<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Three D Departments, 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):
[_] No fee required.
[X] 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:
Three D Departments, Inc. Class A Common Stock
Three D Departments, Inc. Class B Common Stock
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(2) Aggregate number of securities to which transaction applies:
2,435,961
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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):
N/A
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
THREE D DEPARTMENTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 31, 1997
To The Stockholders of Three D Departments, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Three D
Departments, Inc., a Delaware corporation (the "Company"), will be held at our
Simsbury store, Farmington Valley Mall, Route #44 and Bushy Hill Road,
Simsbury, Connecticut, on Friday, January 31, 1997, at 11:00 a.m., Eastern
Standard Time, for the following purposes:
1. To elect seven directors to serve for a term of one year each and
until their respective successors have been elected and qualified; two of
whom shall be elected by the holders of the Company's Class A Common Stock,
voting separately as a class, and five of whom shall be elected by the
holders of the Company's Class B Common Stock, voting separately as a
class.
2. To approve the appointment of Price Waterhouse as independent
accountants of the Company for the 1997 fiscal year.
3. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The close of business on January 3, 1997 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting.
You are cordially invited to attend the Meeting in person. IF YOU DO NOT
EXPECT TO BE PRESENT, PLEASE COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE. It will assist us in controlling
expenses of the Meeting if stockholders who do not expect to attend in person
will return their signed proxies promptly, whether they own a few shares or
many shares.
By Order of the Board of Directors,
David Kotkin,
Secretary
Costa Mesa, California
January 3, 1997
<PAGE>
THREE D DEPARTMENTS, INC. PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is solicited on behalf of the Board of Directors of Three
D Departments, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held on Friday, January 31, 1997, and at any adjournments
thereof. This Proxy Statement and the accompanying proxy are being sent to
stockholders on or about January 4, 1997. Stockholders are requested to
complete, date and sign the proxy and return it promptly to the Company.
Any stockholder executing a proxy has the power to revoke it at any time
before it is voted by filing with the Secretary of the Company either a
written notice of revocation or a duly executed proxy bearing a later date.
Proxies also may be revoked by any stockholder present at the Meeting who
elects to vote in person. Subject to such revocation, all proxies duly
executed and received by the Company on a timely basis prior to commencement
of the Meeting will be voted in accordance with the directions specified on
the proxy.
The Annual Meeting is being called for the purpose of electing seven
directors, and ratifying the appointment of Price Waterhouse as the Company's
independent accountants for the 1997 fiscal year. Votes cast by proxy or in
person at the Meeting will be counted by the person(s) appointed by the
Company to act as election inspectors for the meeting. The election inspectors
will treat shares represented by proxies that reflect abstentions as shares
that are present and entitled to vote, for purposes of determining the
presence of a quorum and for purposes of determining the outcome of any matter
submitted to the shareholders for a vote. Abstentions, however, do not
constitute a vote "for" or "against" any matter and thus will be disregarded
in the calculation of a plurality or of "votes cast".
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares identified as held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote that the broker or nominee does not have discretionary power
to vote on a particular matter) as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. However, for the
purposes of determining the outcome of any matter as to which the broker or
nominee has physically indicated on the proxy that it does not have
discretionary authority to vote, those shares will be treated as not present
and not entitled to vote with respect to that matter (even though those shares
are considered entitled to vote for quorum purposes and may be entitled to
vote on other matters).
IF NO SPECIFICATION IS MADE TO THE CONTRARY, PROXIES DULY EXECUTED WITH
RESPECT TO CLASS A COMMON STOCK WILL BE VOTED IN FAVOR OF ALL TWO NOMINEES
NAMED HEREIN FOR ELECTION AS CLASS A DIRECTORS; PROXIES DULY EXECUTED WITH
RESPECT TO CLASS B COMMON STOCK WILL BE VOTED IN FAVOR OF ALL FIVE NOMINEES
NAMED HEREIN FOR ELECTION AS CLASS B DIRECTORS; AND ALL DULY EXECUTED PROXIES
WILL BE VOTED IN FAVOR FOR THE APPOINTMENT OF SUCH INDEPENDENT ACCOUNTANTS.
Copies of the Company's Annual Report to Stockholders for the fiscal year
ended August 3, 1996, are being mailed concurrently with this Proxy Statement
to all stockholders entitled to notice of and to vote at the Meeting. The
Annual Report is not incorporated in the Proxy Statement and is not to be
considered proxy solicitation material.
The Company's principal executive offices are located at 3535 Hyland Ave.,
Costa Mesa, California 92626-1439.
January 3, 1997, has been fixed by the Board of Directors as the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting and any adjournments thereof. As of January 3, 1997, there were
1,168,094 shares of the Company's Class A Common Stock outstanding and
1,267,867 shares of the Company's Class B Common Stock outstanding. Only
stockholders of record at the close of business on January 3, 1997, are
entitled to notice of and to vote at the Meeting.
<PAGE>
VOTES AND VOTING PROCEDURES(1)
At the Annual Meeting the holders of Class A Common Stock, voting separately
as a class, will be entitled to elect directors for two of the seven positions
on the Board of Directors, and for this purpose two persons have been
nominated for election to the Board as "Class A Directors." Similarly, the
holders of Class B Common Stock, voting separately as a class, will be
entitled to elect the balance of the directors, being five of the seven
positions on the Board, and for this purpose five persons have been nominated
for election to the Board as "Class B Directors."
With respect to the proposals to ratify the appointment of Price Waterhouse
as the Company's independent accountants, both Class A and Class B shares
shall vote together as a single class, with each share of Class A Common Stock
counted as 1/10 of a vote and each share of Class B Common Stock counted as
one vote. Thus, the total number of votes represented by the sum of a) the
1,168,094 Class A shares (116,809 votes) and b) the 1,267,867 Class B shares
(1,267,867 votes) is 1,384,676.
Directors to represent each class are elected by a plurality of the votes
cast by the shares of that class entitled to vote, at a meeting at which a
majority of the shares of that class entitled to vote are present in person or
by proxy. Signed, unmarked proxy cards are voted in accordance with
management's recommendations.
The Class A shares may be voted with respect to the election of Class A
Directors, and the appointment of the Company's independent accountants, but
may not be voted with respect to the election of Class B Directors. Similarly,
Class B shares may be voted with respect to the election of Class B Directors,
and the appointment of the Company's independent accountants, but may not be
voted with respect to the election of Class A Directors. Separate proxy cards
are provided for each class of common stock.
- --------
(1) The Company's Certificate of Incorporation provides that, other than the
differences in voting rights discussed above, Class A and Class B shares
differ in the following respects: Quarterly cash dividends, if declared,
must be for a higher amount on Class A shares than on Class B shares.
Extra dividends, special dividends and dividends payable other than in
cash, if any, are payable equally on all shares of both classes. Class B
shares may be converted to Class A shares, share for share, at the option
of the holder. Although stock dividends of either class may be payable on
shares of either or both classes, any such stock dividends which would
result in a change in the ratio of the number of outstanding shares of the
two Classes to each other may be subject to American Stock Exchange
("AMEX") consent.
2
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth the beneficial ownership of the Company's
Class A and Class B Common Stock by each person known by the Company to own
beneficially more than five percent of any class at November 30, 1996.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF CLASS OF BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK OWNERSHIP(1) OF CLASS
------------------------------------ ----------------- ------------ --------
<S> <C> <C> <C>
Bernard Abrams(2).................... Class A 389,084 33.3
3535 Hyland Ave. Suite 200 Class B 509,246 40.2
Costa Mesa, CA 92626-1439
Donald L. Abrams(2).................. Class A 152,817(3) 13.1
3535 Hyland Ave. Suite 200 Class B 152,516(3) 12.0
Costa Mesa, CA 92626-1439
John B. Abrahms...................... Class A 45,616 3.9
47 Brookside Blvd. Class B 78,384 6.2
West Hartford, CT 06107
Joel Diamond(2)...................... Class A 121,632 10.4
16954 Canyon Creek Circle Class B
Riverside, CA 92503
David Kotkin......................... Class A 115,832(4) 9.9
90 State House Square Class B 115,832(4) 9.1
Hartford, CT 06103
Dimensional Fund Advisors, Inc.(5)... Class A 50,500 4.3
1299 Ocean Avenue Class B 63,800 5.0
Suite 650
Santa Monica, CA 90401
</TABLE>
- --------
(1) Sole voting and investment power unless otherwise stated.
(2) Bernard Abrams is the father of Donald L. Abrams and the uncle of Joel
Diamond.
(3) Includes 6,000 shares of each class held for minor children; and 46,846
shares of Class B common stock which could be acquired within 60 days of
November 30, 1996 upon the exercise of stock options.
(4) Includes 33,369 shares of each class owned by David Kotkin's wife, as to
which he does not share voting or investment power.
(5) States that it is a registered investment advisor, deemed to have
beneficial ownership (which it disclaims) as of September 30, 1995, as
investment manager of DFA Investment Dimensions Group, Inc., a registered
open-end investment company, or DFA Group Trust and DFA Participating
Group Trust, investment vehicles for qualified employee benefit plans.
3
<PAGE>
SHARE OWNERSHIP OF DIRECTOR NOMINEES
The following table sets forth the beneficial ownership of the Company's
Class A and Class B Common Stock beneficially owned by each of the seven
nominees for election as a director, all of whom are currently directors, and
by all directors and officers of the Company as a group at November 30, 1996.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF CLASS OF BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK OWNERSHIP(1) OF CLASS
------------------------------------ ----------------- ------------ --------
<S> <C> <C> <C>
John B. Abrahms...................... Class A 45,616 3.9
47 Brookside Blvd. Class B 78,384 6.1
West Hartford, CT 06107
Bernard Abrams(2).................... Class A 389,084 33.3
3535 Hyland Ave. Suite 200 Class B 509,246 40.2
Costa Mesa, CA 92626-1439
Donald L. Abrams(2).................. Class A 152,817(3) 13.1
3535 Hyland Ave. Suite 200 Class B 152,516(3) 12.0
Costa Mesa, CA 92626-1439
Gerson K. Bernstein.................. Class A 3,684(4) 0.3
79 Highwood Road Class B 3,684(4) 0.3
West Hartford, CT 06117
David Kotkin Class A 115,832(5) 9.9
90 State House Square Class B 115,832(5) 9.1
Hartford, CT 06103
Abe Markowicz........................ Class A 18,810(6) 1.6
63 Bainton Road Class B 13,810(6) 1.1
West Hartford, CT 06117
Henry W. Nozko, Jr................... Class A 150 --
233 Main Street Class B 2,250 0.3
New Britain, CT 06050-4011
All Directors and Officers as a Group
(11 persons)........................ Class A 764,095(7) 65.4
Class B 915,397(7) 72.2
</TABLE>
- --------
(1) Sole voting and investment power unless otherwise stated.
(2) Bernard Abrams and Donald L. Abrams are father and son, respectively.
(3) Includes 6,000 shares of each class held by Mr. Abrams for minor children;
and 46,846 shares of Class B common stock which could be acquired within
60 days of November 30, 1996 upon the exercise of stock options.
(4) Owned by Mr. Bernstein's wife, as to which he shares voting and investment
power.
(5) Includes 33,369 shares of each class owned by Mr. Kotkin's wife, as to
which he does not share voting or investment power.
(6) Includes 1,470 shares of each class owned by Mr. Markowicz's wife, as to
which he does not share voting or investment power.
(7) Includes 38,000 shares of Class A and 40,923 shares of Class B Common
Stock which could be acquired by officers and directors within 60 days of
November 30, 1996 upon the exercise of stock options including those
shares under option as set forth in note 3 above; includes 1,025 shares of
Class A and 10,175 shares of Class B Common Stock owned by Mr. Bassell's
wife, as her sole and separate property and as to which he does not share
voting or investment power, also includes all other shares referred to in
notes 3, 4, 5 and 6 above.
4
<PAGE>
EXECUTIVE OFFICERS
The following information is provided with respect to each executive officer
of the Company. Each of Messrs. Abrahms, B. Abrams, D. Abrams and Kotkin
currently is a director and is a nominee for re-election as a director. The
Company's executive officers serve at the discretion of the Board of Directors
and are customarily appointed as officer at the annual organizational meeting
of the Board held immediately following the Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
DATE OFFICE
NAME AGE OFFICE ASSUMED
---- --- ------ -----------
<S> <C> <C> <C>
John B. Abrahms......... 79 Senior Vice President and Assistant Treasurer 1958
Bernard Abrams.......... 76 Chairman of the Board and Chief Executive Officer 1958
Donald L. Abrams........ 49 President 1983
Steven R. Kerkstra...... 45 Vice President-Chief Financial Officer and Assistant Secretary 1995
Lawrence Bassell........ 42 Vice President--West Coast Operations 1995
Robert Stephenson....... 47 Vice President--East Coast Operations 1992
Ronald Dow.............. 58 Controller 1978
and Treasurer 1989
David Kotkin............ 83 Secretary 1958
</TABLE>
See "Election of Directors" for summary of the principal occupation and
relevant business experience of each executive officer who is also a nominee
for election as a director. Mr. Ronald Dow has been employed as Controller of
the Company since 1978. Mr. Robert Stephenson, appointed an officer in October
1992, has been employed by the Company in various capacities since 1980. Mr.
Lawrence Bassell has been employed by the Company in various capacities since
1983 and was appointed to his present office in February 1995. Mr. Steven R.
Kerkstra joined the Company as Chief Financial Officer in December, 1995. Mr.
Kerkstra served as Vice-President, Finance of Strouds for ten years prior to
his employment with the Company. Mr. Donald L. Abrams has been President and
Chief Operating Officer since 1983. In June 1996, the duties of the Chief
Operating Officer were assigned to Mr. Bernard Abrams, Mr. Steven R. Kerkstra
and other Company personnel. The role of the President has been redefined to
support the overall strategic goals of the Company regarding new business
development, store development and other corporate issues.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
The Company's directors and executive officers and any holders of 10% or
more of either class of the Company's stock are required to report ownership
and any changes in that ownership to the SEC and the AMEX. Based solely upon
written representations of its officers and directors, and its review of the
copies of those reports filed with it by its officers and directors, the
Company believes that during the fiscal year ended August 3, 1996 all filing
requirements by such officers and directors were timely met.
5
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors consist of an Audit
Committee, an Executive Committee and a Compensation and Stock Option
Committee. The Board of Directors does not have a Nominating Committee.
The Audit Committee reviews the engagement of the independent accountants,
reviews and approves the scope of the annual audit undertaken by the
independent accountants and reviews the independence of the accounting firm.
The Audit Committee also reviews the adequacy of the Company's internal
control procedures. During the 1996 fiscal year, the Audit Committee held one
meeting. The members of the Audit Committee are Gerson K. Bernstein and Henry
W. Nozko, Jr.
The Executive Committee exercises all of the powers and authority of the
Board of Directors in the management and affairs of the Company between
meetings of the Board of Directors to the extent permitted by law. The members
of the Executive Committee are Bernard Abrams, Donald L. Abrams, John B.
Abrahms and David Kotkin. The Executive Committee conducted one formal meeting
during the fiscal year and several telephonic conferences.
The Compensation and Stock Option Committee determines the compensation of
corporate officers and determines the award of stock options. This Committee
was reconstituted in April 1993 so as to be composed of non-management
directors. The members of the Committee are Messrs. Gerson K. Bernstein and
Henry W. Nozko, Jr. The Compensation and Stock Option Committee conducted one
formal meeting during the fiscal year and several telephonic conferences.
During the 1996 fiscal year, there were four meetings of the Board of
Directors. In addition, the Board and/or its Committees are authorized to
adopt resolutions by the unanimous written consent of the members, acting
without a meeting. All directors attended at least 75% of the Board meetings
and all committee meetings that they were scheduled to attend during the year.
ELECTION OF DIRECTORS
At the Annual Meeting, a total of seven directors will be elected to hold
office for a term of one year, and until their respective successors have been
duly elected and qualified. The persons named as proxies in the accompanying
proxy card, or their substitutes, intend to vote the shares represented by
each proxy card in favor of the election of the nominees (for the respective
classes of stock) set forth below, unless a contrary direction is specified on
the proxy card. Each nominee has indicated his intention to serve, if elected.
In case any such nominee shall become unavailable for election to the Board of
Directors, an event which is not anticipated, the persons named as proxies, or
their substitutes, will have full discretion and authority, as and if provided
in the proxy card, to vote or refrain from voting for any other nominee in
accordance with their judgement.
The Company's Bylaws authorize a minimum of six and a maximum of fifteen
directors, the exact number of which is established from time to time by
action of the Board. The Board of Directors has determined that the Board
shall consist of seven members, and proxies are solicited for the seven
nominees set forth below, two of whom are nominated as Class A Directors, and
five of whom are nominated as Class B Directors. Class A shares may only be
voted with respect to the election of the Class A Directors, and Class B
shares may only be voted with respect to the election of Class B Directors.
6
<PAGE>
NOMINEES FOR ELECTION
Each of the nominees set forth below is currently a director of the Company
and each was elected to the Board of Directors at the last Annual Meeting of
Stockholders. The following information furnished with respect to each nominee
was obtained from the records of the Company or from information furnished
directly by the nominee.
NOMINEES FOR ELECTION AS CLASS A DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE SINCE PRINCIPAL OCCUPATION
--------------- --- -------- --------------------
<C> <C> <C> <S>
Abe Markowicz........ 69 1973 Retired; until April 1992 Vice President-
Merchandising; employed by the Company in
various capacities since 1954. A Director
of the Company.
Henry W. Nozko, Jr... 49 1982 Chief Operating Officer, Treasurer and a
Director of ACMAT Corporation of New
Britain, Connecticut, a NASDAQ traded
company, and chief operating officer of its
construction and insurance brokerage
subsidiaries, and President and Director of
United Coast Corporation of New Britain,
CT, a NASDAQ traded company and of its
subsidiary, United Coastal Insurance
A Director of the Company.
NOMINEES FOR ELECTION AS CLASS B DIRECTORS
John B. Abrahms...... 79 1958 Chief Executive Officer of the Abrahms
Agency Group Companies, insurance brokers
of Newington, Connecticut, and a Director
of Motts Holdings, an American Stock
Exchange listed corporation. A Senior Vice
President, Assistant Treasurer and a
Director of the Company.
Bernard Abrams....... 76 1958 Chairman of the Board and Chief Executive
Officer of the Company.
Donald L. Abrams..... 49 1980 President since 1983; an Executive Officer
and a Director of the Company since 1980.
Gerson K. Bernstein.. 79 1973 Retired; formerly President, Treasurer and
a Director of Van Way-Webco, Inc. of New
Britain, Connecticut, from 1966 to 1981. A
Director of the Company and of Boca Raton
First National Bank, Boca Raton, Florida.
David Kotkin......... 83 1958 Of counsel to the law firm of Schatz &
Schatz, Ribicoff & Kotkin of Hartford,
Connecticut; Special Counsel to the Company
and Secretary and a Director of the
Company.
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Stock Option Committee are Messrs. Gerson
K. Bernstein and Henry W. Nozko, Jr., all members are non-employee directors
and none has any other direct or indirect material interest in or relationship
with the Company outside of his position as director. To the Company's knowledge
there were no other interrelationships involving current members of the
Committee or other directors of the Company requiring disclosures in this Proxy
Statement.
DIRECTORS FEES
Each member of the Board of Directors who is not otherwise compensated as an
officer or employee of the Company receives a director's fee at the current
rate of $3,000 per year for attending meetings of the Board and committees
thereof, plus payment of travel expenses related to such attendance. Each such
director who also serves as a member of the Audit Committee receives an
additional fee at the current rate of $1,000 per year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-----------------------------------------------------
OTHER RESTRICTED
NAME AND PRINCIPAL FISCAL ANNUAL STOCK LTIP ALL OTHER
POSITION(1) YEAR SALARY BONUS(2) COMP. AWARDS OPTIONS/SARS(3) PAYOUTS COMPENSATION
------------------ ------ ---------- ---------------- ---------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bernard Abrams.......... 1996 $ 275,000 -- -- -- -- -- --
Chairman of the 1995 272,700 --
Board and Chief 1994 243,750 75,000 -- -- -- -- --
Executive Officer
Donald L. Abrams........ 1996 210,000 -- -- -- -- -- --
President 1995 212,600 -- -- -- 80,000 -- --
1994 185,625 60,000 -- -- 53,691 -- --
</TABLE>
- --------
(1) Includes the Chief Executive Officer and all other executive officers
earning over $100,000 salary plus bonus.
(2) Bonuses paid in fiscal 1994 were for services performed in fiscal 1993;
bonuses paid fiscal 1993 were for services performed in fiscal 1992.
(3) Mr. Donald Abrams holds incentive stock options granted in February 1994
and October 25, 1994 to purchase 53,691 and 80,000 of Class B shares,
respectively, at prices in excess of current market.
8
<PAGE>
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED TO EXERCISE OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------------
(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------------------ ------------ -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bernard Abrams.......... -- -- -- -- -- --
Donald Abrams........... -- -- -- -- -- --
</TABLE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTIONS/SAR EXERCISES IN FISCAL YEAR ENDED AUGUST 3, 1996
AND FISCAL YEAR END AUGUST 3, 1996 OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS/SARS AT VALUE OF UNEXERCISED IN-THE-
SHARES ACQUIRED ON VALUE AUGUST 3, 1996 MONEY OPTIONS/SARS AT
EXERCISE REALIZED(A) # AUGUST 3, 1996(A)
# ($) EXERCISABLE/UNEXERCISABLE ($)
NAME ------------------ ----------- ------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Bernard Abrams.......... -- -- -- --
Donald L. Abrams........ -- -- 46846/133691 --
</TABLE>
- --------
(A) No options were in-the-money at the end of the fiscal year and no options
were exercised during the fiscal year ended August 3, 1996.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIALS OR TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF
1934 OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee reviewed the Compensation of its Chief Executive Officer and
all others expected to earn, during fiscal 1996, in excess of $100,000. In
reviewing the Compensation policies and business performance of the Company,
the Committee determined the Company will not pay bonuses to its executives
for the fiscal year. In addition, the Committee determined to defer making any
compensation changes until February 1997, at which time it will assess its
first and second quarter's business and determine whether compensation changes
are in order. The fiscal 1996 salary levels do not reflect any specific
qualitative or quantitative measures of the Company's performance.
In fiscal 1996, there were no options granted to either the President or
Chief Executive Officer. The Chief Executive Officer holds no stock options
nor SARs nor other long-term incentives. He is the beneficiary of a Deferred
Compensation Plan which will provide him with $20,000 annually for 10 years
upon his retirement; or in the event of his death prior to expiration of such
10 years, the then unpaid portion is payable to his estate in two equal annual
installments. No options were repriced during the fiscal year.
The Compensation Committee has considered the anticipated tax treatment to
the Company regarding the compensation and benefits paid to the executive
officers of the Company in light of the enactment of
9
<PAGE>
Section 162(m) of the Internal Revenue Code of 1986, as amended. The basic
philosophy of the Compensation Committee is to strive to provide the executive
officers of the Company with a compensation package which will preserve the
deductibility of such payments for the Company. However, certain types of
compensation payments and their deductibility (e.g. the spread on exercise of
non-qualified options) depend upon the timing of an executive officer's
vesting or exercise of previously granted rights. Moreover, interpretations of
and changes in the tax laws and other factors beyond the Compensation
Committee's control may affect the deductibility of certain compensation
payments. The Compensation Committee will consider various alternatives to
preserving the deductibility of compensation payments and benefits to the
extent reasonably practicable and to the extent consistent with its other
compensation objectives.
Gerson K. Bernstein
Henry W. Nozko, Jr.
Members of the Compensation Committee
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Class A and Class B
common stock against the cumulative return on the AMEX Market Index as well as
a Peer Group Index for the five year period from July 29, 1991 through August
3, 1996. The graph assumes that $100 was invested on July 28, 1990 in Class A
or Class B common stock and in the other indices, and that all dividends were
reinvested. The Peer Group is Media General Industry Group 529--"Other
Importers, Wholesalers, and Retailers".
DATA POINTS FOR SHAREHOLDER PERFORMANCE GRAPH
91 92 93 94 95 96
Three D Class A 100 69.6 52.2 47.9 107.6 39.1
Three D Class B 100 65.2 56.5 50.0 115.2 39.3
AMEX 100 105.6 118.7 118.9 142.1 146.5
Group #529 100 116.7 129.2 143.7 176.7 200.7
10
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company owns and operates a Bed and Bath store, in leased premises
consisting of 12,000 feet of a 280,000 foot shopping center in Saybrook,
Connecticut. The spouses and/or other family members of Messrs. John Abrahms,
Bernard Abrams, and David Kotkin, officers and directors, own an aggregate 41%
interest in such shopping center. Management believes that the terms of the
Company's lease, including rental, are competitive with those available for
similar properties.
John B. Abrahms, an officer and director, is the principal stockholder of
Abrahms Agency Group Companies, an insurance broker used by the Company. During
the fiscal year ended August 3, 1996, approximately $383,874 in insurance
premiums were incurred by the Company through this group. Management believes
that such premiums are competitive with those charged by other insurance
brokers.
In December 1994, the Company entered into a note agreement to borrow $500,000
from Bernard Abrams. The agreement provided for interest payable monthly at 10%
for the first 18 months and interest and principal thereafter with the note due
in December 1999.
APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP as the independent
accountants for the Company for the 1997 fiscal year, subject to the approval
of the stockholders. Stockholders owning both Class A and Class B Common Stock
are entitled to vote as a single class on this proposal, with each share of
Class A common stock counted as one-tenth of a vote and each share of Class B
stock counted as one vote.
Price Waterhouse LLP has audited the financial statements of the Company for
the past 28 fiscal years. A representative of Price Waterhouse is expected to
be available at the Annual Meeting in person or by telephone and will have an
opportunity to make a statement if he desires and will be available to respond
to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
In order to be considered by the Company for inclusion in its proxy material
for the next Annual Meeting, stockholder proposals must be received by the
Company no later than September 6, 1997, and should be submitted to the
Secretary, Three D Departments, Inc., P.O. Box 19773, Irvine, CA 92713-9773.
11
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OTHER MATTERS
GENERAL
Pursuant to the Securities Exchange Act of 1934, the Company is required to
file an Annual Report with the Securities And Exchange Commission ("SEC") on
Form 10-K containing certain prescribed information, including financial
statements and financial statement schedules. The Company has filed this report
with the SEC for the fiscal year ended August 3, 1996. THE COMPANY WILL FURNISH
COPIES OF THE REPORT TO STOCKHOLDERS INCLUDING BENEFICIAL OWNERS OF SHARES,
WITHOUT CHARGE, UPON WRITTEN REQUEST SUBMITTED TO STEVEN R. KERKSTRA, CFO, THREE
D DEPARTMENTS, INC., P.O. BOX 19773, IRVINE, CA 92713-9773.
The cost of preparing this Proxy Statement and of soliciting proxies will be
borne by the Company. Proxies may be solicited by mail, personal interview,
telephone and telegraph. Directors, officers and regular employees of the
Company may solicit proxies by such methods without additional remuneration.
Banks, brokerage houses and other institution nominees and fiduciaries will be
requested to forward the soliciting material to their principals and to obtain
authorizations for the execution of proxy cards, and will, upon request, be
reimbursed for reasonable expenses incurred.
As of the date of this Proxy Statement, the Company does not intend to
present, and has not been informed that any other person intends to present,
any business not specified in this Proxy Statement for action at the Meeting.
If any other business is properly presented for consideration at the Meeting,
proxies will be voted on such matters in accordance with the judgement of the
person or persons to the extent authorized to vote the proxies.
Your cooperation in giving this matter your immediate attention and
returning your proxies will be appreciated.
By Order of the Board of Directors
DAVID KOTKIN
Secretary
January 3, 1997
12
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PROXY
CLASS A
COMMON STOCK
THREE D DEPARTMENTS, INC.
3535 HYLAND AVE
COSTA MESA, CA 92626-1439
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE STOCKHOLDERS - JANUARY 31, 1997
The undersigned hereby appoints Bernard Abrams, Henry W. Nozko, Jr. and
Gerson K. Bernstein, and any of them, as attorneys and proxies ("Proxies") of
the undersigned, with full powers of substitution, and hereby authorizes them to
represent and to vote all shares which the undersigned would be entitled to vote
if personally present of the Class B Common Stock of Three D Departments, Inc.
at the Annual Meeting of Stockholders to be held on January 31, 1997, any
adjournments thereof. Said Proxies are authorized to vote upon the following
proposals, as designated on the reverse hereof, and upon all other matters as
may properly come before the Meeting, in their discretion.
(Please sign and date on the reverse side)
- --------------------------------------------------------------------------------
<PAGE>
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A [X] Please mark your
votes as in this
example.
WITHELD
FOR FOR ALL NOMINEES: Abe Markowicz
1. ELECTION OF [_] [_] Henry W. Nozko, Jr.
DIRECTORS
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE BELOW.
--------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to approve the appointment of Price [_] [_] [_]
Waterhouse as the independent accountants of the
Company for the 1997 fiscal year.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS
TO ALL OTHER MATTERS WHICH MAY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
This Proxy when properly executed will be voted
by the Proxies in the manner directed by the
undersigned stockholder. If no direction is
given, this Proxy will be voted FOR ALL NOMINEES
listed in Proposal No. 1 and FOR Proposal No. 2.
If you intend to attend the Annual Meeting in person, [_]
please indicate here.
Signature(s) Date
----------------------------------------------------- ----------
Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- --------------------------------------------------------------------------------
<PAGE>
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PROXY
CLASS B
COMMON STOCK
THREE D DEPARTMENTS, INC.
3535 HYLAND AVE
COSTA MESA, CA 92626-1439
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE STOCKHOLDERS - JANUARY 31, 1997
The undersigned hereby appoints Bernard Abrams, Henry W. Nozko, Jr. and
Gerson K. Bernstein, and any of them, as attorneys and proxies ("Proxies") of
the undersigned, with full powers of substitution, and hereby authorizes them to
represent and to vote all shares which the undersigned would be entitled to vote
if personally present of the Class B Common Stock of Three D Departments, Inc.
at the Annual Meeting of Stockholders to be held on January 31, 1997, any
adjournments thereof. Said Proxies are authorized to vote upon the following
proposals, as designated on the reverse hereof, and upon all other matters as
may properly come before the Meeting, in their discretion.
(Please sign and date on the reverse side)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
WITHELD
FOR FOR ALL NOMINEES: John B. Abrahms
1. ELECTION OF [_] [_] Bernard Abrams
DIRECTORS Donald L. Abrams
Gerson K. Bernstein
David Kotkin
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE BELOW.
--------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to approve the appointment of Price [_] [_] [_]
Waterhouse as the independent accountants of the
Company for the 1997 fiscal year.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS
TO ALL OTHER MATTERS WHICH MAY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
This Proxy when properly executed will be voted
by the Proxies in the manner directed by the
undersigned stockholder. If no direction is
given, this Proxy will be voted FOR ALL NOMINEES
listed in Proposal No. 1 and FOR Proposal No. 2.
If you intend to attend the Annual Meeting in person, [_]
please indicate here.
Signature(s) Date
----------------------------------------------------- ----------
Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
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