<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.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total Fee Paid:
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[ ] 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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4) Date Filed:
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<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 1997
To the Stockholders of Oshman's Sporting Goods, Inc.
NOTICE IS HEREBY GIVEN that the 1997 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 20, 1997, 11:00
a.m., local time, for the following purposes:
1. To elect seven 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 21, 1997 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,
RICHARD G. DENNIS
Vice President, Secretary
and General Counsel
Dated: May 21, 1997
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 1997
The accompanying proxy is solicited by the Board of Directors of Oshman's
Sporting Goods, Inc. (the "Company"), to be voted at the 1997 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 1,
1997, including financial statements, is enclosed with this proxy statement,
which is being mailed to stockholders on or about May 21, 1997. 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 21, 1997. As of April 21, 1997, there were 5,827,249 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 21, 1997, 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.................... 1,210,822(2) 20.8%
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 6.8%
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
</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 by Mr. Lewis as trustee for the benefit of Ms. Margolis and her
children.
(4) These shares are held by Mr. Stanton as trustee for the benefit of Ms.
Oshman and her children.
(5) These shares are held by Mr. Lewis as trustee for the benefit of Ms.
Margolis and her children.
2
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table shows, as of April 21, 1997, 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 OWNERSHIP(1) OF CLASS
- ---- ---------------------- -----------
<S> <C> <C>
Marilyn Oshman................................................ 1,210,822(2)(3) 20.8%
Alvin N. Lubetkin............................................. 272,000(3)(4) 4.5%
Marvin Aronowitz.............................................. 18,441 *
Karen Oshman Desenberg........................................ 120,412(5) 2.1%
William M. Hitchcock.......................................... 0 *
Manuel A. Sanchez, III........................................ 106,000(6) *
Dolph B.H. Simon.............................................. 10,000(7) *
Lindsay J. Rice............................................... 13,433(3)(8) *
Steve Rath.................................................... 18,400(3)(9) *
William N. Anderson........................................... 0 *
All executive officers and directors as a group (16 persons).. 1,780,565(3)(10) 29.1%
</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 Marvin Aronowitz,
Marilyn Oshman and Alvin N. Lubetkin are three of the 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 92,280 shares owned by the Company's 401(k) Plan of which Messrs.
Lubetkin, Rath, Rice, and Ms. Oshman are four of the seven trustees. Such
trustees share voting and dispositive power over such shares. These
persons disclaim all beneficial ownership of shares owned by the 401(k)
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 6,666 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan and 1991 Stock Option Plan. Does
not include 125,900 shares of Common Stock held in trust for the benefit of
Ms. Desenberg.
(6) Includes 100,000 shares owned by Sanchez Interests, Ltd., 25.5% of which is
owned by Mr. Sanchez and vested options to purchase 4,000 shares of Common
Stock pursuant to the Company's 1993 Non-Employee Director Stock Option
Plan.
(7) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(8) Includes vested options to purchase 13,333 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan and 1991 Stock Option Plan.
(9) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan and 1991 Stock Option Plan.
(10) Includes vested options to purchase 301,931 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 seven 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.
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE POSITION WITH THE COMPANY
- ---- -------- --- ----------------------------------------------------
<S> <C> <C> <C>
Marvin Aronowitz(1)................. 1962 72 Director
Karen Oshman Desenberg.............. -- 35 Nominee for Director, Divisional Vice
President-Merchandising Manager
William M. Hitchcock................ -- 57 Nominee for Director
Alvin N. Lubetkin(1)................ 1962 63 Vice Chairman of the Board, Chief Executive Officer,
President and Director
Marilyn Oshman(1)................... 1979 57 Chairman of the Board and Director
Manuel A. Sanchez, III(2)........... 1996 55 Director
Dolph B. H. Simon(2)................ 1987 64 Director
</TABLE>
- --------------
(1) Member of Executive Committee.
(2) Member of the Audit Committee and the Compensation Committee.
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 Ms. Oshman.
Ms. Desenberg has been a Divisional Vice President - Merchandising Manager of
the Company since April 1991. She is the daughter of Ms. Oshman and Mr.
Lubetkin. Ms. Desenberg is the granddaughter and Ms. Oshman is the daughter of
Jeanette Oshman Efron, a principal shareholder of the Company. Ms. Desenberg is
the niece and Ms. Oshman is the sister of Judy O. Margolis, a principal
shareholder of the Company.
Mr. Hitchcock has been President of Avalon Financial, Inc. (a private
investment company) since December 1996. He was employed as President of Plains
Resources International Inc. (a wholly owned subsidiary of Plains Resources
Inc., an independent oil and gas company) from 1992 to 1995. He was Chairman of
the Board of Plains Resources, Inc. from August 1981 to October 1992, except for
the period from April 1987 through October 1987 when he served as its Vice
Chairman. Mr. Hitchcock is currently a director of Plains Resources Inc. and
Thoratec Laboratories Corp. (a medical device company).
Mr. Lubetkin has been an officer of the Company since 1966 and a Director
since 1962. Mr. Lubetkin has overall responsibility for the Company's
operations. 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.
Mr. Sanchez has served as a Director of the Company since 1996. He currently
serves as President of the General Partner of each of Highland Distributing
Company, Ltd. and HiPal Partners, Ltd., which are 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
1, 1997, 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 three meetings during the
last fiscal year. The Compensation Committee has authority to consider and make
recommendations to the Board of Directors regarding compensation of executive
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 1, 1997, the Board of the
Directors held seven meetings. Each incumbent 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 50% 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 1,
1997 to the Chief Executive Officer, the two other highest paid executive
officers for whom disclosure is required, and one former executive officer and
(ii) the value at the end of the last fiscal year of the stock options held by
such individuals. No stock options were granted to or exercised by any of such
individuals during the fiscal year ended February 1, 1997.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
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............. 1996 $364,237 $ 0 $44,377(1) $ 0 0 $ 38,460(2)
Vice Chairman of the Board, 1995 342,200 75,000 52,126(1) 0 250,000(3) 40,964
Chief Executive Officer, 1994 342,200 0 50,768(1) 825,000(4) 0 30,139
President and Director
Lindsay J. Rice............... 1996 160,000 0 0 0 0 0
Executive Vice President 1995 150,385 0 0 0 0 0
1994 143,942 0 0 0 0 0
Steven U. Rath................ 1996 110,769 10,000 0 0 0 0
Vice President 1995 112,981 0 0 0 0 0
1994 95,961 0 0 0 0 0
William N. Anderson(5)........ 1996 148,900 0 0 0 0 330,000(6)
Former President and Chief 1995 300,060 50,000 0 0 0 0
Operating Officer 1994 229,112 25,000 0 0 100,000 0
</TABLE>
- --------------
(1) Includes $35,600 in 1996, $45,270 in 1995 and $43,863 in 1994 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 $462,110. As of February 1,
1997, $420,101 remained outstanding under the loan.
(2) 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. Assuming the Company is
able to utilize the tax benefit from payments made under this agreement, the
amount of such payments is currently estimated at $152,000 annually and
$1,061,000 in the aggregate, based on an assumed 5.48% annual rate of
interest and other actuarial assumptions included in such insurance policy.
The amount shown reflects the value of this benefit under methodology
required by the Commission.
(3) 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.
(4) 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 February 1, 1997, 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 January 31,
1997, such shares had a value of $518,750. 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.
(5) Mr. Anderson resigned from the Company in July 1996.
(6) Represents a severance payment of $300,000, consulting fees of $10,000 and
$20,000 paid in consideration of Mr. Anderson's surrender and cancellation
of stock options, each in connection with Mr. Anderson's resignation from
the Company. See "--Employment Agreements and Other Arrangements."
6
<PAGE>
FEBRUARY 1, 1997 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 (1)
-------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Alvin N. Lubetkin........ 250,000 0 $0 $0
Lindsay J. Rice.......... 13,333 6,667 0 0
Steven U. Rath........... 10,000 5,000 0 0
William N. Anderson (2).. 0 0 0 0
</TABLE>
- --------------
(1) As of February 1, 1997, no options were in-the-money.
(2) Mr. Anderson's outstanding options were surrendered and cancelled as part
of his separation agreement with the Company. See "--Employment Agreements
and Other Arrangements."
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.
Mr. Anderson resigned from the Company effective July 23, 1996. Under the
terms of a Separation Agreement, dated as of such date, and pursuant to the
terms of his Employment Agreement dated June 20, 1994, Mr. Anderson received a
severance payment of $300,000 and in addition the Company paid Mr. Anderson
$10,000 as a consulting fee. The Company also paid Mr. Anderson $20,000 in
exchange for the surrender and assignment back to the Company all of Mr.
Anderson's rights under a stock option agreement to purchase up to 100,000
shares of the Company's Common Stock.
The Company has entered into an executive salary continuation agreement
with Mr. Aronowitz, as its former President and Chief Operating Officer, 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 $4,805
for this policy during the fiscal year ended February 1, 1997.
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.
7
<PAGE>
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 executive 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 1, 1997.
During the fiscal year ended February 1, 1997, the Committee was comprised
of the following Board members, none of whom was employed by the Company: Dolph
B. H. Simon (Chairman) and Manuel A. Sanchez, III. Mr. Sanchez's service on the
Committee began in June 1996 when he was first elected to the Board of
Directors; Morrie K. Abramson and Fred M. Gerson, Directors of the Company until
June 1996, also served on the Committee until they each declined to stand for
re-election as Directors at that time.
Committee Charter. The Committee's charter provides that the Committee is
to oversee the development of all compensation plans that apply to executive
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
executive officers. The Committee also approves offers of employment to
individuals who would fill any executive 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 executive
officers. To that end, the Committee will annually review the total
compensation paid to executive officers. In any given year, Oshman's total
compensation for any executive 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.
During fiscal 1996, no cash incentive bonuses pursuant to any such
incentive plan were paid to executive officers of the Company. A cash
incentive of $10,000 was paid to Mr. Rath in connection with his efforts
during 1996 in resolving certain leases relating to traditional stores of
the Company that were closed.
Stock-Based Incentives - are used to reward executive officers and to
motivate them to achieve the Company's longer-term goals. In general, the
Company will place greater emphasis on stock-based incentives, which are
comprised of stock options, 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. Mr. Lubetkin's base salary
was increased by approximately 14% in April 1996 based upon the following
criteria: (i) Mr. Lubetkin's responsibilities as Chief Executive Officer of a
company with revenues in excess of $300 million; (ii) the absence of any salary
increase for Mr. Lubetkin in the preceding 5 year period since he took a
voluntary salary cut as part of an overall program of salary reduction for
executive officers; (iii) Mr. Lubetkin's efforts at negotiating and developing
creative strategy for the acquisition of the seven SportsTown stores during
1995; (iv) the significant increase in the market price of the Company's stock
during 1995; and (v) the significant increase in the Company's net earnings for
1995 as compared to 1994. No cash incentive bonus or stock-based incentive
award was made to the Chief Executive Officer during the fiscal year ended
February 1, 1997.
8
<PAGE>
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 executive 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
Manuel A. Sanchez, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gerson, who was a member of the Compensation Committee until June 1996,
served as a Vice President of the Company from 1966 to 1981. He did not stand
for reelection as a Director of the Company at the 1996 Annual Meeting and
consequently ceased to be a member of the Compensation Committee at that time.
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 January 31, 1992, the last trading day in fiscal year 1991
which ended February 1, 1992, and that all dividends were reinvested. (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
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY OR FEBRUARY,
1992 1993 1994 1995 1996 1997
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Oshman's $ 100 $240.01 $213.33 $180.01 $263.35 $138.34
S&P 500 $ 100 110.58 124.82 125.49 174.00 215.12
S&P Retail Stores $ 100 119.37 115.04 106.53 114.86 135.45
</TABLE>
9
<PAGE>
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 all of the leases currently in effect 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 1, 1997. The
Company believes that the terms of all of these leases with the Warehouse Trusts
are as favorable to the Company as the terms 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.
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 Oshman Desenberg,
is employed by the Company as a Divisional Vice President-Merchandise Manager
and is a nominee for election as a Director. See "Election of Directors."
During the fiscal year ended February 1, 1997, Ms. Desenberg received
compensation of $160,892. 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who own more than ten percent of a
registered class of the Company's securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Based soley upon a review of copies of reports filed with the SEC and written
representations from certain of the Company's directors and executive officers
that no other reports were required, the Company notes that all forms required
to be filed during fiscal 1996 under Section 16(c) were so filed.
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 1998 Annual Meeting of Stockholders
must be received by the Company at its principal executive offices no later than
January 10, 1998.
10
<PAGE>
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, President and
Chief Executive Officer
Dated: May 21, 1997
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 1, 1997, 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 A. LYNN BOERNER, VICE PRESIDENT, OSHMAN'S
SPORTING GOODS, INC., 2302 MAXWELL LANE, HOUSTON, TEXAS 77023.
11
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
ANNUAL MEETING
JUNE 20, 1997 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 1, 1997, 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 SEVEN DIRECTORS:
Nominees: Marvin Aronowitz, Karen Desenberg, William A. Hitchcock, 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 20, 1997
The undersigned hereby appoints ALVIN N. LUBETKIN and RICHARD G. DENNIS, 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 20, 1997, or any
adjournment thereof.
Dated: ___________________________, 1997
----------------------------------------
----------------------------------------
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.)
