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<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REX STORES CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
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[Logo]
REX STORES CORPORATION
2875 NEEDMORE ROAD
DAYTON, OHIO 45414
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 4, 1998
The Annual Meeting of Shareholders of REX Stores Corporation will be held
at the Dayton Racquet Club, Kettering Tower, Dayton, Ohio on Thursday, June 4,
1998, at 2:00 p.m., for the following purposes:
1. Election of five members to the Board of Directors to serve until
the next Annual Meeting of Shareholders and until their respective
successors are elected and qualified.
2. Transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 17, 1998 will
be entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person.
By Order of the Board of Directors
EDWARD M. KRESS
EDWARD M. KRESS
Secretary
Dayton, Ohio
May 1, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK,
DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
<PAGE>
<PAGE>
REX STORES CORPORATION
2875 NEEDMORE ROAD
DAYTON, OHIO 45414
---------------------------------
PROXY STATEMENT
---------------------------------
MAILING DATE
MAY 1, 1998
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of REX Stores Corporation, a Delaware
corporation (the 'Company'), for use for the purposes set forth herein at its
Annual Meeting of Shareholders to be held on June 4, 1998 and any adjournments
thereof. All properly executed proxies will be voted as directed by the
shareholder on the proxy card. If no direction is given, proxies will be voted
in accordance with the Board of Directors' recommendations and, in the
discretion of the proxy holders, in the transaction of such other business as
may properly come before the Annual Meeting and any adjournments thereof. Any
proxy may be revoked by a shareholder by delivering written notice of revocation
to the Company or in person at the Annual Meeting at any time prior to the
voting thereof.
The Company has one class of stock outstanding, namely Common Stock, $.01
par value, of which there were 7,708,322 shares outstanding as of April 17,
1998. Only holders of Common Stock whose names appeared of record on the books
of the Company at the close of business on April 17, 1998 are entitled to notice
of and to vote at the Annual Meeting. Each shareholder is entitled to one vote
per share.
A majority of the outstanding shares of Common Stock will constitute a
quorum at the Annual Meeting. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum. Directors are
elected by a plurality of the votes cast by the holders of Common Stock at a
meeting at which a quorum is present. Abstentions and broker non-votes will not
be counted toward a nominee's achievement of a plurality and thus will have no
effect. A broker non-vote occurs when a broker submits a proxy that indicates
the broker does not have discretionary authority to vote the shares on a
particular matter.
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting to hold office until
the next Annual Meeting of Shareholders and until their successors are elected
and qualified. Unless otherwise directed, it is the intention of the persons
named in the accompanying proxy to vote each proxy for the election of the
nominees listed below. All nominees are presently directors of the Company.
Tibor Fabian, a member of the Board of Directors since 1984, died in
December 1997. The Board of Directors will miss the friendship, counsel and
insight that Dr. Fabian has given to the Company over
<PAGE>
<PAGE>
his years of service. As a result of Dr. Fabian's death, the size of the Board
was reduced from six to five members.
If at the time of the Annual Meeting any nominee is unable or declines to
serve, the proxy holders will vote for the election of such substitute nominee
as the Board of Directors may recommend. The Company and the Board of Directors
have no reason to believe that any substitute nominee will be required.
Set forth below is certain information with respect to the nominees for
director.
STUART ROSE, 43, has been the Chairman of the Board and Chief Executive
Officer of the Company since its incorporation in 1984 as a holding company to
succeed to the ownership of Rex Radio and Television, Inc. ('Rex Radio & TV'),
Kelly & Cohen Appliances, Inc. ('Kelly & Cohen') and Stereo Town, Inc. ('Stereo
Town'). Prior to 1984, Mr. Rose was Chairman of the Board and Chief Executive
Officer of Rex Radio & TV, which he founded in 1980 to acquire the stock of a
corporation which operated four retail stores.
LAWRENCE TOMCHIN, 70, has been the President and Chief Operating Officer of
the Company since 1990. From 1984 to 1990, he was the Executive Vice President
and Chief Operating Officer of the Company. Mr. Tomchin has been a director of
the Company since 1984. Mr. Tomchin was Vice President and General Manager of
the corporation which was acquired by Rex Radio & TV in 1980 and served as
Executive Vice President of Rex Radio & TV after the acquisition.
ROBERT DAVIDOFF, 71, has been a director of the Company since 1984. Mr.
Davidoff has been employed by Carl Marks & Co., Inc., an investment banking
firm, since 1950 and currently is Vice President in charge of corporate finance.
Mr. Davidoff is also a general partner of CMNY Capital, L.P., a limited
partnership and successor in interest through liquidation to CMNY Capital
Company, Inc., a small business investment company of which Mr. Davidoff was
Vice President. Mr. Davidoff is also a director of Sidari Corp., Hubco
Exploration, Inc., Paging Partners Corp., Marisa Christina, Inc. and Audio
Communications Network, Inc.
EDWARD KRESS, 48, has been the Secretary of the Company since 1984 and a
director of the Company since 1985. Mr. Kress has been a partner of the law firm
of Chernesky, Heyman & Kress P.L.L., counsel for the Company, since 1988. From
1985 to 1988, Mr. Kress was a member of the law firm of Smith & Schnacke. Mr.
Kress has practiced law in Dayton, Ohio since 1974.
LEE FISHER, 46, has been a director of the Company since 1996. Mr. Fisher
has been a partner of the law firm of Hahn Loeser & Parks LLP since 1995. Mr.
Fisher served as Ohio Attorney General from 1991 to 1995, State Senator, Ohio
General Assembly, from 1983 to 1991, and State Representative, Ohio General
Assembly, from 1981 to 1983. Mr. Fisher also practiced law with Hahn Loeser &
Parks from 1978 to 1991.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors has three standing committees: the Executive
Committee, the Audit Committee and the Compensation Committee. The Board has no
nominating committee.
The Executive Committee (of which Messrs. Rose and Tomchin are members) is
empowered to exercise all the powers and authority of the Board of Directors
between meetings of the Board, other than the power to fill vacancies on the
Board or on any Board committee and the power to declare dividends.
2
<PAGE>
<PAGE>
The Audit Committee (of which Mr. Davidoff is a member) meets with Company
personnel and with representatives of the Company's independent public
accountants to review internal auditing procedures and matters relating to the
annual audit of the Company's financial statements. The committee also annually
recommends to the Board of Directors the appointment of independent public
accountants.
The Compensation Committee (of which Mr. Davidoff is a member) establishes
the Company's executive compensation policies and administers the Company's
stock option plans. See 'Compensation Committee Report on Executive
Compensation.'
The Executive Committee did not meet but took action by unanimous written
consent six times during the fiscal year ended January 31, 1998. The Audit
Committee met once during the fiscal year ended January 31, 1998. The
Compensation Committee met once and took action by unanimous written consent
three times during the fiscal year ended January 31, 1998.
The Board of Directors held one meeting and took action by unanimous
written consent once during the fiscal year ended January 31, 1998. Each
incumbent director attended all meetings of the Board of Directors and Board
Committees on which he served.
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Company may receive a
fee of up to $1,000 plus reasonable expenses for each meeting of the Board
attended.
Nonemployee directors are eligible to receive grants of stock options under
the Company's 1995 Omnibus Stock Incentive Plan. Under the Plan, on the date of
each annual meeting of the Company's shareholders, each nonemployee director is
awarded a nonqualified stock option to purchase a number of shares of Common
Stock such that the exercise price of the option multiplied by the number of
shares subject to the option is as near as possible to $100,000, but in no event
more than 10,000 shares. The exercise price of each nonqualified option is the
fair market value of the Common Stock on the date of grant. The options are
exercisable in five equal annual installments commencing on the first
anniversary of the date of grant and expire ten years from the date of grant.
For fiscal 1998, each nonemployee director was granted an option to purchase
9,638 shares at an exercise price of $10.375 per share.
3
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation awarded to, earned by or
paid to the Chief Executive Officer, and to each of the other executive officers
of the Company whose total annual salary and bonus exceeded $100,000, for
services rendered in all capacities to the Company and its subsidiaries for each
of the last three fiscal years ended January 31.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
NAME AND ----------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS(#) COMPENSATION ($)(1)
- --------------------------------------------- ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Stuart Rose ................................. 1998 154,500 298,000 20,000 0
Chairman of the Board and Chief Executive 1997 154,500 284,600 5,961 0
Officer 1996 154,500 544,000 456,552 0
Lawrence Tomchin ............................ 1998 154,500 139,350 20,000 0
President and Chief Operating Officer 1997 154,500 133,050 6,557 0
1996 154,500 254,500 157,207 0
Douglas Bruggeman ........................... 1998 98,400 15,400 57,207 200
Vice President -- Finance and Treasurer 1997 96,800 14,700 15,000 200
1996 91,067 27,900 12,207 200
</TABLE>
- ------------
(1) Amounts in this column represent employer matching contributions on behalf
of the named executive under the Company's Profit Sharing Plan.
EMPLOYMENT AGREEMENTS
Stuart Rose and Lawrence Tomchin have entered into Employment Agreements
with Rex Radio & TV. The Agreements provide that Mr. Rose and Mr. Tomchin are
each entitled to an annual salary of $154,500, a cash bonus at the discretion of
the Board of Directors, participation in all employee benefit plans and
reimbursement for business expenses. Each Agreement is for a term of three years
commencing January 1, 1997 and is automatically renewed for additional one-year
terms until Mr. Rose's or Mr. Tomchin's resignation, death, total disability or
termination of employment for cause, unless earlier terminated by either party
upon 180 days written notice.
4
<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
stock options made to the named executive officers during the fiscal year ended
January 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------------------------- ----------- -------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stuart Rose............................. 20,000(2) 7.9 10.375 6/6/07 130,496 330,702
Lawrence Tomchin........................ 9,500(1) 10.375 6/6/07 61,985 157,083
10,500(2) 7.9 10.375 6/6/07 68,510 173,618
Douglas Bruggeman....................... 9,500(1) 10.375 6/6/07 61,985 157,083
10,500(2) 7.9 10.375 6/6/07 68,510 173,618
5,000(3) 8.125 5/6/02 11,654 25,895
10,000(3) 8.125 5/6/06 45,842 113,533
5,000(3) 8.125 7/6/01 9,578 20,835
7,207(3) 8.125 7/6/05 29,401 71,145
5,000(3) 8.125 4/5/00 6,599 13,897
5,000(3) 10.3 8.125 6/24/99 4,911 10,168
</TABLE>
- ------------
(1) Incentive stock options granted pursuant to the Company's 1995 Omnibus Stock
Incentive Plan (the 'Omnibus Plan'). These options become exercisable in
five cumulative installments of 20% on each anniversary of the date of
grant. The date of grant was June 6, 1997.
(2) Nonqualified options granted pursuant to the Omnibus Plan. These options
become exercisable in five cumulative installments of 20% on each
anniversary of the date of grant. The date of grant was June 6, 1997.
(3) Options repriced during fiscal 1998. Percent of total reflects percent of
total options repriced. These options become exercisable in five cumulative
installments of 20% on each anniversary of the date of original grant. The
original grant dates were May 6, 1996, May 6, 1996, July 6, 1995, July 6,
1995, April 5, 1994 and June 24, 1993, respectively. See 'Report on
Repricing of Options.'
5
<PAGE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning each exercise of
stock options during fiscal 1998 by each of the named executive officers and the
fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
SHARES (#) FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stuart Rose........................ 13,223 23,967 761,069 333,707 2,025,000 0
Lawrence Tomchin................... 15,685 60,779 439,950 133,927 1,478,805 0
Douglas Bruggeman.................. 5,000 19,375 19,883 42,324 46,016 44,648
</TABLE>
- ------------
(1) Unexercised options were in-the-money if the fair market value of the
underlying shares exceeded the exercise price of the option at January 31,
1998.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that might incorporate this Proxy Statement, in whole or in part, the following
report and the Performance Graph shall not be incorporated by reference into any
such filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was comprised during
fiscal 1998 of Robert Davidoff, and Tibor Fabian until his death, both outside
directors of the Company. This Committee establishes policies relating to
compensation of executive officers of the Company and administers the Company's
1995 Omnibus Stock Incentive Plan (the 'Omnibus Plan').
EXECUTIVE COMPENSATION POLICIES
The goal of the Company's executive compensation policy is to ensure that
an appropriate relationship exists between executive pay and the creation of
shareholder value, while at the same time motivating and retaining key
employees. To achieve this goal, the Company's executive compensation policies
integrate base salary with annual bonuses based upon corporate and individual
performance, supplemented with long-term equity-based incentive awards.
Base salary is intended to be set at a level below the base salaries paid
to executives of similarly-sized companies within the industry and the peer
group. Salaries for executive officers are reviewed by the Committee on an
annual basis, subject to the terms of any existing employment agreements.
Annual bonuses are intended to comprise a substantial portion of each
senior executive officer's annual cash compensation and are based upon corporate
financial performance. For fiscal 1998, the Committee established the amount of
the Company's pre-tax earnings as a percentage of net sales (the 'Pre-Tax
Earnings Percentage') as the performance measure for determining senior
executives' bonuses. Annual bonuses for the executive officers other than senior
executives are established by the Chief Executive Officer based on his
assessment of the individual's performance.
Long-term incentive awards are made in the form of periodic grants of
incentive stock options, nonqualified stock options, stock appreciation rights,
restricted stock and other stock-based awards
6
<PAGE>
<PAGE>
pursuant to the Omnibus Plan. The Committee feels that stock options and other
stock-based awards are an effective long-term incentive for executive officers
to create value for shareholders, since their value bears a direct relationship
to the Company's stock price. Stock options are granted at the fair market value
of the underlying shares at the date of grant (unless otherwise required by
applicable law), and generally vest in installments over multiple years. During
fiscal 1998, incentive stock options were granted under the Omnibus Plan to 51
employees, including two executive officers, and nonqualified stock options were
granted to seven officers, including three executive officers, based primarily
on the individual's contribution to the Company's growth and profitability.
CEO COMPENSATION
Stuart Rose, the Chairman and Chief Executive Officer of the Company,
received a base salary of $154,500 in fiscal 1998 pursuant to the terms of his
employment agreement.
Mr. Rose earned a cash bonus of $298,000 in fiscal 1998, compared to his
fiscal 1997 cash bonus of $284,600. This increase was based on the fiscal 1998
Pre-Tax Earnings Percentage of 2.98% (compared to the fiscal 1997 Pre-Tax
Earnings Percentage of 2.846%). In determining Mr. Rose's cash bonus, the
Committee utilized a measure of a $100,000 cash bonus for each Pre-Tax Earnings
Percentage point.
Mr. Rose was granted 20,000 nonqualified stock options under the Omnibus
Plan in fiscal 1998 at an exercise price of $10.375 per share, which was the
fair market value of the underlying shares on the date of grant. The number of
options granted to Mr. Rose equaled the aggregate option grants to each of the
other executive officers.
INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code generally disallows a federal
income tax deduction to a public company for compensation paid in excess of $1
million in any taxable year to the corporation's chief executive officer or any
of its four other most highly compensated executive officers. Based on current
compensation levels and the present structure of the Company's compensation
programs, the Company believes that the annual compensation paid to its
executive officers will not exceed or otherwise be subject to the deduction
limitation, other than with the possible exception of the nonqualified executive
stock options granted in 1993. Depending upon the number of options exercised by
a senior executive officer in a particular year and the value of the underlying
shares at that time, exercise of the 1993 nonqualified executive stock options
could result in the individual's annual compensation exceeding the $1 million
deduction limitation.
ROBERT DAVIDOFF
7
<PAGE>
<PAGE>
REPORT ON REPRICING OF OPTIONS
The Company has utilized stock options as a key element in its executive
compensation program to provide directors, officers and other key employees with
long-term incentive to create value for shareholders. Due to a decline in the
market price of the Company's Common Stock in fiscal 1997 in part due to
external factors, including an overall earnings downturn in the consumer
electronics retailing industry, certain options outstanding under the Company's
stock option plans were exercisable at prices substantially in excess of the
current price of the Common Stock. In order to restore the incentive value to
such options and to actively encourage key employees to remain with the Company,
and in recognition that many of the employees holding such options would earn
less in fiscal 1998 due to the industry slowdown, in February 1997 the
Compensation Committee approved the repricing of all outstanding
'out-of-the-money' employee stock options, other than options held by persons
who are directors of the Company, by amending the exercise price to the then
current market price of $8.125 per share. All other terms and conditions of
these options remained the same. Out-of-the-money stock options held by
employees who are members of the Board of Directors (Messrs. Rose and Tomchin)
and options held by nonemployee directors were not repriced.
ROBERT DAVIDOFF
TEN-YEAR OPTION REPRICINGS
The following table sets forth information concerning all repricings of
stock options held by executive officers of the Company during the last ten
completed fiscal years.
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE EXERCISE ORIGINAL
UNDERLYING OF STOCK AT PRICE AT OPTION TERM
OPTIONS TIME OF TIME OF NEW REMAINING AT
REPRICED OR REPRICING OR REPRICING OR EXERCISE DATE OF
AMENDED AMENDMENT AMENDMENT PRICE REPRICING OR
NAME DATE (#) ($) ($) ($) AMENDMENT
- --------------------------------------- -------- ----------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Douglas Bruggeman ..................... 02/26/97 5,000 8.125 15.25 8.125 5 yrs, 2 mos.
Vice President -- Finance and 02/26/97 10,000 8.125 15.25 8.125 9 yrs, 2 mos.
Treasurer 02/26/97 5,000 8.125 13.875 8.125 4 yrs, 4 mos.
02/26/97 7,207 8.125 13.875 8.125 8 yrs, 4 mos.
02/26/97 5,000 8.125 17.25 8.125 3 yrs, 1 mos.
02/26/97 5,000 8.125 13.00 8.125 2 yrs, 4 mos.
</TABLE>
8
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PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the S&P 500 Stock Index and a peer index
comprised of three selected publicly traded consumer electronics retailers (*)
for the period commencing January 31, 1993 and ended January 31, 1998. The graph
assumes an investment of $100 in the Company's Common Stock and each index on
January 31, 1993 and reinvestment of all dividends.
REX STORES CORPORATION
Comparison of Five Year Total Return
(REX Stores Corporation, S&P 500 and Peer Group)
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1/31/93 1/31/94 1/31/95 1/31/96 1/31/97 1/31/98
<S> <C> <C> <C> <C> <C> <C>
REX Stores Corporation 100 204 164 130 81 101
S&P 500 Index 100 113 113 157 199 252
Peer Group - Industry* 100 108 74 39 26 24
</TABLE>
- ------------
* The peer group is comprised of The Good Guys, Inc., Campo Electronics,
Appliances and Computers, Inc. and Sun Television & Appliances, Inc.
9
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of April 17, 1998 (the record date for
the Annual Meeting), certain information with respect to the beneficial
ownership of the Company's Common Stock by each director and nominee for
director of the Company, each executive officer of the Company, all directors
and executive officers of the Company as a group and those persons or groups
known by the Company to own more than 5% of the Company's Common Stock.
For purposes of this table, a person is considered to 'beneficially own'
any shares if such person, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has (or has the right to
acquire within 60 days after April 17, 1998) sole or shared power (i) to vote or
to direct the voting of such shares or (ii) to dispose or to direct the
disposition of such shares. Unless otherwise indicated, voting power and
investment power are exercised solely by the named person or shared with members
of his household.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-----------------------
NAME AND ADDRESS NUMBER PERCENT(1)
- ----------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Stuart Rose(2) .......................................................................... 2,208,202 26.0%
2875 Needmore Road
Dayton, Ohio 45414
Lawrence Tomchin(3) ..................................................................... 531,052 6.5%
2875 Needmore Road
Dayton, Ohio 45414
Robert Davidoff(4) ...................................................................... 334,185 4.3%
135 East 57th Street, 27th Floor
New York, New York 10022
Edward Kress(5) ......................................................................... 55,487 *
1100 Courthouse Plaza S.W.
Dayton, Ohio 45402
Lee Fisher(6) ........................................................................... 4,316 *
3300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Douglas Bruggeman(7) .................................................................... 45,383 *
2875 Needmore Road
Dayton, Ohio 45414
All directors and executive officers as a group (6 persons)(8)........................... 3,178,625 35.5%
FMR Corp.(9) ........................................................................... 834,400 10.5%
82 Devonshire Street
Boston, Massachusetts 02109
Granahan Investment Management, Inc.(10) ................................................ 591,000 7.2%
275 Wyman Street, Suite 270
Waltham, Massachusetts 02154
The TCW Group, Inc.(11) ................................................................. 573,600 7.2%
865 South Figueroa Street
Los Angeles, California 90017
Dimensional Fund Advisors Inc.(12) ...................................................... 551,400 7.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
(table continued on next page)
10
<PAGE>
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-----------------------
NAME AND ADDRESS NUMBER PERCENT(1)
- ----------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Lighthouse Capital Management, Inc.(13) ................................................. 528,700 6.7%
10000 Memorial Drive, Suite 600
Houston, Texas 77024
Investment Counselors of Maryland, Inc.(14) ............................................. 520,000 6.6%
803 Cathedral Street
Baltimore, Maryland 21201-5297
Vanguard Explorer Fund, Inc.(15) ........................................................ 464,000 5.9%
P.O. Box 2600
Valley Forge, Pennsylvania 19482-2600
</TABLE>
- ------------
* One percent or less.
(1) Percentages are calculated on the basis of the number of shares outstanding
on April 17, 1998 plus the number of shares issuable upon the exercise of
options held by the person or group which are exercisable within 60 days
after April 17, 1998.
(2) Includes (i) 133,563 shares held by the Stuart Rose Foundation, an Ohio
nonprofit corporation of which Mr. Rose is the sole member, president and
one of three members of the board of trustees, the other two being members
of his immediate family and (ii) 768,816 shares issuable upon the exercise
of options.
(3) Includes 8,333 shares held by Mr. Tomchin's wife and 432,377 shares
issuable upon the exercise of options.
(4) Includes 325,659 shares held of record by CMNY Capital, L.P. and 8,526
shares issuable upon the exercise of options. Mr. Davidoff is a general
partner of CMNY Capital, L.P. and has shared voting and investment power
with respect to the shares it holds.
(5) Includes 26,960 shares held by Mr. Kress as co-trustee of two trusts with
respect to which Mr. Kress has shared voting and investment power and 8,526
shares issuable upon the exercise of options.
(6) Includes 4,316 shares issuable upon the exercise of options.
(7) Includes 22,883 shares issuable upon the exercise of options.
(8) Includes 1,245,444 shares issuable upon the exercise of options.
(9) Based on a Schedule 13G filing dated February 14, 1998. Fidelity Management
& Research Company, a wholly-owned subsidiary of FMR Corp. and a registered
investment adviser, is the beneficial owner of 834,000 shares of Common
Stock of the Company as a result of acting as an investment adviser to
various registered investment companies. Edward C. Johnson 3d (Chairman of
FMR Corp.), FMR Corp., through its control of Fidelity Management &
Research Company, and the funds each has sole power to dispose of the
834,000 shares owned by the funds, while the power to vote such shares
resides solely with the funds' boards of trustees.
(footnotes continued on next page)
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(footnotes continued from previous page)
(10) Based on a Schedule 13G filing dated January 27, 1998. Granahan Investment
Management, Inc. has sole power to vote 10,000 shares and sole power to
dispose of 591,000 shares.
(11) Based on a Schedule 13G filing dated February 12, 1998. The TCW Group, Inc.
and Robert Day (an individual who may be deemed to control The TCW Group,
Inc.) have sole power to vote and dispose of 573,600 shares, which shares
are held by Trust Company of the West, TCW Asset Management Company,
Oakmont Corporation and Cypress International Partners Limited.
(12) Based on a Schedule 13G filing dated February 9, 1998. Dimensional Fund
Advisors, Inc., a registered investment adviser, is deemed to have
beneficial ownership of 551,400 shares of Common Stock of the Company as of
December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
Fund Advisors, Inc. serves as investment manager. Dimensional Fund
Advisors, Inc. has sole power to vote 377,200 shares and sole power to
dispose of 551,400 shares. Dimensional Fund Advisors, Inc. disclaims
beneficial ownership of all such shares.
(13) Based on a Schedule 13G filing dated February 6, 1998. Lighthouse Capital
Management, Inc. has sole power to vote and dispose of 528,700 shares. Paul
G. Horton and Kevin P. Duffy disclaim beneficial ownership of all such
shares except for the pro rata interest in certain shares held by
Lighthouse Capital Management, Inc. of which each is a shareholder.
(14) Based on a Schedule 13G filing dated February 14, 1997. All shares of
Common Stock are owned by various investment advisory clients of Investment
Counselors of Maryland, Inc., which is deemed to be a beneficial owner of
those shares due to its discretionary power to make investment decisions
over such shares for its clients and the ability to vote such shares.
Investment Counselors of Maryland, Inc. has sole power to vote 480,000
shares and sole power to dispose of 520,000 shares.
(15) Based on a Schedule 13G filing dated February 9, 1998. Vanguard Explorer
Fund, Inc. has sole power to vote and shared power to dispose of 464,000
shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports of ownership and changes of
ownership of the Company's Common Stock with the Securities and Exchange
Commission. The Company believes that during fiscal 1998 all filing requirements
applicable to its directors and executive officers were met.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Rex Radio & TV leases 10,000 square feet for a store in a strip shopping
center in Beavercreek, Ohio, from Stuart Rose/Beavercreek, Inc. The shareholders
of Stuart Rose/Beavercreek, Inc. are Stuart Rose and Lawrence Tomchin. The lease
term is 10 years plus four additional five year renewal options. Base rent is
$82,500 per year during the primary term and increases each renewal term. In
consideration of the lease, the Company licensed the REX trade name to Stuart
Rose/Beavercreek, Inc. to name the shopping center 'Rex Centre.' The transaction
was authorized by the Company's outside directors.
During fiscal 1998, the Company paid the law firm of Chernesky, Heyman &
Kress P.L.L., of which Edward Kress is a partner, a total of $258,809 for legal
services.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the Company's independent public accountants
for the fiscal year ended January 31, 1998, and has served in that capacity
since the Company's incorporation in 1984. It is anticipated that
representatives of Arthur Andersen LLP will be present at the Annual Meeting to
respond to questions from shareholders and to make a statement if they desire to
do so.
The Board of Directors of the Company annually appoints the independent
public accountants for the Company after receiving the recommendations of its
Audit Committee. No recommendation of the Audit Committee has been made
concerning the appointment of independent public accountants for the fiscal year
ending January 31, 1999.
OTHER BUSINESS
SOLICITATION OF PROXIES
The Company will bear the entire expense of this proxy solicitation.
Arrangements will be made with brokers and other custodians, nominees and
fiduciaries to send proxy solicitation materials to their principals and the
Company will, upon request, reimburse them for their reasonable expenses in so
doing. Officers and other regular employees of the Company may solicit proxies
by mail, in person or by telephone.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those mentioned above. However, if other matters
should properly come before the Annual Meeting or any adjournments thereof, the
proxy holders will vote the proxies thereon in their discretion.
SHAREHOLDER PROPOSALS
Any proposal by any shareholder intended to be presented at the Company's
1999 Annual Meeting of Shareholders must, in accordance with applicable
regulations of the Securities and Exchange Commission, be received by the
Secretary of the Company at 2875 Needmore Road, Dayton, Ohio
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45414 on or before January 1, 1999 in order to be considered for inclusion in
the Company's proxy materials for that meeting.
By Order of the Board of Directors
EDWARD M. KRESS
EDWARD M. KRESS
Secretary
May 1, 1998
Dayton, Ohio
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APPENDIX 1
PROXY CARD
PROXY REX STORES CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 1998
The undersigned hereby appoints Stuart Rose and Lawrence Tomchin and each of
them proxies for the undersigned, with full power of substitution, to vote all
the shares of Common Stock of REX STORES CORPORATION, a Delaware corporation
(the 'Company'), which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held on Thursday, June 4, 1998 at 2:00 p.m.
and any adjournments thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
nominees listed below
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME BELOW.
Stuart Rose, Lawrence Tomchin, Robert Davidoff, Edward Kress, Lee
Fisher
2. IN THEIR DISCRETION the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(Continued, and to be signed, on the other side.)
<PAGE>
<PAGE>
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED AS
DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY SHALL BE VOTED FOR
PROPOSAL 1.
DATED ................ , 1998
.............................
.............................
(Signatures)
SHAREHOLDERS SHOULD DATE THIS
PROXY AND SIGN HERE EXACTLY AS
NAME(S) APPEARS HEREON. IF
STOCK IS HELD JOINTLY, BOTH
OWNERS SHOULD SIGN THIS PROXY.
EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS AND OTHERS
SIGNING IN A FIDUCIARY
CAPACITY SHOULD INDICATE THEIR
FULL TITLE IN SUCH CAPACITY.
