<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:
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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:
-------------------------------------------------------------------------
(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 23, 2000
To the Stockholders of Oshman's Sporting Goods, Inc.
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Oshman's Sporting Goods, Inc. will be held at The St. Regis Hotel, 1919 Briar
Oaks Lane, Houston, Texas on Friday, June 23, 2000, 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 approve an amendment to the Oshman's Sporting Goods, Inc. 1993
Non-Employee Director Stock Option Plan.
3. To approve an amendment to the Oshman's Sporting Goods, Inc.
Amended and Restated 1994 Omnibus Plan.
4. 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 28,
2000, 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 23, 2000
<PAGE>
OSHMAN'S SPORTING GOODS, INC.
2302 MAXWELL LANE
HOUSTON, TEXAS 77023
=====================
PROXY STATEMENT
=====================
ANNUAL MEETING OF STOCKHOLDERS
JUNE 23, 2000
The accompanying proxy is solicited by the Board of Directors of
Oshman's Sporting Goods, Inc. (the "Company"), to be voted at the 2000 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, and for the approval
of the proposals described 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
29, 2000, including financial statements, is enclosed with this proxy statement,
which is being mailed to stockholders on or about May 23, 2000. 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 28, 2000. As of April 28, 2000, there were 5,763,249 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. Provided that a quorum is
present at the meeting, (i) the seven director nominees who receive the greatest
number of votes cast for election by stockholders entitled to vote therefor will
be elected directors, (ii) the proposed amendment to the Company's 1993 Non-
Employee Director Plan will require approval by a majority of shares entitled to
vote thereon and (iii) the proposed amendment to the Company's Amended and
Restated 1994 Omnibus Plan will also require approval by a majority of shares
entitled to vote thereon. Abstentions and broker non-votes with respect to the
proposed amendment to the Company's 1993 Non-Employee Director Plan and the
Company's 1994 Amended and Restated Omnibus Plan will have the same effect as a
vote against approval thereof, but will have no effect with respect to the
election of directors. 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 28, 2000, 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......................................... 1,177,674(2) 20.4%
2302 Maxwell Lane
Houston, Texas 77023
Judy O. Margolis....................................... 801,618(3) 13.9%
1400 Post Oak Blvd., Suite 808
Houston, Texas 77056
Edward C. Stanton III, Trustee......................... 422,300(4) 7.3%
6363 Woodway, Suite 300
Houston, Texas 77057
Jeanette Oshman........................................ 398,829 6.9%
2302 Maxwell Lane
Houston, Texas 77023
Dimensional Fund Advisors, Inc......................... 350,200 6.1%
1299 Ocean Ave., 11th Floor
Santa Monica, California 90401
Vendamerica B.V........................................ 300,000 5.2%
De Klencke 6 1083 HH
Amsterdam, Netherlands
Barry M. Lewis, Trustee................................ 298,432(5) 5.2%
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, 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 by Mr. Stanton
as trustee 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 Ms. 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.
Marilyn 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 28, 2000, 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 PERCENTAGE
OF BENEFICIAL OF
NAME OWNERSHIP(1) CLASS
- ---- ----------------- ------------
<S> <C> <C>
Marilyn Oshman 1,177,674(2) 20.4%
Alvin N. Lubetkin 144,900(3) 2.5%
Marvin Aronowitz 18,441 *
Richard G. Dennis 1,600(4)(5) *
Karen Desenberg 142,246(6) 2.5%
Margaret A. Gilliam 4,000(7) *
William M. Hitchcock 8,000(8) *
Thomas J. McVey 8,000(4)(9) *
Richard L. Randall 0(4) *
Steven U. Rath 29,300(4)(10) *
Manuel A. Sanchez, III 102,000 1.8%
Dolph B.H. Simon 10,000(11) *
All executive officers and directors as a group (14 persons) 1,647,761(4)(12) 27.9%
</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 100,000 shares of restricted Common Stock that are subject to
vesting requirements. Includes vested options to purchase 100,000 of
Common Stock pursuant to the Company's 1994 Omnibus Plan.
(4) Excludes 68,848 shares owned by the Company's 401(k) Plan of which Messrs.
Randall, Rath, Dennis, 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) Includes vested options to purchase 1,600 shares of Common Stock pursuant
to the Company's 1994 Omnibus Plan.
(6) Does not include 125,900 shares of Common Stock held in trust for the
benefit of Ms. Desenberg. Includes vested options to purchase 6,000 shares
of Common Stock pursuant to the Company's 1993 Non-Employee Director Stock
Option Plan.
(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 8,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan. Mr.
Hitchcock is not standing for reelection as a director.
(9) Includes vested options to purchase 8,000 shares of Common Stock pursuant
to the Company's 1994 Omnibus Plan.
(10) Includes vested options to purchase 5,000 shares of Common Stock pursuant
to the Company's 1986 Stock Option Plan and 6,000 shares of Common Stock
pursuant to the Company's 1994 Omnibus Plan.
(11) Includes vested options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1993 Non-Employee Director Stock Option Plan.
(12) Includes vested options to purchase 150,200 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>
PROPOSAL NO. 1 -- 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................... 1962 75 Director
Karen Desenberg.................... 1997 38 Director
Margaret A. Gilliam(1)............. 1998 61 Director
Alvin N. Lubetkin.................. 1962 66 Vice Chairman of the Board, Chief Executive
Officer, President and Director
Marilyn Oshman..................... 1979 60 Chairman of the Board and Director
Manuel A. Sanchez, III............. -- 58 Nominee for Director
Dolph B. H. Simon(1)............... 1987 67 Director
</TABLE>
- -----------------
(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. 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 served as a Director of the Company from 1996 through
1998. 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.
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, a jewelry retailer, from 1978 until
1995.
4
<PAGE>
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 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 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 29, 2000, 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, which will be increased to
$15,000 effective July 1, 2000. In addition each non-employee director receives
$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. 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 amount of remuneration paid by
the Company for the three fiscal years ended January 29, 2000, 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.................. 1999 $390,000 $ 0 $28,506(1) 0 0 $151,515(2)
Vice Chairman of the Board, 1998 390,000 0 35,037(1) 0 250,000(3) 151,515(2)
Chief Executive Officer, 1997 389,900 0 40,776(1) 0 0 39,187(2)
President and Director
Richard L. Randall................. 1999 189,327 0 0 0 0 0
Vice President 1998 128,077 0 5,047 0 20,000 0
1997 0 0 0 0 0 0
Steven U. Rath..................... 1999 159,231 0 599 0 0 0
Executive Vice President 1998 141,923 50,000 0 0 0 0
1997 115,000 33,000 0 0 15,000(4) 0
Thomas J. McVey.................... 1999 128,077 0 937 0 0 0
Senior Vice President 1998 125,000 10,000 1,065 0 0 0
1997 114,423 0 1,022 0 20,000(5) 0
Richard G. Dennis.................. 1999 121,154 0 0 0 0 0
Vice President, Secretary 1998 112,692 0 0 0 0 0
and General Counsel 1997 102,115 0 0 0 4,000(6) 0
</TABLE>
________________________
(1) Includes $21,767 in 1999, $27,574 in 1998 and $33,768 in 1997 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 $326,626. As of
January 29, 2000, $254,658 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 1997 number reflects the value of the benefit
provided to Mr. Lubetkin pursuant to the Deferred Compensation Agreement
for the year prior its amendment in 1998.
(3) This grant is a repricing of previously granted stock options made in 1995
under the 1994 Omnibus Plan.
(4) Includes 10,000 shares of the Company's common stock granted as a repricing
of previously granted stock options.
(5) Includes 5,000 shares of the Company's common stock granted as a repricing
of previously granted stock options.
(6) Includes 1,000 shares of the Company's common stock granted as a repricing
of previously granted stock options.
6
<PAGE>
JANUARY 29, 2000 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 $ - $ -
Richard L. Randall........ - 20,000 - -
Steven U. Rath............ 5,000 15,000 - -
Thomas J. McVey........... - 20,000 - -
Richard G. Dennis......... - 4,000 - -
</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 $5,321
for this policy during the fiscal year ended January 29, 2000.
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,
Dennis, 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 29, 2000.
During the fiscal year ended January 29, 2000, 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 (not standing for reelection) and
Margaret A. Gilliam.
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
7
<PAGE>
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
29, 2000, the Compensation Committee took no action to increase Mr. Lubetkin's
salary or to award him any bonus, being mindful that the Company had generated
net losses from operations for the two preceding fiscal years ended January 31,
1998 and January 30, 1999, and that shareholders had suffered a significant
decline in the market value of their shares.
At the same time, however, the Committee knew that the last several years
had been marked by a general decline in sales and profits of the retail sporting
goods industry as a whole, led by factors such as excess selling space
throughout the industry and a significant reversal in customers' buying patterns
of athletic shoes that formerly had been a leading source of revenue growth and
a major contributor to operating income for Oshman's as well as most other
sporting goods stores. In addition, the Committee was acutely aware that shares
of the other large publicly-held retail sporting goods firms that compete with
the Company had also had lost investor favor, driving their market prices down
to their lowest levels in over ten years.
Notwithstanding the foregoing negative forces, the Committee believed that
Mr. Lubetkin's personal efforts, achievements and contributions to the Company's
business and operations have been visionary, resourceful and exemplary. Examples
of Mr. Lubetkin's hands-on efforts include: (i) in spite of the precarious
nature of the industry, and the Company's own financial performance, he managed
to recruit talented merchandising and financial management who are quickly
contributing to the improved performance of the Company; (ii) he has continued
to work closely with the Company's primary lender, giving it enhanced confidence
in the Company's ability to achieve its financial plans, even with the
industry's lack-luster performance; (iii) he conceived, and has begun to
implement, the conversion of the stores' shoe departments to a new high impact
format which has already resulted in substantial improvement in overall store
sales in general and athletic shoes in particular; and (iv) most importantly, he
conceived a productivity improvement plan for the Company's SuperSports USA(R)
stores that is reducing payroll and other costs significantly while store sales
are increasing.
On overview, the Committee believes Mr. Lubetkin has responded in an
extraordinarily prudent and yet aggressive manner to the competitive and
financial challenges of the last several years with visionary leadership. He
continues to be the engine that drives the Company's current resurgent financial
performance enabling it to maintain a competitive edge in an industry struggling
to achieve profitability.
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
8
<PAGE>
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
Margaret A. Gilliam
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 27, 1995, the last trading day in fiscal year 1994
which ended January 28, 1995, 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
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY OR FEBRUARY,
<S> <C> <C> <C> <C> <C> <C>
1995 1996 1997 1998 1999 2000
Oshman's 100 148.15 76.85 75.93 46.30 26.85
S&P 500 100 135.19 167.12 208.40 272.04 289.16
S&P Retail Stores 100 107.39 124.55 182.75 297.40 293.40
</TABLE>
9
<PAGE>
PROPOSAL NO. 2 -- AMENDMENT OF THE OSHMAN'S SPORTING GOODS, INC. 1993 NON-
EMPLOYEE DIRECTOR PLAN (THE "NON-EMPLOYEE DIRECTOR PLAN")
DESCRIPTION OF PROPOSED AMENDMENT
The Non-Employee Director Plan currently provides for the grant of options
exercisable for 10,000 shares of Common Stock to each individual who was a Non-
Employee Director on the original effective date of such plan (i.e., June 18,
1993). In addition, the plan currently provides that following the effective
date of such plan, as of the date of the annual meeting of the Company's
stockholders in each year after 1993 that it is in effect, each Non-Employee
Director who is then in office and who did not previously receive a grant of
options under such plan, shall receive options exercisable for 10,000 shares of
Common Stock. Under the terms of the Non-Employee Director Plan as currently in
effect, 20% of the options vest six months after the date on which they are
granted and 20% thereafter at the commencement of each subsequent annual meeting
of the Company's stockholders until the options are fully vested.
The Non-Employee Director Plan provides that the option exercise price
shall be the fair market value (as defined in such plan) of the shares of Common
Stock subject to the option at the time the option is granted under such plan.
The Board has adopted the First Amendment of the Non-Employee Director Plan
that, if approved by the Company's stockholders, will add language to such plan
that will result in the automatic grant of up to two additional options
exercisable for 10,000 shares of Common Stock (subject to the terms of such plan
including, without limitation, the above-described provisions relating to the
option exercise price and a longer vesting period described below) to each Non-
Employee Director who (i) is in office as of the date of any annual meeting of
the stockholders of the Company in any year after 1993 that such plan is in
effect, (ii) previously received a grant of options under such plan that, on the
date of such annual meeting, became fully vested in all of the shares of Common
Stock subject to the previous grant and (iii) has been elected to serve as a
Non-Employee Director on and after the date of such annual meeting. As a
result, once a Non-Employee Director's initial option for 10,000 shares has
become fully vested, he or she will receive an additional option grant for
10,000 shares, and once that option becomes fully vested, a second additional
option grant. The additional automatic grants will become 20% vested at the
commencement of each subsequent annual meeting of stockholders of the Company,
(instead of the initial 20% vesting after six months) until fully vested on the
fifth anniversary of the date of grant.
In addition, the First Amendment extends the term of the Non-Employee
Director Plan an additional 10 years. As a result, if approved by the Company's
stockholders, the Non-Employee Director Plan will terminate on the date of the
annual meeting of the Company's stockholders in the year 2013 (instead of 2003).
Ms. Desenberg, Ms. Gilliam and Mr. Simon are currently Non-Employee
Directors. Ms. Desenberg received an initial grant in June 1998, Ms. Gilliam in
June 1999 and Mr. Simon in 1993. Mr. Sanchez received an initial grant in June
1996 that expired when he ceased serving as a director in 1998. Under the
current plan, it is anticipated that Mr. Sanchez will receive a new initial
grant upon his election as a Non-Employee Director at the 2000 Annual Meeting.
If the amendment is approved by the Company's stockholders, it is anticipated
that Mr. Simon will receive an additional grant for 10,000 shares upon his re-
election at the 2000 Annual Meeting. See "New Plan Benefits" below for the
table setting forth benefits to be received by the relevant persons.
SUMMARY OF THE NON-EMPLOYEE DIRECTOR PLAN
As stated above, the Non-Employee Director Plan provides for the granting
of options to purchase the Company's Common Stock to non-employee directors of
the Company. The plan is administered by the Board of Directors. However,
because the principal terms of the option grants are fixed in the plan, the
Board will have no discretion to select which directors receive options, the
number of shares subject to such grants or the exercise price thereof.
Options granted pursuant to the Non-Employee Director Plan are "non-
qualified" stock options and are not intended to qualify as incentive stock
options under Section 422 of the Code meaning that the optionee will realize no
income at the time he is granted such non-qualified stock option. Ordinary
income will be realized by the optionee when the non-qualified stock option is
exercised. The amount of such income will be equal to the excess of the fair
market value on the exercise date over the exercise price of the shares of
Common Stock, and the Company's deduction for Federal income tax purposes will
correspond to the amount of income realized by the optionee upon exercise. The
optionee's holding period for Federal income tax purposes with respect the
shares
10
<PAGE>
acquired will begin on the date of exercise. Any gain or loss on the
subsequent sale of the stock will be either a long-term or short-term capital
gain or loss depending on the optionee's holding period for the Common Stock
disposed by the optionee.
A copy of the First Amendment of the Non-Employee Director Plan is attached
to the Proxy Statement as Appendix A, and the foregoing discussion is qualified
in its entirety by reference to Appendix A.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE APPROVAL OF THE
AMENDMENT OF THE NON-EMPLOYEE DIRECTOR PLAN.
PROPOSAL NO. 3 -- AMENDMENT OF OSHMAN'S SPORTING GOODS, INC. AMENDED AND
RESTATED 1994 OMNIBUS PLAN (THE "OMNIBUS PLAN")
DESCRIPTION OF PROPOSED AMENDMENT
The Omnibus Plan currently provides for issuance of a maximum of 750,000
shares of Common Stock under such plan. In addition, such plan currently limits
the maximum number of shares of Common Stock (and shares underlying any stock
appreciation rights) that may be granted to any one grantee (who is included in
the group composed of the Chief Executive Officer and the four highest
compensated officers of the Company (excluding the Chief Executive Officer) in a
given taxable year) during the term of the plan to 250,000 shares.
The Board has adopted the First Amendment of the Omnibus Plan, that if
approved by the Company's stockholders, will increase the number of shares of
Common Stock reserved for issuance under such plan to 1,050,000. In addition,
the First Amendment will increase the 250,000 share limit to 750,000 shares.
SUMMARY OF THE OMNIBUS PLAN
The Omnibus Plan authorizes the grant of Incentive Awards to be made
available from either authorized and unissued shares, treasury shares, if any,
or shares to be purchased or acquired by the Company. Unless terminated
earlier, the Omnibus Plan will terminate on January 31, 2004. Select executive
officers and other key management personnel of the Company are eligible to
receive Incentive Awards (defined below). Directors who are not employees of
the Company are not eligible to participate in the Omnibus Plan. Awards under
the Omnibus Plan may be in the form of stock options (including incentive stock
options), stock appreciation rights, restricted stock, performance units,
performance shares or other stock-based awards and certain additional payments
in the amount of Federal income taxes payable by a grantee and relating to an
award under the Omnibus Plan (all such options, awards and rights are
collectively referred, to as "Incentive Awards").
The Omnibus Plan is administered by a committee ("Committee") consisting of
three persons, all of whom are "disinterested persons" as defined by Rule, 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and "outside directors" as defined in Section 162(m) of the Code and the
regulations approved thereunder. Subject to the provisions of the Omnibus Plan,
the Committee determines the employee and individuals to whom awards are
granted, the number and type of awards to be granted, the combination of awards
to be granted and the specific terms of each grant. It is impracticable to
estimate the total number of employees eligible to receive grants under the
Omnibus Plan. Except under certain circumstances, no incentive Award may vest
or be exercised under the Omnibus Plan prior to the expiration of six months
from the date of award.
Incentive and Nonqualified Options. Stock options granted under the
Omnibus Plan may be either nonqualified options ("Nonqualified Options") or
incentive stock options ("Incentive Stock Options") (within the meaning of the
Code) and may include "reload" options ("Reload Options"), which permit the
holder to purchase a number of shares equal to the number of shares delivered in
payment of the exercise price of Nonqualified Options or Incentive Stock
Options. Pursuant to the Omnibus Plan, the Committee determines the exercise
price for each share issued in connection with an Incentive Stock Option, a
Nonqualified Option or a Reload Option (collectively referred to as "Options"),
but in the case of Incentive Stock Options, the exercise price may not be less
than the closing sales price per share of Common Stock (the "Fair Market Value")
on the date the Incentive Stock Option is granted. The exercise price must be
paid in full at the time of exercise, either in cash or, at the discretion of
the Committee, in Common Stock owned by the grantee or an equivalent
consideration acceptable to the Committee. The Committee determines when
Options may be exercised, which may not be more than 10 years from the date of
grant, and the manner in which the Option will become exercisable.
11
<PAGE>
Stock Appreciation Rights. Stock appreciation rights ("SARs") may be
granted under the Omnibus Plan in tandem with Options ("Tandem SARs") or
independent of Options ("Independent SARs"). A SAR may be awarded with an
exercise price at least equal to the Fair Market Value of a share of Common
Stock on the date of grant, if an Independent SAR, or on the date of grant of
the applicable Option if a Tandem SAR. Upon exercise, the holder is entitled to
receive the difference (in cash, Common Stock or a combination thereof, at the
option of the Committee) between the exercise price and the Fair Market Value on
the date of exercise. Tandem SARs may be exercised in lieu of the Option to
which they relate at any time such Option is exercisable, terminate upon the
exercise of such Option and are automatically exercised on the last day of the
term of such Option if they have not been exercised or terminated prior to such
date. Independent SARs are subject to their own terms, as established by the
Committee; they do not affect, and are not affected by, the existence or
exercise of other Incentive Awards. The number of shares of Common Stock
actually issued in connection with the exercise of a SAR will reduce the shares
of Common Stock available for distribution under the Omnibus Plan.
Restricted Stock Awards. The Omnibus Plan authorizes the Committee to
award shares of restricted stock ("Restricted Stock"). Restricted Stock is
Common Stock that may not be sold, pledged or otherwise disposed of until the
restrictions set by the Committee have been satisfied. At the time of an award
to a grantee, the Committee will determine a "Restriction Period" for all shares
awarded to the grantee or if the total of such shares is divided into separate
parts, for each part of the total shares awarded. Unless otherwise approved by
the Committee, until such time as a stock certificate is issued to a grantee at
the expiration of the applicable Restriction Period, the grantee will not have
any rights as a stockholder of the Company.
Performance Units and Performance Shares. The Omnibus Plan also provides
for the grant by the Committee of performance units ("Performance Units") and
performance shares ("Performance Shares"). Vesting in awards of Performance
Units and Performance Shares will be contingent upon the attainment of
performance goals and measured over a period of time as determined by the
Committee. Upon attainment of the goals, the Incentive Award will be paid in
cash or by delivery of shares of Common Stock (which may include Restricted
Stock), or a combination thereof, as determined by the Committee.
Other Stock-Based Awards and Supplemental Payments. The Omnibus Plan also
authorizes the Committee to grant other forms of stock-based incentive awards
("other stock-based awards"). The Committee has the discretion to determine the
terms and conditions of such other stock-based awards, which may be paid in
shares of Common Stock or such other consideration relating to the Common Stock
as the Committee deems appropriate. In addition, the Omnibus Plan authorizes
the Committee to provide for a supplemental payment of all or any portion of
Federal income taxes payable in connection with various Incentive Awards and
receipt of the supplemental payment, assuming that the Grantee is taxable at the
maximum Federal income tax rate. Any such supplemental payment may be made in
cash, Common Stock or any combination, as determined by the Committee.
Federal Income Tax Consequences. The following is a brief summary of the
principal United States Federal income tax consequences under current Federal
income tax laws related to Incentive Awards under the Omnibus Plan. This
summary is not intended to be exhaustive and among other things, does not
describe state or local tax consequences.
Nonqualified Options. The grantee of a Nonqualified Option does not
recognize income at the time the option is granted. When the Nonqualified
Option is exercised, the grantee recognizes ordinary income equal to the
difference between the Fair Market Value of the Common Stock on the
exercise date and the exercise price. The Company receives a deduction
equal to the amount of ordinary income recognized by the grantee. Upon
subsequent disposition of the shares, the grantee will recognize capital
gain or loss, which will be short-term or long-term, depending upon the
length of time the shares were held since the date the Nonqualified Option
was exercised.
Incentive Options. In general, a grantee will not be subject to tax
at the time an Incentive Option is granted or exercised. However, the
excess of the fair market value of the shares received upon exercise of
Incentive Option over the exercise price is potentially subject to
taxation. Upon disposition of the shares acquired upon exercise of an
Incentive Option, long-term capital gain or loss will be recognized in an
amount equal to the difference between the sales price and the exercise
price provided that the grantee has not disposed of the shares within two
years of the date of the grant or within one year from the date of
exercise. If the grantee disposes of the shares without satisfying both
holding period requirements (a "Disqualifying Disposition"), the grantee
will recognize ordinary income at the time of such Disqualifying
Disposition. The Company is not entitled to a tax deduction upon either
the exercise of an Incentive Option or upon disposition of the shares
acquired pursuant to such exercise, except to the extent that the grantee
recognizes ordinary income in a Disqualifying Disposition.
12
<PAGE>
Reload options. Reload Options are treated the same as other
Nonqualified Options for Federal income tax purposes.
The text of the First Amendment of the Omnibus Plan is attached to this
Proxy Statement as Appendix B, and the foregoing is qualified in its entirety by
reference to Appendix B.
See "New Plan Benefits" below for the table setting forth benefits to be
received by the relevant persons.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE APPROVAL OF THE
AMENDMENT OF THE OMNIBUS PLAN.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
AMENDED AND RESTATED
1993 NON-EMPLOYEE DIRECTOR PLAN 1994 OMNIBUS PLAN
NAME AND POSITION DOLLAR VALUE ($) NUMBER OF UNITS DOLLAR VALUE ($) NUMBER OF UNITS
- ----------------- ---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Alvin N. Lubetkin,
Vice Chairman of the Board,
Chief Executive Officer,
President and Director.......... - - (1) 150,000(1)
Richard L. Randall,
Vice President................ - - 2.00(2) 25,000
Steven U. Rath,
Executive Vice President...... - - 2.00(2) 25,000
Thomas J. McVey,
Senior Vice President......... - - 2.00(2) 25,000
Richard G. Dennis,
Vice President, Secretary and
General Counsel.............. - - 2.00(2) 5,000
Executive Group.................. - - (1)(2) 255,000
Non-Executive Director Group..... (3) 20,000 - -
Manuel A. Sanchez, III,
Nominee for Director........ (3) 10,000 - -
Dolph B.H. Simon,
Nominee for Director........ (3) 10,000 - -
Non-Executive Officer Employee
Group........................... - - 2.00(2) 45,000
</TABLE>
___________________
(1) The exercise price of Mr. Lubetkin's grant will be the fair market value
of the Common Stock on June 23, 2000, the anticipated date of the grant.
Mr. Lubetkin's grant is contingent upon the shareholders' approval of the
proposed amendment to the 1994 Omnibus Plan, but the other grants under
this plan are not.
(2) The exercise price per share of the grants other than Mr. Lubetkin's is
$2.00, the closing price of the Common Stock on the NASDAQ Stock Market on
April 26, 2000, the date of the grant.
(3) The exercise price will be the fair market value of the Common Stock on
June 23, 2000, the anticipated date of the grant. Mr. Simon's grant is
contingent upon the shareholders' approval of the proposed amendment to
the 1994 Omnibus Plan, but Mr. Sanchez's is not.
The grants of options that are set forth in the above table under the
Amended and Restated 1994 Omnibus Plan will vest equally over three years and
are not contingent upon the Company's achievement of earnings goals. The options
become exercisable in full upon a Change of Control (as defined in the plan) of
the Company and expire after ten years or earlier, if an optionholder's
employment with the Company is terminated for a reason other than retirement,
death or disability. The option grants were made in the form of Incentive
Options.
13
<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 $398,860 during the fiscal year ended
January 29, 2000. 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 1999 under Section 16(c) were
timely 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 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 2001 Annual Meeting of
Stockholders must be received by the Company at its principal executive offices
no later than January 4, 2001.
14
<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 and the approval of the amendments
to the 1993 Non-Employee Director Stock Option Plan and the Amended and Restated
1994 Omnibus Plan. 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 23, 2000
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 29, 2000, 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 STEVEN MARTIN, SENIOR VICE PRESIDENT, OSHMAN'S
SPORTING GOODS, INC., 2302 MAXWELL LANE, HOUSTON, TEXAS 77023.
15
<PAGE>
APPENDIX A
FIRST AMENDMENT OF
OSHMAN'S SPORTING GOODS, INC.
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
THIS AMENDMENT made as of the date set forth below by Oshman's Sporting
Goods, Inc. (the "Company"),
W I T N E S S E T H:
WHEREAS, the Company maintains the Oshman's Sporting Goods, Inc. 1993 Non-
Employee Director Stock Option Plan (the "Plan") for the benefit of its eligible
Non-Employee Directors; and
WHEREAS, the Company desires to amend the Plan to provide for the grant of
additional options to certain Non-Employee Directors who satisfy the eligibility
requirements set forth in the Plan amendment described below; and
WHEREAS, in Section IX of the Plan, the Board of Directors of the Company
(the "Board") reserved the right to amend the Plan from time to time with the
approval of at least a majority of the outstanding shares of the Company's
voting stock under certain circumstances as described in the Plan; and
WHEREAS, subject to the required stockholder approval, the Board has
authorized appropriate officers to amend the Plan to provide for the grant of
additional options to eligible Non-Employee Directors as described in the
amendment set forth below;
NOW, THEREFORE, the Plan is hereby amended effective as of June 23, 2000 by
this First Amendment thereto, as follows:
1. Section III of the Plan is hereby amended in its entirety to provide
as follows:
"(a) Options will be granted only to individuals who are Non-
Employee Directors of the Company. On the Effective Date, each Non-
Employee Director shall receive, without the exercise of the
discretion of any person or persons, Options exercisable for 10,000
Shares. Thereafter, as of the date of the annual meeting of
stockholders in each year after 1993 that the Plan is in effect, as
provided in Section V hereof, each Non-Employee Director then in
office (i) who did not previously receive a grant of Options hereunder
and (ii) who has been elected to serve as a Non-Employee Director on
and after the date of such annual meeting, shall receive, without the
exercise of the discretion of any person or persons, Options
exercisable for 10,000 Shares. In addition, as of the date of the
annual meeting of stockholders in any year after 1993 that the Plan is
in effect, each Non-Employee Director then in office (i) who
previously received a grant of Options hereunder that, on the date of
such annual meeting, become fully vested in 100% of the Shares granted
under the Plan and (ii) who has been elected to serve as a Non-
Employee Director on and after the date of such annual meeting, shall
receive as of the date of such annual meeting without the exercise of
the discretion of any person or persons, a grant of new Options (in
addition to the prior fully vested Options), exercisable for 10,000
Shares.
If, as of such annual meeting date there are not sufficient Shares
available under the Plan to allow for the grant to each eligible Non-
Employee Director of Options for the number of shares provided herein,
each eligible Non-Employee Director shall receive Options for a pro
rata share of the total number of Shares available under the Plan.
All Options granted under the Plan shall be (i) at the Option price
set forth in subjection (b), (ii) subject to the vesting schedule set
forth in subsection (c), and (iii) subject to adjustment as provided
in Section VII and to the terms and conditions set forth in Section
VIII.
(b) The purchase price of Shares issued under each Option shall be
the Fair Market Value of Shares subject to the Option on the date the
Option is granted.
(c) All Options initially granted to a Non-Employee Director
hereunder shall vest 20% six months following the date on which they
were granted and 20% thereafter at the commencement of each subsequent
annual meeting of stockholders until fully vested. All Options granted
to a Non-Employee Director hereunder after the initial grant of
Options to such individual shall vest
<PAGE>
20% at the commencement of each subsequent annual meeting of
stockholders until fully vested. No portion of an Option shall be
exercisable unless and until it is vested."
2. The first sentence of Section V is hereby amended in its entirety to
provide as follows:
"The term of this Plan commences on the Effective Date and will
terminate at 11:59 p.m. on the date of the annual meeting of
stockholders in the year 2013."
3. Except as modified herein, the Plan is specifically ratified and
affirmed.
The foregoing Amendments to the Stock Option Plan are effective only upon
approval thereof by the stockholders of the Company.
<PAGE>
APPENDIX B
FIRST AMENDMENT OF
OSHMAN'S SPORTING GOODS, INC.
AMENDED AND RESTATED 1994 OMNIBUS PLAN
THIS AMENDMENT made as of the date set forth below by Oshman's Sporting
Goods, Inc. (the "Company"),
W I T N E S S E T H:
WHEREAS, the Company maintains the Oshman's Sporting Goods, Inc. Amended
and Restated 1994 Omnibus Plan (the "Plan") for the benefit of its eligible
employees; and
WHEREAS, the Company desires to amend the Plan to (i) increase the
aggregate number of shares of the Company's common stock available for granting
incentive awards under the Plan from 750,000 shares to 1,050,000 shares and (ii)
increase the aggregate number of shares of the Company's common stock subject to
stock options and stock appreciation rights, if any, awarded to any single
grantee who is one of the top five reporting officers of the Company during the
period from April 22, 1994 to January 31, 2004 from 250,000 shares to 750,000
shares; and
WHEREAS, in Section 6.8 of the Plan, the Board of Directors of the Company
(the "Board") reserved the right to amend the Plan from time to time with the
prior approval of the stockholders under certain circumstances as described in
the Plan; and
WHEREAS, subject to the required stockholder approval, the Board has
authorized appropriate officers to amend the Plan to effect the changes
generally described above and as specifically set forth in the amendment below;
NOW, THEREFORE, the Plan is hereby amended effective as of June 23, 2000 by
this First Amendment thereto, as follows:
1. Section 1.4(a) of the Plan is hereby amended in its entirety to provide
as follows:
"(a) Common Stock Authorized. Subject to adjustment under Section 5.5,
the aggregate number of shares of Common Stock available for granting
Incentive Awards under the Plan shall be equal to 1,050,000 shares of
Common Stock. If any Incentive Award shall expire or terminate for any
reason, without being exercised or paid, shares of Common Stock subject
to such Incentive Award shall again be available for grant in
connection with grants of subsequent Incentive Awards."
2. The first sentence of Section 1.4(d) of the Plan is hereby amended in
its entirety to provide as follows:
"(d) Special Limitation. In no event shall the number of shares of
Common Stock subject to Options granted with an exercise price at
least equal to the Fair Market Value of the underlying shares of
Common Stock on the date of grant, plus the number of shares
underlying Stock Appreciation Rights awarded to any one Grantee
who is a Covered Employee during the period from April 22, 1994
through January 31, 2004, exceed seven hundred fifty thousand
(750,000) shares of the Common Stock authorized under Section
1.4(a). In all events, determinations under the preceding sentence
shall be made in a manner that is consistent with Section 162(m)
of the Code and regulations promulgated thereunder. Except as
otherwise provided in the two immediately preceding sentences, the
provisions of this Section 1.4(d) shall not limit the number of
shares of Common Stock that otherwise may be awarded to any one
Grantee who is a Covered Employee under any form of Incentive
Award authorized under the Plan."
3. Except as modified herein, the Plan is specifically ratified and
affirmed.
The foregoing Amendments to the Omnibus Plan are effective only upon approval
thereof by the stockholders of the Company.
<PAGE>
PROXY PROXY
OSHMAN'S SPORTING GOODS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting June 23, 2000
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 23, 2000, or any
adjournment thereof.
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 29, 2000, is hereby
acknowledged. If no direction is made, this proxy will be voted FOR proposals 1,
2 and 3 which are being proposed by the Board of Directors.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued, and to be signed, on the other side.)
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<PAGE>
OSHMAN'S SPORTING GOODS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<CAPTION>
[ ]
<S> <C> <C>
1. Election of Seven Directors --
Nominees: 01-Marvin Aronowitz, For Withhold For All 2. Amendment to Oshman's Sporting
02-Karen Desenberg, All All Except Goods, Inc. 1993 Non-Employee For Against Abstain
03-Margaret A. Gillam Director Stock Option Plan. [ ] [ ] [ ]
04-Alvin N. Lubetkin, [ ] [ ] [ ]
05-Marilyn Oshman, 3. Amendment to Oshman's Sporting
06-Manuel A. Sanchez, III, Goods, Inc. Amended and For Against Abstain
07-Dolph B. H. Simon Restated 1994 Omnibus Plan. [ ] [ ] [ ]
___________________________________________________
(INSTRUCTION: To withhold authority to vote for any 4. In accordance with their discretion upon such
individual nominee, write that nominee(s) name above) other business as may properly come before the
meeting or any adjournment thereof.
Dated:________________________, 2000
Signature(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.)
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FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
</TABLE>
