SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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240.14a-12
Proffitt's, Inc.
___________________________________________
(Name of Registrant as Specified in Its Charter)
Proffitt's, Inc.
____________________________________________
(Name of Person(s) Filing Proxy Statement)
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and 0-11.
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computed pursuant to Exchange Act Rule 0-11 (set forth the
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PROFFITT'S, INC.
Midland Shopping Center
115 North Calderwood
Alcoa, Tennessee 37701
May 1, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of the
Shareholders to be held at 8:30 a.m. Eastern Daylight Time on
Thursday, June 19, 1997, at Proffitt's West Town Mall Store, 7600
Kingston Pike, Knoxville, Tennessee 37919.
The notice of the meeting and proxy statement accompanying this letter
describe the specific business to be acted upon. Your vote is very
important, and your cooperation in completing, signing, and returning
your proxy promptly in the enclosed return envelope will be
appreciated.
At the meeting, there will be a report on the progress of the Company
and an opportunity to ask questions of general interest to the
shareholders.
Shareholders attending the meeting are invited to shop at both our
West Town Mall Proffitt's and Parisian stores and will be given a
special discount on the day's purchases.
I hope you will be able to join us, and I look forward to seeing you.
Sincerely,
/s/ R. Brad Martin
R. Brad Martin
Chairman of the Board and
Chief Executive Officer
PROFFITT'S, INC.
Midland Shopping Center
115 North Calderwood
Alcoa, Tennessee 37701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Proffitt's, Inc.:
Notice is hereby given that the Annual Meeting of the Shareholders of
Proffitt's, Inc. (the "Company") will be held at 8:30 a.m. Eastern
Daylight Time on Thursday, June 19, 1997, at Proffitt's West Town Mall
Store, 7600 Kingston Pike, Knoxville, Tennessee 37919, for the
following purposes:
1. To approve an amendment to the Company's Charter, as
permitted by the Tennessee Business Corporation Act, to
divide the Board of Directors into three classes;
2. To elect twelve Directors to hold office for the terms
specified or until their respective successors have been
elected and qualified;
3. To consider and act upon a proposal to ratify the
appointment of the firm of Coopers & Lybrand as independent
accountants for the current fiscal year ending January 31,
1998; and
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on April 21, 1997 are
entitled to notice of, and to vote at, the meeting.
Shareholders are cordially invited to attend the meeting in person.
By order of the Board of Directors,
/s/ Julia Bentley
Julia Bentley
Secretary
May 1, 1997
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED
TO MARK, SIGN, AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED.
PROFFITT'S, INC.
PROXY STATEMENT
Information Concerning the Solicitation
This proxy statement is furnished in connection with the solicitation
of proxies to be used at the Annual Meeting of the Shareholders (the
"Annual Meeting") of Proffitt's, Inc. ("Proffitt's" or the "Company"),
a Tennessee corporation, to be held on June 19, 1997.
The solicitation of proxies in the enclosed form is made on behalf of
the Board of Directors of the Company.
The cost of preparing, assembling, and mailing the proxy material and
of reimbursing brokers, nominees, and fiduciaries for out-of-pocket
and clerical expenses of transmitting copies of the proxy material to
the beneficial owners of shares held of record by such persons will be
borne by the Company. The Company does not intend to solicit proxies
otherwise than by use of the mails, but certain officers and regular
employees of the Company, without additional compensation, may use
their personal efforts, by telephone or otherwise, to obtain proxies.
The proxy materials are first being mailed to shareholders on May 1,
1997.
A shareholder signing and returning a proxy on the enclosed form has
the power to revoke it at any time before the shares subject to it are
voted by notifying the Secretary of the Company in writing. Attendance
at the Annual Meeting by a shareholder who has given a proxy will not
have the effect of revoking it unless he gives such written notice of
revocation to the Secretary before the proxy is voted. Votes cast by
proxy or in person at the Annual Meeting will be tabulated by the
election inspectors appointed for the meeting and will determine
whether or not a quorum is present. The election inspectors will treat
abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. If a broker
indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will
not be considered as present and entitled to vote with respect to that
matter. The nominees for Director receiving a plurality of the votes
cast at the meeting in person or by proxy shall be elected.
Abstentions and broker non-votes have no affect on the plurality vote
for the election of Directors. All other matters will be approved if
the votes cast favoring the action exceed the votes opposing the
action.
Outstanding Voting Securities
Only shareholders of record at the close of business on April 21, 1997
are entitled to vote at the Annual Meeting. On that day, there were
issued and outstanding 28,128,846 shares of Common Stock. Each share
has one vote.
Listed in the following table are the number of shares owned by each
nominee for Director, certain executive officers, and all Directors
and officers of the Company as a group as of March 21, 1997. The table
also includes the beneficial owners as of March 21, 1997 of more than
5% of the Company's outstanding Common Stock who are known to the
Company.
<TABLE>
<CAPTION>
Name of Beneficial Owner Total Shares Percentage of
(and Address if "Beneficial Beneficially Common Stock
Ownership" Exceeds 5%) Owned (1) Ownership
------------------------ --------------- --------------
<S> <C> <C>
Director Nominees:
Bernard E. Bernstein 16,401 (2) *
Edmond D. Cicala 9,589 *
Ronald de Waal 1,250,713 4.45%
Gerard K. Donnelly 5,049 *
Donald F. Dunn 8,950 *
Michael S. Gross 2,200 (3) *
Donald E. Hess 407,664 (4) 1.45%
G. David Hurd 6,843 *
R. Brad Martin 1,327,423 (5) 4.69%
C. Warren Neel 7,450 *
Marguerite W. Sallee 2,200 *
Gerald Tsai, Jr. 5,200 *
Named Executive Officers:
James A. Coggin 85,129 *
Robert M. Mosco 131,527 (6) *
W. Thomas Gould 305,456 (7) 1.08%
Tom R. Amerman 16,886 (8) *
All Directors and Officers
as a group (22 persons) 3,787,655 13.15%
Other 5% Owners (9):
Fidelity Management and
Research Corporation 1,698,206 6.04%
82 Devonshire Street
Boston, Massachusetts
Norwest Bank Minnesota,
as trustee 2,913,720(10) 10.36%
Investors Building
733 Marquette
Minneapolis, MN
</TABLE>
* Owns less than 1% of the total outstanding Common Stock of the
Company.
(1) Includes shares that the following persons have a right to
acquire within sixty days after March 21, 1997 through the
exercise of stock options: Bernstein (3,200), Cicala (2,200), de
Waal (2,200), Donnelly (2,070), Dunn (2,070), Gross (1,200), Hurd
(2,070), Martin (173,000), Neel (3,200), Sallee (200), Tsai
(2,200), Amerman (8,333), Coggin (58,000), Gould (205,824), and
Mosco (101,106).
(2) Includes 3,000 shares owned by the Bernard E. Bernstein Defined
Benefit Pension Plan.
(3) Does not include 1,211,801 shares held by Apollo Specialty Retail
Partners, L.P. ("Apollo Specialty"). Mr. Gross is one of the
founding principals of Apollo Advisors, L.P., the managing
general partner of Apollo Investment Fund, L.P., the general
partner of Apollo Specialty. Mr. Gross disclaims beneficial
ownership of all securities held by Apollo Specialty.
(4) Includes: (i) 180,908 shares owned directly by Mr. Hess, (ii)
174,222 shares held by Mr. Hess as trustee or co-trustee for his
children, and (iii) 52,534 shares held by him as trustee for the
children of his sister, Jo Ann H. Morrison. Does not include: (i)
2,290 shares owned directly by his wife, (ii) 7,330 shares held
by his wife as co-trustee for one of their children, and (iii)
88,058 shares held by another individual as trustee for Mr. Hess'
children, with respect to which shares Mr. Hess disclaims
beneficial ownership.
(5) Includes: (i) 2,000 shares held by Mr. Martin for his children,
(ii) 1,900 shares owned by RBM Venture Company, a company of
which Mr. Martin is sole shareholder, (iii) 100,000 shares held
by Mr. Martin as trustee or co-trustee for his children, (iv)
3,774 shares owned by the R. Brad and Jean L. Martin Family
Foundation, (v) 10,000 shares of restricted stock which will vest
on January 31, 1998, and (vi) 25,000 shares of restricted stock,
the restrictions on which will lapse based on performance
measurements and length of service.
(6) Includes 3,158 shares held in a Company profit sharing and
savings plan for the account of Mr. Mosco. Excludes 16,282 shares
reserved by the Company for issuance to Mr. Mosco with respect to
a deferred compensation arrangement.
(7) Includes 3,577 shares owned by Mr. Gould's wife as to which he
disclaims beneficial ownership. Also includes 18,033 shares held
in a Company profit sharing and savings plan for the account of
Mr. Gould. Excludes 84,735 shares reserved by the Company for
issuance to Mr. Gould with respect to a deferred compensation
arrangement. Mr. Gould terminated his employment with the Company
effective April 1, 1997; see "Mr. Gould's Employment Agreement."
(8) Mr. Amerman resigned on February 7, 1997. He has 90 days from
that date to exercise the vested portion of his stock options,
which total 8,333 shares.
(9) Based solely on information provided by the beneficial owner.
(10) Represents shares held in trust for the G.R. Herberger's, Inc.
401(k) Employee Stock Purchase Plan and Employee Stock Ownership
Plan.
Proposal to Amend the Company's Charter to Provide for a
Classified Board of Directors
(Proposal No. 1)
Proposed Classified Board Amendment
Directors of the Company presently are elected annually by the
shareholders to serve until the next Annual Meeting and until their
successors are elected and qualified. The Board of Directors (the
"Board") has unanimously approved and recommends that the shareholders
adopt an amendment (the "Classified Board Amendment"), the text of
which is set forth below, to the Company's Charter that would divide
the Board into three classes of Directors. This new Charter provision
is permitted under the Tennessee Business Corporation Act.
The Board is recommending the adoption of the Classified Board
Amendment in order to increase continuity and stability in the
leadership and policies of the Company and to discourage certain types
of tactics which could involve threatened changes of control that are
not in the best interests of the shareholders. If the Classified Board
Amendment is adopted, the Company's Bylaws will also be revised
accordingly.
The Classified Board Amendment provides for the Board to be divided
into three classes of Directors serving staggered three-year terms. If
adopted, the Classified Board Amendment would divide the Board into
three equal classes, designated Class I, Class II, and Class III. At
the 1997 Annual Meeting, at which twelve Directors are to be elected,
Class I, consisting of four Directors, would be elected for a term
expiring at the 1998 Annual Meeting; Class II, consisting of four
Directors, would be elected for a term expiring at the 1999 Annual
Meeting; and Class III, consisting of four Directors, would be elected
for a term expiring at the 2000 Annual Meeting (and in each case until
their respective successors are duly elected and qualified).
Commencing with the election of Directors to Class I in 1998, each
class of Directors elected at an Annual Meeting would be elected to a
three-year term with the shareholders electing only one-third of the
Directors at each Annual Meeting. If the Classified Board Amendment is
adopted, the shareholders will not be able to amend or repeal or adopt
any provisions inconsistent with it unless holders of 80% or more of
the voting power of the shares of the then outstanding Voting Stock,
voting as a single class, vote in favor.
If the number of Directors constituting the Board is increased or
decreased, the resulting number would be apportioned by the Board
among the three classes so as to make all classes as nearly equal in
number as possible.
The Classified Board Amendment also provides that a vacancy on the
Board may be filled by the remaining Directors, acting by majority
vote. This is the current procedure under the Company's Bylaws. Any
Director so chosen to fill the vacancy will hold office until the next
shareholders' meeting at which Directors are elected and until his or
her successor shall have been elected and qualified.
Information concerning the current nominees for election as Directors
at the 1997 Annual Meeting and the terms for which they will serve if
the Classified Board Amendment is adopted is contained under the
caption "Election of Directors." If the Classified Board Amendment is
not adopted, all Directors will be elected to serve until the 1998
Annual Meeting and until their successors are elected and qualified.
If adopted, the provisions of the amendment would be applicable to
every election of Directors.
The Board of Directors believes adopting the Classified Board
Amendment is advantageous to the Company and its shareholders by
facilitating Director continuity and experience, because a majority of
the Company's Directors at any given time will have prior experience
as Company Directors. Thus, the likelihood of continuity in the
policies formulated by the Board will be enhanced.
The Board believes that the Classified Board Amendment will also
encourage persons who may seek to acquire control of the Company to
initiate such an acquisition through negotiations with the Board,
assuring sufficient time for the Board to review any such proposal and
recommend appropriate alternatives to such proposal. The Board
believes that a classified Board will therefore be in a better
position to protect the interests of all the shareholders.
The Classified Board Amendment would extend the time required to make
any change in composition of a majority of the Board and would tend to
discourage certain kinds of unsolicited takeover bids for the Company.
Presently, a change in control of the Board can be made by a majority
of the Company's shareholders at a single Annual Meeting. Under the
proposed amendment, it will take at least two annual meetings to
effect a change in the majority control of the Board, except in the
event of vacancies resulting from removal. Because of the additional
time required to change control of the Board, the Classified Board
Amendment may tend to perpetuate present management and to discourage
certain tender offers, perhaps including some tender offers which
shareholders may feel would be in their best interests. The Classified
Board Amendment will also make it more difficult for the shareholders
to change the composition of the Board even if a majority of the
shareholders believe such a change would be desirable.
The Board, in recommending approval of the Classified Board Amendment,
considered the experience of Younkers, Inc. ("Younkers"), which is now
affiliated with the Company. In 1994, Carson Pirie Scott & Co.
("Carson") commenced an unsolicited tender offer for the shares of
Younkers. Carson offered to exchange each share of Younkers Common
Stock for $17 per share. Carson also commenced a proxy fight to elect
its own three members to the Younkers board, which was a classified
board. Carson elected its three candidates to the Younkers board and
also raised its proposed price to $20 per share. The Younkers
classified board, a majority of which remained independent from
Carson, rejected Carson's hostile offer and then negotiated an
agreement with Proffitt's whereby each share of Younkers Common Stock
was exchanged for .98 of a share of Proffitt's Common Stock. On the
date the merger agreement was signed, the value of .98 of a share of
Proffitt's Stock was $28.18. Accordingly, the Younkers Board was able
to negotiate a better transaction for its shareholders because it was
a classified board that could not be entirely changed at one annual
meeting. There is no assurance that the Classified Board Amendment
would have similar effects with respect to an unsolicited takeover bid
for Proffitt's Common Stock. As discussed above, the Classified Board
Amendment may discourage the making of an unsolicited takeover bid.
The Classified Board Amendment will not change the current Charter
provision stating that Directors may be removed by shareholders only
for cause as defined in the Tennessee Business Corporation Act.
Upon adoption of the Classified Board Amendment by the shareholders,
the Board will direct the officers of the Company to execute and file
with the Secretary of State of Tennessee an amendment to the Charter
of the Company reflecting the Classified Board Amendment. The Board
does not currently contemplate recommending the adoption of any
further amendments to the Charter or Bylaws which would affect the
ability of a third party to take over or change control of the
Company. Classified board provisions are permitted under the Tennessee
Business Corporation Act and are consistent with applicable securities
laws.
The Classified Board Amendment is not in response to any specific
efforts of which the Company is aware to accumulate shares or to
obtain control of the Company. The Directors of the Company who
formerly served as Directors of Younkers provided impetus for adoption
of the amendment at this time. Moreover, the department store industry
is undergoing a period of consolidation. Due to the time required to
seek and obtain shareholder approval of the Classified Board
Amendment, it would be impractical to complete such approval in the
face of a hostile takeover bid. Further, the expense of soliciting
such approval would be greater if for a shareholder meeting other than
the Annual Meeting. Therefore, the Board of Directors determined to
seek approval of the Classified Board Amendment at this time.
The Board of Directors has recommended that the Company's shareholders
approve an amendment to the Company's Charter, as permitted by the
Tennessee Business Corporation Act, to provide for a classified Board
of Directors. The text of the proposed amendment is set out in full on
page 7.
The Charter is amended by amending ARTICLE IX, Section 1, to read as
follows:
Article IX. Section 1. Number of Directors. The affairs of this
Corporation shall be managed by a Board of up to fifteen (15)
Directors.
Effective as of the Annual Meeting of Shareholders in 1997, the
Board shall be divided into three classes, designated as Class I,
Class II, and Class III, as nearly equal in number as possible.
The initial term of office of Class I shall expire at the
Annual Meeting of Shareholders in 1998, that of Class II shall
expire at the Annual Meeting in 1999, and that of Class III shall
expire at the Annual Meeting in 2000, and in all cases as to each
Director until his successor shall be elected and shall
qualify, or until his earlier resignation, removal from office,
death, or incapacity.
Subject to the foregoing, at each Annual Meeting of Shareholders
the successors to the class of Directors whose term shall then
expire shall be elected to hold office for a term expiring at the
third succeeding Annual Meeting and until their successors
shall be elected and qualified. Vacancies on the Board, for any
reason, and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a
vote of the majority of the Directors then in office, although
less than a quorum, or by a sole remaining Director.
If the number of Directors is changed, the Board shall determine
the class or classes to which the increased or decreased number
of Directors shall be apportioned; provided that the Directors in
each class shall be as nearly equal in number as possible. No
decrease in the number of Directors shall have the effect of
shortening the term of any incumbent Director.
Notwithstanding any other provisions of this Charter or the
bylaws of the Corporation (and notwithstanding that a lesser
percentage may be specified by law, this Charter or the bylaws of
the Corporation), the affirmative vote of the holders of 80% or
more of the voting power of the shares of the then outstanding
Voting Stock, voting together as a single class, shall be
required to amend or repeal, or adopt any provisions inconsistent
with, this Article IX, Section 1 of this Charter.
Existing Provisions
The Company's Charter and Bylaws as currently in force contain the
following additional provisions which may also discourage unsolicited
takeover bids or make it more difficult to change control of the
Company: (i) Directors may be removed only for cause as defined in the
Tennessee Business Corporation Act; (ii) the Board of Directors may
from time to time create one or more series of Preferred Stock from
the Company's authorized and unissued shares of Preferred Stock and
determine the rights (including voting rights), preferences, and
limitations of each such series; (iii) as described further below,
certain business combinations may be approved only with affirmative
vote of holders of 80% or more of the voting power of Proffitt's
Common Stock, unless the business combination is approved by
"continuing" Directors or meets certain "fair price" conditions; (iv)
shareholders of the Company may not take action by written consent in
lieu of a meeting; (v) the provisions described in items (iii) and
(iv) may be amended only with the affirmative vote of holders of 80%
or more of the outstanding shares of Proffitt's Common Stock; and (vi)
under the Company's Rights Plan, as described below, shareholders may,
in the event of an unsolicited takeover bid and on certain conditions,
purchase shares of Proffitt's Common Stock at a price equal to
one-half of the then current market price of the Proffitt's Common
Stock.
The Company's Charter requires that certain business combinations
(including mergers and certain sales of assets) may be approved only
with the affirmative vote of holders of 80% or more of the voting
power of Proffitt's Common Stock. Such provisions do not apply if
either: (i) the business combination is approved by "continuing"
Directors or (ii) the business combination meets certain "fair price"
provisions. "Continuing" Directors may not be affiliates of the person
with whom the Company is proposed to be combined and must have been
Directors at the time, if any, that such person became an "Interested
Shareholder." An "Interested Shareholder" generally is any person
who, directly or indirectly, beneficially owns 10% or more of the
voting power of Proffitt's Common Stock. The fair price provisions are
designed to deter coercive tender offers by requiring that all
shareholders receive a price in the business combination that is fair
and at least as high as the highest price paid for shares of
Proffitt's Common Stock by the "Interested Shareholder" in the two
years preceding the business combination.
On March 28, 1995, the Board of Directors of the Company declared a
dividend distribution of one right (a "Right") for each share of
Proffitt's Common Stock. Each Right entitles the holder to purchase
from Proffitt's one one-hundredth (1/100) of a share of Series C
Preferred Stock at a price of $85 per one one-hundredth (1/100) of a
share. Initially, the Rights are not exercisable but will become
exercisable upon the acquisition by any person of, or the announcement
of the intention of any person to commence a tender or exchange offer
upon the successful consummation of which such person would be the
beneficial owner of, 20% or more of the shares of Proffitt's Common
Stock then outstanding, without the prior approval of the Board of
Directors. The Rights are generally designed to deter coercive
takeover tactics and to encourage all persons interested in
potentially acquiring control of the Company to treat each shareholder
on a fair and equal basis.
Effects of Tennessee Law
In addition to the foregoing, the laws of the State of Tennessee
contain certain provisions, summarized below, which have similar
effects.
Tennessee's Business Combination Act (the "Combination Act") provides
that a party owning 10% or more of the stock in a "resident domestic
corporation" (such party is called an "interested stockholder") cannot
engage in a business combination with the resident domestic
corporation unless the combination (i) takes place at least five years
after the interested stockholder first acquired 10% or more of the
resident domestic corporation, and (ii) either (A) is approved by at
least 2/3 of the non-interested voting shares of the resident domestic
corporation or (B) satisfies certain fairness conditions as specified
in the Combination Act. These provisions apply unless one of two
events occurs. A business combination with an entity can proceed
without delay when approved by the target corporation's board of
directors before that entity becomes an interested stockholder, or the
resident corporation may enact a charter amendment or bylaw to remove
itself entirely from the Combination Act. This charter amendment or
bylaw must be approved by a majority of the stockholders who have held
shares for more than one year prior to the vote. It may not take
effect for a least two years after the vote. The Company has not
adopted a provision in its Charter or Bylaws removing it from coverage
under the Combination Act.
The Tennessee Greenmail Act ("TGA") applies to any corporation
chartered under the laws of Tennessee which has a class of voting
stock registered or traded on a national securities exchange or
registered with the Securities and Exchange Commission pursuant to
Section 12(g) of the Securities Exchange Act of 1934. The TGA provides
that it is unlawful for any corporation or subsidiary to purchase,
either directly or indirectly, any of its shares at a price above the
market value, as defined in the TGA, from any person who holds more
than 3% of the class of the securities purchased if such person has
held such shares for less than two years, unless either the purchase
is first approved by the affirmative vote of a majority of the
outstanding shares of each class of voting stock issued or the
corporation makes an offer of at least equal value per share to all
holders of shares of such class.
Vote Required for Approval
The Classified Board Amendment will be approved by shareholders if a
quorum exists at the Annual Meeting and more votes are cast in favor
of the Classified Board Amendment than are cast against it.
Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present but otherwise will not affect
the number of votes cast for or against the Classified Board
Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
PROPOSAL TO AMEND THE COMPANY'S CHARTER TO PROVIDE FOR A CLASSIFIED
BOARD OF DIRECTORS.
ELECTION OF DIRECTORS
(Proposal No. 2)
Subject to the amendment of the Charter as described above, twelve
Directors are to be elected at the Annual Meeting, each to hold office
for the term specified below and until his or her successor is elected
and qualified. Each Director nominee is currently a Director. Unless
otherwise instructed by the shareholder, the persons named in the
enclosed form of proxy intend to vote for the election of the persons
listed in this proxy statement. If any nominee becomes unavailable for
any reason or should a vacancy occur before the election (which events
are not anticipated), the proxies will be voted for the election of a
substitute nominee to be selected by the persons named in the proxy.
Nominees for the term expiring in 1998 (Class I) are: Bernard E.
Bernstein, Gerard K. Donnelly, Donald F. Dunn, and Donald E. Hess.
Nominees for the term expiring in 1999 (Class II) are: Edmond D.
Cicala, Michael S. Gross, G. David Hurd, and Gerald Tsai, Jr. Nominees
for the term expiring in 2000 (Class III) are: Ronald de Waal, R. Brad
Martin, C. Warren Neel, and Marguerite W. Sallee.
Certain information, including Board memberships of other public
companies, is given below for each nominee for Director.
Name, Principal Occupation, Director
and Directorship Age Since
-------------------------- -------- ---------
Class I (terms expiring in 1998):
Bernard E. Bernstein 66 1987
Partner in the Knoxville, Tennessee
law firm of Bernstein,
Stair & McAdams
Gerard K. Donnelly 63 1996
Chairman of Princeton Middletown
Partners, Inc., a consulting
company, since February 1994. From
1990 to January 1994,
Mr. Donnelly was President, Chief Executive
Officer, and a director of H.C. Prange
Company, a specialty retailer. H.C.
Prange filed a petition for reorganization
under the Bankruptcy Code in September 1994.
Donald F. Dunn 71 1996
Retired Senior Vice President and
director of Allied Stores
Corporation. Mr. Dunn serves on the
Board of Directors
of Tech Data Corporation.
Donald E. Hess 48 1996
Chairman of the Parisian Division of
Proffitt's, Inc. Mr. Hess served as President
and Chief Executive Officer of Parisian
from 1986 to April 1996. Mr. Hess serves
on the Board of Directors of AmSouth Bancorporation.
Class II (terms expiring in 1999):
Edmond D. Cicala 71 1987
President of Edmond Enterprises, Inc.
Retired Chairman and
Chief Executive Officer of the Goldsmith's
Division of Federated Department Stores.
Mr. Cicala is a Director of
Evans, Inc. and National Commerce Bancorporation.
Michael S. Gross 35 1994
Vice President of Apollo Capital Management,
Inc., the general partner of Apollo Advisors,
L.P. Mr. Gross serves on the Board of
Directors of Converse, Inc., Florsheim
Group, Inc., Furniture Brands International,
Inc., and Urohealth, Inc.
G. David Hurd 67 1996
Chairman and Chief Executive Officer of The
Principal Financial Group, an insurance and
financial services company, from 1989 until
his retirement in December 1994. Mr. Hurd is
the Emeritus Chairman of The Principal
Financial Group.
Gerald Tsai, Jr. 68 1993
Chairman, President, and Chief Executive
Officer of Delta Life Corporation. Mr. Tsai
serves on the Board of Directors
of Meditrust, Rite Aid Corporation, Sequa
Corporation, Triarc Companies, Inc., and
Zenith National Insurance Corporation.
Class III (terms expiring in 2000):
Ronald de Waal 45 1985
Chairman of We International, B.V., a
Netherlands corporation, which operates
more than 250 fashion specialty stores in
Belgium, the Netherlands, Switzerland,
Germany, and France
R. Brad Martin 45 1984
Chief Executive Officer of the Company since
1989, Chairman of the Board of the Company
since 1987, and President from July 1989
until March 1994 and from September 1994
to March 1995. Mr. Martin serves on the
Board of Directors of Delta Life Corporation,
First Tennessee National Corporation, and
Harrah's Entertainment, Inc.
C. Warren Neel 58 1987
Dean of the College of Business Administr-
ation at the University of Tennessee,
Knoxville. Dr. Neel serves on the Board of
Directors of American Healthcorp, Inc.,
Clayton Homes, Inc., O'Charley's, Inc., and
The Promus Companies, Inc.
Marguerite W. Sallee 51 1996
President and Chief Executive Officer
of CorporateFamily Solutions. Ms. Sallee
serves on the Board of Directors of
MagneTek, Inc. and NationsBank of Tennessee
and Kentucky.
_________________________________
The business association of the nominees as shown has been continued
for more than five years unless otherwise noted.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS THE ABOVE LISTED NOMINEES.
Further Information Concerning Directors
Directors' Fees
Directors who are not officers of the Company each receive an annual
fee of $15,000 and $1,000 for attendance at each board meeting or
meeting of a committee of which he is a member (or $750 for
participation in a telephonic board or committee meeting). Committee
chairpersons each receive an additional annual fee ranging from $1,500
to $2,500, depending upon the committee chaired. Directors are
reimbursed for expenses in connection with their services as Directors
of the Company. Directors not employed by the Company may elect to
participate in the Company's Deferred Compensation Plan for
Non-Employed Directors of Proffitt's, Inc. and defer all such
compensation in lieu of immediate cash payments. The deferred
compensation is tied to the value of the Company's Common Stock.
Pursuant to the Company's 1994 Long-Term Incentive Plan (the "Plan"),
each non-employee Director of the Company annually is granted a
nonqualified stock option to purchase 1,000 shares of Company Common
Stock. Options are priced at fair market value at the date of grant
and vest in one-fifth installments commencing six months from the date
of grant (with each subsequent installment vesting on the anniversary
date of grant) with full vesting occurring on the fourth anniversary
date of grant. In addition, pursuant to the Plan, each non-employee
Director has been awarded 1,000 shares of restricted Common Stock
which vest in one-tenth installments commencing on the first
anniversary of the award date.
Committees of the Board of Directors and Meeting Attendance
The Board met six times during the last fiscal year. The Board of
Directors has established Audit, Human Resources/Compensation, Stock
Option, and Nominating Committees.
The Audit Committee includes C. Warren Neel (Chairman), Donald F.
Dunn, Richard D. McRae, and Harwell W. Proffitt. The Committee met
three times during the last fiscal year. The Audit Committee
recommends engagement of the independent accountants, reviews the fee
arrangement and scope of the audit, reviews the financial statements
and the report of independent accountants, reviews the activities and
recommendations of the Company's internal auditors, and considers
comments made by the independent accountants with respect to the
Company's system of internal accounting control.
The Human Resources/Compensation Committee includes Bernard E.
Bernstein (Chairman), Edmond D. Cicala, Gerard K. Donnelly, and C.
Warren Neel. The Committee met four times during the last fiscal year.
The purpose of this Committee is to review compensation of Company
officers and employees and any other compensation related plan, other
than the stock option and long-term incentive plans.
The Stock Option Committee consists of Ronald de Waal (Chairman),
Edmond D. Cicala, and Michael S. Gross and administers the Company's
1987 Stock Option Plan and the 1994 Long-Term Incentive Plan. This
Committee met twice during the last fiscal year.
The Nominating Committee includes Gerald Tsai, Jr. (Chairman), Bernard
E. Bernstein, G. David Hurd, and Marguerite W. Sallee. The functions
of the Committee are to screen and recommend candidates for the
Company's Board of Directors. The Nominating Committee does not
consider nominees for Director recommended by shareholders. This
Committee met twice during the last fiscal year.
No Director attended fewer than 75% of the aggregate number of
meetings of the Board of Directors and the committee(s) on which he or
she served. The overall average percentage for all Directors' meeting
attendance was 95%.
Executive Compensation
Summary Compensation Table
The following table sets forth, for the years ended February 1, 1997,
February 3, 1996, and January 28, 1995, the cash compensation paid by
the Company, as well as other compensation paid or accrued for these
years, as to the Company's Chief Executive Officer and to each of the
other four highest compensated executive officers ("Named Officers").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------- ---------------------
Other Restricted Securities All
Annual Stock Underlying Other
Name & Principal Salary Bonus Compensation Award(s) Options Compensation
Position Year ($) ($)(1) ($) ($) Granted(#) ($)
- ------------------ ------ -------- -------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Brad Martin 1996 536,031 609,382(2) 27,700 (3) 683,321(4)(5) 7,800(6)
Chairman of the Board
and Chief Executive 1995 445,833 233,250(7) 27,700 (3) 312,000 (8) 20,000 7,140(6)
Officer 1994 383,334 293,438(9) 27,700 (3) 95,000 7,140(6)
James A. Coggin (10) 1996 450,000 376,450(2) 373,750(4)(5)
President and Chief 1995 358,333 108,600(7) 20,000
Operating Officer 1994 270,833 208,125(9) 60,000
Robert M. Mosco (10) 1996 450,000 229,167 160,430 (4) 60,000 37,500(11)
President and Chief 1995
Executive Officer of 1994
Proffitt's Merchandising
Group
W. Thomas Gould (10) 1996 750,000 372,799(12) 100,000
Former Vice Chairman
of the Board and 1995
Chairman of the 1994
Younkers Division
Tom R. Amerman (10) 1996 300,000 87,750 25,000
Former Executive Vice 1995
President of Special 1994
Projects
</TABLE>
(1) Amounts awarded under the Incentive Compensation Plan for the
respective fiscal years, even if deferred.
(2) Includes stock grants to Martin and Coggin of 5,000 and 2,500
shares of Proffitt's Common Stock, respectively, which are
subject to pricing at a later date. These grants were valued at
$192,500 and $96,250 for Martin and Coggin, respectively, as of
March 21, 1997 (at a market price of $38.50).
(3) In February 1989, the Company entered into a compensation
agreement with R. Brad Martin which provides for a $500,000
interest-free loan due January 31, 1999 or upon Mr. Martin's
termination of employment with the Company. Other Annual
Compensation represents imputed interest on that interest-free
loan.
(4) In 1996, Martin, Coggin, and Mosco were granted 25,000, 15,000,
and 12,500 shares of Company Common Stock under a Restricted
Stock Grant Agreement under the Company's 1994 Long-Term
Incentive Plan. Restrictions shall lapse as a function of the
Company achieving certain performance goals. Shares shall be
earned ("Earned Shares") on the basis of achieving these goals
for 1996, 1997, and 1998. Restrictions shall be removed from 25%
of such Earned Shares at the time they are earned, and
restrictions shall be removed from an additional 25% of such
Earned Shares at the end of each of the following three years. As
of February 1, 1997, 8,333, 5,000, and 4,167 shares were Earned
Shares for Martin, Coggin, and Mosco, respectively, and 2,083,
1,250, and 1,042 shares were vested for Martin, Coggin, and
Mosco, respectively. These shares are subject to pricing at a
later date. As of March 21, 1997, the market price of the Common
Stock was $38.50, and the value of the Earned Shares was
$320,821, $192,500, and $160,430 for Martin, Coggin, and Mosco,
respectively, as of that date. This value of the Earned Shares is
included in total Restricted Stock Awards.
(5) Includes restricted stock awards of 10,000 and 5,000 shares of
Proffitt's Common Stock for Martin and Coggin, respectively,
which were granted at the market price of $36.25 on the January
31, 1997 date of grant (valued at $362,500 and $181,250 for
Martin and Coggin, respectively). The awards will fully vest one
year from the date of grant.
(6) Economic benefit of split dollar life insurance policy.
(7) Includes stock grants to Martin and Coggin of 5,000 and 1,500
shares of Proffitt's Common Stock, respectively, which were
granted at the market price of $32.25 on the March 21, 1996 date
of grant (valued at $161,250 and $48,375 for Martin and Coggin,
respectively).
(8) Represents a restricted stock award of 13,000 shares of
Proffitt's Common Stock which was granted at the market price of
$24.00 on the February 12, 1996 date of grant. The award fully
vested one year from the date of grant.
(9) Includes stock grants to Martin and Coggin of 5,000 and 2,500
shares of Proffitt's Common Stock, respectively, which were
granted at the market price of $21.50 on the February 6, 1995
date of grant (valued at $107,500 and $53,750 for Martin and
Coggin, respectively).
(10) The hire date for Coggin was April 1, 1994 and for Amerman,
Gould, and Mosco was February 3, 1996. Amerman resigned effective
February 7, 1997. Gould terminated his employment effective April
1, 1997; see "Mr. Gould's Employment Agreement."
(11) One-time relocation bonus.
(12) Reimbursement payment of excise, federal, and Medicare taxes.
Note: As of February 1, 1997, the number and value (based on the
$36.25 closing price of Common Stock as of January 31, 1997) of shares
of restricted stock held by each of the Named Officers were as
follows: Martin, 35,000 shares ($1,268,750); Coggin, 20,000 shares
($725,000); and Mosco, 12,500 shares ($453,125). Gould and Amerman had
no restricted stock holdings at that date.
Employment Contracts
All of the Named Officers and certain other officers have employment
agreements with the Company. All agreements fix the Named Officers'
minimum base compensation for the fiscal year and provide for
participation by such officers in employment benefit plans as the
Company may adopt. The agreements for Martin, Coggin, and Mosco expire
on October 11, 2001, October 11, 1999, and February 5, 2000,
respectively. Amerman resigned on February 7, 1997, and his agreement
expired on that date. For terms of Mr. Gould's employment, see "Mr.
Gould's Employment Agreement." Under the terms of each agreement, each
Named Officer (excluding Gould) is entitled to receive his base salary
for the remainder of his employment period in the event he is
terminated without cause. If the termination is involuntary and due to
a change in control or a potential change in control, he is entitled
to receive his base salary then in effect for the greater of the
remaining term of his agreement or twenty-four months. Annual base
salaries currently in effect are as follows: Martin, $625,000; Coggin,
$510,000; and Mosco, $500,000. A "Change in Control" is defined as:
(i) the acquisition of 25% or more of the combined voting power of the
Company's outstanding securities, (ii) a tender offer, merger, sale of
assets, or other business combination which results in the transfer of
a majority of the combined voting power of the Company or any
successor entity, or (iii) during any two consecutive year period, the
failure to elect a majority of the individuals constituting the Board
of Directors of the Company prior to the commencement of such period,
unless the election or nomination of any replacement Directors was
approved by vote of at least two-thirds of the Directors of the
Company then still in office who were Directors of the Company at the
beginning of such period. A "Potential Change in Control" is defined
as: (i) the approval by the shareholders of the Company of an
agreement which, if consummated, will result in a change of control or
(ii) the acquisition of 5% or more of the outstanding voting
securities of the Company and the adoption by the Company's Directors
of a resolution to the effect that a potential change in control of
the Company has occurred.
The Company entered into an employment agreement with Robert M. Mosco
in conjunction with the Company's February 3, 1996 business
combination with Younkers, Inc. Under the terms of that Employment
Agreement, Mr. Mosco had the right to terminate his employment with
the Company in the 13th month after the business combination. In such
event, he would have received a lump-sum severance payment in an
amount equal to (i) salary through the date of termination and bonus
for the then-current year, (ii) three tines Mr. Mosco's highest annual
salary in effect during the 12-month period prior to termination and
three times Mr. Mosco's average bonus in respect of the three
immediately preceding fiscal years, (iii) any unvested benefit under
Younkers's defined benefit pension plan, and (iv) any unvested
employer contributions under Younkers' defined contribution plan. In
connection with Mr. Mosco's entering into a new Employment Contract
that expires on February 5, 2000, Mr. Mosco waived his right to
terminate employment and receive such compensation. In connection with
that waiver, the Company paid Mr. Mosco $1,064,387 on February 3,
1997.
Mr. Gould's Employment Agreement
The Company entered into the employment agreement with Mr. Gould in
conjunction with the Company's February 3, 1996 business combination
with Younkers, Inc. February 3, 1996 was the effective date of the
agreement ("Effective Date"). Mr. Gould's employment agreement, as
amended ("Employment Agreement") has a five year term and provides
that Mr. Gould will be paid a minimum annual base salary of $750,000.
Mr. Gould's Employment Agreement provides that each of Proffitt's and
Mr. Gould may terminate Mr. Gould's Employment Agreement prior to its
expiration upon thirty days' prior written notice; provided, however,
that such notice may not be provided for at least one year from the
Effective Date, and provided further that Mr. Gould's payments
thereunder are not terminated by virtue of his notice. Mr. Gould
terminated his employment with Proffitt's effective April 1, 1997.
Under the terms of the Employment Agreement, Proffitt's will continue
to pay Mr. Gould his annual salary and continue to provide Mr. Gould
with medical and life insurance coverage during the remaining term of
the Employment Agreement. In the event Mr. Gould's payments are
subject to an excise tax under Section 4999 of the Internal Revenue
Code, he will receive a reimbursement payment to offset such tax.
Stock Options
The following table contains information concerning the grant of stock
options under the Proffitt's, Inc. 1994 Long-Term Incentive Plan
("Plan") to the Named Officers as of fiscal year end.
<TABLE>
Option Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (3)
------------------------------------- -------------------------
% of Total
Options
Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#)(1) Year ($/share)(2) Date 5%($) 10%($)
- ---------- -------- --------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
R. Brad Martin - - - - - -
James A. Coggin - - - - - -
Robert M. Mosco 50,000(4) 10.2 24.50 2/5/06 770,396 1,952,335
10,000(4) 2.0 39.75 10/28/06 249,986 633,513
W. Thomas Gould 100,000(4) 20.4 24.50 4/1/99(5) 1,540,792 3,904,669
Tom R. Amerman 25,000(6) 5.1 24.50 5/8/97(7) 385,198 976,167
</TABLE>
(1) Under the terms of the Plan, the Stock Option Committee retains
discretion, subject to Plan limits, to modify the terms of
outstanding options and to reprice the options.
(2) All options were granted at the market closing price on the date
of grant. No incentive stock options were granted. The exercise
price and tax withholding obligations related to exercise may be
paid by delivery of already owned shares, subject to certain
conditions.
(3) Potential gains are reported net of the option exercise price but
before taxes associated with exercise. These amounts represent
certain assumed rates of appreciation only. Actual gains, if any,
on stock option exercises are dependent on the future performance
of the Common Stock of the Company and overall stock conditions,
as well as the optionholder's continued employment through the
vesting period. The amounts reflected in this table may not
necessarily be achieved.
(4) Options are exercisable in cumulative one-fifth installments
commencing six months from the date of grant (with each
subsequent installment vesting on the anniversary date of grant)
with full vesting occurring on the fourth anniversary of the date
of grant.
(5) Gould resigned April 1, 1997. Under the terms of his Employment
Agreement, all options fully vest upon termination of employment,
and he has two years from the termination date to exercise the
vested portion of these options.
(6) Options are exercisable in cumulative one-third installments
commencing six months from the date of grant (with each
subsequent installment vesting on the anniversary date of grant)
with full vesting occurring on the second anniversary of the date
of grant.
(7) Amerman resigned on February 7, 1997, and under terms of the
Plan, he has 90 days from that date to exercise the vested
portion of these options.
Option Exercises and Holdings
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during 1996 and
unexercised options held at fiscal year end.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year End and Fiscal Year-End Option Values
Value of
Unexercised Unexercised
Options Held at In-the-Money
Fiscal Year Options at Fiscal
End (#) Year End($)(1)
Shares ----------------- ---------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
----------- ------------- ------------ ----------------- ---------------
<S> <C> <C> <C> <C>
R. Brad Martin 0 0 150,000/70,000 1,870,000/820,000
James A. Coggin 0 0 44,000/36,000 510,000/412,500
Robert M. Mosco 0 0 89,106/50,000 2,046,108/470,000
W. Thomas Gould 127,500 3,744,215 185,824/80,000 4,349,520/940,000
Tom R. Amerman 65,324 993,847 0/16,667 0/195,837
</TABLE>
(1) Represents the difference between the closing price of the
Company's Common Stock on January 31, 1997 and the exercise price
of the options.
Report of the Human Resources Committee of
the Board of Directors on Executive Compensation
The Human Resources/Compensation Committee of the Board of Directors
(the "Committee") is composed of four independent Directors who are
not employees of the Company: Mr. Bernstein, Chairman of the
Committee; Mr. Cicala; Mr. Donnelly; and Dr. Neel. The Committee makes
recommendations to the Board of Directors as to the amount and form of
officer compensation. The Committee at least annually evaluates the
Company's performance and executive officers' compensation compared
with results of the Company. The Committee reviews the key performance
standards of the executives of the corporation and measures individual
and corporate achievement of these standards. The Committee also
annually meets to evaluate the performance of the Chief Executive
Officer ("CEO").
The compensation programs of the Company are designed to align
compensation with business objectives and performance and to enable
the corporation to attract, retain, and reward executives who
contribute to the long-term success of the Company. The Board of
Directors believes that executive pay should be linked to level of
responsibility and performance. Therefore, the Company provides an
executive compensation program which includes base pay, cash bonuses,
and long-term incentive opportunities through the use of stock options
and stock grants. Individual executive performance is evaluated by
reviewing organization and management development progress against the
established objectives. Consistent with the compensation philosophy of
the corporation, salaries for executives are established at levels for
comparable positions in the department store and specialty retailing
industry. Generally, executive cash bonus programs provide the
opportunity for executives to earn from 20% to 50% of annual base
compensation. Bonuses are earned as the result of the achievement of
specific corporate and/or division objectives and individual
objectives.
Long-term incentives are provided through grants of stock options and
stock grants to the Named Officers and other key employees pursuant to
the Proffitt's, Inc. 1994 Long-Term Incentive Plan ("Plan"). This
component is intended to provide added incentive to secure, retain,
and reward those responsible for the successful leadership of the
Company. Stock options are granted at or above the prevailing market
value and will only have value if the Company's stock price increases.
Currently, options vest in five equal installments, and executives
must be employed by the Company at the time of vesting in order to
exercise the option grants. The Stock Option Committee of the Board of
Directors administers the Plan.
R. Brad Martin has served as Chairman and CEO of the corporation since
July 1989. While serving in this capacity, the Company's revenues have
grown from $94.8 million for the year ended February 3, 1990 ("1989")
to $1.9 billion for the year ended February 1, 1997 ("1996"). Net
income (before non-recurring and special charges) has increased from
$.8 million in 1989 to $52.2 million in 1996. Shareholders' equity has
grown from $20.2 million in 1989 to $539.9 million in 1996. The price
of the Company's Common Stock has increased from $6.00 at February 3,
1990 to $38.50 at March 21, 1997. Market capitalization of the Company
has increased from $22.8 million at February 3, 1990 to over $1.1
billion at March 21, 1997.
The compensation of the Chairman and CEO of the corporation is set
forth in an Employment Agreement ("Agreement") dated October 11, 1996,
approved by the Committee and the Board of Directors. The terms of
this Agreement provide for an annual base salary of not less than
$552,000. Effective April 1, 1997, Mr. Martin's annual base salary was
increased to $625,000. The CEO may earn an annual cash bonus of up to
75% of base salary based upon the achievement of specific annual
objectives. For 1996, 50% of the potential bonus award was based on
achievement of targeted earnings per share of the corporation; 50% of
the potential bonus award was based upon the achievement by the CEO of
certain objectives in his personal plan. These objectives included
specified goals in such areas as corporate growth, human resources,
acquisition assimilation, merchandising, and shareholder relations.
For 1996, Mr. Martin was awarded 100% of his total bonus potential.
For 1996, Mr. Martin's cash compensation totaled $952,913 which was
comprised of $536,031 in base salary and $416,882 in bonus.
Pursuant to the terms of the Agreement, the CEO is also eligible for
an annual award of up to 5,000 shares of Company Common Stock, based
upon the achievement of annual targeted growth in intrinsic value of
the corporation. For 1996, Mr. Martin was awarded 5,000 shares of
Common Stock of the corporation pursuant to this provision, valued at
$192,500 as of March 21, 1997. These shares are subject to pricing at
a later date.
During 1996, the CEO was granted 25,000 additional restricted shares
of Company Common Stock under a Restricted Stock Grant Agreement under
the Plan. Restrictions shall lapse as a function of the Company
achieving certain performance goals. Shares shall be earned ("Earned
Shares") on the basis of achieving those goals for 1996, 1997, and
1998. Restrictions shall be removed from 25% of such Earned Shares at
the time they are earned, and restrictions shall be removed from an
additional 25% of such Earned Shares at the end of each of the
following three years. As of February 1, 1997, 8,333 shares were
earned, with 2,083 (25%) vested. These shares are subject to future
pricing; the Earned Shares were valued at $320,821 on March 21, 1997.
In recognition of the extraordinary efforts of the CEO in completing
the business combinations with Parisian, Inc. and G.R. Herberger's,
Inc. during 1996, the CEO was granted 10,000 restricted shares of
Company Common Stock under the Plan. These shares were valued at
$362,500 on the January 31, 1997 grant date. These shares fully vest
one year from the date of grant.
Section 162(m) of the Internal Revenue Code (the "Code") limits the
tax deductibility of compensation in excess of $1 million paid to the
Named Officers, unless the payments are made under a performance-based
plan as defined in Section 162(m). The Committee believes the payments
in 1996 under the Plan (as previously approved by the shareholders of
the Company) meet the requirements of deductibility as specified under
the applicable provisions of the Code. It is the Committee's intention
to continue to utilize performance-based compensation under the terms
of the Plan in order to obtain maximum deductibility of executive
compensation, while providing a compensation program that will
attract, retain, and reward the executive talent necessary to maximize
shareholder return. Nevertheless, it is the Committee's understanding
that all or some of the $1,064,387 payment to Mr. Mosco to waive his
rights under a prior employment agreement will not be deductible under
the Code.
Human Resources/Compensation Committee
Bernard E. Bernstein, Chairman
Edmond D. Cicala
Gerard K. Donnelly
Dr. C. Warren Neel
March 21, 1997
Certain Transactions
Transaction with Michael S. Gross.
Director Michael S. Gross is one of the founding principals of Apollo
Advisors, L.P., the managing general partner of Apollo Investment
Fund, L.P., the general partner of Apollo Specialty Retail Partners,
L.P. ("Apollo Specialty"), the holder of the Company's Series A
Preferred Stock, which was converted into Common Stock in June 1996.
Proffitt's paid Apollo Specialty $.8 million in regular dividends and
a one-time $3.0 million payment for the early conversion of the
Preferred Stock for the fiscal year ended February 1, 1997.
Human Resources/Compensation Committee Interlocks and Insider
Participation.
Mr. Bernard E. Bernstein, Chairman of the Human Resources/Compensation
Committee, is a partner in Bernstein, Stair & McAdams, which serves,
on occasion, as legal counsel for the Company.
Ratification of Appointment of Independent Accountants
(Proposal No. 3)
Subject to ratification by the shareholders, the Board of Directors
has reappointed Coopers & Lybrand as independent accountants to audit
the financial statements of the Company for the fiscal year ending
January 31, 1998. Coopers & Lybrand has examined the financial
statements of the Company since 1991.
Representatives of Coopers & Lybrand will be present at the Annual
Meeting and will have an opportunity to make a statement, if they so
desire, and will be available to respond to appropriate questions.
THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMEND THE
SHAREHOLDERS VOTE "FOR" SUCH RATIFICATION.
Section 16(a) of the Securities Exchange Act of 1934
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors, executive officers, and persons who own more than
10% of the Company's Common Stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes in ownership of stock of the Company.
To the Company's knowledge, based solely on a review of copies of
reports provided by such individuals to the Company and written
representations of such individuals that no other reports were
required, during the fiscal year ended February 1, 1997, all Section
16(a) filing requirements applicable to its officers, Directors, and
10% or greater beneficial owners were satisfied.
Other Matters
The Board of Directors of the Company knows of no other matters that
may come before the meeting. However, if any other matters should
properly come before the meeting or any adjournment thereof, it is the
intention of the persons named in the proxy to vote the proxy in
accordance with their best judgment.
Shareholders' Proposals for 1998 Annual Meeting
Proposals for shareholder action which eligible shareholders wish to
have included in the Company's proxy mailed to shareholders in
connection with the Company's 1998 Annual Meeting must be received by
the Company at its corporate headquarters on or before January 5,
1998.
Listing of Shareholders
A complete list of the shareholders entitled to vote at the Annual
Meeting of the Shareholders, to be held on June 19, 1997, will be
available for inspection during normal business hours at the principal
office of the Company for a period of at least 10 days prior to the
meeting, upon written request to the Company by a shareholder, and at
all times during the Annual Meeting at the place of the meeting.
Annual Report
The Company's annual report for the year ended February 1, 1997 is
being mailed with this proxy statement but is not to be considered as
a part hereof.
A copy of the Company's annual report on Form 10-K, including the
financial statements and schedules thereto, required to be filed with
the Securities and Exchange Commission, may be obtained without charge
by any shareholder whose proxy is solicited upon written request to:
Senior Vice President of Investor Relations
Proffitt's, Inc.
P.O. Box 9388
Alcoa, Tennessee 37701-9388
By order of the Board of Directors,
Julia Bentley
Secretary
Alcoa, Tennessee
May 1, 1997
PROFFITT'S, INC.
P.O. Box 9388
Alcoa, TN 37701
This proxy is solicited on behalf of the Board of Directors. The
undersigned hereby appoints R. Brad Martin, James A. Coggin, and Julia
A. Bentley as Proxies, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and vote as
designated below, all the shares of Common Stock of Proffitt's, Inc.
held of record by the undersigned on April 21, 1997 at the Annual
Meeting of the Shareholders to be held on June 19, 1997 or any
adjournment thereof.
1. PROPOSAL TO AMEND THE COMPANY'S CHARTER, as permitted by the
Tennessee Business Corporation Act, to divide the Board of
Directors into three classes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(Except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name on the list
below.)
CLASS I (term expiring in 1998): Bernard E. Bernstein, Gerard K.
Donnelly, Donald F. Dunn, Donald E. Hess
CLASS II (term expiring in 1999): Edmond D. Cicala, Michael S.
Gross, G. David Hurd, Gerald Tsai, Jr.
CLASS III (term expiring in 2000): Ronald de Waal, R. Brad
Martin, C. Warren Neel, Marguerite W. Sallee
(continued, and signed on other side)
3. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND as the
independent accountants of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. IF NO ELECTION
IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2, AND 3.
Please sign exactly as name appears below. When shares are held
by joint tenants, both should sign. when signing as attorney,
executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign full corporate name
by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
DATED: ____________________, 1997 _____________________________
Signature
PLEASE MAKE, SIGN, DATE, AND RETURN _____________________________
THE PROXY CARD PROMPTLY USING THE Signature if held jointly
ENCLOSED ENVELOPE.
