<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Oshman's Sporting Goods, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 21, 1996
To the Stockholders of Oshman's Sporting Goods, Inc.
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
Oshman's Sporting Goods, Inc. will be held in the Oshman's SuperSports USA store
at 2131 South Post Oak Road, Houston, Texas on Friday, June 21, 1996, 11:00
a.m., local time, for the following purposes:
1. To elect six directors to serve as the Board of Directors until the
next annual meeting of stockholders and until their respective
successors are elected.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 22, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting.
Stockholders who do not expect to attend the meeting in person are
requested to fill in, date and sign the enclosed proxy and return it promptly in
the enclosed postage-paid return envelope so that their shares may be
represented and voted at the meeting.
By Order of the Board of Directors,
R. L. BOCKART
Vice President
Dated: May 17, 1996
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 21, 1996
The accompanying proxy is solicited by the Board of Directors of Oshman's
Sporting Goods, Inc. (the "Company"), to be voted at the 1996 Annual Meeting of
Stockholders, which will be held at the time and place and for the purposes
expressed in the accompanying Notice of Annual Meeting. All shares represented
by a properly completed and executed proxy will be voted at the meeting in
accordance with the specifications set forth therein. If no contrary
specification is made, all shares represented by an executed proxy will be voted
for the nominees for the Board of Directors named therein. If the enclosed form
of proxy is executed and returned, it may nevertheless be revoked by you at any
time before it is exercised by giving notice to the Secretary of the Company, or
by giving a later proxy or voting in person at the meeting.
In addition to the solicitation of proxies by use of the mail, officers and
regular employees of the Company may aid in such solicitation by personal
contact, telephone and telegraph. Brokerage firms will be requested to forward
proxy materials to beneficial owners of shares registered in the names of such
firms and will be reimbursed for their expenses. The cost of solicitation will
be borne by the Company.
The Company's Annual Report to Stockholders for the year ended February 3,
1996, including financial statements, is enclosed with this proxy statement,
which is being mailed to stockholders on or about May 17, 1996. The Annual
Report to Stockholders does not constitute a part of the proxy soliciting
material.
VOTING RIGHTS AND PRINCIPAL STOCKHOLDERS
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting of Stockholders is the close of business on
April 22, 1996. As of April 22, 1996, there were 5,824,249 shares of common
stock, $1.00 par value, of the Company ("Common Stock") issued and outstanding.
In accordance with Delaware law and the Company's charter and bylaws, each of
such shares of Common Stock is entitled to one vote on each matter to be acted
upon at the meeting. In establishing the presence of a quorum, abstentions and
broker non-votes will be included in the determination of the number of shares
represented at the meeting. Abstentions will have the same effect as a vote
against a proposal; broker non-votes, however, are not included in the tally of
votes present and will not affect the outcome of a proposal. During the ten
days prior to the annual meeting, a list of the stockholders entitled to vote at
the annual meeting will be available at the principal offices of the Company
during ordinary business hours for examination by any stockholder for any
purpose germane to the meeting.
<PAGE>
Based on the records of the Company as of April 22, 1996, the following
persons were known by the Company to own beneficially more than 5% of the Common
Stock of the Company then outstanding:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENTAGE
OWNERSHIP (1) OF CLASS
-------------------- -----------
<S> <C> <C>
Marilyn Oshman.................... 1,219,422(2) 20.9%
2302 Maxwell Lane
Houston, Texas 77023
Judy O. Margolis.................. 801,618(3) 13.8%
1400 Post Oak Blvd., Suite 808
Houston, Texas 77056
Edward C. Stanton III, Trustee.... 422,300(4) 7.2%
6363 Woodway, Suite 300
Houston, Texas 77057
Jeanette Oshman Efron............. 398,829 7.0%
2302 Maxwell Lane
Houston, Texas 77023
Vendamerica B.V................... 300,000 5.1%
De Klencke 6 1083 HH
Amsterdam, Netherlands
Barry M. Lewis, Trustee........... 298,432(5) 5.1%
515 Post Oak Blvd., Suite 300
Houston, Texas 77027
Dimensional Fund Advisors, Inc.... 298,400 5.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
(1) The persons listed have the sole power to vote and to dispose of the shares
beneficially owned by them except as otherwise indicated. Does not include
11,802 shares owned by the Oshman Foundation. Jeanette Oshman Efron,
Marilyn Oshman and Judy O. Margolis are three of six trustees of the Oshman
Foundation. Such trustees are vested with the power to vote and dispose of
all assets of the Foundation, including such shares. These persons
disclaim all beneficial ownership of shares owned by the Foundation.
(2) Includes 251,800 shares held by Ms. Oshman as trustee for the benefit of
her children. Does not include 422,300 shares held in trust for the
benefit of Ms. Oshman and her children.
(3) Includes 237,800 shares held by Ms. Margolis as trustee for the benefit of
her children, 1,500 shares held by Mrs. Margolis as custodian for three
grandchildren and 11,527 shares held by the husband of Ms. Margolis as
trustee for Ms. Margolis' son. Does not include 298,432 shares held in
trust for the benefit of Ms. Margolis and her children.
(4) These shares are held by Edward C. Stanton III as trustee for the benefit
of Marilyn Oshman and her children.
(5) These shares are held by Barry M. Lewis as trustee for the benefit of Judy
O. Margolis and her children.
2
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table shows, as of April 22, 1996, the number of shares of
Common Stock beneficially owned by each of the directors, nominees for director,
the executive officers named below in the Summary Compensation Table, and all
executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENTAGE
NAME OF BENEFICIAL OWNERS OWNERSHIP (1) OF CLASS
- - ------------------------------------------------- --------------------- -----------
<S> <C> <C>
Marilyn Oshman................................... 1,219,422(2) 20.9%
Alvin N. Lubetkin................................ 272,000(3)(4) 4.5%
Fred M. Gerson................................... 62,699(5) 1.1%
William N. Anderson.............................. 62,500(6) 1.1%
Marvin Aronowitz................................. 28,441(7) *
Steve Rath....................................... 12,900(3) *
Dolph B.H. Simon................................. 8,000(5) *
Lindsay J. Rice.................................. 6,767(3) *
Will A. Clark.................................... 6,667 *
Morrie K. Abramson............................... 4,000(8) *
Manuel A. Sanchez, III........................... 4,000 *
All executive officers and directors as a group.. 1,704,096(3)(9) 27.6%
</TABLE>
- - -------------------------
*Less than 1%
(1) The persons listed above have the sole power to vote and to dispose of the
shares beneficially owned by them except as otherwise indicated. The
11,802 shares owned by the Oshman Foundation, of which Fred M. Gerson,
Marvin Aronowitz, Marilyn Oshman and Alvin N. Lubetkin are four of six
trustees, are not included. Such trustees are vested with the power to
vote and dispose of all assets of the Foundation, including such shares.
These persons disclaim all beneficial ownership of shares owned by the
Foundation.
(2) Includes 251,800 shares held by Ms. Oshman as trustee for the benefit of
her children. Does not include 422,300 shares held in trust for the
benefit of Ms. Oshman and her children.
(3) Excludes 150,280 shares owned by the Company's Profit Sharing Plan of which
Messrs. Lubetkin, Rath, Rice and Richard Bockart, Vice President and
Treasurer are trustees. Such trustees share voting and dispositive power
over such shares. These persons disclaim all beneficial ownership of
shares owned by the Profit Sharing Plan.
(4) Includes vested options to purchase 250,000 shares of Common Stock pursuant
to the Company's 1994 Omnibus Plan. Excludes 100,000 shares of restricted
Common Stock that are subject to vesting requirements.
(5) Includes vested options to purchase 8,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(6) Includes vested options to purchase 43,750 shares of Common Stock pursuant
to the Company's 1994 Omnibus Plan and options to purchase an additional
18,750 shares of Common Stock that will vest within sixty days.
(7) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan.
(8) Includes vested options to purchase 4,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(9) Includes vested options to purchase 359,833 shares of Common Stock held by
officers and directors pursuant to the Company's 1986 Stock Option Plan,
1991 Stock Option Plan, 1993 Non-Employee Director Stock Option Plan and
1994 Omnibus Plan.
The Company is not aware of any contractual arrangement, the operation of
which may at a subsequent date result in a change in control of the Company.
3
<PAGE>
ELECTION OF DIRECTORS
At the annual meeting, the stockholders will elect the six individuals who
are to serve as directors during the coming year. Directors will be elected by
the plurality vote of the shares of Common Stock represented at the annual
meeting and entitled to vote. The persons named as proxies in the enclosed
proxy, unless otherwise directed, intend to vote the shares represented by such
proxy for the election of the nominees listed below.
The following table and information sets forth the names of the nominees
for election to the Board of Directors, the year from which each nominee has
served as a director, if applicable, the age of each nominee and the principal
occupation or employment of each nominee. The nominees elected as directors of
the Company will serve until the next annual meeting of stockholders or until
their respective successors are elected. Two current directors, Morrie K.
Abramson and Fred M. Gerson, have chosen not to stand for reelection at this
year's Annual Meeting.
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE POSITION WITH THE COMPANY
- - ---------------------------- -------- --- -------------------------------------------------------
<S> <C> <C> <C>
William N. Anderson(1).... 1994 49 President, Chief Operating Officer and Director
Marvin Aronowitz(1)....... 1962 71 Director
Alvin N. Lubetkin(1)...... 1962 62 Vice Chairman of the Board, Chief Executive Officer and
Director
Marilyn Oshman(1)........... 1979 56 Chairman of the Board and Director
Manuel A. Sanchez, III (2).. N/A 54 None
Dolph B. H. Simon(2)...... 1987 63 Director
</TABLE>
- - -----------------------
(1) Member of Executive Committee.
(2) Mr. Simon is currently a member of the Audit Committee and the Compensation
Committee, and it is anticipated that Mr. Sanchez will become a member of
such committees upon his election as a director.
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).
Mr. Aronowitz has served as a Director of the Company since 1962. He also
served as President and Chief Operating Officer of the Company until June 1989,
at which time he resigned as an officer and Mr. Lubetkin was elected President.
Mr. Aronowitz remains an employee of the Company and was originally hired by the
Company in 1945. He is a cousin of Marilyn Oshman.
Mr. Lubetkin has been an officer of the Company since 1966 and a Director
since 1962. Mr. Lubetkin, in addition to having overall responsibility for the
Company's operations, is primarily responsible for finance, real estate, store
operations and corporate development for the Company. He was originally hired
by the Company in 1961.
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. Ms. Oshman is the daughter of Jeanette
Oshman Efron and the sister of Judy O. Margolis, each a significant stockholder
of the Company. Such persons, individually or as a group, may constitute a
control person under the rules of the Securities and Exchange Commission (the
"Commission").
Mr. Sanchez serves as President of the General Partner of each of Highland
Distributing Company, Ltd. and HiPal Partners, Ltd., beer importation and
distribution companies in Houston and Palestine, Texas.
4
<PAGE>
Mr. Simon has served as a Director of the Company since 1987. He is currently
engaged in the private practice of law. He served as Vice President and General
Counsel of Zale Corporation from 1978 until 1995. In January 1992, involuntary
petitions for reorganization under Chapter 11 of the federal bankruptcy laws
were filed against Zale Corporation, and it consented to the entry of an order
for relief under such filings. In June 1993, Zale Corporation completed its
plan of reorganization and emerged from bankruptcy.
Management of the Company has no reason to believe that any of the above
nominees will be unavailable or unwilling to serve as director; however, in the
event any of the above nominees should become unavailable or unwilling to serve
if elected, proxies will be voted for the election of substitute nominees
selected by the Board of Directors.
The Company does not have a standing nominating committee of the Board of
Directors or any committee performing similar functions. The Company has an
Executive Committee which held no meetings during the fiscal year ended February
3, 1996, but met informally on several occasions during the year. The Executive
Committee exercises limited powers of the Board of Directors between meetings of
the Board. The Company's Compensation Committee held two meetings during the
last fiscal year. The Compensation Committee has authority to consider and make
recommendations to the Board of Directors regarding compensation of officers of
the Company. The Company's Audit Committee, which held four meetings during the
last fiscal year, considers the audit services performed by the Company's
independent auditors and the possible effect on the independence of the auditors
of the performance of non-audit services. The Audit Committee makes
recommendations to the Board of Directors as to the selection of independent
auditors and reviews with such independent auditors their reports of audit, the
adequacy of internal controls and the accompanying management letters. During
the fiscal year ended February 3, 1996, the Board of the Directors held five
meetings. Each director attended 75% or more of the aggregate number of
meetings of the Board of Directors and committees of the Board on which he or
she served.
Each non-employee director of the Company currently receives director's fees
at a rate of $10,000 per full year plus $1,000 per meeting attended and $500 for
meeting participation via telephone. Members of the Audit Committee receive
$1,000 per meeting attended and members of the Compensation Committee receive
$1,000 per meeting attended. These committee meeting fees are reduced to $500
for meetings held the same day as a Board of Directors meeting. The Chairman of
the Audit Committee and the Compensation Committee receives a fifty percent
premium fee for each meeting attended. The Company reimburses directors for
out-of-pocket expenses incurred in connection with their duties. In addition,
each non-employee director is granted options under the non-employee director
stock option plan upon his or her becoming a director.
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth (i) the aggregate amount of remuneration paid
by the Company for the three fiscal years ended February 3, 1996 to the Chief
Executive Officer and the four other highest paid executive officers, (ii) the
number of shares of Common Stock that are subject to options granted to such
individuals during the last fiscal year and the hypothetical value thereof
assuming specified annual rates of Common Stock price appreciation, and (iii)
the value at the end of the last fiscal year of the stock options held by such
individuals. No stock options were exercised by any of such individuals during
the fiscal year ended February 3, 1996.
5
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
-------------------------------- ------------------------------------
Restricted Securities
Fiscal Stock Underlying All Other
Name and Principal Position Year Salary Bonus Other Awards Options Compensation
- - ------------------------------- ------ --------- -------- ----------- ------------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alvin N. Lubetkin.............. 1995 $342,200 $75,000 $52,126(1) $ 0 250,000(2) $40,964(4)
Vice Chairman of the Board, 1994 342,200 0 50,768(1) 825,000(3) 0 30,139(4)
Chief Executive Officer and 1993 342,200 0 48,110(1) 0 0 27,571(4)
Director
William N. Anderson............ 1995 300,060 50,000 0 0 0 0
President, Chief Operating 1994 229,112 25,000 0 0 100,000 0
Officer and Director 1993 --- --- --- --- --- ---
Lindsay J. Rice................ 1995 150,385 0 0 0 0 0
Executive Vice President 1994 143,942 0 0 0 0 0
1993 133,077 0 0 0 20,000 0
Will A. Clark (5).............. 1995 125,000 0 0 0 0 0
Vice President 1994 118,942 0 0 0 0 0
1993 105,085 0 0 0 20,000 0
Steven U. Rath................. 1995 112,981 0 0 0 0 0
Vice President 1994 95,961 0 0 0 0 0
1993 88,846 0 0 0 15,000 0
</TABLE>
(1) Includes $45,270 in 1995, $43,863 in 1994 and 41,560 in 1993 as incremental
cost to the Company for a $700,000 non-interest bearing ten-year loan made
in October 1990 by the Company to Mr. Lubetkin. The loan is being repaid in
bi-weekly installments. The loan is secured by a $700,000 life insurance
policy and certain stock option rights. At the commencement of the last
fiscal year, Mr. Lubetkin owed the Company $511,070. As of February 17,
1996, $462,110 remained outstanding under the loan.
(2) This option grant was made in exchange for the surrender by Mr. Lubetkin of
a previous stock option granted December 22, 1986 under the 1986 Stock
Option Plan for 250,000 shares at an option price of $8.40 per share.
(3) Represents a grant of 100,000 shares of restricted stock of the Company made
on July 15, 1994 under the 1994 Omnibus Plan, calculated at a market price
of $8.25, the closing price of a share of Common Stock on the grant date.
As of January 28, 1995, Mr. Lubetkin had 100,000 restricted shares that are
scheduled to vest 25% if he should retire at age 62, 50% at age 63, 75% at
age 64 and 100% at or after age 65. The shares would vest 100% in the event
of Mr. Lubetkin's death or disability (as defined) prior to his retirement
or upon certain terminations of his employment. To the extent Mr.
Lubetkin's loan from the Company (see note 1) has not been repaid at the
time vesting would occur, an appropriate number of shares otherwise
scheduled to vest would instead be canceled to satisfy the remaining loan
obligation. Based on the closing price of the Common Stock on February 2,
1996, such shares had a value of $1,000,000. Dividends are not payable upon
such shares until they have vested. None of the other officers named in the
table owns any shares of restricted Common Stock.
(4) The Company has a Deferred Compensation Agreement with Mr. Lubetkin under
which Mr. Lubetkin will receive annual lump-sum retirement benefits after he
attains age 65. Upon Mr. Lubetkin's death, whether prior to or after he
attains age 65, such payments will be made to his designated beneficiary.
It is anticipated that these payments will be provided through a $900,000
life insurance policy (owned by Texas Commerce Trust Company N.A., trustee
for the Deferred Compensation Agreement trust), which is subject to the
rights of the general creditors of the Company. The amount of payments is
currently estimated at $152,000 annually and $1,061,000 in the aggregate,
based on an assumed 5.44% annual rate of interest and other actuarial
assumptions included in such insurance policy. The amount shown in this
column reflects the value of this benefit under methodology required by the
Commission.
(5) Mr. Clark terminated employment with the Company on January 31, 1996.
6
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS DURING FISCAL YEAR ENDED FEBRUARY 3, 1996
Individual Grants
-------------------------------------------------------------
% of Total Potential Realizable Value
Number of Options at Assumed Annual Rates of
Securities Granted to Stock Price Appreciation
Underlying Employees Exercise Market for Option Term
Options in Fiscal Price Per Price on Expiration ---------------------------
Name Granted Year Share Grant Date Date 0% 5% 10%
- - --------------------- ------------- ----------- --------- ---------- ---------- -- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alvin N. Lubetkin.... 250,000(1) 99% $7.13 $6.25 4-20-05 $0 $763,750 $2,271,250
William N. Anderson.. 0 -- -- -- -- -- -- --
Lindsay J. Rice...... 0 -- -- -- -- -- -- --
Will A. Clark........ 0 -- -- -- -- -- -- --
Steven U. Rath....... 0 -- -- -- -- -- -- --
- - ---------------
(1) The option became exercisable as to 100% on October 20, 1995.
Total Outstanding Shares at February 3, 1996: 5,819,149
Aggregate Assumed Appreciation of all currently outstanding shares at 10 Years .......... $22,869,255 $57,958,724
</TABLE>
FEBRUARY 3, 1996 FISCAL YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-Money
Options at Fiscal Year End Options at Fiscal Year End
-------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - --------------------- ----------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Alvin N. Lubetkin.... 250,000 0 $718,750 $ 0
William N. Anderson.. 43,750 56,250 125,781 161,718
Lindsay J. Rice...... 6,667 13,333 23,351 46,699
Will A. Clark........ 6,667 13,333 23,351 46,699
Steven U. Rath....... 5,000 10,000 17,933 35,867
</TABLE>
EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
In October 1990, the Company entered into an employment agreement with Mr.
Lubetkin. The agreement provides that Mr. Lubetkin will serve as the Chief
Executive Officer of the Company for such salary and compensation as may be
fixed from time to time by the Board of Directors. The agreement limits the
ability of Mr. Lubetkin to compete with the Company for a period of 18 months
after he ceases to be an employee of the Company. The term of the agreement
commenced October 3, 1990 and continues until the loan to Mr. Lubetkin described
in note (1) to the Summary Compensation Table has been fully repaid.
In June 1994, the Company entered into an employment agreement with Mr.
Anderson. The agreement provides that Mr. Anderson will serve as President and
Chief Operating Officer on an "at will" basis for such salary and compensation
as may be fixed from time to time by the Board of Directors. The agreement
provides that if the Company terminates Mr. Anderson's employment other than for
"cause," or Mr. Anderson terminates his employment for "good reason," each as
defined in the agreement, at any time, the Company will pay a lump sum severance
payment to Mr. Anderson in the amount of $300,000, provided, however, the
Company shall have no obligation under this agreement if, as of the date of such
termination, the aggregate value of all stock options exercised by Mr. Anderson
(valued as of the date of each such exercise), together with all vested but
unexercised
7
<PAGE>
stock options held by Mr. Anderson (valued as of the date of termination of
employment) is equal to or exceeds $1,000,000.
Marvin Aronowitz and the Company are parties to a split dollar insurance
agreement pursuant to which the Company paid for an insurance policy on the life
of Mr. Aronowitz in the amount of $285,000. Each year, that portion of the
annual premium cost equal to the one-year term cost of the insurance protection
was paid by Mr. Aronowitz. Upon the death of Mr. Aronowitz, the beneficiary
named by him is entitled to receive the benefits under the policy, less the
amount of the contributions made under the policy by the Company. The Company
funded its portion of the premiums through a policy loan. The interest incurred
on such loan during the fiscal year ended February 3, 1996 was $7,069.
The Company has also entered into an executive salary continuation agreement
with Mr. Aronowitz under which the Company agrees to pay to certain
beneficiaries of Mr. Aronowitz up to $51,000 upon his death. This payment is to
be funded by an insurance policy obtained by the Company on the life of Mr.
Aronowitz. The Company paid $2,826 for this policy during the fiscal year ended
February 3, 1996.
The Company maintains a severance pay and bonus policy for certain officers
and employees of the Company. The policy provides that the Company will be
required to make payments (in the form of bonuses or severance pay, depending on
the circumstances) to designated officers and employees of the Company on a date
that is six months following a "Change in Control" of the Company. A Change in
Control occurs when (i) certain persons or groups hold or acquire, directly or
indirectly, securities representing 50% or more of the voting power of the
Company's then outstanding voting stock or (ii) there is a change in the
ownership of 80% or more of the assets of the Company. Following a Change in
Control, the Company is obligated to make such payments whether the designated
persons continue in the employ of the Company or they resign or are terminated.
The amount payable to Mr. Lubetkin under the policy is equal to the lesser of
(i) 299% of his "base amount," as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), which is generally the same as such person's average
annual compensation from the Company, or (ii) the maximum amount of additional
compensation that may be paid to such person without the Company losing any
Federal income tax deduction for such payments or the employee being subjected
to a Federal excise tax on such payments. The amounts payable to Messrs. Rice,
Rath and other officers or employees of the Company under the policy are
calculated using other formulas and are subject to different restrictions.
The Company maintains a non-contributory profit sharing plan (the "Plan") for
its employees which has been determined by the Internal Revenue Service to be
qualified under the Code. The payment of benefits under the Plan is made to
employees upon termination of employment. In addition, each employee may make
one life-time election to withdraw up to fifty percent of such employee's
account balance as of the date of such election. The Company's contributions to
the Plan are made at the discretion of the Company. The Company did not
contribute to the Plan for the fiscal year ended February 3, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("the Committee") of the Company's Board of
Directors is pleased to present its annual report to stockholders on executive
compensation. This report summarizes the charter of the Committee, the
compensation policy for officers, the components of the executive compensation
program and the basis on which compensation was determined for the Chief
Executive Officer and other executive officers of the Company for the fiscal
year ended February 3, 1996.
During the fiscal year ended February 3, 1996, the Committee was comprised of
the following Board members, none of whom was employed by the Company: Dolph B.
H. Simon, Chairman, Morrie K. Abramson, Fred M. Gerson and Stewart Orton. Mr.
Abramson's service on the Committee began in June 1995 when he was first elected
to the Board of Directors; Stewart Orton, a Director of the Company until June
1995, also served on the Committee until he resigned as a Director at that time.
8
<PAGE>
Committee Charter. The Committee's charter provides that the Committee is to
oversee the development of all compensation plans that apply to officers of the
Company; administer all stock and incentive compensation plans requiring
administration by "disinterested directors"; evaluate the performance and set
the salary, bonus and stock awards for the Chairman of the Board, Chief
Executive Officer and Chief Operating Officer; and act on recommendations by the
Chief Executive Officer as to the salary, bonus and stock awards for all other
senior officers. The Committee also approves offers of employment to
individuals who would fill any senior officer position.
Compensation Policy for Officers. It is the goal of the Company to strive for
excellence in the selection and retention of highly qualified officers. To that
end, the Committee will annually review the total compensation paid to officers,
compared to the compensation paid by sporting goods and other specialty
retailers of similar size and complexity for similar positions. In any given
year, Oshman's total compensation for any officer may be above or below the
industry median based on the performance of the Company and the individual.
The principal components of the executive compensation program are base
salary, cash incentive compensation and stock-based, longer-term incentives:
BASE SALARY - levels are targeted at the industry median (sporting goods
-----------
and other specialty retailers of similar size and complexity). Variations
above and below this target should be based on the executive's background,
qualifications and job performance at Oshman's.
CASH INCENTIVES - should be given based upon achievement of pre-
---------------
determined, measurable Company and individual goals. Incentive plans
measure Company performance based on pre-tax income and other factors. For
fiscal 1995 the Committee established a one-year bonus plan for its two
most senior executives based on enhancement in the stock market value of
its Common Stock provided that the Company's results of operations were
profitable. For fiscal 1995 the Company's operating income was $4.7
million and its net earnings were $1.9 million, as compared with $1.8
million and $290,000, respectively, for fiscal 1994; the Company's Common
Stock closed at $10.00 at the end of fiscal 1995 as compared with $7.13 at
the beginning of fiscal 1995. Pursuant to the Committee's 1995 bonus plan,
cash bonuses in the amount of $75,000 and $50,000 were paid to Mr. Lubetkin
and Mr. Anderson, respectively.
STOCK-BASED INCENTIVES - are used to reward officers and to motivate
----------------------
them to achieve the Company's longer-term goals. In general, Oshman's will
place greater emphasis on stock-based incentives than on cash incentive
payments. Company and individual performance results are considered when
determining stock-based incentive awards, although no pre-determined
performance criteria are utilized.
Compensation of the Chief Executive Officer. Although no base salary increase
was granted and no stock-based incentive awards were made to the Chief Executive
Officer during the fiscal year ended February 3, 1996, he did receive a cash
bonus as described above. The Committee recognized the significant
accomplishments of the Chief Executive Officer in leading the Company to
substantially greater profitability during a difficult year in the retail
sporting goods industry. The Committee also noted the successful implementation
to date of the Company's previously-adopted restructuring plan in closing
unprofitable locations while at the same time opening twelve new SuperSports USA
megastores during the fiscal year.
Omnibus Budget Reconciliation Act of 1993. The Omnibus Budget Reconciliation
Act of 1993 (the "Budget Act") imposes a limit of $1,000,000, with certain
exceptions, that a publicly held corporation may deduct in any year for the
compensation paid with respect to each of its five most highly compensated
officers. The Committee does not expect the compensation levels of Oshman's
executives to exceed this limit and intends to try to comply with the provisions
of the Budget Act that would preserve the deductibility of executive
compensation payments to the greatest extent possible.
Dolph B. H. Simon, Chairman
Morrie K. Abramson
Fred M. Gerson
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gerson, who is a member of the Compensation Committee, served as a Vice
President of the Company from 1966 to 1981. He is not standing for reelection
as a Director of the Company at the 1996 Annual Meeting and, consequently, as of
the date of the meeting, he will cease to be a member of the Compensation
Committee. Mr. Abramson also will not stand for reelection at the Annual
Meeting and will therefore also cease to be a member of the Committee as of such
date.
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock to
the S&P 500 Index and to the S&P Retail Stores Composite Index. The graph
assumes that the value of the investment in the Company's Common Stock and each
index was $100 at February 1, 1991, the last trading day in fiscal year 1990
which ended February 2, 1991. (The Company's fiscal year ends on the Saturday
closest to the end of January.) Thereafter, points on the graph are plotted as
of the last trading day in January for each successive fiscal year.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
[A Performance graph plotted from the data in the
table below appears here]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY OR FEBRUARY,
1991 1992 1993 1994 1995 1996
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oshman's 100 68.18 163.64 145.45 122.73 179.55
S&P 500 100 122.69 135.67 153.14 153.96 213.48
S&P Retail Stores 100 139.73 166.79 160.75 148.85 160.50
-----------------------------------------------------------------
</TABLE>
CERTAIN TRANSACTIONS
In numerous transactions since 1959, the Company has leased both land and
buildings for its executive offices, warehouses and one store in Houston, Texas
from two trusts (the "Warehouse Trusts") of which Marilyn Oshman and Judy O.
Margolis are the respective beneficiaries. Many of these leases are in effect
at the present time, and some of the leases extend up to 1998. The aggregate
rental payments from the Company to the Warehouse Trusts were approximately
$362,600 during the fiscal year ended February 3, 1996. The Company believes
that the terms of all of these leases with the Warehouse Trusts are as favorable
to the Company as the terms
10
<PAGE>
under which it could lease comparable facilities from an unaffiliated lessor in
arm's length transactions. If the Company needs to further expand its offices
or warehouse facilities, it may enter into other leases with the Warehouse
Trusts. However, no lease will be entered into unless its terms are as
favorable to the Company as those which could be obtained in arm's length
negotiations for comparable premises. Fred M. Gerson is a trustee under one
Warehouse Trust.
In March 1988, the Company entered into an agreement with Flagship Associates
providing for the lease by the Company of the land and building in Union, New
Jersey where one of the Company's stores was operated from March 1990 to
September 1993. Charles Lubetkin, Alvin Lubetkin's brother, is a general
partner of Flagship Associates and has a 19.75% interest in such partnership.
The lease is for a term of twenty years, provides for annual rental payments of
$600,000 and is otherwise on terms the Company believes to be no less favorable
than could be obtained from an unrelated third party. This lease was amended
and assigned to an unrelated third party in September 1993, and the Company
remains liable on the lease.
The daughter of Marilyn Oshman and Alvin Lubetkin, Karen Desenberg, is
employed by the Company as a Divisional Vice President-Merchandise Manager.
During the fiscal year ended February 3, 1996, Ms. Desenberg received
compensation of $124,903. In addition, Ms. Desenberg is entitled to the
benefits available to other Company employees of similar position. Although the
specific value of such benefits cannot be determined by the Company, such value
does not exceed 10% of her reported compensation.
INDEPENDENT AUDITORS
Grant Thornton LLP has served as auditors of the Company for a number of
years. Representatives of such firm are expected to be present at the annual
meeting and will have the opportunity to make a statement if they desire to do
so. Such representative will be available to respond to appropriate questions.
PROPOSALS OF SECURITY HOLDERS
Proposals which stockholders of the Company intend to present for inclusion in
the proxy statement with respect to the 1997 Annual Meeting of Stockholders must
be received by the Company at its principal executive offices no later than
January 11, 1997.
GENERAL
As of the date of this statement, the Board of Directors has no knowledge of
any business that will be presented for consideration at the meeting other than
the election of directors. With respect to any other business that may properly
come before the meeting or any adjournment thereof, it is intended that proxies
will be voted in accordance with the judgment of the person or persons voting
them.
By Order of the Board of Directors,
ALVIN N. LUBETKIN
Vice Chairman of the Board and
Chief Executive Officer
Dated: May 17, 1996
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3, 1996, INCLUDING THE
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, TO INTERESTED SECURITY
HOLDERS ON REQUEST. THE COMPANY WILL ALSO FURNISH TO ANY SUCH PERSON ON REQUEST
ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS
FOR COPIES SHOULD BE DIRECTED TO R. L. BOCKART, VICE PRESIDENT, OSHMAN'S
SPORTING GOODS, INC., 2302 MAXWELL LANE, HOUSTON, TEXAS 77023.
11
<PAGE>
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OSHMAN'S SPORTING GOODS, INC. ANNUAL MEETING
JUNE 21, 1996 CONTINUED FROM OTHER SIDE
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND IN ACCORDANCE WITH
THE ACCOMPANYING PROXY STATEMENT. RECEIPT OF THE PROXY STATEMENT AND THE ANNUAL
REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 3, 1996, IS HEREBY ACKNOWLEDGED. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 WHICH IS BEING
PROPOSED BY THE BOARD OF DIRECTORS.
1.ELECTION OF SIX DIRECTORS:
Nominees: William N. Anderson, Marvin Aronowitz, Alvin N. Lubetkin, Marilyn
Oshman, Manuel A. Sanchez III, Dolph B.H. Simon.
(MARK ONLY ONE)
[_] VOTE FOR all nominees listed, except as marked to the contrary above (if
any).
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE).
[_] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. In accordance with their discretion upon such other business as may properly
come before the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK, DATE AND SIGN THIS PROXY
- - -------------------------------------------------------------------------------
OSHMAN'S SPORTING GOODS, INC. ANNUAL MEETING JUNE 21, 1996
The undersigned hereby appoints ALVIN N. LUBETKIN and RICHARD L. BOCKART, or
either of them, each with power to appoint his substitute, as proxies of the
undersigned and authorizes them to represent and vote, as designated below, all
the shares of the Common Stock of Oshman's Sporting Goods, Inc. which the
undersigned would be entitled to vote if personally present, and to act for the
undersigned at the annual meeting to be held Friday, June 21, 1996, or any
adjournment thereof.
Dated: , 1996
----------------------------
----------------------------------------
----------------------------------------
Signature(s) of Stockholder(s)
(Please sign exactly as shown hereon.
Executors, administrators, guardians,
trustees, attorneys, and officers
signing for corporations should give
full title. If a partnership or jointly
owned, each owner should sign.)
- - -------------------------------------------------------------------------------
