SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
only (as permitted by Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or
ss. 240.14a-12
STAGE 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) (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:
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5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11 (a) (2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the Form or
Schedule and the date of its filing.
1. Amount Previously Paid:
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3. Filing Party:
4. Date Filed:
<PAGE>
STAGE STORES INC.
BEALLS - PALAIS ROYAL - STAGE
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of
Stockholders of Stage Stores, Inc., a Delaware corporation
("Stage Stores" or the "Company") will be held at the
offices of the Company, 10201 Main Street, Houston, Texas
77025 on May 13, 1999, at 10:00 A.M., Houston time, for
the following purposes:
1. To elect eight Directors for the ensuing year and
until their successors are elected;
2. To elect auditors for the Company for the ensuing year; the
Board of Directors has recommended PricewaterhouseCoopers LLP,
the present auditors, for election as auditors;
3. To vote on the Amended and Restated 1996 Equity Incentive
Plan; and
4. To consider and transact such other business as
may properly come before the meeting, and any
adjournment or adjournments thereof.
Only stockholders of record at the close of business on
April 5, 1999 will be entitled to notice of and to vote at
the meeting, and at any adjournment or adjournments
thereof.
By order of the Board of Directors,
STAGE STORES, INC.
James Marcum
Vice Chairman and Chief
Financial Officer
Dated: April 13, 1999
PROXY STATEMENT
GENERAL
This Proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders which will
be held at the offices of the Company, 10201 Main Street,
Houston, Texas 77025 on May 13, 1999, at 10:00 A.M., Houston
time.
References to a particular year are to the Company's fiscal
year which is the 52 or 53 week period ending on the Saturday
closest to January 31 of the following calendar year (e.g., a
reference to "1998" is a reference to the fiscal year ended
January 30, 1999).
VOTING MATTERS
The Company's authorized common equity securities consist of
par value $0.01 per share common stock ("Common Stock") and par
value $0.01 per share Class B common stock ("Class B Common
Stock"). Except as otherwise described herein, all shares of
Common Stock and Class B Common Stock are identical and entitle
the holders thereof to the same rights and privileges (except
with respect to voting privileges). Holders of Class B Common
Stock may elect at any time to convert any or all of such shares
into Common Stock, on a share-for-share basis, to the extent the
holder thereof is not prohibited from owning additional voting
securities by virtue of regulatory restrictions. The holders of
Common Stock are entitled to one vote per share on all matters to
be voted upon by the stockholders. Except as required by law,
holders of Class B Common Stock do not have the right to vote on
any matters to be voted upon by the stockholders.
The representation in person or by proxy of a majority of the
outstanding shares of Common Stock entitled to a vote at the
meeting is necessary to provide a quorum for the transaction of
business at the meeting. Shares can only be voted if the
stockholder is present in person or is represented by a properly
signed proxy. Each stockholder's vote is very important. Whether
or not you plan to attend the meeting in person, please sign and
promptly return the enclosed proxy card. All signed and returned
proxies will be counted towards establishing a quorum for the
meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with
your instructions. You may specify your choice by marking the
appropriate box on the proxy card. If your proxy card is signed
and returned without specifying choices, your shares will be
voted FOR the Board of Director's proposals, and as the
individuals named as proxy deem advisable on all other matters as
may properly come before the meeting.
For all matters to be voted upon at the meeting, the
affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is
necessary for approval. Withholding authority to vote or an
instruction to abstain from voting on a proposal will be treated
as shares present and entitled to vote and, for purposes of
determining the outcome of the vote, will have the same effect as
a vote against the proposal. A broker "non-vote" occurs when a
nominee holding shares for a beneficial holder does not have
discretionary voting power and does not receive voting
instructions from the beneficial owner. Broker "non-votes" will
not be treated as shares present and entitled to vote on a voting
matter and will have no effect on the outcome of the vote.
Any stockholder giving the enclosed Proxy has the power to
revoke such proxy prior to exercise either by voting by ballot at
the meeting, by executing a later-dated proxy or by delivering a
signed written notice of the revocation to the office of the
Secretary of the Company before the meeting begins. The Proxy
will be voted at the meeting if the signer of the Proxy was a
stockholder of record on April 5, 1999 (the "Record Date").
On the Record Date, there were 26,743,461 shares of Common
Stock outstanding and entitled to vote at the meeting. Each
outstanding share of Common Stock is entitled to one vote. On the
Record Date, there were 1,250,584 shares of Class B Common Stock
outstanding. Class B Common Stock is not entitled to vote. This
Proxy Statement is first being sent to the stockholders on or
about April 13, 1999. A list of the stockholders entitled to vote
at the meeting will be available for inspection at the meeting
for purposes relating to the meeting.
SOLICITATION OF PROXIES
The Company has retained Corporate Investor Communications,
Inc. as proxy solicitor for a fee. Solicitation of Proxies may
also be made through officers and regular employees of the
Company by telephone or in person with some stockholders
following the original solicitation period. No additional
compensation will be paid to such officers and regular employees
for proxy solicitation. Expenses incurred in the solicitation of
Proxies will be borne by the Company, including the charges and
expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of Common Stock.
MATTERS TO BE ACTED UPON
1. Election of Directors
The Board of Directors recommends that the stockholders vote
FOR each nominee for Director as set forth below. Eight Directors
are to be elected at the meeting, each to hold office until the
following Annual Meeting of Stockholders when a successor is duly
elected and qualified or until his or her earlier death,
resignation or removal.
Each nominee listed below is currently a Director. The
following information pertains to each nominee's (i) age as of
April 1, 1999, (ii) principal occupations for at least the past
five years and (iii) certain other directorships:
Name Age Positions Currently Held
Carl Tooker 51 Chairman, Chief Executive Officer and
President of Stage Stores
James Marcum 39 Director, Vice Chairman and Chief
Financial Officer of Stage Stores
Harold Compton 51 Executive Vice President and Chief
Operating Officer of CompUSA, Inc.
Robert Huth 53 Director, President and Chief Operating
Officer of David's Bridal, Inc.
Richard Jolosky 64 Director and Vice Chairman of Payless
ShoeSource, Inc.
Jack Bush 64 President of Raintree Partners, Inc. and
Chairman, Director and Chief Executive
Officer of Jumbo Sports
David Thomas 49 Managing Director of Citicorp Venture
Capital , Ltd.
John Wiesner 61 Former Chairman and Chief Executive
Officer of C. R. Anthony Company
Mr. Tooker joined the Company as Director, President and
Chief Operating Officer on July 1, 1993. On July 1, 1994, Mr.
Tooker was appointed Chief Executive Officer and on January 27,
1997, Mr. Tooker was elected Chairman of the Board. Mr. Tooker
has 26 years of experience in the retail industry, 18 of which
were spent at the May Co. where he served as Chairman and Chief
Operating Officer of Filene's of Boston from 1988 to 1990. In
1990, Mr. Tooker joined Rich's, a division of Federated
Department Stores, Inc., as President and Chief Operating
Officer, and in 1991 Mr. Tooker was promoted to Chief Executive
Officer of Rich's where he served until joining the Company in
1993.
Mr. Marcum joined the Company in June 1995 as Executive Vice
President and Chief Financial Officer, was elected to the Board
on August 20, 1997 and was promoted to Vice Chairman and Chief
Financial Officer on March 5, 1998. Prior to joining the Company,
Mr. Marcum held various positions at the Melville Corporation
where he was employed since 1983. Mr. Marcum served as Treasurer
of Melville Corporation from 1986 to 1989, Vice President and
Controller of Marshalls, Inc., a division of the Melville
Corporation, from 1989 to 1990 and as Senior Vice President and
Chief Financial Officer of Marshalls, Inc. from 1990 to 1995.
Mr. Marcum has been nominated as a director candidate for The
Bombay Company, Inc. to be voted on by shareholders at their
annual meeting on May 20, 1999.
Mr. Compton has been a Director since March 1997. Mr.
Compton is also Executive Vice President and Chief Operating
Officer of CompUSA, Inc. where he has served since January 1995.
Mr. Compton is also President of CompUSA Stores. Previously, he
served as Executive Vice President-Operations of CompUSA Stores
from August 1994 to January 1995. Prior to joining CompUSA, Inc.,
Mr. Compton served as President and Chief Operating Officer of
Central Electric Inc. from December 1993 to August 1994 and as
Executive Vice President-Operations & Human Resources of
HomeBase, Inc. from 1989 to 1993. Mr. Compton is also a director
of Linens `N Things, Inc. and Jumbo Sports.
Mr. Huth has been a Director since March 1997. Mr. Huth is
also Director, President and Chief Operating Officer of David's
Bridal where he has served since 1995. Prior to joining David's
Bridal, Mr. Huth served as Director, Executive Vice President and
Chief Financial Officer of Melville Corporation from 1987 to
1995.
Mr. Jolosky has been a Director since March 1997. Mr.
Jolosky is also Director and Vice Chairman of Payless ShoeSource,
Inc. where he has served since 1996. Prior to joining Payless
ShoeSource, Inc., Mr. Jolosky served as President and Chief
Executive Officer of Silverman Jewelry Company from 1995 to 1996
and as Chief Executive Officer of the Richard Allen Company from
1992 to 1995.
Mr. Bush has been a Director since December 1997. Mr. Bush
is also President of Raintree Partners, Inc., a management
consulting firm where he has served since 1995, as well as
Chairman, Director and Chief Executive Officer of Jumbo Sports,
Director of TeleQuip Co. and Chairman of the Strategic Board of
Directors of the College of Business and Public Administration at
the University of Missouri. From 1991 to August 1995, Mr. Bush
was President and Director of Michaels Stores, Inc.
Mr. Thomas has been a Director since September 1997. Mr.
Thomas has been a Managing Director of Citicorp Venture Capital,
Ltd. and a Vice President of Court Square Capital Limited for
more than five years. Mr. Thomas is also a director of Lifestyle
Furnishings International Ltd., Galey & Lord, Inc., Anvil
Knitwear, Inc., Neenah Corporation, Plainwell, Inc., Sleepmaster
Corporation and American Commercial Lines, LLC.
Mr. Wiesner has been a Director since July 1997. Prior to
joining the Company, Mr. Wiesner held varying positions at CR
Anthony, including Chairman of the Board, Chief Executive Officer
from 1987 to 1997, and President from 1987 to 1990 and 1992 to
1995. Mr. Wiesner is also a director of Lamont Apparel, Inc. and
Elder Beerman, Inc.
2. Election of Auditors
The Audit Committee of the Board of Directors recommends that
the stockholders vote FOR the election of the firm of
PricewaterhouseCoopers LLP as the auditors to audit the
consolidated financial statements of the Company and the
financial statements of certain of its subsidiaries for the
fiscal year ending January 29, 2000.
Representatives of PricewaterhouseCoopers LLP are expected to
be present at the Annual Meeting of Stockholders. They will have
the opportunity to make statements if they desire to do so and
will be available to respond to appropriate questions.
3. Approval of the Amended and Restated 1996 Equity Incentive
Plan
Under the existing Amended and Restated 1996 Equity
Incentive Plan (the "1996 Equity Incentive Plan"), an aggregate
of 1,500,000 shares of common stock have been reserved for
issuance. Of this amount, 83,299 shares of common stock remain
available for future grant. In addition, the Company has granted
1,077,725 options under the 1996 Equity Incentive Plan with
exercise prices higher than the market price of the Company's
common stock as of January 29, 1999. The Company does not
currently anticipate repricing these options, but rather, intends
to continue granting awards which are designed to advance the
interests of the Company and its shareholders by providing
incentives to certain key employees of the Company and its
subsidiaries who contribute significantly to the strategic and
long-term performance objectives and growth of the Company. The
Board of Directors regards such awards as a significant incentive
to such employees and, for this reason, in order to continue to
provide the Company with such flexibility, is proposing (a) to
increase the number of shares of common stock reserved under the
1996 Equity Incentive Plan by 2,000,000, bringing the total
number of shares of common stock reserved under the 1996 Equity
Incentive Plan to 3,500,000 and (b) to extend the term of the
plan through 2009 (as amended, the "Proposed Plan").
The Board of Directors considers the increase of shares of
Common Stock that may be issued under the Proposed Plan
appropriate and equitable and is requesting that the shareholders
approve the proposed amendment. The following is a description
of the principal features of the Proposed Plan (see Exhibit A for
a copy of the Proposed Plan in its entirety):
The Proposed Plan provides for the granting to employees and
other key individuals who perform services for the Company and
its subsidiaries ("Participants") of the following types of
incentive awards: stock options, stock appreciation rights
("SARs"), restricted stock, performance units, performance grants
and other types of awards that the Board of Directors or the
Compensation Committee (the "Plan Administrator") deems to be
consistent with the purposes of the Proposed Plan. An aggregate
of 3,500,000 shares of Common Stock have been reserved for
issuance under the Proposed Plan; however, no Participant shall
be entitled to receive grants of Common Stock, stock options or
SARs with respect to Common Stock, in any calendar year in excess
of 400,000 shares in the aggregate. The Proposed Plan affords the
Company latitude in tailoring incentive compensation for the
retention of key personnel, to support corporate and business
objectives, and to anticipate and respond to a changing business
environment and competitive compensation practices.
The Plan Administrator will have exclusive discretion to
select the Participants and to determine the type, size and terms
of each award, to modify the terms of awards, to determine when
awards will be granted and paid, and to make all other
determinations which it deems necessary or desirable in the
interpretation and administration of the Proposed Plan. The
Proposed Plan is scheduled to terminate ten years from the date
that the Proposed Plan is approved and adopted by the
shareholders of the Company, unless extended for up to an
additional five years by action of the Board of Directors. With
limited exceptions, including termination of employment as a
result of death, disability or retirement, or except as otherwise
determined by the Plan Administrator, rights to these forms of
contingent compensation are forfeited if a recipient's employment
or performance of services terminates within a specified period
following the award. Generally, a Participant's rights and
interest under the Proposed Plan will not be transferable except
by will or by the laws of descent and distribution.
Options, which include nonqualified stock options and
incentive stock options, are rights to purchase a specified
number of shares of Common Stock at a price fixed by the Plan
Administrator. The option grant price must be equal to or greater
than the fair market value of the underlying shares of Common
Stock on the date of grant. Options generally will expire not
later than ten years after the date on which they are granted.
Options will become exercisable at such times and in such
installments as the Plan Administrator shall determine. Payment
of the option price must be made in full at the time of exercise
in such form (including, but not limited to, cash or Common Stock
of the Company) as the Plan Administrator may determine.
An SAR may be granted alone, or in tandem with another
option or award, or a holder of an option or other award may be
granted a related SAR, either at the time of grant or by
amendment thereafter. In the event that an SAR is granted in
tandem with another award, the holder of the SAR must surrender
the SAR and surrender, unexercised, any related option or other
award, and the holder will receive in exchange, at the election
of the Plan Administrator, cash or Common Stock or other
consideration, or any combination thereof, equal in value to the
difference between the exercise price or option price per share
and the fair market value per share on the last business day
preceding the date of exercise, times the number of shares
subject to the SAR or option or other award, or portion thereof,
which is exercised.
A restricted stock award is an award of a given number of
shares of Common Stock which are subject to a restriction against
transfer and to a risk of forfeiture during a period set by the
Plan Administrator.
Performance grants are awards whose final value, if any, is
determined by the degree to which specified performance
objectives have been achieved during an award period set by the
Plan Administrator, subject to such adjustments as the Plan
Administrator may approve based on relevant factors. Performance
objectives are based on such measures of performance, including,
without limitation, measures of industry, Company, unit or
Participant performance, or any combination of the foregoing, as
the Plan Administrator may determine. The Committee may make such
adjustments in the computation of any performance measure as it
deems appropriate. A target value of an award is established (and
may be amended thereafter) by the Plan Administrator and may be a
fixed dollar amount, an amount that varies from time to time
based on the value of a share of Common Stock, or an amount that
is determinable from other criteria specified by the Plan
Administrator. Payment of the final value of an award is made as
promptly as practicable after the end of the award period or at
such other time or times as the Plan Administrator may determine.
Upon the liquidation or dissolution of the Company all
outstanding awards under the Proposed Plan shall terminate
immediately prior to the consummation of such liquidation or
dissolution, unless otherwise provided by the Plan Administrator.
In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or
into another corporation, all restrictions on any outstanding
awards may lapse and Participants may be entitled to the full
benefit of such awards, as determined by the Plan Administrator,
immediately prior to the closing date of such sale or merger.
Certain Federal Tax Consequences under the Proposed Plan.
The following discussion addresses certain federal income tax
consequences under current law associated with awards made under
the Proposed Plan. The following discussion is intended only as a
general summary of the federal income tax consequences arising
under the Proposed Plan based upon the Internal Revenue Code of
1986, as amended (the "Code") as currently in effect.
A Participant to whom a nonqualified stock option is granted will
not recognize any income at the time of the grant. When a
Participant exercises a nonqualified stock option, he generally
will recognize ordinary compensation income equal to the
difference, if any, between the fair market value of the Common
Stock he receives at such time and the option's exercise price
and the Company for which the Participant performed services will
receive a corresponding deduction.
A participant to whom an incentive stock option is granted
will not recognize any ordinary income at the time of grant or at
the time of exercise and his employer will not be entitled to a
tax deduction. However, upon the exercise of an incentive stock
option, the Participant generally will be required to include the
excess of fair market value of the Common Stock over the option's
exercise price in his alternative minimum taxable income and, as
a result, he may be subject to an alternative minimum tax
("AMT"). In order to obtain incentive stock option treatment for
federal income tax purposes, a Participant (i) must be an
employee of the Company or a subsidiary continuously from the
date of grant until any termination of employment and (ii) in the
event of such a termination, must exercise an incentive stock
option within three months after such termination, except if
disabled, in which case exercise may occur within one year from
the date of termination of employment. If a Participant holds
Common Stock received upon the exercise of an incentive stock
option for more than one year after exercise and more than two
years after the option was granted (the "Statutory Holding
Periods"), then upon a sale of such Common Stock he will
recognize long-term capital gain or loss equal to the difference,
if any, between the sale price of such shares and the option's
exercise price and his employer will not be entitled to a tax
deduction. If the Participant has not held such shares for the
Statutory Holding Periods, when he sells such share (a
"disqualifying disposition") he will recognize ordinary
compensation income equal to the lesser of (i) the excess, if
any, of the fair market value of such shares on the date of
exercise over the exercise price or (ii) the excess, if any, of
the sale price over the exercise price and the Company for which
the Participant performed services will receive a corresponding
deduction.
A Participant will not recognize any taxable income upon
date of grant for SARs in a nonqualified stock option or an
incentive stock option. At the time of exercise, a Participant
generally will recognize ordinary compensation income (and his
employer will be entitled to a corresponding tax deduction) in an
amount equal to the cash and the fair market value of the Common
Stock he receives to satisfy his SARs.
With respect to restricted stock awards, unless he files a
timely election with the Internal Revenue Service under Section
83(b) of the Code (a "Section 83(b) election"), a Participant who
receives Common Stock pursuant to a restricted stock award will
not recognize any taxable income upon the receipt of such award,
but will recognize taxable compensation income, at the time his
interest in such shares is no longer subject to the restrictions.
Alternatively, by filing a Section 83(b) election within 30 days
after the shares are granted, the Participant may elect to
recognize ordinary income equal to the fair market value of the
shares on the grant date. If a Participant does not make a
Section 83(b) election, dividends paid on restricted stock awards
will be includable in his income as compensation when received.
The timing of any tax deduction by the Company will correspond to
the Participant's recognition of taxable income.
A Participant to whom a performance grant award is made will
not recognize taxable income at the time such award is made. Such
Participant generally will recognize taxable income, however, at
the time cash, Common Stock or other Company securities or
property are paid to him pursuant to such award in an amount
equal to the amount of such cash and the fair market value at
such time of such shares, securities or property. Any income
equivalents paid to a Participant with respect to his performance
grant award should generally be regarded as compensation.
If a Participant who receives Common Stock under the
Proposed Plan (whether pursuant to the exercise of an option, as
a restricted stock award, or as a performance grant award) is
subject to Section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (such recipient, an "Insider"),
the tax consequences may be different from those described above.
Generally, an Insider will not recognize income (or, in the case
of the exercise of an incentive stock option, alternative minimum
taxable income) on receipt of Common Stock until he is no longer
subject to liability with respect to the disposition of such
Common Stock. However, by filing a Section 83(b) election with
the Internal Revenue Service no later than 30 days after the date
of transfer of property (e.g., after exercise of a nonqualified
stock option that was granted within six months of such exercise
to the extent a six month holding period is required), an
Insider may elect to be taxed based upon the fair market value of
the Common Stock at the time of such transfer.
Subject to certain limitations described in the next
paragraph, the company for which a Participant is performing
services generally will be allowed to deduct amounts that are
includable in the Participant's income as ordinary compensation
income at the time such amounts are so includable, provided that
such amounts qualify as reasonable compensation for personal
services actually rendered.
With limited exceptions, the Company may not deduct certain
compensation paid to its chief executive officer or any of its
four other highest paid executives to the extent such
compensation exceeds $1 million in any taxable year. Depending on
the circumstances, some or all of the compensation paid to such
an executive under the Proposed Plan may be nondeductible.
Nondeductibility would result in additional tax cost to the
Company. It is contemplated that the individual grant limitations
on options which may be made to any employee in any calendar year
under the Proposed Plan will enable options to be granted under
the Proposed Plan to qualify for the "performance-based
compensation" exclusion under the $1.0 million limitation.
Nevertheless, there is no assurance that compensation realized by
a Participant with respect to any particular award under the
Proposed Plan would qualify as a deductible compensation expense
under this limitation exclusion.
4. Other Business
The Board of Directors does not know of any other business to
be presented at the Annual Meeting of Stockholders. If any other
matters come before the meeting, however, it is intended that the
persons named in the enclosed form of Proxy will vote said Proxy
in accordance with their best judgment.
DIRECTORS MEETINGS, COMMITTEE MEETINGS AND COMPENSATION
Directors Meetings
The Board of Directors held 6 meetings during 1998. All of the
Company's Directors participated in excess of 75% of the
meetings.
Committee Meetings
The Audit Committee, which currently consists of Messrs. Bush,
Huth and Wiesner, recommends the engagement of the Company's
independent auditors and oversees actions taken by the auditors.
The Audit Committee held 2 meetings during 1998.
The Compensation Committee, which currently consists of Messrs.
Compton and Jolosky, approves the compensation of executives of
the Company, makes recommendations to the Board of Directors with
respect to standards for setting compensation levels and
administers the Company's incentive plans. The Compensation
Committee held 2 meetings during 1998.
Compensation of Directors
Directors who are full-time employees or affiliates of the
Company receive no additional compensation for serving on the
Board of Directors. Directors who are not full-time employees or
affiliates of the Company (Messrs. Bush, Compton, Huth, Jolosky
and Wiesner) receive quarterly cash compensation of $5,000 for
services rendered as Director and $1,000 for each committee
meeting the Director attends. In addition, such Directors are
eligible for annual option grants. During 1998, such Directors
each received 2,500 option grants. The option grants were at
100% of fair market value of the Company's common stock on the
grant date. Such options vest evenly over a four year period.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following summarizes, for the fiscal years indicated, the
principal components of compensation for the Company's Chief
Executive Officer (the "CEO") and the four highest compensated
executive officers (collectively, the "named executive
officers"). Sections omitted are not applicable.
Long-term
Annual Compensation Compensation Awards
Annual
Other
Annual Securities
Name and Compen- Restricted Underlying All Other
Principle Fiscal Salary Bonus sation Stock Options/ Comp.
Position Year ($) ($)(1) ($) ($) SARs (#) ($)(3)
Carl Tooker, 1998 758,333 -- 137,658(4) 744,750 35,000 9,282
Chairman, Chief 1997 683,438 645,000 119,341(5) 3,225,000 50,000 9,282
Executive 1996 600,000 300,000 1,010,426(6) -- 213,136 1,273
Officer and
President
James Marcum, 1998 420,833 -- 62,539(7) 372,375 42,000 2,127
Director, Vice 1997 377,563 322,000 110,945(8) 806,250 15,000 1,483
Chairman and 1996 295,833 120,000 173,415(9) -- 71,046 952
Chief Financial
Officer
Stephen Lovell, 1998 420,833 -- 62,404(10) 372,375 42,000 3,232
Vice Chairman 1997 363,044 322,000 527,017(11) 806,250 15,000 2,332
and Chief Field 1996 295,833 120,000 133,069(12) -- 71,046 865
Operations
Officer
Ron Lucas, 1998 222,500 -- 1,027,495(13) 165,500 22,500 5,313
Executive Vice 1997 204,662 163,000 15,170(14) 161,250 5,000 3,967
President, 1996 187,500 76,000 49,516(15) __ 33,154 174
Human
Resources
Jim Bodemuller, 1998 292,624 -- 16,485(16) 211,013 25,000 6,781
Executive Vice 1997 188,493 -- 23,679(17) 161,250 35,000 1,832
President and 1996 -- -- -- -- -- --
Chief
Information
Officer
Harry Brown, 1998 385,417 -- 67,008(19) 372,375 17,000 9,282
former Vice 1997 417,964 272,000 16,210(20) 806,250 170,000 3,053
Chairman and 1996 -- -- -- -- -- --
Chief
Merchandising
Officer (18)
___________________________________
(1) Amounts reflect bonuses earned during the fiscal year
covered (and paid during the subsequent fiscal year).
(2) The following represents the restricted stock holdings by the
named executives officers at January 30, 1999:
Value
Using
January
29, 1999
Shares Market
Executive Held Price
Carl Tooker 118,000 $944,000
James Marcum 34,000 272,000
Stephen Lovell 34,000 272,000
Ron Lucas 9,000 72,000
Jim Bodemuller 5,000 40,000
Harry Brown 27,250 218,000
(3) Amounts reflect premiums paid for life insurance coverage.
(4) Amount shown includes imputed interest on executive
loans of $78,263 and a distribution related to options vested
of $38,000 paid to Mr. Tooker during 1998.
(5) Amount shown includes imputed interest on executive loans of
$45,685 and a distribution related to options vested of
$38,000 paid to Mr. Tooker during 1997.
(6) Amount shown includes the value realized by Mr. Tooker upon
the exercise of options for common stock of $895,000 during
1996. Value realized is based upon the fair value of the
stock at the exercise date minus the exercise price. Amount
shown also includes imputed interest on executive loans of
$44,946 and a distribution related to options vested of
$38,000 paid to Mr. Tooker during 1996.
(7) Amount shown includes imputed interest on executive
loans of $24,977 paid to Mr. Marcum during 1998.
(8) Amount shown includes moving expenses of $74,490 and imputed
interest on executive loans of $20,485 paid to Mr. Marcum
during 1997.
(9) Amount shown includes the value realized by Mr. Marcum upon
the exercise of options for common stock of $142,400 during
1996. Value realized is based upon the fair value of the
stock at the exercise date minus the exercise price.
(10) Amount shown includes imputed interest on executive
loans of $42,880 paid to Mr. Lovell during 1998.
(11) Amount shown includes the value realized by Mr. Lovell
upon the exercise of options for common stock of $485,941
during 1997. Value realized is based upon the fair value of
the stock at the exercise date minus the exercise price.
(12) Amount shown includes the value realized by Mr. Lovell
upon the exercise of options for common stock of $106,800
during 1996. Value realized is based upon the fair value of
the stock at the exercise date minus the exercise price.
(13) Amount shown includes the value realized by Mr. Lucas upon
the exercise of options for common stock of $985,139 during 1998.
Value realized is based upon the fair value of the stock at the
exercise date minus the exercise price.
(14) Amount shown includes automobile allowance of $12,000 paid
to Mr. Lucas during 1997.
(15) Amount shown includes moving expenses of $43,062 paid to
Mr. Lucas during 1996.
(16) Amount shown includes automobile allowance of $12,000 and
health insurance benefits of $4,485 paid to Mr. Bodemuller
during 1998.
(17) Amount shown includes moving expenses of $20,270 paid to Mr.
Bodemuller during 1997.
(18) Mr. Brown resigned from the Company on November 11, 1998
effective December 31, 1998.
(19) Amount shown includes deferred compensation distribution of
$52,122 paid to Mr. Brown during 1998. The amount shown excludes
a termination payment of $1,299,000 Mr. Brown received upon his
resignation.
(20) Amounts shown reflects moving expenses of $11,210 and
housing and automobile allowances of $5,000 paid to Mr. Brown
during 1997.
Option/SAR Grants During 1998
The following discloses options granted during 1998 to the
named executive officers.
Individual Grants
Number of Potential Realizable
Securities % of Total Value at Assumed
Under- Options/ Annual Rates of Stock
lying SAR's Price Appreciation for
Options/ Granted to Option Term (2)
SAR's Employees Exercise Ex- 5% 10%
Granted in Fiscal or Base piration Annual Growth Annual Growth
Name (#) (1) Year(%) Price ($) Date Rate ($) Rate ($)
Carl Tooker 35,000 6.93 51.63 3/31/08 1,136,334 2,879,693
James Marcum 17,000 3.37 51.63 3/31/08 551,934 1,398,708
25,000 4.95 10.50 12/03/08 165,085 418,357
Steve Lovell 17,000 3.37 51.63 3/31/08 551,934 1,398,708
25,000 4.95 10.50 12/03/08 165,085 418,357
Ron Lucas 7,500 1.48 51.63 3/31/08 243,500 617,077
15,000 2.97 10.50 12/03/08 99,051 251,014
Jim Bodemuller 10,000 1.98 51.63 3/31/08 324,667 822,770
15,000 2.97 10.50 12/03/08 99,051 251,014
Harry Brown(3) 17,000 3.37 51.63 3/31/08 551,934 1,398,708
____________________
(1) All of such options were granted under the 1996 Incentive
Plan. The options granted under the Stock Option Plan are subject
to vesting.
(2) The potential realizable values presented represent assumed
annual growth rates multiplied by base prices in effect as of the
date of the grants. The potential realizable value of the grants
calculated assuming growth on the stock price as of January 29,
1999 of $8.00 less the exercise price would be as follows:
Potential Realizable Value at
Number of Assumed Annual Rates of Stock Price
Securities Appreciation for Option Term Using
Underlying January 29, 1999 Market Value
Options/
SAR's Expiration 5% Annual 10% Annual
Name Granted (#) Date Growth Rate ($) Growth Rate ($)
Carl Tooker 35,000 3/31/08 -- --
James Marcum 17,000 3/31/08 -- --
25,000 12/03/08 63,279 256,248
Steve Lovell 17,000 3/31/08 -- --
25,000 12/03/08 63,279 256,248
Ron Lucas 7,500 3/31/08 -- --
15,000 12/03/08 37,967 153,749
Jim Bodemuller 10,000 3/31/08 -- --
15,000 12/03/08 37,967 153,749
Harry Brown(3) 17,000 3/31/08 -- --
(3) Amount includes 8,500 shares that were cancelled upon Mr.
Brown's resignation.
Aggregated Option/SAR Exercises During 1998 and 1998 Year-End
Option/SAR Values
The following summarizes exercises of stock options (granted
in prior years) by the named executive officers during 1998, as
well as the number and value of all unexercised options held by
the named executive officers at the end of 1998.
Number of
Securities Value of
Underlying Unexercised In-
Unexercised the-Money
Options/SARs at Options/SARs at
Shares FY-End (#) FY-End($)(2)
Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise (#) ($) (1) Unexercisable Unexercisable
Carl Tooker -- -- 154,589/247,745 $835,630/$247,520
James Marcum -- -- 103,213/100,614 $440,293/--
Stephen Lovell -- -- 51,110/114,822 $224,297/$38,646
Ron Lucas 29,667 985,139 --/68,878 --/$98,369
Jim Bodemuller -- -- 8,750/51,250 --/--
Harry Brown -- -- 42,500/93,500 --/--
____________________
(1) Value realized is based upon the fair market value of the
stock at the exercise date minus the exercise price.
(2) Value is based upon the closing price of the Common Stock
on January 29, 1999 of $8.00 minus the exercise price.
Employment Agreements
The Company entered into employment agreements with the named
executive officers which provide for their initial base salaries
as well as annual incentive bonuses as agreed to with the
Compensation Committee. The employment agreements also provide
for annual performance reviews, salary increases at the
discretion of the Compensation Committee and participation in all
other bonus and benefit plans available to executive officers of
the Company.
If the Company terminates any of the named executive officers,
other than for good cause (as defined in the respective
employment agreements) or if any of the named executive officers
terminate their employment agreement for good reason (as defined
in the respective employment agreements), the named executive
officer would be entitled to two times his base salary as well as
targeted bonus amounts, any accrued or unpaid bonus, salary and
deferred compensation, any expense allowances and any earned but
unpaid benefits under the Company's benefit plans.
In addition, any unvested stock options and restricted stock awards
would continue to vest during this two year period. In the event any
of the named executive officers are terminated following a change
in control (as defined in the respective agreements), the
employment agreements provide that the respective individual
would be entitled to three times his base salary plus the amounts
referred to above. In the event of a change of control of the
Company in which the Company does not survive, all unvested
options for the purchase of Common Stock and restricted stock
held by the aforementioned individuals would vest immediately and
the respective individual would also be entitled to certain other
payments as specified in the employment agreements. The
employment agreements also contain certain non-compete and
confidentiality provisions. Each of the employment agreements
renew annually in accordance with its terms.
Company Retirement Plans
Retirement Plan
The Stage Stores, Inc. Retirement Plan (the "Plan") is a
qualified defined benefit plan. Benefits under the Plan are
administered through a trust arrangement providing benefits in
the form of monthly payments or a single lump sum payment. The
Plan covers substantially all employees who have completed one
year of service with 1,000 hours of service as of June 30, 1998.
Effective June 30, 1998, the Plan was frozen. There were no
future benefit accruals after that date. Any service after that
date will continue to count toward vesting and eligibility for
normal and early retirement.
The Plan is administered by the retirement plan committee (the
"Retirement Committee"), and the Company appoints its three to
five members. All determinations of the Retirement Committee are
made in accordance with the provisions of the Plan in a uniform
and nondiscriminatory manner.
Generally, a participant is eligible for a benefit on his/her
normal retirement date, which is the later of age 65 or the fifth
anniversary of the date of hire. A participant may elect an early
retirement benefit if he/she is at least 55 years old, has 10
Years of Service (as defined below) and retires from active
employment with the Company. Early retirement benefits are
reduced according to a formula established in the Plan based upon
each full month that the participant's age is less than 65 on the
date the payments commence. If a participant who is vested
terminates employment, he/she is entitled to a deferred benefit
payable at his/her normal retirement date or an earlier date, if
requested, but not before age 55.
The amount of a participant's retirement benefit is based on
each Year of Credited Service (as defined below) and on his/her
earnings for that year. The individual yearly benefits are then
totaled to determine the annual benefit at age 65. The annual
amount of the participant's normal retirement benefit is derived,
subject to certain limitations, by adding (i) 1% of earnings up
to $30,600 plus 1-1/2% of the excess of such earnings over
$30,600 for each Year of Credited Service earned on or after July
1, 1989 through December 31, 1991, (ii) 1% of earnings up to
$31,800 plus 1-1/2% of the excess of such earnings over $31,800
for each Year of Credited Service earned after December 31, 1991,
and (iii) 1% of earnings up to $42,500 plus 1-1/2% of the excess
of such earnings over $42,500 for each Year of Credited Service
earned after December 31, 1994 through June 30, 1998. The normal
retirement benefit formula produces an annual benefit, which is
paid to the participant in equal monthly installments. The
standard form of payment for a single participant is a monthly
benefit payable for the participant's life only. The standard
form of payment for a married participant is a 50% joint and
survivor benefit, which provides a reduced monthly benefit to the
participant during his/her lifetime, and 50% of that benefit to
the participant's spouse for his/her lifetime in the event of the
participant's death. Other forms of the payment are also provided
including lump sum payouts, but they require participant
election. In addition, the Retirement Committee may elect to pay
the benefit equivalent of a benefit payable at normal retirement
date in the form of a lump sum payment, if the lump sum payment
does not exceed $3,500.
Any participant who is credited with 1,000 or more hours of
service in a calendar year receives a "Year of Service", while
any participant who is credited with 1,284 or more hours of
service in a calendar year receives a "Year of Credited Service".
Years of Service determine a participant's eligibility for
benefits under the Plan, and the percentage vested in those
benefits. After five Years of Service, a participant is 100%
vested.
The Plan is funded entirely by Company contributions that are
held by a trustee for the exclusive benefit of the participants.
The Company voluntarily agreed to contribute the amounts
necessary to provide the assets required to meet the future
benefits payable to Plan participants. Under the Retirement Plan,
contributions are not specifically allocated to individual
participants.
The Benefit Equalization Plan
The Specialty Retailers, Inc. Benefit Equalization Plan (the
"Equalization Plan") is a non-qualified defined benefit plan
which is intended to replace the benefits that cannot be provided
under the terms of the Retirement Plan on account of certain
limitations imposed under the Internal Revenue Code (for example,
the Retirement Plan cannot consider compensation for a
participant which is in excess of $150,000 when determining the
participant's benefit). Effective June 30, 1998, the Equalization
Plan was frozen. There were no future benefit accruals after that
date. Any service after that date will continue to count toward
vesting and eligibility for normal and early retirement. The
Equalization Plan is unfunded. However, upon a change of control
as defined in the Equalization Plan, the Company is required to
deposit into a rabbi trust sufficient funds to cover all
obligations then accrued under the Equalization Plan.
Supplemental Employee Retirement Plan
In 1996, the Company adopted the Specialty Retailers, Inc.
Supplemental Employee Retirement Plan (the "SERP"). The SERP
provides for supplemental retirement benefits for certain key
executives of the Company upon retirement at or after age 65 with
at least 15 years of credited service with the Company. The SERP
provides for annual retirement compensation of 50% of the
retiree's average annual base salary for the three years
preceding retirement, less amounts received under the Company's
defined benefit retirement plans. Participants in the SERP may
elect to receive reduced early retirement benefits at or after
age 55 with at least 15 years of credited service. Upon a change
in control as defined in the SERP, the Company is required to
deposit into a rabbi trust, sufficient funds to cover all
obligations then accrued under the SERP. If a participant's
employment is terminated after a change in control by the Company
without cause or by the participant for good reason, the
participant will be fully vested in the benefit that would have
been payable at age 55. This amount will be paid to the
participant in a lump sum upon termination of employment.
The estimated annual benefits payable upon retirement under the
Retirement Plan, Equalization Plan and SERP at normal retirement
age assuming 15 years of credited service, subject to certain
adjustments permitted by applicable federal law, for the named
executive officers would be as follows (assuming no increase in
compensation): Mr. Tooker - $385,000 ; Mr. Marcum - $212,500 ;
Mr. Lovell - $212,500 ; Mr. Bodemuller - $150,000 ; and Mr. Lucas
- - $112,500. No amounts were paid or distributed during 1998
pursuant to any of the above plans to any of the individuals
named or included in the group in the summary compensation table
above.
Company Deferred Compensation Plan
The Specialty Retailers, Inc. Deferred Compensation Plan (the
"Deferred Compensation Plan") provides executive officers and
other key employees of the Company with the opportunity to
participate in an unfunded, deferred compensation program that is
not qualified under the Code. Generally, the Code and the
Employee Retirement Income Security Act of 1974, as amended,
restrict contributions to a 401(k) plan by highly compensated
employees. The Deferred Compensation Plan is intended to allow
participants to defer income at the same rates as those employees
not restricted by such regulations. Under the Deferred
Compensation Plan, participants may defer up to 15% of their
salary and bonus (not otherwise covered by the Company's 401(k)
plan) and earn a rate of return based on select indices chosen by
each participant. The Company may, but is not obligated to,
establish a grantor trust for the purposes of holding assets to
provide benefits to the participants. The Company will match 50%
of the first 6% of each participant's contributions to the
Deferred Compensation Plan not otherwise covered by the Company's
401(k) plan. Company contributions vest over five years of
service.
Compensation Committee Report
The Compensation Committee of the Board of Directors is
responsible for administering the compensation of senior
executives of the Company. During 1998, the Compensation
Committee consisted of Messrs. Compton and Jolosky.
The Company's executive compensation programs are designed to
align the interests of senior management with those of the
Company's stockholders. There are three key components of
executive compensation: base salary, pay for performance (bonus
plan), and long-term performance incentive. It is the intent of
these programs to attract, motivate and retain senior executives.
It is the philosophy of the Compensation Committee to allocate a
significant portion of cash compensation to variable performance-
based compensation in order to reward executives for high
achievement.
Base Salary
The salaries for senior executives are based upon a combination
of factors including past individual performance, competitive
salary levels and an individual's potential for making
significant contributions to future Company performance.
Bonus Plan
Each of the named executive officers and certain other key
personnel of the Company participate in an executive/management
bonus plan (the "Bonus Plan") The Bonus Plan provides for annual
bonus awards based upon individual performance and actual
operating results compared to planned operating results. Bonus
payments are subject to modification at the discretion of the
Compensation Committee. Due to the Company's poor 1998 actual
operating results, no bonuses were paid to the named executive
officers for such year.
Stock Options and Restricted Stock
Stock options and restricted stock are an important component
of senior executive compensation. The 1993 Stock Option Plan and
the 1996 Equity Incentive Plan were designed to motivate senior
executives and other key employees to contribute to the long-term
growth of stockholder value. Generally, options granted under
such plans have been, and are expected to be, granted with a
price equal to the market price of the Common Stock on the date
of the grant and vest over four years. This approach is designed
to encourage the creation of long-term stockholder value since
the full benefit of such options cannot be realized unless the
stock price exceeds the exercise price. Restricted stock is
generally issued with long-term vesting schedules. This approach
provides a retention incentive for the recipient as well as the
creation of long-term stockholder value. Pursuant to the 1996
Equity Incentive Plan, the Compensation Committee recommended,
and the Board of Directors approved, an award of restricted stock
to the named executive officers of the Company during 1998 as
follows: Mr. Tooker, 18,000 shares; Mr. Marcum, 9,000 shares; Mr.
Lovell, 9,000 shares; Mr. Brown, 9,000 shares; Mr. Bodemuller,
5,000 shares; and Mr. Lucas, 4,000 shares. These awards vest 25%
per year on each of the first through fourth anniversaries of the
grant date.
Chief Executive Officer
The compensation policies described above apply as well to the
compensation of Mr. Tooker. The Compensation Committee is
directly responsible for determining Mr. Tooker's salary level
and for all awards and grants to Mr. Tooker under incentive
components of the compensation program. The overall compensation
package of Mr. Tooker is designed to recognize the fact that he
bears primary responsibility for increasing the value of
stockholders' investments. Accordingly, a substantial portion of
Mr. Tooker's compensation is incentive-based, providing greater
compensation as the direct and indirect financial measures of
stockholder value increase. Mr. Tooker's compensation is thus
structured and administered to motivate and reward the successful
exercise of these qualities.
Mr. Tooker's base compensation for 1998 was directly related to
the Company's overall performance for 1997, as measured by
financial and other criteria such as: (i) the strong financial
performance of the Company; (ii) the continued strong performance
of the senior management team; (iii) other related qualitative
factors. Due to the Company's poor 1998 actual operating
results, no bonus was paid to Mr. Tooker for such year.
Conclusion
Through the programs described above, a significant portion of
the Company's executive compensation is linked directly to
corporate performance and stock price appreciation. The
Compensation Committee believes that existing compensation
policies and programs are competitive and effectively align
executive compensation with the Company's goal of maximizing the
return to stockholders.
The Compensation Committee has determined that it is unlikely
that the Company would pay amounts during 1998 that would result
in the loss of a federal income tax deduction under Section
162(m) of the Code, and accordingly, had not recommended that any
special actions be taken or that any plans or programs be revised
at this time in light of such provision.
Harold Compton and Richard Jolosky
Performance Graph
The following graph compares the cumulative total return on
$100.00 invested on October 25, 1996 (the date of the initial
public offering "IPO" of the Company) through January 29, 1999
(the last day of public trading in fiscal 1998 at the closing
price on the New York Stock Exchange (the "NYSE")) in the Common
Stock, the S&P 500 and the S&P 500 Retail. The return of the
indices is calculated assuming reinvestment of dividends during
the period presented. The Company has not paid any dividends
since its initial public offering. The stock price performance
shown on the graph below is not necessarily indicative of future
price performance. The closing price of the Common Stock on the
NYSE on the Record Date was $6.75.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG STAGE STORES, INC.,
S&P 500 AND S&P 500 RETAIL
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
Stage Stores, S&P 500
Date Inc. Retail S&P 500
10/25/96 $100.00 $100.00 $100.00
1/31/97 $105.30 $ 94.86 $112.16
1/30/98 $235.04 $139.19 $139.86
1/29/99 $48.48 $221.45 $182.62
The company applied for and received a listing on the NYSE and
started trading on the NYSE on April 27, 1998 under the stock
symbol "SGE".
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information regarding
ownership of Common Stock as of either the Record Date or based
on the latest filings made under Section 13 (d) and 13 (g) of the
Securities Exchange Act of 1934 and assuming exercise of options
exercisable within sixty days of the Record Date by (i) each
person or entity who owns of record or beneficially 5% or more of
the Common Stock, (ii) each director and named executive officer
and (iii) all executive officers and directors as a group. Each
such stockholder is assumed to have sole voting and investment
power as to the shares shown. Known exceptions are noted. As of
the Record Date, 1,250,584 shares of Class B Common Stock were
outstanding, all of which are owned by Court Square Capital Limited.
Number of Shares of Percent of Shares of
Name Common Stock(1) Common Stock
5% Stockholders
Brookside Capital Partners Fund, L.P.
Two Copley Place
Boston, MA 02116 3,980,472 14.2%
The Equitable Companies, Inc.
1290 Avenue of the Americas
New York, NY 10104 3,354,500 12.0%
Safeco Corporation
SAFECO Plaza
Seattle, WA 98185 2,868,881 10.2%
Citibank, N.A.
399 Park Avenue
New York, NY 10043 (2) 2,220,948 7.9%
Warburg Pincus Asset Management, Inc.
75 State Street
Boston, MA 02109 1,486,900 5.3%
Directors and Executive Officers
Carl Tooker 222,212 *
James Marcum 139,908 *
Steve Lovell 85,039 *
Ron Lucas 38,634 *
Jim Bodemuller 14,525 *
Harold Compton 3,125 *
Robert Huth 7,125 *
Richard Jolosky 3,125 *
Jack E. Bush 6,875 *
David Thomas -- *
John Wiesner 4,875 *
All executive officers and directors 525,443 1.9%
as a group (11 persons)
______________________________
*Less than 1%.
(1) Amount shown includes shares of Common Stock that such
persons or group could acquire upon the exercise of options
exercisable within 60 days.
(2) Citibank beneficially owns above shares (including Class B
Common Stock) through its subsidiaries Citicorp Venture Capital
and Court Square. Citicorp Venture Capital owns 600,296 shares of
Common Stock. Court Square owns 370,068 shares of Common Stock
and 1,250,584 shares of non-voting Class B Common Stock. Each
share of non-voting Class B Common Stock is convertible, subject
to certain restrictions, into one share of Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Directors and Executive Officers
The Company has loans in an aggregate principal amount
outstanding of approximately $2.1 million at January 30, 1999, to
certain executive officers of the Company. These loans are full
recourse loans and are secured by a pledge of the shares of
common stock owned by such executive officers. The loans provide
for interest from 5.7% to 7.25% and mature no later than June 1,
2000.
Transactions with Stockholders
Registration Rights Agreement
The Company is party to a Registration Agreement (the
"Registration Agreement") with Court Square pursuant to which
such stockholder has the right to cause the Company to register
shares of Common Stock (the "registrable securities") under the
Securities Act. As of the Record Date, 1,620,652 outstanding
shares of Common Stock constitute registrable securities and
therefore will be eligible for registration pursuant to the
Registration Agreement. Under the terms of the Registration
Agreement, the holders of at least a majority of the registrable
securities can require the Company, subject to certain
limitations, to file up to three "long-form" registration
statements under the Securities Act covering all or part of the
registrable securities, and, subject to certain limitations, to
file an unlimited number of "short-form" registration statements
under the Securities Act covering all or part of the registrable
securities. The Company is obligated to pay all registration
expenses (other than underwriting discounts and commissions and
subject to certain limitations) incurred in connection with the
demand registrations. In addition, the Registration Statement
provides Court Square with "piggyback" registration rights,
subject to certain limitations, whenever the Company files a
registration statement on a registration form that can be used to
register registrable securities.
DIRECTOR AND OFFICER AND TEN PERCENT STOCKHOLDER SECURITIES
REPORTS
Federal securities laws require the Company's directors and
officers, and persons who own more than ten percent of the
Company's Common Stock, to file with the Securities and
Commission, the New York Stock Exchange and the Secretary of the
Company initial reports of ownership and reports of changes in
ownership of the Common Stock of the Company.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports are required, during 1998,
all of the Company's officers, directors and greater-than-ten-
percent beneficial owners made all required filings, except the
filing of a Form 4 for Mr. Lucas which was not filed on a timely
basis.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be presented at the next Annual
Meeting of Stockholders must be received by the Secretary of the
Company by December 15, 1999 to be considered for inclusion in
the Company's Proxy Statement and form of proxy relating to that
meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
does not know of any business to come before the Annual Meeting
other than the matter described in the notice. If other business
is properly presented for consideration at the Annual Meeting,
the enclosed Proxy authorizes the persons named therein to vote
the shares in their discretion.
EXHIBIT A
STAGE STORES, INC.
AMENDED AND RESTATED 1996 EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the Stage Stores, Inc. Amended
and Restated 1996 Equity Incentive Plan (the "Plan") is to
advance the interests of Stage Stores, Inc., a Delaware
corporation (the "Company"), and its stockholders by providing
incentives to certain key employees of the Company and its
subsidiaries who contribute significantly to the strategic and
long-term performance objectives and growth of the Company.
2. Administration. The Plan shall be administered solely
by the Board of Directors (the "Board") or the Compensation
Committee (the "Committee") of the Board, which Committee shall
be comprised solely of two or more Outside Directors who shall
administer the Plan. The term "Outside Director" shall mean a
director who, within the meaning of Treasury Department
regulation 1.162-27(e)(3), (1) is not a current employee of the
Company, (2) is not a former employee of the Company who receives
compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year with
respect to which the director's status is being determined, (3)
has not been an officer of the Company or (4) does not receive
remuneration from the Company, either directly or indirectly, in
any capacity other than as a director. References to the
Committee hereunder shall include the Board where appropriate.
The membership of the Committee or such successor committee shall
be constituted so as to comply at all times with the applicable
requirements of Rule 16b-3. No member of the Committee shall
have within one year prior to his appointment received awards
under the Plan ("Awards") or under any other plan, program or
arrangement of the Company or any of its affiliates if such
receipt would cause such member to cease to be a "disinterested
person" under Rule 16b-3; provided that if at any time (i) Rule
16b-3 so permits without adversely affecting the ability of the
Plan to comply with the conditions for exemption from Section 16
of the Exchange Act (or any successor provision) provided by Rule
16b-3 and (ii) Treasury Department regulation 1.162-27 so
permits without adversely affecting the ability of Awards under
the Plan to qualify as "performance-based" within the meaning of
such regulation, one or more members of the Committee may cease
to be a "disinterested person." For purposes of the remainder of
the Plan, reference to the "Committee" shall include the Board to
the extent that the Board has not designated a committee to
administer the Plan.
The Committee has all the powers vested in it by the terms of
the Plan set forth herein, such powers to include exclusive authority
(except as may be delegated as permitted herein) to select the key
employees and other key individuals to be granted Awards under the
Plan, to determine the type, size and terms of the Award to be made
to each individual selected, to modify the terms of any Award that
has been granted, to determine the time when Awards will be granted,
to establish performance objectives, to make any adjustments necessary
or desirable as a result of the granting of Awards to eligible
individuals located outside the United States and to prescribe the
form of the instruments embodying Awards made under the Plan.
The Committee is authorized to interpret the Plan and the Awards
granted under the Plan, to establish, amend and rescind any rules
and regulations relating to the Plan, and to make any other
determinations which it deems necessary or desirable for the
administration of the Plan. The Committee (or its delegate as
permitted herein) may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award in the manner
and to the extent the Committee deems necessary or desirable to carry
it into effect. Any decision of the Committee (or its delegate as
permitted herein) in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all
parties concerned. The Committee may act only by a majority of
its members in office, except that the members thereof may
authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other
ministerial action on behalf of the Committee with respect to
Awards made or to be made to Plan participants. No member of the
Committee and no officer of the Company shall be liable for
anything done or omitted to be done by him, by any other member
of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for his own
willful misconduct or as expressly provided by statute.
Determinations to be made by the Committee under the Plan may be
made by its delegates.
3. Participation. Consistent with the purposes of the
Plan, the Committee shall have exclusive power (except as may be
delegated as permitted herein) to select the key employees of the
Company and its subsidiaries who may participate in the Plan and
be granted Awards under the Plan. Eligible individuals may be
selected individually or by groups or categories, as determined
by the Committee in its discretion.
4. Awards under the Plan.
(a) Types of Awards. Awards under the Plan may
include, but need not be limited to, one or more of the
following types, either alone or in any combination thereof:
(i) "Stock Options," (ii) "Stock Appreciation Rights," or
(iii) "Restricted Stock" (including, but not limited to,
Awards of, or options or similar rights granted with respect
to, unbundled stock units or components thereof, and Awards
made to participants who are foreign nationals or are
employed or performing services outside the United States).
Stock Options, which include "Nonqualified Stock Options"
and "Incentive Stock Options" or combinations thereof, are
rights to purchase common shares of the Company having a par
value of $.01 per share and stock of any other class into
which such shares may thereafter be changed (the "Common
Shares"). Nonqualified Stock Options and Incentive Stock
Options are subject to the terms, conditions and
restrictions specified in Paragraph 5. Stock Appreciation
Rights are rights to receive (without payment
to the Company) cash, Common Shares, other Company securities
(which may include, but need not be limited to, unbundled stock
units or components thereof, debentures, preferred stock, warrants,
securities convertible into Common Shares or other property ("Other
Company Securities")) or property, or other forms of payment, or any
combination thereof, as determined by the Committee, based on the
increase in the value of the number of Common Shares specified in
the Stock Appreciation Right. Stock Appreciation Rights are subject
to the terms, conditions and restrictions specified in
Paragraph 6. Shares of Restricted Stock are Common Shares
which are issued subject to certain restrictions pursuant to
Paragraph 7.
(b) Maximum Number of Shares that May be Issued.
There may be issued under the Plan (as Restricted Stock,
pursuant to the exercise of Stock Options or Stock
Appreciation Rights, or in payment of or pursuant to the
exercise of such other Awards as the Committee, in its
discretion, may determine) an aggregate of not more than
3,500,000 Common Shares, subject to adjustment as provided
in Paragraph 13. Irrespective of the aggregate number of
shares authorized herein, each participant in the Plan shall
be entitled to receive grants of Stock Options and Stock
Appreciation Rights with respect to no more than 400,000
Common Shares in any calendar year. Common Shares issued
pursuant to the Plan may be either authorized but unissued
shares, treasury shares, reacquired shares, or any
combination thereof. If any Common Shares issued as
Restricted Stock or otherwise subject to repurchase or
forfeiture rights are reacquired by the Company pursuant to
such rights, or if any Award is cancelled, terminates or
expires unexercised, any Common Shares that would otherwise
have been issuable pursuant thereto will be available for
issuance under new Awards.
(c) Rights with respect to Common Shares and Other
Securities.
(i) Unless otherwise determined by the Committee
in its discretion, a participant to whom an Award of
Restricted Stock has been made (and any person
succeeding to such participant's rights in accordance
with the Plan) shall have, after issuance of a
certificate for the number of Common Shares awarded and
prior to the expiration of the Restricted Period (as
hereinafter defined) or the earlier repurchase of such
Common Shares as herein provided, ownership of such
Common Shares, including the right to vote the same and
to receive dividends or other distributions made or
paid with respect to such Common Shares (provided that
such Common Shares, and any new, additional or
different shares, or Other Company Securities or
property, or other forms of consideration which the
participant may be entitled to receive with respect to
such Common Shares as a result of a stock split, stock
dividend or any other change in the corporation or
capital structure of the Company, shall be subject to
the restrictions hereinafter described as determined by
the Committee in its discretion), subject, however, to
the options, restrictions and limitations imposed
thereon pursuant to the Plan. Notwithstanding the
foregoing, a participant with whom an Award agreement
is made to issue Common Shares in the future, shall
have no rights as a stockholder with respect to Common
Shares related to such agreement until issuance of a
certificate to him.
(ii) Unless otherwise determined by the Committee
in its discretion, a participant to whom a grant of
Stock Options or Stock Appreciation Rights is made (and
any person succeeding to such a participant's rights
pursuant to the Plan) shall have no rights as a
stockholder with respect to any Common Shares or as a
holder with respect to other securities, if any,
issuable pursuant to any such Award until the date of
the issuance of a stock certificate to him for such
Common Shares or other instrument of ownership, if any.
Except as provided in Paragraph 13, no adjustment shall
be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in
cash, securities, other property or other forms of
consideration, or any combination thereof) for which
the record date is prior to the date such stock
certificate or other instrument of ownership, if any,
is issued.
(iii) Any participant who is directly or
indirectly the beneficial owner of more than 10 per
centum of any class of any equity security which is
registered pursuant to Section 12 of the Exchange Act,
or who is an officer of the Company, shall hold his
Restricted Stock, if any, for at least six months from
the date of grant and any other Award received by him
for at least six months from the date of acquisition of
the Award before disposition of the Award or its
underlying Common Stock.
(d) Vesting. Rights acquired pursuant to an Award may
be subject to vesting as determined by the Committee in its
sole discretion.
(e) Frequency of Grants. The Committee in its
discretion, shall set the frequency of grants.
(f) Securities and Tax Law Compliance.
(i) Unless otherwise determined by the Committee
in its discretion, no Awards shall be granted unless
counsel for the Company shall be satisfied that such
issuance will qualify as performance-based compensation
for purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended, or any successor statutory
provision thereto (the "Code") and that such issuance
will be in compliance with the Code and regulations
issued thereunder.
(ii) No Common Shares, Other Company Securities
or property, other securities or property, or other
forms of payment shall be issued hereunder with respect
to any Award unless counsel for the Company shall be
satisfied that such issuance will be in compliance with
applicable federal, state, local and foreign legal,
securities exchange and other applicable requirements.
5. Stock Options. The Committee may grant or sell Stock
Options either alone, or in conjunction with Stock Appreciation
Rights, either at the time of grant or by amendment thereafter;
provided that an Incentive Stock Option may be granted only to an
eligible employee of the Company or any parent or subsidiary
corporation. Each Stock Option (referred to herein as an
"Option") granted or sold under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with
the following terms and conditions, and with such other terms and
conditions, including, but not limited to, restrictions upon the
Option or the Common Shares issuable upon exercise thereof, as
the Committee, in its discretion, shall establish:
(a) The option price shall be at least the fair market
value of the Common Shares subject to such Option at the
time the Option is granted.
(b) The Committee shall determine the number of Common
Shares to be subject to each Option. The number of Common
Shares subject to an outstanding Option may be reduced on a
share-for-share or other appropriate basis, as determined by
the Committee, to the extent that Common Shares under such
Option are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment,
or any combination thereof, received pursuant to exercise of
a Stock Appreciation Right attached to such Option.
(c) Unless the Committee determines otherwise, the
Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the
laws of descent and distribution, and shall be exercisable
during the grantee's lifetime only by him. Unless the
Committee determines otherwise, the Option shall not be
exercisable for at least six months after the date of grant,
unless the grantee ceases employment before the expiration
of such six-month period by reason of his disability as
defined in Paragraph 11 or his death.
(d) The Option shall not be exercisable:
(i) after the tenth anniversary of the date it is
granted. Any Option may be exercised during such
period only as set forth under Paragraph 4(d) or at
such time or times and in such installments as the
Committee may establish in its grant of the Option;
(ii) unless payment in full is made for the
shares being acquired thereunder at the time of
exercise; such payment shall be made in such form
(including, but not limited to, cash, Common Shares
held for at least six months, or a combination thereof)
as the Committee may determine in its discretion; and
(iii) unless the person exercising the Option has
been, at all times during the period beginning with the
date of the grant of the Option and ending on the date
of such exercise, employed by the Company, or a parent
or subsidiary of the Company, or a corporation
substituting or assuming the Option in a transaction to
which Section 424(a) of the Code, is applicable, except
that:
(A) if such person shall cease such
employment by reason of his disability as defined
in Paragraph 11 or early, normal or deferred
retirement under an approved retirement program of
the Company (or such other plan or arrangement as
may be approved by the Committee, in its
discretion, for this purpose) while holding an
Option which has not expired and has not been
fully exercised, such person, at any time within
one year (or such period determined by the
Committee) after the date he ceased such
employment (but in no event after the Option has
expired), may exercise the Option with respect to
any shares as to which he could have exercised the
Option on the date he ceased such employment or
with respect to such greater number of shares as
determined by the Committee; or
(B) if any person to whom an Option has been
granted shall die holding an Option which has not
expired and has not been fully exercised, his
executors, administrators, heirs or distributees,
as the case may be, may, at any time within one
year (or such other period determined by the
Committee) after the date of death (but in no
event after the Option has expired), exercise the
Option with respect to any shares as to which the
decedent could have exercised the Option at the
time of his death, or with respect to such greater
number of shares as determined by the Committee;
or
(C) if such person shall cease employment
with the Company while holding an Option which has
not expired and has not been fully exercised, the
Committee may determine to allow such person at
any time within the one year (or three months in
the case of an Incentive Stock Option) or such
other period determined by the Committee after the
date he ceased such employment (but in no event
after the Option has expired), to exercise the
Option with respect to any shares as to which he
could have exercised the Option on the date he
ceased such employment or with respect to such
greater number of shares as determined by the
Committee.
(e) In the case of an Incentive Stock Option, the
amount of the aggregate fair market value of Common Shares
(determined at the time of grant of the Option pursuant to
subparagraph 5(a) of the Plan) with respect to which
incentive stock options are exercisable for the first time
by an employee during any calendar year (under all such
plans of his employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000.
(f) It is the intent of the Company that Nonqualified
Stock Options granted under the Plan not be classified as
Incentive Stock Options, that the Incentive Stock Options
granted under the Plan be consistent with and contain or be
deemed to contain all provisions required under Section 422
(and the other appropriate provisions) of the Code and any
implementing regulations (and any successor provisions
thereof), and that any ambiguities in construction shall be
interpreted in order to effectuate such intent.
6. Stock Appreciation Rights. The Committee may grant
Stock Appreciation Rights either alone, or in conjunction with
Stock Options, either at the time of grant or by amendment
thereafter. Each Award of Stock Appreciation Rights granted
under the Plan shall be evidenced by an instrument in such form
as the Committee shall prescribe from time to time in accordance
with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including,
but not limited to, restrictions upon the Award of Stock
Appreciation Rights or the Common Shares issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:
(a) The Stock Appreciation Right shall be granted with
a hurdle price equal to at least the fair market value of
the underlying Common Shares on the date of such grant.
(b) The Committee shall determine the number of Common
Shares to be subject to each Award of Stock Appreciation
Rights. The number of Common Shares subject to an
outstanding Award of Stock Appreciation Rights may be
reduced on a share-for-share or other appropriate basis, as
determined by the Committee, to the extent that Common
Shares under such Award of Stock Appreciation Rights are
used to calculate the cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of an
Option attached to such Award of Stock Appreciation Rights,
or to the extent that any other Award granted in conjunction
with such Award of Stock Appreciation Rights is paid.
(c) Unless the Committee determines otherwise, the
Award of Stock Appreciation Rights may not be sold,
assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and
distribution, and shall be exercisable during the grantee's
lifetime only by him. Unless the Committee determines
otherwise, the Award of Stock Appreciation Rights shall not
be exercisable for at least six months after the date of
grant, unless the grantee ceases employment or performance
of services before the expiration of such six-month period
by reason of his disability as defined in Paragraph 11 or
his death.
(d) The Award of Stock Appreciation Rights shall not
be exercisable:
(i) after the tenth anniversary of the date it is
granted. Any Award of Stock Appreciation Rights may be
exercised only as set forth under Paragraph 4(d) or at
such time or times and in such installments as the
Committee may establish;
(ii) in the case that the Award of Stock
Appreciation Rights is attached to an Option, unless
such Option is at the time exercisable; and
(iii) unless the person exercising the Award of
Stock Appreciation Rights has been, at all times during
the period beginning with the date of the grant thereof
and ending on the date of such exercise, employed by
the Company, except that:
(A) if such person shall cease such
employment or performance of services by reason of
his disability as defined in Paragraph 11 or
early, normal or deferred retirement under an
approved retirement program of the Company (or
such other plan or arrangement as may be approved
by the Committee, in its discretion, for this
purpose) while holding an Award of Stock
Appreciation Rights which has not expired and has
not been fully exercised, such person may, at any
time within three years (or such other period
determined by the Committee) after the date he
ceased such employment (but in no event after the
Award of Stock Appreciation Rights has expired),
exercise the Award of Stock Appreciation Rights
with respect to any shares as to which he could
have exercised the Award of Stock Appreciation
Rights on the date he ceased such employment or
with respect to such greater number of shares as
determined by the Committee; or
(B) if any person to whom an Award of Stock
Appreciation Rights has been granted shall die
holding an Award of Stock Appreciation Rights
which has not expired and has not been fully
exercised, his executors, administrators, heirs or
distributees, as the case may be, may at any time
within one year (or such other period determined
by the Committee) after the date of death (but in
no event after the Award of Stock Appreciation
Rights has expired), exercise the Award of Stock
Appreciation Rights with respect to any shares as
to which the decedent could have exercised the
Award of Stock Appreciation Rights at the time of
his death, or with respect to such greater number
of shares as determined by the Committee.
(e) An Award of Stock Appreciation Rights shall
entitle the holder (or any person entitled to act under the
provisions of subparagraph 6(d)(iii)(B) hereof) to exercise
such Award and surrender unexercised the Option, if any, to
which the Stock Appreciation Right is attached (or any
portion of such Option) to the Company and to receive from
the Company in exchange thereof, without payment to the
Company, that number of Common Shares having an aggregate
value equal to (or, in the discretion of the Committee, less
than) the excess of the fair market value of one share at
the time of such exercise, over the exercise price (or
Option Price, as the case may be), times the number of
shares subject to the Award or the Option, or portion
thereof, which is so exercised or surrendered, as the case
may be. The Committee shall be entitled in its discretion
to elect to settle the obligation arising out of the
exercise of a Stock Appreciation Right by the payment of
cash or Other Company Securities or property, or other forms
of payment, or any combination thereof, as determined by the
Committee, equal to the aggregate value of the Common Shares
it would otherwise be obligated to deliver. Any such
election by the Committee shall be made as soon as
practicable after the receipt by the Committee of written
notice of the exercise of the Stock Appreciation Right. The
value of a Common Share, Other Company Securities or
property, or other forms of payment determined by the
Committee for this purpose shall be the fair market value
thereof on the last business day next preceding the date of
the election to exercise the Stock Appreciation Right,
unless the Committee, in its discretion, determines
otherwise.
(f) A Stock Appreciation Right may provide that it
shall be deemed to have been exercised at the close of
business on the business day preceding the expiration date
of the Stock Appreciation Right or of the related Option, or
such other date as specified by the Committee, if at such
time such Stock Appreciation Right has a positive value.
Such deemed exercise shall be settled or paid in the same
manner as a regular exercise thereof as provided in
subparagraph 6(e) hereof.
(g) No fractional shares may be delivered under this
Paragraph 6, but in lieu thereof a cash or other adjustment
shall be made as determined by the Committee in its
discretion.
7. Restricted Stock. Each Award of Restricted Stock under
the Plan shall be evidenced by an instrument in such form as the
Committee shall prescribe from time to time in accordance with
the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions as the
Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of Common
Shares to be issued to a participant pursuant to the Award,
and the extent, if any, to which they shall be issued in
exchange for cash, other consideration, or both.
(b) Restricted Stock awarded to a participant in
accordance with the Award shall be subject to the following
restrictions until the expiration of such period as the
Committee shall determine, from the date on which the Award
is granted (the "Restricted Period"): (i) a participant to
whom an award of Restricted Stock is made may, at the
discretion of the Committee, be issued, but shall not be
entitled to, a stock certificate, (ii) the Restricted Stock
shall not be transferable prior to the end of the Restricted
Period, (iii) the Restricted Stock shall be forfeited and
the stock certificate, if issued, shall be returned to the
Company and all rights of the holder of such Restricted
Stock to such shares and as a shareholder shall terminate
without further obligation on the part of the Company if the
participant's continuous employment or performance of
services for the Company shall terminate for any reason
prior to the end of the Restricted Period, except as
otherwise provided in subparagraph 7(c), and (iv) such other
restrictions as determined by the Committee in its
discretion.
(c) if a participant who has been in continuous
employment with the Company since the date on which a
Restricted Stock Award was granted to him shall, while in
such employment, die, or terminate such employment by reason
of disability as defined in Paragraph 11 or by reason of
early, normal or deferred retirement under an approved
retirement program of the Company (or such other plan or
arrangement as may be approved by the Committee in its
discretion, for this purpose) and any of such events shall
occur after the date on which the Award was granted to him
and prior to the end of the Restricted Period of such Award,
the Committee may determine to cancel any and all
restrictions on any or all of the Common Shares subject to
such Award.
8. Deferral of Compensation. The Committee shall determine
whether or not an Award shall be made in conjunction with
deferral of the participant's salary, bonus or other
compensation, or any combination thereof, and whether or not such
deferred amounts may be:
(a) forfeited to the Company or to other participants
or any combination thereof, under certain circumstances
(which may include, but need not be limited to, certain
types of termination of employment with the Company),
(b) subject to increase or decrease in value based
upon the attainment of or failure to attain, respectively,
certain performance measures and/or,
(c) credited with income equivalents (which may
include, but need not be limited to, interest, dividends or
other rates of return) until the date or dates of payment of
the Award, if any.
9. Deferred Payment of Awards. The Committee may specify
that the payment of all or any portion of cash, Common Shares,
Other Company Securities or property, or any other form of
payment, or any combination thereof, under an Award shall be
deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as
the Committee shall determine in its discretion. Deferred
payments of Awards may be made by undertaking to make payment in
the future based upon the performance of certain investment
equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property
or consideration, or any combination thereof), together with such
additional amounts of income equivalents (which may be compounded
and may include, but need not be limited to, interest, dividends
or other rates of return or any combination thereof) as may
accrue thereon until the date or dates of payment, such
investment equivalents and such additional amounts of income
equivalents to be determined by the Committee in its discretion.
10. Amendment or Substitution of Awards under the Plan.
The terms of any outstanding Award under the Plan may be amended
from time to time by the Committee in its discretion in any
manner that it deems appropriate (including, but not limited to,
acceleration of the date of exercise of any Award and/or payments
thereunder); provided that no such amendment shall adversely
affect in a material manner any right of a participant under the
Award without his written consent, unless the Committee
determines in its discretion that there have occurred or are
about to occur significant changes in the participant's position,
duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit
conditions which are determined by the Committee in its
discretion to have or to be expected to have a substantial effect
on the performance of the Company, or any subsidiary, affiliate,
division or department thereof, on the Plan or on any Award under
the Plan. The Committee may, in its discretion, permit holders
of Awards under the Plan to surrender outstanding Awards in order
to exercise or realize the rights under other Awards, or in
exchange for the grant of new Awards, or require holders of
Awards to surrender outstanding Awards as a condition precedent
to the grant of new Awards under the Plan.
11. Disability. For the purposes of this Plan, a
participant shall be deemed to have terminated his employment by
the Company and its Affiliates by reason of disability, if the
Committee shall determine that the physical or mental condition
of the participant by reason of which such employment terminated
was such at that time as would entitle him to payment of monthly
disability benefits under any Company disability plan. If the
participant is not eligible for benefits under any disability
plan of the Company, he shall be deemed to have terminated such
employment by reason of disability if the Committee shall
determine that his physical or mental condition would entitle him
to benefits under any Company disability plan if he were eligible
therefor.
12. Termination of a Participant. For all purposes under
the Plan, the Committee shall determine whether a participant has
terminated employment with the Company.
13. Dilution and Other Adjustments. In the event of any
change in the outstanding Common Shares of the Company by reason
of any stock split, dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the
Company of all of its assets, any distribution to stockholders
other than a normal cash dividend, or other extraordinary or
unusual event, if the Committee shall determine, in its
discretion, that such change equitably requires an adjustment in
the terms of any Award or the number of Common Shares available
for Awards, such adjustment may be made by the Committee and
shall be final, conclusive and binding for all purposes of the
Plan.
In the event of the proposed dissolution or liquidation of
the Company, all outstanding Awards shall terminate immediately
prior to the consummation of such proposed action, unless
otherwise provided by the Committee. In the event of a proposed
sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, all
restrictions on any outstanding Awards shall lapse and
participants shall be entitled to the full benefit of all such
Awards immediately prior to the closing date of such sale or
merger, unless otherwise provided by the Committee.
14. Designation of Beneficiary by Participant. A
participant may name a beneficiary to receive any payment to
which he may be entitled in respect of any Award under the Plan
in the event of his death, on a written form to be provided by
and filed with the Committee, and in a manner determined by the
Committee in its discretion. The Committee reserves the right to
review and approve beneficiary designations. A participant may
change his beneficiary from time to time in the same manner,
unless such participant has made an irrevocable designation. Any
designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling
over any other disposition, testamentary or otherwise, as
determined by the Committee in its discretion. If no designated
beneficiary survives the participant and is living on the date on
which any amount becomes payable to such a participant's
beneficiary, such payment will be made to the legal
representatives of the participant's estate, and the term
"beneficiary" as used in the Plan shall be deemed to include such
person or persons. If there are any questions as to the legal
right of any beneficiary to receive a distribution under the
Plan, the Committee in its discretion may determine that the
amount in question be paid to the legal representatives of the
estate of the participant, in which event the Company, the Board
and the Committee and the members thereof, will have no further
liability to anyone with respect to such amount.
15. Financial Assistance. If the Committee determines that
such action is advisable, the Company may assist any person to
whom an Award has been granted in obtaining financing from the
Company (or under any program of the Company approved pursuant to
applicable law), or from a bank or other third party, on such
terms as are determined by the Committee, and in such amount as
is required to accomplish the purposes of the Plan, including,
but not limited to, to permit the exercise of an Award, the
participation therein, and/or the payment of any taxes in respect
thereof. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan
from the Company, a guarantee of the obligation by the Company,
or the maintenance by the Company of deposits with such bank or
third party.
16. Miscellaneous Provisions.
(a) No employee or other person shall have any claim
or right to be granted an Award under the Plan.
Determinations made by the Committee under the Plan need not
be uniform and may be made selectively among eligible
individuals under the plan, whether or not such eligible
individuals are similarly situated. Neither the Plan nor
any action taken hereunder shall be construed as giving any
employee any right to continue to be employed by the
Company, and the right to terminate the employment of any
participants at any time and for any reason is specifically
reserved.
(b) No participant or other person shall have any
right with respect to the Plan, the Common Shares reserved
for issuance under the Plan or in any Award, contingent or
otherwise, until written evidence of the Award shall have
been delivered to the recipient and all the terms,
conditions and provisions of the Plan and the Award
applicable to such recipient (and each person claiming under
or through him) have been met.
(c) Except as may be approved by the Committee where
such approval shall not adversely affect compliance of the
Plan with Rule 16b-3 under the Exchange Act, a participant's
rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part
either directly or by operation of law or otherwise (except
in the event of a participant's death) including, but not by
way of limitation, execution, levy, garnishment, attachment,
pledge, bankruptcy or in any other manner; provided,
however, that any Option or similar right (including, but
not limited to, a Stock Appreciation Right) offered pursuant
to the Plan shall be transferable by will or the laws of
descent and distribution but shall be exercisable during the
participant's lifetime only by him.
(d) It is the intent of the Company that the Plan
comply in all respects with Rule 16b-3 under the Exchange
Act, that any ambiguities or inconsistencies in construction
of the Plan be interpreted to give effect to such intention
and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed
null and void to the extent required to permit the Plan to
comply with Rule 16b-3.
(e) The Company shall have the right to deduct from
any payment made under the Plan any federal, state, local or
foreign income or other taxes required by law to be withheld
with respect to such payment. It shall be a condition to
the obligation of the Company to issue Common Shares, Other
Company Securities or property, other securities or
property, or other forms of payment, or any combination
thereof, upon exercise, settlement or payment of any Award
under the Plan, that the participant (or any beneficiary or
person entitled to act) pay to the Company, upon its demand,
such amount as may be required by the Company for the
purpose of satisfying any liability to withhold federal,
state, local or foreign income or other taxes. If the
amount requested is not paid, the Company may refuse to
issue Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or
any combination thereof. Notwithstanding anything in the
Plan to the contrary, the Committee may, in its discretion,
permit an eligible participant (or any beneficiary or person
entitled to act) to elect to pay a portion or all of the
amount requested by the Company for such taxes with respect
to such Award, at such time and in such manner as the
Committee shall deem to be appropriate (including, but not
limited to, by authorizing the Company to withhold, or
agreeing to surrender to the Company on or about the date
such tax liability is determinable, Common Shares, Other
Company Securities or property, other securities or
property, or other forms of payment, or any combination
thereof, owned by such person or a portion of such forms of
payment that would otherwise be distributed, or have been
distributed, as the case may be, pursuant to such Award to
such person, having a fair market value equal to the amount
of such taxes).
(f) The expenses of the Plan shall be borne by the
Company.
(g) The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to
make any other segregation of assets to assure the payment
of any Award under the Plan, and rights to the payment of
Awards shall be no greater than the rights of the Company's
general creditors.
(h) By accepting any Award or other benefit under the
Plan, each participant and each person claiming under or
through him shall be conclusively deemed to have indicated
his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the
Committee or its delegates.
(i) Fair market value in relation to Common Shares,
Other Company Securities or property, other securities or
property or other forms of payment of Awards under the Plan,
or any combination thereof, as of any specific time shall
mean such value as determined by the Committee in accordance
with applicable law.
(j) The masculine pronoun includes the feminine and
the singular includes the plural wherever appropriate.
(k) The appropriate officers of the Company shall
cause to be filed any reports, returns or other information
regarding Awards hereunder of any Common Shares issued
pursuant hereto as may be required by Section 13 or 15(d) of
the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
(l) The validity, construction, interpretation,
administration and effect of the Plan, and of its rules and
regulations, and rights relating to the Plan and to Awards
granted under the Plan, shall be governed by the substantive
laws, but not the choice of law rules, of the State of
Delaware.
17. Plan Amendment or Suspension. The Plan may be amended
or suspended in whole or in part at any time from time to time by
the Board, but no amendment shall be effective unless and until
the same is approved by stockholders of the Company where the
failure to obtain such approval would adversely affect the
compliance of the Plan with Rule 16b-3 under the Exchange Act and
with other applicable law. No amendment of the Plan shall
adversely affect in a material manner any right of any
participant with respect to any Award theretofore granted without
such participant's written consent, except as permitted under
Paragraph 10.
18. Plan Termination. This Plan shall terminate upon the
earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board
terminating the Plan; or
(b) ten years from the date the Plan as amended is approved and
adopted by the stockholders of the Company in accordance with
Paragraph 19 hereof; provided, however, that the Board may, prior
to the expiration of such ten-year period, extend the term of the
Plan for an additional period of up to five years for the grant
of Awards other than Incentive Stock Options. No termination of
the Plan shall materially alter or impair any of the rights or
obligations of any person, without his consent, under any Award
theretofore granted under the Plan, except that subsequent to
termination of the Plan, the Committee may make amendments
permitted under Paragraph 17.
19. Stockholder Adoption. The Plan was approved by the
Board of Directors on March 5, 1999 and stockholders of the
Company on May 13, 1999.
STAGE STORES, Inc.
Proxy for Annual Meeting of Shareholders
May 13, 1999
This Proxy is Solicited on Behalf of Stage Stores, Inc.'s Board
of Directors
P The undersigned hereby appoints Carl E. Tooker and
James A. Marcum, and each of them, as proxies for the
R undersigned with full power of substitution to vote all
share of Stage Stores, Inc.'s Common Stock which the
O undersigned may be entitled to vote at the Annual Meeting of
Shareholders of Stage Stores, Inc., Houston, Texas on
X Thursday, May 13, 1999 at 10:00 A.M., or at any adjournment
thereof, upon the matters set forth on the reverse side and
Y described in the accompanying Proxy Statement and upon such
other business as may properly come before the meeting or
any adjournment thereof.
Please mark this proxy as indicated on the reverse side
to vote on any item. If you wish to vote in accordance with
the Board of Director's recommendations, please sign the
reverse side, no boxes need to be checked.
COMMENTS/ADDRESS CHANGE:
Please mark comments/address box on the reverse side
(Continued and to be signed on other side)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR Please [X]
ITEMS 1,2 and 3 mark your
votes as
indicated
in this
example
WITHHELD
FOR FOR ALL
ITEM 1 - ELECTION OF DIRECTORS [ ] [ ]
Carl Tooker, Jack Bush, Harold Compton,
Robert Huth, Richard Jolosky,
James Marcum, David Thomas, John Wiesner
WITHHELD FOR (Write the nominee's name in
the space provided)
_________________________________________________________________
FOR AGAINST ABSTAIN
ITEM 2 - Ratification of the appointment [ ] [ ] [ ]
of PricewaterhouseCoopers LLP as the
company's auditors for 1999.
Item 3 - To approve the Amended and [ ] [ ] [ ]
Restated 1996 Equity Incentive Plan.
Item 4 - To transact such other business
as may properly come before the meeting.
I PLAN TO ATTEND THE MEETING [ ]
COMMENTS/ADDRESS CHANGE [ ]
PLEASE MARK THIS BOX IF YOU HAVE WRITTEN
COMMENTS/ADDRESS CHANGE ON THE REVERSE SIDE
RECEIPT IS HEREBY ACKNOWLEDGED OF THE STAGE [ ]
STORES, Inc. NOTICE OF MEETING AND PROXY
STATEMENT
Signature________________________
Signature________________________ Date__________
Note: Please sign as name appears hereon. Joint owners should
each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such.
