SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEUDLE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFOMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------------
(Amendment No. )
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14-a6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Ames Department Stores, Inc.
- ----------------------------------------------------------------------
(Name of Registrant as Sepcified In Its Charter)
- -----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
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 filing 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:<PAGE>
PRELIMINARY
Ames Department Stores, Inc.
2418 Main Street
Rocky Hill, CT 06067-2598
Notice of Annual Meeting of Stockholders To Be Held on May 22, 1996
The Annual Meeting of Stockholders of Ames Department Stores,
Inc., a Delaware corporation (the "Company"), will be held at the
Radisson Hotel and Conference Center, Cromwell, Connecticut on
Wednesday, May 22, 1996 at 10:00 a.m., to consider and act upon the
following matters:
1. the election of seven (7) directors for a term of one year
or until their successor(s) have been elected and qualified;
2. the approval of an Amended and Restated Certificate of
Incorporation of the Company to authorize a class of
preferred stock commonly known as "blank check" preferred
stock and to make certain other changes;
3. the ratification and approval of the appointment of Arthur
Andersen LLP as independent certified public accountants and
auditors for the Company for the fiscal year ending January
25, 1997;
4. voting on a stockholder proposal to limit the terms of
office of its non-employee directors; and
5. the transaction of such other business as may properly come
before the meeting or any adjournment(s) thereof.
Pursuant to the By-Laws of the Company, the Board of Directors
has fixed the time and date for the determination of stockholders
entitled to notice of and to vote at the meeting as of the close of
business on April 5, 1996. The stock transfer books of the Company
will not be closed. Accordingly, only holders of record of issued and
outstanding shares of Common Stock of the Company at such time and on
such date will be entitled to notice of and to vote at the Annual
Meeting notwithstanding any transfer of any stock on the books of the
Company thereafter. A complete list of the stockholders entitled to
vote will be available for inspection by any stockholder during the
meeting. In addition, the list will be open for examination by any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10 days prior to the meeting
at the Ames store located at 30 Waterchase Drive, Rocky Hill,
Connecticut 06067.
By Order of the Board
of Directors
---------------------
Rocky Hill, Connecticut David H. Lissy
April 8, 1996 Secretary
EVEN IF YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY AS SOON AS POSSIBLE. A RETURN ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR
YOUR CONVENIENCE. IF FOR ANY REASON YOU DESIRE TO REVOKE YOUR PROXY,
YOU MAY DO SO IN THE MANNER SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT AT ANY TIME PRIOR TO THE CLOSE OF BALLOTING.<PAGE>
PRELIMINARY PROXY STATEMENT
Ames Department Stores, Inc.
2418 Main Street
Rocky Hill, CT 06067-2598
=====================================================================
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 1996
General Information
This proxy statement is furnished to holders of record of the Common
Stock of Ames Department Stores, Inc. ("Ames" or the "Company") in
connection with the solicitation of proxies by the Board of Directors
for use at the Annual Meeting of Stockholders to be held on May 22,
1996 at 10:00 a.m. (the "Annual Meeting"), and at all adjournments or
postponements thereof, for the purposes set forth in the accompanying
notice of meeting.
The mailing address of the principal executive offices of the Company
is 2418 Main Street, Rocky Hill, Connecticut 06067-2598 (telephone
number 860/257-2000). The enclosed proxy and this proxy statement are
first being transmitted to stockholders of the Company, together with
the Annual Report on Form 10-K for the fiscal year ended January 27,
1996 ("fiscal year 1995"), on or about April 10, 1996.
Holders of outstanding shares of Common Stock of record at the close
of business on April 5, 1996 (the "Record Date") are entitled to
notice of and to vote at the meeting. Stockholders representing a
majority of the outstanding shares must be present in person or
represented by proxy at the meeting for there to be a quorum for the
conduct of business. For this purpose, shares which are present or
represented by a proxy will be counted for quorum purposes, regardless
of whether the holder of the shares or proxy fails to vote on, or
whether a broker with discretionary authority fails to exercise its
discretionary voting authority with respect to, any particular matter.
Once a quorum of the stockholders is established, a plurality of the
votes represented by shares of Common Stock present in person or
represented by proxy at the meeting is necessary for the election of
directors; the remaining proposals require approval by a majority of
the outstanding shares. For voting purposes on a particular matter
(as opposed to establishing a quorum), abstentions and broker
non-votes will not be counted. Broker non-votes occur when a broker
nominee (which has voted on one or more matters at the meeting) does
not vote on one or more other matters because it has not received
instructions to so vote from the beneficial owner and does not have
discretionary authority to so vote. At the close of business on the
Record Date, there were [ 20,447,269 ] shares of Common Stock, par
value $.01 per share, of the Company issued and outstanding, each of
which is entitled to one vote on each matter to be acted upon at the
meeting.
PROXIES
Solicitation: Proxies in the form enclosed are solicited by and on
behalf of the Board of Directors of the Company. The persons named in
the proxy have been designated as proxies by the Board of Directors.
Actions to be Taken under Proxy: Shares represented by properly
executed proxies received by the Company will be voted at the meeting
in the manner specified therein or, if no specification is made, will
be voted FOR: (1) election of the seven (7) directors listed herein;
(2) approval of an Amended and Restated Certificate of Incorporation
of the Company to authorize a class of preferred stock commonly known
as "blank check" preferred stock and to make certain other changes;
and (3) ratification and approval of the appointment of Arthur
Andersen LLP as the independent certified public accountants and
auditors for the Company for the fiscal year ending January 25, 1997;
and will be voted AGAINST: (4) the stockholder proposal to limit the
terms of office of the Company's non-employee directors. <PAGE>
Proxies will also be voted FOR or AGAINST such other matters as may
properly come before the meeting in the discretion of the persons
named in the proxy. The management of the Company is not aware of any
other matters to be presented for action at the meeting.
Execution: If stock is registered in the names of two or more
persons, the proxy must be signed by each of them. If stock is
registered in the name of a decedent, the proxy must be signed by an
executor or administrator whose title must follow his or her
signature. If a stockholder is a corporation, the proxy must be
signed by an executive officer whose title must be indicated.
Revocation: Any proxy given by a stockholder pursuant to this
solicitation may be revoked by the stockholder at any time before it
is exercised by written notification delivered to the Company,
addressed to David H. Lissy, Secretary, Ames Department Stores, Inc.,
2418 Main Street, Rocky Hill, CT 06067-2598, or by executing another
proxy bearing a later date or by voting in person at the meeting.
ELECTION OF DIRECTORS
(Proposal No. 1)
Seven directors are to be elected at the Annual Meeting of
Stockholders to hold office until the next annual meeting of
stockholders or until the election and qualification of their
respective successors. The Board of Directors has nominated the
persons named in the table below, all of whom are currently directors
of the Company.
Unless otherwise specified in a duly executed and returned proxy,
the shares voted pursuant thereto will be cast for the nominees. If,
for any reason, any of the nominees should be unable to accept the
nomination or election, such proxy will be voted for the election of a
substitute nominee recommended by the Board of Directors. The Board
of Directors, however, has no reason to believe that any nominee will
be unable to serve as a director.
Set forth below is certain relevant information with respect to
each nominee as of March 1, 1996:
<TABLE>
<CAPTION>
Shares of
First Common Stock
Name, Age, Principal Occupation, Became Beneficially
Business Experience and Directorships Director Owned (1)
------------------------------------- -------- ----------
<S> <C> <C>
Joseph R. Ettore, age 56 ............................. 1994 145,000
President, Chief Executive Officer and Director since June,
1994. Prior to joining Ames, he was President, Chief Execu-
tive Officer and Director of Jamesway Corporation ("Jamesway")
from July, 1993 to June, 1994; President, Chief Operating
Officer and Director of Jamesway in June, 1993; Chairman of
the Board and Chief Executive Officer of Stuarts Department
Stores, Inc. ("Stuarts") from October, 1992 to June, 1993;
and President, Chief Operating Officer and Director of Stuarts
from October, 1989 to October, 1992. He remained a Director of
Stuarts until May, 1994. Jamesway filed for protection under
Chapter 11 of the Bankruptcy Code ("Chapter 11") in July, 1993
and emerged from the Chapter 11 case in January, 1995 and
re-filed for protection under Chapter 11 in October, 1995.
Stuarts filed under Chapter 11 in December, 1990 and emerged
from the Chapter 11 case in October, 1992 and re-filed for
protection under Chapter 11 in May, 1995.
<PAGE>
Shares of
First Common Stock
Name, Age, Principal Occupation, Became Beneficially
Business Experience and Directorships Director Owned (1)
------------------------------------- -------- ------------
<S> <C> <C>
Francis X. Basile, age 64 ................................ 1992 11,000
Chairman and Chief Executive Officer of the CIT Group/
Factoring, Inc. until his retirement in January, 1992. He
was appointed President and Chief Executive Officer of the
CIT Group/Factoring, Inc. in January, 1986. Prior to his
retirement, he was also a Director and the Chairman of the
National Commercial Finance Association and a member of its
Executive Committee.
Paul Buxbaum, age 41 ...................................... 1992* 11,000
Executive Vice President of Buxbaum, Ginsberg & Associates,
a nationwide retail consulting company, since 1984. He is
also a Director of Richmond Gordman 1/2 Price Stores and
Herbalife International, Inc., and serves on the Audit,
Stock Option, Finance and Compensation Committees of
Herbalife International, Inc.
Alan Cohen, age 59 ......................................... 1992 36,000
Chairman of Alco Capital Group, Inc., et al., a diversified
financial service and investment company, since 1975,
and Chief Executive Officer of Russ Toggs, Inc., since
November, 1993. He is also Chairman of the Board of
Marion Oil Corp. and Alco Cadillac-Pontiac Sales Corp.,
and the current court-appointed trustee of Tower Financial
Corporation. He formerly served as Chief Executive Officer
of Health-Tex, Inc.
Richard M. Felner, age 60 ................................... 1994 13,500
Head of Richard M. Felner Associates, a consulting firm
specializing in retail and commercial real estate, since
1991. From 1985 to 1991, he was Vice President of Real
Estate and Corporate Development, and Director, of Worths
Stores Corporation, a subsidiary of Reitmans Ltd., Canada's
largest women's apparel retailer.
Sidney S. Pearlman, age 64 .................................. 1992 13,000
Currently retired. He was formerly Senior Vice President/
General Merchandise Manager of Younkers, Inc. from 1987 to
March, 1991. He has extensive retail experience, having
served as president of three different department store
chains.
Laurie M. Shahon, age 44 ...................................... 1995 3,500
President of Wilton Capital Group since January, 1994 which
makes principal investments in later-staged venture capital
companies and medium-sized management buyouts. She was
previously Managing Director of '21' International Holdings,
Inc., a private holding company, from 1988 to December, 1993.
She is also a Director of Arbor Drugs, Inc. and One Price
Clothing Stores, Inc.
<FN>
(1) As used herein, "beneficial ownership" means the sole or shared power to vote or
invest either Common Stock or Warrants, or the right to acquire Common Stock or
Warrants within sixty (60) days (e.g., through the exercise of stock options).
Each director, except for Mr. Basile who holds his shares jointly with his wife,
has sole voting and investment power in the shares listed.
* Chairman of the Board of Directors since July, 1993.
The Board of Directors unanimously recommends a vote FOR each of these nominees.
Your proxy will be so voted unless you specify otherwise.
/TABLE
<PAGE>
Board Meetings and Committees
During fiscal year 1995, the Board of Directors held eight (8)
meetings. With the exception of Mr. Cohen, none of the directors
attended fewer than 75% of the total number of meetings of the Board
of Directors and committees of which they were members during fiscal
year 1995.
The Board of Directors has an Audit Committee comprised of
Messrs. Basile (Chairman), Buxbaum, and Cohen, and a Compensation
Committee comprised of Messrs. Pearlman (Chairman), Basile, and
Buxbaum. The Audit Committee is responsible for recommending the
appointment of independent accountants and for reviewing the audit
reports and fees of the Company's independent public accountants. The
Compensation Committee is responsible for recommending the
compensation to be paid to the Company's executive officers, and the
amount of and the persons to whom stock options should be granted by
the Company. During fiscal year 1995, there were five (5) formal
meetings and numerous other conversations held by the Compensation
Committee. The Audit Committee met two (2) times during fiscal year
1995; at each of these meetings, the Audit Committee was joined by
other outside directors.
Compensation of Directors
Ames' directors who are not full-time Ames employees receive
$40,000 in director's fees ($80,000 per year for the Chairman) for six
regular meetings and $3,000 for each additional Board meeting and are
reimbursed for their expenses. Directors are also compensated at the
rate of $10,000 per year for up to four meetings for each committee on
which they serve and $2,500 for each additional committee meeting.
For fiscal year 1995, Board activity and meetings exceeded the
anticipated number of regular meetings. The directors, however,
unanimously determined to limit their compensation for fiscal year
1995 to the base fee for meetings and to forego any additional
compensation for meetings in excess of the planned schedule. During
the first quarter of fiscal year 1995 an additional payment of $9,000
was made to Messrs. Basile, Buxbaum and Pearlman and $4,500 to Mr.
Cohen for excess meetings attended during fiscal year 1994.
Pursuant to the Company's 1994 Non-Employee Directors Stock
Option Plan (the "Non-Employee Plan") which was approved by the
Company's stockholders on
May 24, 1995, Ames directors who are not full-time Ames employees may
be granted options to purchase Common Stock of the Company. The
exercise prices of the options are equal to the fair market value of
the common stock on the date of grant. The options become exercisable
in full six months after date of grant or stockholder approval of the
Non-Employee Plan, whichever is later. As of
January 27, 1996, Messrs. Basile, Buxbaum, Cohen and Pearlman had been
granted 10,000 options each (exercise price: $3.13 per share) and Mr.
Felner and Ms. Shahon had been granted 2,500 options each (exercise
price: $2.75 per share). Effective on the date of each annual meeting
of stockholders of the Company commencing with the 1996 Annual
Meeting, each non-employee director of the Company then in office will
be granted options to purchase 2,500 shares with the date of grant to
be the date of such meeting. All options terminate
July 21, 2004.
Executive Compensation
The following table sets forth each item of compensation paid,
earned or awarded over each of the preceding three years to the Chief
Executive Officer and the four other most highly paid executive
officers serving at January 27, 1996.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
-------------------------------
Annual Compensation Awards Payouts
---------------------------- --------------------- ---------
Name & Other Restricted (#) LTIP All
Principal Fiscal Annual Stocks Options/ Payouts Other
Position Year Salary Bonus(a ) Comp. Awards(b) SARs(c) (d) Comp.(e)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph R. Ettore 1995 $750,000 $-0- (f) $206,250 -0- $-0- $36,530
President & Chief 1994(g) 481,731 450,000 (f) -0- 200,000 -0- 26,514
Executive Officer 1993
Denis T. Lemire 1995 300,000 -0- 33,200 96,250 -0- -0- 1,507
Executive VP, 1994(h) 132,692 50,000 (f) -0- 30,000 -0- 352
Merchandising 1993
John F. Burtelow 1995 263,462 -0- (f) 96,250 -0- -0- 1,219
Executive VP, 1994(i) 125,000 -0- (f) -0- 30,000 -0- 422
Chief Financial 1993
Officer
Eugene E. Bankers 1995 216,361 -0- (f) 68,750 -0- -0- 7,677
Senior VP, 1994 202,500 -0- (f) -0- 21,000 -0- 2,398
Marketing 1993(j) 15,385 50,000 (f) -0- -0- -0- -0-
David H. Lissy 1995 214,947 -0- (f) 68,750 -0- -0- 6,445
Senior VP, 1994 210,000 -0- (f) -0- 21,000 -0- 6,241
General Counsel 1993 210,000 24,331 (f) -0- -0- -0- 3,412
and Corporate Secretary
<FN>
(a) Represents certain signing bonuses and bonuses earned under
the Annual Incentive Compensation Plan (see below).
(b) Restricted Stock was awarded to the Chief Executive Officer
and to each Executive Vice President and each Senior Vice
President in fiscal year 1995 under the 1995 Long Term
Incentive Plan (the "Long Term Plan"; see below). The dollar
value of the Restricted Stock award shown in the table is
calculated by multiplying the share price of the Company's
common stock on the date of the award by the number of shares
awarded. As of 1/27/96, a total of 345,000 shares of
Restricted Stock have been awarded under the Long Term Plan.
The total aggregate value of these shares was $476,100, based
on a market price of the Company's Common Stock of $1.38 as
of 1/27/96.
(c) Stock Options were granted to certain members of management
in fiscal year 1995 and 1994 under the 1994 Management Stock
Option Plan (see below).
(d) There were no payouts under the Long Term Plan discussed in
(b) above.
(e) Represents the Company's matching contributions under the
Retirement and Savings Plan (see below), excess paid life
insurance, and for J. Ettore, $28,761 and $24,576 of paid
disability and life insurance coverage in fiscal years 1995
and 1994, respectively.
(f) Represents a car allowance and, for J. Ettore and D. Lemire,
a living allowance that for each executive except D. Lemire
aggregated to less than the lesser of $50,000 or 10% of the
individual executive's total salary and bonus.
(g) Joined the Company on June 9, 1994 (see summary description
of employment contract in this proxy statement).
(h) Joined the Company on August 22, 1994 (see summary
description of employment contract in this proxy statement).
(i) Joined the Company on August 1, 1994.
(j) Joined the Company on December 31, 1993.
/TABLE
<PAGE>
Option Grants in Last Fiscal Year
There were no stock options or Stock Appreciation Rights (SARs)
granted to the named executive officers during fiscal year 1995.
Pursuant to the 1994 Management Stock Option Plan (the "Option
Plan"), the Company may grant options with respect to an aggregate of
up to 1,700,000 shares of Common Stock, with no individual optionee to
receive in excess of 200,000 shares of Common Stock upon exercise of
options granted under the Option Plan. During fiscal year 1995,
options with respect to a total of 230,100 shares of Common Stock were
issued to certain members of management. After certain terminations,
options with respect to a total of 1,274,600 shares of Common Stock
were outstanding as of January 27, 1996. The exercise prices of the
options are equal to the fair market value of the Common Stock on the
date the options were granted. One-third (one-fifth for J. Ettore) of
the shares underlying the options may be purchased at the exercise
price after one year from the grant date, with an additional one-third
(one-fifth for J. Ettore) of the shares allowed to be purchased after
two and three years, respectively (after two, three, four and five
years, respectively, for J. Ettore). The unexercised portion of the
options granted under the Option Plan will terminate upon the
expiration of five years (six years for J. Ettore) from the grant
date.
Aggregated SAR Exercises in Last Fiscal Year and FY-End SAR/Option Values
The table below discloses information regarding aggregated
exercises of stock options and SARs by the named executive officers
during fiscal year ("FY") 1995 and stock options and SARs held by the
named executive officers as of January 27, 1996. There were no stock
options or SARs repriced during FY 1995.
Aggregated SAR Exercises in Last Fiscal Year and FY-End SAR/Option Values
# of Shares Value of
Underlying Unexercised
Unexercised In-the-Money
SARs/Options SARs/Options
at 1/27/96 at 1/27/96($)
(#)Shares ($) Value Exercisable/ Exercisable/
Name Exercised Received Unexercisable Unexercisable
------------------- --------- ------- ------------- ------------
Joseph R. Ettore -0- $-0- 40,000/160,000 $-0- / -0-
Denis T. Lemire -0- -0- 10,000/ 20,000 -0- / -0-
John F. Burtelow -0- -0- 10,000/ 20,000 -0- / -0-
Eugene E. Bankers -0- -0- 7,000/ 14,000 -0- / -0-
David H. Lissy -0- -0- 82,000/ 14,000 -0- / -0-
In connection with the plan of reorganization, SARs exercisable
only for cash, equivalent to 1.2 million shares of the new Common
Stock were granted to certain members of management and key employees
as compensation for their efforts in restructuring Ames and enabling
it to emerge from Chapter 11. After exercises and terminations, SARs
equivalent to 183,350 shares (including 75,000 for D. Lissy) were
outstanding as of January 27, 1996. One-third of the SARs vested on
December 30, 1992 (the "Consummation Date" of the Company's plan of
reorganization); one-third vested on December 30, 1993; and the
remaining one-third vested on December 30, 1994. Each SAR entitles
the recipient upon exercise (which may not be later than five years
after the Consummation Date), to receive in cash the excess of the
average closing price of a share of Common Stock during the ten
trading days prior to the exercise date, over the average closing
price of a share of Common Stock during the 60 trading days after the
Consummation Date. The average closing price for the 60 trading days
after the Consummation Date was $2.96 per share and the average
closing price for the last 10 trading days of fiscal year 1995 was
$1.47 per share. There were no SARs exercised during fiscal year
1995.
<PAGE>
Long Term Incentive Plan Awards
The table below discloses information regarding awards of
Restricted Stock (as defined below) to the named executive officers
during fiscal year 1995.
<TABLE>
<CAPTION>
Long-Term Incentive Plans - Awards in Last Fiscal Year
Performance
Number of or Other Estimated Future Payouts under
Shares, Units Period Until Non-Stock Price-Based Plans
or Other Maturation ------------------------------
Name Rights (#) or Payout Threshold Target Maximum
---- ---------- --------- --------- ------ --------
<S> <C> <C> <C> <C> <C>
Joseph R. Ettore 75,000 3 years (a) (a) (a)
Denis T. Lemire 35,000 3 years (a) (a) (a)
John F. Burtelow 35,000 3 years (a) (a) (a)
Eugene E. Bankers 25,000 3 years (a) (a) (a)
David H. Lissy 25,000 3 years (a) (a) (a)
<FN>
(a) All awards during fiscal year 1995 were made
pursuant to the Long Term Plan (as defined below)
which is a stock price-based plan.
</TABLE>
The Company's 1995 Long Term Incentive Plan (the "Long Term
Plan") was approved by the stockholders at the Annual Meeting held in
May, 1995. The purpose of the Long Term Plan is to promote the long
term success of the Company by affording certain officers with an
opportunity to acquire an ownership interest in the Company in order
to incentivize such persons and to align their financial interests
with the stockholders of the Company. Pursuant to the Long Term Plan,
the Company may make awards ("Awards") of an aggregate of up to
500,000 shares of Common Stock that are subject to restrictions on
transfer thereof ("Restricted Stock") and a cash payment (a "Cash
Payment") in an amount up to 50% of the Fair Market Value (as defined
in the Long Term Plan) of the Restricted Stock determined as of, and
paid on, the third anniversary of the date of grant (the "Vesting
Date"). The Cash Payment is intended as an estimate of an Award
recipient's Federal income tax liability on the Award (including the
Cash Payment) in order to allow the recipient to receive the
Restricted Stock free and clear on the Vesting Date.
The Company officers eligible for Awards under the Long Term Plan
are the Chief Executive Officer, each Executive Vice President and
each Senior Vice President. The Compensation Committee administers
the Long Term Plan.
Annual Incentive Compensation Plan
The Company has an Annual Incentive Compensation Plan (the "Annual
Bonus Plan") that is subject to annual review by the Board of
Directors. The Annual Bonus Plan provides annual incentive cash
bonuses based on the achievement of the Company's financial goals for
the year (and customer service goals for store and field management).
Pursuant to the Annual Bonus Plan, bonuses for fiscal year 1995 will
not be paid until May, 1996. Participants must be active Ames
employees at the time the bonus payments are made to earn a bonus.
None of the named executive officers (those listed in the Summary
Compensation Table) earned bonuses under the Annual Bonus Plan for
fiscal year 1995.
<PAGE>
Retirement and Savings Plan
The Company has a defined contribution retirement and savings plan
(the "Retirement and Savings Plan") that is qualified under Sections
401(a) and 401(k) of the Internal Revenue Code of 1986, as amended.
Employees who have reached the age of 21 are eligible to participate
after one year of service provided they have completed at least 1,000
hours of service in a 12-month period. For each participant's
contribution (up to a maximum of 5% of such participant's total
compensation), the Company contributes to the Retirement and Savings
Plan an amount equal to 50% of such contribution. A participant may
contribute to the plan from 1% to 18% of annual compensation on a pre-
tax or after-tax basis, or a combination of both. Participants who
terminate their employment with the Company are entitled to receive
the full amount of their contributions and, depending on the length of
the participant's service to Ames, a portion of the Company's matching
contributions.
The following table sets forth as to the named executive officers
(those listed in the Summary Compensation Table), and all other
officers and employees of Ames as a group, the aggregate matching
contributions by Ames under the Retirement and Savings Plan during
fiscal year 1995:
Aggregate Matching
Contributions
------------------
Joseph R. Ettore $4,620
Denis T. Lemire 288
John F. Burtelow -0-
Eugene E. Bankers 4,528
David H. Lissy 4,425
All other employees and officers $2,833,697
Retirement Plan
Through the end of fiscal year 1995, Ames had an unfunded
Retirement Plan for Officers/Directors (the "Retirement Plan"). It
provided that every person who was employed by Ames when he or she
retired, died or became disabled and who (i) served as both a
full-time officer and a director of Ames and had completed five years
of service, not necessarily consecutive, in both of these capacities,
or (ii) served as a director of Ames and had completed 10 years, not
necessarily consecutive, of service to Ames, was eligible for benefits
under the Retirement Plan.
Benefits under the Retirement Plan were payable upon termination
of employment due to retirement, death or disability. The annual
benefit was equal to two-thirds of the participant's average annual
base salary during the five-year period of highest compensation
preceding such termination of employment. The maximum annual benefit
under the Retirement Plan was $100,000, reduced by an amount equal to
certain of such participant's annual Social Security benefits. Each
participant in the Retirement Plan was entitled to benefits for a
period of 10 years. Upon the earlier death of the participant, at the
Company's option, the future payments as scheduled or the then present
value of all unpaid benefits would be paid to the participant's
estate. Joseph Ettore, current President, Chief Executive Officer
and Director, and the other current directors potentially qualified
for benefits under this plan. As of January 27, 1996, Mr. Ettore had
completed approximately twenty months of credited service as a
full-time officer and director of Ames. No payments were made under
this plan in fiscal year 1995.
In the first quarter of fiscal year 1996, the Board of Directors
voted to eliminate any benefits under the Retirement Plan for non-
employee directors of the Company.
<PAGE>
Employment Contracts, Termination, Severance
and Change-in-Control Arrangements
Employment Contracts
Set forth below are descriptions of the material features of the
employment contracts between the Company and Joseph R. Ettore,
President and Chief Executive Officer, and Denis T. Lemire, Executive
Vice President-Merchandising.
The Company is party to an employment agreement with Joseph
Ettore dated June 6, 1994 (the "Ettore Agreement"), pursuant to which
Mr. Ettore currently serves as President and Chief Executive Officer
of the Company. The Ettore Agreement has a current term due to expire
June 30, 1997. Under the Ettore Agreement, Mr. Ettore is entitled to
a base salary of $750,000 per year; an annual bonus under the
Company's Annual Bonus Plan; a signing bonus of $350,000 (paid in
June, 1994); an option to acquire 200,000 shares of Common Stock under
the 1994 Management Stock Option Plan; a living allowance of $30,000
per year; and other compensation and benefits in effect from time to
time for the Company's senior executive officers. For fiscal year
1995, Mr. Ettore did not earn a bonus.
During the term of the Ettore Agreement, the Company is required
to reimburse Mr. Ettore $12,000 per year for the cost of maintaining a
policy insuring the life of Mr. Ettore with a face amount of $500,000,
and to provide additional life insurance for Mr. Ettore in the face
amount of $500,000. During the term of the Ettore Agreement, the
Company shall also maintain a disability insurance policy which shall
pay Mr. Ettore 60% of his base salary during any period of disability
up to age 65. In addition, the Company shall maintain customary
directors' and officers' liability insurance for Mr. Ettore if such
insurance is available to the Company at reasonable costs.
In the event that Ames terminates the employment of Mr. Ettore
without cause (as such term is defined in the Ettore Agreement) Mr.
Ettore will be entitled to (a) his base salary for the remaining term
of the Ettore Agreement when it would otherwise be payable; (b) any
annual bonus prorated to the effective date of termination; (c)
immediate vesting of his stock options as of the date of termination;
and (d) coverage under the Company's medical plan for one year after
the date of termination. In the event that the employment of Mr.
Ettore is terminated by the Company for cause, or if he terminates his
agreement other than as specifically contemplated in the Ettore
Agreement in connection with a change in control (as such term is
defined in the Ettore Agreement) of the Company, he shall receive no
further compensation or other benefits under the Ettore Agreement
except for any amounts to which he was entitled prorated to the
effective date of termination. In the event that there is a change of
control and Mr. Ettore terminates his employment by providing three
months' prior written notice thereof to the Company (given within 30
days of the change in control), he shall be entitled to the same
termination entitlements as listed above for termination without
cause.
The Company is party to an employment agreement with Denis Lemire
dated August 9, 1994 (the "Lemire Agreement"), pursuant to which Mr.
Lemire currently serves as Executive Vice President, Merchandising of
the Company. The Lemire Agreement has a current term due to expire
August 21, 1997. Under the Lemire Agreement, Mr. Lemire is entitled
to a base salary of $300,000 per year; an annual bonus under the
Company's Annual Bonus Plan; a sign-on bonus of $50,000 (paid in
August, 1994); an option to acquire 30,000 shares of Common Stock
under the 1994 Management Stock Option Plan; a living allowance of
$18,000 per year; and other compensation and benefits in effect from
time to time for the Company's senior executive officers.
<PAGE>
In the event that Ames terminates the employment of Mr. Lemire
without cause (as such term is defined in the Lemire Agreement) Mr.
Lemire shall be entitled to (a) his base salary for the remaining term
of the Lemire Agreement when it would otherwise be payable; (b) any
annual bonus prorated to the effective date of termination; (c)
immediate vesting of his stock options as of the date of termination;
and (d) coverage under the Company's medical plan for one year after
the date of termination. In the event that the employment of Mr.
Lemire is terminated by the Company for cause, or if he terminates his
agreement, he shall receive no further compensation or other benefits
under the Lemire Agreement except for any amounts to which he was
entitled prorated to the effective date of termination.
Income Continuation Plan
The named executive officers of Ames (those listed in the Summary
Compensation Table), except for Mr. Ettore and Mr. Lemire who have
separate contracts (see above), participate in an Income Continuation
Plan ("ICP"), which guarantees up to one year's salary in the event of
termination other than for cause. Certain other officers of Ames also
participate in the ICP.
Key Employee Continuity Benefit Plan
Ames has a Key Employee Continuity Benefit Plan (the "Continuity
Plan") that covers all officers (Vice President and above) and certain
other employees of Ames. If the employment of any participant in the
Continuity Plan is terminated by the Company other than for death,
disability, cause (as defined in the Continuity Plan) or by the
participant for good reason (as defined in the Continuity Plan) within
18 months after a change of control of Ames, the participant will
receive a lump sum cash severance payment. The severance payment is
2.99 times Base Compensation for the President and Executive Vice
Presidents, 2 times Base Compensation for Senior Vice Presidents and
selected Vice Presidents, and 1 times Base Compensation for other Vice
Presidents. Base Compensation is defined generally as the sum of the
participant's annual base compensation in effect immediately prior to
the participant's termination plus one-third of the value of the cash
and stock bonuses paid to the participant during the 36 months ending
on the date of termination. For purposes of the Continuity Plan, a
change of control includes, but is not limited to, the acquisition by
any person of beneficial ownership of 20% or more of the Company's
outstanding voting securities or the failure of the individuals who
constituted the Board of Directors at the beginning of any period of
12 consecutive months to continue to constitute a majority of the
Board during such period.
Additional Information with respect to Board of Directors Interlocks
and Insider Participation in Compensation Decisions
Joseph Ettore has been a member of the Board of Directors and an
executive officer of the Company since June, 1994. However, he did
not participate as a Board member in Board deliberations in fiscal
year 1995 relating to his own executive compensation.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that
would otherwise incorporate future filings, including this Proxy
Statement, in whole or in part, the Compensation Committee's Report on
Executive Compensation and the Performance Graph that follow below
shall not be incorporated by reference into any such filings.
<PAGE>
The Compensation Committee's Report on Executive Compensation
The Compensation Committee of the Company's Board of Directors
(the "Committee") is responsible for recommending to the full Board of
Directors (the "Board") the compensation to be paid to the Company's
principal executive officers, including the Chief Executive Officer
("CEO"), the persons to whom and the amount in which stock options
should be granted by the Company under the Company's 1994 Management
Stock Option Plan and the persons to whom shares of Restricted Stock
should be awarded by the Company under the Long Term Plan. As
previously described, the Company currently has employment contracts
with Joseph R. Ettore, CEO, and Denis T. Lemire, Executive Vice
President, Merchandising. Set forth below is a report submitted by
the Committee regarding the compensation policies for fiscal year
1995, as they related to the Company's principal executive officers,
including the CEO.
Compensation Policies
In April of each year, the Committee reviews management's
proposed annual salaries for principal executive officers for the
remainder of the new fiscal year and the beginning of the next fiscal
year. In determining whether to accept management's proposed
salaries, or recommend different salaries, the Committee considers a
number of factors, including but not limited to the following: (1) the
Company's financial performance for the prior fiscal year, including
whether the Company had a net profit or loss, the amount thereof, the
reasons for such performance, and whether such performance was
primarily as a result of the executive officers' performance, or
whether the performance might have related to unforeseen events or
events not in the executives' control; and (2) the extent to which an
executive officer achieved certain objectives in his or her area of
primary responsibility that might have been set in the prior fiscal
year, or otherwise made a significant contribution to the Company.
The Committee believes that an important factor in attracting and
motivating Ames' executive officers is to insure that the compensation
paid to such individuals is competitive with that paid by comparable
companies. In its review of management's proposed goals under the
Annual Bonus Plan for a fiscal year, the Committee utilizes criteria
similar to that which it uses in reviewing annual salaries.
In considering the grant of stock options to employees, including
the Company's principal executive officers, the Committee considers
the responsibility level of the position, job performance and salary
level, and reviews the long-term objectives of management and the
Board.
Fiscal Year 1995 Executive Compensation
Employing its compensation review factors described above, the
Committee recommended to the Board that management's salary
recommendations for its senior executives and the recommendations for
eligible participants in, and the Company's goals for, the Annual
Bonus Plan for the fiscal year ending January 27, 1996 be adopted.
The Committee also reviewed the compensation level for John F.
Burtelow, Executive Vice President, Chief Financial Officer.
In accepting the salary recommendations for those executive
officers who had served in the prior year, the Committee noted that
management's recommended salaries were, for the principal executive
officers, slightly higher in the aggregate than the previous year's
salaries. The Committee specifically considered that the Company had
achieved net earnings of $17.0 million, or $.79 per share, in the
previous fiscal year.
<PAGE>
The Committee approved the grants of stock options to certain
members of management in fiscal year 1995 pursuant to the 1994
Management Stock Option Plan (the "Option Plan") that was approved by
stockholders in June, 1994. The purpose of the Option Plan is to
provide certain key employees of the Company an opportunity to acquire
an ownership interest in the Company and thereby create in such
employees an increased interest in and greater concern for the welfare
of the Company, to retain their continued employment, and to secure
and retain the services of persons capable of filling key positions
with the Company. Such options were granted during fiscal year 1995
with an exercise price equal to the market price of the Common Stock
on the date of grant, so that individuals receiving such grants
benefit only if stockholders benefit through appreciation in the post-
grant value of Ames shares.
The Committee also approved the awards of Restricted Stock to
certain officers of the Company in fiscal year 1995 pursuant to the
Long Term Plan that was approved by stockholders in May, 1995. The
purpose of the Long Term Plan is to promote the long term success of
the Company by affording certain officers with an opportunity to
acquire ownership interest in the Company in order to incentivize such
persons and to align their financial interests with the stockholders
of the Company.
The Compensation Committee
Sidney S. Pearlman, Chairman
Francis X. Basile
Paul Buxbaum
<PAGE>
Performance Graph
The following graph compares the changes in the cumulative total
return on the Company's Common Stock with the cumulative total return
of the NASDAQ Stock Market Index (U.S. Companies) and the cumulative
total return of the NASDAQ Retail Stock Index for the period
commencing on December 30, 1992 (the first day of trading in the
Company's Common Stock) and ending on January 30, 1993, and for the
three subsequent fiscal years ended January 29, 1994, January 28, 1995
and January 27, 1996. The graph assumes that the value of the
investment in Ames Department Stores, Inc. and each index was $100 on
December 30, 1992 and that any dividends were reinvested.
[ Graph not included as it cannot be transmitted through EDGAR;
see table below for data points which would appear on graph ]
<TABLE>
<CAPTION>
12/30/92 1/29/93 1/28/94 1/27/95 1/27/96
<S> <C> <C> <C> <C> <C>
Ames Department Stores, Inc. 100 238 154 159 85
CRSP Index for NASDAQ Stock
Market (U.S. Companies) 100 104 119 114 158
CRSP Index for NASDAQ Retail
Companies 100 99 105 95 104
</TABLE>
Transactions with Management and Others
Mr. Ettore's brother-in-law is principal and partner of Four Star
Apparel, a supplier to the Company. The Company did business with
Four Star Apparel prior to Mr. Ettore joining the Company. In fiscal
year 1995, in the normal course of business, the Company purchased
approximately $2.6 million of merchandise from Four Star Apparel. To
the knowledge of Ames, there were no other related transactions or
business relationships, with directors or executive officers of Ames
during fiscal year 1995, or any currently proposed, that would require
disclosure.<PAGE>
Security Ownership of Management
As of March 1, 1996, the Company's directors and officers as a
group were beneficial owners of 705,986 shares of the Common Stock.
As used herein, "beneficial ownership" means the sole or shared power
to vote or invest either Common Stock or Warrants, or the right to
acquire Common Stock or Warrants within sixty (60) days. To the
knowledge of Ames, there were no director or officer reporting
delinquencies during fiscal year 1995.
The Company is not aware of any arrangements, including any
pledge by any person of securities of the Company, which may at a
subsequent date result in a change of control of the Company.
Listed below are the number of shares of Common Stock
beneficially owned by the named executive officers (those listed in
the Summary Compensation Table) and all executive officers as a group
as of March 1, 1996:
<TABLE>
<CAPTION>
Total
Shares of Shares of
Name of Common Stock Exercisable Common Stock Percent
Beneficial Beneficially Stock Beneficially of
Owner Owned (1) Options (2) Owned Class
----------- ------------ ----------- ------------ --------
<S> <C> <C> <C> <C>
J. Ettore 105,000 40,000 145,000 0.7%
D. Lemire 40,000 10,000 50,000 0.2%
J. Burtelow 40,000 10,000 50,000 0.2%
E. Bankers 25,000 14,000 39,000 0.2%
D. Lissy 25,200 14,000 39,200 0.2%
Executive Group as
a whole, including
the above 385,300 137,000 522,300 2.5%
<FN>
(1) Each named executive, except for Mr. Lissy who holds
200 of his shares jointly with his wife and Mr. Burtelow
who holds 5,000 of his shares jointly with his wife, has
sole voting and investment power in the shares listed.
Includes Restricted Stock awarded under the Long Term Plan.
(2) Represents shares of Common Stock that may be acquired
within 60 days through the exercise of stock options
under the 1994 Management Stock Option Plan.
</TABLE>
Security Ownership of Certain Beneficial Owners
Through April 5, 1996, Ames is aware of one public filing
reflecting beneficial ownership of more than 5% of the total
outstanding shares of the Common Stock on the Record Date. DDJ
Capital Management, LLC ("DDJ") of 141 Linden Street, Wellesley, MA
02181, has filed a Schedule 13D with the Securities and Exchange
Commission indicating that DDJ through its affiliates DDJ Copernicus,
LLC, DDJ Copernicus Management, LLC, DDJ Galileo, LLC and DDJ Galileo
Management, LLC had beneficial ownership of 1,231,200 shares of the
Company's Common Stock, or 6.0% of the total shares of Common Stock.
<PAGE>
PROPOSAL TO APPROVE AN AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF THE COMPANY TO
AUTHORIZE A CLASS OF BLANK CHECK PREFERRED STOCK
AND TO MAKE CERTAIN OTHER CHANGES
(Proposal No. 2)
The Board of Directors has adopted, subject to stockholder
approval, a resolution approving an Amended and Restated Certificate
of Incorporation of the Company (the "Amended Certificate") to
authorize a class of preferred stock commonly known as "blank check"
preferred stock. The form of the Amended Certificate is set forth as
Exhibit A hereto.
The Amended Certificate will authorize 3,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock").
The Amended Certificate will provide that Preferred Stock may be
issued in one or more series as may be determined from time to time by
the Board of Directors. All shares of any one series of Preferred
Stock will be identical except as to the date of issue and dates from
which dividends on shares of the series issued on different dates will
cumulate, if cumulative. The Amended Certificate will grant the Board
of Directors the power to authorize the issuance of one or more series
of Preferred Stock, and to fix by resolution or resolutions providing
for the issue of each such series the voting powers (but no greater
than one vote per share), designations, preferences, and relative,
participating, optional, redemption, conversion, exchange or other
special rights, qualifications, limitations or restrictions of such
series, and the number of shares in each series, to the full extent
now or hereafter permitted by law.
While there is no present intention that any shares of Preferred
Stock will be issued by the Company, the Company believes that this
class of securities will provide greater flexibility for financing of
the Company's activities in the future. Since no Preferred Stock has
been issued, and the issuance of the same is not currently
contemplated, it is not possible to know whether such Preferred Stock,
if ever issued, would have preference over the holders of Common Stock
in the distribution of any assets in the event of a liquidation.
In addition, the Company could issue Preferred Stock for other
corporate purposes, such as to implement joint ventures or to make
acquisitions, although no issuances for such purposes are presently
contemplated. If the Amended Certificate is approved, the Board of
Directors will be able to specify the precise characteristics of each
series of the Preferred Stock to be issued, depending on the current
market conditions and the nature of specific transactions.
The Amended Certificate also eliminates certain provisions in the
existing Certificate of Incorporation which relate to the Priority
Stock issued when the Company emerged from bankruptcy and to certain
restrictions on trading of the Common Stock of the Company. Both the
Priority Stock and the trading restrictions expired in December 1994
pursuant to the terms of the Certificate of Incorporation.
The Amended Certificate also provides that the size of the Board
of Directors shall be as set forth in the By-Laws.
The Board of Directors unanimously recommends a vote FOR the
approval of the amendment to the Certificate of Incorporation to
authorize the named class of preferred stock. Your proxy will be so
voted unless you specify otherwise.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal No. 3)
Upon recommendation of the Audit Committee, the Board of
Directors has selected Arthur Andersen LLP, independent public
accountants, as auditors of the Company for the fiscal year ending
January 25, 1997, subject to ratification by stockholders at the
Annual Meeting. It is intended that, unless otherwise directed by the
stockholders, proxies will be voted for the ratification and approval
of this appointment. A member of the firm of Arthur Andersen LLP will
be present at the meeting to make such statements as that firm may
desire and to answer questions by stockholders.
The Board of Directors unanimously recommends a vote FOR the
appointment of the named auditors. Your proxy will be so voted unless
you specify otherwise.
STOCKHOLDER PROPOSAL RE NON-EMPLOYEE BOARD MEMBER TERM LIMITS
(Proposal No. 4)
The Company is informed that a stockholder, whose name, address
and stock ownership will be furnished by the Company to any person
promptly upon receipt of any oral or written request therefor, intends
to present the following proposal at the Annual Meeting:
"That the by-laws of Ames Department Stores
Inc. be modified in such a way as to limit the
terms of office of its non-employee directors
to no more than five consecutive years. This
provision shall apply retroactively to the
existing board and its members."
Board of Directors Statement in Opposition to the Stockholder Proposal
While none of the incumbent non-employee directors nominated for
reelection at this Annual Meeting will have served for more than three
and a half years as of the date of the Annual Meeting, the Board of
Directors believes that a fixed limit on service on the Board of
Directors by a non-employee director would be contrary to the best
interests of the Company and its stockholders. Continuity of service,
and the experience and insights of an incumbent Board member regarding
the business operations, policies, plans and key personnel of the
Company enhance a director's ability to contribute knowledgeably, and
with perspective, to the Board's deliberations. In addition, since
the proposal would arbitrarily disqualify those directors who had
served for five consecutive years, the Company's stockholders would be
denied the opportunity to evaluate and vote for or against those
directors on the basis of merit.
Incumbent directors are not entitled to automatic renomination
and election. They, as well as other candidates for election, are
initially proposed to stand for election by the Board of Directors on
the basis of the background and skills which the Board of Directors
believes they will contribute as directors. In the case of incumbent
directors, a proposal to stand for reelection is grounded as well in
the personal knowledge of the other Board members of the nominee's
past contributions. Moreover, because all directors must be elected
by the stockholders, continued tenure of an incumbent director is
never assured.
<PAGE>
For the foregoing reasons, the Board of Directors believes that
this Proposal is not in the best interest of the Company or its
stockholders, and recommends a vote AGAINST the adoption of this
proposal.
The Board of Directors unanimously recommends a vote AGAINST the
proposal to limit the terms of non-employee directors. Your proxy
will be so voted unless you specify otherwise.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholder proposals which are intended to be presented at the
1997 Annual Meeting of Stockholders must be received at the principal
executive offices of the Company on or before December 16, 1996. To
be eligible for inclusion in the Company's proxy statement and form of
proxy relating to such meeting, a proposal must conform to the
requirements of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations promulgated thereunder. Any such
proposal should be submitted to the attention of David H. Lissy,
Secretary, Ames Department Stores, Inc., 2418 Main Street, Rocky Hill,
CT 06067-2598.
FORM 10-K OR QUARTERLY REPORTS
To receive additional financial information about Ames, please
write to Margaret E. Wyrwas, Vice President, Corporate Communications
& Investor Relations, MS # 1030, 2418 Main Street, Rocky Hill, CT
06067-2598.
EXPENSES OF SOLICITATION
The expenses of solicitation of proxies hereunder will be paid by
the Company. Proxies will be solicited by mail. They may also be
solicited by directors, officers and employees of the Company
(personally, by mail, telegraph or telephone), but such persons will
not be specifically compensated for such services. The Company will
reimburse banks, brokers, nominees and other custodians and
fiduciaries for their reasonable out-of-pocket expenses in forwarding
the proxy soliciting materials to their principals.
OTHER MATTERS
The Board of Directors does not intend to present any other
business at the meeting and knows of no other matter which will be
properly presented. If, however, any other matter calling for a vote
of stockholders is properly presented at the meeting, it is the
intention of the persons named in the accompanying proxy to vote in
accordance with their judgement on such matters.
By order of the Board of Directors
April 8, 1996 David H. Lissy,
Secretary
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AMES DEPARTMENT STORES, INC.
PURSUANT TO SECTIONS 242 AND 245
OF THE GENERAL CORPORATION LAW
The undersigned, David H. Lissy and Dorene Robotti,
certify that they are the Senior Vice President and Assistant
Secretary, respectively, of Ames Department Stores, Inc., a
corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), and do hereby further certify as
follows:
1. The name of the Corporation is AMES DEPARTMENT
STORES, INC., and the original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Delaware on March 30, 1962.
2. This Amended and Restated Certificate of
Incorporation has been duly adopted by the Board of Directors of the
Corporation and the Stockholders of the Corporation in accordance with
the provisions of Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
3. The text of the Amended and Restated Certificate of
Incorporation as heretofore amended or supplemented is hereby further
amended and restated to read in its entirety as follows:
FIRST: The name of the Corporation is AMES DEPARTMENT
STORES, INC. (the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street in the City
of Wilmington, County of New Castle. The name of its registered agent
at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of the State of Delaware as set forth in
Title 8 of the Delaware Code (the "GCL").
<PAGE>
FOURTH:
A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
43,000,000 shares. Of these, (i) 3,000,000 shares shall be
shares of preferred stock, each having a par value of $.01 per
share (hereinafter referred to as "Preferred Stock"), and (ii)
40,000,000 shares shall be shares of common stock, each having a
par value of $.01 per share (hereinafter referred to as "Common
Stock").
B. Preferred Stock may be issued in one or more series
as may be determined from time to time by the Board of Directors
of the Corporation. All shares of any one series of Preferred
Stock will be identical except as to the date of issue and the
dates from which dividends on shares of the series issued on
different dates will cumulate, if cumulative. Authority is
hereby expressly granted to the Board of Directors of the
Corporation to authorize the issuance of one or more series of
Preferred Stock, and to fix by resolution or resolutions
providing for the issue of each such series the voting powers
(but no greater than one vote per share), designations,
preferences, and relative, participating, optional, redemption,
conversion, exchange or other special rights, qualifications,
limitations or restrictions of such series, and the number of
shares in each series, to the full extent now or hereafter
permitted by law.
C. The following is a statement of the designations and
the powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, in respect of the Common
Stock, and of the authority with respect thereto expressly
vested in the Board of Directors of the Corporation.
(1) Except as shall be otherwise stated and expressed
herein, all shares of Common Stock shall be identical with each other
in all respects and shall entitle the holders thereof to the same
rights and privileges.
(2) Subject to the rights of the holders of any Preferred
Stock that may be provided for hereafter, the holders of Common Stock
shall be paid dividends equally, on a share for share basis, when and
as declared by the Board of Directors of the Corporation out of the
assets of the Corporation available for the payment of dividends to
the extent permitted by law.
<PAGE>
(3) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, after
there shall have been paid or set apart for the holders of Preferred
Stock the full preferential amount to which they are respectively
entitled under the terms and provisions of all outstanding series and
classes of Preferred Stock, the remaining assets of the Corporation
available for distribution to its stockholders shall be paid to the
holders of the Common Stock equally, on a share for share basis.
(4) Except as otherwise provided by law, each holder of
Common Stock shall be entitled to one vote for each such share held by
such holder on all matters to be voted on by the stockholders of the
Corporation, and the holders of Common Stock shall vote together as a
single class on all matters to be voted on by the stockholders of the
Corporation.
D. No holder of any of the shares of stock of the
Corporation, whether now or hereafter authorized and issued,
shall be entitled, as of right, to purchase or subscribe for (1)
any unissued shares of any class, or (2) any additional shares
of any class to be issued by reason of any increase of the
authorized shares of the Corporation of any class, or (3) bonds,
certificates of indebtedness, debentures or other securities
convertible into shares of the Corporation, or carrying any
right to purchase shares of any class, but any such unissued
shares of such additional authorized issue of any shares or of
other securities convertible into shares, or carrying any right
to purchase shares, may be issued and disposed of pursuant to
resolution of the Board of Directors of the Corporation to such
persons, firms, corporations or associations and upon such terms
as may be deemed advisable by the Board of Directors of the
Corporation in the exercise of its discretion.
E. Notwithstanding anything to the contrary contained
herein, the Corporation shall not issue any shares of nonvoting
stock.
FIFTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the
Corporation, and for further definition, limitation and regulation of
the powers of the Corporation and of its directors and stockholders:
1. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors of the
Corporation.
<PAGE>
2. The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the By-
Laws of the Corporation.
3. To the fullest extent permitted by the GCL as it now
exists and as it may hereafter be amended, no director shall be
personally liable to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director. Any
repeal or modification of this Article FIFTH by the stockholders of
the Corporation shall not adversely affect any right or protection of
a director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such
repeal or modification.
4. In addition to the powers and authority hereinbefore
or by statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Amended and Restated Certificate of
Incorporation, and any By-Laws adopted by the stockholders; provided,
however, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid
if such By-Laws had not been adopted.
5. The number of Directors of the Corporation shall be
fixed by the By-Laws.
SIXTH: Meetings of stockholders may be held within or
without the State of Delaware, as the By-Laws may provide. The books
of the Corporation may be kept (subject to any provisions contained in
the GCL) outside the State of Delaware at such place or places as may
be designated from time to time by the Board of Directors of the
Corporation or in the By-Laws.
SEVENTH: Special meetings of the stockholders of the
Corporation, for any purpose or purposes, may be called at any time by
either (i) the Chairman, if there be one, or (ii) the President, (iii)
any Vice President, if there be one, (iv) the Secretary or (v) any
Assistant Secretary, if there be one, and shall be called by any such
officer at the request in writing of a majority of the Board of
Directors of the Corporation or at the request in writing of
stockholders owning a majority of the capital stock of the Corporation
issued and outstanding and entitled to vote.
<PAGE>
EIGHTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Amended and
Restated Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, Ames Department Stores, Inc. has
caused its corporate seal to be hereunto affixed and this Amended and
Restated Certificate of Incorporation to be signed by David H. Lissy
its Senior Vice President and attested by Dorene Robotti its Assistant
Secretary this day of , 1996.
AMES DEPARTMENT STORES, INC.
By:
--------------------------
Name: David H. Lissy
Title: Senior Vice President
[Seal]
Attest:
- -------------------------
Name: Dorene Robotti
Title: Assistant Secretary
<PAGE>
PRELIMINARY FORM OF PROXY
AMES DEPARTMENT STORES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Francis X. Basile, Paul M.
Buxbaum, Alan Cohen, Joseph R. Ettore, Richard M. Felner, Sidney S.
Pearlman, Laurie M. Shahon, or any of them, attorneys and proxies with
full power of substitution, to represent and to vote all of the shares
of Common Stock of Ames Department Stores, Inc. standing on the books
of the Company in the name of the undersigned at the Annual Meeting of
Shareholders of the Company to be held at the Radisson Hotel and
Conference Center, Cromwell, Connecticut, on Wednesday, May 22, 1996,
at 10:00 a.m., local time, and at any and all adjournments thereof,
upon the matters set forth on the reverse. A majority of said
attorneys and proxies shall be present and voting (or if only one
shall be present and voting, then that one) in person or by substitute
or substitutes at said meeting, or at any adjournments thereof, and
shall have and may exercise all of the powers of said attorneys and
proxies hereunder. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting and Proxy Statement dated April 8, 1996, and
instructs said attorneys and proxies to vote as set forth on the
reverse side of this Proxy.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
(Continued, and to be signed and dated on the reverse side)
<PAGE>
<TABLE>
<CAPTION>
Please mark
Common Shares X your votes
this way
<S> <C> <C> <C>
Item 1 - The election of directors duly nominated: WITHHELD
Francis X. Basile; Paul M. Buxbaum; Alan Cohen; FOR FOR ALL
Joseph R. Ettore; Richard M. Felner; Sidney S. [ ] [ ]
Pearlman; Laurie M. Shahon.
WITHHELD FOR: (Write that nominee's name in the space provided below.)
Item 2 - The approval of an Amended and Restated FOR AGAINST ABSTAIN
Certificate of Incorporation of the Company as [ ] [ ] [ ]
described in the Proxy Statement.
Item 3 - The ratification and approval of Arthur
Andersen LLP as independent certified public FOR AGAINST ABSTAIN
accountants and auditors for the fiscal year [ ] [ ] [ ]
ending January 26, 1997.
Item 4 - The approval of a stockholder proposal FOR AGAINST ABSTAIN
to limit terms of office of non-employee directors. [ ] [ ] [ ]
- ---------------------------------------------------------------------------------
Item 5 - In their descretion, upon such other
matters as may properly come before the meeting.
The shares represented by
this Proxy will be voted as
specified. If no choice is
specified, the proxies will
be voted in favor of
proposals 1, 2, and 3,
against proposal 4 and
pursuant to Item 5.
Please check this box if you
plan to attend the Annual
Meeting of Stockholders. [ ]
Signatures(s) Date
-------------------------- ------------------------
(Where shares are held jointly, each holder must sign. When signing as attorney,
executor, administrator, trustee or guardian, please add your title as such. If
signing as a corporation, please sign the full corporate name by an authorized
officer.) PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
</TABLE>
<PAGE>
