<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1995
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
For the transition period from ________________ to _______________
Commission File Number 1-542
GROSSMAN'S INC.
- --------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 38-0524830
- -------------------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
45 Dan Road, Canton, Massachusetts 02021
- -------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(617) 830-4000
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Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchange
Title of Class on Which Registered
- --------------------------------------- ---------------------------
Common Stock, par value $0.01 per share The Nasdaq Stock Market
Securities registered pursuant to Section 12(g) of the Act:
None
- --------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K, or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of March 27, 1996 was $46,471,919.
The number of shares of the registrant's class of Common Stock ($.01 par
value) outstanding on March 27, 1996 was 26,089,498, exclusive of 42,849
shares held as treasury shares.
This amendment files Part III, Items 10, 11, 12, and 13, previously
incorporated by reference to the Company's definitive Proxy Statement for
its 1996 Annual Meeting of Stockholders.
<PAGE> 2
Part III
Capitalized terms used herein without definition have the meanings
specified in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 Form 10-K").
Item 10. Directors and Executive Officers of the Registrant
(a) Identification of Directors
Effective as of April 25, 1995, the following seven
directors of the Company were appointed by the majority of stockholders:
Russell Cox Age: 69
Mr. Cox has been President of Resort Management Inc.,
a property management and real estate consulting firm located in Waterville
Valley, New Hampshire, since 1977 and has been general partner of Real Estate
Venture Fund since 1985.
John R. Grey Age: 73
Mr. Grey retired as President of Chevron Corporation in
1985. He is a director of Academy Studio of Novato, California; he retired as
a director of BankAmericorp and Bank of America NT & SA in 1993.
Maurice Grossman Age: 74
Mr. Grossman retired as an employee of the Company in 1994
and served as Chairman of the Board and Chief Executive Officer of the Company
from 1986 to 1990.
Sydney L. Katz Age: 54
Mr. Katz has been President and Chief Executive Officer of
the Company since December 1, 1994; prior to his election as President he had
been Executive Vice President, Chief Financial Officer and Treasurer of the
Company for more than five years.
W. Wallace McDowell, Jr. Age: 59
Mr. McDowell is a private investor and was Managing
Director of MLGAL Partners, a leveraged acquisition firm from 1991 to 1994.
From 1983 to 1990, Mr. McDowell was Chairman and Chief Executive Officer of
Prospect Group, Inc, a diversified holding company.
Stephen B. Oresman Age: 63
Mr. Oresman has been the owner and President of Saltash
Ltd., a management consulting firm, since 1991. He was a partner and Vice
President of The Canaan Group Ltd., another management consulting firm, from
1988 to 1991.
<PAGE> 3
Robert K. Swanson Age: 63
Mr. Swanson has been non-executive Chairman of the Board
of the Company since November 23, 1994 and also serves as Chairman of the
Board of RKS, Inc., an investment and marketing consulting firm in Phoenix,
Arizona, and U.S. Games, Inc., a manufacturing company in Atlanta Georgia. He
also serves as a director of American Southwest Concepts, Inc., Arizona Desert
Saguaro, Inc. and The Thursley Group. He was Chairman and Chief Executive
Officer of Del Webb Corporation, a diversified company located in Phoenix,
Arizona, engaged in the management and development of real estate and leisure
operations, from 1981 to 1987, when he retired from that position.
The above appointments to the Board of Directors of the
Company are effective until successor directors are elected and qualified.
The Company anticipates that the Board of Directors will call a meeting of the
stockholders of the Company as soon as practicable to elect directors and vote
upon certain other matters.
(b) Identification of Executive Officers
Sydney L. Katz Age: 54
Mr. Katz is President and Chief Executive Officer and has been with
the Company 13 years.
David T. Krawczyk Age: 39
Mr. Krawczyk is Executive Vice President - President of Contractors'
Warehouse Division and has been with the Company 23 years.
Michael J. Shea Age: 46
Mr. Shea is Executive Vice President and Chief Financial Officer and
has been with the Company since September 1995.
Richard E. Kent Age: 67
Mr. Kent is Vice President, Secretary and General Counsel and has
been with the Company 24 years.
Steven L. Shapiro Age: 38
Mr. Shapiro is Vice President - Controller and has been with the
Company 10 years.
Arthur S. Ryan Age: 51
Mr. Ryan is Vice President and Treasurer and has been with the
Company 9 years.
(c) Identification of Certain Significant Employees
Not applicable
(d) Family Relationships
Not applicable
<PAGE> 4
(e) Business Experience
The business experience of each director of the Company
is set forth in Item 10(a) hereof, "Identification of Directors", and the
business experience of each executive officer of the Company is set forth in
Item 10(b) hereof, "Identification of Executive Officers".
(f) Involvement in Certain Legal Proceedings
None
(g) Promoters and Control Persons
Not Applicable
Item 11. Executive Compensation
(a) The following table sets forth information with respect
to cash compensation for services in all capacities to the Company during 1995
of each of the five most highly paid executive officers of the Company and all
executive officers as a group.
COMPENSATION OF EXECUTIVE OFFICERS
Compensation of Executive Officers
The following tables sets forth information with respect to
compensation for services to the Company in 1995 paid to or accrued on behalf
of (i) the chief executive officer as of December 31, 1995 and (ii) each of the
four most highly compensated executive officers of the Company, other than the
chief executive officer, as of December 31, 1995 (collectively, the "Named
Executive Officers"):
<TABLE>
<CAPTION>
Long Term
Annual Compensation
Name and Compensation ------------
Principal ----------------- Option All Other
Position Year Salary Bonus Awards (#) Compensation
- ------------------------- ---- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Sydney L. Katz 1995 $400,000 $ - - $520
President and CEO 1994 304,125 - 235,000 520
1993 274,400 75,000 - 520
David T. Krawczyk 1995 243,875 - - -
Executive Vice President 1994 215,250 63,100 35,000 -
President of Contractors' 1993 173,301 71,750 90,000 -
Warehouse Division
Richard E. Kent 1995 167,700 - - 520
Vice President, Secretary 1994 164,450 - 8,000 520
and General Counsel 1993 157,976 7,000 - 520
Robert L. Flowers (1) 1995 197,400 166,859 - 520
Executive Vice President- 1994 191,800 - 8,000 520
Real Estate 1993 182,476 - - 520
(Retired March 1, 1996)
Arthur S. Ryan 1995 142,500 - - 520
Vice President and 1994 133,812 - 8,000 520
Treasurer 1993 126,333 7,500 - 520
</TABLE>
<PAGE> 5
The options listed below are reflected in the Summary Compensation
Table above. No stock options or stock appreciation rights were granted by
the Company to the Named Executive Officers in 1995.
The table below sets forth information with respect to the number and
value of unexercised options held by the Named Executive Officers of the
Company on December 31, 1995. No stock options or stock appreciation rights
were exercised by such persons in 1995, and there are no outstanding stock
appreciation rights.
<TABLE>
<CAPTION>
YEAR-END OPTION VALUES
Number of Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired at December 31, 1995 at December 31, 1995
on Value --------------------- --------------------
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ----------------- -------- -------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sydney L. Katz - - 288,750 111,250 - -
David T. Krawczyk - - 110,000 90,000 - -
Richard E. Kent - - 79,500 18,500 - -
Robert L. Flowers - - 81,750 19,250 - -
Arthur S. Ryan - - 42,000 11,000 - -
<PAGE> 6
Employment Agreements
The Company has an employment agreement dated December 1, 1994 with
Mr. Katz, providing for his employment as President of the Company for a
three-year rolling term. His annual base salary under the agreement is
$400,000, effective December 1, 1994. In the event of termination of Mr.
Katz's employment without cause, he would be entitled to a lump sum severance
payment (the "Severance Payment") equal to 300% of his base salary in effect
at the time of such termination plus his target bonus for the current year
(50% of base salary for 1996), except that if such termination is following a
"change of control," as defined in the agreement, the Severance Payment would
be equal to 300% of the sum of his base salary in effect at the time of such
termination plus the highest cash bonus earned by him during any of the last
three full calendar years. In the event that any portion of the Severance
Payment would constitute an "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code, Mr. Katz will receive a "gross-up
payment" from the Company in an amount sufficient to make Mr. Katz whole for
all taxes imposed with respect to the excess parachute payment (including the
gross-up payment) and any associated interest and penalties. Following a
change of control, Mr. Katz may terminate his employment and receive the
Severance Payment. The employment agreement also provides that his benefit
under the Company's ERISA Excess Plan and its Supplemental ERISA Excess Plan
is to be computed on a final pay formula rather than a career average formula.
Accordingly, his straight life pension benefit accrued as of December 31, 1995
was $74,715, and at age 65, assuming annual compensation to age 65 at his
current base salary, would be $151,097 per year.
The Company also has employment agreements with the two other
executive officers of the Company. The agreements provide for employment for
a two-year rolling term. Any increase in annual salary during the employment
term increases the minimum annual salary under the agreements. The current
minimum annual salaries under the agreements for Messrs. Krawczyk and Kent
are $250,000 and $167,700, respectively. In addition, the agreements provide
for severance pay upon involuntary termination without cause in an amount
equal to one year's annual salary plus any bonus received within the preceding
12-month period. Upon an involuntary termination without cause or a
constructive termination, as defined in each agreement, within one year
following a change in control, the officer so terminated under the agreements
is entitled to severance pay equal to 200% of the greater of (i) of the sum of
his base annual salary plus any bonus received within the preceding 12 months
and (ii) the average of the sum of annual base salary plus bonuses paid during
the three twelve-month periods preceding the termination date.
Compensation of Directors
Pursuant to the 1995 Directors Stock and Option Plan, each director
who is not an employee of the Company receives, as an annual fee, Common Stock
of the Company having an equivalent market value on the date of issuance of
$15,000. In addition, each new Director receives a nonqualified stock option
to purchase 25,000 shares of the Company's Common Stock at an exercise price
equal to the fair market value of such stock on the date the option is
granted. Each option is immediately exercisable as to 5,000 shares and will
become exercisable to the extent of an additional 5,000 shares on each of the
four succeeding anniversaries of the date the option is granted. The options
expire ten years from the date of the grant.
<PAGE> 7
In addition, each director who is not an employee of the Company
receives an attendance fee of $500 for each meeting at which he is present in
person. The Chairman of each committee of the Board of Directors receives an
annual fee of $2,000. Each member of a committee (other than an employee of
the Company) receives an attendance fee of $500 for each meeting at which he
is present in person. Directors are reimbursed for expenses incurred in
performing their duties.
Mr. Swanson was elected non-executive Chairman of the Board of
Directors on November 23, 1994. In connection with such election, Mr. Swanson
entered into a consulting agreement with the Company. Pursuant to this
agreement, in 1995 Mr. Swanson received a one-time grant of an option covering
50,000 shares of the Common Stock of the Company and a one-time issuance of
shares of Common Stock of the Company having a fair market value equal to
$20,000 for consulting services performed in 1994. In addition, commencing
with the first quarter of 1995 and continuing thereafter, Mr Swanson received
and will receive for each day that he worked during the previous quarter on
the affairs of the Company, up to a maximum of 90 days per calendar year,
shares of Common Stock of the Company having a fair market value on the last
day of each calendar quarter equal to $1,000 and $1,000 in cash. He received
$88,000 and 49,591 shares of Common Stock of the Company for services in 1995.
In May through October 1990, Jay H. Shidler and Robert W. Holman, Jr.
(the "Shidler/Holman Group") unsuccessfully solicited written consents of
stockholders of the Company seeking to remove the directors then in office and
to elect their designees. In order to avoid the diversion of management time
and resources and the expense of a proxy contest, on March 13, 1991, the
Company entered into a Standstill Agreement (the "Standstill Agreement") with
Messrs. Shidler and Holman and Mr. Stephen B. Oresman, pursuant to which the
Board of Directors agreed to nominate as directors a representative of the
Shidler/Holman Group and a second person not financially affiliated with the
Shidler/Holman Group. On March 13, 1991, the Board of Directors increased its
size by two members and elected Messrs. Shidler and Oresman as directors. In
1993, Mr. Shidler resigned as director, and Mr. McDowell was elected to fill
the vacancy. In February 1995, Mr. Shidler relinquished his right to
designate one affiliated and one independent director. The Standstill
Agreement expires on the day following the Company's 1996 Annual Meeting of
Stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth the beneficial ownership, reported to
the Company as of March 30, 1996, of Common Stock of the Company, including
shares as to which the right to acquire ownership exists by the exercise of
stock options, within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934 (the "Exchange Act"), of each director and nominee, the chief
executive officer, the other current and former executive officers of the
Company who are "Named Executive Officers" as defined below under "Compensation
of Executive Officers," and all directors and executive officers as a group.
<PAGE> 8
</TABLE>
<TABLE>
<CAPTION>
Number of Shares of Percent of
Name Common Stock (1)(3) Class (2)
- ------------------------------------------- ------------------- ---------
<S> <C> <C>
Russell Cox................................ 20,866 *
Robert L. Flowers (5)...................... 106,000 *
John R. Grey............................... 32,886 *
Maurice Grossman........................... 219,886 *
Leo Kahn................................... 17,886 *
Sydney L. Katz............................. 426,805 1.5%
Richard E. Kent............................ 95,000 *
David T. Krawczyk.......................... 136,875 *
W. Wallace McDowell, Jr. .................. 21,886 *
Stephen B. Oresman......................... 17,886 *
Arthur S. Ryan............................. 59,600 *
Robert K. Swanson.......................... 125,662 *
All of the directors and executive officers
as a group (13 persons) (4)................ 1,232,638 4.3%
_____________________
<PAGE> 9
Information with respect to stock ownership has been furnished by the persons
named.
(1) The persons named have sole voting and investment power with respect
to shares listed, except as described under "Standstill Agreement."
(2) Asterisks indicate beneficial ownership of less than 1% of the
outstanding Common Stock.
(3) Stock beneficially owned includes shares which may be acquired upon
the exercise of presently exercisable options as follows: Mr.
Flowers -- 101,000 shares; Mr. Grossman -- 200,000 shares; Mr.
Katz -- 349,583 shares; Mr. Kent -- 88,000 shares; Mr. Krawczyk -
- 155,625 shares; Mr. Ryan - 48,000 shares; Messrs. Cox, Grey,
Kahn, McDowell, and Oresman -- 10,000 shares each; Mr. Swanson -
30,000 shares; and the group -- 1,022,208 shares. Not included
are shares which may be acquired upon the exercise of options
which are not presently exercisable as follows: Mr. Katz --
150,417 shares; Mr. Kent -- 10,000 shares; Mr. Krawczyk -- 44,375
shares; Messrs. Cox, Grey, Kahn, McDowell, and Oresman - 15,000
shares each; Mr. Swanson -- 45,000 shares and the group -- 444,792
shares.
(4) The percentage of outstanding Common Stock held by all directors and
executive officers as a group has been calculated on the basis of
26,088,219 shares of Common Stock outstanding on February 1, 1995,
plus 2,756,575 shares of Common Stock subject to currently
exercisable stock options held by such group.
(5) Mr. Flowers retired as Executive Vice President - Real Estate of the
Company on March 1, 1996.
Section 16(a) Reporting
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and beneficial owners of more than 10%
of its Common Stock to file initial reports of ownership and reports of
changes in ownership of the Company's securities with the Securities and
Exchange Commission and to furnish the Company with copies of the reports they
file.
Michael J. Shea was engaged as an Executive Vice President and
Chief Financial Officer of the Company in September of 1995 when he was
awarded a grant of 10,000 shares of Common Stock of the Company pursuant to
the Company's Restricted Stock Plan and a stock option for 80,000 shares of
Common Stock of the Company pursuant to the Company's 1986 Stock Option Plan.
Mr. Shea held 1,000 shares of Common Stock of the Company when he was
employed. Mr. Shea did not report such holdings or awards until February of
1996 when he filed his Annual Statement on Form 5.
Retirement Plans
The Company has a non-contributory defined benefit pension plan (the
"Pension Plan"), which covers substantially all of its employees and an ERISA
Excess Plan (the "EEP"), to preserve certain benefits for employees whose
retirement benefits under the Pension Plan are affected by limitations imposed
by the Internal Revenue Code.
<PAGE> 10
The following table shows the estimated annual benefits payable upon
retirement at age 65 under the Pension Plan as supplemented by the EEP for
services performed and compensation earned through December 31, 1995 on a 100%
straight-life annuity basis to persons in specified remuneration and years-of-
service classifications. The straight-life annuity benefit is approximately
110% of the 10-year certain benefit. Such benefits reflect a reduction for
annual earnings below $20,900 in 1996 to recognize in part the Company's cost
of Social Security benefits related to credited service under the Pension
Plan.
</TABLE>
<TABLE>
<CAPTION>
Years of Service
Annual ----------------------------------------------------------
Compensation 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 6,238 $ 9,008 $ 11,778 $ 14,549 $ 17,319 $ 20,089
100,000 13,053 18,857 24,662 30,466 36,270 42,075
150,000 19,868 28,706 37,545 46,383 55,222 64,060
200,000 26,683 38,555 50,428 62,300 74,173 86,046
250,000 33,498 48,404 63,311 78,218 93,124 108,031
300,000 40,313 58,253 76,194 94,135 112,075 130,016
350,000 47,128 68,102 89,077 110,052 131,027 152,002
400,000 53,973 77,951 101,960 125,969 149,978 173,987
500,000 67,573 97,650 127,727 157,804 187,881 217,958
600,000 81,203 117,348 153,493 189,638 225,783 261,928
700,000 94,833 137,046 179,259 221,473 263,686 305,899
800,000 108,463 156,744 205,025 253,307 301,588 349,870
900,000 122,093 176,442 230,792 285,141 339,491 393,840
1,000,000 135,723 196,140 256,558 316,976 377,393 437,811
</TABLE>
Reference earnings ("Reference Earnings") covered by the Pension
Plan, and EEP include all direct compensation payments, including overtime,
bonuses, commissions and similar payments. Reference Earnings for any year
are determined by reference to payments made during the year, whereas
compensation set forth in the Summary Compensation Table is determined by
reference to payments, whether made during the year or thereafter, for
services during the year. In 1995, Reference Earnings for the Named Executive
Officers were substantially (within a 10% variance) the same as the annual
compensation (salary and bonus) reported in the Summary Compensation Table.
Benefits are based upon the average of the highest five of the last
ten years for service prior to 1991 and upon annual reference earnings for
each year thereafter. The Summary Compensation Table does not include the
value of retirement benefits earned in 1995.
As of December 31, 1995 the years of credited service for the
individuals named in the Cash Compensation Table above were: Sydney L. Katz,
12 years, David T. Krawczyk, 20 years, Robert L. Flowers, 26 years, Richard E.
Kent, 25 years and Arthur S. Ryan, 8 years. For purposes of the portion of
the Pension Plan formula determined on a final average pay basis for service
prior to 1991, supplemented by the EEP, the covered compensation for service
prior to 1991 of Messrs. Krawczyk, Flowers, Kent and Ryan are $89,054,
$169,558, $184,823 and $105,791, respectively. Messrs. Flowers and Kent
received lump sum benefits under the Pension Plan at age 65 in 1991 and 1994,
respectively. Mr. Katz is entitled to a retirement benefit computed on a
final average pay basis for his entire credited service.
<PAGE> 11
Mr. Grossman does not participate in the EEP and is presently
receiving an annual retirement benefit of $124,147. Mr. Kent accrues benefits
under the Pension Plan during employment reflecting the increase in his lump
sum benefits, if any, attributable to such service.
Base Salaries
Base salaries for new executive officers are determined by evaluating
the responsibilities of the position and the experience of the individual,
with reference to the marketplace for executive talent, including a comparison
to base salaries for comparable positions with other corporations. Annual
salary adjustments are determined by evaluating the performance of the Company
and of each executive officer with consideration to any new responsibilities
of such officer. In the case of corporate officers with responsibility for
operating divisions, the financial results of the division are considered in
the context of economic and competitive factors. The Committee also grants
appropriate consideration to such non-financial performance measures as the
quality of work, business relationships and operational efficiency.
During 1995, Michael J. Shea was employed as Executive Vice President
and Chief Financial Officer and Charles L. Hofeller was employed as Vice
President-Real Estate of the Company. The annual salary of $175,000 for Mr.
Shea was determined by reference to his experience and the responsibilities of
the office. The Company also entered into a Severance Agreement with Mr. Shea
that provides that he will be entitled to severance of six months salary in
the event of termination without cause within one year of employment and of
one year's salary in the event of termination without cause thereafter. Mr.
Hofeller's annual salary of $120,000 was determined after consideration of his
experience and an evaluation of his ability to sell properties on terms
advantageous to the Company.
Annual Bonus
The Company's executive officers are eligible for an annual cash
bonus awarded by reference to an operating income plan for the Company and,
where appropriate, for a division of the Company. Pursuant to his employment
agreement, Mr. Katz's bonus will be determined based upon the attainment of
objectives (including non-financial objectives) to be established in writing
by the Committee prior to the end of the first quarter of each calendar year.
Each executive officer is assigned a target bonus expressed as a percentage of
base salary. Target bonus levels for all executives, including the President,
are periodically evaluated by the Committee to ensure that they represent
competitive pay opportunities for comparable executives in the retail
industry. In 1995, such target percentage rates ranged from 25% to 50% for
executive officers of the Company, with Mr. Katz assigned a 50% opportunity.
Bonuses for executive officers are awarded as a percentage of the target
bonus, ranging from 0% to 150% of the target bonus upon achievement of scaled
percentages of the applicable operating income plan.
In 1995, the Company did not achieve its corporate operating income
plan, and accordingly, no incentive bonuses were paid for services in 1995
under the Plan to any executive officer of the Company, including the
President.
No special bonus award was approved in 1995. Special bonus awards
are considered by the Company to be non-recurring and outside the criteria
typically utilized in considering pay competitiveness.
<PAGE> 12
Stock Options
Under the Company's 1986 Nonqualified Stock Option Plan, as amended,
stock options are granted from time to time to key employees, including
executive officers, of the Company. The Committee sets guidelines for the
size of stock option awards based upon competitive practice, base salary and
other factors, including contributions to initiatives adopted by the Company
to increase stockholder value, similar to the factors considered in setting
base salary.
Stock options are designed to align the interests of executives with
those of the stockholders, as part of the compensation objectives of the
Company. Stock options are granted with an exercise price equal to the market
price of the Company's common stock on the date of grant. The options
generally vest over four years. Accordingly, the full benefit of the options
is realized only when stock price appreciation occurs over an extended period.
The Committee has endeavored to motivate executives by granting
options that present executives an opportunity for significant gains
commensurate with gains in stockholder values.
In 1995, the Company also adopted the 1995 Restricted Stock Plan
whereby awards of Common Stock will be issued to officers and key employees as
an incentive to increase the profitability of the Company. In 1995, the Board
of Directors approved awards under the Plan for an aggregate of 162,000 shares
of Common Stock to 16 officers and key employees in lieu of annual salary
increases for 1995 and 1996.
No stock options were granted to Named Executive Officers in 1995.
Conclusion
The programs described above correlate a significant portion of the
Company's executive compensation to individual and corporate performance and
stock price appreciation. The Committee intends to continue the policy of
linking executives' compensation to corporate performance and improvement in
stockholder values, recognizing that economic factors beyond management's
control may result in imbalances for particular periods but that consistent
improvement in corporate performance over the long term will inure to the
mutual benefit of the Company's executives and its stockholders.
The Compensation Committee
John R. Grey, Chairman
Russell Cox
Stephen B. Oresman
<PAGE> 13
PRINCIPAL STOCKHOLDERS
The following table sets forth the name and address of the only
persons known to the Company to beneficially own more than 5% of the Common
Stock as of February 1, 1996, the number of shares beneficially owned and the
percentage so owned:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED OUTSTANDING SHARES
- ------------------------- ------------------- --------------------
<S> <C> <C>
Richard L. Wendt 2,691,700 10.3%
3250 Lakeport Blvd.
Klamath Falls, OR 97601
Pioneer Funds 2,255,500 8.7%
60 State Street
Boston, MA 02109
Dimensional Funds 1,448,700 5.6%
1299 Ocean Ave.
Santa Monica, CA 04041
Continental Assurance 1,538,462 (1) 5.9%
Company and Continental
Casualty Company
333 S. Wabash - 41 South
Chicago, IL 60685
<F1>
(1) 1,153,846 of these shares are shares received upon conversion of the
convertible Notes for 1,500,000 in principal convertible into Common Stock of
the Company at $1.30 per share.
</TABLE>
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
GROSSMAN'S INC.
Company
Date: May 10, 1996 By /s/ Steven L. Shapiro
Steven L. Shapiro
Vice President - Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
Signature Title Date
/s/ Robert K. Swanson Chairman of the Board May 10, 1996
Robert K. Swanson
/s/ Sydney L. Katz President and Chief May 10, 1996
Sydney L. Katz Executive Officer
(Principal Executive
Officer)
/s/ Michael J. Shea Vice President and Chief May 10, 1996
Michael J. Shea Financial Officer
/s/ Steven L. Shapiro Vice President - Controller May 10, 1996
Steven L. Shapiro (Principal Accounting
Officer)
/s/ Russell Cox Director May 10, 1996
Russell Cox
/s/ John Grey Director May 10, 1996
John Grey
/s/ Maurice Grossman Director May 10, 1996
Maurice Grossman
/s/ Leo Kahn Director May 10, 1996
Leo Kahn
/s/ W. Wallace McDowell, Jr. Director May 10, 1996
W. Wallace McDowell, Jr.
/s/ Stephen B. Oresman Director May 10, 1996
Stephen B. Oresman
