<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Edison Brothers Stores, Inc.
---------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
---------------------------------------------------------
(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:
/ / 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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3) Filing Party:
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4) Date Filed:
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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 1996 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 Hilton-St. Louis Airport, 10330 Natural
Bridge Road, St. Louis, Missouri, on the 12th day of
June, 1996, at 11 o'clock A.M. for the following
purposes:
(1) To elect ten directors; and
(2) 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 17, 1996, 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
May 2, 1996
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
1996 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 May 2, 1996.
The total number of outstanding shares of common stock entitled to vote at
the annual meeting is 22,201,778. 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 17, 1996 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.
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.
ELECTION OF DIRECTORS
A board consisting of ten 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. Set forth below are the names of the nominees and
certain biographical information. It is the intention of the persons appointed
as proxies 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 named below is unable to stand for election
because of some unexpected occurrence, the persons appointed as proxies 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.
BART A. BROWN, JR., age 64, is not currently a director of the Corporation.
He is a consultant to Investcorp International, Inc., an international
investment banking firm. From August 1995 to April 1996, he was Chairman of the
Board and Chief Executive Officer of Color Tile, Inc., a retailer of specialty
flooring and wall covering. Since June 1994, he has been Chairman of the Board
of Spreckels Industries, Inc., a manufacturing and processing company, serving
as its Chief Executive Officer from June 1994 to May 1995. From June 1990 to
August 1995, he was Chairman of the Board of The Circle K Corporation, an
operator and licensor of convenience stores, serving also as its Chief
Executive Officer from June 1991 through July 1993. He was Senior Partner of
the law firm of Keating, Muething and Klekamp, Cincinnati, Ohio, from 1987 to
1990. Mr. Brown is a director of Spreckels Industries, Inc., The Circle K
Corporation, Barry's Jewelers, Inc. and FirstCity Financial Corp.
DAVID B. COOPER, JR., age 40, has been a director since 1995. He 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.
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<PAGE> 4
JULIAN I. EDISON, age 66, has been a director since 1965. He was Chairman
of the Corporation from 1974 to 1987.
PETER A. EDISON, age 40, has been a director since 1990. He 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. He is a director of
Dave & Buster's, Inc.
JANE EVANS, age 51, has been a director since 1990. She is President and
Chief Operating Officer of Smart TV. From March 1991 to March 1995, she was
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., Georgia-Pacific Corporation, Kaufman and Broad Home
Corporation, and Banc One-Arizona, N.A.
RICHARD C. MARCUS, age 57, is not currently a director of the Corporation.
He is a principal of InterSolve Group, a management services firm he co-founded
in 1991. He has been a director since September 1994 of the Plaid Clothing
Group, a manufacturer of men's tailored clothing, and from December 1994
through December 1995 served as Plaid Clothing Group's Chief Executive Officer.
From 1979 to 1988, he was Chairman and Chief Executive Officer of Neiman
Marcus. In addition to Plaid Clothing Group, he is a director of Zale
Corporation and XcelleNet, Inc.
KARL W. MICHNER, age 48, has been a director since 1989. He is Senior
Executive Vice President of the Corporation and President of the Corporation's
Menswear Group.
ALAN D. MILLER, age 43, has been a director since 1993. He 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 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.
ALAN A. SACHS, age 49, has been a director since 1990. He is Executive Vice
President, General Counsel and Secretary of the Corporation.
CRAIG D. SCHNUCK, age 48, has been a director since 1990. He is Chairman of
the Board and Chief Executive Officer of Schnuck Markets, which operates 90
supermarkets in the Midwest. He is a director of Mercantile Bancorporation Inc.
and General American Life Insurance Company.
Messrs. Cooper, P. Edison, Michner, Miller and Sachs were serving as
executive officers of the Corporation in November 1995 when the Corporation
filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. Mr. Brown was Chief Executive Officer of Color Tile, Inc. in
January 1996 when Color Tile filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code. Mr. Marcus was Chief Executive Officer of Plaid Clothing
Group in July 1995 when Plaid Clothing Group filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
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 Compensation Committee of the Board determines the compensation of all
executives of the Corporation, except as indicated in the next sentence. A
Special Compensation Subcommittee of the Compensation Committee has 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
2
<PAGE> 5
Corporation's Executive Performance-Based Bonus Plan. The Compensation
Committee is comprised of Julian I. Edison, Jane Evans and Craig D. Schnuck.
The Special Compensation Subcommittee consists of Jane Evans and Craig D.
Schnuck.
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.
The Corporation has 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. The
appropriateness and effectiveness of this program will be reevaluated by the
Board during 1996.
During the 53 weeks ended February 3, 1996, there were nine meetings of the
Board of Directors, two of the Audit Committee and four of the 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.
SECURITY OWNERSHIP OF 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, 1996
by (i) each current director and nominee for director, (ii) the persons named
in the Summary Compensation Table on page 5, and (iii) all current directors
and executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of of Beneficial Percent
Beneficial Owner Ownership<F1><F2><F3> of Class<F4>
---------------------------- --------------------- ------------
<S> <C> <C>
Bart A. Brown, Jr. -- --
David B. Cooper, Jr. 13,310 --
Julian I. Edison 817,238 3.6%
Peter A. Edison 317,282 1.4%
Jane Evans 100 --
Michael H. Freund 209,674 --
Richard C. Marcus -- --
Karl W. Michner 56,340 --
Alan D. Miller 107,092<F5> --
Andrew E. Newman 718,375<F6> 3.2%
Eric P. Newman 1,580,852<F6> 7.0%
Alan A. Sachs 38,445 --
Craig D. Schnuck 1,000 --
Martin Sneider 77,840 --
All current directors and
executive officers
as a group 3,622,704<F7> 16.0%
<FN>
<F1> Sole voting and dispositive power, except for the following shares as to
which the named individual has shared voting and dispositive power: Peter
A. Edison, 242,274 shares; Michael H. Freund, 175,017 shares; Andrew E.
Newman, 496,741 shares; Eric P. Newman, 1,399,105 shares; and Martin
Sneider, 30 shares.
<F2> Includes shares which were not owned by the named individual or group
member as of March 1, 1996, but which such individual or group member
could acquire on or before April 30, 1996 under options granted pursuant
to the Corporation's 1986 Stock Option Plan and/or 1992 Stock Option Plan,
as follows: David B. Cooper, Jr., 13,310 shares; Peter A. Edison, 15,307
shares; Michael H. Freund, 9,316 shares; Karl W. Michner, 35,107 shares;
Alan D. Miller, 45,589 shares; Alan A. Sachs, 24,125 shares; and all
current directors and executive officers as a group, 251,235 shares.
3
<PAGE> 6
<F3> Includes shares allocated to the account of the named individual or group
member under the Edison Brothers Stores Savings Plan, as follows: Michael
H. Freund, 180 shares; Karl W. Michner, 391 shares; Alan D. Miller, 387
shares; Andrew E. Newman, 449 shares; Alan A. Sachs, 360 shares; Martin
Sneider, 471 shares; and all current directors and executive officers as a
group, 4,367 shares.
<F4> Percentages are calculated based on the number of shares deemed
outstanding under applicable Securities and Exchange Commission rules as
of March 1, 1996. Only percentages of beneficial ownership of 1% or more
are shown.
<F5> Includes 50,000 shares of restricted stock granted in 1995.
<F6> Includes 444,205 shares held in trust, with Andrew E. Newman and Eric P.
Newman among those sharing voting and dispositive power as to such shares.
<F7> When ownership of the same shares is attributable to more than one person,
any duplication is eliminated in the total set forth.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the number and percentage of outstanding
shares of the Corporation's common stock beneficially owned as of March 1, 1996
(except as otherwise noted) by each person known by management to be the
beneficial owner of more than 5% of the outstanding common stock (except for
one individual who is a director of the Corporation, as to whom such
information is set forth at page 3 above).
<TABLE>
<CAPTION>
Percent
Name and Address Amount and Nature of
of Beneficial Owner of Beneficial Ownership Class<F1>
-------------------------- ----------------------- ----------
<S> <C> <C>
Georges Marciano 1,510,700<F2> 6.7%
Georges Marciano Trust
9465 Wilshire Boulevard
Beverly Hills, CA 90210
Bernard Edison 1,298,814<F3> 5.8%
501 North Broadway
St. Louis, MO 63102
<FN>
<F1> Percentages are calculated based on the number of shares deemed
outstanding under applicable Securities and Exchange Commission rules as
of March 1, 1996.
<F2> The information presented is derived from Schedule 13D (Amendment No. 1)
dated March 14, 1996 with respect to beneficial ownership of common stock
of the Corporation as of March 13, 1996. The Georges Marciano Trust (the
``Trust'') is the direct beneficial owner of all of the shares and has
sole voting and dispositive power with respect to the shares owned by it.
Georges Marciano is the sole trustee of the Trust and has sole voting and
dispositive power with respect to the shares owned by the Trust.
<F3> Includes 1,186,374 shares the ownership of which is also attributable to
one or more directors.
</TABLE>
In addition to those shares listed above and the shares attributable to
directors of the Corporation, 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 1,033,517 shares
of the common stock of the Corporation, or 4.6% 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.
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<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to each of the five
most highly compensated executive officers and two former executive officers of
the Corporation (the ``named executive officers'') for services rendered to the
Corporation and its subsidiaries for the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------------- -------------------------------------
Stock Long-
Restricted Options Term
Other Common Granted Incentive
Fiscal Annual Stock (Number of Plan All Other
Name and Principal Position Year Salary<F1> Bonus Compensation Award(s) Shares)<F2> Payouts Compensation<F3>
- --------------------------- ------ ---------- ----- ------------ ---------- ----------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan D. Miller 1995 $ 433,333 -- -- $637,500<F4> 45,000 -- $ 529
Chairman, President and 1994 339,167 -- -- -- 11,000 -- 829
Chief Executive Officer 1993 279,168 -- -- -- -- -- 1,838
Karl W. Michner 1995 347,167 -- -- -- 23,500 -- 517
Senior Executive Vice 1994 333,000 -- -- -- 11,000 -- 899
President and President 1993 328,835 -- -- -- -- -- 2,182
of the Corporation's
Menswear Group
David B. Cooper, Jr. 1995 316,666 -- -- -- 20,000 -- --
Executive Vice President 1994 81,818<F5> -- -- -- 10,000 -- 50,000
and Chief Financial 1993 -- -- -- -- -- -- --
Officer
Alan A. Sachs 1995 282,333 -- -- -- 16,500 -- 533
Executive Vice President, 1994 269,000 -- -- -- 7,000 -- 795
General Counsel and 1993 266,500 -- -- -- -- -- 1,877
Secretary
Peter A. Edison 1995 231,667 -- -- -- 14,400 -- --
Senior Executive Vice 1994 158,833 -- -- -- 4,000 -- --
President and Director 1993 151,333 -- -- -- -- -- --
of Corporate Development
Andrew E. Newman 1995 320,000 -- -- -- -- -- 542,072
Former Chairman 1994 891,667 -- -- -- 200,000<F6> -- 899
of the Board 1993 1,014,589 -- -- -- -- -- 3,231,940
Martin Sneider 1995 320,000 -- -- -- -- -- 594,770
Former President 1994 891,667 -- -- -- 200,000<F6> -- 899
1993 1,014,589 -- -- -- -- -- 3,449,809
<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> The number of shares, along with the exercise price, of each option was
subsequently adjusted, pursuant to the terms of the Corporation's 1992
Stock Option Plan, to reflect the June 1995 spin-off by the Corporation of
its stock in Dave & Buster's, Inc. (See Note 1 on page 6.)
<F3> Except as indicated below, the amounts shown were 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.) The amount shown for Mr. Cooper for 1994 was a lump sum hiring
bonus paid upon his commencement of employment with the Corporation. The
amounts shown for Messrs. Newman and Sneider for 1993 were 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. The amounts shown for Messrs. Newman and
Sneider for 1995 were comprised of two elements: (a) amounts contributed
by the Corporation to the Edison Brothers Stores Savings Plan for their
accounts ($450 and $450, 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 for the period January 1, 1994 through April 30, 1995.
5
<PAGE> 8
<F4> Reflects the grant on May 11, 1995 of 50,000 shares of common stock of the
Corporation, with the aggregate value based on the closing price of the
Corporation's common stock on the date of grant. As of the end of the 1995
fiscal year, Mr. Miller held a total of 50,000 restricted shares of common
stock of the Corporation, having an aggregate value of $81,250 based on
the closing price of the Corporation's common stock as of the end of such
fiscal year. Under the terms of the 1995 grant, the shares will vest in
10,000 share increments on May 13, 1996, May 20, 1997, May 27, 1998, June
3, 1999 and June 12, 2000, subject to certain forfeiture and acceleration
provisions. Dividends (if any) are paid on these restricted shares at the
same time and at the same rate as dividends are paid to stockholders
generally.
<F5> Commenced employment with the Corporation on October 24, 1994.
<F6> In connection with the announced retirement of Messrs. Newman and Sneider
from their respective positions as Chairman of the Board and President,
these options were canceled in February 1995.
</TABLE>
STOCK OPTIONS
The following table provides information with respect to the grant of stock
options during the 1995 fiscal year to each of the named executive officers.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Individual Grants<F1> Stock Price Appreciation for Option Term<F2>
- ---------------------------------------------------------------------------------- ----------------------------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year<F3> ($/sh) Date 0%($) 5%($) 10%($)
- -------------------- ------------ --------------- -------- ---------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan D. Miller 45,000 8.0% $14.81 2/21/05 $0 $419,124 $1,062,148
Karl W. Michner 23,500 4.2% 14.81 2/21/05 0 218,876 554,667
David B. Cooper, Jr. 20,000 3.6% 14.81 2/21/05 0 186,278 472,066
Alan A. Sachs 16,500 2.9% 14.81 2/21/05 0 153,679 389,454
Peter A. Edison 14,400 2.6% 14.81 2/21/05 0 134,120 339,887
Andrew E. Newman -- -- -- -- -- -- --
Martin Sneider -- -- -- -- -- -- --
<FN>
<F1> All options granted to the named executive officers were granted on
February 21, 1995, at an exercise price equal to the fair market value of
the Corporation's common stock on the date of grant. The number of shares
subject to each option and the exercise price were subsequently adjusted
to take account of the June 1995 spin-off by the Corporation of its stock
in Dave & Buster's, Inc. As a result of such adjustment--which was
calculated so that each option would have the same intrinsic value, based
on its relationship to the market price of the Corporation's common stock,
immediately after the spin-off as it had immediately before--the number of
shares subject to each option was increased by 33.1% and the exercise
price was reduced by 24.9%. 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 they already own, with proceeds from the immediate
sale of 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. As of April 22, 1996,
the closing price of the Corporation's common stock on the New York Stock
Exchange was $1.75 per share. Unless the stock price increases to a level
above the exercise price of the options, the options will have zero value.
<F3> Based on options for 562,450 shares granted to 830 employees.
</TABLE>
6
<PAGE> 9
The following table provides information with respect to stock option
exercises during the 1995 fiscal year by the named executive officers and the
value of such officers' unexercised options as of the end of the fiscal year.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Year-End(#)<F1> Year-End($)<F2>
Shares Acquired ------------------------------- -------------------------------
Name on Exercise(#) Value Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan D. Miller -- -- 26,954 70,882 $0 $0
Karl W. Michner -- -- 23,627 42,263 0 0
David B. Cooper, Jr. -- -- 6,655 33,278 0 0
Alan A. Sachs -- -- 16,306 28,952 0 0
Peter A. Edison -- -- 9,318 22,628 0 0
Andrew E. Newman -- -- -- -- -- --
Martin Sneider -- -- -- -- -- --
<FN>
<F1> The number of shares is as adjusted to reflect the June 1995 spin-off by
the Corporation of its stock in Dave & Buster's, Inc. (See Note 1 on page
6.)
<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.
</TABLE>
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In September 1995, in order to assure the Corporation of the continued
availability of the services of its key executives, the Corporation entered
into employment agreements with certain of its officers, including each of the
named executive officers (other than Messrs. Newman and Sneider). The
agreements between the Corporation and the named executive officers provide for
a two-year term of employment, ending on September 17, 1997, subject to
extension by mutual agreement. In addition to salary and benefits, the
agreements each provide for a lump sum cash bonus equal to four times the
executive's monthly base salary, payable on September 17, 1997. This
``retention'' bonus, intended as an incentive for the executive to remain with
the Corporation, is payable only if the executive is still in the Corporation's
employ on the payment date (subject to the executive's right to receive a
prorata portion of the bonus if terminated without cause less than six months
before the payment date). If there occurs a ``change in control'' of the
Corporation, as defined in the agreements, the employment term is extended for
a period ending either three years, in the case of Alan Miller, or two years,
in the case of the other named executive officers, after the date of occurrence
of the change in control. 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'' (which, prior to a change in
control, would be limited to a reduction in salary, and following a change in
control would include a reduction in salary, material change in 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 at any time between the contract date and the date
of termination of employment, multiplied by (ii) the greater of (a) twelve or
(b) the number of months remaining under the agreement. Further, in the event
of termination without cause or for ``good reason,'' the Corporation is to
maintain for the executive's continued benefit for the longer of the unexpired
term of the agreement or twelve months from the date of termination (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. If a change in control occurs after the term
of the agreement but at a time when the executive is still employed by the
Corporation, and the executive's employment is then terminated by the
Corporation without cause or by the
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<PAGE> 10
executive for ``good reason'' within three years, in the case of Alan Miller,
or two years, in the case of the other named executive officers, after the
occurrence of such change in control, the executive will also be entitled to
the payments and benefits described above. 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.
Annual 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.
The Pension Plan contains provisions designed to protect its assets in the
event of a potential change in control of the Corporation. Under these
provisions, if 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 1996 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 PLAN TABLE
Years of Service
<CAPTION>
Remuneration 15 20 25 30 35
- ------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 8,916 $ 11,884 $ 14,860 $ 17,832 $ 17,832
100,000 20,167 26,889 33,612 40,334 40,334
200,000 42,667 56,889 71,112 85,334 85,334
400,000 87,667 116,889 146,112 175,334 175,334
600,000 132,667 176,889 221,112 265,334 265,334
800,000 177,667 236,889 296,112 355,334 355,334
</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.
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<PAGE> 11
As of February 3, 1996, the years of credited service under the Pension
Plan for each of the named executive officers were as follows: Alan D. Miller,
17; Karl W. Michner, 22; David B. Cooper, Jr., 0; Alan A. Sachs, 9; Peter A.
Edison, 13; Andrew E. Newman, 22; and Martin Sneider, 24.
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. On
May 1, 1995, in connection with their retirement from their respective
positions as Chairman of the Board and President, Messrs. Newman and Sneider
received from the Corporation 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 satisfaction of all
rights to such benefits and in consideration of their disclaiming all rights to
any additional payments under the Pension Restoration Plan as respects their
service with the Corporation beyond April 30, 1995.
REPORT OF THE COMPENSATION COMMITTEE
The following report discusses the compensation policies applied by the
Compensation Committee of the Board of Directors and by its Special
Compensation Subcommittee 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 the Committee and/or the
Subcommittee 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.
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. That program was carried forward in 1995.
SALARY
Each executive's base salary was reviewed at the end of the prior fiscal
year. In determining individual salaries for 1995, 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.
ANNUAL CASH BONUS
The Edison Brothers Stores, Inc. Executive Performance-Based Bonus Plan was
adopted in early 1994. Administered by the Special Compensation Subcommittee,
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 is
assigned a target bonus award, expressed as a percentage of the participant's
base salary. For 1995, since the Corporation did not attain the financial goals
set by the Subcommittee, no participant received any payment under the plan.
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<PAGE> 12
STOCK OPTIONS
The committee believes that the stock option program is 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.
As part of the compensation program described above, options were granted
to all executive officers in 1995. 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.
EMPLOYMENT AGREEMENTS
In September 1995, the Committee authorized the Corporation to enter into
employment agreements with certain of its key executives. In the Committee's
judgment, it was important during this period of uncertainty that these
executives remain in the Corporation's employ. The agreements are described in
detail in the section entitled ``Employment Agreements and Change in Control
Arrangements'' on pages 7-8.
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 has sought to structure the
performance-based portion of the compensation of its executive officers in a
manner that complies with Section 162(m).
1995 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In early 1995, the then-current Chairman and President retired from their
respective positions and Alan D. Miller was elected to both offices. In
determining Mr. Miller's compensation as the new Chairman, President and Chief
Executive Officer, the Special Compensation Subcommittee used the same criteria
described in the Salary, Annual Cash Bonus and Stock Options sections above.
The Subcommittee also took into account the fact that the two top positions
were being consolidated into one. Based on these factors (without any specific
weighting among them), the Subcommittee established a base salary for Mr.
Miller of $450,000. The Subcommittee granted Mr. Miller a stock option covering
45,000 shares of the Corporation's common stock, in accordance with the stock
option program described above, and also granted Mr. Miller 50,000 shares of
restricted common stock to vest over an approximate five-year period, in
furtherance of the objectives of the executive compensation program as set
forth above.
COMPENSATION COMMITTEE SPECIAL COMPENSATION SUBCOMMITTEE
Julian I. Edison Jane Evans
Jane Evans Craig D. Schnuck
Craig D. Schnuck
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
Julian I. Edison, who, during the last fiscal year, was a member of the
Compensation Committee, is a former officer and employee of the Corporation.
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<PAGE> 13
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 and the three
preceding years with the cumulative total return of the Standard & Poor's
Retail Stores Index and the Standard & Poor's 500 Stock Index. The graph
assumes a $100 investment in the Corporation's common stock and each index on
February 1, 1991 (the last trading day of the Corporation's 1990 fiscal year)
and the reinvestment of all dividends. The graph includes the distribution by
the Corporation to its shareholders of the common stock owned by the
Corporation in its former Dave & Buster's, Inc. subsidiary, based on the
assumption that the shares of Dave & Buster's received in the distribution were
sold on June 29, 1995, the effective date of the distribution, and the proceeds
immediately reinvested in shares of the Corporation's common stock.
COMPARISON OF FIVE-YEAR CUMULTIVE TOTAL RETURNS
[GRAPH]
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Edison Brothers 38.3 58.3 94.7 100.0 120.5 166.4 110.5 48.7 8.4
S&P Retail 55.5 74.2 85.2 100.0 139.7 166.7 160.9 149.0 160.6
S&P 500 67.3 80.7 92.3 100.0 122.6 135.6 153.0 153.8 213.2
</TABLE>
TRANSACTIONS INVOLVING DIRECTORS AND OFFICERS
In June 1994, the Corporation purchased from Race Rock, Inc., a corporation
wholly-owned by Robert B. Moore, certain of its assets, including its ``Race
Rock'' motorsports themed restaurant concept and related intellectual and
personal property, for a purchase price of $1,373,000, plus certain contingent
future payments. It was the intention of the Corporation at that time to
develop the restaurant concept into a national chain. In early 1995, the
Corporation determined not to proceed with development of the concept, and in
July 1995, the Corporation sold the concept and related assets, including
certain real property in Orlando, Florida that had been purchased in the
interim as a potential site for a Race Rock restaurant, to Race Rock Holdings,
Inc. (``Holdings''), a corporation owned jointly by Mr. Moore and Andrew E.
Newman, a director of Edison Brothers. At the time of the sale, Race Rock had
no revenues or earnings. The sale price consisted of (a) cash in the amount of
$5,066,903, (b) 180,000 shares of Holdings' non-voting Class A common stock and
(c) a warrant to purchase an additional 420,000 shares of Holdings' Class A
common stock at $2 per share at any time prior to the third anniversary of the
closing date. The sale price was intended to be approximately equal to the
Corporation's net investment in the Race Rock assets and concept as of the date
of sale.
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<PAGE> 14
FILINGS UNDER SECTION 16(a)
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 1995 fiscal year were
complied with by its officers, directors and greater than ten percent
shareholders, except that one report on Form 4, covering one transaction, was
filed late by Paul Eisen, an officer of the Corporation, two reports on Form 4,
covering three transactions, were filed late by Les Wagner, an officer of the
Corporation, and two reports on Form 4, covering two transactions, were filed
late by Peter Edison, an officer and director of the Corporation.
1997 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 1997, all
stockholder proposals must be received by the Secretary of the Corporation on
or before January 2, 1997.
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
12, 1996, will recommend, and that the Board of Directors will approve, the
reappointment of Ernst & Young as independent auditor for the Corporation for
the 1996 fiscal year.
The Corporation's Annual Report including financial statements for the 53
weeks ended February 3, 1996 is simultaneously herewith being mailed to all
holders of common stock of record as of April 17, 1996, 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: May 2, 1996
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<PAGE> 15
EDISON BROTHERS STORES INC.
May 2, 1996
Dear Stockholder:
The annual meeting of stockholders of Edison Brothers
Stores, Inc. will be held at The Hilton-St. Louis
Airport, 10330 Natural Bridge Road, St. Louis, Missouri,
at 11:00 A.M. on Wednesday, June 12, 1996. At the
meeting, stockholders will elect ten directors. The Board
has nominated two new outside directors, Bart A. Brown,
Jr. and Richard C. Marcus. Four members of the current
Board, Michael H. Freund, Andrew E. Newman, Eric P.
Newman and Martin Sneider, have decided not to stand for
re-election.
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 ON THE REVERSE
SIDE HEREOF. IF NO DIRECTION IS MADE, THEN THIS PROXY WILL BE VOTED FOR ITEM 1.
Dated: ________________________________, 1996
---------------------------------------------
---------------------------------------------
(Signature of Stockholder)
(Please sign exactly as name appears at left)
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
<PAGE> 16
PLEASE DETACH PROXY HERE, SIGN AND MAIL
- -------------------------------------------------------------------------------
EDISON BROTHERS STORES, INC. 1996 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 The Hilton-St.
Louis Airport, 10330 Natural Bridge Road, St. Louis, Missouri, on June 12, 1996
at 11 o'clock A.M., and at any adjournments thereof, all shares held of record
by the undersigned as of April 17, 1996 in the manner designated as to the
following matter, and in their discretion as to such other matters as may
properly arise:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of Directors
Nominees: B.A. Brown, Jr., D.B. Cooper, Jr., J.I. Edison, P.A. Edison,
J. Evans, R.C. Marcus, K.W. Michner, A.D. Miller,
A.A. Sachs, C.D. Schnuck
/ / 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.
---------------------------------------------------------------------
<PAGE> 17
APPENDIX
Page 11 of the printed proxy contains a stock price performance graph. The
information contained in the graph is depicted in the table that immediately
follows the graph.
