<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
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] 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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(3) Filing Party:
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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 19, 1998
To the Stockholders of Oshman's Sporting Goods, Inc.
NOTICE IS HEREBY GIVEN that the 1998 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 19, 1998, 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 20,
1998 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 18, 1998
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 19, 1998
The accompanying proxy is solicited by the Board of Directors of
Oshman's Sporting Goods, Inc. (the "Company"), to be voted at the 1998 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 January
31, 1998, including financial statements, is enclosed with this proxy statement,
which is being mailed to stockholders on or about May 18, 1998. 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 20, 1998. As of April 20, 1998, 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 20, 1998, 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
NAME OWNERSHIP(1) OF CLASS
- ---- ---------------- -----------
<S> <C> <C>
Marilyn Oshman......................... 1,199,122(2) 20.6%
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
Dimensional Fund Advisors, Inc......... 321,800 5.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, California, 90401
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 20, 1998, 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................................................. 1,199,122(2)(3) 20.6%
Alvin N. Lubetkin.............................................. 22,000(3)(4) *
Marvin Aronowitz............................................... 18,441 *
A. Lynn Boerner................................................ 5,625(3)(5) *
Karen Desenberg................................................ 117,346(6) 2.0%
Timothy L. Grady............................................... 0 *
Mark L. Groeneman.............................................. 0 *
William M. Hitchcock........................................... 4,000(7) *
Stephen A. Lasher.............................................. 4,000(7) *
Thomas J. McVey................................................ 0 *
Steven U. Rath................................................. 13,400(3)(8) *
Manuel A. Sanchez, III......................................... 108,000(9) 1.9%
Dolph B.H. Simon............................................... 10,000(10) *
All executive officers and directors as a group (14 persons)... 1,501,934(3)(11) 25.6%
</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 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 79,304 shares owned by the Company's 401(k) Plan of which Messrs.
Lubetkin, Rath, Boerner, and Ms. Oshman are four of the six trustees. Such
trustees share voting and dispositive power over such shares. These
persons disclaim beneficial ownership of shares owned by the 401(k) Plan,
except to the extent of their respective interests as participants in the
401(k) plan.
(4) Excludes 100,000 shares of restricted Common Stock that are subject to
vesting requirements.
(5) Includes vested options to purchase 2,500 shares pursuant to the Company's
1991 Stock Option Plan.
(6) Does not include 125,900 shares of Common Stock held in trust for the
benefit of Ms. Desenberg.
(7) Includes vested options to purchase 4,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(8) Includes vested options to purchase 5,000 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan.
(9) Includes 100,000 shares owned by Sanchez Interests, Ltd., 25.5% of which is
owned by Mr. Sanchez and vested options to purchase 6,000 shares of Common
Stock pursuant to the Company's 1993 Non-Employee Director Stock Option
Plan. Mr. Sanchez is not standing for reelection as a director.
(10) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(11) Includes vested options to purchase 31,500 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 73 Director
Karen Desenberg.................... 1997 36 Director
William M. Hitchcock(2)............ 1997 58 Director
Stephen A. Lasher(2)............... 1997 50 Director
Alvin N. Lubetkin(1)............... 1962 64 Vice Chairman of the Board, Chief Executive
Officer, President and Director
Marilyn Oshman(1).................. 1979 58 Chairman of the Board and Director
Dolph B. H. Simon(2)............... 1987 65 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 Director of the Company since June 1997.
Prior to that time, she was a Divisional Vice President-Merchandising Manager at
the Company from April 1991 until December 1997. 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 a Director of the Company since June 1997. He
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. Lasher has been a Director of the Company since June 1997. Mr.
Lasher is President of Gulfstar Group, Inc., an investment banking firm in
Houston, and has held that position since 1990. Mr. Lasher is a director of
Weingarten Realty Investors, Ceonic Corp. and numerous private companies. In
addition, Mr. Lasher serves on a number of charitable/non-profit boards in
Houston, Texas including the boards of the University of Texas Health Science
Center, Hermann Eye Institute, Kinkaid School, Society for the Performing Arts
and the Children's Museum.
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.
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.
In addition, Manuel A. Sanchez has served as a Director of the Company
since 1996 and was a member of the Compensation Committee and the Audit
Committee during fiscal 1997. 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. He is not standing for reelection at the annual meeting.
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 January
31, 1998, 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 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 January 31, 1998,
the Board of the Directors held eight 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 January 31,
1998 to the Chief Executive Officer, the four other highest paid executive
officers for whom disclosure is required, and one former executive officer who
was not employed by the Company as of January 31, 1998 and (ii) the value at the
end of the last fiscal year of the stock options held by such individuals.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------------- -------------------------
Restricted Common Stock
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........... 1997 $389,900 $ 0 $40,776(1) $ 0 $ 0 $ 39,187(2)
Vice Chairman of the Board, 1996 364,237 0 44,377(1) 0 0 38,460(2)
Chief Executive Officer, 1995 342,200 75,000 52,126(1) 0 250,000(3) 40,964(2)
President and Director
Steven U. Rath.............. 1997 115,000 33,000 0 0 15,000(4) 0
Executive Vice President 1996 110,769 10,000 0 0 0 0
1995 112,981 0 0 0 0 0
Thomas J. McVey............. 1997 114,423 0 0 0 20,000(5) 0
Senior Vice President 1996 97,692 2,200 0 0 0 0
1995 80,000 6,000 0 0 0 0
A. Lynn Boerner............. 1997 100,000 2,500 0 0 3,500 0
Vice President and Chief 1996 97,885 0 0 0 0 0
Accounting Officer 1995 90,962 0 0 0 0 0
Mark L. Groeneman........... 1997 97,850 5,000 0 0 6,000(6) 0
Former Vice President 1996 97,083 0 0 0 0 0
1995 94,808 0 5,363 0 0 0
Timothy L. Grady............ 1997 107,560 0 0 0 20,000(7) 0
Former Senior Vice 1996 83,654 0 16,000 0 10,000 0
President and Chief 1995 0 0 0 0 0 0
Financial Officer
</TABLE>
- ------------------------
(1) Includes $33,768 in 1997, $35,600 in 1996 and $45,270 in 1995 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
$420,101. As of January 31, 1998, $374,619 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 Chase of
Texas, 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
5.30% 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) Includes options to purchase 10,000 shares of the Company's common
stock granted as a repricing of previously granted stock options. See
"Compensation Committee Report on Executive Compensation-Repricing of
Stock Options".
(5) Includes 5,000 shares of the Company's common stock granted as a
repricing of previously granted stock options. See "Compensation
Committee Report on Executive Compensation-Repricing of Stock Options".
(6) Includes 2,500 shares of the Company's common stock granted as a
repricing of previously granted stock options. See "Compensation
Committee Report on Executive Compensation-Repricing of Stock Options".
Mr. Groeneman resigned from the Company in March 1998 and all stock
options granted to him were terminated at such time.
(7) Includes 10,000 shares of the Company's common stock granted as a
repricing of previously granted stock options. See "Compensation
Committee Report on Executive Compensation-Repricing of Stock Options".
Mr. Grady resigned from the Company in August 1997 and all stock
options granted to him were terminated at such time.
<PAGE>
STOCK OPTION GRANTS
DURING THE FISCAL YEAR ENDED JANUARY 31, 1998
<TABLE>
<CAPTION>
POTENTIAL
Individual Grants REALIZABLE VALUE
------------------------------------------- AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION
UNDERLYING EMPLOYEES PRICE FOR OPTION TERM
OPTIONS IN FISCAL PER EXPIRATION ------------------------------
Name GRANTED YEAR SHARE DATE 5% 10%
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alvin N. Lubetkin 0 -- -- -- -- --
Steven U. Rath 15,000(1) 5.4% $4.56 April 7, 2007 $43,016 $109,012
Thomas J. McVey 20,000(2) 7.2% 4.56 April 7, 2007 57,355 145,349
A. Lynn Boerner 3,500 1.3% 4.56 April 7, 2007 10,037 25,436
Mark L. Groeneman 6,000(3) 2.1% 4.56 April 7, 2007 17,207 43,605
Timothy L. Grady 20,000(4) 7.2% 4.56 April 7, 2007 57,355 145,349
</TABLE>
_____________________
(1) Includes options to purchase 10,000 shares of the Company's common stock
granted as a repricing of previously granted stock options. See
"Compensation Committee Report on Executive Compensation-Repricing of Stock
Options".
(2) Includes 5,000 shares of the Company's common stock granted as a repricing
of previously granted stock options. See "Compensation Committee Report on
Executive Compensation-Repricing of Stock Options".
(3) Includes 2,500 shares of the Company's common stock granted as a repricing
of previously granted stock options. See "Compensation Committee Report on
Executive Compensation-Repricing of Stock Options". Mr. Groeneman resigned
from the Company in March 1998 and all stock options granted to him were
terminated at such time.
(4) Includes 10,000 shares of the Company's common stock granted as a repricing
of previously granted stock options. See "Compensation Committee Report on
Executive Compensation-Repricing of Stock Options". Mr. Grady resigned
from the Company in August 1997 and all stock options granted to him were
terminated at such time.
JANUARY 31, 1998 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(1) 0 $0 $ 0
Steven U. Rath............ 5,000 15,000 0 8,475
Thomas J. McVey........... 0 20,000 0 11,300
A. Lynn Boerner........... 2,500 3,500 0 1,978
Mark L. Groeneman(2)...... 0 6,000 0 3,390
Timothy L. Grady.......... 0 0 0 0
</TABLE>
__________________
(1) In April 1998, these options were repriced and, as a result of new vesting
requirements, became unexercisable.
(2) Mr. Groeneman resigned from the Company in March 1998 and all stock options
granted to him were terminated at such time.
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
7
<PAGE>
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.
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 $5,026
this policy during the fiscal year ended January 31, 1998.
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. McVey,
Boerner, Rath and other officers or employees of the Company under the policy
are calculated using other formulas and are subject to different restrictions.
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 January 31, 1998.
During the fiscal year ended January 31, 1998, the Committee was comprised of
the following Board members, none of whom was employed by the Company: Dolph B.
H. Simon (Chairman), Manuel A. Sanchez, III, William M. Hitchcock (added to the
Committee on June 20, 1997) and Stephen A. Lasher (added to the Committee on
December 5, 1997.)
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.
8
<PAGE>
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.
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.
Repricing of Stock Options. The Company's 1994 Omnibus Plan (the "Omnibus
Plan") is designed to attract and retain the services of the Company's employees
for the successful conduct, operation and administration of the Company, to
provide an incentive to the employees and to align the interests of the
employees with those of the stockholders. In April 1997, the Committee observed
that the decline in the market price of the Company's Common Stock had
frustrated these purposes and diminished the value of the Company's stock option
program as an element of the Company's compensation arrangements. The decline in
the market price per share to an extent that the price was significantly and
consistently below the exercise price of stock options granted under the
Company's various stock option plans had caused those stock options to lose
their incentive and motivational value. The Committee determined that a stock
option repricing program was the most cost-effective method to retain and
motivate key employees and affiliates. At the time of the repricing, each
employee of the Company, other than the chief executive officer, was given the
option to have the Company cancel such existing employee's option and grant an
option in replacement of such option, with a new vesting period.
For these reasons, in April 1997, the Committee adopted a stock option
repricing program with the following elements: (i) each employee of the
Company, other than Alvin N. Lubetkin, who had received stock options under the
Company's various stock option plans, would be eligible to participate in the
program, (ii) each such employee would have the opportunity to exchange
previously granted stock options for a grant of new options to purchase the same
number of shares at an exercise price of $4.56, the then market price per share,
and (iii) the repriced stock options vest as to 40% of the shares covered
thereby on the third anniversary of the grant date and an additional 30% of the
shares covered thereby on each of the fourth and fifth anniversaries of the
grant date. All repriced options were granted as of April 8, 1997. In April
1998, the Committee determined that Alvin Lubetkin would be eligible to have his
stock options repriced and options to purchase 250,000 shares of common stock
previously issued to Mr. Lubetkin, constituting all stock options granted to
him, were repriced with an exercise price of $5.50 per share. Mr. Lubetkin's
repriced options vest as to 40% of the shares covered thereby on the second
anniversary of the grant date and an additional 30% of the shares covered
thereby on each of the third and fourth anniversaries of the grant date.
OPTION REPRICING TABLE
<TABLE>
<CAPTION>
Length of
Original
Option Term
Number of Securities Market Price of Exercise Price New Remaining at
Underlying Repriced Stock at Time at Time Exercise Date of
Name Date Options of Repricing of Repricing Price Repricing
- ----------------------------- ------------- -------------------- --------------- -------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Steven U. Rath, Executive April 8, 1997 10,000 $4.56 $6.75 $4.56 1.7 years
Vice President
Thomas J. McVey, Senior April 8, 1997 5,000 $4.56 $6.75 $4.56 1.7 years
Vice President
Mark L. Groeneman April 8, 1997 2,500(1) $4.56 $7.25 $4.56 2.2 years
Former Vice President
Timothy L. Grady, Former April 8, 1997 10,000(2) $4.56 $8.50 $4.56 9.3 years
Senior Vice President
</TABLE>
__________________
(1) Mr. Groeneman resigned from the Company in March 1998 and all stock options
granted to him were terminated at such time.
(2) Mr. Grady resigned from the Company in August 1997 and all stock options
granted to him were terminated at such time.
Compensation of the Chief Executive Officer. During the year ended
January 31, 1998, Mr. Lubetkin's salary was maintained at the level in effect as
of the end of the prior year, based upon the Compensation Committee's evaluation
of his performance and the Company's performance. Mr. Lubetkin did not receive
a bonus for fiscal 1997. Company performance is measured by, among other
things, corporate net earnings, revenues and a comparison to the Company's peer
group. Measurements used to evaluate the Chief Executive Officer include stock
price performance and development of sound strategic and operating plans.
9
<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
William M. Hitchcock
Stephen A. Lasher
Manuel A. Sanchez, III
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 29, 1993, the last trading day in fiscal year
1992 which ended January 30, 1993, 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]
FISCAL YEAR ENDED JANUARY OR FEBRUARY,
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
-------- --------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Oshman's $ 100 $ 88.88 75.00 109.72 57.64 56.94
S&P 500 $ 100 $112.88 113.48 157.35 194.53 242.59
S&P Retail Stores $ 100 $ 96.38 89.24 96.23 113.47 166.50
</TABLE>
10
<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. The aggregate rental payments from the Company to the
Warehouse Trusts were approximately $362,600 during the fiscal year ended
January 31, 1998. The existing leases were amended as of February 8, 1998, to
extend the term to expire on November 3, 2003, and the annual rental was
increased to $398,860. The amendment also provides for an option period to
extend the term for an additional five years, at an annual rental rate of
$478,632. 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. This unrelated third party filed for bankruptcy
protection under chapter 11 of the US Bankruptcy Code on December 16, 1997. The
lease was subsequently assumed and assigned to a different unrelated third party
on February 5, 1998.
The daughter of Marilyn Oshman and Alvin Lubetkin, Karen Oshman Desenberg,
was employed by the Company as a Divisional Vice President--Merchandise Manager
until December 1997. She currently serves as a Director of the Company. During
the fiscal year ended January 31, 1998, Ms. Desenberg received compensation of
$143,930. In addition, Ms. Desenberg was 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 1999 Annual Meeting of Stockholders
must be received by the Company at its principal executive offices no later than
January 15, 1999.
11
<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 18, 1998
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 31, 1998, 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.
12
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
ANNUAL MEETING
JUNE 19, 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 JANUARY 31, 1998, 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, Stephen A. Lasher, Marilyn Oshman, 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 19, 1998
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 19, 1998, or any
adjournment thereof.
Dated: ___________________________, 1998
----------------------------------------
----------------------------------------
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.)
