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 toss.240.14a-12
JACOBSON 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
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 fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
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:
4) Date Filed:
Jacobson Stores Inc.
NOTICE
OF
ANNUAL MEETING
AND
PROXY STATEMENT
Jacobson Stores Inc.
3333 Sargent Road, Jackson, Michigan 49201-8847
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
May 25, 2000
TO THE SHAREHOLDERS OF
JACOBSON STORES INC.:
The 2000 Annual Meeting of Shareholders of Jacobson Stores Inc. will
be held at the corporate offices, 3333 Sargent Road, Jackson, Michigan
49201-8847, on Thursday, May 25, 2000, at 11:30 a.m., local time, for the
following purposes:
(1) To elect Leslie E. Dietzman, Paul W. Gilbert, Philip H.
Power and Robert L. Rosenfeld as Class II Directors, to serve
until the 2003 Annual Meeting of Shareholders and until their
successors are elected and qualified;
(2) To consider and act on a proposal to appoint Arthur Andersen
LLP, independent public accountants, as auditors for the fiscal
year ending February 3, 2001; and
(3) To transact any other business that may properly come before
the meeting or any adjournments thereof.
Common shareholders of record at the close of business on March 27,
2000 will be entitled to notice of and to vote at the meeting.
Your attention is directed to the proxy statement submitted with this
notice.
By order of the Board of Directors,
RICHARD Z. ROSENFELD, Secretary
Jackson, Michigan, April 10, 2000
- ------------------------------------------------------------------------------
It is important that your shares be represented at the
meeting, even if you expect to attend.
PLEASE DATE, SIGN AND RETURN YOUR PROXY CARD PROMPTLY.
- ------------------------------------------------------------------------------
JACOBSON STORES INC.
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
This proxy statement is furnished in connection with the solicitation
on behalf of the Board of Directors of Jacobson Stores Inc. (the "Company")
for use at its 2000 Annual Meeting of Shareholders, to be held Thursday, May
25, 2000, at 11:30 a.m., local time, at the corporate offices, 3333 Sargent
Road, Jackson, Michigan 49201-8847, and at any adjournments thereof, for the
purposes set forth in the accompanying notice. This proxy statement and the
enclosed form of proxy are first sent or given to security holders on or
about April 10, 2000.
If the enclosed proxy is properly executed and returned to Norwest
Shareowner Services, P.O. Box 64859, St. Paul, MN 55164-9445, all shares
represented will be voted in the manner specified. A proxy may be revoked at
any time before it is exercised.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of March 1, 2000, 5,788,209-2/3 shares of the Company's Common
Stock, par value $1 per share, were outstanding and entitled to vote. Common
shareholders of record at the close of business on March 27, 2000 will be
entitled to notice of and to vote at the meeting. Each shareholder is
entitled to one vote for each share of Common Stock held on the record date.
Shares may not be voted cumulatively.
The following table and the corresponding explanations on pages 2 and 3
provide information as of March 1, 2000 (or in 3 cases, December 31, 1999)
about each person known to the Company to be the beneficial owner of more
than 5% of the Company's Common Stock, which is its only class of voting
securities:
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ -------------------- --------
David L. Babson and Company Incorporated 582,400 10.1%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
Dimensional Fund Advisors Inc. 417,300 7.2
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Franklin Resources, Inc. 384,300 6.6
777 Mariners Island Blvd
San Mateo, California 94404
Mark K. Rosenfeld 364,505(1) 6.3
4816 Culbreath Isles Rd
Tampa, Florida 33629
Robert L. Rosenfeld, Ph.D 354,320-1/3(2) 6.1
4535 Fourth Road North
Arlington, Virginia 22203-2342
David A. Rosenfeld 327,909(3) 5.7
180 Grand Ave., Suite 400
Oakland, California 94612
P. Gerald Mills 414,000(4) 6.7
3333 Sargent Rd
Jackson, Michigan 49201-8847
<PAGE>
(1) Includes 15,793 shares held by his wife, 1,500 shares held by his wife
as custodian, 2,401 shares held by him as custodian and 306 shares that
may be acquired by Mark K. Rosenfeld or his wife as custodian on the
conversion of debentures.
(2) Includes 7,312 shares held jointly with his wife, 18,418 shares held by
his wife and 2,500 shares that may be acquired on exercise of options.
(3) Includes 11,445 shares held jointly with his wife, 325 shares held by
him as custodian and 14,493 shares held by his wife.
(4) Includes 400,000 shares that may be acquired on exercise of options,
including 100,000 granted on March 23, 2000.
The following table and explanations provide information as of March 1,
2000 about shares of the Company's Common Stock beneficially owned by each
director, each of the executive officers identified on page 9, and all
directors and executive officers as a group.
Amount and Nature of Percent
Name Beneficial Ownership(1) of Class
---- ----------------------- --------
Herbert S. Amster 25,500 (2) *
Leslie E. Dietzman 1,500 (3) *
Paul W. Gilbert 113,837 (4) 1.9
Herman S. Kohlmeyer, Jr. 216,001 (5) 3.7
Theodore R. Kolman 19,250 (6) *
Kathleen McCree Lewis 3,500 (7) *
P. Gerald Mills 414,000 (8) 6.7
Michael T. Monahan 4,000 (9) *
M. Marnette Perry 1,500 (10) *
Philip H. Power 4,300 (11) *
Beverly A. Rice 16,500 (12) *
James A. Rodefeld 41,750 (13) *
Richard Z. Rosenfeld 128,564 (14) 2.2
Robert L. Rosenfeld, Ph.D. 354,320 (15) 6.1
James L. Wolohan 3,500 (16) *
All directors and executive officers
(16 persons) 1,354,021 (17) 21.3
* Less than 1% of the class
(1) Includes shares the spouse and/or minor children of the named individual
owns or has the right to acquire individually or jointly with the named
individual. Also includes shares that may be acquired on exercise of
options which are exercisable within 60 days after March 1, 2000.
(2) Includes 10,000 shares subject to shared voting and investment power and
2,500 shares that may be acquired on exercise of options.
(3) Includes 1,500 shares that may be acquired on exercise of options.
(4) Includes 25,000 shares subject to shared voting and investment power,
87,000 shares that may be acquired on exercise of options and 1,837
shares that may be acquired on conversion of debentures subject to
shared voting and investment power.
(5) Includes 206,001 shares subject to shared voting and investment power
and 2,500 shares that may be acquired on exercise of options.
(6) Includes 19,250 shares that may be acquired on exercise of options.
(7) Includes 2,500 shares that may be acquired on exercise of options.
(8) Includes 400,000 shares that may be acquired on exercise of options,
including 100,000 granted on March 23, 2000.
(9) Includes 2,500 shares that may be acquired on exercise of options.
(10) Includes 1,500 shares that may be acquired on exercise of options.
(11) Includes 2,500 shares that may be acquired on exercise of options.
(12) Includes 12,500 shares that may be acquired on exercise of options.
(13) Includes 31,750 shares that may be acquired on exercise of options.
(14) Includes 40,710 shares subject to shared voting and investment power and
2,500 shares that may be acquired on exercise of options.
(15) Includes 7,312 shares held jointly with his wife, 18,418 shares held by
his wife and 2,500 shares that may be acquired on exercise of options.
(16) Includes 2,500 shares that may be acquired on exercise of options.
(17) Includes 577,875 shares that may be acquired on exercise of options and
1,837 shares that may be acquired on conversion of debentures.
2
Information about beneficial ownership set forth in the stock ownership
tables is based on information furnished by the shareholder, director, or
executive officer.
The following additional information is furnished in explanation of the
stock ownership tables:
40,279 shares of Common Stock are held by Richard Z. Rosenfeld as
trustee under a revocable Trust Agreement dated December 14, 1968,
established by Jacques A. Preis. Richard Z. Rosenfeld disclaims any
beneficial interest in the shares, but they are shown as beneficially owned
by him.
23,585 shares of Common Stock are held by Robert L. Rosenfeld as
trustee under various trust agreements established for the issue of Mark K.
Rosenfeld and David A. Rosenfeld. Robert L. Rosenfeld disclaims any
beneficial interest in the shares, but they are shown as beneficially owned
by him.
As of December 31, 1999, David L. Babson and Company Incorporated, a
registered investment advisor, exercised investment and voting discretion
with respect to 582,400 shares of the Company's Common Stock which were owned
by various investors. The foregoing information is based solely on a Schedule
13G report, dated January 27, 2000, filed by David L. Babson and Company
Incorporated with the Securities and Exchange Commission.
As of December 31, 1999, Dimensional Fund Advisors Inc., a
registered investment advisor, was deemed to have beneficial ownership of
417,300 shares of the Company's Common Stock, all of which shares are held in
portfolios of certain registered investment companies and certain other
investment vehicles for all of which Dimensional Fund Advisors Inc. serves as
investment manager and advisor. Dimensional Fund Advisors Inc. disclaims
beneficial ownership of all such shares. The foregoing information is based
solely on a Schedule 13G report, dated February 4, 2000, filed by Dimensional
Fund Advisors Inc. with the Securities and Exchange Commission.
As of December 31, 1999 (i) Franklin Resources, Inc., a parent holding
company, (ii) Charles B. Johnson and Rupert H. Johnson, Jr., principal
shareholders of Franklin Resources, Inc., and (iii) Franklin Advisory
Services, LLC., an investment advisor, were deemed to have sole voting and
investment power over 384,300 shares of the Company's Common Stock. The
address of Franklin Advisory Services, Inc. is One Parker Plaza, Sixteenth
Floor, Ft. Lee, New Jersey 07024. The foregoing information is based on a
Schedule 13G report, dated January 19, 2000, filed by Franklin Resources,
Inc., Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisory
Services, Inc. with the Securities and Exchange Commission.
The shareholdings reported above exclude the beneficial interest of the
executive officers of the Company in 227,673 shares of Common Stock held in
the Company's pension and profit sharing plans.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the securities laws of the United States, the Company's
directors, executive officers, and any persons holding 10% or more of its
Common Stock are required to report their ownership of the Company's Common
Stock and any changes in that ownership to the Securities and Exchange
Commission (the "S.E.C."). The Company is required to report in this proxy
statement any late filings of reports of stock transactions in fiscal 1999,
and any known failure to file a required report. Based on written
representations of its directors, executive officers and 10% shareholders,
and copies of reports that have been filed with the S.E.C. and furnished to
the Company, the Company believes that all such persons complied with the
filing requirements for all transactions in fiscal 1999.
3
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide for a Board of
Directors consisting of not less than three members as determined by the
affirmative vote of at least two-thirds of the entire Board. The directors
are divided into three classes, as nearly equal in number as possible, with
the term of office of one class expiring each year. At each annual meeting of
shareholders, the successors of the class of directors whose term expires at
that meeting are elected for a three-year term. If a quorum is present, the
four nominees receiving the greatest number of votes cast at the meeting or
its adjournment will be elected. Withheld votes and broker non-votes will not
be deemed votes cast, but will be counted for purposes of determining whether
a quorum is present.
The directors whose term of office expires at the 2000 Annual Meeting
of Shareholders are Leslie E. Dietzman, Paul W. Gilbert, Philip H. Power and
Robert L. Rosenfeld (Class II directors). The Board of Directors has
determined that the number of directors shall be twelve effective May 25,
2000, and has nominated Leslie E. Dietzman, Paul W. Gilbert, Philip H. Power,
and Robert L. Rosenfeld, each of whom is a current director, as Class II
Directors, to serve until the 2003 Annual Meeting of Shareholders and until
their successors are elected and qualified. The terms of office of the Class
III and Class I Directors will expire at the annual meetings of shareholders
in 2001 and 2002, respectively.
It is intended that each proxy given pursuant to this solicitation will
be voted in favor of election of each of the four director nominees named,
unless the shareholder withholds authority to vote for any one or more or all
nominees in the manner indicated on the proxy.
Management has no reason to believe that any nominee will be unable to
serve; but if any should be unable to serve, the persons named in the
enclosed proxy will vote for a substitute nominee or nominees, and/or for
fewer nominees, according to their judgment.
Proxies cannot be voted for more than four nominees.
The following information is furnished with respect to the members of
the Board of Directors, whose term of office will continue after the 2000
Annual Meeting of Shareholders, and nominees:
<TABLE>
<CAPTION>
First Current
Principal Occupation and Became Term
Name Positions with the Company Age Director Class Expires
- ---- -------------------------- --- -------- ----- -------
<S> <C> <C> <C> <C> <C>
Herbert S. Amster (2) Management consultant 65 1967 I 2002
Leslie E. Dietzman (1) President and 57 1999 II 2000
Chief Executive Officer,
Family Christian Stores, Inc.
Grand Rapids, Michigan
Paul W. Gilbert (1,2) Vice Chairman of the Board, 55 1988 II 2000
Jacobson Stores Inc.
Herman S. Kohlmeyer, Jr. (2) Senior Vice President-Investments, 67 1971 I 2002
A.G. Edwards & Sons, Inc.
New Orleans, Louisiana
4
<CAPTION>
First Current
Principal Occupation and Became Term
Name Positions with the Company Age Director Class Expires
- ---- -------------------------- --- -------- ----- -------
<S> <C> <C> <C> <C> <C>
Kathleen McCree Lewis Attorney; member, Dykema Gossett 52 1993 III 2001
PLLC, Detroit, Michigan
P. Gerald Mills (2) Chairman of the Board, President and 71 1996 I 2002
Chief Executive Officer,
Jacobson Stores Inc.
Michael T. Monahan (2,3) President, Monahan Enterprises, LLC; 61 1990 III 2001
Chairman, Munder Capital Management
Bloomfield Hills, Michigan
M. Marnette Perry (2) President, 49 1999 I 2002
Kroger Co. of Michigan
Livonia, Michigan
Philip H. Power (1,3) Chairman of the Board, HomeTown 61 1985 II 2000
Communications Network, Inc.,
newspaper publisher, Livonia, Michigan
Richard Z. Rosenfeld (2,3) Of Counsel, Rosenfeld, 68 1957 III 2001
Grover & Frang, P.C., Attorneys,
Jackson, Michigan; Secretary,
Jacobson Stores Inc.
Robert L. Rosenfeld, Ph.D. (1) Program Manager, Defense 62 1967 II 2000
Advanced Research Projects Agency,
U.S. Department of Defense
Arlington, Virginia
James L. Wolohan Chairman of the Board, President 48 1993 III 2001
and Chief Executive Officer, Wolohan
Lumber Co., Saginaw, Michigan
<FN>
(1) Class II Directors, whose current term expires at the 2000 Annual
Meeting; nominated to serve until 2003.
(2) Members of the Executive Committee.
(3) See information on page 6 under the caption "Certain Relationships and
Related Transactions".
</TABLE>
Mr. Amster has been an independent management consultant for the past
five years. He is also a director of Mechanical Dynamics, Inc.
Mr. Dietzman has been President and Chief Executive Officer of Family
Christian Stores, Inc., a family-oriented bookstore, since 1992. He is also
Chief Executive Officer of iBelieve.com.
Mr. Gilbert has been Vice Chairman of the Board of the Company since
1993. He was also Vice President and Controller of the Company, 1976-1984,
Senior Vice President and Chief Financial Officer, 1984-1988, Executive Vice
President and Chief Financial Officer, 1988-1993 and Treasurer, 1991-1993.
Mr. Kohlmeyer has been Senior Vice President - Investments of A.G.
Edwards & Sons, Inc., a broker-dealer, since 1999. He held a similar position
with Prudential Securities, Inc. 1988 - 1999.
Ms. Lewis has been a member of Dykema Gossett PLLC, a law firm, since
1982.
5
Mr. Mills has served as Chairman of the Board and Chief Executive
Officer of the Company since October 31, 1996, and also as President of the
Company since December 20, 1996. He was Chairman and Chief Executive Officer
of Dayton Corporation, 1978-1981; was Chairman and Chief Executive Officer,
the J. L. Hudson Company, 1981-1983; was Chairman and Chief Executive
Officer, Dayton Hudson Department Store Company and Executive Vice President,
Dayton Hudson Corporation, 1983-1985; was Chairman and Chief Executive
Officer, Millston Corporation, a specialty store retailer, 1986-1992; and was
a business consultant from 1992-1996.
Mr. Monahan has been President of Monahan Enterprises, LCC, an
investment adviser, since June 1999 and has been Chairman of Munder Capital
Management ("Munder"), an investment company, since January 2000. He was
President and a director of Comerica Bank from June 1992 to May 1999 and
Chief Executive Officer of Munder from October 1999 until January 2000. He is
also a director of Hertz Corporation and of Munder.
Ms. Perry has been President of Kroger Co. of Michigan, a division of
the Kroger Co., a grocery retailer, since August 1997 and was Vice President
of Merchandising for the Kroger Co., 1991-1997.
Mr. Power founded HomeTown Communications Network, Inc., a publisher of
newspapers, in 1965, and has been its Chairman of the Board since that date.
He is also a director of Sensytech, Inc.
Richard Z. Rosenfeld was a member of Rosenfeld, Grover & Frang, P.C., a
law firm, from 1981 until his retirement in 1995, and he continues to serve
of Counsel to the firm. He has been Secretary of Jacobson Stores Inc. since
1964.
Dr. Robert L. Rosenfeld has been Program Manager, Defense Advanced
Research Projects Agency (formerly Advanced Research Projects Agency) since
1985.
Mr. Wolohan has been a director, President and Chief Executive Officer
of Wolohan Lumber Co., a retailer of lumber building materials and home
improvement products, since 1987, and has also been Chairman of the Board
since 1995. He is also a director of Citizens Banking Corporation.
Richard Z. Rosenfeld is the first cousin of Robert L. Rosenfeld.
Certain Relationships and Related Transactions
The Company and its subsidiaries have business relationships and
transactions in the ordinary course of business with the following entities,
of which the directors of the Company named below are officers or directors.
The Company considers that the terms of all transactions referred to are
comparable to those which would have been reached with unaffiliated parties.
The Company and its subsidiaries have an investment management
agreement with Munder Capital Management ("Munder") whereby Munder provides
investment management services for a portion of the assets held by the
Company's defined pension benefit plan. Mr. Monahan has been Chairman of
Munder since January 2000. In addition, the Company and its subsidiaries
regularly deposit money with and borrow money from various banks, including
Comerica Bank. Mr. Monahan was President and a director of Comerica Bank
until May 1999. Information on the Company's relationship with Munder and the
Company's banking relationships with Comerica Bank in fiscal 1999 is reported
on page 14 under the caption "Compensation Committee Interlocks and Insider
Participation."
The Company regularly advertises in various newspapers and other
periodicals, including newspapers published by HomeTown Communications
Network, Inc., of which Philip H. Power is Chairman of the Board. During its
last fiscal year, the Company paid newspapers published by HomeTown
Communications Network, Inc. $259,000 for advertising space.
The Company retained Rosenfeld, Grover & Frang, P.C. for legal services
in fiscal 1999. Richard Z. Rosenfeld serves of Counsel to that law firm.
Information on the fees paid by the Company to that law firm is reported on
page 14 under the caption "Compensation Committee Interlocks and Insider
Participation".
6
Compensation of Directors
The Company compensates its directors at the rate of $10,000 per year
($12,500 for committee chair) plus $750 for each Board meeting attended and
each committee meeting attended, except that no director fees are paid to any
director who is a full-time employee of the Company (Messrs. Mills and
Gilbert). Directors are eligible to defer director fees, with interest
thereon, until after termination of service as a director of the Company. The
interest rate used by the Company's Deferred Compensation Plan, which is
currently equal to the one-year Treasury Bill rate plus 125 basis points, or
7.44%, is determined from time to time by the Compensation Committee of the
Board of Directors.
Under the Company's Stock Option Plan of 1994, non-statutory stock
options were granted in fiscal 1999 to the following directors who are not
full-time employees of the Company, at the following prices, which in each
case was the fair market value on the date of grant:
Exercise Price
Name Options per Share
- ----------------------------------------------------------------------
Herbert S. Amster 500 sh. $6 13/32
Leslie E. Dietzman 500 6 13/32
Herman S. Kohlmeyer, Jr. 500 6 13/32
Kathleen McCree Lewis 500 6 13/32
Michael T. Monahan 500 6 13/32
M. Marnette Perry 500 6 13/32
Philip H. Power 500 6 13/32
Richard Z. Rosenfeld 500 6 13/32
Robert L. Rosenfeld, Ph.D. 500 6 13/32
James L. Wolohan 500 6 13/32
The term of each director option is five years. No director options
were exercised during 1999.
Committees and Meetings of the Board of Directors
The Company's Board of Directors held six meetings during the year
ended January 29, 2000.
There are four permanent committees of the Board of Directors:
Executive Committee, Audit Committee, Compensation Committee and Directors
Committee.
The Executive Committee did not meet during the year. The Executive
Committee has the authority of the Board of Directors, between Board
meetings, to take action and adopt resolutions in the ordinary course of
business of the Company. The Executive Committee also has authority with
respect to any matters designated by the Board of Directors, subject to any
limitations in the Michigan Business Corporation Act.
The Audit Committee consists of Directors Wolohan (Chair), Dietzman,
Lewis, Power and Robert L. Rosenfeld. It met three times during the year. The
Audit Committee reviews the Company's accounting policies and reporting
practices, and the adequacy of the system of internal controls; reviews and
evaluates the scope and results of the audits completed by the Company's
internal auditors; recommends to the Board, subject to shareholder approval,
the selection of independent public accountants; reviews the quality
standards maintained in their audit of the Company's financial statements;
and evaluates their independence and professional competence, as well as the
scope and results of their audit.
7
The Compensation Committee consists of Directors Kohlmeyer (Chair),
Lewis, Monahan, Perry and Robert L. Rosenfeld. It met three times during the
year. It provides general oversight for the compensation and benefit policies
of the Company; reviews the development of corporate management and
succession, including considering the Chairman of the Board, President and
Chief Executive Officer's recommendations for officer promotions and
compensation; reviews the salaries, bonuses and total compensation levels of
Company officers; reviews the Company's employee benefit plans and policies;
administers the Company's Deferred Compensation Plan; evaluates the
performance and makes recommendations to the Board of Directors as to the
compensation of all of the Company's executive officers; and serves as the
employee option committee under the Company's Stock Option Plan of 1994.
The Directors Committee consists of Directors Power (Chair), Amster,
Dietzman, Mills, Richard Z. Rosenfeld and Wolohan. It met two times during
the year. The Directors Committee determines a desirable balance of expertise
among Board members; identifies and recommends to the Board qualified
candidates to fill positions and vacancies on the Board; considers director
nominees proposed by shareholders and recommends to the Board the slate of
director nominees for election by the shareholders at the Annual Meeting;
reviews and recommends to the Board the performance criteria for members of
the Board, the size of the Board, the committee structure and assignments,
and the conduct and frequency of Board meetings; reviews and recommends
compensation arrangements for members of the Board; and evaluates the
performance of the members of the Board and assesses the Board's
effectiveness as a whole.
The Company's Restated Articles of Incorporation contain procedures
to be followed by any shareholder who intends to nominate a candidate for the
Board of Directors. A written notice should be delivered to the Secretary of
the Company not less than 120 days before the anniversary date of the
Company's proxy statement for the previous year's annual meeting of
shareholders. The notice should set forth the name, age, business address and
residence address of each nominee proposed; the principal occupation or
employment of each nominee; the number of shares of stock of the Company
which are beneficially owned by each nominee; a statement that the nominee is
willing to be nominated; and such other information concerning each nominee
as is required under the rules of the Securities and Exchange Commission in a
proxy statement soliciting proxies for the election of such nominees. Any
nomination not made in accordance with this procedure will be void.
During the year, every director attended at least 75% of the meetings
of the Board and any committees on which the director served.
8
EXECUTIVE COMPENSATION
The following table and footnotes summarize the compensation for the
last three fiscal years of the Company's Chief Executive Officer during
fiscal 1999 and the Company's four most highly compensated executive officers
other than the Chief Executive Officer who were serving as executive officers
of the Company at the end of fiscal 1999:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
------------
Awards
------------
Annual Securities
Compensation(1) Underlying
-------------------- Options/ All Other
Salary Bonus SARs Compensation(2)
Name and Principal Position Year ($) ($) (#) ($)
- --------------------------- ---- ------ ----- ----------- ---------------
<S> <C> <C> <C> <C> <C>
P. Gerald Mills 1999 $340,274 $ 0 0 $ 4,892
Chairman of the Board, President 1998 285,000 0 0 4,710
and Chief Executive Officer 1997 221,000 0 0 2,210
Paul W. Gilbert 1999 340,274 0 20,000 2,511
Vice Chairman of the Board 1998 295,000 0 25,000 2,136
1997 280,289 0 25,000 1,447
James A. Rodefeld 1999 240,274 0 17,000 5,556
Executive Vice President - 1998 188,500 0 20,000 3,573
Marketing & Stores 1997 132,596 0 15,000 625
Theodore R. Kolman 1999 166,220 0 5,000 2,982
Senior Vice President - 1998 148,500 0 7,500 2,922
General Merchandise Manager 1997 142,692 70,000 7,500 1,755
Beverly A. Rice 1999 128,192 0 5,000 2,783
Senior Vice President - 1998 94,230 0 7,500 2,783
Fashion & Merchandising Strategy 1997 71,346 0 5,000 1,391
<FN>
(1) The only types of other annual compensation for each of the named
executive officers were in the form of perquisites in amounts less than
the level required for reporting.
(2) The amounts shown as other compensation include for 1999: (a) Company
contributions to the Jacobson's Retirement Savings & Profit Sharing Plan
(401(k) plan) (Mr. Mills $470; Mr. Gilbert $960; Mr. Rodefeld $960; and
Mr. Kolman $960) and (b) amounts paid by the Company for term life
insurance (Mr. Mills $4,422; Mr. Gilbert $1,551; Mr. Rodefeld $4,596;
Mr. Kolman $2,022 and Ms. Rice $2,783).
</TABLE>
9
Options
The table below reports options granted during the last fiscal year to
each of the executive officers of the Company listed in the Summary
Compensation Table on page 9. The Company has not granted any stock
appreciation rights (SARs).
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants Potential
- ----------------------------------------------------------------------------------- Realizable Value at
Number of % of Total Assumed Annual
Securities Options/SARs Rates of Stock Price
Underlying Granted to Appreciation
Options/SARs Employees Exercise for Option Term
Granted in Fiscal or Base Price Expiration --------------------
Name (#) Year ($/sh) Date 5%($) 10%($)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P. Gerald Mills - - - - - -
Paul W. Gilbert 20,000 16.7% $6.500 March 24, 2009 $81,756 $207,187
James A. Rodefeld 17,000 14.2 6.500 March 24, 2009 69,493 176,108
Theodore R. Kolman 5,000 4.2 6.500 March 24, 2009 20,439 51,797
Beverly A. Rice 5,000 4.2 6.500 March 24, 2009 20,439 51,797
</TABLE>
Each option referred to in the foregoing table is a non-statutory
option and has a term of ten years. The options granted vest at the rate of
25% per year, commencing on the first anniversary of the date of grant. The
exercise price is not less than the market value of the Company's Common
Stock on the date of grant.
The table below reports options exercised in the last fiscal year by
each of the executive officers of the Company listed in the Summary
Compensation Table on page 9, and the number and fiscal year-end value of
options held by each such executive officer.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options/SARs
Shares Acquired Value Options/SARs at Fiscal Year-end at Fiscal Year-end(1)
on Exercise Realized(1) (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- ----------- ------------------------------- -------------------------
<S> <C> <C> <C> <C>
P. Gerald Mills 0 $0 300,000 / 0 $ 0/0
Paul W. Gilbert 0 0 75,750 / 61,250 0/0
James A. Rodefeld 0 0 22,500 / 39,500 0/0
Theodore R. Kolman 0 0 16,125 / 14,375 0/0
Beverly A. Rice 0 0 9,375 / 13,125 0/0
<FN>
(1) Market value of underlying securities at exercise or fiscal year-end,
minus the exercise or base price.
</TABLE>
10
Long-Term Incentive Plans
The Company does not have a long-term incentive plan.
Pension Plan
The following table summarizes annual benefits under the Company's
pension plan:
Years of Service
Average -------------------------------------------
Remuneration 15 20 25 30
- ---------------------------------------------------------------
$125,000 $11,250 $15,000 $18,750 $22,500
150,000 13,500 18,000 22,500 27,000
175,000 15,750 21,000 26,250 31,500
200,000 18,000 24,000 30,000 36,000
225,000 20,250 27,000 33,750 40,500
250,000 22,500 30,000 37,500 45,000
300,000 27,000 36,000 45,000 54,000
350,000 31,500 42,000 52,500 63,000
The Plan recognizes a maximum of 30 years credited service.
Benefits under the plan are based on an employee's cash compensation,
including contributions to the Company's 401(k) plan, but excluding deferred
compensation and compensation which exceeds the applicable limitation under
the Internal Revenue Code. Benefits under the plan prior to an amendment were
computed on the basis of total compensation for the 30 calendar years during
which an employee's compensation was highest, or the entire period of
employment if less than 30 years. Effective January 1, 1998, the pension plan
of the Company was modified to provide benefits to employees as illustrated
in the above table. Benefits of the amended plan are computed on the basis of
the average yearly compensation for the highest five consecutive years during
the ten years preceding the employee's last day of employment. In accordance
with the plan provisions, all present and former employees as of January 1,
1998 will receive the greater of the benefits as determined under the prior
plan and under the terms of the modified plan. Certain of the executive
officers' minimum annual benefits will be determined as 1% of their total
compensation, subject to the limitations described herein, during their years
of service with the Company, plus $100. Benefits are paid as a monthly
annuity, and are not subject to deduction for social security or other offset
amounts.
For each of the executive officers named in the Summary Compensation
Table, all of their salary reported in the Summary Compensation Table,
including the Company's contributions on their behalf to the 401(k) plan, are
eligible for consideration in computing their benefits under the pension
plan, subject to the applicable limitation under the Internal Revenue Code.
That limitation was $160,000 for 1999, 1998 and 1997.
The years of credited service of the executive officers named in the
Summary Compensation Table are:
Years of Service
----------------
P. Gerald Mills 3 years
Paul W. Gilbert 25 years
James A. Rodefeld 3 years
Theodore R. Kolman 9 years
Beverly A. Rice 3 years
11
Executive Officers Employment Agreements
The Company's employment agreement with P. Gerald Mills, as amended
effective April 15, 2000, is for a term ending April 15, 2001 at an annual
salary of $425,000. The Agreement authorizes Mr. Mills to defer payment of
any part of the salary and interest thereon until after his retirement or
death pursuant to the Company's Deferred Compensation Plan. None of Mr.
Mills' salary for the year ended January 29, 2000 was deferred. Pursuant to
the agreement, Mr. Mills is entitled (i) to participate in the Company's
management incentive plan, (ii) to four weeks of vacation a year, and (iii)
to participate in such other plans and additional benefits as are generally
available to other executives and for which he is eligible. Mr. Mills'
agreement provides an option to purchase 300,000 shares of Common Stock,
which was granted to him on October 31, 1996, and which vested in one-third
cumulative annual installments beginning October 31, 1996 and was fully
vested as of October 31, 1998.
The agreement provides that, in the event of the termination of Mr.
Mills' employment during the term of the agreement as a result of death or
disability, or termination by the Company for cause, (i) he will be entitled
to his accrued salary through the date of termination and a pro-rata bonus,
if any, for the year of such termination, based on the actual number of days
worked in that year, and (ii) if such termination is a result of Mr. Mills'
death or disability, he will be entitled to any benefits contained in any
wage continuation program, insurance or other employee benefit plans that are
generally applicable to all executive officers of the Company and that are
maintained by the Company at that time. If such termination is by the Company
without cause, Mr. Mills' salary and benefits will be continued as described
below. His agreement also includes change in control severance provisions as
described below.
The Company's employment agreements with Messrs. Gilbert and Rodefeld
are for a term of three years currently ending April 14, 2002, which term is
automatically extended one year each April 15, unless either party gives the
other notice that such extension will not occur. Effective April 15, 2000,
Mr. Gilbert's and Mr. Rodefeld's annual salaries under their agreements are
$400,000 and $300,000, respectively. The agreements authorize the executive
to defer payment of any part of the salary and interest thereon until after
the executive's retirement or death pursuant to the Company's Deferred
Compensation Plan. None of the executives' salaries for the year ended
January 29, 2000 was deferred. The agreements also provide that, in the event
of the death of the executive during the term of the agreement, (i) his
salary will continue for two years at the rate in effect immediately before
his death, (ii) he will receive a pro-rata bonus for the year of death, based
on the actual number of days worked in that year, and (iii) the Company will
continue to maintain medical and hospitalization insurance for his spouse and
dependents for five years. The Company may offset against these payments the
proceeds of any increased insurance it provides on Mr. Gilbert's life after
January 31, 1996 and on Mr. Rodefeld's life after April 15, 1998.
If the executive's employment is terminated as a result of his
disability during the term of the agreement (i) his salary will continue for
two years at the rate in effect immediately before his disability and then at
one-half such rate for one more year, (ii) he will receive a pro-rata bonus
for the year of his termination, based on the actual number of days worked in
that year, and (iii) the Company will continue to maintain medical,
hospitalization and life insurance for the executive, his spouse and
dependents for five years. The Company may offset against these payments (i)
any disability benefits paid under any insurance maintained by the Company,
and (ii) if the executive dies while these payments are being made, the
proceeds of any increased insurance the Company provides on Mr. Gilbert's
life after January 31, 1996, and on Mr. Rodefeld's life after April 15, 1998.
If the Company terminates employment of Messrs. Mills, Gilbert or
Rodefeld without cause before the expiration of the term (i) the executive's
salary will continue, at the rate in effect immediately before termination,
and the Company will provide continued medical and hospitalization insurance,
for the balance of the term of the agreement or one year, whichever is
greater, and (ii) he will receive a pro-rata bonus for the year of his
termination, based on the actual number of days worked in that year.
Commencing one year after termination, the Company's continuing payment
obligation, if any, will be reduced by the amount of any salary, consulting
fees, or other compensation or remuneration for services thereafter received
by him with respect to any remaining part of the period covered by the
Company's obligation, and the Company's continuing medical and
hospitalization insurance obligation shall be reduced by the amount of any
other medical and hospitalization insurance provided to the executive with
respect to any remaining part of such period.
The Company's employment agreements with Messrs. Mills, Gilbert and
Rodefeld also provide for change in control severance benefits described
below if (i) a change in control of the Company occurs within the period
described below, and (ii) (A) the executive's employment is terminated by the
Company without cause or by the executive for good reason during the period
beginning 90 days before the change in control and ending two years after the
change in control, or (B) the executive terminates his employment with the
Company at any time during the 3rd month after the change in control for any
reason or for no reason. The change in control must occur on or before the
earliest of (A) the expiration of the term of the written employment
agreement between the executive and the Company, and (B) the executive's
death or disability.
12
For purposes of the agreements, a change in control generally includes
(i) the acquisition by any person or group (excluding specified persons
affiliated with the Company) of 20% or more of the Company's voting
securities, (ii) various business combinations involving the Company if the
Company's shareholders do not own more than 50% of the surviving entity,
(iii) specified sales of substantially all of the Company's assets, and (iv)
the continuing directors of the Company cease to be a majority of the
Company's directors.
The severance benefits provided by the agreement in the event of a
change in control are (i) a lump-sum cash payment equal to (a) the amount of
the executive's salary for a period of two years after termination of
employment, or through the termination date of his employment agreement with
the Company, whichever is greater (the "Time "), (b) a pro-rata bonus for the
year of termination, equal to the prior year's bonus adjusted for the actual
number of days worked in the year of termination, and (c) the executive's
prior year's bonus multiplied by the Time (in years and fractions of a
partial year), and (ii) continued medical, dental, life, disability,
hospitalization, optical and prescription drug coverage, automobile
allowances and benefits during the Time and, if applicable, payments under
the Company's Split Dollar Agreement with Mr. Gilbert, during the Time.
Pursuant to the agreement, the executive has also agreed to non-competition,
confidentiality, and non-solicitation provisions.
In the event that any payments made in connection with the change in
control provisions would be subject to an excise tax imposed under Section
4999 of the Internal Revenue Code, the agreement provides that the Company is
obligated to make the executive whole with respect to such excise tax and any
related income tax.
The Company has an agreement with Mr. Kolman and Ms. Rice for a term of
one year ending April 15, 2001, at an annual salary of $185,000 and $150,000,
respectively. The agreements provide that if the Company terminates the
executive's employment without cause or if the executive terminates his or
her employment for good reason within one year after a change in control of
the Company (defined as described above in connection with the agreements
with Messrs. Mills, Gilbert and Rodefeld) each of their salary will continue
for a period of 24 months after the change in control occurred. If employment
is terminated because of any other termination by the Company or the
executive for any or no reason or because of his or her death, permanent
incapacity or retirement, benefits may continue to the extent provided in any
severance program, wage continuation program, insurance or other employee
benefit plans that are generally applicable to all employees of the Company
and that are maintained by the Company at that time.
The Jacobson Stock Option Plan of 1994 provides that all options
granted to employees under that plan shall become immediately exercisable in
full immediately before a change in control of the Company. The definition of
change in control under the Plan is substantially the same as the definition
as described above.
13
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors since
May 27, 1999 has consisted of Directors Kohlmeyer (Chair), Lewis, Monahan,
Perry and Robert L. Rosenfeld. During fiscal 1999 before May 27, 1999
Director Richard Z. Rosenfeld was also a member of the Compensation Committee
instead of directors Lewis and Perry.
During fiscal 1999 Richard Z. Rosenfeld served as Secretary of the
Company. No executive officer of the Company serves as a director or as a
member of the Compensation Committee (or other board committee performing
equivalent functions or, in the absence of such committee, the entire board
of directors) of another entity, one of whose executive officers also serves
as a director of the Company.
Mr. Monahan was President and director of both Comerica Bank and
Comerica Incorporated until May 1999. During its last fiscal year, the
Company and its subsidiaries paid $1,055,000 in interest to Comerica Bank at
rates ranging from 7.22% to 8.75% and paid $25,000 in fees to Comerica Bank
pursuant to its Revolving Credit loan agreement. At January 29, 2000, the
total unpaid principal balance of all borrowings of the Company and its
subsidiaries from Comerica Bank was $10,720,000. Comerica Bank is also a
depository of funds of the Company and its subsidiaries and trustee of the
Company's Pension Plan, which holds 28,890 shares of the Company's Common
Stock. The Company paid approximately $75,000 in fees for such services in
fiscal 1999.
Mr. Monahan is Chairman of Munder Capital Management ("Munder") and
during fiscal 1999 also served as their Chief Executive Officer. The Company
has engaged the services of Munder Capital Management as an investment
manager for a portion of the assets maintained by its defined pension benefit
plan since 1990 and prior to Mr. Monahan's service to Munder. During its last
fiscal year, the Company's defined pension benefit plan paid investment fees
to Munder of $ 66,628.
Richard Z. Rosenfeld serves of Counsel to Rosenfeld, Grover & Frang,
P.C., and the firm provides legal services to the Company. Mr. Rosenfeld is
also Secretary of the Company. During its last fiscal year, the Company paid
Rosenfeld, Grover & Frang, P.C. $6,600 for legal services and $150 for
reimbursed expenses.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee")
provides general oversight for the compensation and benefit policies of the
Company, reviews the development of corporate management and succession,
including considering the Chairman of the Board, President and Chief
Executive Officer's recommendations for officer promotions and compensation,
reviews the salaries, bonuses and total compensation levels of Company
officers, reviews the Company's employee benefit plans and policies,
administers the Company's Deferred Compensation Plan, and evaluates the
performance and makes recommendations to the Board of Directors as to the
compensation of all of the Company's executive officers (including those
named in the Summary Compensation Table on page 9). The Committee also serves
as the employee option committee under the Company's Stock Option Plan of
1994.
The Committee uses a number of resources to assist the Committee in
making informed decisions regarding compensation. In prior years, the
Committee has obtained Company research on industry practices and financial
performance, including those of companies included in the Company's peer
group index, as support to the Committee in fulfilling its responsibilities.
In addition, the Company and the Committee have, in prior years, consulted
with independent compensation consultants.
The Company seeks to provide executive compensation that will support
achievement of the Company's goals while attracting and retaining talented
executives and rewarding superior performance. The Company implements this
policy through salaries, bonuses, stock options, employment and severance
agreements, and benefit plans which are generally available to all Company
employees.
Base salary. The Company's practice is to set base salary levels for
the Company's executive officers which generally approximate the median
salary levels of executive officers in other companies of comparable size
within the retail industry, taking into consideration the position's
complexity, responsibility, working environment, and need for special
expertise. Increases in base salary are determined by the Committee's
subjective evaluation of the Company's performance and financial condition,
the executive's individual performance and position in the salary range, and
management's recommendations. The salary increases given to executives in
1999 were based primarily on management's recommendations, the Company's
improved financial performance in fiscal 1998 and the Committee's judgment
that their salaries, adjusted for inflation, were low relative to executives
at comparable companies.
14
Bonuses. The Company has a bonus plan to compensate its executive
officers for achieving the Company's return on sales target set near the
beginning of each fiscal year and for their individual performance during the
year. Bonuses are intended to make a significant portion of each executive
officer's compensation dependent on the Company's performance and to provide
executive officers with incentives to achieve Company goals and increase
shareholder value. They are also intended to establish high levels for
expected performance, foster awareness of the benefits of teamwork, and
recognize the executive officer's individual contributions to the Company.
For the fiscal year ended January 29, 2000, the Jacobson Stores Inc.
1999 Management Incentive Plan (the "1999 Plan") covered all the executive
officers of the Company. Pursuant to the 1999 Plan, a bonus pool was
established for each executive officer equal to 15% to 35% of the executive
officer's 1999 base salary if 100% of the corporate and individual
performance targets were reached. The bonus pool was to be reduced pro-rata
for performance less than the target and eliminated entirely if certain
minimum performance thresholds (approximately 71% of the targets) were not
met, or increased to a maximum of 22.5% to 52.2% of base salary if 130% of
the targets were achieved. For Messrs. Mills, Gilbert and Rodefeld, 75% of
their bonuses under the plan were payable based on the Company's targeted
return on sales, and 25% of their bonuses under the plan were payable at the
discretion of the Board, based on the Committee's recommendations after its
subjective evaluation of the executive's individual contribution to the
implementation of the Company's strategic business plan. For Mr. Kolman and
Ms. Rice, 50% of their bonuses under the plan were payable based on the
Company's targeted return on sales, and the remaining 50% of their bonuses
under the plan on the executive's individual performance specific to their
position. Under the 1999 Plan, bonuses would be paid only if the Company
achieved or exceeded its threshold return on sales.
In 1999, no bonuses were paid under the Plan, as the Company did not
meet the threshold return on sales.
Stock Options. The Company's practice is to award stock options to the
Company's executive officers in amounts reflecting the Committee's subjective
evaluation of the executive officer's position and ability to influence the
Company's overall performance, previously issued option grants, the amount
necessary to attract new executives, and management's recommendations,
without any specific weight being given to any of these factors. Options are
intended to provide executives with an increased incentive to make
contributions to the long-term performance and growth of the Company, to join
the interests of the executive officers with the interests of the
shareholders of the Company, and to attract and retain qualified employees.
The Company made its 1999 annual key employee option grants in March 1999.
Stock options granted in fiscal 1999 are non-statutory options, have a
term of ten years, and generally vest at the rate of 25% per year commencing
on the first anniversary of the date of grant to provide a long-term
incentive. The exercise price is not less than the fair market value of the
underlying shares at the date of grant. Such options only provide
compensation if the Company's stock price increases.
Employment Agreements. The Company's practice is to have written
employment agreements with all officers to provide them with specified
periods of employment, salaries and severance benefits, including change in
control severance provisions. The employment agreements with each of the
Company's executive officers named in the Summary Compensation Table are
summarized on pages 12-13 of this proxy statement.
Section 162 (m) of the Internal Revenue Code provides that publicly
held corporations may not deduct compensation paid to certain executive
officers in excess of $1 million annually, with certain exemptions. The
Company has not had more than $1 million in compensation deductions for any
executive officer in any one year, but the Compensation Committee reserves
the right to recommend the payment of compensation to the Company's
executives in amounts it deems appropriate regardless of whether such
compensation is deductible for federal income tax purposes.
15
Basis for Compensation of P. Gerald Mills. Factors used by the
Committee in evaluating Mr. Mills' performance as Chairman of the Board,
President and Chief Executive Officer included the Company's 1999 financial
performance compared to the previous year, strategic planning, organizational
development and reorganization, investor and vendor relations, formulation of
major corporate policies, including corporate governance policies, keeping
the Board fully informed on the condition of the Company, and working with
the directors to effectively use their talents to the best strategic
advantage of the Company. The Committee recommended that the Company enter
into an amendment to its employment agreement with Mr. Mills extending its
term one year, increasing his base salary and modifying the change in control
threshold to be consistent with the Company's shareholder rights plan (see
"Executive Officers Employment Agreements" above), based on its judgment of
what was appropriate in Mr. Mills' agreement and the terms that were
necessary to retain Mr. Mills with the Company. The salary in Mr. Mills'
amended employment agreement increased from his fiscal 1998 base salary based
on the Committee's judgment that his salary was low relative to other Chief
Executive Officers at comparable companies and the salaries of other Company
officers. No bonus was approved for Mr. Mills for fiscal 1999 because the
Company did not meet its threshold return on sales target under the 1999
Plan. Mr. Mills was granted options upon his employment with the Company as
described in the "Summary Compensation Table" on page 9. No additional
options were granted to Mr. Mills during 1999 based on the amount of
previously issued stock options.
COMPENSATION COMMITTEE
Herman S. Kohlmeyer, Jr., Chair
Kathleen M. Lewis
Michael T. Monahan
M. Marnette Perry
Robert L. Rosenfeld
Performance Graph
The following graph compares the Company's cumulative shareholder
return on its Common Stock for the last five fiscal years with the cumulative
total return of retailers in a peer group index, and with the cumulative
total return of companies included in the Total Return Index for The Nasdaq
Stock Market (U.S. Companies), a broad equity market index.
Comparison of Five Year Cumulative Total Return*
Among Jacobson Stores Inc., The Nasdaq Stock Market (U.S. Companies),
and Peer Group Index
(A paper copy of the Performance Graph is contained
in the Company's definitive proxy statement.)
*Assumes $100 invested on January 28, 1995 in Jacobson Common Stock,
The Nasdaq Stock Market (U.S. Companies), and an index comprised of Peer
Group companies. Total Return assumes reinvestment of dividends.
The dollar values for total shareholder return plotted in the graph
above are shown in the table below.
- --------------------------------------------------------------------------
1-28-95 1-27-96 1-25-97 1-31-98 1-30-99 1-29-00
- --------------------------------------------------------------------------
Jacobson's 100 88 79 135 70 54
Nasdaq Market 100 138 182 218 340 513
Peer Group 100 112 139 196 264 225
16
The peer group included in the graph is comprised of eleven retail
companies offering mainly apparel and accessories. The members of the peer
group are as follows: AnnTaylor Stores Corp., Bon-Ton Stores, Inc.; Target
Corporation (formerly Dayton Hudson Corp.); Dillard's, Inc.; Federated
Department Stores, Inc.; Gottschalks Inc.; May Department Stores Company;
Neiman Marcus Group, Inc.; Nordstrom, Inc.; Saks Inc. (formerly Proffitt's,
Inc.); and Talbots, Inc. The shareholder returns for each of these companies
have been weighted according to each company's stock market capitalization at
the beginning of each period.
APPOINTMENT OF AUDITORS
Arthur Andersen LLP, independent public accountants, have been auditors
for Jacobson Stores Inc. and its subsidiaries since 1960. One or more
representatives of that firm are expected to be present at the 2000 Annual
Meeting, with the opportunity to make a statement if they want to do so, and
will be available to respond to appropriate questions.
The Board of Directors has nominated Arthur Andersen LLP as the
auditors of Jacobson Stores Inc. and its subsidiary corporations for the
fiscal year ending February 3, 2001. The following resolution will be offered
at the meeting:
"RESOLVED, that Arthur Andersen LLP, independent public accountants,
be appointed auditors of Jacobson Stores Inc. and its subsidiary
corporations for the fiscal year ending February 3, 2001."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RESOLUTION.
Approval of this proposal is given by a majority of the votes cast.
Broker non-votes and abstentions will not be deemed votes cast, but will be
counted for purposes of determining whether a quorum is present.
OTHER MATTERS
Management does not know of any other matter to be brought before the
meeting. If any other matters properly come before the meeting, the persons
named in the enclosed proxy will vote according to their judgment.
Votes in all matters will be counted by Norwest Shareowner Services
whose address is P.O. Box 64859, St. Paul, MN 55164-9445.
Cost of Solicitation
The Company will pay the cost of soliciting proxies. In addition to
solicitation by mail, proxies may be solicited personally or by telephone by
a few employees of the Company; and brokers, banks and others known by the
Company to hold Common Stock for other beneficial owners will be requested to
forward proxies and proxy soliciting material to the beneficial owners and
will be reimbursed for their expenses.
17
Proposals for 2001 Annual Meeting
Any shareholder's proposal intended to be presented at the 2001 Annual
Meeting must be in writing, must comply with the requirements set forth in
the Company's Restated Articles of Incorporation (summarized on page 8,
above) and with the requirements of the Securities and Exchange Commission,
should be addressed to Secretary, Jacobson Stores Inc., 3333 Sargent Road,
Jackson, Michigan 49201-8847, and must be received by the Company at that
address no later than December 11, 2000, in order to be considered for
inclusion in the Company's proxy material for that meeting.
The Company must receive notice of any shareholder's proposals intended
to be presented at the 2001 Annual Meeting that are not intended to be
considered for inclusion in the Company's Proxy Statement and Proxy related
to that meeting, no later than February 24, 2001 to be considered timely.
Such proposals should be addressed to Secretary, Jacobson Stores Inc., 3333
Sargent Rd., Jackson, Michigan 49201-8847 by certified mail, return receipt
requested. If the Company does not have notice of the matter by that date,
the Company's form of proxy in connection with that meeting may confer
discretionary authority to vote on that matter, and the persons named in the
Company's form of proxy will vote the shares represented by such proxies in
accordance with their best judgment.
By order of the Board of Directors,
RICHARD Z. ROSENFELD, Secretary
Jackson, Michigan, April 10, 2000.
18
JACOBSON'S
PROXY JACOBSON STORES INC. COMMON STOCK
2000 ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 25, 2000
The undersigned appoint(s) P. GERALD MILLS and PHILIP H. POWER as proxies,
each with power of substitution, and authorize(s) them to represent and vote
as indicated below all shares of Common Stock of Jacobson Stores Inc. held of
record by the undersigned on March 27, 2000, at the 2000 Annual Meeting of
Shareholders, to be held May 25, 2000, and at any adjournments thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS: |_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
<CAPTION>
Class II Directors to serve until the 2003 Annual Meeting of Shareholders:
01 Leslie E. Dietzman 02 Paul W. Gilbert 03 Philip H. Power 04 Robert L. Rosenfeld
---------------
(To withhold authority to vote for any individual nominee, write the / /
number(s) of the nominee(s) in the box provided to the right.) / /
---------------
</TABLE>
Please fold here
- -----------------------------------------------------------------------------
2. APPOINTMENT OF AUDITORS:
Proposal to appoint Arthur Andersen LLP as auditors for the fiscal year
ending February 3, 2001 |_| For |_| Against |_| Abstain
3. In their discretion, the proxies are authorized to vote on any other
matters that may properly come before the meeting or any adjournments
thereof.
This proxy is solicited on behalf of the Company's Board of Directors.
Properly executed proxies will be voted as specified. If no direction is
given or no instructions to the contrary are indicated, proxies will be voted
FOR items 1 and 2 and according to the judgment of the proxies on all other
matters.
The undersigned acknowledge(s) receipt of the Notice of the 2000 Annual
Meeting of Shareholders, the Proxy Statement for said meeting, and the Annual
Report of Jacobson Stores Inc. to its shareholders for the year ended January
29, 2000.
Please sign in the space provided exactly as name(s) appear(s) below. For
joint accounts, each joint owner is requested to sign. When signing as
attorney, executor, administrator, trustee or guardian, or on behalf of a
corporation or partnership, please sign in the name of the shareholder, sign
your name, and give your title. Unsigned or improperly signed proxies will
not be counted. Signed but unmarked proxies will be voted in accordance with
the Board of Director's recommendation.
Address Change? Mark Box |_| Indicate changes below: Dated ________ , 2000
--------------------
/ /
/ /
/ /
/ /
--------------------
Signature(s) in Box
Please sign, date and
return this proxy
promptly in the
enclosed envelope.
This proxy will not
be used if you attend
the meeting in person
and so request.
