UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
__X__ Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 29, 1994
____ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ to _____________
Commission File No. 0-5648
OSHMAN'S SPORTING GOODS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 74-1031691
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
2302 Maxwell Lane 77023
Houston, Texas (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (713) 928-3171
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes __X__ No _____
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ____
The aggregate market value of the voting stock held by non-
affiliates of the Registrant as of March 31, 1994 (based upon the
average of closing bid and ask prices as of such date) was
$15,230,538.
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock as of March 31, 1994:
Common Stock, $1.00 par value 5,804,624
Documents incorporated by reference:
Proxy Statement for the Registrant's Annual Meeting of
Shareholders to be held June 17, 1994 (to be filed within 120 days
of the close of Registrant's fiscal year) is incorporated by
reference into Part III.
<PAGE>
PART I
ITEM 1. BUSINESS.
DEVELOPMENT OF BUSINESS
Oshman's Sporting Goods, Inc. ("Oshman's" or the
"Company"), which operates a chain of retail sporting goods
specialty stores, primarily in the Sun Belt, was incorporated in
1946 as the successor to a proprietorship founded by J. S. Oshman
in 1931. Unless the context otherwise requires, the terms
"Oshman's" and the "Company" as used herein include the Company and
its subsidiaries, whether operating under the name "Oshman's,"
"SuperSports USA" or "Honsport."
Oshman's offers a full line of sporting goods equipment,
sportswear and athletic footwear in medium to higher price ranges.
Nationally advertised brand name products are featured, along with
the Company's own labels in certain categories. Sales of
sportswear represented approximately 31-32% and footwear accounted
for approximately 16-17% of net retail sales during the last three
fiscal years. The remaining approximately 51-53% of the net retail
sales during these years was attributable to sporting goods
equipment. Net retail sales contributed 97% of the Company's total
net sales and 100% of its loss before income taxes for the fiscal
year ended January 29, 1994. The Company has determined, pursuant
to the provisions of Statement 14 of the Financial Accounting
Standards Board, that its business constitutes a single reportable
industry segment.
Oshman's retail stores are located primarily in major
regional or suburban shopping centers, shopping malls and suburban
shopping districts. The Company believes that its extensive
promotional policies enable it to operate stores successfully in a
variety of shopping environments. The Company's Texas stores and
California stores accounted for approximately 37% and 27%,
respectively, of consolidated net sales for the fiscal year ended
January 29, 1994.
Through the establishment of new stores and the acquisition
of existing stores, Oshman's has expanded from 11 retail stores in
1970 to 161 stores at January 29, 1994, 146 of which were Oshman's
stores, 10 of which were SuperSports USA stores (including eight
megastores, as described below) and five of which were Honsport
stores. Changes in the number of stores during the last five
fiscal years are summarized below:
<TABLE>
<CAPTION>
TRADITIONAL TOTAL STORES
FISCAL STORES "MEGASTORES" STORES OPERATED AT
YEAR ENDED OPENED OPENED CLOSED YEAR END
---------- ----------- ----------- ------ -----------
<S> <C> <C> <C>
February 3, 1990 9 0 9 193
February 2, 1991 5 2 11 189
February 1, 1992 2 0 8 183
January 30, 1993 2 3 18 170
January 29, 1994 1 3* 13* 161
--- --- ---
Total 19 8 59
- ---------------------------------
*Includes a traditional store which was expanded and converted to a megastore.
</TABLE>
<PAGE>
Oshman's opened the first version of its SuperSports USA
store during the fiscal year ended January 30, 1988 in Princeton,
New Jersey and was operating five of these stores by February 1990.
The SuperSports USA stores offer a broad selection of sporting and
related goods in an expanded sales floor space with updated store
appointments. The SuperSports USA concept was originally developed
to compete as a high-volume, low-price retailer. Although the
stores quickly achieved high sales volumes, the administrative
personnel necessary to oversee the different style of operation and
the reduced profit margins achieved by the everyday low-price
format made the stores inefficient. In 1990, the Company changed
the format of the SuperSports USA operations to closely resemble
the traditional Oshman's stores. In March 1990, the Company
further modified the SuperSports USA concept with the opening of a
78,000 square foot megastore which included several areas for
customers to try out sports equipment. Customer response to the
first megastore was excellent and sales exceeded the Company's
expectations. A second megastore opened in November 1990 was also
very successful, and in fiscal years 1992 and 1993 a total of six
additional megastores were opened.
Oshman's traditional stores, which include two of the five
original concept SuperSports USA stores, range from approximately
3,600 to 32,000 square feet, while the SuperSports USA megastores
contain approximately 41,000 to 80,000 square feet.
Early in 1993, the Board of Directors approved a five-year
plan that, subject to available financing and continued acceptable
performance, designates the megastores as the Company's principal
growth vehicle. Current plans call for opening 51 megastores
during the five-year period ending January 30, 1999, including two
new stores and the conversion of a traditional store to a
SuperSports USA megastore in 1994. In December 1993, the Board of
Directors approved a plan to close 57 traditional stores during
such five-year period and to accelerate the closing of 34
underperforming stores over the next two years in order for the
Company to more aggressively redeploy its assets to the more
profitable megastore strategy. Oshman's megastores cost more to
build and fixture and more to operate than those of its large-store
competitors. A significant amount of the capital differential has
been contributed by developers who consider these stores an
attraction for shopping centers attempting to differentiate
themselves from their competition. The higher operating costs have
been more than offset by a more profitable sales mix and a higher
sales level. Although the eight megastores represent only 5.0% of
Oshman's total stores, they were responsible for 21.6% of store
sales and 35.7% of total direct store contributions during the
fiscal year ended January 29, 1994.
The following table is included to highlight the current
contribution of SuperSports USA megastores relative to Oshman's
traditional stores and to demonstrate the significance of Oshman's
plans for opening 51 megastores in the five years, 1994-1998.
<PAGE>
<TABLE>
FIVE-YEAR SUMMARY OF DIRECT STORE CONTRIBUTIONS*
(Unaudited)
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990 1989
--------- --------- --------- -------- ---------
Total number of stores open at fiscal year
end 161 170 183 189 193
Total retail sales (in thousands) $ 299,716 $ 305,890 $ 291,484 $ 311,269 $ 310,639
Percentage of Total 100.0% 100.0% 100.0% 100.0% 100.0%
Direct store contributions (in thousands) $ 15,639 $ 23,938 $ 21,143 $ 25,396 $ 29,630
Percentage of Total 100.0% 100.0% 100.0% 100.0% 100.0%
Total traditional stores open at fiscal year end 153 165 181 187 193
Traditional stores sales (in thousands) $ 235,100 $ 264,872 $ 270,401 $ 295,799 $ 310,639
Percentage of total 78.4% 86.6% 92.8% 95.0% 100.0%
Direct store contributions (in thousands) $ 10,062 $ 19,749 $ 19,567 $ 24,278 $ 29,630
Percentage of total 64.3% 82.5% 92.5% 95.6% 100.0%
SuperSports USA megastores open at fiscal
year end 8 5 2 2 -
Megastores sales (in thousands) $ 64,616 $ 41,018 $ 21,083 $ 15,470 -
Percentage of Total 21.6% 13.4% 7.2% 5.0% -
Direct store contributions (in thousands) $ 5,577 $ 4,189 $ 1,576 $ 1,118 -
Percentage of total 35.7% 17.5% 7.5% 4.4% -
</TABLE>
- ----------------------------
* Direct store contributions are presented for comparative
purposes and do not include any charges for warehousing, buying
or administrative expenses. Direct store contributions
include all direct revenues and expenses incurred within the
respective stores and allocated charges for advertising,
insurance, accrual of shrinkage and merchandise markdowns and
certain other expenses.
COMPETITION
Oshman's competes with a number of other specialty sporting
goods chains, including large-format retailers that provide a broad
selection of inventory at every-day low prices, but believes that,
in terms of sales and number of stores, it is one of the largest
specialty retailers of sporting goods in the United States.
Oshman's also competes with diversified retail establishments, such
as department, discount, drug and other stores carrying sporting
goods and equipment or sports and leisure apparel. Many of these
non-specialty retailers are part of organizations considerably
larger than Oshman's in terms of overall sales and financial
resources, and some of these organizations have larger sporting
goods volume as well. Compe-tition is based on a number of
factors, including price, quality and variety of goods offered,
location of stores and quality of service.
In recent years, competition has intensified in key market
areas of the Company, particularly with the opening of a number of
new sporting goods stores offering large quantities and broad
selections of sporting goods equipment and related merchandise at
competitive prices. These large-format retailers are reshaping the
retail sporting goods market and Oshman's expects them to continue
to expand aggressively and seek to increase their market share,
while competition from traditional chain-store operations may
diminish. Where appropriate, Oshman's will continue to operate
traditional stores, but, as noted above, the predominant number of
new store openings will be SuperSports USA megastores. Oshman's
experienced 13.2% same store sales increases in megastores and 6.0%
same store sales decreases in traditional stores during the fiscal
year ended January 29, 1994.
SEASONAL FACTORS
Oshman's business is highly seasonal. Retail sales reach
their peak in December due to holiday shopping and the purchase of
ski equipment. Weather conditions add to the seasonal nature of
the business. For instance, in fiscal 1993, although sales of non-
ski merchandise increased in the fourth quarter, ski equipment
sales decreased sharply as a result of light snowfall and poor
skiing conditions, and, as a result, overall retail sales declined
during the quarter. In contrast, good snow ski conditions during
the prior year had increased winter sales.
Retail sales also increase in May and June in connection
with Oshman's annual Once-A-Year Sale, while institutional sales
are at their heaviest in August and September with the commencement
of the traditional school year and football season.
SUPPLIERS AND INVENTORY; CUSTOMERS
Oshman's purchases most of its merchandise on a centralized
basis from its Houston, Texas offices directly from manufacturers
and their representatives, both in the United States and overseas
(principally the Far East). Inventory is stored at its warehouses
in Houston, Texas; Santa Ana, California; and Honolulu, Hawaii.
Oshman's has no significant long-term contract with any supplier;
the merchandise sold by the Company is available from several
manufacturers, and no single supplier accounted for more than 10%
of the Company's total pur-chases during the fiscal year ended
January 29, 1994.
TRADEMARKS AND SERVICE MARKS; OTHER BUSINESS
As of January 29, 1994, Oshman's owned approximately 38
trademarks and service marks that were employed in its advertising
and operations. The Company believes that its marks are, in the
aggregate, materially important in its business and that the
"Oshman's" marks are individually material. The Company
anticipates that it will continue to own each of its trademarks and
service marks for so long as it finds it beneficial to use them in
connection with its operations.
Oshman's sells sporting goods and equipment to certain
institutional customers, including scholastic, industrial, amateur
and professional teams and has limited export sales which are made
through written request. Neither area is material to its business.
Oshman's has also entered into certain licensing arrangements
relating to the use of its name and trademarks in Japan and Mexico,
however the Mexican licensee has discontinued operating retail
stores. These arrangements are not material to the Company's
business.
MISCELLANEOUS
Oshman's typically satisfies its working capital needs out
of internally generated funds from current operations and its
credit facilities as addressed in Management's Discussion and
Analysis of Financial Condition and Results of Operations, below.
Oshman's is a retailer and backlog is not relevant to its
business. Oshman's does not have contracts subject to
renegotiation or termination and does not carry on any material
amount of research and development activities.
Federal, state, and local environmental regulations have
not had, and are not expected to have, any material effect upon the
expenditures, earnings or competitive position of the Company.
As of January 29, 1994, Oshman's employed approximately
3,200 people including part-time employees.
ITEM 2. PROPERTIES.
Oshman's general and executive offices are located at 2302
Maxwell Lane, Houston, Texas and consist of approximately 79,000
square feet of leased space in a well maintained brick and steel
building. A Houston warehouse and distribution center occupies
approximately 257,000 square feet of leased space in the same
building complex. The Company rents an office/warehouse in Santa
Ana, California, in which approximately 7,000 square feet are
devoted to office space and 151,000 square feet are used as
warehouse space. Additionally, the Company leases 14,000 square
feet of warehouse and office space in Honolulu, Hawaii.
Oshman's owns the following properties: an 83,000 square
foot building on approximately six acres in Houston, Texas housing
a second distribution center; a 56,500 square foot building on 2.7
acres in Millbrae, California, of which 14,000 square feet are
utilized for a retail store and the remaining 42,500 square feet
are leased to an unrelated party; a 16,000 square foot building on
1.4 acres in Mountain View, California, of which 11,500 square feet
are utilized for a retail store and the remaining 4,500 square feet
are leased to an unrelated party; a 10,000 square foot building on
approximately one acre in Los Angeles, California which is utilized
for a retail store; and a 27,500 square foot building on 1.8 acres
in San Antonio, Texas of which 20,000 square feet are utilized for
a retail store and the remaining 7,500 square feet are leased to an
unrelated party.
Substantially all of Oshman's retail stores occupy leased
space in modern structures. As of the end of the last fiscal year,
these retail stores occupied an aggregate of approximately
2,198,000 square feet of floor space under leases expiring at
various dates from 1994 to 2017 (exclusive of renewal options).
Traditional stores on average are comprised of approximately 11,400
square feet, while the average megastore occupies approximately
63,000 square feet.
The four traditional stores in locations owned by Oshman's
aggregate approximately 50,000 square feet of floor space.
Aggregate rentals paid by the Company under all its leases
amounted to approximately $16,447,000 during the fiscal year ended
January 29, 1994. Most store leases provide for rentals which are
the greater of a fixed minimum or a specified percentage of sales.
Oshman's owns the fixtures in its retail stores and considers all
property owned or leased to be well maintained, adequately insured
and suitable for its purposes.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to certain pending legal
proceedings, most of which are ordinary and routine litigation
incidental to its business. None of such legal proceedings, in the
opinion of the Company, is material to its business or financial
condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Oshman's did not submit any matters to a vote of security
holders during the fourth quarter of the fiscal year ended January
29, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the name and age of each
executive officer of the Company, all positions and offices with
the Company held by each person named, and the period during which
each person named has served as an officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD (1) OFFICER SINCE
- ------------------ --- ------------------------------ -------------
<S> <C> <C> <C>
Alvin N. Lubetkin 60 Vice Chairman of the Board, President, Chief Executive 1966
Officer, Director (2)
Marilyn Oshman 54 Chairman of the Board, Director (3) 1993
Edward R. Carlin 53 Executive Vice President, Chief Financial Officer, 1982
Secretary, Director
Lindsay J. Rice 39 Executive Vice President (4) 1991
Richard L. Bockart 59 Vice President, Treasurer, Assistant Secretary (5) 1969
A. Lynn Boerner 53 Vice President 1984
Will A. Clark 47 Vice President (6) 1992
Steven U. Rath 39 Vice President (7) 1992
</TABLE>
- -------------------------
(1) Unless otherwise stated below, each person has held such
positions and offices for the last five years. The term of
office of each officer is until the next annual meeting of
directors or until his or her successor has been elected and
qualified.
(2) Mr. Lubetkin was elected President in June 1989 after Marvin
Aronowitz resigned from that position.
(3) Ms. Oshman was elected Chairman of the Board in April 1993 and
has been a director of the Company since 1979. Prior to
becoming an employee of the Company in 1990, Ms. Oshman was
involved in civic and charitable activities and management of
her personal investments.
(4) Prior to being elected Executive Vice President in March 1991,
Mr. Rice served as California Division Vice President
(1988-1991) and Divisional Merchandise Manager (1986-1988).
(5) Mr. Bockart was elected Treasurer in June 1990.
(6) Prior to becoming Vice President of the Company, Mr. Clark
served as a Divisional Vice President in the warehousing and
human resource functions (1990-1992), and store operations
(1989-1990). Before joining the Company, Mr. Clark was Vice
President and General Manager of The Outdoorsman Group, a
retailer and manufacturer of sporting goods apparel and
equipment.
(7) Prior to becoming Vice President of the Company, Mr. Rath
served as a Divisional Vice President for corporate
development (1990-1992), and Director of Corporate Development
(1988-1989). Before joining the Company, Mr. Rath was
Director of Research and Strategic Planning for the Foley's
Division of Federated Department Stores, Inc.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Oshman's Common Stock is traded on the National Market System
of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") under the symbol OSHM. The high and
low closing sales prices of the Common Stock, as reported by
NASDAQ, were as follows for the quarterly periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED HIGH LOW
----------------- ----- -----
<S> <C> <C>
JANUARY 29, 1994
First Quarter. . . . . . . . . . . . . . . . $11.00 $7.50
Second Quarter . . . . . . . . . . . . . . . 9.00 4.63
Third Quarter. . . . . . . . . . . . . . . . 8.50 4.75
Fourth Quarter . . . . . . . . . . . . . . . 9.00 5.63
JANUARY 30, 1993
First Quarter. . . . . . . . . . . . . . . . $7.50 $3.75
Second Quarter . . . . . . . . . . . . . . . 5.75 4.50
Third Quarter. . . . . . . . . . . . . . . . 9.25 4.75
Fourth Quarter . . . . . . . . . . . . . . . 9.50 7.75
</TABLE>
As of March 31, 1994, there were 388 holders of record of
the Common Stock. The Board of Directors suspended the payment of
dividends in March 1991 and does not anticipate paying dividends in
the foreseeable future. The Company's credit facility restricts
the payment of dividends on the Common Stock.
ITEM 6. SELECTED FINANCIAL DATA.
The following table provides selected consolidated
financial information for the Company's last five fiscal years.
<TABLE>
<CAPTION>
JANUARY 30, FEBRUARY 1, FEBRUARY 2, FEBRUARY 3,
FOR THE YEAR ENDED JANUARY 29, 1993 1992 1991 1990
OR AS OF THE YEAR END 1994 (52 WEEKS) (52 WEEKS) (52 WEEKS) (53 WEEKS)
(52 WEEKS) (RESTATED) (RESTATED) (RESTATED) (RESTATED)
------------ ----------- ----------- ----------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Consolidated Sales $ 307,935 $ 313,253 $ 297,829 $ 318,100 $ 317,197
Net Earnings (Loss) (19,494) (679) (4,050)* (3,834) (455)
Net Earnings (Loss)
per Share (3.36) (.12) (.70)* (.66) (.08)
Dividends per Share -- -- -- .20 .20
Total Assets 126,432 138,341 143,384 155,257 164,621
Long-Term Debt 3,712 1,696 5,510 8,885 12,550
</TABLE>
- ---------------------------
* Does not include a net gain of $2,150,000 arising from a non-
recurring change in accounting principle reflected in the Company's
Statement of Operations for the year ended February 1, 1992.
The four years ended January 30, 1993 have been restated to
reflect a change in inventory valuation methods from the last-in,
first-out (LIFO) to the first-in, first-out (FIFO) method during
the third quarter of 1993.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
During the year ended January 29, 1994, ("fiscal 1993"),
Oshman's continued to reposition itself within the competitive
sporting goods market toward its goal of becoming primarily a
megastore sporting goods operator. In addition to opening three
new stores, two of which were SuperSports USA megastores, the
Company converted one of its traditional stores into a megastore
and closed 12 traditional stores. In the fourth quarter of fiscal
1993, the Company announced a plan to accelerate the closing of 34
underperforming stores over the next two years in order for the
Company to redeploy more aggressively its assets toward the more
profitable megastore format.
Oshman's business is subject to substantial seasonal
variation and may also be impacted by regional and national
economic and weather conditions. Favorable snow ski conditions
during the year ended January 30, 1993 ("fiscal 1992"), for
instance, benefitted the Company, while unfavorable ski and
economic conditions negatively impacted results during fiscal 1993.
In addition, results of operations during the past three years have
been influenced by certain nonrecurring items which affect the
comparison of one year's results to another.
NON-RECURRING ITEMS
On December 27, 1993, the Company announced a restructuring
plan to accelerate the closing of 34 underperforming traditional
stores over the next two years, two of which were closed in January
1994, and that it would record a $15,000,000 pre-tax restructuring
charge against fiscal 1993 fourth quarter earnings. The
significant components of the charge, which will negatively affect
future cash flows of the Company, are (i) estimated future
operating losses totaling approximately $3,360,000, before
depreciation, (ii) $3,650,000 for estimated lease termination
costs, (iii) $3,050,000 for markdowns related to the liquidation of
merchandise inventories and (iv) approximately $1,100,000 for
severance pay and various other store closing costs. In addition,
the Company expects to incur non-cash flow charges of approximately
$3,500,000 in connection with the disposition of fixed assets.
These 34 stores as a group incurred direct store losses of almost
$3,000,000 in fiscal 1993. Management believes the Company will be
better served by redeploying the assets invested in these stores
toward the more profitable megastore strategy, thereby accelerating
its transformation into a megastore sporting goods operator.
In the third quarter of fiscal 1993, the Company changed its
method of valuing its merchandise inventories from the last-in, first-out
method (LIFO) to the first-in, first-out method (FIFO) in order
to better measure the current value of such merchandise inventories
and the financial position of the Company. This change was applied
retroactively and at the beginning of fiscal year 1993 had the
effect of increasing merchandise inventories by $10,896,000 and
retained earnings by $6,911,000, net of income taxes. Accordingly,
all prior year amounts affected by this accounting change
have been restated primarily earnings, inventories, income tax
liabilities and expense, retained earnings and costs of goods sold.
In the fourth quarter of fiscal 1990, Oshman's began
implementing a corporate restructuring to eliminate duplicate
merchandising and administrative functions. The merchandising and
administrative functions of the California division were relocated
to Houston, Texas and combined with the Central division operation
in an effort to reduce combined operating expenses by approximately
$2,000,000 annually on a continuing basis. During fiscal 1992,
payroll and related expenses for the merchandising and administrative
areas of the Company were more than $2,300,000 less than fiscal
1990 levels. In fiscal 1993, these expenses were further reduced
by $500,000 from the 1992 levels. In fiscal 1990, Oshman's recorded
a one-time charge of $1,966,000, which included severances, employee
relocations, fixed asset abandonment losses and costs related to
converting separate divisional merchandise information systems to
a single system located in Houston.
In December 1987, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 96,
"Accounting for Income Taxes," which requires deferred income taxes
to be determined based on the enacted income tax rates for the
years in which these taxes will be payable or refundable. The
Company adopted the standard in the first quarter of the year ended
February 1, 1992 ("fiscal 1991"), and the cumulative effect for the
years prior to February 2, 1991 was to decrease deferred income
taxes and provide a one time credit to net earnings in the amount
of $2,150,000. In February 1992, the Financial Accounting
Standards Board issued Statement of Accounting Standards No. 109
(SFAS 109), "Accounting for Income Taxes." The Company adopted
this standard in fiscal 1993, and the impact was immaterial to the
Company's financial statements.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1993, net cash of $4,406,000 was used in
operating activities. The primary causes for the net use of cash
were (i) a pretax loss of $4,587,000 before depreciation,
amortization and the $15,000,000 restructuring charge and (ii) a
$2,622,000 decrease in accounts payable, offset by cash provided by
a reduction in merchandise inventories of $4,634,000. Cash used by
investing activities was $3,035,000, which related primarily to the
net purchase of property, plant and equipment of $4,497,000, after
reduction for landlord-provided construction funds of $1,576,000,
offset by proceeds of $1,284,000 from the sale of real estate and
leasehold interests. Financing activities provided net cash of
$2,042,000 due to the Company's utilization of its credit facility
at the end of the year in the amount of $1,985,000 and the addition
of a five-year mortgage note for $855,000 in the third quarter of
1993 in connection with the purchase of real estate where one of
the Company's stores was under lease. Cash of $765,000 was used
for payment of scheduled long-term debt and the prepayment of
mortgage debt in relation to the sale of real estate.
In fiscal 1992, operating activities provided a net cash
increase of $3,906,000. The primary sources of the net cash
increase from operating activities were pretax profits before
depreciation and amortization of $5,011,000 and a decrease in
prepaid expenses and other of $2,900,000, related primarily to the
realization of a Federal income tax refund. These items were
offset by an increase in merchandise inventories of $7,200,000
reduced by a related increase in trade accounts payable of
$3,643,000. Cash used by investing activities was $2,021,000,
including net purchase of property, plant and equipment totaling
$2,876,000 after reduction for landlord-provided construction funds
of $2,817,000. Financing activities used cash of $7,724,000 for
payment of scheduled long-term debt installments, costs associated
with the acquisition of a new revolving credit facility and
prepayment of certain long-term debt obligations, discussed below.
Operating activities in fiscal 1991 provided a net cash
increase of $10,133,000. The primary source of the net cash
increase from operating activities was a reduction in merchandise
inventories of $12,739,000, offset by a related decrease in trade
accounts payable of $2,669,000. Cash used by investing activities
was $2,604,000, including net purchase of property, plant and
equipment totaling $2,784,000 after reduction for landlord-provided
construction funds of $1,141,000. Financing activities used cash
of $3,720,000 for payment of scheduled long-term debt installments.
As discussed above, the Company converted to the FIFO
inventory method of accounting for its merchandise inventories in
fiscal 1993. Fiscal year-end inventories, on a FIFO basis, were
$88,699,000 for 1993, $93,333,000 for 1992 and $86,133,000 for
1991. The Company began reducing its inventory levels in fiscal
1990 to improve turnover through utilization of its new merchandise
information systems. In fiscal 1992, as sales began to increase,
and as a result of opening five new stores, three of which were
megastores, inventory levels were increased. In fiscal 1993, as a
result of the Company's efforts to continue to improve its
inventory management and in consideration of declining sales
trends, inventories were reduced.
Additions to property, plant and equipment in fiscal 1993,
fiscal 1992 and fiscal 1991 were $4,497,000, $2,876,000 and
$3,242,000 (including a capital lease), respectively. In fiscal
1993, the Company opened three new stores, two of which were
SuperSports USA megastores, and converted an existing traditional
store to a SuperSports USA megastore. The net expenditure relating
to the opening of these new stores and the conversion of the
existing store, over and above developer funding, totaled
approximately $1,067,000. Approximately $1,736,000 was spent to
renovate and refurbish existing locations and for other uses and
$953,000 was used for the purchase of real estate where one of the
Company's retail stores was under lease. Five stores, including
three new SuperSports USA megastores, were opened during fiscal
1992, the construction of and appointments for which were
substantially funded by developers. Approximately $1,676,000 was
spent to renovate and refurbish existing locations, and $750,000
was used in the exercise of an advantageous option to purchase real
estate where one of the Company's stores was under lease. Two new
stores were opened in fiscal 1991, the construction of and
appointments for which were totally funded by developers, and
approximately $2,042,000 was used in the renovation and
refurbishment of existing locations. Additions of approximately
$687,000 in fiscal 1993, $450,000 in fiscal 1992 and $1,200,000 in
fiscal 1991 related to the acquisition of computer hardware and
software, including the continued development of the Company's
merchandise information systems.
One of the principal sources of the Company's liquidity has
been its lines of credit. On August 31, 1992, the Company entered
into an agreement providing for a three-year, $32,500,000 revolving
credit facility with The CIT Group/Business Credit, Inc. Advances
under the facility are based on a borrowing base formula, and
subject to certain loan reserves. The facility is secured
primarily by inventory, accounts receivable and real estate. The
financing agreement includes various restrictions, requirements and
financial covenants. Advances under the credit facility bear
interest at the prime rate plus 1.5% and any unused borrowing
capacity is subject to a line of credit fee of .5%. The Company
drew upon the credit facility on September 1, 1992 in an initial
amount of approximately $15,213,000 to prepay, without prepayment
penalty, its existing unsecured promissory notes due December 31,
1993 and October 1, 1995 in the aggregate principal amount of
$6,250,000 and to satisfy its working capital needs.
The Company's financing agreement was amended in December
1993 to increase the revolving line of credit from $32,500,000 to
$40,000,000. The agreement has been amended several other times as
well, primarily to modify the financial covenants contained
therein. The Company is currently in compliance with all covenants
of the financing agreement.
At the end of fiscal 1993, borrowings outstanding against
the Company's credit facility were $1,985,000. There were no
borrowings outstanding against the Company's credit facilities in
effect at the end of fiscal 1992 or fiscal 1991. The Company had
outstanding letters of credit (used primarily to purchase certain
of the Company's imported inventory) totaling $3,439,000 at the end
of fiscal 1993, $3,092,000 at the end of fiscal 1992 and $5,195,000
at the end of fiscal 1991.
The Company's primary source of liquidity in fiscal 1993
was the use of its credit facility under which average borrowings
were $13,781,000. The Company's primary sources of liquidity in
fiscal 1992 and 1991 were cash provided by operating activities of
$3,906,000 and $10,133,000, respectively, and the Company's use of
its lines of credit under which average borrowings were $7,884,000
in fiscal 1992 and $4,916,000 in fiscal 1991. Average borrowings
increased in fiscal 1993, primarily as a result of the Company's
reduced levels of cash provided by operations. Average borrowings
in 1992 increased from fiscal 1991, primarily because of the
Company's prepayment of certain of its long-term debt, as discussed
above. Because of the seasonal nature of its business and the
build up in inventory for the Christmas season, the highest amount
of borrowings and outstanding letters of credit under the Company's
credit facility and lines of credit typically is in November and
was $30,489,000 at November 12, 1993, $25,652,000 at November 13,
1992 and $19,857,000 at November 27, 1991.
Capital expenditures in fiscal 1994 are expected to be
approximately $4,600,000. Approximately $1,950,000 will be
allocated to renovations of existing locations and to other uses.
The Company plans to open three SuperSports USA megastores in
fiscal 1994 at a net capital cost of approximately $1,250,000.
Additionally, approximately $1,400,000 will be used for point of sale
systems and computer hardware and software. During fiscal 1993,
the Company closed 12 marginally performing stores, 10 of which
had direct store losses, thereby eliminating their working capital
requirements and overhead costs. In fiscal 1994, the Company
expects to close approximately 26 stores, 16 of which are part of
the restructure discussed above and the costs of which will be
charged against the restructure reserve provided in fiscal 1993.
In fiscal 1994, the Company estimates that the stores included in
the restructure will require cash of approximately $7-8 million to
cover the operating losses of the stores in operation during the
year, plus the lease termination costs, liquidation markdowns and
other closing costs associated with the 16 stores expected to close
in 1994. The remainder of the closures in fiscal 1994 are expected
to occur in the normal course of business as leases expire; the
Company does not anticipate any unusual material costs or capital
requirements in connection with these closures. The Company
anticipates being able to satisfy its capital needs during fiscal
1994 from internally generated funds and the use of its credit
facility.
RESULTS OF OPERATIONS
Sales for fiscal 1993 decreased 1.7% to $307,935,000 from
$313,253,000 in fiscal 1992. Sales for fiscal 1992 increased 5.2%
to $313,253,000 from $297,829,000 in fiscal 1991. Same store sales
increases (decreases) for the last three fiscal years were (4.2%)
in fiscal 1993, 1.7% in fiscal 1992 and (6.4%) in fiscal 1991.
The sales decline in fiscal 1993 was largely due to lost
sales in California resulting primarily from the declining economic
environment, poor snow-ski conditions and disruptions caused by the
natural disasters that occurred in the state. Sales also declined
in Florida as a result of a substantial reduction in advertising
expenditures that had been increased to combat large-format
competitors during fiscal 1992. A substantial number of the
Company's Florida stores will be closed during the next two years
pursuant to the restructure plan. In addition, competition from
large-format sporting goods retailers continued to negatively
impact the Company's smaller traditional stores.
During the quarter ended July 31, 1993, the Company changed
its method of determining same store sales results. Previously, a
store's sales had been included in same store sales after its
twelfth full month of operation. To prevent distortions of same
store sales results caused by the relatively high sales levels
associated with the grand opening promotions of its SuperSports USA
megastores, the Company redefined same store sales to include only
those stores that have been open for a full 12 months as of the
beginning of the current fiscal year.
Even though the Company experienced an overall same store
sales decrease in fiscal 1993, the SuperSports USA megastores
experienced a same store sales increase of 13.2%, while total sales
from all megastores (including two new stores) open at the end of
the year increased 57.5% to $64,616,000. Same store sales from
stores to be closed pursuant to the restructure plan declined 10.9%
from fiscal 1992.
Even though the Company experienced a same store sales
increase in fiscal 1992, the increase in total sales was primarily
due to the five new stores, including three SuperSports USA
megastores, opened during the year. These five new stores were
responsible for a sales contribution of approximately $21,270,000,
part of which was offset by lost sales of about $9,600,000
attributable to the closing of 18 traditional stores during the
year. The principal factor in the Company's same store sales
decline during fiscal 1991 was a severe out-of-stock situation that
occurred in key items due to buying disruptions during the
corporate restructuring. The impact was felt mostly by the stores
in the western United States, although other stores were also
affected. Weak economic conditions, particularly in California,
together with the Persian Gulf war and continuing strong
competitive pressures also contributed significantly to the
decline. Additionally, the Company closed eight stores while
opening only two traditional stores in fiscal 1991. During fiscal
1992, the Company was able to recover some of the sales volume lost
in fiscal 1991 due to the disruptions caused by the corporate
restructure and the Persian Gulf war. The weak economy in
California, however, continued to negatively impact overall
results.
Cost of goods sold as a percentage of sales for fiscal
years 1993, 1992 and 1991 was 66.7%, 64.0% and 64.0%, respectively.
The increase in cost of goods sold as a percentage of sales in
fiscal 1993 was due primarily to increased price reductions and
promotional markdowns.
In fiscal 1993, the Company aggressively pursued
competitive pricing, which did not produce sufficient sales
increases to cover the increased cost of goods sold as a percentage
of sales. In fiscal 1994, the Company does not plan to continue
this strategy and therefore expects to reduce cost of goods sold as
a percentage of sales.
Selling and administrative expenses as a percentage of
sales was 36.7%, 36.3% and 37.6% for the fiscal years 1993, 1992
and 1991, respectively. The slightly increased rate as a
percentage of sales in fiscal 1993 was primarily related to reduced
same store sales and the resulting effect on relatively fixed
costs. The reduced rate of selling and administrative expenses in
fiscal 1992 was largely attributable to the increased level of
sales, savings realized as a result of the corporate restructuring
and the Company's continuing effort to control expenses. In fiscal
1993, occupancy costs increased to 8.6% as a percentage of sales
from 8.3% in each of the previous two fiscal years. Advertising
costs were 5.2% as a percentage of sales in fiscal 1993 and fiscal
1992 compared to 4.8% in fiscal 1991. The increased rates of
advertising costs in both fiscal 1993 and 1992 were due to a more
aggressive promotional program. In fiscal 1993, payroll and
related taxes and benefit costs decreased .4% as a percentage of
sales from the prior year levels. This decrease of approximately
$2,100,000 from fiscal 1992 levels resulted primarily from a net
reduction of selling payrolls in existing and closed stores, offset
by payrolls in new stores. In fiscal 1992, payroll and related
taxes and benefit costs decreased approximately $400,000 from 1991
levels, which had been reduced more than $3,300,000 from fiscal
1990 amounts, and, as a percentage of sales, were a full percentage
point lower than in the prior year. The modest overall expense
reduction was achieved through expense reductions in the
administrative areas and closed stores, thereby offsetting
increased payroll and related costs in new and existing stores.
Approximately 60% of the $3,300,000 expense reduction in fiscal
1991 occurred in stores and distribution centers; the balance of
the reduction related to savings in administrative areas, primarily
in the latter part of the year, reflecting partially the benefit of
the corporate restructuring.
Interest expense for fiscal years 1993, 1992 and 1991 was
$1,427,000, $1,085,000 and $1,555,000, respectively. The increased
expense in fiscal 1993 was a result of the Company's increased
average borrowing during the year. The reduction in interest
expense in fiscal 1992 related to reduced long-term debt caused by
scheduled principal payments during the first seven months of the
year and by the replacement of the long-term debt with proceeds of
the Company's new credit facility (as discussed above) at lower
interest rates.
The major components of miscellaneous (income) expense are
set out in the table below:
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR
1993 1992 1991
--------------- --------------- --------------
<S> <C> <C> <C>
Gain on sale of real estate and leasehold interests $ (699,000) $ (960,000) $ --
Provision for stores closed in the normal course of
operations and write off of other assets 719,000 660,000 351,000
License fees (1,303,000) (625,000) (372,000)
Provision for earthquake loss 500,000 -- --
Interest income (69,000) (327,000) (175,000)
Accrual for legal settlement (235,000) 300,000 --
Other - net 97,000 95,000 83,000
-------------- ------------- --------------
Total $ (990,000) $ (857,000) $ (113,000)
</TABLE>
The income tax (benefit) rates for fiscal years 1993, 1992
and 1991 were (24.2%), (40.0%) and (35.9%), respectively. The
decreased benefit rate in fiscal 1993 was the result of the
Company's inability to fully recognize the tax benefits of net
operating losses and future deductible temporary differences in the
calculation of its tax expense under SFAS 109. However, these
amounts will be available to reduce future tax liabilities in years
in which the Company has taxable earnings. The variance in the
rate in fiscal 1992 was caused by the effects of state income taxes
and income tax credits.
In fiscal 1993, the Company's net loss was $19,494,000.
Before income tax benefit and the $15,000,000 charge related to the
Company's restructure (discussed above), the Company incurred a
loss of $10,731,000 compared to a pre-tax loss of $1,131,000 in
fiscal 1992. The increase in the loss before income tax benefit
and the restructuring charge was primarily attributable to a
$10,220,000 decrease in gross profit which was somewhat offset by
a slight reduction in selling and administrative expenses. The
reduction of gross profit was caused by a sales decline of
$5,318,000 compared to fiscal 1992 and the increased rate of cost
of goods sold as a percentage of sales in fiscal 1993 as discussed
above. The Company also recorded a charge of $500,000 for damages
suffered during the California earthquake in January 1994.
In fiscal 1992, the Company reduced its net loss from
$1,900,000 ($4,050,000 before cumulative effect of change in
accounting principle) in fiscal 1991 to $679,000. This improvement
was primarily the result of the gross profit contribution from
increased sales in new and existing stores. Additionally, except
for occupancy costs which increased proportionally with sales and
increased advertising expense, selling and administrative expenses
were reduced by more than $1,000,000 from their 1991 levels.
Reduced interest expense and an increase in miscellaneous income
further contributed to the improved results in fiscal 1992.
Although revenues will continue to be influenced by
economic conditions and the competitive environment, the Company
believes that, as it repositions itself towards becoming primarily
a megastore operator, improved sales and earnings results from its
megastores, together with reductions in the number of marginally
performing traditional stores (which are more susceptible to the
effects of competitive pressures from other large-format sporting
goods retailers), will enable it to provide positive operating cash
flows and also to overcome the effects of any future inflation.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item appears on pages 24
through 47 of this report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There is no incident required to be disclosed herein.
PART III
In accordance with paragraph (3) of General Instruction G
to Form 10-K, Part III of this Report is omitted because the
Company will file with the Securities and Exchange Commission not
later than 120 days after the end of the fiscal year ended
January 29, 1994 a definitive proxy statement pursuant to
Regulation 14A involving the election of directors, which proxy
statement is incorporated herein by reference.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
<S> <C>
PAGE
(a) 1. Financial Statements REFERENCE
-------------------- ---------
Report of independent certified public accountants . . . . . . . . 24
Consolidated balance sheets at January 29, 1994
and January 30, 1993 . . . . . . . . . . . . . . . . . . . . . . . 26
Consolidated statements of operations for the years
ended January 29, 1994, January 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . 27
Consolidated statements of stockholders' equity for the
years ended January 29, 1994, January 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . 28
Consolidated statements of cash flows for the years ended
January 29, 1994, January 30, 1993 and February 1, 1992. . . 29
Notes to consolidated financial statements . . . . . . . . . . . . 30
Selected quarterly financial data. . . . . . . . . . . . . . . . . 42
2. Financial Statement Schedules
Schedule V - Property, Plant and Equipment -
Years ended January 29, 1994,
January 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . 43
Schedule VI - Accumulated Depreciation and
Amortization of Property, Plant
and Equipment - Years ended
January 29, 1994, January 30, 1993
and February 1, 1992 . . . . . . . . . . . . 44
Schedule VIII - Allowance for Doubtful
Receivables - Years ended
January 29, 1994,
January, 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . 45
<PAGE>
Schedule IX - Short-Term Borrowings -Years
ended January 29, 1994,
January 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . 46
Schedule X - Supplementary Income Statement
Information -Years ended
January 29, 1994,
January 30, 1993 and
February 1, 1992 . . . . . . . . . . . . . . . 47
</TABLE>
All other schedules have been omitted since the required information is
not present or not present in amounts sufficient to require submission of
the schedule, or because the information required is included in the
financial statements or the notes thereto.
3. List of Exhibits
----------------
3.1 Certificate of Incorporation of Oshman's Sporting Goods,
Inc., as amended to date. (Filed as Exhibit 3.1 to the Company's
Form 10-K for the fiscal year ended January 31, 1987 and
incorporated herein by reference.)
3.2 Bylaws of Oshman's Sporting Goods, Inc., as amended to
date. (Filed as Exhibit 3.2 to the Company's Form 10-K for the
fiscal year ended January 31, 1987 and incorporated herein by
reference.)
4.1 Financing Agreement dated August 31, 1992 between the
Company and The CIT Group/Business Credit, Inc. (the "Financing
Agreement"). (Filed as Exhibit 4.1 to the Company's Form 10-Q for
the quarterly period ended August 1, 1992 and incorporated herein by
reference.)
4.1(a) Amendment dated March 9, 1993 to the Financing
Agreement. (Filed as Exhibit 19.1 to the Company's Form 10-K for
the fiscal year ended January 30, 1993 (the "1993 10-K") and
incorporated herein by reference.)
4.1(b) Amendment dated March 22, 1993 to the Financing
Agreement. (Filed as Exhibit 19.2 to the 1993 10-K and incorporated
herein by reference.)
4.1(c) Amendment dated June 3, 1993 to the Financing
Agreement. (Filed as Exhibit 4.1 to the Company's Form 10-Q for the
fiscal quarter ended May 1, 1993 and incorporated herein by
reference.)
4.1(d) Amendment dated October 29, 1993 to the Financing
Agreement. (Filed as Exhibit 4.1 to the Company's Form 10-Q for the
fiscal quarter ended October 30, 1993 (the "October 10-Q") and
incorporated herein by reference.)
4.1(e) Amendment dated October 29, 1993 to the Financing
Agreement. (Filed as Exhibit 4.2 to the October 10-Q and
incorporated herein by reference.)
4.1(f) Amendment dated December 23, 1993 to the Financing
Agreement.
4.1(g) Amendment dated December 23, 1993 to the Financing
Agreement.
4.1(h) Amendment dated January 27, 1994 to the Financing
Agreement.
4.1(i) Amendment dated April 6, 1994 to the Financing
Agreement.
10.1 * Split Dollar Agreement between the Company and Marvin
Aronowitz, dated October 1, 1976. (Filed as Exhibit 10.3 to the
Company's Form 10-K for the fiscal year ended January 29, 1983 and
incorporated herein by reference.)
10.2 * Executive Salary Continuation Agreement between the
Company and Marvin Aronowitz, dated October 1, 1976. (Filed as
Exhibit 10.4 to the Company's Form 10-K for the fiscal year ended
January 29, 1983 and incorporated herein by reference.)
10.3 * Oshman's Sporting Goods, Inc. 1982 Incentive Stock
Option Plan for Key Employees. (Filed as Exhibit 10.7 to the
Company's Form 10-K for the fiscal year ended January 29, 1983 and
incorporated herein by reference.)
10.3(a) * First Amendment to Oshman's Sporting Goods, Inc. 1982
Incentive Stock Option Plan for Key Employees. (Filed as Exhibit
10.6 to the Company's Form 10-K for the fiscal year ended January
31, 1987 and incor-porated herein by reference.)
10.4 * Deferred Compensation Agreement between the Company
and Alvin N. Lubetkin, dated December 29, 1988. (Filed as Exhibit
10.5 to the Company's Form 10-K for the fiscal year ended January
28, 1989 and incorporated herein by reference.)
10.5 * Oshman's Sporting Goods, Inc. 1988 Statement of Policy
Regarding Key Employees Severance Pay Bonus Program. (Filed as
Exhibit 10.7 to the Company's Form 10-K for the fiscal year ended
January 28, 1989 and incorporated herein by reference.)
10.5(a) * First Amendment to Oshman's Sporting Goods, Inc.
Statement of Policy Regarding Key Employees Severance Pay Bonus
Program. (Filed as Exhibit 19.3 to the 1993 10-K and incorporated
herein by reference.)
10.6 * Oshman's Sporting Goods, Inc. 1986 Stock Option Plan,
as amended. (Filed as Exhibit 10.9 to the Company's Form 10-K for
the fiscal year ended January 31, 1987 and incorporated herein by
reference.)
10.6(a) * Second Amendment to Oshman's Sporting Goods, Inc. 1986
Stock Option Plan. (Filed as Exhibit 19.4 to the 1993 10-K and
incorporated herein by reference.)
10.6(b) * Third Amendment to Oshman's Sporting Goods, Inc. 1986
Stock Option Plan. (Filed as Exhibit 19.5 to the 1993 10-K and
incorporated herein by reference.)
10.7 * Oshman's Sporting Goods, Inc. 1986 Stock Bonus Plan.
(Filed as Exhibit 10.10 to the Company's Form 10-K for the fiscal
year ended January 31, 1987 and incorporated herein by reference.)
10.7(a) * First Amendment to Oshman's Sporting Goods, Inc. 1986
Stock Bonus Plan. (Filed as Exhibit 10.9 to the Company's Form 10-K
for the fiscal year ended February 3, 1990 and incorporated herein
by reference.)
10.8 * Employment Agreement dated October 3, 1990 between the
Company and Alvin N. Lubetkin.
10.9 * Loan Agreement dated October 3, 1990 between the
Company and Alvin N. Lubetkin. (Filed as Exhibit 10.9 to the
Company's Form 10-K for the fiscal year ended February 2, 1991 and
incorporated herein by reference.)
10.10 * Oshman's Sporting Goods, Inc. 1991 Stock Option Plan.
(Filed as Exhibit 10.10 to the Company's Form 10-K for the fiscal
year ended February 2, 1991 and incorporated herein by reference.)
10.11 * Severance Agreement between the Company and Edward R.
Carlin, dated January 29, 1992. (Filed as Exhibit 10.10 to the
Company's Form 10-K for the fiscal year ended February 1, 1992 and
incorporated herein by reference.)
10.12 * Oshman Employees' Profit-Sharing Plan and Trust.
(Filed as Exhibit 10.11 to the Company's Form 10-K for the fiscal
year ended February 1, 1992 and incorporated herein by reference.)
10.12(a) * First Amendment to Oshman Employees' Profit-Sharing
Plan. (Filed as Exhibit 19.6 to the 1993 10-K and incorporated
herein by reference.)
10.13 * Separation Agreement between the Company and Charles
Rosemond dated February 22, 1993. (Filed as Exhibit 10.13 to the
1993 10-K and incorporated herein by reference.)
10.14 * Oshman's Sporting Goods, Inc. 1993 Non-Employee
Director Stock Option Plan.
11.1 Statement re Computation of Per Share Earnings.
18.1 Letter from Grant Thornton dated December 10, 1993
regarding Change in Accounting Principle. (Filed as Exhibit 18.1 to
the October 10-Q and incorporated herein by reference).
21.1 Subsidiaries of the Registrant.
23.1 Consent of Grant Thornton.
- ---------------------------------
* Management contract or compensatory plan or arrangement.
The Registrant will furnish to stockholders a copy of any
exhibit upon payment of $.20 per page to cover the expense of
furnishing such copies. Requests should be directed to Richard L.
Bockart, Vice President, Oshman's Sporting Goods, Inc., P.O. Box
230234, Houston, Texas 77223-0234.
(b) Reports on Form 8-K. The Company filed no reports on
Form 8-K during the last quarter of the fiscal year ended
January 29, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OSHMAN'S SPORTING GOODS, INC.
By:/s/ EDWARD R. CARLIN
---------------------------
Edward R. Carlin
Executive Vice President,
Chief Financial Officer and
Director
Date: April 22, 1994
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below on April 22, 1994 by the
following persons on behalf of the Registrant and in the capacities
indicated.
/s/ MARILYN OSHMAN /s/ ALVIN N. LUBETKIN
- ------------------------------ ------------------------------
Marilyn Oshman Alvin N. Lubetkin
Chairman of the Board of Directors Vice Chairman of the
Board of Directors,
President, Chief
Executive Officer
(Principal Executive Officer)
and Director
/s/ EDWARD R. CARLIN /s/ MARVIN ARONOWITZ
- ------------------------------ ------------------------------
Edward R. Carlin Marvin Aronowitz
Executive Vice President, Director
Chief Financial Officer (Principal
Financial and Accounting Officer)
and Director
/s/ FRED M. GERSON /s/ STEWART ORTON
- ------------------------------ ------------------------------
Fred M. Gerson Stewart Orton
Director Director
/s/ DOLPH B.H. SIMON
- ------------------------------
Dolph B.H. Simon
Director
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Oshman's Sporting Goods, Inc.
We have audited the accompanying consolidated balance sheets
of Oshman's Sporting Goods, Inc. (a Delaware corporation) and
Subsidiaries as of January 29, 1994 and January 30, 1993, and the
related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period
ended January 29, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Oshman's Sporting Goods, Inc. and
Subsidiaries as of January 29, 1994 and January 30, 1993, and the
consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended January
29, 1994, in conformity with generally accepted accounting
principles.
We have also audited Schedules V, VI, VIII, IX and X of
Oshman's Sporting Goods, Inc. and Subsidiaries for each of the
three years in the period ended January 29, 1994. In our opinion,
these schedules present fairly, in all material respects, the
information required to be set forth therein.
As discussed in note A4, the Company retroactively changed
its method of accounting for inventory.
GRANT THORNTON
Houston, Texas
March 18, 1994
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 29, 1994 and January 30, 1993
(In thousands)
<TABLE>
<CAPTION>
ASSETS 1993 1992
(Restated)
-------- ----------
(Restated)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 44 $ 5,443
Accounts receivable, less allowance of $242 in 1993 and
$244 in 1992 3,492 3,590
Merchandise inventories 88,699 93,333
Prepaid expenses and other 4,549 4,124
------ -------
Total current assets 96,784 106,490
PROPERTY, PLANT AND EQUIPMENT - AT COST 80,811 78,998
Less accumulated depreciation and amortization 52,066 48,215
------- -------
28,745 30,783
OTHER ASSETS 903 1,068
------ ------
$126,432 $138,341
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term obligations $ 373 $ 313
Trade accounts payable 32,866 35,488
Accrued liabilities 11,242 11,283
Income taxes 154 1,012
Sales tax payable 2,650 2,903
Restructuring reserve 10,971 -
------ ------
Total current liabilities 58,256 50,999
DEFERRED INCOME TAXES 313 5,823
LONG-TERM OBLIGATIONS 3,712 1,696
LONG-TERM RESTRUCTURING RESERVE 3,822 -
STOCKHOLDERS' EQUITY
Common stock 5,805 5,805
Additional capital 3,252 3,252
Retained earnings 51,272 70,766
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands except per share amounts)
<TABLE>
<CAPTION>
1993 1992 1991
(Restated) (Restated)
--------- ---------- ----------
<S> <C> <C> <C>
Net sales $307,935 $313,253 $297,829
Costs and expenses
Cost of goods sold 205,250 200,348 190,706
Selling and administrative expenses 112,979 113,808 112,002
Corporate restructuring 15,000 - -
Interest expense 1,427 1,085 1,555
Miscellaneous income (990) (857) (113)
--------- -------- --------
333,666 314,384 304,150
Loss before income taxes and cumulative
effect of change in accounting principle (25,731) (1,131) (6,321)
Income tax benefit (6,237) (452) (2,271)
--------- --------- --------
Loss before cumulative effect of change in
accounting principle (19,494) (679) (4,050)
Cumulative effect to February 2, 1991 of change
in accounting for income taxes - - 2,150
--------- ----------- -------
NET LOSS $(19,494) $ (679) $ (1,900)
========= =========== ==========
Earnings (loss) per share
Loss before cumulative effect of change in
accounting principle $ (3.36) $ (.12) $ (.70)
Cumulative effect to February 2, 1991 of change
in accounting for income taxes - - .37
_________ __________ ___________
Loss per common and common equivalent
share $ (3.36) $ (.12) $ (.33)
========== ========== ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended January 29, 1994, January 30, 1993 and February 1, 1992
(In thousands)
<CAPTION>
Common stock Additional Retained
Shares Amount capital earnings
(Restated)
<S> <C> <C> <C> <C>
Balance at February 2, 1991, as
previously reported 5,795 $5,795 $3,264 $ 66,905
Cumulative effect on prior years
of retroactive restatement for
change in method of accounting
for inventory valuation - - - 6,440
Balance at February 2, 1991, ------ ------ ------ --------
as restated 5,795 5,795 3,264 73,345
Stock option and stock bonus plan - - 10 -
Issuance of shares under stock
bonus plan 9 9 (23) -
Net loss for the year - - - (1,900)
------ ------ -------- -------
Balance at February 1, 1992 5,804 5,804 3,251 71,445
Issuance of shares under stock
bonus plan 1 1 1 -
Net loss for the year - - - (679)
______ ______ _______ ________
Balance at January 30, 1993 5,805 5,805 3,252 70,766
Net loss for the year - - - (19,494)
----- ----- -------- --------
Balance at January 29, 1994 5,805 $5,805 $3,252 $ 51,272
======= ======= ======== ========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands)
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
(Restated) (Restated)
<S> <C> <C> <C>
Cash flows of operating activities
Net loss $(19,494) $ (679) $ (1,900)
Adjustments to reconcile net cash (used) provided
by operating activities
Depreciation and amortization 6,144 6,142 6,205
Reserve for corporate restructuring 15,000 - -
Charge to reserve for corporate restructuring (207) - -
Stock option and bonus plan expense, net of stock
retained for income taxes - 2 (4)
(Gain) loss on disposition of fixed assets (130) 368 449
(Decrease) increase in deferred income taxes (5,510) (247) 3,647
Cumulative effect of change in accounting principle - - (2,150)
Gain on disposition of real estate and leaseholds (698) (960) -
Changes in assets and liabilities
Decrease in accounts receivable 98 396 288
Decrease (increase) in merchandise inventories 4,634 (7,200) 12,739
(Increase) decrease in prepaid expenses and other (469) 2,900 (1,053)
(Decrease) increase in trade accounts payable (2,622) 3,643 (2,669)
Decrease in accrued liabilities (294) (93) (1,529)
Decrease in income taxes (858) (366) (3,890)
------- ------ -------
Net cash (used) provided in operating activities (4,406) 3,906 10,133
Cash flows of investing activities
Proceeds from sale of fixed assets 132 102 136
Purchase of property, plant and equipment (4,497) (2,876) (2,784)
Proceeds from disposition of real estate and leaseholds 1,284 710 -
Proceeds from note receivable 46 43 44
------- ------- -------
Net cash used by investing activities (3,035) (2,021) (2,604)
Cash flows of financing activities
Payment of loan acquisition costs (34) (421) -
Proceeds (payment) of long-term obligations, net 2,076 (7,303) (3,720)
------- ------- --------
Net cash provided (used) by financing activities 2,042 (7,724) (3,720)
------- ------- --------
Net (decrease) increase in cash and cash equivalents (5,399) (5,839) 3,809
Cash and cash equivalents at beginning of period 5,443 11,282 7,473
------- ------- --------
Cash and cash equivalents at end of period $ 44 $ 5,443 $ 11,282
======== ========= ========
Supplemental disclosures of cash flow information
Cash paid (refunded) during the year for
Income taxes $ 108 $ (4,501) $ 240
Interest $ 1,403 $ 1,343 $ 1,520
Noncash investing and financing activities:
During 1991, a capital lease obligation of $458
was incurred when the Company entered into a
lease for new computer equipment
See notes to consolidated financial statements.
</TABLE>
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
GENERAL BUSINESS
- ----------------
Oshman's Sporting Goods, Inc. (the Company) operates a chain of
retail sporting goods specialty stores, primarily in the
Southwestern, Western, and Southern United States. The Texas and
California stores accounted for approximately 37% and 27%,
respectively, of sales for the year ended January 29, 1994. The
majority of the Company's sales are either cash or through major
national credit cards.
1. FISCAL YEAR
-----------
The Company's fiscal year ends on the Saturday closest to the
end of January. Fiscal years 1993 (52 weeks), 1992 (52 weeks), and
1991 (52 weeks) ended on January 29, 1994, January 30, 1993, and
February 1, 1992, respectively.
2. PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of
Oshman's Sporting Goods, Inc. and its subsidiaries, all wholly-
owned. In consolidation, all significant intercompany transactions
have been eliminated.
3. CASH AND CASH EQUIVALENTS
-------------------------
The Company considers all highly liquid debt instruments
purchased with an original maturity of three months or less to be
cash equivalents.
Equivalents of $3,002,000 at the end of 1992 consist of short-
term, interest bearing deposits and securities stated at cost,
which approximates market. These equivalents include securities
purchased under agreements to resell (reverse repurchase
agreements), which result from transactions that are collateralized
by negotiable securities. At the end of 1992, the Company had
agreements outstanding to resell securities in the amount of
$3,002,000 with maturity dates of less than four days. There were
no equivalents in 1993.
4. MERCHANDISE INVENTORIES
-----------------------
Merchandise inventories are valued principally by the retail
method and are stated at the lower of cost, determined on a first-
in, first-out (FIFO) basis, or market. During the year ended
January 29, 1994, the Company changed its method of valuing its
inventory to the FIFO method from the last-in, first-out (LIFO)
method in order to better measure the current value of such
inventories and the financial position of the Company.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
The effect of this change was to decrease the net loss by
approximately $4,600,000 ($0.79 per share) in 1993, primarily due
to increased realization of tax benefits. The financial statements
of 1992 have been retroactively restated increasing the previously
reported net loss by $479,000 ($.08 per share). The financial
statements for 1991 have also been retroactively restated for the
change, resulting in an increase of the loss before cumulative
effect of change in accounting principle by $12,000 (no earnings
per share effect) and decrease of the net loss by $950,000 ($.16
per share).
5. PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Depreciation and amortization are provided principally by the
straight-line method based upon estimated useful lives of 3 to 10
years for furniture, fixtures and equipment, 3 to 30 years for
leasehold improvements and 20 to 40 years for buildings. Estimated
useful lives of leasehold improvements represent the remaining term
of the lease in effect at the time the improvements are made.
6. AMORTIZATION OF OTHER ASSETS
----------------------------
Amortization is computed using the straight-line method. Excess
of cost over net assets of a business acquired is being amortized
over 40 years. Loan acquisition costs are being amortized over the
term of the related debt.
7. INCOME TAXES
------------
Provision has been made for deferred income taxes applicable to
the temporary differences between earnings for financial reporting
purposes and taxable income. Principal temporary differences
include differences in accounting for depreciation and
capitalization of certain inventory costs. Income tax credits are
accounted for by the flow-through method, which recognizes the
credits as reductions of income tax expense in the year utilized.
8. PRE-OPENING COSTS
-----------------
Costs (other than property, plant and equipment) associated with
the opening of new stores under 25,000 square feet are charged to
expense as incurred. Pre-opening costs of stores larger than
25,000 square feet are deferred and amortized over a one-year
period subsequent to the store opening.
9. RECLASSIFICATIONS
-----------------
Certain amounts in the 1992 and 1991 financial statements have
been reclassified to conform to the 1993 financial statement
presentation.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
<TABLE>
NOTE B - PROPERTY, PLANT AND EQUIPMENT
The cost of property, plant and equipment at the end of the year consists of
the following:
<CAPTION>
1993 1992
------ ------
(In thousands)
<S> <C> <C>
Furniture, fixtures and equipment $44,397 $43,830
Leasehold improvements 29,329 28,203
Buildings 3,574 3,631
Land 1,917 1,657
Leasehold improvements under capital leases 1,594 1,677
------- -------
$80,811 $78,998
====== ======
</TABLE>
NOTE C - NOTE RECEIVABLE
The Company has a noninterest bearing note receivable from the
Company's chief executive officer. At the end of 1993 and 1992,
the balance of the note was $556,000 and $601,000, respectively.
The note is payable in 228 bi-weekly installments of approximately
$2,000 beginning April 1, 1991, with the remainder due September
2000. The note is collateralized by life insurance and Company
stock options.
<TABLE>
NOTE D - LONG-TERM OBLIGATIONS
Long-term obligations at the end of the year consist of the following:
<CAPTION>
1993 1992
------ ------
(In thousands)
<S> <C> <C>
Revolving credit facility due August
31, 1995, interest payable monthly
at prime plus 1-1/2%; collateralized
by inventory, accounts receivable
and real estate $1,985 $ -
Mortgage notes collateralized by
land and buildings (approxi-
mate cost $4,736,000) payable in
aggregate monthly installments
of $28,000, including interest
ranging from prime (6% at
January 29, 1994) plus 1% to 9-1/2%
(fixed), maturing through 2005 1,876 1,575
Capitalized lease obligations, interest
at an average rate of 8% to 15-1/2%,
maturing at various dates through 1997 224 434
------ -----
4,085 2,009
Less current maturities 373 313
------ ------
$3,712 $1,696
====== ======
</TABLE>
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE D - LONG-TERM OBLIGATIONS - CONTINUED
Following are maturities of long-term obligations for each of the
next five years and thereafter:
<TABLE>
<CAPTION>
Fiscal year Amount
----------- ----------
(In thousands)
<S> <C>
1994 $ 373
1995 2,189
1996 655
1997 110
1998 497
Thereafter 261
_____
$4,085
======
</TABLE>
On August 31, 1992, the Company entered into an agreement
providing for a three-year, $32,500,000 revolving credit facility.
Advances under the facility are based on a borrowing base formula
and subject to certain loan reserves, and the facility is secured
primarily by inventory, accounts receivable and real estate. The
credit agreement includes various requirements, financial covenants
and restrictions, including a restriction on the payment of
dividends. Advances under the credit facility bear interest at the
prime rate (6% at January 29, 1994) plus 1.5% and any unused
borrowing capacity is subject to a line of credit fee of .5%.
Advances outstanding at January 29, 1994 amounted to $1,985,000.
Effective April 30, 1993, the credit facility was amended to
increase the revolving line of credit from $32,500,000 to
$38,500,000 for the month of November 1993 and to amend certain
financial covenants for the fiscal year 1993. Additionally, on
October 29,1993 the credit facility was amended to permit the
change in method of valuing inventories and certain financial
covenants for the period ended October 30, 1993. During the fourth
quarter in 1993, the facility was also amended to increase the
revolving line of credit to $40,000,000 and to modify the financial
covenants to accommodate the Company's restructuring plan.
On September 1, 1992, amounts advanced under the revolving
credit facility were used to prepay, without penalty, $6,250,000
of unsecured promissory notes payable.
At the end of 1993 and 1992, outstanding letters of credit were
$3,439,000 and $3,092,000, respectively.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE E - INCOME TAXES
During the first quarter of 1991, the Company changed its method
of accounting for income taxes to conform to Statement of Financial
Accounting Standards No. 96, Accounting for Income Taxes. Under
SFAS No. 96, deferred tax assets and liabilities represent the tax
effect, based on current law, of future deductible or taxable
amounts attributable to events that have been recognized in the
financial statements.
The cumulative effect of this accounting change on the years
ending February 2, 1991 and prior was to reduce the net loss by
$2,150,000 ($.37 per share).
During the first quarter of 1993, the Company adopted Statement
of Financial Accounting Standards No. 109, Accounting for Income
Taxes. The new standard has changed certain requirements
prescribed by SFAS No. 96, but retains the asset and liability
approach of accounting for deferred taxes. The adoption of SFAS
No. 109 did not have a material effect on the Company's financial
statements.
The Company's tax benefit consisted of the following:
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
(In thousands)
<S> <C> <C> <C>
Current
Federal (9) $ - $(2,348)
State 34 233 59
Deferred
Federal (5,638) (634) 18
State (624) (51) -
------- ------ ------
$(6,237) $(452) $(2,271)
======= ====== =======
</TABLE>
A reconciliation of income tax benefits on net losses before
cumulative effect of change in accounting principle computed at
the statutory federal income tax rate and income taxes reported in
the consolidated statements of operations is as follows:
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE E - INCOME TAXES - CONTINUED
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
(In thousands)
<S> <C> <C> <C>
Income tax benefit at statutory rate $(8,748) $(385) $(2,150)
Increases (reductions)
State income taxes (net of
Federal tax benefit) 22 119 39
Targeted jobs tax credit-net (15) (100) (104)
Other items - net (446) (86) (56)
Valuation allowance 2,950 - -
----- ----- ------
2,511 (67) (121)
------ ----- --------
Income tax benefit $(6,237) $(452) $(2,271)
======= ===== ========
</TABLE>
Deferred federal income taxes (benefit) result from temporary
differences in the recognition of revenue and expenses for tax and
financial statement purposes.
The sources of these differences and the tax effect were as
follows:
<TABLE>
<CAPTION
1993 1992 1991
------ ------ ------
(In thousands)
<S> <C> <C> <C>
Tax benefit carryforward of operating loss $(2,261) $(263) $ -
Targeted jobs and other tax credit (22) (209) -
Accelerated depreciation (458) (274) (110)
Inventory capitalization (172) (131) (72)
Accrued expenses deductible in different
years for financial and tax purposes (5,346) 168 329
LIFO termination (409) (246) (7)
Deferred gain - condemnation - 99 -
Store pre-opening costs, net (89) 245 (96)
Other items 169 (23) (26)
Valuation allowance 2,950 - -
------ ----- -----
$(5,638) $(634) $ 18
======= ===== ======
</TABLE>
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE E - INCOME TAXES - CONTINUED
Deferred tax assets and liabilities at January 29, 1994 consist
of the following:
<TABLE>
<CAPTION>
Current Long-Term
------- ---------
(In thousands)
<S> <C> <C>
Assets
Accrued expenses $ 3,660 $ 2,710
Other 121 -
NOL carryforward - 2,469
Business tax credits - 466
------- -------
3,781 5,645
Liabilities
Depreciation of property and equipment - 2,984
Inventory capitalization 776 -
LIFO termination 490 1,985
Store opening costs 159 -
State taxes 4 179
Other 53 213
------ -----
1,482 5,361
------ -----
Net asset before valuation allowance 2,299 284
Less valuation allowance (2,353) (597)
------- -----
NET LIABILITY $ 54 $ 313
====== ======
</TABLE>
Deferred income taxes of $54,000 and $16,000 were included in
current liabilities at the end of 1993 and 1992. The change in the
method of accounting for inventory which was made in the first
quarter of 1993 resulted in a $3,596,000 increase in the deferred
federal tax liability and a $388,000 increase in deferred state tax
liability.
Deferred assets were reduced by a valuation allowance of
$2,950,000 during 1993. Based upon the criterion of SFAS No. 109,
recognition of a deferred tax asset is prohibited if the Company
cannot show that it is more likely than not that the deferred tax
asset will be realized in future years.
The Company has net operating loss carryforwards of
approximately $7,261,000. The carryforwards expire $641,000 in
2008 and $6,620,000 in 2009. Additionally, the Company has foreign
tax credit carryforwards of $232,000 expiring from 1997 to 1999,
job tax credit carryforwards of $173,000 expiring from 2008 to 2009
and alternative minimum tax credit carryforwards of $61,000.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE F - COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company conducts certain of its operations in owned
facilities with its remaining operations being conducted in
facilities leased under noncancelable operating leases. Rentals of
the retail locations are based on minimum required rentals and/or,
in certain instances, contingent rentals based on a percentage of
sales. Some leases contain renewal options with provision for
increased rentals during the renewal term.
Future minimum rental payments under operating leases at the end
of 1993 are as follows:
<TABLE>
<CAPTION>
Fiscal year Amount
----------- --------
(In thousands)
<S> <C>
1994 $13,311
1995 13,192
1996 12,439
1997 11,835
1998 11,186
Thereafter to 2017 76,612
</TABLE>
Minimum payments have not been reduced by minimum sublease
rental income of $19,167,000 due in the future under noncancelable
subleases.
Total rental expense entering into the determination of net loss
is as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
(In thousands)
<S> <C> <C> <C>
Leased facilities
Minimum rentals $13,798 $13,545 $12,382
Contingent rentals (based
on a percentage of sales) 2,649 2,488 2,210
------ ------- ------
16,447 16,033 14,592
Other rentals 461 448 577
------ ------- ------
$16,908 $16,481 $15,169
====== ====== ======
</TABLE>
Certain leases between the Company and two trusts, which are for
the benefit of two shareholders, provide for total minimum annual
rentals of $363,000 through 1998.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE F - COMMITMENTS AND CONTINGENCIES - CONTINUED
CAPITAL LEASES
--------------
Future minimum lease payments for assets under capital leases at
the end of 1993, and the present value of such payments, are as
follows:
<TABLE>
<CAPTION>
Fiscal year Amount
----------- --------
(In thousands)
<S> <C>
1994 $209
1995 17
1996 17
-----
Total minimum lease payments 243
Less amount representing interest 19
-----
Present value of minimum obligations $224
===
</TABLE>
PROFIT SHARING PLAN
-------------------
The Company and its subsidiaries participate in a discretionary
employee profit sharing plan. No contributions were made in 1993,
1992 or 1991.
EMPLOYEE MEDICAL PLAN
---------------------
The Company has an employee medical plan available to all full-
time regular employees. The plan provides for payment of various
medical expenses and is funded by participating employees and the
Company. The provision for the Company's contribution to the plan
amounted to $691,000, $484,000 and $865,000 for 1993, 1992 and
1991, respectively.
SEVERANCE PAY BONUS AGREEMENTS
------------------------------
The Company has employment agreements with certain executive
officers that become operative only upon a change in control of the
Company. Compensation which may be payable under these agreements
has not been accrued in the consolidated financial statements as a
change in control, as defined, has not occurred.
LITIGATION
----------
Various legal claims have arisen in the normal course of
business, which, in the opinion of management, will not have a
material adverse effect on the Company's financial statements.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993
and February 1, 1992
NOTE G - STOCKHOLDERS' EQUITY
CAPITAL STOCK
- -------------
Authorized capital stock consists of 500,000 shares of $1 par
value preferred stock and 15,000,000 shares of $1 par value common
stock. No preferred stock has been issued. Common stock issued
and outstanding was 5,805,000 shares at the end of 1993 and 1992,
and 5,804,000 shares at the end of 1991.
COMMON STOCK OPTION PLANS
-------------------------
At the end of 1993, the Company had under option 580,100 shares
of its common stock for issuance at prices ranging from $4.13 to
$15.20 per share, of which 322,950 were exercisable.
The Company's 1993 Non-Employee Director Stock Option Plan
provides for the issuance of options to non-employee directors of
the Company at an option price equal to the average of the closing
prices of the last five trading days preceding and including the
date of grant. Unexercised options expire no later than ten years
from date of grant or three months after the termination of the
directorship, extended to one year if the termination of
directorship is caused by death or disability. An additional
70,000 shares are reserved for future option grants.
The Company's 1991 Stock Option Plan and 1982 Incentive Stock
Option Plan provide for the issuance of options to key employees of
the Company at an option price of 100% of the market value of the
shares at the time the options are granted. No option is
exercisable after the expiration of five years from the date the
option is granted and unexercised options lapse at termination of
employment under the 1982 Plan and thirty-one days after
termination of employment under the 1991 Plan. An additional
80,300 shares are reserved for future option grants under the 1991
Plan.
The Company's 1986 Stock Option Plan allows the granting of
options at an option price of not less than 50% of the market value
of the shares at date of grant. Unexercised options expire no
later than ten years from date of grant or twelve months after
termination of employment. An additional 32,000 shares are
reserved for future option grants.
The Company records an expense based on the difference between
the option price and fair market value of the stock at date of
grant, amortized over the vesting period of the option. Selling
and administrative expenses related to the grant of stock options
were not material in 1993, 1992 or 1991. Upon the exercise of
options, the proceeds are credited to the common stock account to
the extent of the par value of the shares issued, and the proceeds
in excess of the par value are credited to additional capital.
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 29, 1994, January 30, 1993 and February 1, 1992
NOTE G - STOCKHOLDERS' EQUITY - CONTINUED
No options were exercised in 1993, 1992 or 1991.
COMMON STOCK BONUS PLAN
-----------------------
The Company has 36,502 shares of stock reserved for future
grants under a stock bonus plan. At the end of 1993, no grants
were outstanding. The plan provides for the issuance of shares, at
no cost to employees, over a five year period from date of grant,
with one-third of the shares to be received at the end of each of
the third, fourth, and fifth years if still employed. Selling and
administrative expenses related to the stock bonus plan were not
material in 1993, 1992 or 1991.
NOTE H - EARNINGS (LOSS) PER SHARE
Earnings (loss) per common and dilutive common equivalent share
are based upon the weighted average number of common shares
outstanding during each year. Outstanding options and bonus grants
are included in periods where they have a dilutive effect.
NOTE I - CORPORATE RESTRUCTURING
As a result of the Company's review of its operating strategies
to become primarily a mega-store sporting goods operator, and in
order to more aggressively redeploy its assets, the Company is
implementing a restructuring plan to close 34 underperforming
traditional stores. A restructuring charge of $15,000,000 before
taxes was recorded in December 1993 which includes provisions for
anticipated operating losses, liquidation markdowns on inventory,
leasehold improvement abandonments, lease termination costs and
other anticipated costs necessary to close the stores.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
(Unaudited)
Years ended January 29, 1994 and January 30, 1993
(In thousands except per share amounts)
<TABLE>
<CAPTION>
First Second Third Fourth
quarter quarter quarter quarter
-------- ------- ------- --------
<S> <C> <C> <C> <C>
1993 (First and Second Quarters
Restated)
Net sales $64,166 $81,290 $66,563 $ 95,916
======== ======== ======== ==========
Gross profit $23,337 $26,306 $23,114 $ 29,928
======== ======== ======== ==========
Net earnings (loss) $(2,311) $(1,569) $(3,333) $ (12,281)
======== ======== ======== ==========
Earnings (loss) per share $ (.40) $ (.27) $ (.57) $ (2.12)
======== ======== ======== ==========
1992 (Restated)
Net sales $62,186 $80,962 $69,019 $101,086
======== ======== ======== =========
Gross profit $24,256 $28,420 $24,221 $ 36,008
======== ======== ======== =========
Net earnings (loss) $ (925) $ 123 $(2,390) $ 2,513
======== ======== ======== =========
Earnings (loss) per share $ (.16) $ .02 $ (.41) $ .43
======== ======== ======== =========
</TABLE>
<PAGE>
Schedule V
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column F
-------- ---------- -------- -------- --------
Balance at Balance at
beginning Additions end of
Classifications of period at cost Retirements period
--------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 29, 1994
Furniture, fixtures and equipment $43,830 $2,003 $1,436 $44,397
Leasehold improvements 28,203 1,540 414 29,329
Buildings 3,631 524 581 3,574
Land 1,657 430 170 1,917
Leasehold improvements under capital leases 1,677 - 83 1,594
------ ----- ------ ------
$78,998 $4,497 $2,684 $80,811
====== ===== ===== ======
YEAR ENDED JANUARY 30, 1993
Furniture, fixtures and equipment $43,641 $1,293 $1,104 $43,830
Leasehold improvements 29,000 831 1,628 28,203
Buildings 3,471 160 - 3,631
Land 1,065 592 - 1,657
Leasehold improvements under capital leases 1,847 - 170 1,677
------ ------ ------ ------
$79,024 $2,876 $2,902 $78,998
====== ===== ===== ======
YEAR ENDED FEBRUARY 1, 1992
Furniture, fixtures and equipment $43,129 $2,866 $2,354 $43,641 Leasehold improvement
Buildings 3,471 - - 3,471
Land 1,065 - - 1,065
Leasehold improvements under capital leases 1,847 - - 1,847
------ ----- ----- -----
$78,602 $3,242 $2,820 $79,024
====== ===== ===== ======
Column E - None.
</TABLE>
<PAGE>
Schedule VI
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column F
-------- -------- -------- -------- --------
Balance at Additions Balance at
beginning charged to end of
Classifications of period expense Retirements period
--------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 29, 1994
Furniture, fixtures and equipment $28,147 $3,715 $1,129 $30,733
Leasehold improvements 16,992 2,052 607 18,437
Buildings 1,466 139 276 1,329
Leasehold improvements under capital leases 1,610 40 83 1,567
-------- -------- ------- ------
$48,215 $5,946 $2,095 $52,066
======= ====== ======= =======
YEAR ENDED JANUARY 30, 1993
Furniture, fixtures and equipment $25,313 $3,756 $ 922 $28,147
Leasehold improvements 16,203 2,129 1,340 16,992
Buildings 1,344 122 - 1,466
Leasehold improvements under capital leases 1,734 46 170 1,610
------- ------ ------ ------
$44,594 $6,053 $2,432 $48,215
======= ====== ====== =======
YEAR ENDED FEBRUARY 1, 1992
Furniture, fixtures and equipment $23,233 $3,793 $1,713 $25,313
Leasehold improvements 14,383 2,226 406 16,203
Buildings 1,223 121 - 1,344
Leasehold improvements under capital leases 1,682 52 - 1,734
------- ----- ------ ------
$40,521 $6,192 $2,119 $44,594
======= ====== ======= =======
Column E - None.
</TABLE>
<PAGE>
Schedule VIII
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
ALLOWANCE FOR DOUBTFUL RECEIVABLES
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Balance at Additions Balance at
beginning charged to end of
Description of period expense Deductions (A) period
----------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Year ended January 29, 1994 $244 $ 17 $ 19 $242
Year ended January 30, 1993 $260 $ 10 $ 26 $244
Year ended February 1, 1992 $222 $ 49 $ 11 $260
(A) Receivables charged off, net of recoveries.
Column C(2) - None.
</TABLE>
<PAGE>
Schedule IX
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
SHORT-TERM BORROWINGS
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
<TABLE>
<CAPTION>
(In thousands)
Column A Column D Column E Column F
-------- -------- ------------ --------
Maximum Average Weighted
Category of amount amount average
aggregate outstanding outstanding interest rate
short-term during the during the during the
borrowings period period period
---------- --------- ------------ -------- (a)
<S> <C> <C> <C>
Year ended January 29, 1994
Payable to banks - - -
Year ended January 30, 1993
Payable to banks $ 7,000 $2,940 6.56%
Year ended February 1, 1992
Payable to banks $15,530 $4,916 7.29%
</TABLE>
(a) The Company's unsecured bank line of credit of $15,000,000
expired in August 1992 and was replaced by a $32,500,000 long-
term revolving credit facility which was subsequently
increased to $40,000,000.
(b) Total weighted borrowings outstanding divided by 365 days (135
days for the year 1992).
(c) Interest expense divided by average daily balance on a 365 day
basis (135 days for the year 1992).
Column B - None.
Column C - Not applicable.
<PAGE>
Schedule X
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years ended January 29, 1994, January 30, 1993
and February 1, 1992
(In thousands)
<TABLE>
<CAPTION>
1993 1992 1991
------- ------- ------
<S> <C> <C> <C>
Maintenance and repairs expense $ 6,852 $ 6,592 $ 7,238
Advertising costs $ 15,878 $ 16,193 $ 14,265
Taxes, other than payroll and
income taxes $ 4,273 $ 3,859 $ 3,975
</TABLE>
Exhibit 4.1(f)
December 23, 1993
Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77223
Gentlemen:
Reference is made to the Financing Agreement dated August 31, 1992
(as amended or otherwise modified from time to time, the "Financing
Agreement") among J. S. OSHMAN AND CO., INC., OSHMAN SPORTING GOODS
CO., ALABAMA, OSHMAN SPORTING GOODS CO., ARIZONA, OSHMAN SPORTING
GOODS CO., ARKANSAS, OSHMAN SPORTING GOODS CO., CALIFORNIA, OSHMAN
SPORTING GOODS CO., FLORIDA, OSHMAN SPORTING GOODS CO., GEORGIA,
OSHMAN SPORTING GOODS CO., HAWAII, OSHMAN SPORTING GOODS CO.,
LOUISIANA, OSHMAN SPORTING GOODS CO., MINNESOTA, OSHMAN SPORTING
GOODS CO., MISSOURI, OSHMAN SPORTING GOODS CO., NEVADA, OSHMAN
SPORTING GOODS CO., NEW JERSEY, OSHMAN SPORTING GOODS CO., NEW
MEXICO, OSHMAN SPORTING GOODS CO., NEW YORK, OSHMAN SPORTING GOODS
CO., OHIO, OSHMAN SPORTING GOODS CO., OKLAHOMA, OSHMAN SPORTING
GOODS CO., TENNESSEE, OSHMAN SPORTING GOODS CO., TEXAS, OSHMAN
SPORTING GOODS CO., WASHINGTON, OSHMAN'S SKI SKOOL, INC., and
OSHMAN'S SPORTING GOODS, INC. - SERVICES, (collectively the
"Companies"), and THE CIT GROUP/BUSINESS CREDIT, INC. ("CITBC").
Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Financing Agreement.
Effective immediately, pursuant to mutual understanding, the
Financing Agreement is hereby amended as follows:
1. The dollar amount of "$32,500,000" as it appears in the
definitions of Revolving Line of Credit and Availability shall be,
and hereby is, amended to read: "$40,000,000". Notwithstanding
such increase in the Revolving Line of Credit, all loans, advances
and extensions of credit to you pursuant to Sections 3 and 4 of the
Financing Agreement shall be within the Borrowing Base.
2. Section 6, paragraph 9 of the Financing Agreement is
hereby amended to read in its entirety as follows:
9. The Parent and its Subsidiaries shall maintain on a
consolidated basis, as of the end of each fiscal quarter
ending during the periods or on the dates below, a Net Worth
of not less than:
Date or Period Amount
-------------- ------
October 31, 1992-January 30, 1993 $68,000,000.00
January 31, 1993-October 30, 1993 $67,500,000.00
January 29, 1994 $61,200,000.00
April 30, 1994 $59,000,000.00
July 30, 1994 $58,000,000.00
October 29, 1994 $54,000,000.00
January 28, 1995 $61,200,000.00
At all times after January 28, 1995 $61,200,000.00
3. Section 6, subparagraph 10 I. of the Financing Agreement
is hereby amended to read in its entirety as follows:
I. Permit EBITDA, on a consolidated and cumulative
fiscal year to date basis (except for the
calculation of EBITDA for the fiscal quarter ending
January 29, 1994, which shall not be on a
cumulative basis, but which shall be calculated
solely for the fiscal quarter then ending), for the
Parent and its Subsidiaries, at the end of each
fiscal quarter, to be:
<TABLE>
<CAPTION>
Fiscal Quarter Ending EBITDA
--------------------- ------
<S> <C> <C>
October 31, 1992 Not more than
negative $ 1,370,000.00
January 30, 1993 Less than $ 6,387,000.00
May 1, 1993 Not more than
negative $ 2,400,000.00
July 31, 1993 Less than $ 425,000.00
October 30, 1993 Not more than
negative $ 5,639,000.00
January 29, 1994 Not more than
negative $ 10,800,000.00
April 30, 1994 Not more than
negative $ 500,000.00
July 30, 1994 Less than $ 650,000.00
October 29, 1994 Not more than
negative $ 1,400,000.00
January 28, 1995 Less than $ 9,000,000.00
April 29, 1995 Not more than
negative $ 703,000.00
July 29, 1995 and
at all times
thereafter Less than $ 1,141,000.00
</TABLE>
4. Section 6, subparagraph 11(iii) of the Financing
Agreement is hereby amended to read in its entirety as follows:
iii) $4,500,000.00 for the fiscal year ending
January 28, 1995;
5. Section 6, paragraph 12 of the Financing Agreement is
hereby amended to read in its entirety as follows:
12. The Parent and its Subsidiaries shall maintain, as
of the end of each fiscal quarter, on a consolidated basis,
for the particular quarters below, Working Capital of not less
than:
Fiscal Quarters Working Capital Amount
--------------- ----------------------
a) For the fiscal quarter ending
October 31, 1992 $ 37,525,000.00
b) For the fiscal quarter ending
January 30, 1993 $ 41,800,000.00
c) For the fiscal quarter ending
May 1, 1993 $ 41,800,000.00
d) For the fiscal quarter ending
July 31, 1993 $ 43,440,000.00
e) For the fiscal quarter ending
October 30, 1993 $ 40,565,000.00
f) For the fiscal quarter ending
January 29, 1994 $ 49,000,000.00
g) For the fiscal quarter ending
April 30, 1994 $ 46,700,000.00
h) For the fiscal quarter ending
July 30, 1994 $ 44,200,000.00
i) For the fiscal quarter ending
October 29, 1994 $ 37,800,000.00
j) For the fiscal quarter ending
January 28, 1995 $ 44,200,000.00
k) For the fiscal quarter ending
April 29, 1995 $ 41,800,000.00
l) For the fiscal quarter ending
July 29, 1995 and at the end of
each fiscal quarter thereafter $ 42,750,000.00
6. Section 6, paragraph 13 of the Financing Agreement is
hereby amended to read in its entirety as follows:
13. The Parent and its Subsidiaries, on a consolidated
basis, shall maintain at the end of each fiscal quarter ending
on the dates listed below, on a cumulative basis for the four
(4) fiscal quarters just ended (except for the calculation of
the Interest Coverage Ratio for the fiscal quarter ending
January 29, 1994 which shall not be on a cumulative basis, but
which shall be calculated solely for the fiscal quarter then
ending), an Interest Coverage Ratio of at least:
Fiscal Quarter Ending Ratio
--------------------- -----
a) October 31, 1992 .38 to 1
b) January 30, 1993 1.37 to 1
c) May 1, 1993 .19 to 1
d) July 31, 1993 .34 to 1
e) October 30, 1993 Negative(4.69)to 1
f) January 29, 1994 6.80 to 1
g) April 30, 1994 Negative(1.60) to 1
h) July 30, 1994 Negative(1.25) to 1
i) October 29, 1994 Negative(.95) to 1
j) January 28, 1995 2.20 to 1
k) April 29, 1995 2.00 to 1
l) July 29, 1995 and at the end of each
fiscal quarter thereafter 2.00 to 1
In any calculation of an Interest Coverage Ratio (i) that
includes the fiscal quarter ending January 29, 1994, there
shall be added to the calculation of EBITDA for such quarter
the actual amount, when determined, of the pre-tax charge
referred to in the Parent's press release dated December 6,
1993 relating to 30 to 35 store closings referred to therein
and (ii) that includes the fiscal quarter ending July 31,
1993, there shall be subtracted from the calculation of
Capital Expenditures for such quarter the sum of $855,000.00.
7. Section 6, paragraph 14 of the Financing Agreement is
hereby amended to read in its entirety as follows:
14. The Parent and its Subsidiaries shall maintain, as
of the end of each fiscal quarter, on a consolidated basis, a
ratio of Inventory, valued on the first-in, first-out method,
in accordance with GAAP, to Trade Accounts Payable plus the
amount of any "book overdraft" of the Parent and its
Subsidiaries of not more than:
Fiscal Quarter Ratio
-------------- -----
a) October 31, 1992 3.20 to 1
b) January 30, 1993 3.20 to 1
c) May 1, 1993 3.60 to 1
d) July 31, 1993 3.60 to 1
e) October 30, 1993 3.20 to 1
f) January 29, 1994 3.50 to 1
g) April 30, 1994 3.90 to 1
h) July 30, 1994 4.10 to 1
i) October 29, 1994 3.50 to 1
j) January 28, 1995 3.50 to 1
k) April 29, 1995 3.90 to 1
l) July 29, 1995 and for each fiscal
quarter thereafter 3.90 to 1
8. Section 6, paragraph 15 of the Financing Agreement is
hereby amended to read in its entirety as follows:
15. The Parent and its Subsidiaries shall maintain, as
of the end of each fiscal quarter ending on the dates listed
below, on a consolidated basis, a Leverage Ratio of not more
than:
Fiscal Quarters Ratio
--------------- -----
October 31, 1992 1.24 to 1
January 30, 1993 .77 to 1
May 1, 1993 .95 to 1
July 31, 1993 .98 to 1
October 30, 1993 1.27 to 1
January 29, 1994 1.20 to 1
April 30, 1994 1.50 to 1
July 30, 1994 1.40 to 1
October 29, 1994 1.90 to 1
January 28, 1995 1.20 to 1
April 29, 1995 1.50 to 1
July 29, 1995 and for each fiscal
quarter thereafter 1.40 to 1
9. Section 6, paragraph 16 of the Financing Agreement is
hereby amended to read in its entirety as follows:
16. The Parent and its Subsidiaries shall maintain, on
a consolidated basis, as of the end of each fiscal quarter
ending on the dates or during the periods listed below, on a
consolidated basis, a Current Ratio of at least:
October 31, 1992-January 29, 1994 1.50 to 1
April 30, 1994 1.25 to 1
July 30, 1994 1.25 to 1
October 29, 1994 1.25 to 1
January 28, 1995 1.50 to 1
April 29, 1995 and for each fiscal
quarter thereafter 1.50 to 1
In consideration of our execution of this agreement, you hereby
agree to pay us an accommodation fee equal to $25,000.00, and you
authorize us to charge your loan account with such fee on the date
hereof.
You hereby further agree that you shall be solely responsible for
the fees and expenses of your counsel incurred in connection with
this agreement.
Except as herein otherwise specifically provided, no other change
in any of the terms or provisions of the Financing Agreement is
intended or implied. If the foregoing is in accordance with your
understanding, please sign and return to us the enclosed copy of
this letter to so indicate.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: _______________________________
Title: _____________________
Read and Agreed to:
J. S. OSHMAN AND CO., INC.
OSHMAN SPORTING GOODS CO., ALABAMA
OSHMAN SPORTING GOODS CO., ARIZONA
OSHMAN SPORTING GOODS CO., ARKANSAS
OSHMAN SPORTING GOODS CO., CALIFORNIA
OSHMAN SPORTING GOODS CO., FLORIDA
OSHMAN SPORTING GOODS CO., GEORGIA
OSHMAN SPORTING GOODS CO., HAWAII
OSHMAN SPORTING GOODS CO., LOUISIANA
OSHMAN SPORTING GOODS CO., MINNESOTA
OSHMAN SPORTING GOODS CO., MISSOURI
OSHMAN SPORTING GOODS CO., NEVADA
OSHMAN SPORTING GOODS CO., NEW JERSEY
OSHMAN SPORTING GOODS CO., NEW MEXICO
OSHMAN SPORTING GOODS CO., NEW YORK
OSHMAN SPORTING GOODS CO., OHIO
OSHMAN SPORTING GOODS CO., OKLAHOMA
OSHMAN SPORTING GOODS CO., TENNESSEE
OSHMAN SPORTING GOODS CO., TEXAS
OSHMAN SPORTING GOODS CO., WASHINGTON
OSHMAN'S SKI SKOOL, INC.
OSHMAN'S SPORTING GOODS, INC. - SERVICES
By: __________________________________
Title: _____________________________
of each of the above companies
Exhibit 4.1(g)
As of December 23, 1993
Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77233
Gentlemen:
Reference is made to the Financing Agreement dated August 31, 992,
(as amended or otherwise modified from time to time, the "Financing
Agreement") among J.S. Oshman and Co., Inc., Oshman Sporting Goods
Co., Alabama, Oshman Sporting Goods Co., Arizona, Oshman Sporting
Goods Co., Arkansas, Oshman Sporting Goods Co., California, Oshman
Sporting Goods Co., Florida, Oshman Sporting Goods Co., Georgia,
Oshman Sporting Goods Co., Hawaii, Oshman Sporting Goods Co.,
Louisiana, Oshman Sporting Goods Co., Minnesota, Oshman Sporting
Goods Co., Missouri, Oshman Sporting Goods Co., Nevada, Oshman
Sporting Goods Co., New Jersey, Oshman Sporting Goods Co., New
Mexico, Oshman Sporting Goods Co., New York, Oshman Sporting Goods
Co., Ohio, Oshman Sporting Goods Co., Oklahoma, Oshman Sporting
Goods Co., Oregon, Oshman Sporting Goods Co., Tennessee, Oshman
Sporting Goods Co., Texas, Oshman Sporting Goods Co., Washington,
Oshman's Ski Skool, Inc., Oshman's Sporting Goods, Inc.-Services
(collectively the "Companies"), and THE CIT GROUP/BUSINESS CREDIT,
INC. ("CITBC"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in the Financing
Agreement.
Effective immediately pursuant to mutual understanding, the
Financing Agreement is hereby amended as follows:
1. Section 1 of the Financing Agreement is hereby amended to add
the following definition:
"Restructuring Charge" shall mean the pre-tax charge
--------------------
referred to in the Parent's press release dated
December 6, 1993 relating to 30 to 35 store closings
referred to therein.
2. The definition of "Current Ratio" appearing in Section 1 of
the Financing Agreement is hereby amended by deleting it in its entirety
and substituting the following in lieu thereof as follows:
"Current Ratio" shall mean a ratio determined by dividing
-------------
Current Assets by Current Liabilities provided, however,
that in any calculation of Current Ratio, Current
Liabilities shall exclude the Restructuring Charge."
3. The definition of "Working Capital" appearing in Section 1 of
the Financing Agreement is hereby amended by deleting it in its entirety
and substituting the following in lieu thereof:
"Working Capital" shall mean Current Assets in excess of
---------------
Current Liabilities, provided, however, that in any
calculation of Working Capital, Current Liabilities shall
exclude the Restructuring Charge."
Except as otherwise provided herein, no other change in any of the
terms or provisions of the Financing Agreement is intended or
implied. If the foregoing is in accordance with your
understanding, please sign and return to us the enclosed copy of
this letter to so indicate.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: ___________________________
Title:
Read and Agreed to:
J.S. OSHMAN AND CO., INC.
OSHMAN SPORTING GOODS CO., ALABAMA
OSHMAN SPORTING GOODS CO., ARIZONA
OSHMAN SPORTING GOODS CO., ARKANSAS
OSHMAN SPORTING GOODS CO., CALIFORNIA
OSHMAN SPORTING GOODS CO., FLORIDA
OSHMAN SPORTING GOODS CO., GEORGIA
OSHMAN SPORTING GOODS CO., HAWAII
OSHMAN SPORTING GOODS CO., LOUISIANA
OSHMAN SPORTING GOODS CO., MINNESOTA
OSHMAN SPORTING GOODS CO., MISSOURI
OSHMAN SPORTING GOODS CO., NEVADA
OSHMAN SPORTING GOODS CO., NEW JERSEY
OSHMAN SPORTING GOODS CO., NEW MEXICO
OSHMAN SPORTING GOODS CO., NEW YORK
OSHMAN SPORTING GOODS CO., OHIO
OSHMAN SPORTING GOODS CO., OKLAHOMA
OSHMAN SPORTING GOODS CO., OREGON
OSHMAN SPORTING GOODS CO., TENNESSEE
OSHMAN SPORTING GOODS CO., TEXAS
OSHMAN SPORTING GOODS CO., WASHINGTON
OSHMAN'S SKI SKOOL, INC.
OSHMAN'S SPORTING GOODS, INC. - SERVICES
By:__________________________________
Title:
Exhibit 4.1(h)
January 27, 1994
Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77233
Gentlemen:
Reference is made to the Financing Agreement dated August 31, 1992,
(as amended or otherwise modified from time to time, the "Financing
Agreement") among J.S. Oshman and Co., Inc., Oshman Sporting Goods
Co., Alabama, Oshman Sporting Goods Co., Arizona, Oshman Sporting
Goods Co., Arkansas, Oshman Sporting Goods Co., California, Oshman
Sporting Goods Co., Florida, Oshman Sporting Goods Co., Georgia,
Oshman Sporting Goods Co., Hawaii, Oshman Sporting Goods Co.,
Louisiana, Oshman Sporting Goods Co., Minnesota, Oshman Sporting
Goods Co., Missouri, Oshman Sporting Goods Co., Nevada, Oshman
Sporting Goods Co., New Jersey, Oshman Sporting Goods Co., New
Mexico, Oshman Sporting Goods Co., New York, Oshman Sporting Goods
Co., Ohio, Oshman Sporting Goods Co., Oklahoma, Oshman Sporting Goods Co.,
Tennessee, Oshman Sporting Goods Co., Washington, Oshman's Ski Skool, Inc.,
Oshman's Sporting Goods Co., Texas and Oshman's Sporting Goods, Inc.-Services
(collectively the "Companies"), and THE CIT GROUP/BUSINESS CREDIT, INC.
(the "Lender"). Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the Financing Agreement.
Paragraphs 9, 10(I), 12, 13 and 15 of Section 6 of the Financing
Agreement shall be, and each hereby is, amended as follows:
(a) the entry next to the date January 29, 1994 in said
Paragraph 9 shall be, and thereby is amended by substituting
the following in lieu thereof:
"January 29, 1994 $59,000,000.00"
(b) the entry next to the date January 29, 1994 in said
Paragraph 10(I) shall be, and hereby is, amended as follows:
"January 29, 1994 Not more than a negative $14,300,000.00"
(c) subparagraph f of said Paragraph 12 shall be, and hereby
is, amended to read as follows:
"f) For the fiscal quarter ending $46,000,000"
January 29, 1994
(d) subparagraph f of said Paragraph 13 shall be, and hereby
is, amended to read as follows:
"f) January 29, 1994 No test"
(e) the entry next to the date January 29, 1994 in said
paragraph 15 shall be, and hereby is, amended as follows:
"January 29, 1994 1.30 to 1"
In consideration of (i) the preparation of this amendment by the
Legal Department of CITBC, you hereby agree to pay us a
Documentation Fee equal to $195.00 and (ii) our execution of this
agreement you hereby agree to pay us an Accomodation Fee equal to
$5,000, and you authorize us to charge your loan account with such
fees on the date hereof.
Except to the extent set forth herein, no other change in any of
the terms or provisions of the Financing Agreement is intended or
implied.
If the foregoing is in accordance with your understanding, please
sign and return to use the enclosed copy of this letter to so
indicate.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: ______________________________
Title:
Read and Agreed to:
J.S. OSHMAN AND CO., INC.
OSHMAN SPORTING GOODS CO., ALABAMA
OSHMAN SPORTING GOODS CO., ARIZONA
OSHMAN SPORTING GOODS CO., ARKANSAS
OSHMAN SPORTING GOODS CO., CALIFORNIA
OSHMAN SPORTING GOODS CO., FLORIDA
OSHMAN SPORTING GOODS CO., GEORGIA
OSHMAN SPORTING GOODS CO., HAWAII
OSHMAN SPORTING GOODS CO., LOUISIANA
OSHMAN SPORTING GOODS CO., MINNESOTA
OSHMAN SPORTING GOODS CO., MISSOURI
OSHMAN SPORTING GOODS CO., NEVADA
OSHMAN SPORTING GOODS CO., NEW JERSEY
OSHMAN SPORTING GOODS CO., NEW MEXICO
OSHMAN SPORTING GOODS CO., NEW YORK
OSHMAN SPORTING GOODS CO., OHIO
OSHMAN SPORTING GOODS CO., OKLAHOMA
OSHMAN SPORTING GOODS CO., TENNESSEE
OSHMAN SPORTING GOODS CO., TEXAS
OSHMAN SPORTING GOODS CO., WASHINGTON
OSHMAN'S SKI SKOOL, INC.
OSHMAN'S SPORTING GOODS, INC. - SERVICES
By:__________________________________
Title:
of each of the above named companies
Exhibit 4.1(i)
April 6, 1994
Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77223
Gentlemen:
Reference is made to the Financing Agreement dated August 31, 1992,
(as amended or otherwise modified from time to time, the "Financing
Agreement") among J. S. Oshman and Co., Inc., Oshman Sporting Goods
Co., Alabama, Oshman Sporting Goods Co., Arizona, Oshman Sporting
Goods Co., Arkansas, Oshman Sporting Goods Co., California, Oshman
Sporting Goods Co., Florida, Oshman Sporting Goods Co., Georgia,
Oshman Sporting Goods Co., Hawaii, Oshman Sporting Goods Co.,
Louisiana, Oshman Sporting Goods Co., Minnesota, Oshman Sporting
Goods Co., Missouri, Oshman Sporting Goods Co., Nevada, Oshman
Sporting Goods Co., New Jersey, Oshman Sporting Goods Co., New
Mexico, Oshman Sporting Goods Co., New York, Oshman Sporting Goods
Co., Ohio, Oshman Sporting Goods Co., Oklahoma, Oshman Sporting
Goods Co., Oregon, Oshman Sporting Goods Co., Tennessee, Oshman
Sporting Goods Co., Texas, Oshman Sporting Goods Co., Washington,
Oshman's Ski Skool, Inc., Oshman's Sporting Goods, Inc.-Services
(collectively the "Companies"), and THE CIT GROUP/BUSINESS CREDIT,
INC. ("CITBC"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in the Financing
Agreement.
Effective immediately pursuant to mutual understanding, the
Financing Agreement is hereby amended as follows:
1. Paragraph 9 (Net Worth) of Section 6 of the Financing
Agreement is hereby amended by deleting it in its entirety, and the
following is substituted in lieu thereof:
Date or Period Amount
-------------- ------
" April 30, 1994 $56,500,000.00
July 30, 1994 $56,500,000.00
October 29, 1994 $52,500,000.00
January 28, 1995 $59,500,000.00
At all times thereafter $61,200,000.00"
2. Paragraph 10(I) (Minimum EBITDA) of Section 6 of the
Financing Agreement is hereby amended by deleting the following:
"January 28, 1995 Less than $9,000,000.00"
and substituting the following in lieu thereof:
"January 28, 1995 Less than $8,500,000.00"
3. Paragraph 12 (Working Capital) of Section 6 of the Financing
Agreement is hereby amended by deleting the following:
"g) For the fiscal quarter ending $46,700,000.00
April 30, 1994
h) For the fiscal quarter ending $44,200,000.00
July 30, 1994
i) For the fiscal quarter ending $37,800,000.00
October 29, 1994
j) For the fiscal quarter ending $44,200,000.00
January 28, 1995
and substituting the following in lieu thereof:
"g) For the fiscal quarter ending $42,750,000.00
April 30, 1994
h) For the fiscal quarter ending $41,400,000.00
July 30, 1994
i) For the fiscal quarter ending $35,000,000.00
October 29, 1994
j) For the fiscal quarter ending $43,000,000.00
January 28, 1995
4. Paragraph 13 (Interest Coverage Ratio) of Section 6 of the
Financing Agreement is hereby amended by deleting the following:
"g) April 30, 1994 Negative (1.60) to 1
h) July 30, 1994 Negative (1.25) to 1
i) October 29, 1994 Negative (.95) to 1
j) January 28, 1995 2.20 to 1"
and substituting the following in lieu thereof:
"g) April 30, 1994 No Test
h) July 30, 1994 No Test
i) October 29, 1994 No Test
j) January 28, 1995 2.00 to 1"
5. Paragraph 15 (Leverage Ratio) of Section 6 of the Financing
Agreement is hereby amended by deleting the following:
"April 30, 1994 1.50 to 1"
and substituting the following in lieu thereof:
"April 30, 1994 1.60 to 1"
Except as otherwise specifically provided herein, no other change
in any of the terms or provisions of the Financing Agreement is
intended or implied. If the foregoing is in accordance with your
understanding, please sign and return to us the enclosed copy of
this letter to so indicate.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: _______________________________
Title:
Read and Agreed to:
J.S. OSHMAN AND CO., INC.
OSHMAN SPORTING GOODS CO., ALABAMA
OSHMAN SPORTING GOODS CO., ARIZONA
OSHMAN SPORTING GOODS CO., ARKANSAS
OSHMAN SPORTING GOODS CO., CALIFORNIA
OSHMAN SPORTING GOODS CO., FLORIDA
OSHMAN SPORTING GOODS CO., GEORGIA
OSHMAN SPORTING GOODS CO., HAWAII
OSHMAN SPORTING GOODS CO., LOUISIANA
OSHMAN SPORTING GOODS CO., MINNESOTA
OSHMAN SPORTING GOODS CO., MISSOURI
OSHMAN SPORTING GOODS CO., NEVADA
OSHMAN SPORTING GOODS CO., NEW JERSEY
OSHMAN SPORTING GOODS CO., NEW MEXICO
OSHMAN SPORTING GOODS CO., NEW YORK
OSHMAN SPORTING GOODS CO., OHIO
OSHMAN SPORTING GOODS CO., OKLAHOMA
OSHMAN SPORTING GOODS CO., OREGON
OSHMAN SPORTING GOODS CO., TENNESSEE
OSHMAN SPORTING GOODS CO., TEXAS
OSHMAN SPORTING GOODS CO., WASHINGTON
OSHMAN'S SKI SKOOL, INC.
OSHMAN SPORTING GOODS, INC.-SERVICES
By: _______________________________
Title:
Exhibit 10.8
OSHMAN'S SPORTING GOODS, INC.
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement ("Agreement") is dated as of
October 3, 1990, between Oshman's Sporting Goods, Inc., a Delaware
corporation ("Employer"), and Alvin N. Lubetkin, a resident of
Houston, Texas ("Employee").
Recitals
--------
Employee has been employed by Employer since 1961 and has
served as chief executive officer since 1968. Employee's
employment has been and is presently terminable at will by either
party. Concurrently herewith, Employer is making a loan to
Employee in the principal amount of $700,000.00 (the "Loan") in
order to assure that the Employer shall have the continued benefit
of Employee's services on the terms and conditions herein provided
for.
Now Therefore, it is agreed as follows:
1. Employment. Employee agrees to continue to serve the
----------
Employer on the terms and conditions set forth in this Agreement
for a term commencing as of October 3, 1990 (the "Effective Date")
and expiring on the date the Loan is fully repaid (the "Expiration
Date"). Employee acknowledges that his employment shall continue
to be at the will of the Employer, who may terminate his employment
at any time with or without cause. If Employee remains in the
employ of Employer following the Expiration Date and Employer and
Employee do not enter into a written employment agreement governing
such employment, then such employment shall be on an at-will basis
with either party having the right to terminate such employment at
any time and for any reason (with or without cause) and none of the
provisions of this Agreement shall apply to such employment other
than the provisions of Sections 4, 6 and 7.
2. Compensation and Other Benefits. As compensation for all
-------------------------------
services rendered by Employee in the performance of his duties or
obligations under this Agreement, Employer shall pay Employee a
salary and such other compensation as are fixed from time to time
by the Board of Directors of the Employer (the "Board"), such
salary to be payable in the manner and on the timetable which
Employer's payroll is customarily handled or at such intervals as
the Employer and the Employee may hereafter agree to from time to
time. Employee shall receive such other benefits as may be fixed
from time to time by the Board of Directors of the Employer. All
compensation paid hereunder, whether in the form of salary or
otherwise, shall be subject to any and all applicable payroll and
withholding deductions required by the law of any jurisdiction,
state or federal, with taxing authority with respect thereto.
3. Duties. Employee is employed to act as President and
------
chief executive officer of Employer or in such other office or
position of an executive character as shall be assigned to him from
time to time by the Board, and to perform such executive duties as
are commensurate with his position with Employer and which are
assigned by the Board not inconsistent with the provisions hereof.
In addition, if requested to do so by the Board, Employee shall
serve as an officer and as a member of the board of directors of
any subsidiary or affiliate of Employer. Employee agrees that he
shall be a full-time employee of Employer; shall devote his entire
working time, attention and energy to the affairs of Employer;
shall not serve on the board of directors of any other corporation
without the prior consent of Employer; shall perform the duties of
his position in an efficient and competent manner and shall use his
best efforts to promote the interests of Employer, its subsidiaries
and affiliates. The foregoing shall not be construed as preventing
Employee from making investments in business enterprises provided
such investments do not require any services on the part of
Employee in the operation of such businesses or enterprises.
4. Disclosure of Confidential Information. Except to the
--------------------------------------
extent required in the performance of his duties or obligations to
Employer and as expressly authorized herein, or by express prior
consent of the Board, Employee will never, directly or indirectly,
at any time during his employment with Employer, or at any time
subsequent to the termination of such employment, for any reason
whatsoever, with or without cause, breach the confidence reposed in
him by the Employer by using, disseminating, disclosing, divulging
or in any manner whatsoever permitting to be divulged or disclosed
to any person, firm, corporation, association or other business
entity, trade secrets, secret methods or "Confidential Information"
of Employer or any of its subsidiaries or affiliates (herein
referred to collectively as the "Company"). As used herein, the
term "Confidential Information" means any and all information
relating directly or indirectly to the Company that is not
generally ascertainable in usable form from public or published
information or trade sources, including, but not limited to, any
and all information concerning the Company's financial condition,
products, processes, sources of supply, services, customers,
licensees, financial statements and other financial data (including
such statements or data for any individual retail store or group of
retail stores), purchasing, marketing, merchandising, accounting
(including receivables, provisions for taxes, internal reporting
systems and accountant's work papers), management organization,
appraisals, leases, books and records, costs and net and gross
margin information, disclosed to Employee or known by Employee as
a consequence of or through his employment by the Company. On
termination of employment with Employer, all documents, records,
notebooks, tapes and similar repositories of Confidential
Information then in Employee's possession or in the possession of
any third party under the control of Employee or pursuant to any
agreement with Employee, whether prepared by Employer, Employee or
any other person, firm, corporation, association or other business
entity, together with any copies of the foregoing, will be
delivered to Employer by Employee.
5. Termination of Employment.
-------------------------
(a) Employee's employment pursuant hereto shall terminate in
the event of the death of Employee.
(b) Employer may by action of the Board terminate Employee's
employment under this Agreement for cause without any prior notice,
upon the occurrence of any of the following events:
(i) the conviction of Employee, whether or not appeal
be taken, of any misdemeanor or felony crime involving
personal dishonesty, moral turpitude or willfully violent
misconduct;
(ii) any embezzlement or wrongful diversion of funds of
the Company;
(iii) gross business misconduct by Employee;
(iv) gross malfeasance by Employee in the conduct of his
duties;
(v) breach of Section 4 or Section 6 of this Agreement;
or
(vi) any other breach of any of the terms of this
Agreement and such breach has not been corrected after
Employer has given Employee reasonable notice thereof and a
reasonable opportunity to correct any such breach.
(c) Employer may terminate Employee's employment under this
Agreement without cause at any time by giving written notice to
Employee.
6. Covenant Not to Compete.
-----------------------
(a) For purposes of this Section 6, the term "Conflicting
Organization" shall mean any person or organization which is
engaged in or about to become engaged in, any retail sporting goods
business in competition with the Company in any geographical areas
in which the Company was conducting business during Employee's
employment with Employer.
(b) Employee covenants and agrees that during Employee's
employment with Employer and for a period of eighteen (18) months
following any termination of his employment with Employer, other
than termination without cause by Employer (whether prior to or
after the Expiration Date), Employee shall not, without Employer's
prior written approval render services for or own or participate in
the ownership of, finance or participate in the financing of,
manage, operate, join or control, directly or indirectly, in any
capacity whatsoever, any Conflicting Organization, except that
Employee may accept employment with a Conflicting Organization
whose business is diversified and that as to some part of its
business is not a Conflicting Organization, provided that Employer,
prior to Employee accepting such employment, shall receive separate
written assurances satisfactory to Employer from such Conflicting
Organization and from Employee that Employee will not render
services directly or indirectly in connection with any part of the
business which is a Conflicting Organization. Notwithstanding the
foregoing, the covenant contained in the preceding sentence shall
apply only so long as any part of the Loan remains unpaid if either
(i) Employee's employment is terminated after September 6, 1992 or
(ii) Employee terminates his employment before September 6, 1992
for the reason that he is no longer employed as the chief executive
officer of Employer or that his base salary has been materially
reduced.
(c) Nothing contained in paragraph (b) above shall in any
manner be construed as prohibiting Employee from purchasing for
investment any stock or securities listed on any recognized stock
exchange; provided, however, that Employee may not purchase or own,
directly or indirectly a five percent (5%) or greater equity
interest in any Conflicting Organization issuing such stock or
securities.
(d) Employee covenants and agrees that for a period of three
(3) years following the termination for any reason of his
employment with the Company he shall not either for himself or on
behalf of any other person or organization (i) hire, attempt to
hire, contact or solicit with respect to hiring any employee of the
Company or any of its subsidiaries or (ii) induce or otherwise
counsel, advise or encourage any employee of the Company or any of
its subsidiaries to leave the employment of the Company or such
subsidiary.
(e) Employee acknowledges that this Section 6 constitutes an
independent covenant and shall not be affected by performance or
non-performance of any provision of this Agreement by Employer and
that the making to Employee of the Loan is good and sufficient
consideration for all Employee's covenants under this Section 6.
(f) To the extent necessary to satisfy the laws of the State
of Texas or any other applicable jurisdiction, Employer and
Employee agree that any geographical, temporal or other restriction
set forth in this Section 6 can and should, if necessary, be
judicially modified and enforced as modified to protect any
legitimate interest of the Employer.
(g) Employee warrants and represents that he:
(i) is familiar with covenants not to compete;
(ii) has concluded that such provisions (including,
without limitation, the right to equitable relief and the
length of time and size of area provided for herein) are fair,
reasonable and just under the circumstances; and
(iii) is fully aware of the obligations, limitations and
liabilities included in the covenant not to compete contained
in this Agreement.
7. Remedies. It is agreed that Employer would be
--------
irreparably damaged by reason of any violation of the provisions of
Sections 4 or 6 hereof, and that any remedy at law for a breach of
such provisions would be inadequate. Therefore, Employer shall be
entitled to seek and obtain injunctive or other equitable relief
(including, but not limited to, a temporary restraining order, a
temporary injunction or a permanent injunction) against Employee,
his agents, assigns or successors for a breach or threatened breach
of such provisions and without the necessity of proving actual
monetary loss. It is expressly understood that this injunctive or
other equitable relief shall not be Employer's exclusive remedy for
any breach of this Agreement and Employer shall be entitled to seek
any other relief or remedy which it may have by contract, statute,
law or otherwise for any breach hereof.
8. Actions by Board. Though Employee may be serving on the
----------------
Board of Employer at such time, he shall not participate in the
voting on any action of the Board provided for or referred to in
this Agreement.
9. Notice. Any notice, request, reply, instruction, or
------
other communication provided or permitted in this Agreement must be
given in writing and shall be deemed delivered if delivered in
person or if transmitted by telecopy or if sent by certified mail,
postage prepaid, return receipt requested, as follows
if to Employer, at:
Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77023
Attention: Edward R. Carlin
Executive Vice President
Telecopy: (713) 928-5196
With a copy to:
Mayor, Day & Caldwell
1900 NCNB Center
Houston, Texas 77002
Attention: Richard B. Mayor
Telecopy: (713) 225-7047
or if to Employee, at:
c/o Oshman's Sporting Goods, Inc.
2302 Maxwell Lane
Houston, Texas 77023
or to such other address as may be specified in a notice given in
accordance with this paragraph.
10. Controlling Law. The execution, validity, interpretation
---------------
and performance of this Agreement shall be determined and governed
by the laws of the State of Texas, exclusive of any principles
under which the law of another jurisdiction might be applied.
11. Additional Instruments. Employer and Employee shall
----------------------
execute and deliver any and all additional instruments and
agreements which may be necessary or proper to carry out the
purposes of this Agreement.
12. Entire Agreement. This Agreement contains the entire
----------------
agreement of the parties and supersedes in their entirety any prior
employment agreements between the parties. This Agreement may not
be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification,
extension or discharge is sought and, in the case of Employer, only
upon specific prior approval of the Board.
13. Severability. If any provision of this Agreement is
------------
rendered or declared illegal or unenforceable by reason of any
existing or subsequently enacted legislation or by decree of a
court of last resort, Employer and Employee shall promptly meet and
negotiate substitute provisions for those rendered or declared
illegal or unenforceable, but all the remaining provisions of this
Agreement shall remain in full force and effect.
14. Assignment; Binding Effect of Agreement. This Agreement
---------------------------------------
may not be assigned by Employee without the consent of Employer but
may be assigned by Employer at any time to any successor of the
Company, whether such successor is brought about by capital
reorganization or consolidation of Employer with, or the merger of
Employer into, any other corporation, or the sale of the properties
and assets of Employer as, or substantially as, an entirety to any
other corporation. This Agreement shall be binding on the Employee
and his heirs, executors, administrators, legal representatives,
successors and permitted assigns and Employer and its successors
and assigns.
15. Execution. This Agreement may be executed in multiple
---------
counterparts each of which shall be deemed an original and all of
which shall constitute but one and the same instrument.
16. Waiver of Breach. The waiver by Employer of a breach of
----------------
any provision of this Agreement by the Employee shall not operate
or be construed as a waiver by Employer of any subsequent breach by
Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement
at Houston, Texas, as of the date first above written.
OSHMAN'S SPORTING GOODS, INC.
By: ________________________________
Name: _____________________________
Title: ___________________________
__________________________________________
ALVIN N. LUBETKIN
Exhibit 10.14
OSHMAN'S SPORTING GOODS, INC.
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
I. Purposes
The purposes of this 1993 Non-Employee Director Stock Option
Plan (the "Plan") are (i) to provide additional incentive for
securing and retaining qualified non-employee persons to serve on
the Board of Directors of the Company and (ii) to enhance the
future growth of the Company by furthering the Non-Employee
Directors' identification with the interests of the Company and its
stockholders. It is intended that Options granted under this Plan
will be Non-Qualified Stock Options.
II. Definitions
(a) In this Plan, except where the context otherwise
indicates, the following definitions apply:
(1) "Board" means the Board of Directors of the
Company.
(2) "Code" means the Internal Revenue Code of 1986, as
amended. References herein to any section of the Code shall
include any successor section of the Code or its successor.
(3) "Company" means Oshman's Sporting Goods, Inc., a
Delaware corporation.
(4) "Disability" means the Participant so affected is
unable to engage in substantial gainful activity by reason of
any medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than
12 months. A determination by a majority of the Board, other
than the Participant, as to whether the Participant has
incurred a Disability shall be final and conclusive as to all
interested parties.
(5) "Designated Beneficiary" means the person
designated to be entitled, on the death of a Participant, to
any remaining rights arising out of a Stock Option. If no
such designation has been made by the Participant, or if the
Designated Beneficiary should pre-decease the Participant, any
remaining rights arising out of a Stock Option shall inure to
the executor or administrator of the Participant's estate or
to his heirs at law if no administration is had on the
Participant's estate.
(6) "Effective Date" means the date on which the Plan
is approved by the stockholders of the Company.
(7) "Fair Market Value" means, with respect to a share
of Common Stock on any date herein specified, the average last
reported sale price for the last five trading days (on which
trades have occurred) preceding and including the specified
date on the NASDAQ National Market List, or if the Common
Stock is listed on a national securities exchange as of such
date, the average of the closing prices reported by such
national securities exchange for said five-day period. If the
Common Stock is not included in the NASDAQ National Market
List or listed on a national securities exchange as of such
date, "Fair Market Value" shall mean the average of the
closing bid prices for the five-day period last quoted by an
established quotation service for over-the-counter securities.
In the event the Common Stock is not publicly traded at the
time a determination of its Fair Market Value is required to
be made hereunder, the determination of its Fair Market Value
shall be made by the Board in good faith in such manner as it
deems appropriate. In no event shall the "Fair Market Value"
be lower than the par value per share of the Common Stock.
(8) "Non-Employee Director" means a person who as of
any applicable date is a member of the Board, is not an
officer of the Company or any subsidiary of the Company, and
is not an employee of the Company or any of its subsidiaries.
(9) "Non-Qualified Stock Option" means an option which
does not meet the requirements of Section 422A(b) of the Code.
(10) "Participant" means a Non-Employee Director who is
granted a Stock Option hereunder.
(11) "Securities Act" means the Securities Act of 1933,
as now in effect or as hereafter amended.
(12) "Share" means a share of Stock that has been
previously (i) authorized but unissued, or (ii) issued and
reacquired by the Company.
(13) "Stock" or "Common Stock" means the common stock,
$1.00 par value per share, of the Company.
(14) "Stock Option" or "Option" means an option to
purchase Shares.
(15) "Terminate" means cease to be a Director of the
Company.
(16) "Termination of Directorship" means the cessation
by any Participant to be a Director for any reason whatsoever,
voluntary or involuntary. A Termination of Directorship shall
be deemed to occur on the actual date of such termination (by
death, Disability, retirement, resignation, non-election or
otherwise).
III. Grants of Stock Options and Option Price
(a) Options will be granted only to individuals who are Non-
Employee Directors of the Company. On the Effective Date, each
Non-Employee Director shall receive, without the exercise of the
discretion of any person or persons, Options exercisable for 10,000
Shares. Thereafter, as of the date of the annual meeting of
stockholders in each year after 1993 that the Plan is in effect, as
provided in Section V hereof, each Non-Employee Director then in
office who did not previously receive a grant of Options hereunder
shall receive, without the exercise of the discretion of any person
or persons, Options exercisable for 10,000 Shares. If, as of such
annual meeting date there are not sufficient Shares available under
the Plan to allow for the grant to each eligible Non-Employee
Director of Options for the number of shares provided herein, each
eligible Non-Employee Director shall receive Options for a pro rata
share of the total number of Shares available under the Plan. All
Options granted under the Plan shall be (i) at the Option price set
forth in subsection (b), (ii) subject to the vesting schedule set
forth in subsection (c), and (iii) subject to adjustment as
provided in Section VII and to the terms and conditions set forth
in Section VIII.
(b) The purchase price of Shares issued under each Option
shall be the Fair Market Value of Shares subject to the Option on
the date the Option is granted.
(c) All Options granted hereunder shall vest 20% six months
following the date on which they were granted and 20% thereafter at
the commencement of each subsequent annual meeting of stockholders
until fully vested. No portion of an Option shall be exercisable
unless and until it is vested.
IV. Administration
(a) The Plan shall be administered by the Board or by a duly
appointed committee of the Board having such powers as shall be
specified by the Board. Any subsequent references herein to the
Board shall also mean the committee if such committee has been
appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers of
the Board granted herein, including, without limitation, the power
to terminate or amend the Plan at any time, subject to the terms of
the Plan and any applicable limitations imposed by law. All
questions of interpretation of the Plan or of any Options shall be
determined by the Board, and such determinations shall be final and
binding upon all persons having an interest in the Plan or any
Option.
(b) The Board may, in its discretion, delegate duties to an
officer or employee or a committee composed of officers or
employees of the Company, but it may not delegate its authority to
apply and interpret this Plan.
V. Term
The term of this Plan commences on the Effective Date and will
terminate at 11:59 p.m. on the date of the annual meeting of
stockholders in the year 2003. This Plan shall remain in effect
for the purposes of administration of any Stock Option granted
pursuant to its provisions and no such Stock Option granted during
the term of this Plan shall be adversely affected by the
termination of the Plan.
VI. Shares Reserved; Options Grantable and Exercisable
(a) Subject to adjustment as provided in Section VII hereof,
a total of 100,000 Shares shall be subject to the Plan. The Shares
subject to the Plan shall be and are hereby reserved for issuance
pursuant to the Plan. Any of the Shares that are not subject to
outstanding Options at the termination of the Plan shall cease to
be reserved for the purposes of the Plan. Should any Option expire
or be canceled prior to its exercise in full, the Shares
theretofore subject to such Option may again be subjected to an
Option under the Plan.
(b) As to a Participant, an Option ceases to be exercisable,
as to any Share, when the Participant purchases the Share or when
the Option lapses.
VII. Adjustments
(a) The existence of outstanding Stock Options shall not
affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock ahead of, or affecting, the
Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) If the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, the payment
of a stock dividend, or other increase or reduction of the number
of shares of Common Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the
number and per share price of shares of Common Stock subject to
outstanding Stock Options hereunder shall be appropriately adjusted
in such a manner as to entitle a Participant to receive upon
exercise of a Stock Option, for the same aggregate cash
consideration, the same total number and class of shares as the
Participant would have received had he or she exercised his or her
Stock Option in full immediately prior to the event requiring the
adjustment; and (b) the number and class of shares then reserved
for issuance under the Plan shall be adjusted by substituting for
the total number of shares of Common Stock then reserved that
number and class of shares of Common Stock that would have been
received by the owner of an equal number of outstanding shares of
Common Stock as the result of the event requiring the adjustment.
(c) After a merger of one or more corporations into the
Company or after a consolidation of the Company and one or more
corporations in which the Company is the surviving corporation,
each holder of an outstanding Stock Option, upon exercise of such
Stock Option, shall be entitled to receive (at no additional cost
but subject to any required action by stockholders) in lieu of the
number of shares of Common Stock with respect to which such Stock
Option is exercisable, the number and class of shares of stock (or
other securities or consideration) to which such holder would have
been entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of the
same number of shares of Common Stock which he or she would have
otherwise received upon exercise of such Stock Option.
(d) If the Company is merged into or consolidated with
another corporation under circumstances where the Company is not
the surviving corporation, or if the Company is liquidated, or
sells or otherwise disposes of substantially all its assets to
another corporation while unexercised Stock Options remain
outstanding under the Plan, (i) subject to the provisions of
clause (iii) below, after the effective date of such merger,
consolidation, liquidation, or sale, as the case may be, each
holder of an outstanding Stock Option shall be entitled, upon
exercise of such Stock Option, to receive at no additional cost, in
lieu of shares of Common Stock, shares of such stock (or other
securities or consideration) as the holders of shares of Common
Stock received pursuant to the terms of the merger, consolidation,
liquidation, or sale; (ii) any limitations set forth in or imposed
pursuant to Section VIII hereof shall automatically lapse so that
all Stock Options, from and after a thirty (30) day period
preceding the effective date of such merger, consolidation,
liquidation or sale, as the case may be, shall be exercisable in
full; and (iii) all outstanding Stock Options may be canceled by
the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that (a) notice of such
cancellation shall be given to each holder of a Stock Option, and
(b) each holder of a Stock Option shall have the right to exercise
such Stock Option in full (without regard to any limitations set
forth in or imposed pursuant to Section VIII hereof) during a
thirty (30) day period preceding the effective date of such merger,
consolidation, liquidation, or sale. In the event any acceleration
of vesting provided by clause (ii) or (iii) above would result in
imposition of the excise tax imposed by Section 4999 of the Code,
a Participant may elect to waive such acceleration with respect to
such number of shares subject to unvested Stock Options as the
Participant shall designate, and the Participant shall be entitled
to designate from among his or her unvested Stock Options those
Stock Options which shall not be subject to accelerated vesting.
(e) Except as expressly provided herein, the issue by the
Company of shares of stock of any class, or securities convertible
into shares of stock of any class, for cash, property, labor, or
services, either upon direct sale, exercise of rights or warrants
to subscribe therefor, or conversion of shares or obligations of
the Company convertible into such shares or other securities, shall
not affect, and no adjustment by reason thereof shall be made with
respect to, the number, class or price of shares of Common Stock
then subject to outstanding Stock Options.
VIII. Terms and Conditions of Stock Options
(a) During the Participant's life, the Stock Option is
exercisable only by the Participant or by his or her guardian or
legal representative.
(b) A Stock Option under this Plan is not assignable or
transferable, except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order
(as defined in the Code), and is not subject, in whole or in part,
to attachment, execution or levy of any kind.
(c) Any Stock Option or portion thereof that is exercisable
shall be exercisable for the full amount or for any part thereof.
(d) Stock Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares of
Common Stock with respect to which the Stock Option is to be
exercised and, subject to the subsequent provisions hereof, the
address to which the certificates representing shares of the Common
Stock issuable upon the exercise of such Stock Option shall be
mailed. In order to be effective, such written notice shall be
accompanied at the time of its delivery to the Company by payment
of the exercise price of such shares of Common Stock, which payment
shall be made in cash or by check, bank draft, or postal or express
money order payable to the order of the Company in an amount (in
United States dollars) equal to the exercise price of such shares
of Common Stock. Such notice shall be delivered in person to the
Secretary of the Company, or shall be sent by registered mail,
return receipt requested, to the Secretary of the Company, in which
case, delivery shall be deemed made on the date such notice is
deposited in the mail. When shares of Common Stock are to be
issued or delivered pursuant to the Plan, but only to the extent
that the Company determines that tax withholding is required
pursuant to applicable law or regulation, the Company shall require
the Participant to remit to the Company an amount sufficient to
satisfy federal, state, and local withholding tax requirements
prior to the delivery of any certificate or certificates for such
Shares, which payment may be made in the manner set forth above or
in the manner permitted by clause (e) below.
(e) Alternatively, payment of the exercise price may be
made, in whole or in part, by delivery of shares of Common Stock
previously issued to the Participant. Unless otherwise permitted
by the Board, payment of the exercise price with shares of Common
Stock shall be made only with shares owned by the Participant for
at least six (6) months. If payment is made in whole or in part in
shares of Common Stock owned by the Participant, then the
Participant shall deliver to the Company, in payment of the option
price of the shares of Common Stock with respect to which such
Stock Option is exercised, (i) certificates registered in the name
of such Participant representing a number of shares of Common Stock
legally and beneficially owned by such Participant, free of all
liens, claims and encumbrances of every kind and having a Fair
Market Value as of the date of delivery of such notice that is not
greater than the exercise price of the shares of Common Stock with
respect to which such Stock Option is to be exercised plus any
applicable tax required to be withheld by the Company, such
certificates to be accompanied by stock powers duly endorsed in
blank by the record holder of the shares represented by such
certificates; and (ii), if the exercise price of the shares of
Common Stock with respect to which such Stock Option is to be
exercised exceeds such Fair Market Value, cash or a check, bank
draft, or postal or express money order payable to the order of the
Company in an amount (in United States dollars) equal to the amount
of such excess.
(f) Stock Options granted to any Participant under this Plan
shall be subject to the following conditions:
(1) The price per share shall be as set forth in
Section III.
(2) Except as otherwise provided in paragraph (3)
below, each Stock Option shall have a term of ten (10) years
from the date such Option is granted and shall vest in
accordance with section III(c) hereof.
(3) A Stock Option shall lapse and expire in the
following situations:
(i) If a Termination of Directorship shall occur
with respect to any Participant, for any reason other
than death or Disability, any and all unexercised and
vested Stock Options held by such Participant shall
expire (A) as of 12:01 a.m. on the date which is three
(3) months after the date of such Termination of
Directorship or (B) on the expiration date of the term
of the Stock Option, whichever date is earlier.
(ii) If a Termination of Directorship shall occur
with respect to any Participant by reason of the death
or Disability of such Participant, any and all
unexercised and vested Stock Options shall expire (A) as
of 12:01 a.m. on the date which is one (1) year from the
date of Termination of Directorship due to such death or
Disability or (B) on the expiration date of the term of
the Stock Option, whichever date is earlier. Any such
vested and unexercised Stock Option may be exercised by
the Designated Beneficiary of a deceased Participant, or
the legal guardian of a Disabled Participant, subject to
all applicable provisions of the Plan.
(iii) In the event of a Participant's Termination
of Directorship for any reason other than not being re-
elected at an annual meeting of stockholders, including
death or Disability, any portion of a previously granted
Option that was not exercisable on the date of such
Termination of Directorship shall automatically expire
as of 12:01 a.m. on the date of Termination of
Directorship, and no further vesting of such Option
shall occur. In the event of a Participant's
Termination of Directorship occasioned by not being
re-elected at an annual meeting of stockholders, any
previously granted Option shall continue to vest until
the conclusion of such annual meeting of stockholders
and any portion of such Option that is not then
exercisable shall automatically expire at the conclusion
of such meeting.
IX. Power to Amend
The Board of Directors may modify, revise or terminate this
Plan at any time and from time to time; provided, however, that the
Plan shall not be amended more than once every six (6) months,
other than to comport with changes in the Code, or the regulations
thereunder, or the Employee Retirement Income Security Act of 1974,
as amended, or the regulations thereunder; and provided, further,
that without the approval of the holders of at least a majority of
the outstanding shares of the Company's voting stock, the Board of
Directors may not (i) materially increase the benefits accruing to
participants under the Plan; (ii) change the aggregate number of
Shares which may be issued under Options pursuant to the provisions
of the Plan; (iii) reduce the Option price at which Options have
been granted; or (iv) change the class of persons eligible to
receive Options. However, no termination or amendment of the Plan
may, without the consent of the holder of any Option then
outstanding adversely affect the rights of such holder under the
Option.
X. Exercise of Options; Registration
The Company shall not be required to sell or issue any shares
of Common Stock under any Stock Option if the issuance of such
shares shall constitute a violation by the Participant or the
Company of any provision of any law, statute, or regulation of any
governmental authority whether it be Federal or State.
Specifically, in connection with the Securities Act, upon exercise
of any Stock Option, unless a registration statement under the
Securities Act is in effect with respect to the shares of Common
Stock covered by such Stock Option, the Company shall not be
required to issue such shares unless the Board has received
evidence satisfactory to it to the effect that the holder of such
Stock Option is acquiring such shares of Common Stock for
investment and not with a view to the distribution thereof, and
that such shares of Common Stock may otherwise be issued without
registration under the Securities Act or State securities laws. Any
determination in this connection by the Board shall be final,
binding and conclusive. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to
the Securities Act. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of a Stock
Option, or the issuance of shares pursuant thereto, to comply with
any law or regulation of any governmental authority.
XI. Withholding
The provisions of this section shall apply only to the extent
that the Company determines that tax withholding is required,
pursuant to applicable law or regulation, at the time that Shares
are to be issued or delivered pursuant to the Plan. If the Company
determines that tax withholding is required, the Company shall
require the Participant to remit to the Company an amount
sufficient to satisfy any applicable federal, state, and local
withholding tax requirements prior to the delivery of any
certificate or certificates for Shares. The Company shall also
have the right to withhold from any fees or other compensation
payable by the Company to the Participant an amount sufficient to
satisfy any applicable federal, state and local withholding tax
requirements.
XII. Stock Option Agreement
The Stock Options awarded to a Participant shall be evidenced
by a separate written agreement (the "Stock Option Agreement")
which shall be subject to the terms and provisions of the Plan, and
which shall be signed by the Participant and by a duly authorized
officer, other than the Participant, in the name of and on behalf
of the Company. In the event of any inconsistency or conflict
between the terms of the Plan and a Stock Option Agreement, the
terms of the Plan shall govern.
XIII. No Rights as Stockholder
A holder of a Stock Option shall have no rights as a
stockholder with respect to any Shares of Common Stock until the
issuance of a certificate for such Shares. Except as otherwise
provided in Section VII, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other
property) or distributions or other rights for which the record
date is prior to the date such certificate is issued.
XIV. No Assignment or Alienation of Benefits
No right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same shall be void, except for any
transfer pursuant to the Participant's will or under the laws of
descent and distribution. No right or benefit hereunder shall in
any manner be liable for or subject to any debts, contracts,
liabilities, or torts of the person entitled to such right or
benefit.
XV. Gender, Tense and Headings
Whenever the context so requires, words of the masculine
gender used herein shall include the feminine and neuter, and words
used in the singular shall include the plural. Section headings as
used herein are inserted solely for convenience and reference and
constitute no part of the construction of this Plan. The words
"hereunder", "herein", "hereof" and similar compounds of the word
"here" shall refer to the entire Plan and not to any particular
section or provision.
XVI. No Guarantee of Tax Consequences
The Company makes no commitment or guarantee that any federal,
state or local tax treatment will apply or be available to any Non-
Employee Director participating or eligible to participate herein.
XVII. Severability
In the event that any provision of this Plan shall be held
illegal, invalid or unenforceable, such provision shall be fully
severable, but shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if the
illegal, invalid, or unenforceable provision had not been included
herein.
XVIII. Shareholder Approval
Notwithstanding any other provisions of the Plan, in order for
the Plan to continue as effective, on or before the date which
occurs twelve (12) months after the date the Plan is adopted by the
Board, the Plan must be approved by the holders of at least a
majority of the shares of Stock present, or represented, and
entitled to vote thereon, at a duly held stockholders' meeting, and
no shares of Common Stock shall be issued under the Plan until such
approval has been secured.
XIX. Interpretations
The provisions of the Plan shall be construed, administered,
and governed by the laws of the State of Texas, without giving
effect to principles of conflicts of laws, and, to the extent
applicable, the laws of the United States.
XX. Government Regulations
The Plan, the granting and exercise of Stock Options
thereunder, and the obligation of the Company to sell and deliver
Shares under such Stock Options, shall be subject to all applicable
laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.
IN WITNESS WHEREOF, this Plan is executed in multiple
counterparts, each of which shall be deemed an original, effective
on and as of this 18th day of June, 1993.
OSHMAN'S SPORTING GOODS, INC.
By:
Name:
Title:
Exhibit 11.1
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Year ended January 29, Year ended January 30, Year ended February 1,
1994 1993 1992
(Restated) (Restated)
Fully Fully Fully
Primary diluted Primary diluted Primary diluted
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Loss before cumulative effect
of change in accounting
principle $(19,494) $(19,494) $ (679) $ (679) $(4,050) $(4,050)
Cumulative effect to
February 2, 1991 of change
in accounting for
income taxes - - - - 2,150 2,150
NET LOSS $(19,494) $(19,494) $ (679) $ (679) $(1,900) $(1,900)
Weighted average number of
common shares outstanding 5,805 5,805 5,804 5,804 5,799 5,799
Excess of shares issuable upon
exercise of stock options
over shares deemed retired
under the "treasury stock"
method - - - - - -
Weighted average number of
common and dilutive
common equivalent shares
outstanding 5,805 5,805 5,804 5,804 5,799 5,799
Loss per share before
cumulative effect of change
in accounting principle $(3.36) $(3.36) $(0.12) $(0.12) $(0.70) $(0.70)
Cumulative effect per share
to February 2, 1991
of change in accounting
for income taxes - - - - 0.37 0.37
Loss per common and
common equivalent share $(3.36) $(3.36) $(0.12) $(0.12) $(0.33) $(0.33)
</TABLE>
Exhibit 21.1
LIST OF SUBSIDIARIES
All of the Company's subsidiaries are incorporated under the
laws of the
State of Texas and operate under the name Oshman's unless otherwise
indicated in parenthesis.
Oshman Sporting Goods Co., Alabama
Oshman Sporting Goods Co., Arizona
Oshman Sporting Goods Co., Arkansas
Oshman Sporting Goods Co., California (also operates as SuperSports USA)
Oshman Sporting Goods Co., Connecticut
Oshman Sporting Goods Co., Florida
Oshman Sporting Goods Co., Georgia
Oshman Sporting Goods Co., Hawaii (operates as Honsport)
Oshman Sporting Goods Co., Louisiana
Oshman Sporting Goods Co., Minnesota (operates as SuperSports USA)
Oshman Sporting Goods Co., Missouri (operates as SuperSports USA)
Oshman Sporting Goods Co., Nevada
Oshman Sporting Goods Co., New Jersey (operates as SuperSports USA)
Oshman Sporting Goods Co., New Mexico (also operates as SuperSports USA)
Oshman Sporting Goods Co., New York
Oshman Sporting Goods Co., Ohio
Oshman Sporting Goods Co., Oklahoma
Oshman Sporting Goods Co., Oregon
Oshman Sporting Goods Co., Tennessee
Oshman Sporting Goods Co., Texas (Delaware) (also operates as SuperSports USA)
Oshman Sporting Goods Co., Washington
Oshman's Sporting Goods, Inc. - Services (Delaware)
Oshman Ski Skool, Inc.
J.S. Oshman and Co., Inc.
Oshitch Company
The Best of Oshitch, District of Columbia
Oshitch Company of Maryland, Inc.
Oshitch Company of Virginia, Inc.
Oshitch at Home, Inc.
URAFAN Corp. (operates as URAFAN Corp.)
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 18, 1994, accompanying
the consolidated financial statements and schedules included in the
Annual Report of Oshman's Sporting Goods, Inc. and Subsidiaries on
Form 10-K for the year ended January 29, 1994. We hereby consent
to the incorporation by reference of said reports in the
Registration Statements of Oshman's Sporting Goods, Inc. on Form
S-8, File No. 2-93516, File No. 33-14665 and File No. 33-41404.
GRANT THORNTON
Houston, Texas
April 27, 1994
