<PAGE> 1
SCHEDULE 14A INFORMATION
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:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/ / Definitive Proxy Statement Rule 14a-6(e)(2))
/ / 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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
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<PAGE> 2
EDISON BROTHERS STORES, INC.
EXECUTIVE OFFICES
501 NORTH BROADWAY
P.O. BOX 14020
ST. LOUIS, MISSOURI 63178
NOTICE OF 1995 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 14th
day of June, 1995, at 11 o'clock A.M. for the following purposes:
(1) To elect twelve directors;
(2) To consider and act upon a proposal to amend the Corporation's
Certificate of Incorporation to authorize the issuance of up to
10,000,000 shares of preferred stock;
(3) To consider and act upon a stockholder proposal described in
the accompanying Proxy Statement; and
(4) 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 19,
1995, 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, 1995
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
1995 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 other 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, 1995.
The total number of outstanding shares of common stock entitled to
vote at the annual meeting is xxxxxxxxx. 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 19, 1995 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 to amend the Corporation's Certificate of
Incorporation, which requires the affirmative vote of a majority of
the outstanding shares of common stock entitled to vote thereon,
abstentions and broker non-votes will have the same effect as a
negative vote. With respect to the proposal submitted by a
stockholder, 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.
1. 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, 1995 <F2>
----------------------------------------
(A) (B) (C) (D) (E) (F) (G)
Name of Nominee<F1> Age Director With Fiduciary Total Percent
Since Economic Control Beneficially Beneficially
Benefit<F3><F4><F5> Only<F6> Owned Owned<F7>
<S> <C> <C> <C> <C> <C> <C>
Julian I. Edison 65 1965 745,238 96,000<F8> 841,238 3.8%
Eric P. Newman 83 1966 34,178<F9> 1,546,674<F10> 1,580,852 7.1%
Andrew E. Newman 50 1978 250,845 579,379<F8><F9><F10><F11> 830,224 3.7%
Martin Sneider 52 1978 97,683 - 97,683 -
Michael H. Freund 55 1984 69,447 537,106 606,553 2.7%
Karl W. Michner 47 1989 34,843 - 34,843 -
Peter A. Edison 39 1990 44,611 463,907<F11> 508,518 2.3%
Jane Evans 50 1990 100 - 100 -
Alan A. Sachs 48 1990 24,437 - 24,437 -
Craig D. Schnuck 47 1990 1,000 - 1,000 -
Alan D. Miller 42 1993 30,114 - 30,114 -
David B. Cooper, Jr. 39 1995 - - - -
<FN>
<F1> Further information about the nominees for director, including
the previous five years' experience of each of them, is as
follows:
Julian I. Edison was Chairman of the Corporation from 1974 to
1987 and Chairman of the Executive Committee of the Board from
1987 to February 1995. He is a director of The Boatmen's
National Bank of St. Louis.
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 was Chairman of the Corporation from 1987 to
April 1995 and is currently Co-Chairman of the Executive
Committee of the Board. He is a director of Sigma-Aldrich
Corporation, Boatmen's Bancshares, Inc., and Lee Enterprises.
Martin Sneider was President of the Corporation from 1987 to
April 1995 and is currently Co-Chairman of the Executive
Committee of the Board. He is a director of Angelica
Corporation, Mercantile Trust Company, N.A., and C.P.I.
Corporation.
Michael H. Freund is Executive Vice President and Director of
Corporate Administration of the Corporation.
Karl W. Michner is Senior Executive Vice President of the
Corporation and President of the Corporation's Menswear Group.
Peter A. Edison is Senior 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.
Jane Evans is Vice President and General Manager, Home and
Personal Services, of U.S. West Communications, Inc. From 1989
to 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., Georgia-Pacific Corporation,
Kaufman and Broad Home Corporation, and Banc One-Arizona, N.A.
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 64 supermarkets in
the Midwest. He is a director of Mercantile Bancorporation Inc.
and General American Life Insurance Company.
Alan D. Miller is Chairman, President and Chief Executive
Officer of the Corporation. From February 1993 to April 1995, he
was President of the Corporation's Footwear Group. From February
1991 to 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.
David B. Cooper, Jr. is Executive Vice President and Chief
Financial Officer of the Corporation. From 1993 to April 1994,
he was Executive Vice President and Chief Financial Officer of
Del Monte Fresh Produce Company. From 1987 to 1993, he served as
Vice President and Treasurer of Dole Food Company, Inc.
<F2> None of the Cumulative Preferred Stock of the Corporation (all
outstanding shares of which have since been called for
redemption) was beneficially owned as of March 1, 1995 by any
nominee for director.
<F3> 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: Eric
P. Newman, 34,178 shares; Martin Sneider, 30 shares; Michael H.
Freund, 28,500 shares; and Peter A. Edison, 29,421 shares.
<F4> Includes shares which were not owned by the named individual as
of March 1, 1995 but which such individual could acquire on or
before April 30, 1995 under options granted pursuant to the
Corporation's 1986 Stock Option Plan and/or 1992 Stock Option
Plan, as follows: Andrew E. Newman, 40,000 shares; Martin
Sneider, 20,000 shares; Michael H. Freund, 2,750 shares; Karl W.
Michner, 12,750 shares; Peter A. Edison, 6,800 shares; Alan A.
Sachs, 8,750 shares; and Alan D. Miller, 18,750 shares.
2
<PAGE> 5
<F5> Includes shares allocated to the account of the named individual
under the Edison Brothers Stores Savings Plan, as follows:
Andrew E. Newman, 298 shares; Martin Sneider, 314 shares;
Michael H. Freund, 103 shares; Karl W. Michner, 251 shares;
Alan A. Sachs, 227 shares; and Alan D. Miller, 248 shares.
<F6> 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; Michael
H. Freund, 12,534 shares; and Peter A. Edison, 47,662 shares.
<F7> Percentages are calculated based on common shares outstanding as
of March 1, 1995, and only percentages of beneficial ownership
of 1% or more are shown.
<F8> 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.
<F9> 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.
<F10> Includes 410,027 shares held in trust, with Eric P. Newman and
Andrew E. Newman among those sharing voting and dispositive
power as to such shares.
<F11> 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, the
Executive Committee, then 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 and Special Compensation Committees were dissolved and
compensation functions withdrawn from the Executive Committee. A new
Compensation Committee was formed, 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 was also appointed a Special
Compensation Subcommittee of the Compensation Committee, with
exclusive authority to determine the compensation of the Chairman and
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), to make certain other determinations under
the 1986 Stock Option Plan, and to administer the Corporation's
Executive Performance-Based Bonus Plan. The Compensation Committee
presently consists of Julian I. Edison, Jane Evans, Craig D. Schnuck
and Robert W. Staley. The Special Compensation Subcommittee is
presently comprised of Jane Evans, Craig D. Schnuck and Robert W.
Staley.
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 28, 1995, there were five
meetings of the Board of Directors, two of the Audit Committee, one
of the Executive Committee and one 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.
<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, 1995 (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 (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. 2,859,300<F1> 12.8%
Edward C. Johnson 3d
82 Devonshire Street
Boston, MA 02109
Boatmen's Bancshares, Inc. 1,246,748<F2> 5.6%
One Boatmen's Plaza
St. Louis, MO 63101
Bernard Edison 2,402,574<F3> 10.8%
501 North Broadway
St. Louis, MO 63102
All directors and executive officers
as a group of 25 4,169,065<F4><F5><F6> 18.7%
<FN>
<F1> The information presented is derived from Schedule 13G (Amendment
No. 4) dated February 13, 1995 with respect to beneficial
ownership of common stock of the Corporation as of December 31,
1994. The number shown includes (a) 2,569,600 shares beneficially
owned by Fidelity Management & Research Company and (b) 289,700
shares beneficially owned by Fidelity Management Trust Company.
FMR Corp. has sole voting power as to 191,000 shares, shared
voting power as to no shares, sole dispositive power as to
2,859,300 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 2,859,300 shares and shared dispositive
power as to no shares.
<F2> The information presented is derived from Schedule 13G (Amendment
No. 8) dated February 2, 1995 with respect to beneficial
ownership of common stock of the Corporation as of December 31,
1994. The number shown includes (a) 1,239,148 shares beneficially
owned by Boatmen's Trust Company, (b) 5,000 shares beneficially
owned by Boatmen's First National Bank of Kansas City, (c) 2,000
shares beneficially owned by Boatmen's First National Bank of
Amarillo and (d) 600 shares beneficially owned by other Boatmen's
Banks. Boatmen's Bancshares, Inc. has sole voting power as to
789,326 shares, shared voting power as to 274,496 shares, sole
dispositive power as to no shares and shared dispositive power as
to 741,966 shares. Boatmen's Trust Company has sole voting power
as to 781,726 shares, shared voting power as to 274,496 shares,
sole dispositive power as to 215,511 shares and shared
dispositive power as to 518,855 shares. Of the total reported,
199,972 shares are also attributable to a nominee for director or
to Bernard Edison.
<F3> Includes 1,548,840 shares the ownership of which is also
attributable to one or more nominees for director.
<F4> When ownership of the same shares is attributable to more than
one person, any duplication is eliminated in the totals set
forth.
<F5> Includes 181,850 shares which were not owned by a member of the
group as of March 1, 1995, 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.
<F6> Includes 1,000 shares owned by Robert W. Staley, who is currently
a director but will not be standing for reelection as a director
at the 1995 annual meeting.
</TABLE>
In addition to those shares listed above and the shares
attributable to nominees for director, 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 1,772,283 shares of the
common stock of the Corporation, or
4
<PAGE> 7
7.9% 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 1994 fiscal year were
complied with by its officers, directors and greater than ten percent
shareholders, except that a report on Form 3 and one report on Form
4, covering one transaction, were filed late by David B. Cooper, Jr.,
an officer and director of the Corporation, and a report on Form 3
was filed late by Michael Fine, 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
---------------------------------- ------------------------------------
Stock Long-
Options Term
Other Restricted Granted Incentive
Name and Principal Fiscal Annual Stock (Number Plan All Other
Position Year Salary<F1> Bonus Compensation Award(s) of Shares) Payouts Compensation<F2>
------------------ ------ ---------- ----- ------------ ---------- ---------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Andrew E. Newman 1994 $ 891,667 - - - 200,000<F3> - $ 899
Chairman of 1993 1,014,589 - - - - - 3,231,940
the Board 1992 927,087 - - - - - 1,949
Martin Sneider 1994 891,667 - - - 200,000<F3> - 899
President 1993 1,014,589 - - - - - 3,449,809
1992 927,087 - - - - - 1,949
Alan D. Miller 1994 339,167 - - - 11,000 - 829
President of the 1993 279,168 - - - - - 1,838
Corporation's 1992 246,674 - - - - - 1,949
Footwear Group
Karl W. Michner 1994 333,000 - - - 11,000 - 899
President of the 1993 328,835 - - - - - 2,182
Corporation's 1992 304,334 - - - - - 1,946
Menswear Group
Alan A. Sachs 1994 269,000 - - - 7,000 - 795
Executive Vice President, 1993 266,500 - - - - - 1,877
General Counsel and 1992 251,501 - - - - - 1,621
Secretary
<FN>
<F1> 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.
<F2> 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 $2,182, respectively), and (b) lump sum
payments made to these individuals representing the discounted
value of their accrued benefits under the Corporation's Pension
Restoration Plan for service to the Corporation through December
31, 1993.
<F3> In connection with the announced retirement of Messrs. Newman and
Sneider from their respective positions as Chairman of the Board
and President, these options were cancelled in February 1995.
</TABLE>
5
<PAGE> 8
STOCK OPTIONS
The following table provides information with respect to the grant
of stock options during the 1994 fiscal year to each of the named
executive officers.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Individual Grants<F1> Stock Price Appreciation for Option Term<F2>
----------------------------------------------------------------------------- --------------------------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year<F3> ($/sh) Date 0%($) 5%($) 10%($)
--------------- ------------ --------------- -------- ---------- ----- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Andrew E. Newman 200,000<F4> 28.0% $29.8125 3/3/04 $0 $ 3,749,762 $ 9,502,675
Martin Sneider 200,000<F4> 28.0% 29.8125 3/3/04 0 3,749,762 9,502,675
Alan D. Miller 11,000 1.54% 29.8125 3/3/04 0 206,237 522,647
Karl W. Michner 11,000 1.54% 29.8125 3/3/04 0 206,237 522,647
Alan A. Sachs 7,000 1.0% 29.8125 3/3/04 0 131,242 332,594
All Stockholders n/a n/a n/a n/a 0 412,160,983 1,044,501,302
<FN>
<F1> All options granted to the named executive officers were granted
on March 3, 1994, at an exercise price equal to the fair market
value of the Corporation's common stock on the date of grant. The
options were granted under the Corporation's 1992 Stock Option
Plan, the terms of which permit an optionee to pay for option
stock with cash, with shares of the Corporation's stock already
owned, with proceeds from the immediate sale of the stock
acquired by exercise of the option (a "cashless" exercise), by
the withholding of a portion of the shares otherwise to be
received upon exercise, or by any combination of the foregoing.
The options become exercisable in installments of 25% of the
total grant on each of the first through fourth anniversaries of
the grant date, subject to acceleration upon termination of
employment by reason of death, disability or retirement, or in
the event of a change in control of the Corporation. The options
cease to be exercisable ten years after the date of grant, or
sooner if the optionee's employment terminates.
<F2> The amounts shown under the 5% and 10% columns in this table are
the result of calculations at the assumed rates of stock price
appreciation required by the Securities and Exchange Commission's
rules. There can be no assurance that the values shown will be
attained. A 0% stock price increase will result in the options
having zero value. No gain to the optionees is possible without
an increase in stock price, which will benefit all stockholders
commensurately.
<F3> Based on options for 713,000 shares granted to 614 employees.
<F4> In connection with the announced retirement of Messrs. Newman and
Sneider from their respective positions as Chairman of the Board
and President, these options were cancelled in February 1995.
<F5> Potential gain for all stockholders was determined based on the
number of shares outstanding on March 3, 1994, and a price per
share of $29.8125.
</TABLE>
The following table provides information with respect to stock
option exercises during the 1994 fiscal year by the named executive
officers and the value of such officers' unexercised options as of
the end of the fiscal year.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Year-End (#) Options/SARs at Fiscal Year-End($)<F2>
----------------------------------- ---------------------------------------
Shares Acquired Value
Name on Exercise (#) Realized($)<F1> Exercisable Unexercisable Exercisable Unexercisable
---- --------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew E. Newman - - 40,000 220,000<F3> $0 $0
Martin Sneider - - 20,000 220,000<F3> 0 0
Alan D. Miller - - 16,000 14,500 0 0
Karl W. Michner - - 10,000 14,000 0 0
Alan A. Sachs 1,200 $15,525 7,000 10,500 0 0
<FN>
<F1> 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.
<F2> 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.
<F3> Includes an option for 200,000 shares which was cancelled in
February 1995.
</TABLE>
6
<PAGE> 9
TERMINATION AGREEMENTS
The Corporation has termination agreements with certain of its key
executives, including each of the named executive officers (other
than Messrs. Newman and Sneider). 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 that of Mr. Miller, whose agreement, as the new
Chairman, President and Chief Executive Officer of the Corporation,
is for a three-year term). 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 certain of
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 all salary, bonuses 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 such average
annual compensation, plus 0.6% of such average annual compensation in
excess of a 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 has adopted 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 1995 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:
7
<PAGE> 10
<TABLE>
PENSION PLAN TABLE
Years of Service
<CAPTION>
Remuneration 15 20 25 30
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 100,000 $ 20,312 $ 27,083 $ 33,853 $ 40,624
300,000 65,312 87,083 108,853 130,624
500,000 110,312 147,083 183,853 220,624
700,000 155,312 207,083 258,853 310,624
900,000 200,312 267,083 333,853 400,624
1,100,000 245,312 327,083 408,853 490,624
</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 employment. The benefits shown are in the form of a
single life annuity to the participant.
As of January 28, 1995, the years of credited service under the
Pension Plan for each of the named executive officers were as
follows: Andrew E. Newman, 22; Martin Sneider, 24; Alan D. Miller,
15; Karl W. Michner, 20; and Alan A. Sachs, 8.
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
otherwise thereafter be entitled to receive under the Pension
Restoration Plan as respects their service with the Corporation
through December 31, 1993. It is anticipated that, in connection with
their recent retirement from their respective positions as Chairman
of the Board and President, Messrs. Newman and Sneider, who are
remaining as employees of the Corporation in an advisory capacity,
will receive from the Corporation on or about May 1, 1995 lump sum
payments representing the value of the benefits to which they would
ultimately have been entitled under the terms of the Pension
Restoration Plan with respect to their service to the Corporation for
the period January 1, 1994 through April 30, 1995 in lieu of
receiving such benefits at the time of their actual retirement as
employees and in consideration of their disclaiming all rights to any
additional payments to which they would otherwise be entitled under
the Pension Restoration Plan as respects their service with the
Corporation beyond April 30, 1995.
REPORTS OF THE COMPENSATION COMMITTEES
As noted above at page 3, there were several committees of the
Board of Directors that, at various times during the last fiscal
year, had responsibility for compensation matters.
The following report discusses the compensation policies applied by
each of these committees in performing their respective compensation
functions as related to the Corporation's executive officers. 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
stockholders.
In late 1993, the Corporation retained a professional compensation
consultant to review the Corporation's executive compensation
program. Based on the consultant's recommendations, in 1994 the
Corporation restructured its compensation program for its executive
officers to more closely tie pay to performance. It froze or dampened
the rate of growth of base salaries; introduced a variable cash
compensation component in the form of an annual performance-based
bonus plan; and increased the frequency and amount of stock options
granted.
SALARY
Each executive's base salary was reviewed at the end of the prior
fiscal year. In determining individual salaries for 1994, within the
framework of the restructured compensation program described above,
the committee considered the recent financial performance of the
Corporation, the particular 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.
8
<PAGE> 11
ANNUAL CASH BONUS
The Edison Brothers Stores, Inc. Executive Performance-Based Bonus
Plan was adopted in early 1994. Administered by the Special
Compensation Subcommittee of the Compensation Committee of the Board,
the plan provides for an aggregate annual bonus pool contingent on
the Corporation's attainment of certain financial goals established
by the Subcommittee. Each executive selected by the Subcommittee to
participate was assigned a target bonus award, expressed as a
percentage of the participant's base salary. Since the Corporation
did not attain the financial goals set by the Subcommittee, no
participants received any payments under the plan for 1994.
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 stockholders. 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 stockholders. This encourages a
continuing management focus on increasing profitability and
stockholder value.
As part of the new compensation program described above, options
were granted to all executive officers in 1994. The number of options
granted to each officer was determined by taking a specified
percentage of such officer's base salary (which percentage varied
according to the individual's position and responsibilities) and
dividing that amount by the fair market value per share of the
Corporation's common stock on the date of grant.
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 Section 162(m).
1994 COMPENSATION OF THE CHAIRMAN AND THE PRESIDENT
The Special Compensation Subcommittee viewed these two top
positions as complementary and synergistic, with the two individuals
essentially functioning as co-chief executive officers. In
determining the total compensation for these two positions, the
Subcommittee used the same criteria described in the Salary, Annual
Cash Bonus and Stock Option sections above. The Subcommittee also
took into account the decline in sales and net income for the prior
fiscal year. Based on these factors (without any specific weighting
among them), the Subcommittee reduced the base salaries for 1994 of
both individuals by 12.1%. As indicated above, neither individual
received any payments under the Executive Performance-Based Bonus
Plan for 1994. Each of these executives was granted a stock option in
March 1994 for 200,000 shares, with a 10-year term vesting 25% a year
over the first four years. The number of shares subject to option was
calculated on the percentage of salary basis described in the Stock
Option section above and then multiplied by four, based on the
Subcommittee's determination that four years' worth of options should
be front-loaded and granted all in 1994 as an immediate incentive to
these executives to improve the Corporation's financial performance.
The options granted to these executives in 1994, however, were
cancelled in their entirety in 1995 in connection with the
executives' retirement from their positions as Chairman of the Board
and President of the Corporation.
EXECUTIVE COMMITTEE
STOCK OPTION COMMITTEE COMPENSATION COMMITTEE
Julian I. Edison Julian I. Edison
Andrew E. Newman Jane Evans
Eric P. Newman Craig D. Schnuck
Martin Sneider Robert W. Staley
SPECIAL COMPENSATION COMMITTEE SPECIAL COMPENSATION SUBCOMMITTEE
Julian I. Edison Jane Evans
Jane Evans Craig D. Schnuck
Robert W. Staley Robert W. Staley
9
<PAGE> 12
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, were also officers and employees of the
Corporation during the fiscal year. 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, the Special Compensation Committee and the
Compensation Committee, are former officers and employees of the
Corporation.
STOCK PRICE PERFORMANCE
The following graph compares the cumulative total return to
stockholders on the Corporation's common stock for the last five
fiscal years and the two preceding 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 February 2, 1990
(the last trading day of the Corporation's 1989 fiscal year) and the
reinvestment of all dividends.
COMPARISON OF CUMULATIVE TOTAL RETURNS GRAPH
<TABLE>
<CAPTION>
Measurement Period Edison Brothers S&P 500 S&R Retail
(Fiscal Year Covered)
<S> <C> <C> <C>
Measurement Pt-12/31/87 40.5 65.1 72.9
FYE 12/31/88 61.6 87.1 87.4
FYE 12/31/89 100.0 100.0 100.0
FYE 12/31/90 105.6 117.3 108.4
FYE 12/31/91 127.3 163.9 132.9
FYE 12/31/92 175.8 195.6 147.0
FYE 12/31/93 116.8 188.7 165.8
FYE 12/31/94 51.5 174.8 166.7
</TABLE>
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edison Brothers 40.5 61.6 100.0 105.6 127.3 175.8 116.8 51.5
S&P 500 65.1 87.1 100.0 117.3 163.9 195.6 188.7 174.8
S&P Retail 72.9 87.4 100.0 108.4 132.9 147.0 165.8 166.7
</TABLE>
2. AMENDMENT OF THE CERTIFICATE OF INCORPORATION
TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK
The Board of Directors has approved, and is recommending to the
stockholders for their approval, an amendment to the Corporation's
Certificate of Incorporation which would authorize the Corporation to
issue up to 10,000,000 shares of preferred stock from time to time
upon the authority of the Board of Directors.
Article Fourth of the Certificate of Incorporation currently
authorizes the issuance of 100,065,000 shares of capital stock, of
which 100,000,000 shares are common stock, par value $1 per share,
and 65,000 shares are cumulative preferred stock, par value $100 per
share. All of the authorized shares of cumulative preferred stock
were designated and issued as 4 1/4% Cumulative Preferred Stock, and
all outstanding shares of such class have since been called for
redemption and retired.
The proposed amendment to the Certificate of Incorporation would
replace the existing Article Fourth in its entirety. It would not
change the number of shares of common stock currently authorized
(100,000,000), but would authorize the issuance of up to 10,000,000
shares of preferred stock. The amendment would empower the Board of
Directors of the
10
<PAGE> 13
Corporation, without the necessity of further stockholder action
(unless required in a particular case by applicable law, regulation
or stock exchange rule), to cause the Corporation to issue shares of
the preferred stock from time to time in one or more series and to
determine, with respect to each such series, among other things: (i)
the distinctive designation and maturity date, if any, of such series
and the number of shares constituting such series; (ii) the dividend
rights, if any, including the dividend rate and whether dividends
would be cumulative or non-cumulative; (iii) the rights, if any, upon
a dissolution or distribution of the assets of the Corporation; (iv)
the conversion or exchange provisions, if any; (v) the redemption
provisions, if any; (vi) the sinking fund provisions, if any; and
(vii) the voting rights, if any, provided, however, that the holders
of shares of preferred stock would not be entitled to more than one
vote per share when voting as a class with the holders of shares of
common stock.
The text of the proposed amendment is set forth in full as Exhibit
A to this proxy statement and the foregoing summary is qualified in
its entirety by reference to such text.
The Board of Directors recommends the authorization of preferred
stock to give the Corporation increased flexibility in meeting future
financing needs. If the proposed amendment is approved, preferred
stock would be available for issuance by the Corporation in public or
private offerings to obtain additional capital to reduce outstanding
debt or for use in the Corporation's business. In this regard, the
Corporation has filed a registration statement with the Securities
and Exchange Commission to facilitate the possible sale from time to
time of preferred stock, as well as other securities of the
Corporation. The issuance of any shares of preferred stock pursuant
to such registration statement would be subject to the adoption of
the proposed amendment. Approval of the amendment would also allow
the Corporation to issue preferred stock for other corporate
purposes, such as acquisitions. The amendment would enable the Board
to specify the precise characteristics of the preferred stock to be
issued in light of then-current market conditions and the nature of
the specific transaction. Except as indicated above, the Corporation
has no plans or commitments at this time for the issuance of
preferred stock.
Until such time as the Board of Directors authorizes the issuance
and determines the rights of any series of preferred stock, it is not
possible to state the precise effect that issuance of such series
would have on the holders of the Corporation's common stock. However,
such effect might include a reduction of the amount available for
payment of dividends on the common stock, to the extent dividends are
payable on the preferred stock, and restrictions on dividends on the
common stock if dividends on the preferred stock are in arrears;
dilution of the voting power of the common stock to the extent that
the preferred stock has voting rights; and limitations on the rights
of the holders of common stock to share in the Corporation's assets
upon liquidation until satisfaction of any liquidation preference
granted to the preferred stock. Holders of the Corporation's common
stock would have no preemptive right to acquire additional shares of
common stock or any shares of preferred stock.
Even though the voting rights of preferred stock would be limited
as described above, the issuance of preferred stock could be used to
discourage attempts to acquire control of the Corporation. Neither
the Board nor management is considering the use of preferred stock
for such purposes and is not aware of any present effort by any party
to accumulate the Corporation's securities for the purpose of gaining
control of the Corporation. The Board and management represent that,
without the prior approval of the common stockholders, preferred
stock will not be issued for any anti-takeover purpose, including,
without limitation, to implement any stockholders' rights plan or
with features intended to make any attempted acquisition of the
Corporation more difficult or costly. No preferred stock will be
issued to any individual or group for the purpose of creating a block
of voting power to support management on a controversial issue.
It should be noted that the Corporation's Certificate of
Incorporation and By-Laws currently contain provisions that could
have the effect of delaying or preventing a change in control of the
Corporation, including provisions: (i) requiring the approval of at
least 80% of the outstanding voting stock for certain business
combinations with certain 20% or more stockholders, unless approved
by a majority of disinterested directors or unless certain fair price
criteria and procedural requirements are met; (ii) requiring advance
notice from stockholders in order to nominate persons for election as
directors or to bring other business before an annual meeting of
stockholders; and (iii) permitting only the Chairman, the President
and the Board of Directors to call special meetings of stockholders,
unless otherwise required by law. The Corporation is also subject to
Section 203 of the Delaware General Corporation Law, which generally
prohibits certain 15% or more stockholders from engaging in certain
business combinations with the Corporation for three years following
the date such stockholder became a 15% stockholder, unless approved
by the Board of Directors and at least 66 2/3% of the outstanding
voting stock not owned by the interested stockholder. In addition,
the Corporation is party to a Rights Agreement under which
disinterested stockholders may acquire additional shares of common
stock of the Corporation or of an acquiring company at a substantial
discount in the event of certain described changes or potential
changes in control.
Adoption of the proposed amendment requires the affirmative vote of
a majority of the outstanding shares of the Corporation's common
stock.
The Board of Directors believes it is in the best interests of the
Corporation that preferred stock be available to provide the
Corporation with increased flexibility in meeting corporate needs.
Accordingly, the Board unanimously recommends a vote FOR this
proposal.
11
<PAGE> 14
3. STOCKHOLDER PROPOSAL
William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, who
owns 150 shares of the Corporation's common stock, has advised the
Corporation that he plans to introduce the following proposal at the
annual meeting:
"RESOLVED, that the shareholders assembled in person and by
proxy, recommend (i) that all future non-employee directors not be
granted pension benefits and (ii) current non-employee directors
voluntarily relinquish their pension benefits."
The following statement was submitted by Mr. Steiner in support of
his proposal:
Aside from the usual reasons, presented in the past, regarding
"double dipping", that is outside (non-employee) directors who are
in almost all cases amply rewarded with their pension at their
primary place of employment, and in many instances serving as
outside pensioned directors with other companies, there are other
more cogent reasons that render this policy as unacceptable.
Traditionally, pensions have been granted in both the private and
public sectors for long term service. The service component usually
represents a significant number of hours per week. The practice of
offering pensions for consultants is a rarity. Outside directors'
service could logically fit the definition of consultants and
pensions for this type of service is an abuse of the term.
But more importantly, outside directors, although retained by
corporate management, namely the C.E.O., are in reality
representatives of shareholders. Their purpose is to serve as an
impartial group to which management is accountable. Although
outside directors are certainly entitled to compensation for their
time and expertise, pensions have the pernicious effect of
compromising their impartiality. In essence, pensions are
management's grants to outside directors to insure their
unquestioning loyalty and acquiescence to whatever policy
management initiates, and at times, serving their own self
interests. Thus, pensions become another device to enhance and
entrench management's controls over corporate policies while being
accountable only to themselves. I am a founding member of the
Investors Rights Association of America and I feel this practice
perpetuates a culture of corporate management "cronyism" that can
easily be at odds with shareholder and company interest.
A final note in rebuttal to management's contention that many
companies offer their outside directors pensions, so they can
attract and retain persons of the highest quality. Since there are
also companies that do not offer their outside directors pensions,
can management demonstrate that those companies that offer pensions
have a better performance record then their non-pensioned peers? In
addition, do we have any evidence of a significant improvement in
corporate profitability with the advent of pensions for outside
directors?
I urge your support, vote for this resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
The Board believes it is in the best interests of the Corporation
and its stockholders to have experienced and capable individuals
serving as outside directors. To attract and retain these highly-
qualified individuals, it is necessary as well as appropriate that
the Corporation provide a compensation package that is competitive
with that offered by other major companies.
Compensation consists not only of current payments but also future
payments. Many other companies provide retirement benefits to their
outside directors. The Corporation's retirement plan for its outside
directors, which is described on page 3 of this proxy statement,
requires that in order to be eligible for benefits directors must
have at least five years of continuous Board service. This encourages
directors to remain with the Corporation and promotes greater
expertise and continuity within the Board. Management believes that
having directors eligible for retirement benefits does not compromise
their impartiality, but rather enhances their desire to improve the
long-term performance of the Corporation, and further aligns the
director's interests with the long-term interests of the
stockholders.
Service as a member of the Board of Directors requires a
significant commitment of time and attention. Each director must
analyze and make decisions on many complex matters affecting the
Corporation. Compensation for the position should be based on the
services performed and the responsibilities assumed. It should not be
based on what other assets an individual director may have or receive
from other sources.
The affirmative vote of a majority of the shares present in person
or by proxy at the annual meeting and entitled to vote is required
for approval of this proposal. For the reasons stated above, the
Board of Directors unanimously recommends a vote AGAINST this
proposal. Your proxy will be so voted unless you specify otherwise.
12
<PAGE> 15
1996 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 1996,
all stockholder proposals must be received by the Secretary of the
Corporation on or before December 29, 1995.
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 14, 1995, will recommend, and that the Board of Directors
will approve, the reappointment of Ernst & Young as independent
auditor for the Corporation for the 1995 fiscal year.
The Corporation's Annual Report including financial statements for
the 52 weeks ended January 28, 1995 is simultaneously herewith being
mailed to all holders of common stock of record as of April 19, 1995,
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, 1995
13
<PAGE> 16
Exhibit A
RESOLVED, that Article "FOURTH" of the Certificate of Incorporation
of this Corporation be amended to read in its entirety as follows:
"FOURTH: The total number of shares that may be issued by the
Corporation is one hundred ten million (110,000,000), of which ten
million (10,000,000) shares shall be Preferred Stock, and one hundred
million (100,000,000) shares of the par value of one dollar ($1) per
share shall be Common Stock.
The designations, voting powers, preferences and rights of the
above classes of stock are as follows:
1. Subject to the laws of the State of Delaware and to the
limitations set forth below, authority is hereby vested in the Board
of Directors of the Corporation to issue said ten million
(10,000,000) shares of Preferred Stock from time to time in one or
more series, with such designations, voting powers, preferences, and
relative, participating, optional and other rights, and such
qualifications, limitations or restrictions thereof, as shall be
stated in the resolution or resolutions providing for the issuance of
such stock adopted by the Board of Directors. Without limiting the
generality of the foregoing, in the resolution or resolutions
providing for the issuance of each particular series of Preferred
Stock, the Board of Directors is expressly authorized:
(a) to fix the distinctive serial designation of the shares of any
such series;
(b) to fix the consideration for which the shares of any such
series are to be issued;
(c) to fix the rate per annum, if any, at which the holders of the
shares of any such series shall be entitled to receive
dividends, the dates on which such dividends shall be payable,
whether the dividends shall be cumulative or noncumulative, and
if cumulative, the date or dates from which such dividends
shall be cumulative;
(d) to fix the price or prices at which, the times during which,
and the other terms, if any, upon which the shares of any such
series may be redeemed;
(e) to fix the rights, if any, which the holders of shares of any
such series shall have in the event of dissolution or upon
distribution of the assets of the Corporation;
(f) to determine whether the shares of any such series shall be
made convertible into or exchangeable for other securities of
the Corporation, including shares of the Common Stock of the
Corporation or shares of any other series of the Preferred
Stock of the Corporation, now or hereafter authorized, or any
new class of stock of the Corporation hereafter authorized, the
price or prices or the rate or rates at which such conversion
or exchange may be made, and the terms and conditions upon
which any such conversion right or exchange right may be
exercised;
(g) to determine whether a sinking fund shall be provided for the
purchase or redemption of shares of such series and, if so, to
fix the terms and amount of such sinking fund;
(h) to determine whether the shares of any such series shall have
voting rights, and, if so, to fix the voting rights of the
shares of such series, provided, however, that the holders of
shares of Preferred Stock shall not be entitled to more than
one vote per share when voting as a class with the holders of
shares of Common Stock; and
(i) to fix such other preferences, rights, privileges and
restrictions applicable to any such series as may be permitted
by law.
2. Subject to the prior rights of the holders of any shares of
Preferred Stock, the holders of the Common Stock shall be entitled to
receive, to the extent permitted by law, such dividends as may be
declared from time to time by the Board of Directors."
A-1
<PAGE> 17
EDISON BROTHERS STORES, INC.
April 27, 1995
Dear Stockholder:
The annual meeting of stockholders of Edison Brothers
Stores, Inc. will be held at the headquarters of the
Corporation, 501 North Broadway, St. Louis, Missouri, at
11:00 A.M. on Wednesday, June 14, 1995. At the meeting,
stockholders will elect twelve directors and act upon a
proposal to amend the Corporation's Certificate of
Incorporation to authorize the issuance of preferred stock
and a stockholder proposal relating to retirement benefits
for outside directors.
It is important that your shares be represented at this
meeting. Whether or not you plan to attend the meeting,
please review the enclosed proxy materials, complete the
attached proxy form below, and return it promptly in the
envelope provided.
PLEASE DETACH PROXY HERE, SIGN AND MAIL
----------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
HEREIN. IF NO DIRECTION IS MADE AS TO ONE OR MORE ITEMS, THEN THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST ITEM 3.
Dated:______________________, 1995
----------------------------------
----------------------------------
(Signature of Stockholder)
(Please sign exactly as name
appears at left)
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
<PAGE> 18
PLEASE DETACH PROXY HERE, SIGN AND MAIL
----------------------------------------------------------------------
EDISON BROTHERS STORES, INC. 1995 ANNUAL MEETING
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned stockholder of Edison Brothers Stores, Inc. hereby
appoints PETER A. EDISON, KARL W. MICHNER and ALAN D. MILLER, 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 14, 1995 at 11 o'clock A.M., and at any
adjournments thereof, all shares held of record by the undersigned as
of April 19, 1995 in the manner designated as to the following
matters, and in their discretion as to such other matters as may
properly arise:
1. Election of Directors
Nominees: D. B. Cooper, Jr., 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
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed
below) above
INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space below.
--------------------------------
2. Approval of amendment to Certificate of Incorporation authorizing
the issuance of preferred stock
/ / FOR / / AGAINST / / ABSTAIN
3. Stockholder proposal relating to retirement benefits for outside
directors
/ / FOR / / AGAINST / / ABSTAIN
