<PAGE>
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 28, 1995
[ ] 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. [X]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 31, 1995 (based upon the average of closing bid and ask
prices as of such date) was $16,898,540.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of March 31, 1995:
Common Stock, $1.00 par value 5,808,049
Documents incorporated by reference:
Proxy Statement for the Registrant's Annual Meeting of Stockholders to be
held June 16, 1995 (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 29-32% and footwear
accounted for approximately 17-19% of net retail sales during the last three
fiscal years. The remaining approximately 51-52% 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 for the fiscal year ended
January 28, 1995. 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 42% and 23%, respectively, of
consolidated net sales for the fiscal year ended January 28, 1995.
The Company operates two types of stores: traditional stores, which range
from approximately 3,600 to 32,000 square feet, and SuperSports USA megastores,
which range from approximately 41,000 to 85,000 square feet.
Through the establishment of new stores and the acquisition of existing
stores, Oshman's expanded from 11 retail sporting goods stores in 1970 to 193
stores at February 3, 1990. As reflected in the following table, the Company
has reduced the number of stores open since that time, and in December 1993
announced a restructuring plan that included closing 34 underperforming
traditional stores to redeploy its assets to its more profitable megastore
strategy. As of January 28, 1995, Oshman's was operating 141 stores, 124 of
which were Oshman's stores, 12 of which were SuperSports USA megastores and five
of which were Honsport stores. Changes in the number of stores and square
footage during the last five fiscal years are summarized below:
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF STORES SQUARE FOOTAGE
--------------------------------------------------------- --------------------------------
SUPERSPORTS
TRADITIONAL USA OPERATED SUPERSPORTS
FISCAL STORES STORES STORES AT TRADITIONAL USA
YEAR ENDED OPENED OPENED CLOSED YEAR END STORES STORES TOTAL
- ------------------ ---------------- -------------- ----------- -------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
February 2, 1991 5 2 11 189 2,090,000 158,000 2,248,000
February 1, 1992 2 0 8 183 2,036,000 158,000 2,194,000
January 30, 1993 2 3 18 170 1,879,000 337,000 2,216,000
January 29, 1994 1 3* 13* 161 1,744,000 504,000 2,248,000
January 28, 1995 0 4* 24* 141 1,454,000 785,000 2,239,000
-- -- ---
Total 10 12 74
</TABLE>
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*Includes a traditional store which was expanded and converted to a megastore.
The Company opened its first SuperSports USA Megastore in March 1990.
Customer response to the first megastore was excellent and sales exceeded the
Company's expectations. In subsequent years, a total of eleven additional
megastores have been opened. In 1993, the Board of Directors approved plans
designating the megastore as the Company's principal growth vehicle. Oshman's
megastores cost more to build and fixture and more to operate than those of its
large-store competitors, however the Company believes that the Oshman's
megastores are more profitable. A significant amount of the capital differential
has been funded by developers who consider these stores an attraction for
shopping centers attempting to differentiate themselves from their competition.
The slightly higher operating costs have been more than offset by the higher
gross margins that these stores are able to deliver. Although the twelve
megastores represent only 8.5% of Oshman's total stores, they were responsible
for 31.6% of store sales and 39.2% of total direct store contributions during
the fiscal year ended January 28, 1995.
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 62 megastores in the
five years, 1995-1999.
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FIVE-YEAR SUMMARY OF DIRECT STORE CONTRIBUTIONS*
(Unaudited)
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
--------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Total number of stores
open at fiscal year end 141 161 170 183 189
Total retail sales (in
thousands) $302,990 $299,716 $305,890 $291,484 $311,269
Percentage of total 100.0% 100.0% 100.0% 100.0% 100.0%
Direct store contributions
(in thousands) $ 24,586 $ 15,639 $ 23,938 $ 21,143 $ 25,396
Percentage of total 100.0% 100.0% 100.0% 100.0% 100.0%
Traditional stores open at
fiscal year end 129 153 165 181 187
Traditional stores sales
(in thousands) $ 207,279 $235,100 $264,872 $270,401 $295,799
Percentage of total 68.4% 78.4% 86.6% 92.8% 95.0%
Direct store
contributions
(in thousands) $ 14,938 $ 10,062 $ 19,749 $ 19,567 $ 24,278
Percentage of total 60.8% 64.3% 82.5% 92.5% 95.6%
SuperSports USA megastores
open at fiscal
year end 12 8 5 2 2
Megastores sales (in
thousands) $ 95,711 $ 64,616 $ 41,018 $ 21,083 $ 15,470
Percentage of total 31.6% 21.6% 13.4% 7.2% 5.0%
Direct store contributions
(in thousands) $ 9,648 $ 5,577 $ 4,189 $ 1,576 $ 1,118
Percentage of total 39.2% 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. Competition 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 the Company's key market
areas, 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
3
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store openings will be SuperSports USA megastores. Oshman's experienced 8.5%
same store sales increases in megastores and .5% same store sales decreases in
traditional stores during the fiscal year ended January 28, 1995.
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. Retail
sales also increase in May 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. Weather
conditions add to the seasonal nature of the business, particularly with regard
to sales of snow ski equipment and cold weather apparel.
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 and Santa Ana, California. 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 11% of the Company's total purchases during the fiscal
year ended January 28, 1995.
TRADEMARKS AND SERVICE MARKS; OTHER BUSINESS
As of January 28, 1995, Oshman's owned approximately 33 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 a licensing
arrangement relating to the use of its name and trademarks in Japan, but this
arrangement is 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.
4
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Inasmuch as Oshman's is a retailer, 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 28, 1995, Oshman's employed approximately 3,300 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.
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
14,900 square feet are utilized for a retail store and the remaining 41,600
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; 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; and approximately 5.9 acres in
Houston, Texas which the Company anticipates selling in conjunction with a
sale/leaseback/construction of a 65,000 square foot megastore.
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 2,200,000 square feet of floor space under leases
expiring at various dates from 1995 to 2017 (exclusive of renewal options).
Traditional stores on average are comprised of approximately 11,300 square feet,
while the average megastore occupies approximately 65,000 square feet. The
three traditional stores in locations owned by Oshman's aggregate approximately
39,000 square feet of floor space.
Aggregate rentals paid by the Company under all its leases amounted to
approximately $15,591,000 during the fiscal year ended January 28, 1995. 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.
5
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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 28, 1995.
6
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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 61 Vice Chairman of the Board, Chief Executive Officer, 1966
Director
Marilyn Oshman 55 Chairman of the Board, Director (2) 1993
William N. Anderson 48 President, Chief Operating Officer, Director (3) 1994
Lindsay J. Rice 40 Executive Vice President (4) 1991
Richard L. Bockart 60 Vice President, Treasurer, Secretary (5) 1969
A. Lynn Boerner 54 Vice President 1984
Will A. Clark 48 Vice President (6) 1992
Richard G. Dennis 42 Vice President (7) 1994
Steven U. Rath 40 Vice President (8) 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) 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.
(3) Mr. Anderson was elected President, Chief Operating Officer and Director in
June 1994. Prior to that time Mr. Anderson served as Senior Vice President,
General Manager of Ames Department Stores, Inc. (1992-1994), Chief Executive
Officer of Reality Technologies, Ltd., a computer software developer in the
financial planning/services sector (1991-1992) and President and Chief
Operating Officer of Domain, Inc., a specialty home furnishings retailer
(1985-1991).
(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) Mr. Dennis was elected Vice President in June 1994. Mr. Dennis also served
as General Counsel of the Company since 1993; Managing Attorney, Banc One
New Hampshire Asset Management Company (1992-1993) and Associate Attorney,
Weil, Gotshal & Manges (1986-1992).
(8) 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).
7
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Oshman's Common Stock is traded on The Nasdaq Stock Market ("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 28, 1995
First Quarter............ $ 8.00 $5.50
Second Quarter........... 8.75 6.75
Third Quarter............ 9.00 7.63
Fourth Quarter........... 9.25 6.50
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
</TABLE>
As of March 31, 1995, there were 371 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>
FOR THE YEAR ENDED JANUARY 28, JANUARY 29, JANUARY 30, FEBRUARY 1, FEBRUARY 2,
OR AS OF THE YEAR END 1995 1994 1993 1992 1991
(52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS)
----------- ------------ ------------ ------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Consolidated Sales $311,419 $307,935 $313,253 $297,829 $318,100
Net Earnings (Loss) 290 (19,494) (679) (4,050)* (3,834)
Net Earnings (Loss) per Share .05 (3.36) (.12) (.70)* (.66)
Dividends per Share -- -- -- -- .20
Total Assets 135,077 126,432 138,341 143,384 155,257
Long-Term Debt 5,665 3,712 1,696 5,510 8,885
</TABLE>
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* 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 three years ended January 30, 1993 were restated from originally issued
results 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.
8
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
For the year ended January 28, 1995 ("fiscal 1994"), Oshman's earned its
first profit in six years as it continued to reposition itself within the
competitive sporting goods market with the goal of becoming primarily a
megastore sporting goods operator. During the year, the Company opened four
additional SuperSports USA megastores, including the conversion of one of its
traditional stores into a megastore, and closed 23 traditional stores. In
fiscal 1994, the Company's SuperSports USA megastores (12 in operation as of the
end of the fiscal year) contributed 31.6% of total retail sales and 39.2% of
direct store contributions. Of the 23 stores closed in fiscal 1994, 14 were
stores included in a restructuring plan announced in the fourth quarter of 1993.
Oshman's business is subject to normal seasonal variations and may be
further impacted by regional and national economic conditions. Additionally,
weather may have a significant effect on the Company's snow ski business,
particularly in its California stores. Favorable snow ski conditions during
fiscal 1994 and the year ended January 30, 1993 (fiscal 1992), for instance,
benefitted the Company, while unfavorable ski conditions negatively impacted
results during fiscal 1993. In addition, results of operations in recent years
have been influenced by certain non-recurring items which affect the comparison
of one year's results to another.
NON-RECURRING ITEMS
In the fourth quarter of fiscal 1993, the Company implemented a
restructuring plan to accelerate the closing of 34 underperforming traditional
stores during 1994 and 1995 and recorded a $15,000,000 pretax restructuring
charge. The significant components of the charge, which negatively affect cash
flows of the Company, were (i) estimated 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 expected non-cash flow
charges of approximately $3,500,000 in connection with disposition of fixed
assets. Management believed the Company would be better served by redeploying
the assets invested in these stores towards the more profitable megastore
strategy, thereby accelerating the Company's transformation into a megastore
sporting goods operator. At the end of fiscal 1994, the Company had closed 16
of the 34 stores, obtained rent concessions on two stores and expects to close
six additional stores prior to the end of April 1995.
During fiscal 1994, the stores included in the restructure group used cash
of approximately $4,745,000 to cover losses before depreciation and amortization
and writeoff of fixed assets. Approximately $481,000 of this amount was used
for lease terminations related to stores closed during the year. Sales from all
stores included in the restructure group were
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$21,286,000 in fiscal 1994 compared to $33,726,000 in fiscal 1993. In fiscal
1994, these stores as a group incurred direct store losses of approximately
$6,962,000, including accelerated depreciation of approximately $2,238,000 and
estimated liquidation markdowns in excess of "normal" markdowns totaling
approximately $2,959,000, compared to a loss of $2,982,000 during the previous
year. During fiscal 1994, the Company charged its restructuring reserve
$7,663,000 for the operating losses, liquidation markdowns, lease termination
costs and write-off of fixed assets for the stores included in the restructure
group. Management believes that the closure of these stores is proceeding in
accordance with expectations and that the restructure reserve remaining at the
end of fiscal 1994 is adequate to provide for the costs associated with closing
the remaining restructure stores.
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 the 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 effected by this accounting change have been restated-primarily
earnings, inventories, income tax liabilities and expense, retained earnings and
costs of goods sold.
LIQUIDITY AND CAPITAL RESOURCES
In fiscal 1994, operating activities provided cash of $2,396,000. The
primary sources of the cash provided were pretax earnings before depreciation,
amortization and real estate gains of $4,432,000 and a $12,820,000 increase in
trade accounts payable. These amounts were offset by a $9,595,000 increase in
merchandise inventories and by $4,745,000 used by stores included in the
restructure group. Investing activities used $3,964,000, primarily for the
purchase of property, plant and equipment totaling $7,905,000 offset by
developer provided funds of $1,931,000 in excess of such amounts applied to new
store construction costs and by proceeds from the sale of real estate and
leasehold interest of $1,923,000. Financing activities provided net cash of
$1,778,000 as a result of increased utilization of the Company's credit facility
at the end of fiscal 1994. Cash of $859,000 was used for payment of scheduled
long-term debt and the prepayment of mortgage debt in relation to a sale of real
estate.
During fiscal 1993, net cash of $4,462,000 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 $2,979,000, 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-
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year mortgage note for $855,000 in the second 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 a 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.
Fiscal year-end inventories were $98,294,000 for 1994, $88,699,000 for 1993
and $93,333,000 for 1992. 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. Inventory levels and trade
accounts payable increased at the end of fiscal 1994 primarily as a result of
early receipts of footwear and certain direct import categories of merchandise
in anticipation of additional promotions planned for February 1995. In
addition, selected categories of merchandise were increased from relatively low,
end-of-fiscal-1993 levels in order to improve early 1995 spring season sales
compared to the prior year.
Additions to property, plant and equipment in fiscal 1994, fiscal 1993 and
fiscal 1992 were $7,905,000, $4,497,000 and $2,876,000, respectively. In
fiscal 1994, the Company opened three new SuperSports USA megastores and
converted an existing traditional store to a SuperSports USA megastore at a net
cost of $3,170,000 over and above developer funding. In addition, the Company
spent $1,381,000 to purchase a tract of land in Houston, Texas where it will
open a SuperSports USA megastore in 1995. In 1994, the Company began a two-year
program to upgrade its point of sale information systems. The total cost is
expected to be approximately $2,600,000, of which $750,000 was expended in
fiscal 1994. Additionally, the Company spent approximately $850,000 to upgrade
its merchandise planning and advertising systems, $860,000 for other hardware
and software and $894,000 for renovation and refurbishment of existing
locations. In fiscal 1993, the Company opened three new stores, two of which
were SuperSports USA megastores and converted an existing traditional store to a
megastore at a net expenditure, over and above developer funding, of
approximately $1,067,000. Approximately $1,736,000 was spent to renovate and
refurbish existing locations, 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
11
<PAGE>
was used in the exercise of an advantageous option to purchase real estate where
one of the Company's stores was under lease. Additions of approximately
$687,000 in fiscal 1993 and $450,000 in fiscal 1992 were related to the
acquisition of computer hardware and software.
The Company's policy regarding developer funding of new stores is to offset
the respective construction cost of real property improvements by the amount, if
any, of funding provided by developers. In fiscal 1994, developer funding of
stores opened exceeded the respective real property construction costs by
$1,931,000 in the aggregate. This amount will be amortized over the life of the
respective leases to which they apply as a reduction of rental expense. At the
end of fiscal 1994, the non-current portion of this developer funding is
presented on the Company's balance sheet as Deferred Rental Allowances in the
amount of $1,738,000. The remaining portion is included in accrued liabilities.
In previous years, developer funding in excess of real property construction
costs has been immaterial.
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 credit agreement includes
various restrictions, requirements and financial covenants.
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. In November 1994,
the financing agreement was amended to extend the term of the agreement for two
additional years until August 31, 1997, and to immediately reduce the interest
rate. Additionally, in August 1995, the revolving line of credit will increase
from $40,000,000 to $50,000,000, with a further seasonal increase to $65,000,000
during the period from mid-October through mid-December each year. Other terms
of the financing agreement such as the formula for calculating the Company's
borrowing base and certain requirements regarding the Company's loan reserves
remain unchanged. The agreement has been amended several other times as well,
primarily to modify the financial covenants contained therein. The Company is
in compliance with all covenants of the agreement.
The Company's primary source of liquidity in the fiscal years 1994, 1993 and
1992 was the use of its credit facility and lines of credit, under which average
borrowings were $13,776,000, $13,781,000 and $7,884,000, respectively. In
fiscal 1994 and fiscal 1992, operating activities provided cash of $2,396,000
and $3,906,000, respectively, as additional sources of liquidity. Average
borrowings increased in fiscal 1993 primarily as a result of the Company's
inability to provide sufficient levels of cash from operations. Because of the
seasonal nature of its business and the build up in inventory for the holiday
season, the amount of outstanding borrowings and letters of credit under the
Company's credit facility and lines of credit typically is highest in November
and was $27,440,000 at November 14, 1994, $30,489,000 at November 12, 1993 and
$25,652,000 at November 13, 1992.
12
<PAGE>
At the end of fiscal 1994, borrowings outstanding against the Company's
credit facility were $4,610,000 compared to $1,985,000 at the end of fiscal
1993. There were no borrowings outstanding against the company's credit
facilities at the end of fiscal 1992. The Company had outstanding letters of
credit (used primarily to purchase certain of the Company's imported inventory)
totaling $2,786,000 at the end of fiscal 1994, $3,439,000 at the end of fiscal
1993 and $3,092,000 at the end of fiscal 1992.
Capital expenditures in fiscal 1995 are expected to be approximately
$16,400,000. The Company plans to open approximately six SuperSports USA
megastores in fiscal 1995, at a capital cost of about $10,600,000, of which
approximately $9,000,000 will be funded by a capital lease related to a
sale/leaseback and by funds provided by real estate developers. Approximately
$3,700,000 will be used for computer hardware and software (primarily point-of-
sale related) and $2,100,000 will be allocated to existing stores, warehouses
and administrative areas. During fiscal 1994, the Company closed 23 of its
traditional stores, 14 of which were part of the restructure discussed above,
thereby eliminating their working capital requirements and overhead costs. In
fiscal 1995, the Company expects to close approximately 21 traditional stores,
including the 16 remaining restructure stores, the costs of which will be
charged against the restructure reserve provided in fiscal 1993. In fiscal
1995, the Company estimates that the stores included in the restructure will
require cash of approximately $6,400,000 to cover operating losses, lease
termination costs, liquidation markdowns and other closing costs. The remainder
of the closures in fiscal 1995 are expected to occur in the normal course of
business as leases expire and 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 1995
from the capital lease arrangement and developer funding mentioned above, in
addition to the use of its credit facility and internally generated funds.
RESULTS OF OPERATIONS
Sales for fiscal 1994 increased 1.1% to $311,419,000 from $307,935,000 in
fiscal 1993. Sales for fiscal 1993 decreased 1.7% to $307,935,000 from
$313,253,000 in fiscal 1992. Same store sales increases (decreases) for the
last three fiscal years were 1.7% in fiscal 1994, (4.2%) in fiscal 1993 and 1.7%
in fiscal 1992.
The $3,484,000 net increase in sales during fiscal 1994 reflects an increase
in sales of $29,439,000 contributed by new and ongoing stores offset by lost
sales of $25,955,000 in traditional stores closed during the year and in the
remaining restructure stores. During the last three fiscal years, the Company
has closed a total of 53 of its traditional stores, including 16 stores included
in the restructure group. Sales from these 53 closed stores were $14,370,000,
$36,563,000 and $54,792,000, respectively, in fiscal 1994, fiscal 1993 and
fiscal 1992. Same store sales in the Company's SuperSports USA megastores,
including sales of a traditional store which was converted to a megastore in
October, 1994, increased 8.5% for the fiscal year, while total sales from all
SuperSports USA megastores open at the end of the year reached
13
<PAGE>
$95,711,000 compared to $64,616,000 at the end of fiscal 1993. At the end of
fiscal 1994, sales from the SuperSports USA megastores represented 31.6% of
total retail sales compared to 21.6% in the previous year.
In fiscal 1993, sales declined largely as a result of lost sales in
California resulting primarily from the declining economic environment, poor
snow-ski conditions and disruptions caused by the natural disasters which
occurred in the state. Sales also declined in the state of 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 are included in the group of stores to be closed
pursuant to the restructure plan.
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 has 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.
Cost of goods sold as a percentage of sales for fiscal years 1994, 1993 and
1992 was 64.9%, 66.7% and 64.0%, respectively. The reduction in cost of goods
sold as a percentage of sales in fiscal 1994 was due primarily to reduced
promotional markdowns resulting from the Company's strategy to discontinue
competitive pricing which did not prove to be productive, and to improve gross
profit margins as a percentage of sales.
In fiscal 1993, cost of goods sold as a percentage of sales increased
primarily because of increased price reductions and promotional markdowns. 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.
Selling and administrative expenses as a percentage of sales was 35.5%,
36.7% and 36.3% for the fiscal years 1994, 1993 and 1992, respectively. Selling
and administrative expenses in fiscal 1994 included a net credit of $1,766,000
related to operating results of the 34 stores included in the restructure group.
Excluding this adjustment, selling and administrative expenses, as a percentage
of sales, was 36.0% in fiscal 1994. The decrease, in fiscal 1994, of selling
and administrative expenses, as a percentage of sales, was related primarily to
lower occupancy costs, as a percentage of sales, which decreased to 8.0% in
fiscal 1994, compared to 8.6% and 8.3%, respectively, in fiscal 1993 and fiscal
1992. The reduced rate in fiscal 1994 is largely attributable to lower
occupancy costs, as a percentage of sales, in the SuperSports
14
<PAGE>
USA megastores as a group, compared to the traditional stores, and to the
Company's continued closing of higher cost, marginally performing, traditional
stores. In addition, advertising costs decreased slightly, both in dollars
spent and as a percentage of sales to 5.0% from 5.2% in each of the two previous
fiscal years during which the Company conducted a more aggressive promotional
program.
The slightly increased rate of selling and administrative expenses as a
percentage of sales in fiscal 1993 was primarily related to reduced same store
sales and the resulting effect on relatively fixed costs. However, 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 sales related payrolls in
existing and closed stores, offset by payrolls in new stores.
Interest expense for fiscal years 1994, 1993 and 1992 was $1,498,000,
$1,427,000 and $1,085,000, respectively. The increased expense in fiscal 1994
and fiscal 1993 resulted from the Company's increased average borrowing during
those years compared to fiscal 1992.
The major components of miscellaneous (income) expense are set out in the
table below:
<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
YEAR YEAR YEAR
1994 1993 1992
------------ ------------ ----------
<S> <C> <C> <C>
Gain on sale of real estate and $(1,633,000) $ (698,000) $(960,000)
leasehold interests
Provision for stores closed in
the normal course of business
and write off of other assets 543,000 719,000 660,000
License fees (1,418,000) (1,303,000) (625,000)
Provision for earthquake loss (164,000) 500,000 -
Insurance recovery (372,000) - -
Interest income (116,000) (69,000) (327,000)
Accrual for legal settlement - (235,000) 300,000
Other - net 100,000 96,000 95,000
----------- ----------- ---------
Total $(3,060,000) $ (990,000) $(857,000)
=========== =========== =========
</TABLE>
The income tax (benefit) rates for fiscal years 1994, 1993 and 1992 were
31.3%, (24.2%) and (40.0%), respectively. The tax rate in fiscal 1994 is
related primarily to state income taxes. The decreased benefit rate in fiscal
1993, compared to fiscal 1992, 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.
15
<PAGE>
Pretax income in fiscal 1994 was $422,000 compared to a $10,731,000 pretax
loss before the $15,000,000 restructuring charge in fiscal 1993. The improved
results were primarily due to (i) a $6,624,000 increase in gross profit caused
by both increased sales and a decrease in the rate of cost of goods sold as a
percentage of sales, (ii) the non-recurrence of direct store losses of
approximately $2,982,000 by the restructure group of stores and (iii) an
increase in miscellaneous income as shown above.
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
pretax 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.
Revenues will continue to be influenced by economic conditions and the
competitive environment, however, in fiscal 1995 the Company expects a
significant sales increase from its SuperSports USA megastores as it accelerates
its store opening program with the opening of an additional five to seven
megastores. The Company believes that the increasing sales and profit
contributions from these more profitable megastores will enable it to provide
increased operating cash flows and also to overcome the effects of any future
inflation.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item appears on pages 25 through 45 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 28, 1995 a definitive proxy statement pursuant to Regulation 14A
involving the election of directors, which proxy statement is incorporated
herein by reference.
17
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
PAGE
(a) 1. Financial Statements REFERENCE
<C> <S> <C>
Report of independent certified public accountants........ 26
Consolidated balance sheets at January 28, 1995
and January 29, 1994................................... 28
Consolidated statements of operations for the years
ended January 28, 1995, January 29, 1994 and
January 30, 1993....................................... 29
Consolidated statements of stockholders' equity for the
years ended January 28, 1995, January 29, 1994 and
January 30, 1993....................................... 30
Consolidated statements of cash flows for the years ended
January 28, 1995, January 29, 1994 and
January 30, 1993....................................... 31
Notes to consolidated financial statements................ 32
Selected quarterly financial data......................... 44
2. Financial Statement Schedules
Schedule II - Allowance for Doubtful
Receivables - Years ended
January 28, 1995,
January 29, 1994 and
January, 30, 1993.......................... 45
</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.
18
<PAGE>
<TABLE>
<CAPTION>
3. List of Exhibits
<C> <S>
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 (the "1987 10-K") 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 1987 10-K 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).
</TABLE>
19
<PAGE>
<TABLE>
<C> <S>
4.1(f) Amendment dated December 23, 1993 to the Financing
Agreement (filed as Exhibit 4.1 to the Company's Form
10-K for the fiscal year ended January 29, 1994 (the
"1994 10-K") and incorporated herein by reference).
4.1(g) Amendment dated December 23, 1993 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(h) Amendment dated January 27, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(i) Amendment dated April 6, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(j) Amendment dated November 4, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the Company's Form
10-Q for the quarter ended October 29, 1994 and
incorporated herein by reference).
4.1(k) Amendment dated January 27, 1995 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 (the "1983 10-K") 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 1983 10-K and
incorporated herein by reference).
10.3 * 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 (the "1989 10-K")
and incorporated herein by reference).
</TABLE>
20
<PAGE>
<TABLE>
<C> <S>
10.4 * Oshman's Sporting Goods, Inc. 1988 Statement of
Policy Regarding Key Employees Severance Pay Bonus
Program (filed as Exhibit 10.7 to the 1989 10-K and
incorporated herein by reference).
10.4(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).
10.5 * Oshman's Sporting Goods, Inc. 1986 Stock Option
Plan, as amended (filed as Exhibit 10.9 to the 1987
10-K and incorporated herein by reference).
10.5(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).
10.5(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).
10.6 * Oshman's Sporting Goods, Inc. 1986 Stock Bonus Plan
(filed as Exhibit 10.10 to the 1987 10-K and
incorporated herein by reference).
10.6(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).
10.7 * Employment Agreement dated October 3, 1990 between
the Company and Alvin N. Lubetkin (filed as Exhibit
10.8 to the 1994 10-K and incorporated herein by
reference).
10.8 * 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 (the "1991 10-K") and
incorporated herein by reference).
10.9 * Oshman's Sporting Goods, Inc. 1991 Stock Option
Plan (filed as Exhibit 10.10 to the 1991 10-K and
incorporated herein by reference).
</TABLE>
21
<PAGE>
<TABLE>
<C> <S>
10.10 * Oshman Employees' Profit-Sharing Plan and Trust
(filed as Exhibit 10.11 to the 1992 10-K and
incorporated herein by reference).
10.10(a) * First Amendment to Oshman Employees' Profit-Sharing
Plan (filed as Exhibit 19.6 to the 1993 10-K and
incorporated herein by reference).
10.11 * 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).
10.12 * Oshman's Sporting Goods, Inc. 1993 Non-Employee
Director Stock Option Plan (filed as Exhibit 10.14
to the 1994 10-K and incorporated herein by
reference).
10.13 * Oshman's Sporting Goods Inc. 1994 Omnibus Plan.
10.14 * Restricted Stock Grant Agreement between the
Company and Alvin N. Lubetkin, dated July 15, 1994
(filed as Exhibit 10.1 to the Company's Form 10-Q
for the quarterly period ended July 30, 1994 (the
"July 10-Q") and incorporated herein by reference).
10.14(a) * First Amendment to Restricted Stock Grant Agreement
between the Company and Alvin N. Lubetkin dated as
of July 15, 1994.
10.15 * Employment Agreement between the Company and
William N. Anderson, dated June 20, 1994 (filed as
Exhibit 10.2 to the July 10-Q and incorporated
herein by reference).
11.1 Statement re Computation of Per Share Earnings.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Grant Thornton LLP.
</TABLE>
- -------------------
* Management contract or compensatory plan or arrangement.
22
<PAGE>
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 28, 1995.
23
<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/ A. LYNN BOERNER
------------------------------
A. Lynn Boerner
Vice President and
Chief Accounting Officer
Date: April 21, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on April 21, 1995 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 Vice Chairman of the Board of Directors,
Directors Chief Executive Officer
(Principal Executive Officer) and Director
/s/ WILLIAM N. ANDERSON /s/ MARVIN ARONOWITZ
- ------------------------- --------------------------------
William N. Anderson Marvin Aronowitz
President, Chief Operating Director
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
24
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR INCLUSION IN FORM 10-K
OSHMAN'S SPORTING GOODS, INC. AND
SUBSIDIARIES
JANUARY 28, 1995, JANUARY 29, 1994
AND JANUARY 30, 1993
25
<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 28,
1995 and January 29, 1994, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the three years in
the period ended January 28, 1995. 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.
26
<PAGE>
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 28, 1995 and January 29, 1994, and
the consolidated results of their operations and their consolidated cash flows
for each of the three years in the period ended January 28, 1995, in conformity
with generally accepted accounting principles.
We have also audited Schedule II of Oshmans Sporting Goods, Inc. and
Subsidiaries for each of the three years in the period ended January 28, 1995.
In our opinion, this schedule presents fairly, in all material respects, the
information required to be set forth therein.
Houston, Texas
March 15, 1995
27
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 28, 1995 and January 29, 1994
(In thousands)
<TABLE>
<CAPTION>
ASSETS 1994 1993
--------- --------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 254 $ 44
Accounts receivable, less allowance of $395 in 1994 and
$242 in 1993 3,437 3,492
Merchandise inventories 98,294 88,699
Prepaid expenses and other 4,976 4,549
-------- --------
Total current assets 106,961 96,784
PROPERTY, PLANT AND EQUIPMENT - AT COST 80,374 80,811
Less accumulated depreciation and amortization 52,964 52,066
-------- --------
27,410 28,745
OTHER ASSETS 706 903
-------- --------
$135,077 $126,432
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term obligations $ 186 $ 373
Trade accounts payable 45,686 32,866
Accrued liabilities 13,458 13,892
Income taxes 128 154
Restructuring reserve 7,128 10,971
-------- --------
Total current liabilities 66,586 58,256
DEFERRED INCOME TAXES 302 313
DEFERRED RENTAL ALLOWANCES 1,738 -
LONG-TERM OBLIGATIONS 5,665 3,712
LONG-TERM RESTRUCTURING RESERVE - 3,822
STOCKHOLDERS' EQUITY
Common stock 5,811 5,805
Additional capital 3,434 3,252
Retained earnings 51,562 51,272
Less Treasury stock, at cost (21) -
-------- --------
60,786 60,329
-------- --------
$135,077 $126,432
======== ========
</TABLE>
See notes to consolidated financial statements.
28
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended January 28, 1995, January 29, 1994 and January 30, 1993
(In thousands except per share amounts)
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Net sales $311,419 $307,935 $313,253
Costs and expenses
Cost of goods sold 202,110 205,250 200,348
Selling and administrative expenses 110,449 112,979 113,808
Corporate restructuring - 15,000 -
Interest expense 1,498 1,427 1,085
Miscellaneous income (3,060) (990) (857)
-------- -------- --------
310,997 333,666 314,384
-------- -------- --------
Earnings (loss) before income taxes 422 (25,731) (1,131)
Income tax (benefit) 132 (6,237) (452)
-------- -------- --------
NET EARNINGS (LOSS) $ 290 $(19,494) $ (679)
======== ======== ========
Earnings (loss) per share
Earnings (loss) per common and common
equivalent share $ 0.05 $ (3.36) $ (.12)
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
29
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended January 30, 1993, January 29, 1994 and January 28, 1995
(In thousands)
<TABLE>
<CAPTION>
Common stock
-------------- Treasury Additional Retained
Shares Amount stock capital earnings
------ ------ --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance at February 2, 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
Compensation under stock
option and stock bonus
plans - - - 155 -
Issuance of shares under stock
option plan 6 6 - 27 -
Acquisition of Treasury stock - - (21) - -
Net earnings for the year - - - - 290
----- ------ -------- ------ --------
Balance at January 28, 1995 5,811 $5,811 $(21) $3,434 $ 51,562
===== ====== ======== ====== ========
</TABLE>
See notes to consolidated financial statements.
30
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended January 28, 1995, January 29, 1994 and January 30, 1993
(In thousands)
<TABLE>
<CAPTION>
1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Cash flows of operating activities
Net earnings (loss) $ 290 $(19,494) $ (679)
Adjustments to reconcile net cash provided (used)
by operating activities
Depreciation and amortization 5,643 6,144 6,142
Provision for losses on accounts receivable 153 (2) (16)
Reserve for corporate restructuring - 15,000 -
Charge to reserve for corporate restructuring, net of
depreciation and amortization (4,745) (207) -
Stock option and bonus plan expense, net of stock
retained for income taxes 155 - 2
Loss (gain) on disposition of fixed assets 178 (130) 368
Decrease in deferred income taxes (11) (5,510) (247)
Amortization of deferred rental allowance (63) - -
Gain on disposition of real estate and leaseholds (1,633) (698) (960)
Changes in assets and liabilities
(Increase) decrease in accounts receivable (98) 100 412
(Increase) decrease in merchandise inventories (9,595) 4,634 (7,200)
(Increase) decrease in prepaid expenses and other (108) (469) 2,900
Increase (decrease) in trade accounts payable 12,820 (2,622) 3,643
Decrease in accrued liabilities (564) (350) (93)
Decrease in income taxes (26) (858) (366)
------- -------- -------
Net cash provided (used) by operating activities 2,396 (4,462) 3,906
Cash flows of investing activities
Proceeds from sale of fixed assets 42 132 102
Purchase of property, plant and equipment (7,905) (4,497) (2,876)
Proceeds from disposition of real estate and leaseholds 1,923 1,284 710
Proceeds from note receivable 45 46 43
Proceeds from rental allowances 1,931 56 -
------- -------- -------
Net cash used by investing activities (3,964) (2,979) (2,021)
Cash flows of financing activities
Proceeds from stock issuance 33 - -
Acquisition of treasury stock (21) - -
Payment of loan acquisition costs - (34) (421)
Proceeds (payment) of long-term obligations, net 1,766 2,076 (7,303)
------- -------- -------
Net cash provided (used) by financing activities 1,778 2,042 (7,724)
------- -------- -------
Net increase (decrease) in cash and cash equivalents 210 (5,399) (5,839)
Cash and cash equivalents at beginning of period 44 5,443 11,282
------- -------- -------
Cash and cash equivalents at end of period $ 254 $ 44 $ 5,443
======= ======== =======
Supplemental disclosures of cash flow information
Cash paid (refunded) during the year for
Income taxes $ 139 $ 108 $(4,501)
Interest 1,504 1,403 1,343
</TABLE>
See notes to consolidated financial statements.
31
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 28, 1995, January 29, 1994
and January 30, 1993
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 41%
and 23%, respectively, of sales for the year ended January 28, 1995. 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 1994 (52 weeks), 1993 (52 weeks), and 1992 (52 weeks) ended on
January 28, 1995, January 29, 1994, and January 30, 1993, 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 a
maturity of three months or less to be cash equivalents.
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.
32
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES-Continued
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. DEFERRED RENTAL ALLOWANCES
--------------------------
The Company may receive payments from landlords as inducements to sign new
store leases. The construction costs of real property improvements are offset
by this landlord funding. Deferred rental allowances represent payments in
excess of the costs of the real property improvements and are recognized as a
reduction of rent expense over the life of each applicable lease.
8. 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.
9. 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.
10. RECLASSIFICATIONS
-----------------
Certain amounts in prior financial statements have been reclassified to conform
to the 1994 financial statement presentation.
33
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE B - PROPERTY, PLANT AND EQUIPMENT
The cost of property, plant and equipment at the end of the year consists of
the following:
<TABLE>
<CAPTION>
1994 1993
------- -------
(In thousands)
<S> <C> <C>
Furniture, fixtures and equipment $47,345 $44,397
Leasehold improvements 25,755 29,329
Buildings 3,037 3,574
Land 2,927 1,917
Leasehold improvements under capital leases 1,310 1,594
------- -------
$80,374 $80,811
======= =======
</TABLE>
NOTE C - NOTE RECEIVABLE
The Company has a non-interest bearing note receivable from the Company's chief
executive officer. At the end of 1994 and 1993, the balance of the note was
$511,000 and $556,000, 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.
NOTE D - LONG-TERM OBLIGATIONS
Long-term obligations at the end of the year consist of the following:
<TABLE>
<CAPTION>
1994 1993
------ ------
(In thousands)
<S> <C> <C>
Revolving credit facility due August 31, 1997, interest payable
monthly at prime plus 1/2%; collateralized by inventory,
accounts receivable and real estate $4,610 $1,985
Mortgage notes collateralized by land and buildings (approxi-
mate cost $4,971,000) payable in aggregate monthly
installments of approximately $23,000, including interest
ranging from prime (8.5% at January 28, 1995) plus 1%
to 9-1/2% (fixed), maturing through 2005 1,204 1,876
Capitalized lease obligations, interest at an average rate of
8%, maturing at various dates through 1997 37 224
------ ------
5,851 4,085
Less current maturities 186 373
------ ------
$5,665 $3,712
====== ======
</TABLE>
34
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
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>
1995 $ 186
1996 187
1997 4,720
1998 497
1999 30
Thereafter 231
------
$5,851
======
</TABLE>
On August 31, 1992, the Company entered into an agreement providing for a
revolving credit facility. Currently, available credit under the facility is
$40,000,000. Effective August 1, 1995, available credit under the facility
will be $50,000,000, except for the mid-October to mid-December period when the
available amount is $65,000,000. 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. Such
covenants have been modified several times, most recently in January 1995.
Advances under the credit facility bear interest at the prime rate (8.5% at
January 28, 1995) plus .5% and any unused borrowing capacity is subject to a
line of credit fee of .5%. The Company may, under certain circumstances, elect
to have interest computed at a rate of the London Interbank Offered Rate
(LIBOR, 6% at January 28, 1995) plus 3%. Additionally, the Companys
performance, as measured by a defined ratio, will cause both the prime and
LIBOR based rates to be reduced or increased by one-quarter of one percent.
Advances outstanding at January 28, 1995 amounted to $4,610,000. The credit
facility expires August 31, 1997.
At the end of 1994 and 1993, outstanding letters of credit were $2,786,000 and
$3,439,000, respectively.
35
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE E - INCOME TAXES
The Company's tax expense (benefit) consisted of the following:
<TABLE>
<CAPTION>
1994 1993 1992
----- -------- ------
(In thousands)
<S> <C> <C> <C>
Current
Federal $ - $ (9) $ -
Foreign 33 93 81
State 76 34 233
Deferred
Federal - (5,731) (715)
State 23 (624) (51)
----- ------- -----
$ 132 $(6,237) $(452)
===== ======= =====
</TABLE>
A reconciliation of income tax expenses (benefits) on net earnings (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:
<TABLE>
<CAPTION>
1994 1993 1992
------ -------- ------
(In thousands)
<S> <C> <C> <C>
Income tax expense (benefit) at
statutory rate $ 143 $(8,748) $(385)
Increases (reductions)
State income taxes (net of
Federal tax benefit) 50 22 119
Targeted jobs tax credit - net (62) (15) (100)
Other items - net 40 (446) (86)
Valuation allowance (39) 2,950 -
----- ------- -----
(11) 2,511 (67)
----- ------- -----
Income tax expense (benefit) $ 132 $(6,237) $(452)
===== ======= =====
</TABLE>
36
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE E - INCOME TAXES - CONTINUED
Deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
January 28, 1995 January 29, 1994
-------------------- --------------------
Current Long-Term Current Long-Term
-------- ---------- -------- ----------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Assets
------
Accrued expenses $ 3,078 $ 654 $ 3,660 $2,710
Other 119 49 121 -
NOL carryforward - 3,735 - 2,469
Business tax credits - 604 - 466
------- ------- ------- ------
3,197 5,042 3,781 5,645
------- ------- ------- ------
Liabilities
-----------
Depreciation of property and equipment - 2,239 - 2,984
Inventory capitalization 863 - 776 -
LIFO termination 489 1,495 490 1,985
Store opening costs 240 - 159 -
State taxes 29 175 4 179
Other 51 129 53 213
------- ------- ------- ------
1,672 4,038 1,482 5,361
------- ------- ------- ------
Net asset before valuation allowance 1,525 1,004 2,299 284
Less valuation allowance (1,605) (1,306) (2,353) (597)
------- ------- ------- ------
NET LIABILITY $ 80 $ 302 $ 54 $ 313
======= ======= ======= ======
</TABLE>
Deferred income taxes of $80,000 and $54,000 were included in current
liabilities at the end of 1994 and 1993. 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 tax assets were reduced by valuation allowances of $2,911,000 and
$2,950,000 at January 28, 1995 and January 29, 1994, respectively. 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. Based upon financial
income and tax credits earned but not utilized during 1994, the valuation
allowance was reduced by $39,000.
37
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE E - INCOME TAXES - CONTINUED
The Company has net operating loss carryforwards of approximately $10,985,000.
The carryforwards expire as follows: $641,000 in 2008, $6,680,000 in 2009, and
$3,664,000 in 2010. Additionally, the Company has foreign tax credit
carryforwards of $265,000 expiring from 1997 to 2000, job tax credit
carryforwards of $278,000 expiring from 2008 to 2010 and alternative minimum
tax credit carryforwards of $61,000.
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 1994 are as
follows:
<TABLE>
<CAPTION>
Fiscal year Amount
- ----------- --------------
(In thousands)
<S> <C>
1995 $13,346
1996 13,118
1997 12,663
1998 12,077
1999 11,017
Thereafter to 2017 86,874
</TABLE>
Minimum payments have not been reduced by minimum sublease rental income of
$18,057,000 due in the future under noncancelable subleases.
Total rental expense entering into the determination of net earnings (loss) is
as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- ------- -------
(In thousands)
<S> <C> <C> <C>
Leased facilities
Minimum rentals $12,824 $13,798 $13,545
Contingent rentals (based on a
percentage of sales) 2,767 2,649 2,488
------- ------- -------
15,591 16,447 16,033
Other rentals 673 461 448
------- ------- -------
$16,264 $16,908 $16,481
======= ======= =======
</TABLE>
38
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE F - COMMITMENTS AND CONTINGENCIES - Continued
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.
CAPITAL LEASES
--------------
Future minimum lease payments for assets under capital leases at the end of
1994, and the present value of such payments, are as follows:
<TABLE>
<CAPTION>
Fiscal year Amount
- ----------- --------------
(In thousands)
<S> <C>
1995 $24
1996 17
---
Total minimum lease payments 41
Less amount representing interest 4
---
Present value of minimum obligations $37
===
</TABLE>
PROFIT SHARING PLAN
-------------------
The Company and its subsidiaries participate in a discretionary employee profit
sharing plan. No contributions were made in 1994, 1993 or 1992.
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 $1,088,000, $691,000 and
$484,000 for 1994, 1993 and 1992, 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.
39
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE F - COMMITMENTS AND CONTINGENCIES - Continued
DEFERRED COMPENSATION AGREEMENT
-------------------------------
The Company has a deferred compensation agreement with an executive officer
under which the officer will receive an estimated annual retirement benefit of
$152,000 after he attains age 65. Upon the executives death, such payments
will be made to his designated beneficiary.
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.
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. At the end of 1994, common stock shares issued and
outstanding were 5,811,000 and 5,808,000, respectively. Common stock shares
issued and outstanding at the end of 1993 and 1992 were 5,805,000.
COMMON STOCK OPTION PLANS
-------------------------
The Company's 1994 Omnibus Plan authorizes the grant of Incentive Awards for up
to 500,000 shares of common stock to key employees of the Company. Awards may
be in the form of stock options, stock appreciation rights, restricted stock,
performance units, performance shares or other stock based awards and certain
additional payments in the amount of federal income taxes payable by a grantee
and relating to an award, and are to be determined by a committee of the Board
of Directors.
Stock options granted may be either nonqualified options or incentive stock
options and may include reload options. Exercise price will be determined by
the committee; however, in the case of incentive stock options, the exercise
price shall not be less than 100% of the market value of the shares at the time
the options are granted. No option is exercisable after the expiration of ten
years from the date of grant.
40
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE G - STOCKHOLDERS' EQUITY - Continued
The 1994 Omnibus Plan replaces the Company's 1991 Stock Option Plan, 1986 Stock
Option Plan and 1986 Stock Bonus Plan. However, currently outstanding options
and grants under those plans and the Company's 1982 Incentive Stock Option Plan
will continue to exist until they vest and are exercised or expire. No awards
are outstanding under the 1986 Stock Bonus Plan at year end.
Additionally, 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.
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 1994, 1993 or 1992. 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.
The following table reflects the activity under the Company's various plans
during the three-year period ended January 29, 1995:
<TABLE>
<CAPTION>
Shares Exercise Price Per Share
- ---------------------------------------------------------------------
<S> <C> <C>
Outstanding at February 2, 1992 509,622 $4.38 to $15.20
Granted - $ -
Cancelled (58,032) $5.00 to $14.88
Exercised - $ -
- ---------------------------------------------------------------------
Outstanding at January 30, 1993 451,590 $4.38 to $15.20
Granted 188,950 $5.00 to $ 6.80
Cancelled (60,440) $5.00 to $14.00
Exercised - $ -
- ---------------------------------------------------------------------
Outstanding at January 29, 1994 580,100 $4.38 to $15.20
Granted 238,700 $6.16 to $ 9.00
Cancelled (70,400) $4.13 to $10.00
Exercised (6,050) $4.13 to $ 5.00
- ---------------------------------------------------------------------
Outstanding at January 28, 1995 742,350 $4.13 to $15.20
- ---------------------------------------------------------------------
</TABLE>
At January 28, 1995, options to purchase 358,950 shares of Common Stock under
the stock option plans were exercisable and options available for grant under
the plans were 360,000 shares.
41
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
January 28, 1995, January 29, 1994
and January 30, 1993
NOTE G - STOCKHOLDERS' EQUITY - Continued
RESTRICTED STOCK AWARD
----------------------
The Company granted 100,000 restricted shares of the Company's common stock to
the Company's current Chief Executive Officer in 1994 pursuant to the 1994
Omnibus Plan. The grantee has no rights as a stockholder with respect to the
restricted shares, including no right to transfer or receive dividends in most
circumstances. Grantee becomes 100% vested in restricted shares if retirement
occurs at or after age 65, in the event of death or disability of the grantee,
termination by grantee following a change in control of the Company,
termination of grantee by the company without cause and termination by grantee
for good reason. Partial vesting occurs at the rate of 25% of the grant per
year if retirement occurs at or after the grantee reaches the age of 62.
Restrictions on the stock end on the vesting date. Additionally, the grant
provides that the Company will pay the grantee the federal tax benefit (if any)
realized by the Company from the tax deduction for compensation resulting from
the restricted stock grant. Expense recorded in 1994 for the grant was
approximately $187,000.
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
During the fourth quarter of 1993, as a result of the Company's review of its
operating strategies to become primarily a megastore sporting goods operator,
and in order to more aggressively redeploy its assets, the Company implemented
a restructuring plan to close 34 underperforming traditional stores. A
restructuring charge of $15,000,000 before taxes was recorded 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. At the end of 1994, 16
stores remain to be closed.
42
<PAGE>
SUPPLEMENTAL INFORMATION
43
<PAGE>
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
(Unaudited)
Years ended January 28, 1995 and January 29, 1994
(In thousands except per share amounts)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1994
Net sales $66,125 $80,095 $66,472 $ 98,727
======= ======= ======= ========
Gross profit $24,611 $26,876 $23,085 $ 34,737
======= ======= ======= ========
Net earnings (loss) $ (948) $ 1,048 $(3,690) $ 3,880
======= ======= ======= ========
Earnings (loss) per share $ (.16) $ .18 $ (.64) $ .64
======= ======= ======= ========
1993
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)
======= ======= ======= ========
</TABLE>
44
<PAGE>
Schedule II
OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES
ALLOWANCE FOR DOUBTFUL RECEIVABLES
Years ended January 28, 1995, January 29, 1994
and January 30, 1993
(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 28, 1995 $242 $170 $17 $395
Year ended January 29, 1994 $244 $ 17 $19 $242
Year ended January 30, 1993 $260 $ 10 $26 $244
</TABLE>
- --------------
(A) Receivables charged off, net of recoveries.
Column C(2) - None.
45
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
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 (the "1987 10-K") 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 1987 10-K 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).
</TABLE>
46
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1(f) Amendment dated December 23, 1993 to the Financing
Agreement (filed as Exhibit 4.1 to the Company's Form
10-K for the fiscal year ended January 29, 1994 (the
"1994 10-K") and incorporated herein by reference).
4.1(g) Amendment dated December 23, 1993 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(h) Amendment dated January 27, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(i) Amendment dated April 6, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the 1994 10-K and
incorporated herein by reference).
4.1(j) Amendment dated November 4, 1994 to the Financing
Agreement (filed as Exhibit 4.1 to the Company's Form
10-Q for the quarter ended October 29, 1994 and
incorporated herein by reference).
4.1(k) Amendment dated January 27, 1995 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 (the "1983 10-K") 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 1983 10-K and
incorporated herein by reference).
10.3 * 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 (the "1989 10-K")
and incorporated herein by reference).
</TABLE>
47
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.4 * Oshman's Sporting Goods, Inc. 1988 Statement of
Policy Regarding Key Employees Severance Pay Bonus
Program (filed as Exhibit 10.7 to the 1989 10-K and
incorporated herein by reference).
10.4(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).
10.5 * Oshman's Sporting Goods, Inc. 1986 Stock Option
Plan, as amended (filed as Exhibit 10.9 to the 1987
10-K and incorporated herein by reference).
10.5(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).
10.5(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).
10.6 * Oshman's Sporting Goods, Inc. 1986 Stock Bonus Plan
(filed as Exhibit 10.10 to the 1987 10-K and
incorporated herein by reference).
10.6(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).
10.7 * Employment Agreement dated October 3, 1990 between
the Company and Alvin N. Lubetkin (filed as Exhibit
10.8 to the 1994 10-K and incorporated herein by
reference).
10.8 * 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 (the "1991 10-K") and
incorporated herein by reference).
10.9 * Oshman's Sporting Goods, Inc. 1991 Stock Option
Plan (filed as Exhibit 10.10 to the 1991 10-K and
incorporated herein by reference).
</TABLE>
48
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.10 * Oshman Employees' Profit-Sharing Plan and Trust
(filed as Exhibit 10.11 to the 1992 10-K and
incorporated herein by reference).
10.10(a) * First Amendment to Oshman Employees' Profit-Sharing
Plan (filed as Exhibit 19.6 to the 1993 10-K and
incorporated herein by reference).
10.11 * 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).
10.12 * Oshman's Sporting Goods, Inc. 1993 Non-Employee
Director Stock Option Plan (filed as Exhibit 10.14
to the 1994 10-K and incorporated herein by
reference).
10.13 * Oshman's Sporting Goods Inc. 1994 Omnibus Plan.
10.14 * Restricted Stock Grant Agreement between the
Company and Alvin N. Lubetkin, dated July 15, 1994
(filed as Exhibit 10.1 to the Company's Form 10-Q
for the quarterly period ended July 30, 1994 (the
"July 10-Q") and incorporated herein by reference).
10.14(a) * First Amendment to Restricted Stock Grant Agreement
between the Company and Alvin N. Lubetkin dated as
of July 15, 1994.
10.15 * Employment Agreement between the Company and
William N. Anderson, dated June 20, 1994 (filed as
Exhibit 10.2 to the July 10-Q and incorporated
herein by reference).
11.1 Statement re Computation of Per Share Earnings.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Grant Thornton LLP.
</TABLE>
- -------------------
* Management contract or compensatory plan or arrangement.
49
<PAGE>
EXHIBIT 4.1(K)
January 27, 1995
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
Pursuant to mutual understanding, the Financing Agreement is hereby amended as
follows:
1. Section 6, paragraph 9 (Net Worth) is hereby amended by deleting the figure
"$59,500,000.00" opposite the date "January 28, 1995" and substituting the
figure $58,750,000.00" in lieu thereof.
2. Section 6, paragraph 12 (Interest Coverage Ratio) is hereby amended by
deleting the ratio "2.00 to 1" and the date appearing opposite such ratio
"January 28, 1995."
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:
1
<PAGE>
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 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:
2
<PAGE>
EXHIBIT 10.13
OSHMAN'S SPORTING GOODS, INC.
1994 OMNIBUS PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
SECTION 1. GENERAL PROVISIONS RELATING TO PLAN GOVERNANCE,
COVERAGE AND BENEFITS......................................... 1
1.1 Purpose................................................. 1
1.2 Definitions............................................. 1
1.3 Administration.......................................... 4
1.4 Shares of Common Stock Subject to the Plan.............. 5
1.5 Participation........................................... 6
1.6 Incentive Awards........................................ 6
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.................... 7
2.1 Grant of Options........................................ 7
2.2 Option Terms............................................ 7
2.3 Option Exercises........................................ 8
2.4 Stock Appreciation Rights in Tandem with Options........ 8
2.5 Stock Appreciation Rights Independent of Options........ 9
2.6 Reload Options.......................................... 9
2.7 Supplemental Payment on Exercise of Nonqualified
Stock Options or Stock Appreciation Rights.............. 10
SECTION 3. RESTRICTED STOCK............................................... 10
3.1 Award of Restricted Stock............................... 10
3.2 Restrictions............................................ 10
3.3 Restriction Period...................................... 11
3.4 Delivery of Shares of Common Stock...................... 11
3.5 Supplemental Payment on Vesting of Restricted Stock..... 11
SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES....................... 12
4.1 Performance Based Awards................................ 12
4.2 Supplemental Payment on Vesting of Performance
Units or Performance Shares............................. 13
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION...................... 13
5.1 Plan Conditions......................................... 13
5.2 Transferability......................................... 14
5.3 Rights as a Stockholder................................. 14
5.4 Listing and Registration of Shares of Common Stock...... 15
5.5 Change in Stock and Adjustments......................... 15
5.6 Termination of Employment, Death, Disability and
Retirement.............................................. 16
5.7 Changes in Control...................................... 17
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
5.8 Amendments to Incentive Awards........................... 18
5.9 Exchange of Incentive Awards............................. 18
5.10 Financing................................................ 19
SECTION 6. MISCELLANEOUS.................................................. 19
6.1 Effective Date and Grant Period.......................... 19
6.2 Funding.................................................. 19
6.3 Withholding Taxes........................................ 19
6.4 Conflicts with Plan...................................... 20
6.5 No Guarantee of Tax Consequences......................... 20
6.6 Severability............................................. 20
6.7 Gender, Tense and Headings............................... 20
6.8 Amendment and Termination................................ 21
6.9 Governing Law............................................ 21
6.10 Section 16 Compliance.................................... 21
</TABLE>
ii
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
1994 OMNIBUS PLAN
SECTION 1. GENERAL PROVISIONS
RELATING TO PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 PURPOSE
The purpose of the Oshman's Sporting Goods, Inc. 1994 Omnibus Plan (the
"Plan") is to foster and promote the long-term financial success of Oshman's
Sporting Goods, Inc. (the "Company") and materially increase stockholder value
by: (a) encouraging the long-term commitment of selected key employees (defined
in Section 1.2(j) below), (b) motivating superior performance of key employees
by means of long-term performance related incentives, (c) encouraging and
providing key employees with a formal program for obtaining an ownership
interest in the Company, (d) attracting and retaining outstanding key employees
by providing incentive compensation opportunities competitive with other major
companies and (e) enabling participation by key employees in the long-term
growth and financial success of the Company. The Plan provides for payment of
various forms of incentive compensation and accordingly is not intended to be a
plan that is subject to Parts 1 through 4 of Subtitle B of Title I of the
Employee Retirement Income Security Act of 1974, as amended, and shall be
administered accordingly.
1.2 DEFINITIONS
The following terms shall have the meanings set forth below:
(a) Appreciation. The difference between the option exercise price
per share of the Option to which a Tandem SAR relates and the Fair Market
Value of a share of Common Stock on the date of exercise of the Tandem SAR.
(b) Board. The Board of Directors of the Company.
(c) Change in Control. Any of the events described in and subject to
Section 5.7.
(d) Code. The Internal Revenue Code of 1986, as amended.
(e) Committee. The committee, which shall be comprised of three or
more members of the Board who are disinterested persons as defined under
rules and regulations promulgated under Section 16(b) of the Exchange Act
and who are outside directors as defined in Section 162(m) of the Code and
the regulations promulgated thereunder, appointed by the Board to
administer the Plan, which Board shall have the power to fill vacancies on
the Committee arising by resignation, death, removal or otherwise.
<PAGE>
(f) Common Stock. The common stock of Oshman's Sporting Goods, Inc.,
$1.00 par value, per share.
(g) Company. Oshman's Sporting Goods, Inc.
(h) Covered Employee. Any Employee of the Company, any Parent or
Subsidiary if, as of the close of the taxable year, such Employee is the
chief executive officer of such entity or an individual acting in such
capacity, or the total compensation of such Employee for the taxable year
is required to be reported to stockholders under the Exchange Act by reason
of such Employee being among the four (4) highest compensated officers for
the taxable year (other than the chief executive officer).
(i) Disability. Any complete and permanent disability as defined in
Section 22(e)(3) of the Code.
(j) Employee. Any common-law employee of the Company or any Parent or
Subsidiary, who, in the opinion of the Committee, is one of a select group
of executive officers, other officers or other key management personnel of
the Company or any Parent or Subsidiary who is in a position to contribute
materially to the continued growth and development and to the continued
financial success of the Company or any Parent or Subsidiary, including
executive officers and officers who are members of the Board.
(k) Exchange Act. The Securities Exchange Act of 1934, as amended.
(l) Fair Market Value. The closing sales price of Common Stock as
reported on the NASDAQ National Market System or if the Common Stock is
listed on a national securities exchange, the closing sales price as
reported by such exchange on any relevant date for valuation, or, if there
is no such sale on such date, the applicable prices as so reported on the
nearest preceding date upon which such sale took place. In the event the
shares of Common Stock are no longer listed on a national securities
exchange, the Fair Market Value of such shares shall be determined by the
Committee in its sole discretion.
(m) Grantee. Any Employee who in the opinion of the Committee
performs significant services for the benefit of the Company and who is
granted an Incentive Award under the Plan.
(n) Incentive Award. Any incentive award, individually or
collectively, as the case may be, including any Nonqualified Stock Option,
Incentive Stock Option, Stock Appreciation Right, Restricted Stock Award,
Performance Unit, Performance Share or other stock-based award, as well as
any Supplemental Payment, granted under the Plan.
(o) Incentive Plan Agreement. The written agreement entered into
between the Company and the Grantee pursuant to which an Incentive Award
shall be made under the Plan.
2
<PAGE>
(p) Incentive Stock Option. A stock option granted by the Committee to
a Grantee under the Plan which is designated by the Committee as an
Incentive Stock Option and intended to qualify as an Incentive Stock Option
under Section 422 of the Code.
(q) Independent SAR. A Stock Appreciation Right described in Section
2.5.
(r) Nonqualified Stock Option. A stock option granted by the
Committee to a Grantee under the Plan, which is not designated by the
Committee as an Incentive Stock Option.
(s) Option. An Incentive Stock Option or Nonqualified Stock Option
(including reload Options described in Section 2.6) granted by the
Committee to a Grantee under the Plan.
(t) Parent Corporation. Any corporation (whether now or hereafter
existing) which constitutes a "parent" of the Company, as defined in
Section 424(e) of the Code.
(u) Performance Period. A period of time determined by the Committee
over which performance is measured for the purpose of determining a
Grantee's right to and the payment value of any Performance Units,
Performance Shares or other stock-based awards.
(v) Performance Share or Performance Unit. An Incentive Award
representing a contingent right to receive cash or shares of Common Stock
(which may be Restricted Stock) at the end of a Performance Period and
which, in the case of Performance Shares, is denominated in Common Stock,
and, in the case of Performance Units, is denominated in cash values.
(w) Plan. The Oshman's Sporting Goods, Inc. 1994 Omnibus Plan.
(x) Restricted Stock. Shares of Common Stock issued or transferred to
a Grantee subject to the Restrictions set forth in Section 3.2 hereof.
(y) Restricted Stock Award. An authorization by the Committee to
issue or transfer Restricted Stock to a Grantee.
(z) Restriction Period. The period of time determined by the
Committee during which Restricted Stock is subject to the restrictions
under the Plan.
(aa) Retirement. The termination of employment from the Company or
any Parent or Subsidiary constituting retirement as determined by the
Committee.
3
<PAGE>
(bb) Spread. The difference between the exercise price per share
specified in any Independent SAR grant and the Fair Market Value of a share
of Common Stock on the date of exercise of the Independent SAR.
(cc) Stock Appreciation Right. A Tandem SAR described in Section 2.4
or an Independent SAR described in Section 2.5.
(dd) Subsidiary. Any corporation (whether now or hereafter existing)
which constitutes a "subsidiary" of the Company, as defined in Section
424(f) of the Code.
(ee) Supplemental Payment. Any amounts described in Sections 1.6,
2.7, 3.5 and/or 4.2 dedicated to payment of any federal income taxes that
are payable on an Incentive Award as determined by the Committee.
(ff) Tandem SAR. A Stock Appreciation Right described in Section 2.4.
(gg) Termination for Cause. An employee shall be deemed Terminated
for Cause if he or she is terminated as a result of a breach of his or her
written employment agreement, in the event of a written employment
agreement, or if the Committee determines that such Employee is being
terminated as a result of misconduct, dishonesty, disloyalty, disobedience
or action that might reasonably injure the Company or its Subsidiaries or
their business interests or reputation.
1.3 ADMINISTRATION
(a) Committee Powers. The Plan shall be administered by the Committee
which shall have full power and authority to: (i) designate Grantees; (ii)
determine the Incentive Awards to be granted to Grantees; (iii) subject to
Section 1.4 of the Plan, determine the Common Stock (or securities convertible
into Common Stock) to be covered by Incentive Awards and in connection
therewith, to reserve shares of Common Stock as needed in order to cover grants
of Incentive Awards; (iv) determine the terms and conditions of any Incentive
Award; (v) determine whether, to what extent, and under what circumstances
Incentive Awards may be settled or exercised in cash, Common Stock, other
securities, or other property, or canceled, substituted, forfeited or suspended,
and the method or methods by which Incentive Awards may be settled, exercised,
canceled, substituted, forfeited or suspended; (vi) interpret and administer the
Plan and any instrument or agreement relating to, or Incentive Award made under,
the Plan; (vii) establish, amend, suspend or waive such rules and guidelines;
(viii) appoint such agents as it shall deem appropriate for the administration
of the Plan; provided, however that the Committee shall not delegate any of the
power or authority set forth in (i) through (vii) above; and (ix) make any other
determination and take any other action that it deems necessary or desirable for
such administration. All designations, determinations, interpretations and other
decisions with respect to the Plan or any Incentive Award shall be within the
sole discretion of the Committee and shall be final, conclusive and binding upon
all persons, including the Company or any
4
<PAGE>
Parent or Subsidiary, any Grantee, any holder or beneficiary of any
Incentive Award, any stockholder and any Employee.
(b) No Liability. No member of the Committee shall be liable for any
action or determination made in good faith by the Committee with respect to
this Plan or any Incentive Award under this Plan, and to the fullest extent
permitted by the Company's Bylaws, the Company shall indemnify each member
of the Committee.
(c) Meetings. The Committee shall designate a chairman from among its
members, who shall preside at all of its meetings, and shall designate a
secretary, without regard to whether that person is a member of the
Committee, who shall keep the minutes of the proceedings and all records,
documents, and data pertaining to its administration of the Plan. Meetings
shall be held at such times and places as shall be determined by the
Committee. The Committee may take any action otherwise proper under the
Plan by the affirmative vote, taken with or without a meeting, of a
majority of its members.
1.4 SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Common Stock Authorized. Subject to adjustment under Section 5.5,
the aggregate number of shares of Common Stock available for granting
Incentive Awards under the Plan shall be equal to 500,000 shares of Common
Stock. If any Incentive Award shall expire or terminate for any reason,
without being exercised or paid, shares of Common Stock subject to such
Incentive Award shall again be available for grant in connection with
grants of subsequent Incentive Awards.
(b) Common Stock Available. The Common Stock available for issuance
or transfer under the Plan shall be made available from shares now or
hereafter held in the treasury of the Company or from authorized but
unissued shares or from shares to be purchased or acquired by the Company.
No fractional shares shall be issued under the Plan; payment for fractional
shares shall be made in cash.
(c) Incentive Award Adjustments. Subject to the limitations set forth
in Sections 5.8 and 6.8, the Committee may make any adjustment in the
exercise price or the number of shares subject to, or the terms of, any
Incentive Award other than an Incentive Stock Option. Such adjustment
shall be made by amending, substituting or canceling and regranting such
Incentive Award with the inclusion of terms and conditions that may differ
from the terms and conditions of the original Incentive Award. If such
action is effected by amendment, the effective date of such amendment shall
be the date of the original grant. In addition, any such action shall be
effective only to the extent that such action would not cause (i) the
holder of the Incentive Award to lose the protection of Section 16(b) of
the Exchange Act and the rules and regulations promulgated thereunder, or
(ii) an Incentive Award that is designed to qualify payments thereunder as
performance based compensation as defined in Section 162(m) of the Code to
fail to qualify as such performance based compensation.
5
<PAGE>
(d) Special Limitation. In no event shall the number of shares of
Common Stock subject to Options granted with an exercise price at least
equal to the Fair Market Value of the underlying shares of Common Stock on
the date of grant, plus the number of shares underlying Stock Appreciation
Rights awarded to any one Grantee who is a Covered Employee during the
period from April 22, 1994 through January 31, 2004, exceed two hundred
thousand (200,000) shares of the Common Stock authorized under Section
1.4(a). In all events, determinations under the preceding sentence shall
be made in a manner that is consistent with Section 162(m) of the Code and
regulations promulgated thereunder. Except as otherwise provided in the
two immediately preceding sentences, the provisions of this Section 1.4(d)
shall not limit the number of shares of Common Stock that otherwise may be
awarded to any one Grantee who is a Covered Employee under any form of
Incentive Award authorized under the Plan.
1.5 PARTICIPATION
(a) Eligibility. The Committee shall from time to time designate
those Employees, if any, to be granted Incentive Awards under the Plan, the
type of awards granted, the number of shares, options, rights or units, as
the case may be, which shall be granted to each such Employee, and any
other terms or conditions relating to the awards as it may deem
appropriate, consistent with the provisions of the Plan. An Employee who
has been granted an Incentive Award may, if otherwise eligible, be granted
additional Incentive Awards at any time.
(b) Incentive Stock Option Eligibility. No Employee will be eligible
for the grant of any Incentive Stock Option who owns or would own
immediately before the grant of such Incentive Stock Option, directly or
indirectly, stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company, a Subsidiary or a
Parent Corporation. This restriction does not apply if, at the time such
Incentive Stock Option is granted, the Incentive Stock Option exercise
price is at least 110% of the Fair Market Value on the date of grant and
the Incentive Stock Option by its terms is not exercisable after the
expiration of five years from the date of grant. For the purpose of the
immediately preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply for the purpose of determining an Employee's
percentage ownership.
(c) No Non-Employee Board Participation. In no event may any member
of the Board who is not an Employee be granted an Incentive Award under the
Plan.
1.6 INCENTIVE AWARDS
(a) General Rules. The forms of Incentive Awards under this Plan are
Stock Options, Stock Appreciation Rights and Supplement Payments as
described in Section 2, Restricted Stock and Supplement Payments as
described in Section 3, Performance Units or Performance Shares and
Supplement Payments as described in Section 4, and other stock-based grants
as described in this Section 1.6. Such other stock-based grants will
either be issued (a) for no consideration other than services actually
rendered (in the case of authorized and unissued shares) or to be rendered,
(b) for consideration equal to the amount (such as the par value of such
shares)
6
<PAGE>
required by applicable law to be received by the Company in order to assure
compliance with applicable state law or (c) for consideration (other than
services rendered or to be rendered) equal to the Fair Market Value of the
Common Stock covered by such grant on the date of grant. The Committee may
specify such criteria or periods or goals for payment to the Grantee as it
shall determine, and the extent to which such criteria or periods or goals
have been met shall be conclusively determined by the Committee. Other
stock-based grants may be paid in shares of Common Stock or other
consideration related to such shares or in a single payment or in
installments as specified by the grant and may be payable on such dates as
determined by the Committee and specified by the grant. The other terms
and conditions of other stock-based grants shall be determined by the
Committee, including provision for a Supplemental Payment.
(b) Special Rule. Except as may otherwise be provided under an
Incentive Plan Agreement authorized by the Committee under Section 5.6, no
Incentive Award granted pursuant to this Plan shall vest in less than six
(6) months after the date the Incentive Award is granted.
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 GRANT OF OPTIONS
Subject to Section 1.4(d), the Committee is authorized to grant
Options to Grantees in accordance with the terms and conditions required
pursuant to this Plan and with such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall
determine.
2.2 OPTION TERMS
(a) Exercise Price. The exercise price per share of Common Stock
under each Option shall be determined by the Committee; provided, however,
that in the case of Incentive Stock Options such purchase price shall not
be less than one hundred percent (100%) of the Fair Market Value per share
of such stock on the date the Incentive Stock Option is granted, as
determined by the Committee.
(b) Term. The Committee shall fix the term of each Option which shall
be not more than ten years from the date of grant. In the event no term is
fixed, such term shall be ten years from the date of grant.
(c) Exercise. The Committee shall determine the time or times at
which an Option may be exercised in whole or in part.
(d) Incentive Stock Options. Anything in the Plan notwithstanding,
the aggregate Fair Market Value (determined as of the time the Incentive
Stock Option is granted) of the shares of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by any
Grantee during any single calendar year (under the Plan and any other
Incentive Stock
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Option plans of the Company and its Subsidiaries or any Parent Corporation)
shall not exceed the sum of $100,000 (or such other limit as may be
required by the Code).
2.3 OPTION EXERCISES
(a) Method of Exercise. To purchase shares under any Option granted
under the Plan, Grantees must give notice in writing to the Company of
their intention to purchase and specify the number of shares as to which
they intend to exercise their Option. Upon the date or dates specified for
the completion of the purchase of the shares, the purchase price will be
payable in full. The purchase price may be paid in cash or an equivalent
acceptable to the Committee. At the discretion of the Committee and
provided such payment can be effected without causing the Grantee to incur
liability under Section 16(b) of the Exchange Act, the exercise price may
be paid by the assignment and delivery to the Company of shares of Common
Stock owned by the Grantee or a combination of cash and such shares equal
in value to the exercise price. Any shares so assigned and delivered to
the Company in payment or partial payment of the purchase price shall be
valued at their Fair Market Value on the exercise date. In addition, at
the request of the Grantee and to the extent permitted by applicable law,
the Company in its discretion may selectively approve "cashless exercise"
arrangements with a brokerage firm under which such brokerage firm, on
behalf of the Grantee, shall pay to the Company the exercise price of the
Options being exercised, and the Company, pursuant to an irrevocable notice
from the Grantee, shall promptly deliver the shares being purchased to such
firm.
(b) Notification with Respect to Incentive Stock Options.
Notwithstanding any other provision of the Plan, Grantees who dispose of
shares of Common Stock acquired on the exercise of an Incentive Stock
Option by sale or exchange either (i) within two years after the date of
the grant of the Incentive Stock Option under which the stock was acquired
or (ii) within one year after the transfer of such shares to them pursuant
to exercise shall notify the Company of such disposition and of the amount
realized and of their adjusted basis in such shares.
(c) Proceeds. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to Options exercised under the Plan will be
used for general corporate purposes.
2.4 STOCK APPRECIATION RIGHTS IN TANDEM WITH OPTIONS
(a) General Provisions. Subject to Section 1.4(d), the Committee may,
at the time of grant of an Option, grant Stock Appreciation Rights ("Tandem
SARs") with respect to all or any portion of the shares of Common Stock
covered by such Option. The exercise price per share of Common Stock of a
Tandem SAR shall be fixed in the Incentive Plan Agreement and shall not be
less than one hundred percent (100%) of the Fair Market Value of a share of
Common Stock on the date of the grant of the Option to which it relates. A
Tandem SAR may be exercised at any time the Option to which it relates is
then exercisable, but only to the extent the Option to which it relates is
exercisable, and shall be subject to the conditions applicable to
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such Option. When a Tandem SAR is exercised, the Option to which it
relates shall terminate to the extent of the number of shares with respect
to which the Tandem SAR is exercised. Similarly, when an Option is
exercised, the Tandem SARs relating to the shares covered by such Option
exercise shall terminate. Any Tandem SAR which is outstanding on the last
day of the term of the related Option shall be automatically exercised on
such date for cash without any action by the Grantee.
(b) Exercise. Upon exercise of a Tandem SAR, the holder shall
receive, for each share with respect to which the Tandem SAR is exercised,
an amount equal to the Appreciation. The Appreciation shall be payable in
cash, Common Stock, or a combination of both, at the option of the
Committee, and shall be paid within 30 calendar days of the exercise of the
Tandem SAR.
2.5 STOCK APPRECIATION RIGHTS INDEPENDENT OF OPTIONS
(a) Grant. Subject to Section 1.4(d) and the following provisions,
all Stock Appreciation Rights granted independent of Options ("Independent
SARs") under the Plan to Grantees shall be in such form and shall have such
terms and conditions as the Committee, in its discretion, may from time to
time determine consistent with the Plan.
(b) Exercise Price. The exercise price per share of Common Stock
shall be not less than one hundred percent (100%) of the Fair Market Value
of a share of Common Stock on the date of the grant.
(c) Term. The term of an Independent SAR shall be determined by the
Committee, and, notwithstanding any other provision of this Plan, no
Independent SAR shall be exercised after the expiration of its term.
(d) Exercise. Independent SARs shall be exercisable at such time or
times and subject to such terms and conditions as the Committee shall
specify in the Independent SAR grant. Unless the Independent SAR grant
specifies otherwise, the Committee shall have discretion at any time to
accelerate such time or times and otherwise waive or amend any conditions
in respect of all or any portion of the Independent SARs held by any
Grantee. Upon exercise of an Independent SAR, the holder shall receive,
for each share specified in the Independent SAR grant, an amount equal to
the Spread. The Spread shall be payable in cash, Common Stock, or a
combination of both, at the option of the Committee, and shall be paid
within 30 calendar days of the exercise of the Independent SAR.
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2.6 RELOAD OPTIONS
Subject to Section 1.4(d), at the discretion of the Committee, the
Grantee may be granted by agreement that contains such terms and conditions to
be determined by the Committee, Options that permit the Grantee to purchase an
additional number of shares equal to the number of shares already owned and
surrendered by the Grantee to pay all or a portion of the exercise price of
Options.
2.7 SUPPLEMENTAL PAYMENT ON EXERCISE OF NONQUALIFIED STOCK OPTIONS OR STOCK
APPRECIATION RIGHTS.
The Committee, either at the time of grant or at the time of exercise of
any Nonqualified Stock Option or Stock Appreciation Right, may provide for a
supplemental payment (the "Supplemental Payment") by the Company to the Grantee
with respect to the exercise of any Nonqualified Stock Option or Stock
Appreciation Right. The Supplemental Payment shall be in the amount specified
by the Committee, which shall not exceed the amount necessary to pay the federal
income tax payable with respect to both the exercise of the Nonqualified Stock
Option and/or Stock Appreciation Right and the receipt of the Supplemental
Payment, assuming the holder is taxed at the maximum effective federal income
tax rate applicable thereto. The Committee shall have the discretion to grant
Supplemental Payments that are payable solely in cash or Supplemental Payments
that are payable in cash, Common Stock, or a combination of both, as determined
by the Committee at the time of payment. The Supplemental Payment shall be paid
within 30 calendar days of the date of exercise of a Nonqualified Stock Option
or Stock Appreciation Right (or, if later, within 30 calendar days of the date
on which income is recognized for federal income tax purposes with respect to
such exercise).
SECTION 3. RESTRICTED STOCK
3.1 AWARD OF RESTRICTED STOCK
(a) Grant. Shares of Restricted Stock may be awarded under this Plan by
the Committee on such terms and conditions and with such restrictions as the
Committee may from time to time approve, all of which may differ with respect to
each Grantee. Such Restricted Stock shall be awarded for no cash or such cash
as the Committee shall determine.
(b) Delivery of Restricted Stock. Grantees receiving Restricted Stock
Awards shall not be issued stock certificates in respect of such shares of
Common Stock until such time as the Restriction Period with respect to each
Restricted Stock Award has expired.
3.2 RESTRICTIONS
(a) Restrictive Conditions. Restricted Stock awarded to a Grantee shall be
subject to the following restrictions until the expiration of the Restriction
Period: (i) the shares of Common Stock of the Company included in the
Restricted Stock Award shall be subject to the
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restrictions on transferability set forth in Section 5.2; (ii) unless otherwise
approved by the Committee, the shares of Common Stock included in the Restricted
Stock Award that are subject to restrictions which are not satisfied at such
time as the Grantee ceases to be employed by the Company shall be forfeited and
all rights of the Grantee to such shares shall terminate without further
obligation on the part of the Company when an Employee leaves the employ of the
Company; and (iii) any other restrictions that the Committee may determine in
advance are necessary or appropriate.
(b) Forfeiture of Restricted Stock. If for any reason, the restrictions
imposed by the Committee upon Restricted Stock are not satisfied at the end of
the Restriction Period, any Restricted Stock remaining subject to such
restrictions shall thereupon be forfeited by the Grantee and reacquired by the
Company.
(c) Removal of Restrictions. The Committee shall have the authority to
remove any or all of the restrictions on the Restricted Stock, including the
restrictions under the Restriction Period, whenever it may determine that, by
reason of changes in applicable laws or other changes in circumstances arising
after the date of the Restricted Stock Award, such action is appropriate.
3.3 RESTRICTION PERIOD
The Restriction Period of Restricted Stock shall commence on the date of
grant and shall be established by the Committee in the Incentive Plan Agreement
setting forth the terms of the award of Restricted Stock.
3.4 DELIVERY OF SHARES OF COMMON STOCK
Subject to Section 6.4, at the expiration of the Restriction Period, a
stock certificate evidencing the Restricted Stock with respect to which the
Restriction Period has expired (to the nearest full share) shall be delivered
without charge to the Grantee, or his personal representative, free of all
restrictions under the Plan.
3.5 SUPPLEMENTAL PAYMENT ON VESTING OF RESTRICTED STOCK
The Committee, either at the time of grant or at the time of vesting of
Restricted Stock, may provide for a Supplemental Payment by the Company to the
holder in an amount specified by the Committee which shall not exceed the amount
necessary to pay the federal income tax payable with respect to both the vesting
of the Restricted Stock and receipt of the Supplemental Payment, assuming the
Grantee is taxed at the maximum effective federal income tax rate applicable
thereto. The Supplemental Payment shall be paid within 30 calendar days of each
date that Restricted Stock vests. The Committee shall have the discretion to
grant Supplemental Payments that are payable solely in cash or Supplemental
Payments that are payable in cash, Common Stock, or a combination of both, as
determined by the Committee at the time of payment.
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SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES
4.1 PERFORMANCE BASED AWARDS
(a) Grant. The Committee is authorized to grant Performance Units and
Performance Shares to Grantees. The Committee may make grants of Performance
Units or Performance Shares in such a manner that more than one Performance
Period is in progress concurrently. For each Performance Period, the Committee
shall establish the number of Performance Units or Performance Shares and the
contingent value of any Performance Units or Performance Shares, which may vary
depending on the degree to which performance objectives established by the
Committee are met.
(b) Performance Criteria. At the beginning of each Performance Period, the
Committee shall (i) establish for such Performance Period specific financial or
non-financial performance objectives as the Committee believes are relevant to
the Company's overall business objectives; (ii) determine the value of a
Performance Unit or the number of shares under a Performance Share grant
relative to performance objectives; and (iii) notify each Participant in writing
of the established performance objectives and minimum, target, and maximum
Performance Unit or Share value for such Performance Period.
(c) Modification. If the Committee determines in its sole discretion that
the established performance measures or objectives are no longer suitable to
Company objectives because of a change in the Company's business, operations,
corporate structure, capital structure, or other conditions the Committee deems
to be appropriate, the Committee may modify the performance measures and
objectives as considered appropriate.
(d) Payment. The basis for payment of Performance Units or Performance
Shares for a given Performance Period shall be the achievement of those
financial and non-financial performance objectives determined by the Committee
at the beginning of the Performance Period. If minimum performance is not
achieved for a Performance Period, no payment shall be made and all contingent
rights shall cease. If minimum performance is achieved or exceeded, the value
of a Performance Unit or Performance Share shall be based on the degree to which
actual performance exceeded the preestablished minimum performance standards, as
determined by the Committee. The amount of payment shall be determined by
multiplying the number of Performance Units or Performance Shares granted at the
beginning of the Performance Period times the final Performance Unit or
Performance Share value. Payments shall be made, in the discretion of the
Committee, solely in cash or Common Stock, or a combination of cash and Common
Stock, following the close of the applicable Performance Period, in such manner
as may be permissible without causing the Grantee to incur liability under
Section 16(b) of the Exchange Act.
(e) Special Rule for Covered Employees. Without limiting the generality of
the foregoing, it is intended that the Committee shall establish performance
goals applicable to Performance Units or Performance Shares awarded to Grantees
who, in the judgment of the
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Committee, may be Covered Employees in such a manner as shall permit payments
with respect thereto to qualify as "performance-based compensation" as described
in Section 162(m)(4)(C) of the Code. It is specifically provided that the
material terms of such performance goals for Grantees who, in the judgment of
the Committee, may be Covered Employees, shall, until changed by the Committee
with the approval of the stockholders, be as follows: (i) the business criteria
on which the performance goals shall be based shall be the attainment of such
target levels of earnings per share from continuing operations, total
stockholder return, Common Stock price per share, sales or market share as may
be specified by the Committee; and (ii) the maximum amount of compensation that
may be paid under Performance Units and Performance Shares to any one Grantee
with respect to any one year shall be $1,000,000.
4.2 SUPPLEMENTAL PAYMENT ON VESTING OF PERFORMANCE UNITS OR PERFORMANCE SHARES
The Committee, either at the time of grant or at the time of vesting of
Performance Units or Performance Shares (other than Restricted Stock), may
provide for a Supplemental Payment by the Company to the holder in an amount
specified by the Committee which shall not exceed the amount necessary to pay
the federal income tax payable with respect to both the vesting of such
Performance Units or Performance Shares and receipt of the Supplemental Payment,
assuming the Grantee is taxed at the maximum effective federal income tax rate
applicable thereto. The Supplemental Payment shall be paid within 30 days of
each date that such Performance Units or Performance Shares vest. The Committee
shall have the discretion to grant Supplemental Payments that are payable in
cash, Common Stock, or a combination of both, as determined by the Committee at
the time of payment.
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION
5.1 PLAN CONDITIONS
(a) Incentive Plan Agreement. Each Grantee to whom an Incentive Award is
granted under the Plan shall be required to enter into an Incentive Plan
Agreement with the Company in a form provided by the Committee, which shall
contain certain specific terms, as determined by the Committee, with respect to
the Incentive Award and shall include provisions that the Grantee (i) shall not
disclose any trade or secret data or any other confidential information of the
Company acquired during employment by the Company or a Subsidiary, or after the
termination of employment or Retirement, (ii) shall abide by all the terms and
conditions of the Plan and such other terms and conditions as may be imposed by
the Committee, and (iii) shall not interfere with the employment of any other
Company employee. An Incentive Award may include a noncompetition agreement
with respect to the Grantee and/or such other terms and conditions, not
inconsistent with the Plan, as shall be determined from time to time by the
Committee.
(b) No Right to Employment. Nothing in the Plan or any instrument executed
pursuant to the Plan shall create any employment rights (including without
limitation, rights to continued employment) in any Grantee or affect the right
of the Company to terminate the
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employment of any Grantee at any time for any reason whether before the exercise
date of any Option or during the Restriction Period of any Restricted Stock or
during the Performance Period of any Performance Unit or Performance Share.
(c) Securities Requirements. No shares of Common Stock will be issued or
transferred pursuant to an Incentive Award unless and until all then-applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction and by any stock
market or exchange upon which the Common Stock may be listed, have been fully
met. As a condition precedent to the issuance of shares pursuant to the grant
or exercise of an Incentive Award, the Company may require the Grantee to take
any reasonable action to meet such requirements. The Company shall not be
obligated to take any affirmative action in order to cause the issuance or
transfer of shares pursuant to an Incentive Award to comply with any law or
regulation described in the second preceding sentence.
5.2 TRANSFERABILITY
(a) Non-Transferable Awards. No Incentive Award and no right under the
Plan, contingent or otherwise, other than Restricted Stock as to which
restrictions have lapsed, will be (i) assignable, saleable, or otherwise
transferable by a Grantee except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order, or (ii)
subject to any encumbrance, pledge or charge of any nature. No transfer by will
or by the laws of descent and distribution shall be effective to bind the
Company unless the Committee shall have been furnished with a copy of the
deceased Grantee's will or such other evidence as the Committee may deem
necessary to establish the validity of the transfer. Any attempted transfer in
violation of this Section 5.2 shall be void and ineffective for all purposes.
(b) Ability to Exercise Rights. Only the Grantee or his guardian (if the
Grantee becomes Disabled), or in the event of his death, his legal
representative or beneficiary, may exercise Options, receive cash payments and
deliveries of shares, or otherwise exercise rights under the Plan. The executor
or administrator of the Grantee's estate, or the person or persons to whom the
Grantee's rights under any Incentive Award will pass by will or the laws of
descent and distribution, shall be deemed to be the Grantee's beneficiary or
beneficiaries of the rights of the Grantee hereunder and shall be entitled to
exercise such rights as are provided hereunder.
5.3 RIGHTS AS A STOCKHOLDER
(a) No Stockholder Rights. Except as otherwise provided in Section 5.3(b),
a Grantee of an Incentive Award or a transferee of such Grantee shall have no
rights as a stockholder with respect to any shares of Common Stock until the
issuance of a stock certificate for such shares. Except as otherwise provided
in Section 5.3(b) and Section 5.5, 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 stock certificate is issued.
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(b) Holder of Restricted Stock. Unless otherwise approved by the Committee
prior to the grant of a Restricted Stock Award, a Grantee of Restricted Stock or
a permitted transferee of such Grantee shall not have any rights of a
stockholder until such time as a stock certificate has been issued with respect
to all, or a portion of, such Restricted Stock Award.
5.4 LISTING AND REGISTRATION OF SHARES OF COMMON STOCK
The Company, in its discretion, may postpone the issuance and/or delivery
of shares of Common Stock upon any exercise of an Incentive Award until
completion of such stock exchange listing, registration, or other qualification
of such shares under any state and/or federal law, rule or regulation as the
Company may consider appropriate, and may require any Grantee to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations.
5.5 CHANGE IN STOCK AND ADJUSTMENTS
(a) Changes in Capitalization. Except as provided in Section 5.7, in the
event the outstanding shares of the Common Stock, as constituted from time to
time, shall be changed as a result of a change in capitalization of the Company
or a combination, merger, or reorganization of the Company into or with any
other corporation or any other transaction with similar effects, there then
shall be substituted (at no additional cost to any Grantee) for each share of
Common Stock theretofore subject, or which may become subject, to issuance or
transfer under the Plan, the number and kind of shares of Common Stock or other
securities or other property into which each outstanding share of Common Stock
shall be changed or for which each such share shall be exchanged and the
Committee may make other equitable adjustments which it deems to be warranted at
no additional cost to any Grantee but subject to any required stockholder
approval.
(b) Changes in Law or Circumstances. In the event of any change in
applicable laws or any change in circumstances which results in or would result
in any dilution of the rights granted under the Plan, or which otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan, then, if the Committee shall, in its sole discretion, determine
that such change equitably requires an adjustment in the number or kind of
shares of stock or other securities or property theretofore subject, or which
may become subject, to issuance or transfer under the Plan or in the terms and
conditions of outstanding Incentive Awards, such adjustment shall be made in
accordance with such determination. Such adjustments may include changes with
respect to (i) the aggregate number of shares that may be issued under the Plan,
(ii) the number of shares subject to Incentive Awards and (iii) the price per
share for outstanding Incentive Awards. Any adjustment of an Incentive Stock
Option under this paragraph shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Code. The
Committee shall give notice to each Grantee, and upon notice such adjustment
shall be effective and binding for all purposes of the Plan.
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5.6 TERMINATION OF EMPLOYMENT, DEATH, DISABILITY AND RETIREMENT
(a) Termination of Employment. Subject to Section 3.2, if an Employee's
employment is terminated for any reason whatsoever other than death, Disability
or Retirement, any Incentive Award granted pursuant to the Plan outstanding at
the time and all rights thereunder shall wholly and completely terminate, and
unless otherwise established by the Committee, no further vesting shall occur
and the Employee shall be entitled to exercise his or her rights with respect to
the portion of the Incentive Award vested as of the date of termination for a
period of thirty-one (31) calendar days after such termination date; provided,
however, that if an Employee is Terminated for Cause, such Employee's right to
exercise the vested portion of his or her Incentive Award shall terminate as of
the date of termination of employment.
(b) Retirement. Subject to Section 3.2, unless otherwise approved by the
Committee, upon the Retirement of an Employee:
(i) any nonvested portion of any outstanding Incentive Award shall
immediately terminate and no further vesting shall occur; and
(ii) any vested Incentive Award shall expire on the earlier of (A) the
expiration date set forth in the Incentive Plan Agreement with respect to
such Incentive Awards; or (B) the expiration of (1) six (6) months after
the date of Retirement in the case of any Incentive Award other than an
Incentive Stock Option or (2) three (3) months after the date of Retirement
in the case of an Incentive Stock Option.
(c) Disability or Death. Subject to Section 3.2, unless otherwise approved
by the Committee, upon termination of employment from the Company or any Parent
or Subsidiary as a result of Disability or death:
(i) any nonvested portion of any outstanding Incentive Award shall
immediately terminate and no further vesting shall occur; and
(ii) any vested Incentive Award shall expire upon the earlier of (A)
the expiration date set forth in the Incentive Plan Agreement with respect
to such Incentive Awards or (B) the first anniversary of such termination
of employment as a result of Disability or death.
(d) Continuation. Subject to the express provisions of the Plan and the
terms of any applicable Incentive Plan Agreement, the Committee, in its
discretion, may provide for the continuation of any Incentive Award for such
period and upon such terms and conditions as are determined by the Committee in
the event that a Grantee ceases to be an employee.
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5.7 CHANGES IN CONTROL
(a) Changes in Control. In the event of a Change in Control:
(i) all Options and Stock Appreciation Rights then outstanding
shall become vested and immediately and fully exercisable, notwithstanding
any provision therein for the exercise in installments;
(ii) all restrictions and conditions of all Restricted Stock then
outstanding shall be deemed satisfied, and the Restriction Period with
respect thereto shall be deemed to have expired, as of the date of the
Change in Control; and
(iii) all Performance Shares, Performance Units and any other
stock-based awards shall become vested, deemed earned in full and promptly
paid to the Grantees without regard to payment schedules and
notwithstanding that the applicable performance cycle or retention cycle
shall not have been completed.
For purposes of this Section 5.7, a "Change in Control" shall mean a change
in control of a nature that would be required to be reported in response to item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act as
such Schedule, Regulation and Act were in effect on the date of adoption of this
Plan by the Board, provided that such a change in control shall be deemed to
have occurred at such time as:
(i) any "person" (as that term is used in Section 13(d) and
14(d)(2) of the Exchange Act) is or becomes, directly or indirectly, the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
securities representing 30% or more of the combined voting power for
election of directors of the then outstanding voting securities of the
Company or any successor of the Company;
(ii) during any period of two (2) consecutive years or less,
individuals who at the beginning of such period constituted the Board of
the Company cease, for any reason, to constitute at least a majority of the
Board, unless the election or nomination for election of each new director
was approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the period;
(iii) the stockholders of the Company approve any merger or
consolidation to which the Company is a party as a result of which the
persons who were stockholders of the Company immediately prior to the
effective date of the merger or consolidation (and excluding, however, any
shares held by any party to such merger or consolidation and their
affiliates) shall have beneficial ownership of less than 50% of the
combined voting power for election of directors of the surviving
corporation following the effective date of such merger or consolidation;
or
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(iv) the stockholders of the Company approve any merger or
consolidation as a result of which the Common Stock shall be changed,
converted or exchanged (other than a merger with a wholly-owned subsidiary
of the Company) or any liquidation of the Company or any sale or other
disposition of 50% or more of the assets or earning power of the Company;
provided, however, that no Change in Control shall be deemed to have occurred
if, prior to such time as a Change in Control would otherwise be deemed to have
occurred, the Board determines otherwise.
(b) Right of Cash-Out. If approved by the Board prior to or within thirty
(30) days after such time as a Change in Control shall be deemed to have
occurred, the Board shall have the right for a forty-five (45) day period
immediately following the date that the Change in Control is deemed to have
occurred to require all, but not less than all, Grantees to transfer and deliver
to the Company all Incentive Awards previously granted to Grantees in exchange
for an amount equal to the "cash value" (defined below) of the Incentive Awards.
Such right shall be exercised by written notice to all Grantees. For purposes
of this Section 5.7(b), the cash value of an Incentive Award shall equal the sum
of (i) all cash to which the Grantee would be entitled upon settlement or
exercise of such Incentive Award and (ii) the excess of the "market value"
(defined below) per share over the option price, if any, multiplied by the
number of shares subject to such Incentive Award. For purposes of the preceding
sentence, "market value" per share shall mean the higher of (i) the average of
the Fair Market Value per share on each of the five trading days immediately
following the date a Change in Control is deemed to have occurred or (ii) the
highest price, if any, offered in connection with the Change in Control. The
amount payable to each Grantee by the Company pursuant to this Section 5.7(b)
shall be in cash or by certified check and shall be reduced by any taxes
required to be withheld.
5.8 AMENDMENTS TO INCENTIVE AWARDS
Subject to the following sentence, the Committee may waive any conditions
or rights with respect to, or amend, alter, suspend, discontinue, or terminate,
any unexercised Incentive Award theretofore granted, prospectively or
retroactively, with the consent of any relevant Grantee. Provided, however, the
Committee shall have no authority or power to take any action described in the
immediately preceding sentence to the extent that such action could result in
failure of payments under an Incentive Award to qualify as performance based
compensation as defined in Section 162(m) of the Code where such payments
otherwise would have qualified as such performance based compensation with
respect to a Covered Employee.
5.9 EXCHANGE OF INCENTIVE AWARDS
The Committee may, in its discretion, permit Grantees under the Plan to
surrender outstanding Incentive Awards in order to exercise or realize the
rights under other Incentive Awards, or in exchange for the grant of new
Incentive Awards or require holders of Incentive
18
<PAGE>
Awards to surrender outstanding Incentive Awards as a condition precedent to the
grant of new Incentive Awards.
5.10 FINANCING
The Company may extend and maintain, or arrange for the extension and
maintenance of, financing to any Grantee (including a Grantee who is a director
of the Company) to purchase shares pursuant to exercise of an Incentive Award on
such terms as may be approved by the Committee in its sole discretion. In
considering the terms for extension or maintenance of credit by the Company, the
Committee shall, among other factors, consider the cost to the Company of any
financing extended by the Company.
SECTION 6. MISCELLANEOUS
6.1 EFFECTIVE DATE AND GRANT PERIOD
This Plan has been adopted by the Board on April 22, 1994, subject to
stockholder approval. The Plan shall become effective and shall be deemed to
have been adopted on June 17, 1994 if at the Company's 1994 Annual Meeting of
Stockholders it shall have been approved by holders of at least the majority of
the outstanding Common Stock present, in person or by proxy, and authorized to
vote. If the requisite stockholder approval is not obtained, then the Plan
shall become null and void and be of no force or effect. Unless sooner
terminated by the Board, the Plan shall terminate on January 31, 2004. After
the termination of the Plan, no Incentive Awards may be granted under the Plan
other than reload options described in Section 2.6 granted in accordance with
Incentive Plan Agreements existing as of the Plan termination date, but
previously granted awards shall remain outstanding in accordance with their
applicable terms and conditions.
6.2 FUNDING
Except as provided under Section 3, no provision of the Plan shall require
or permit the Company, for the purpose of satisfying any obligations under the
Plan, to purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for such
purposes. Grantees shall have no rights under the Plan other than as unsecured
general creditors of the Company except that insofar as they may have become
entitled to payment of additional compensation by performance of services, they
shall have the same rights as other employees under general law.
6.3 WITHHOLDING TAXES
(a) Mandatory Withholding. The Company shall have the right to (i) make
deductions from any settlement of an Incentive Award made under the Plan,
including the
19
<PAGE>
delivery of shares, or require shares or cash or both be withheld from any
Incentive Award, in each case in an amount sufficient to satisfy withholding of
any federal, state or local taxes required by law, or (ii) take such other
action as may be necessary or appropriate to satisfy any such withholding
obligations. The Committee may determine the manner in which such tax
withholding may be satisfied, and may permit shares of Common Stock (rounded up
to the next whole number) to be used to satisfy required tax withholding based
on the Fair Market Value of any such shares of Common Stock, as of the delivery
of shares or payment of cash in satisfaction of the applicable Incentive Award.
(b) Incentive Stock Options. With respect to shares received by a Grantee
pursuant to the exercise of an Incentive Stock Option, if such Grantee disposes
of any such shares within two years from the date of grant of such option or
within one year after the transfer of such shares to the Grantee, the Company
shall have the right to withhold from any salary, wages or other compensation
payable by the Company to the Grantee an amount sufficient to satisfy federal,
state and local withholding tax requirements attributable to such disposition.
6.4 CONFLICTS WITH PLAN
In the event of any inconsistency or conflict between the terms of the Plan
and an Incentive Plan Agreement, the terms of the Plan shall govern.
6.5 NO GUARANTEE OF TAX CONSEQUENCES
Neither the Company nor the Committee makes any commitment or guarantee
that any federal, state or local tax treatment will apply or be available to any
person participating or eligible to participate hereunder.
6.6 SEVERABILITY
In the event that any provision of this Plan shall be held illegal, invalid
or unenforceable for any reason, 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 never been included herein.
6.7 GENDER, TENSE AND HEADINGS
Whenever the context requires such, 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 Plan.
20
<PAGE>
6.8 AMENDMENT AND TERMINATION
The Plan may be amended or terminated at any time by the Board by the
affirmative vote of a majority of the directors in office. The Plan, however,
shall not be amended, without prior approval of the stockholders, (a) to
materially increase the number of shares which may be issued or transferred to
Grantees or transferees under the Plan, (b) to materially modify the eligibility
requirements of the Plan, (c) to materially increase the benefits accruing to
participants under the Plan or (d) to cause the Plan to not comply with the
rules and regulations promulgated under Section 16(b) of the Exchange Act.
Notwithstanding anything to the contrary contained herein or in any Incentive
Plan Agreement entered into pursuant hereto relating to an Incentive Stock
Option, this Plan and any such Incentive Plan Agreement shall be subject to
amendment by action of the Committee to the extent necessary to comply with any
applicable requirements of the Code relating to favorable tax treatment of
Incentive Stock Options.
6.9 GOVERNING LAW
The Plan shall be construed in accordance with the laws of the State of
Texas, except as superseded by federal law, and in accordance with applicable
provisions of the Code and regulations or other authority issued thereunder by
the appropriate governmental authority.
6.10 SECTION 16 COMPLIANCE
The Plan, and transactions hereunder by persons subject to Section 16 of
the Exchange Act, are intended to comply with all applicable conditions of Rule
16b-3 or any successor provision under the Exchange Act. To the extent any
provision of the Plan or any action by the Committee or the Board fails, or is
deemed to fail, to so comply, such provision or action shall be null and void to
the extent permitted by law and deemed advisable by the Committee.
IN WITNESS WHEREOF, this Plan has been executed this ___ day of
____________, 1994.
OSHMAN'S SPORTING GOODS, INC.
By:
----------------------------------
Printed Name:
------------------------
Title:
-------------------------------
21
<PAGE>
Exhibit 10.14(a)
FIRST AMENDMENT TO
RESTRICTED STOCK GRANT AGREEMENT
This First Amendment to Restricted Stock Grant Agreement (this "Amendment")
amends that certain Restricted Stock Grant Agreement (the "Agreement") by and
between Oshman's Sporting Goods, Inc., a Delaware corporation (the "Company"),
and Alvin N. Lubetkin, a resident of Harris County, Texas ("Grantee") dated as
of July 15, 1994. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.
WHEREAS, the Company and Grantee entered into the Agreement and desire now
to amend the Agreement;
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto hereby amend the Agreement as follows:
Paragraph 1 of the Agreement is hereby amended to read in its entirety as
follows:
"1. GRANT OF RESTRICTED SHARES. The Company hereby grants to
Grantee, all rights, title and interest in and to the record and beneficial
ownership of 100,000 shares (the "Restricted Shares") of common stock,
$1.00 par value per share, of the Company ("Common Stock"), upon the terms
and subject to the conditions described in Paragraphs 4 and 5 as well as
the other provisions hereof. The Restricted Shares are granted pursuant to
the Oshman's Sporting Goods, Inc. 1994 Omnibus Plan (the "Plan") and are
subject to the provisions of the Plan. By acceptance of this Restricted
Stock Grant, Grantee agrees (i) to be bound by all of the terms,
provisions, conditions and limitations hereof and of the Plan, (ii) not to
disclose any trade or secret data or any other confidential information of
the Company acquired during employment by the Company or a Subsidiary, or
after termination of employment or "Retirement" (as defined in Paragraph
5(a)), and (iii) not to compete with the Company as more fully explained in
Paragraph 7."
Paragraph 10(b) of the Agreement is hereby amended to read in its entirety
as follows:
"(b) In the event of any change in applicable laws or any change in
circumstances which results in or would result in any dilution of the
rights of Grantee hereunder, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of this
Restricted Stock Grant, then, if the Compensation Committee of the Board of
Directors of the Company (the "Committee") shall, in its sole discretion,
determine that such change equitably requires an adjustment in the number
or kind of shares of stock or other securities or property theretofore
subject to issuance hereunder, such adjustment shall be made in accordance
with such determination. The Committee shall give notice
1
<PAGE>
to Grantee, and upon notice such adjustment shall be effective and binding
for all purposes of this Restricted Stock Grant."
Paragraph 12 of the Agreement is hereby amended to read in its entirety as
follows:
"12. AMENDMENT AND TERMINATION. No amendment or termination of this
Restricted Stock Grant shall be made by the Committee at any time without
the written consent of Grantee."
Paragraph 15 of the Agreement is hereby amended to read in its entirety as
follows:
"15. NO GUARANTEE OF TAX CONSEQUENCES. Neither the Company nor the
Committee makes any commitment or guarantee that any federal or state tax
treatment will apply or be available to any person eligible for benefits
under this Restricted Stock Grant."
IN WITNESS WHEREOF, the parties hereto have executed this Amendment in one
or more counterparts, each of which shall constitute an original and all of
which taken together shall constitute one instrument, effective on and as of the
15th day of July, 1994.
"COMPANY"
OSHMAN'S SPORTING GOODS, INC.
By:
--------------------------------
William N. Anderson
President
"GRANTEE"
-----------------------------------
Alvin N. Lubetkin
2
<PAGE>
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 28, Year ended January 29, Year ended January 30,
1995 1994 1993
---------------------- ---------------------- ----------------------
Fully Fully Fully
Primary diluted Primary diluted Primary diluted
---------- ---------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET EARNINGS (LOSS) $ 290 $ 290 $(19,494) $(19,494) $ (679) $ (679)
====== ====== ======== ======== ====== ======
Weighted average number of common shares
outstanding 5,807 5,807 5,805 5,805 5,804 5,804
Excess of shares issuable upon exercise of stock
options over shares deemed retired under the
"treasury stock" method 155 172 - - - -
------ ------ -------- -------- ------ ------
Weighted average number of common and dilutive
common equivalent shares outstanding 5,962 5,979 5,805 5,805 5,804 5,804
====== ====== ======== ======== ====== ======
Earnings (loss) per common and
common equivalent share $ .05 $ .05 $ (3.36) $ (3.36) $(0.12) $(0.12)
====== ====== ======== ======== ====== ======
</TABLE>
<PAGE>
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
parentheses.
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., Kansas (will operate as SuperSports USA)
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 (will operate as SuperSports USA)
Oshman Sporting Goods, Inc. - Service (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.)*
* Indicates a currently inactive subsidiary.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 15, 1995, accompanying the
consolidated financial statements and schedules of Oshman's Sporting Goods, Inc.
and subsidiaries included in the Annual Report on Form 10-K for the year ended
January 28, 1995. 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, File No. 33-41404, File No. 33-28357,
File No. 33-53451 and File No. 33-54221.
/s/ GRANT THORNTON LLP
- ----------------------------
Grant Thornton
Houston, Texas
April 27, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-END> JAN-28-1995
<CASH> 254
<SECURITIES> 0
<RECEIVABLES> 3,437
<ALLOWANCES> 395
<INVENTORY> 98,294
<CURRENT-ASSETS> 106,961
<PP&E> 80,374
<DEPRECIATION> 52,964
<TOTAL-ASSETS> 135,077
<CURRENT-LIABILITIES> 66,586
<BONDS> 0
<COMMON> 5,811
0
0
<OTHER-SE> 54,975
<TOTAL-LIABILITY-AND-EQUITY> 135,077
<SALES> 311,419
<TOTAL-REVENUES> 311,419
<CGS> 202,110
<TOTAL-COSTS> 202,110
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,498
<INCOME-PRETAX> 422
<INCOME-TAX> 132
<INCOME-CONTINUING> 290
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 290
<EPS-PRIMARY> $0.05
<EPS-DILUTED> $0.05
</TABLE>
