as appropriate.
COMPENSATION PHILOSOPHY
The principal objectives of the Corporation's executive
compensation program are to:
(1) Attract, motivate and retain highly qualified managers;
(2) Reward individual executives for their contributions to the
attainment of the Corporation's financial and strategic goals;
and
(3) Align the interests of its executives with those of the
shareholders.
For fiscal 1993, these objectives were met through a compensation
program consisting of an annual salary and longer-term equity-based
incentive compensation in the form of stock options.
SALARY
Each executive's base salary was reviewed at the end of the 1992
fiscal year. In determining the overall salary budget for 1993, the
committee considered the recent financial performance of the
Corporation and the general economic climate. In determining
individual salaries for 1993, the committee took into account the
executive's position and scope of responsibilities, his or her
individual performance and achievements during the prior year
(including separate divisional results, as appropriate, and the
accomplishment of or progress towards identified managerial or
strategic objectives and personal development goals), as well as the
executive's knowledge, experience, capabilities, and prospective
future contributions. There was no set weighting of these variables
in determining individual salaries. In addition, in order that
salaries be externally competitive, the committee took into
consideration data from published surveys of the compensation
practices at other retail companies (twenty of which are included in
the Standard & Poor's Retail Stores Index used in the performance
graph appearing at page 10 of this Proxy Statement) as well as at
other St. Louis-based corporations with which the Corporation
competes for executive talent. Base salaries for 1993 were targeted
at the 50th percentile of annual cash compensation paid by these
other companies.
STOCK OPTIONS
The stock option program is a key component of the Corporation's
total compensation package. The committee believes that stock options
are the long-term compensation vehicle that best aligns the interests
of management with those of the shareholders. Since options gain
value only to the extent that the Corporation's stock price exceeds
the option exercise price, the benefits accruing to management
through stock options are directly tied to how well management
creates increased value for the shareholders. This encourages a
continuing management focus on increasing profitability and
shareholder value.
In past years, a relatively broad cross-section of company
executives, numbering several hundred, have received periodic grants
of stock options. In determining the amount of options to be granted,
the committee took into account the executive's position, scope of
responsibilities, individual performance, prior option grants and, in
certain cases, the recommendations of professional compensation
consultants. There was no fixed formula or weighting applied to these
factors. In 1993, the Corporation made no stock option grants.
8
<PAGE> 11
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code generally disallows a
tax deduction to public companies for compensation over $1 million
paid to certain executive officers in any taxable year beginning on
or after January 1, 1994. Performance-based compensation will not be
subject to the deduction limit if certain requirements are met. The
Corporation currently intends to structure the performance-based
portion of the compensation of its executive officers in a manner
that complies with the new rules.
EXECUTIVE COMMITTEE
STOCK OPTION COMMITTEE
Julian I. Edison
Andrew E. Newman
Eric P. Newman
Martin Sneider
1993 COMPENSATION OF THE CHAIRMAN AND THE PRESIDENT
The Special Compensation Committee viewed these two top positions
as complementary and synergistic, with the two individuals
essentially functioning as co-chief executive officers. In
considering the compensation for these two positions, the Committee
used the same criteria described in the Salary and Stock Options
sections above. In particular, the Committee took into account the
record sales and operating earnings achieved in 1992, the successful
repositioning of key business segments, the expansion of operations
outside the United States, and the effective control of store and
home office expenses. Based on these factors (without any specific
weighting among them), the Committee increased the annual salary of
both individuals by 9.87%, effective April 1, 1993. No stock options
were awarded to these individuals in 1993.
In addition to their regular compensation, in January 1994 Messrs.
Newman and Sneider received from the Corporation payments of
$3,229,758 and $3,447,627, respectively (less required withholdings
for taxes). These payments represented the lump-sum value of the
benefits to which they would have been entitled under the terms of
the Corporation's Pension Restoration Plan had they terminated their
employment with the Corporation as of December 31, 1993, and were
made on the condition that Messrs. Newman and Sneider relinquish all
rights to any future payments under the Pension Restoration Plan in
respect of their service with the Corporation through December 31,
1993. Under the Pension Restoration Plan, Messrs. Newman and Sneider
would have been entitled at any time, upon termination of their
employment, to receive the benefits payable to them thereunder in a
lump sum equal to the actuarial present value thereof with no
reduction for benefit commencement prior to their Normal Retirement
Date (as such term is defined in the Corporation's Pension Plan). The
Committee felt that the fact that such lump sum payment was presently
available to these executives, but only upon their termination of
employment, might operate as a disincentive for them to remain in the
Corporation's employ. In light of the Corporation's overall record of
growth and performance under their stewardship and their continued
importance to the health and future success of the Corporation, the
Committee felt it would be in the Corporation's best interest to
encourage their retention by removing this potential disincentive to
their continued employment through prepayment of their accrued
benefits. The Committee also considered the fact that, if made during
the Corporation's 1993 fiscal year, these lump sum payments would not
be subject to the recently-enacted $1,000,000 limit on deductions for
compensation paid to corporate employees and would thus be fully
deductible to the Corporation for federal income tax purposes,
resulting in a 1993 tax reduction of over $2,500,000.
SPECIAL COMPENSATION COMMITTEE
Julian I. Edison
Jane Evans
Robert W. Staley
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
Andrew E. Newman and Martin Sneider, who were each members of both
the Executive Committee and the Stock Option Committee of the Board
during the last fiscal year, are presently, and were during the last
fiscal year, officers and employees of the Corporation. Eric P.
Newman, who, during the last fiscal year, was a member of the
Executive Committee and the Stock Option Committee, and Julian I.
Edison, who, during the last fiscal year, was a member of the
Executive Committee, the Stock Option Committee and the Special
Compensation Committee, are former officers and employees of the
Corporation.
9
<PAGE> 12
STOCK PRICE PERFORMANCE
The following graph compares the cumulative total return to
shareholders on the Corporation's common stock for the last five
fiscal years with the cumulative total return of the Standard &
Poor's 500 Stock Index and the Standard & Poor's Retail Stores Index.
The graph assumes a $100 investment in the Corporation's common stock
and each index on January 27, 1989 (the last trading day prior to the
beginning of the Corporation's 1989 fiscal year) and the reinvestment
of all dividends.
[COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS GRAPH]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Edison Brothers 100.00 162.4 171.6 206.8 285.6 189.7
S&P 500 100.00 114.4 124.0 152.0 168.1 189.7
S&P Retail 100.00 114.8 134.7 188.2 224.7 216.7
</TABLE>
PROPOSAL TWO
APPROVAL OF THE EXECUTIVE
PERFORMANCE-BASED BONUS PLAN
The Board of Directors has adopted, subject to approval by the
stockholders, the Edison Brothers Stores, Inc. Executive Performance-
Based Bonus Plan (the "Bonus Plan"). The purpose of the Bonus Plan is
to provide added incentive for key executives to exert their best
efforts on behalf of the Corporation by offering annual cash bonuses
contingent on the achievement by the Corporation of specific
financial goals. The Bonus Plan is designed to qualify such bonus
opportunities as "performance-based" compensation under recent
federal tax legislation. The Bonus Plan will be administered by the
Special Compensation Subcommittee of the Compensation Committee of
the Board (the "Subcommittee").
Eligibility for participation in the Bonus Plan is limited to the
Chairman of the Board, the President, the Executive Vice Presidents
and those Presidents of the Corporation's operating groups and
divisions who are based at the Corporation's headquarters in St.
Louis. There are currently 19 eligible individuals. The Subcommittee
each year is authorized to select from the eligible group those
individuals who are to participate in the Bonus Plan for that year.
The full text of the Bonus Plan is set forth as Exhibit A to this
Proxy Statement. The following summary of the major provisions of the
Bonus Plan is qualified in its entirety by reference to the full text
thereof.
The Bonus Plan provides for the creation of an aggregate annual
bonus pool based on the Corporation's attainment of certain financial
goals pre-established by the Subcommittee, consisting of a minimum
return on equity and a specified percentage of the Corporation's net
income above the level necessary to generate that return on equity.
Each participant is assigned a target bonus award at the start of
each year, expressed as a percentage of the participant's base
salary, and a
10
<PAGE> 13
maximum award expressed as a percentage of the target award. At the
end of the applicable performance period, the Subcommittee determines
the aggregate amount available for the payment of awards, calculated
on the basis of the corporate performance measures previously
established by the Subcommittee, and then determines the amount of
each participant's award as a function of the total pool available.
In no event can the bonus pool for any year exceed 3% of the
Corporation's income before income taxes for that year, nor may any
individual participant receive an award under the Bonus Plan in
excess of 20% of such maximum bonus pool. The Subcommittee is
authorized to reduce both the amount of the aggregate bonus pool and
the amount of any individual participant's award if, in the
Subcommittee's judgment, such reduction is warranted to reflect the
level of management performance during the applicable period. All
awards under the Bonus Plan are to be paid in cash (less any required
withholdings for taxes) as soon as practicable after the end of the
related performance period. No award will be payable to any
participant if such participant's employment with the Corporation
terminates for any reason prior to the end of the applicable
performance period.
The Bonus Plan may be terminated or amended by the Board of
Directors at any time, provided that no amendment will be effective
without the further approval of the stockholders of the Corporation
if such approval is then required by applicable law.
Since the amounts to be received by participants in respect to 1994
and future years are dependent on the Corporation's future financial
performance, such amounts are not presently determinable. Nor is it
possible to determine the amounts of any awards that would have been
paid in the past had the Bonus Plan been in effect because no
financial performance measures had then been specified. However,
assuming the Bonus Plan had been in effect for 1993, and the
performance goals established by the Subcommittee for 1994 had been
applicable, no award would have been made to any participant.
An affirmative vote of a majority of the shares of common stock
present in person or by proxy at the annual meeting and entitled to
vote on the proposal will constitute stockholder approval of the
Bonus Plan.
The Board of Directors unanimously recommends a vote FOR Proposal
Two.
1995 STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Corporation's proxy
statement for the annual meeting of stockholders to be held in 1995,
all stockholder proposals must be received by the Secretary of the
Corporation on or before December 28, 1994.
ADDITIONAL INFORMATION
Ernst & Young (including its predecessors) has served continuously
as the Corporation's independent auditor since 1929. Representatives
of Ernst & Young are expected to be present at the annual meeting,
with the opportunity to make a statement if they desire to do so, and
to be available to respond to appropriate questions.
It is expected that the Audit Committee, at its meeting to be held
on June 8, 1994, will recommend, and that the Board of Directors will
approve, the reappointment of Ernst & Young as independent auditor
for the Corporation for the 1994 fiscal year.
The Corporation's Annual Report including financial statements for
the 52 weeks ended January 29, 1994 is simultaneously herewith being
mailed to all holders of common stock of record as of April 13, 1994,
the record date for the determination of stockholders entitled to
vote at the annual meeting.
THE CORPORATION WILL FURNISH WITHOUT CHARGE A COPY OF ITS MOST
RECENT FORM 10-K REPORT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION TO ANY STOCKHOLDER OF RECORD OR BENEFICIAL OWNER OF SHARES
MAKING A WRITTEN REQUEST THEREFOR ADDRESSED TO THE SECRETARY, EDISON
BROTHERS STORES, INC., P.O. BOX 14020, ST. LOUIS, MISSOURI 63178.
EDISON BROTHERS STORES, INC.
Alan A. Sachs
Secretary
Dated: April 27, 1994
11
<PAGE> 14
Exhibit A
EDISON BROTHERS STORES, INC.
EXECUTIVE PERFORMANCE-BASED BONUS PLAN
1. PURPOSE OF THE PLAN
The Edison Brothers Stores, Inc. Executive Performance-Based Bonus
Plan (the "Plan") is intended (a) to create greater incentive for key
executives to exert their best efforts on behalf of the Company by
providing them with compensation in addition to their salaries based
upon the achievement of specified performance goals; (b) to attract
and retain in the employ of the Company highly qualified executives;
and (c) to further align the interests of such employees with those
of the Company's stockholders generally.
2. DEFINITIONS
A. "Board" means the Board of Directors of the Company.
B. "Company" means Edison Brothers Stores, Inc., a Delaware
corporation.
C. "Income before Income Taxes" for a given fiscal year means the
Income before Income Taxes of the Company and its consolidated
subsidiaries as reported in the Company's audited consolidated
financial statements for the fiscal year, and "Net Income" for a
given fiscal year means the Net Income of the Company and its
consolidated subsidiaries as reported in the Company's audited
consolidated financial statements for the fiscal year, in each case
adjusted to exclude the effects of discontinued operations,
extraordinary items, changes in accounting principles and any other
unusual or non-recurring gain or loss which is separately identified
and quantified in such financial statements.
D. "Performance Period" means the Company's fiscal year.
E. "Return on Equity" for a given fiscal year means Net Income for
that fiscal year divided by the average of the beginning and ending
Common Stockholders' Equity for the fiscal year, as reported in the
Company's audited consolidated financial statements.
F. "Subcommittee" means the Special Compensation Subcommittee of
the Compensation Committee of the Board, or any successor thereto
designated by the Board which is comprised of at least two directors,
each of whom qualifies as an "outside director" of the Company as
such term is used in Section 162(m) of the Internal Revenue Code of
1986, as amended.
3. ADMINISTRATION
The Plan shall be administered by the Subcommittee. Subject to the
express provisions of the Plan, the Subcommittee shall have complete
authority to interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan and to make all
determinations necessary or advisable for the administration of the
Plan. All determinations of the Subcommittee with respect to the
interpretation and administration of the Plan, as described herein,
shall be final and binding.
4. PARTICIPATION
Awards under the Plan may be made to those executives of the
Company who are designated as participants by the Subcommittee,
provided, however, that only the Chairman of the Board, the
President, the Executive Vice Presidents and those Presidents of the
Company's operating groups and divisions who are based at the
Company's headquarters in St. Louis shall be eligible to participate
in the Plan.
5. DETERMINATION OF AWARDS
A. Prior to the commencement of each Performance Period, for all
Performance Periods beginning after January 1, 1995, and prior to
April 1, 1994, for the Performance Period beginning January 30, 1994,
the Subcommittee shall:
(i) establish in writing the measures of Company performance to
be used in determining the amount available for the payment of
awards under the Plan in respect of such Performance Period, which
performance measures shall consist of a specified Return on Equity
for the Performance Period (the "Minimum ROE") and a specified
percentage of Net Income for the Performance Period above the
level of Net Income necessary to generate the Minimum ROE; and
(ii) designate in writing the executives who shall be eligible
to receive awards under the Plan for the Performance Period and,
with respect to each such executive (hereinafter a "Participant"),
establish a target award expressed as a percentage of such
Participant's base salary (the "Target Award") and a maximum award
expressed as a percentage of the Target Award (the "Maximum
Award").
B. As soon as practicable after the end of each Performance
Period, the Subcommittee shall:
(i) determine and certify in writing the aggregate amount
available for the payment of awards with respect to the
Performance Period, calculated on the basis of the performance
measures previously established by the Subcommittee, provided that
the Subcommittee shall have the authority in its discretion to
reduce such amount if it believes that such amount would otherwise
produce a level of payout to Participants above the level
warranted by management
A1
<PAGE> 15
performance during the Performance Period (such aggregate amount,
if and as so adjusted, being hereinafter referred to as the
"Available Bonus Pool"); and
(ii) determine and certify in writing the amount of each
Participant's award, which shall be equal to the amount of the
Available Bonus Pool times a fraction, the numerator of which
shall be the Participant's Target Award and the denominator of
which shall be the sum of all Participants' Target Awards,
provided that such award shall not exceed the Participant's
Maximum Award, and provided further that the Subcommittee shall
have the authority to reduce any individual Participant's award
if, in the Subcommittee's sole judgment and discretion, such
reduction is warranted to reflect the level of the Participant's
individual performance during the Performance Period. Any such
reduction of a Participant's share of the Available Bonus Pool
shall not result in an increase in any other Participant's award.
C. Notwithstanding anything to the contrary contained herein, in
no event shall the Available Bonus Pool exceed 3% of Income before
Income Taxes for a given Performance Period (the "Maximum Bonus
Pool") nor may any individual Participant receive an award under the
Plan for any Performance Period in excess of 20% of the Maximum Bonus
Pool.
D. No award shall be payable to any Participant if such
Participant's employment with the Company terminates for any reason
prior to the end of the applicable Performance Period. If a
Participant's employment with the Company terminates after the end of
a Performance Period but before the payment to the Participant of his
or her award for such Performance Period, the Subcommittee in its
sole discretion may authorize the payment of such award to the
Participant or (if such termination of employment is by reason of the
Participant's death) to the Participant's designated beneficiary.
6. TIME AND MANNER OF DISTRIBUTION
All awards under the Plan shall be paid in cash as soon as
practicable after the end of the related Performance Period. The
Company shall have the right to deduct from all payments made under
the Plan any federal, state or local taxes required by law to be
withheld with respect to such payments.
7. TERMINATION OR AMENDMENT OF PLAN
The Board may at any time terminate the Plan or amend the Plan in
such manner as it deems advisable, provided that any such amendment
shall not be effective without the approval of the stockholders of
the Company if such approval is then required under Section 162(m) of
the Internal Revenue Code of 1986, as amended, or any other
applicable law.
8. MISCELLANEOUS
A. COSTS AND EXPENSES. All costs and expenses of administering the
Plan shall be borne by the Company.
B. OTHER INCENTIVE PLANS. Nothing contained in the Plan shall
prohibit the Company from granting special performance awards to
employees (including Participants) under such conditions, and in such
form and manner, as it sees fit. The adoption of the Plan does not
preclude the adoption of any other bonus or incentive plan for
employees.
C. RIGHTS TO CONTINUED EMPLOYMENT. Nothing in the Plan shall
confer on any individual any right to continue in the employ of the
Company or interfere with the right of the Company to terminate such
individual's employment at any time.
D. RELATION TO OTHER BENEFIT PLANS. Awards received under the Plan
shall be considered compensation for purposes of calculating a
Participant's benefits under the Company's Pension Plan, Pension
Restoration Plan, and all other supplemental retirement arrangements
for which the Participant may be eligible. Awards under the Plan
shall not be considered compensation for purposes of the Company's
401(k) Savings Plan or Supplemental Life Insurance Plan.
E. GOVERNING LAW. The Plan shall be governed by the laws of the
State of Missouri and applicable federal law.
9. EFFECTIVE DATE
Subject to its approval by the stockholders of the Company in the
manner prescribed by law, the Plan shall be effective as of January
30, 1994. Unless and until such stockholder approval is obtained, no
awards shall be made under the Plan.
A2
<PAGE> 16
EDISON BROTHERS STORES, INC.
1994 ANNUAL MEETING
Proxy Solicited by Board of Directors
The undersigned stockholder of Edison Brothers Stores, Inc. hereby
appoints JULIAN I. EDISON, ANDREW E. NEWMAN and MARTIN SNEIDER, and
each of them, as proxies of the undersigned, with power of
substitution in each, to vote at the annual meeting of stockholders
of the Corporation to be held at 501 North Broadway, St. Louis,
Missouri on June 8, 1994 at 11 o'clock A.M., and at any adjournments
thereof, all shares held of record by the undersigned as of April 13,
1994 in the manner designated on the reverse side hereof as to the
matters listed thereon, and in their discretion as to such other
matters as may properly arise.
(Continued and to be signed and dated on the reverse side.)
<PAGE> 17
This proxy, when properly executed, will be voted as directed herein.
If no direction is made as to one or more proposals, then this proxy
will be voted FOR the proposal(s).
PROPOSAL ONE:
Election of Twelve Directors
Nominees: J.I. Edison, P.A. Edison, J. Evans, M.H. Freund,
K.W. Michner, A.D. Miller, A.E. Newman, E.P. Newman,
A.A. Sachs, C.D. Schnuck, M. Sneider, R.W. Staley
/ / / /
FOR all nominees listed above WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed above.
to the right).
(INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name on the line provided below.)
- - -------------------------------------------------------------
PROPOSAL TWO:
Approval of Executive Performance-Based Bonus Plan
FOR AGAINST ABSTAIN
/ / / / / /
Dated: ------------------------------, 1994
--------------------------------------------
--------------------------------------------
(Signature of Stockholder)
(Please sign exactly as name appears at left)
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
<PAGE> 18
APPENDIX
1. Page 10 of the printed Proxy Statement contains a Comparison of
Five-Year Cumulative Total Returns Graph. The information in that
graph is depicted in the table that immediately follows the graph.
