<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] 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(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 25, 1999
To the Stockholders of Oshman's Sporting Goods, Inc.
NOTICE IS HEREBY GIVEN that the 1999 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 Boulevard, Houston, Texas on Friday, June 25, 1999, 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 30, 1999 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 14, 1999
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
======================
PROXY STATEMENT
======================
ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1999
The accompanying proxy is solicited by the Board of Directors of Oshman's
Sporting Goods, Inc. (the "Company"), to be voted at the 1999 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 30,
1999, including financial statements, is enclosed with this proxy statement,
which is being mailed to stockholders on or about May 14, 1999. 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 30, 1999. As of April 30, 1999, 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 30, 1999, the following
persons were known by the Company to own beneficially more than 5% of the Common
Stock of the Company then outstanding:
AMOUNT AND NATURE
OF BENEFICIAL PERCENTAGE
NAME OWNERSHIP(1) OF CLASS
- ---- ----------------- ----------
Marilyn Oshman........................ 1,207,122(2) 20.7%
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....................... 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
_______________________
(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, 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 30, 1999, 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.
AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OF
NAME OWNERSHIP(1) CLASS
- ---- ----------------- ----------
Marilyn Oshman 1,207,122(2) 20.7%
Alvin N. Lubetkin 17,000(3) *
Marvin Aronowitz 18,441 *
A. Lynn Boerner 3,125(4) *
Karen Desenberg 126,346(5) 2.2%
Margaret A. Gilliam 0 *
William M. Hitchcock 6,000(6) *
Stephen A. Lasher 6,000(6) *
Thomas J. McVey 0(4) *
Richard L. Randall 0(4) *
Steven U. Rath 23,300(4)(7) *
Dolph B.H. Simon 10,000(8) *
All executive officers and directors
as a group (15 persons) 1,417,334(4)(9) 24.2%
___________________
*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 100,000 shares of restricted Common Stock that are subject to
vesting requirements.
(4) Excludes 74,229 shares owned by the Company's 401(k) Plan of which Messrs.
Randall, Rath, Boerner, and McVey 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.
(5) Does not include 125,900 shares of Common Stock held in trust for the
benefit of Ms. Desenberg. Includes vested options to purchase 4,000 shares
of Common Stock pursuant to the Company's 1993 Non-Employee Director Stock
Option Plan.
(6) Includes vested options to purchase 6,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan. Mr. Lasher
is not standing for reelection as a director.
(7) Includes vested options to purchase 5,000 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan.
(8) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(9) Includes vested options to purchase 31,000 shares of Common Stock held by
officers and directors pursuant to the Company's 1986 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.
Director
Name Since Age Position with the Company
- ---- -------- --- -------------------------
Marvin Aronowitz............ 1962 74 Director
Karen Desenberg............. 1997 37 Director
Margaret A. Gilliam(1)...... 1998 60 Director
William M. Hitchcock(1)..... 1997 59 Director
Alvin N. Lubetkin........... 1962 65 Vice Chairman of the Board, Chief
Executive Officer, President and
Director
Marilyn Oshman.............. 1979 59 Chairman of the Board and Director
Dolph B. H. Simon(1)........ 1987 66 Director
- -------------------
(1) 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, 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.
Ms. Gilliam has been a Director of the Company since September 1998. She
has been President of Gilliam & Co., business advisors since April 1997. Prior
to that time, she was Director, Equity Research at Credit Suisse First Boston,
where she was employed since 1975. She is also a director of Jan Bell Marketing,
Inc., a Florida based retail jewelry concern, Horizon Properties Group of
Chicago, IL, a real estate company specializing in outlet malls, and The Walking
Company, a specialty footwear retailer.
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., Maxx Petroleum, Ltd., an oil and
gas company, Luna Imaging, Inc., a digital imaging company, 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. 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
4
<PAGE>
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'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 one meeting 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 30, 1999, the Board of the Directors held five 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 30, 1999 to the
Chief Executive Officer, the four other highest paid executive officers for whom
disclosure is required 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.............. 1998 $390,000 $ 0 $35,037(1) 0 250,000(3) $151,515(2)
Vice Chairman of the Board, 1997 389,900 0 40,776(1) 0 0 39,187(2)
Chief Executive Officer, 1996 364,237 0 44,377(1) 0 0 38,460(2)
President and Director
Steven U. Rath................. 1998 141,923 50,000 0 0 0 0
Executive Vice President 1997 115,000 33,000 0 0 15,000(4) 0
1996 110,769 10,000 0 0 0 0
Thomas J. McVey................ 1998 125,000 10,000 1,065 0 0 0
Senior Vice President 1997 114,423 0 1,022 0 20,000(5) 0
1996 97,692 2,200 0 0 0 0
A. Lynn Boerner................ 1998 100,000 40,000 0 0 0 0
Vice President and Chief 1997 100,000 2,500 0 0 3,500 0
Accounting Officer 1996 97,885 0 0 0 0 0
Richard L. Randall............. 1998 128,077 0 5,047 0 20,000 0
Vice President 1997 0 0 0 0 0 0
1996 0 0 0 0 0 0
</TABLE>
________________________
(1) Includes $27,574 in 1998, $33,768 in 1997 and $35,600 in 1996 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 $372,844. As of
January 30, 1999, $326,626 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. This
Agreement was amended in 1998 to fix the amount at ten equal payments of
$151,515 each. The first payment was made in January 1999. In the event
of Mr. Lubetkin's death, such payments will be made to his designated
beneficiary. In connection with this amendment, the insurance policy that
had originally been purchased to fund payments under the Deferred
Compensation Agreement was cancelled and the cash value of the policy was
paid to the Company. The 1996 and 1997 numbers reflect the value of the
benefit provided to Mr. Lubetkin pursuant to the Deferred Compensation
Agreement for the two years prior its amendment in 1998.
(3) This grant is a repricing of previously granted stock options made in 1995
under the 1994 Omnibus Plan. See "Compensation Committee Report on
Executive Compensation -- Repricing of Mr. Lubetkin's Stock Options."
(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
Mr. Lubetkin's 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 Mr. Lubetkin's Stock Options."
6
<PAGE>
STOCK OPTION GRANTS
DURING THE FISCAL YEAR ENDED JANUARY 30, 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE PRICE EXPIRATION -----------------
NAME GRANTED YEAR PER SHARE DATE 5% 10%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alvin N. Lubetkin 250,000(1) 81.4% $5.50 April 8, 2008 $864,730 $2,191,396
Steven U. Rath 0 - - - - -
Thomas J. McVey 0 - - - - -
A. Lynn Boerner 0 - - - - -
Richard L. Randall 20,000 6.5% $6.00 May 10, 2008 $ 75,467 $ 191,249
</TABLE>
_____________________
(1) This grant is a repricing of previously granted stock options made in 1995
under the 1994 Omnibus Plan.
JANUARY 30, 1999 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......... 0 250,000 $0 $0
Steven U. Rath............ 5,000 15,000 0 0
Thomas J. McVey........... 0 20,000 0 0
A. Lynn Boerner........... 0 3,500 0 0
Richard L. Randall........ 0 20,000 0 0
</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.
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 $5,186
for this policy during the fiscal year ended January 30, 1999.
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
7
<PAGE>
subjected to a Federal excise tax on such payments. The amounts payable to
Messrs. McVey, Boerner, Rath, Randall 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 30, 1999.
During the fiscal year ended January 30, 1999, the Committee was comprised
of the following Board members, none of whom was employed by the Company: Dolph
B. H. Simon (Chairman), William M. Hitchcock, Stephen A. Lasher (not standing
for reelection), Margaret A. Gilliam (added to the Committee on September 4,
1998) and Manuel A. Sanchez, III (resigned on June 19, 1998).
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.
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. During the year ended January
30, 1999, 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 1998. 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.
The Committee also reviewed and discussed Mr. Lubetkin's Deferred
Compensation Agreement, an amendment to which was approved by the Board of
Directors. See discussion in footnote (2) to the Summary Compensation Table.
Repricing of Mr. Lubetkin's Stock Options. In April 1998, the Committee
determined that Alvin N. Lubetkin would be eligible to have his stock options
issued under the Company's 1994 Omnibus Plan (the "Omnibus Plan") repriced.
Options to purchase 250,000 shares of common stock previously issued to Mr.
Lubetkin
8
<PAGE>
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. The options would also
vest at Mr. Lubetkin's retirement, death or disability. The purpose of this
repricing was to place Mr. Lubetkin's options on an equal basis with the options
of other employees that the Committee had repriced in 1997, except that the
exercise price of $5.50 for Mr. Lubetkin's shares exceeds that for the other
employees, whose exercise price was set in 1997 at $4.56 per share. The
Committee also determined that all repriced options granted to employees over
the age of 62, including Mr. Lubetkin, should be amended to provide that such
options would vest upon their retirement, death or disability.
OPTION REPRICING TABLE
<TABLE>
<CAPTION>
Length of
Original
Number of Securities Market Price of Exercise Price New Option Term
Underlying Repriced Stock at Time at Time Exercise Remaining at
Name Date Options of Repricing of Repricing Price Date of Repricing
- ---- ---- -------------------- --------------- -------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Alvin N. Lubetkin April 9, 1998 250,000 $5.50 $7.125 $5.50 7 years
Vice Chairman of the Board,
Chief Executive Officer,
President and Director
</TABLE>
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
Margaret A. Gilliam
9
<PAGE>
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 28, 1994, the last trading day in fiscal year 1993
which ended January 29, 1994, 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,
1994 1995 1996 1997 1998 1999
- --------------------------------------------------------------------------------
Oshman's $ 100 84.38 123.44 64.85 64.07 39.06
S&P 500 $ 100 100.54 139.40 172.34 214.91 280.54
S&P Retail Stores $ 100 92.60 99.84 117.74 172.76 281.14
- --------------------------------------------------------------------------------
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 $371,363 during the fiscal year ended
January 30, 1999. 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.
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 solely 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 1998 under Section 16(c) were timely filed, except
that the Form 3 for Mr. Charles Carstens, a Vice President of the Company, was
filed late.
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 representatives 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 2000 Annual Meeting of Stockholders
must be received by the Company at its principal executive offices no later than
January 5, 2000.
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 14, 1999
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 1999, 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 25, 1999 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 30, 1999, 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, Margaret A. Gilliam, William A.
Hitchcock, Alvin N. Lubetkin, 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 25, 1999
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 25, 1999, 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.)
