SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
HAROLD'S STORES, INC.
(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if Other Than
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125.00 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), or 14a-(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules
14a-6(i)4) and 0-11.
1) Title of each class securities to which transaction
applies:_________________.
2) Aggregate number of securities to which transaction
applies:________________.
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:______________.
4) Proposed maximum aggregate value of
transaction:_______________.
5) Total fee paid:________________.
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or Schedule and the date of its filing.
1) Amount Previously Paid:____________.
2) Form, Schedule or Registration Statement
No:_________________.
3) Filing Party:_____________________.
4) Date filed:_______________________.
NOTICE OF 1996
ANNUAL MEETING OF
SHAREHOLDERS AND
PROXY STATEMENT
Dear Harold's Shareholder:
On behalf of the Board of Directors and management of Harold's
Stores, Inc., I am pleased to invite you to attend the 1996
Annual Meeting of Shareholders. The meeting will be held at the
Holiday Inn, 1000 N. Interstate Drive, Norman, Oklahoma,
beginning at 2:00 p.m., local time, on Friday, June 28, 1996. A
copy of our Annual Report to Shareholders for the fiscal year
ended February 3, 1996 is enclosed.
The attached Notice of Annual Meeting and Proxy Statement
describe the business to be conducted at the meeting, including
the election of eleven directors. During the meeting, there will
also be a report by management on the Company's business, as well
as a discussion period during which you will be able to ask
questions.
Whether or not you plan to attend in person, please mark your
proxy in the space provided. It is important that your shares be
represented by a proxy, even if you cannot be present. Take a
moment now to sign, date and return your proxy in the envelope
provided. If you have multiple accounts and received more than
one set of this material, please be sure to return each proxy.
I look forward to greeting you at this year's Annual Meeting.
Sincerely,
Harold G. Powell
Chairman of the Board
HAROLD'S STORES, INC., 765 ASP, POST OFFICE DRAWER 2970
NORMAN, OKLAHOMA 73070 (405) 329-4045
HAROLD'S STORES, INC.
765 Asp
Norman, Oklahoma 73069
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 1996
TO OUR SHAREHOLDERS:
The 1996 Annual Meeting of Shareholders of Harold's Stores, Inc.
("the Company") will be held at the Holiday Inn, 1000 N.
Interstate Drive, Norman, Oklahoma, on Friday, June 28, 1996, at
2:00 p.m., local time, for the following purposes:
1. To elect eleven (11) directors to hold office until the next
annual meeting of the shareholders and until their respective
successors shall have been elected and qualified.
2. To act upon a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of
Common Stock of the Company from 7,500,000 shares to 25,000,000
shares.
3. To transact such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
The Annual Meeting may be adjourned from time to time and, at any
reconvened meeting, action with respect to the matters specified
in the notice may be taken without further notice to the
shareholders unless required by the Bylaws.
Shareholders of record of Common Stock at the close of business
on May 1, 1996 are entitled to notice of, and to vote on all
matters at, the Annual Meeting. A list of such shareholders will
be available for examination by any shareholder for any purpose
germane to the Annual Meeting, during normal business hours, at
the principal office of the Company, 765 Asp, Norman, Oklahoma
for a period of ten days prior to the Annual Meeting and at the
Annual Meeting
BY THE ORDER OF THE BOARD OF DIRECTORS
H. RAINEY POWELL
Secretary
DATED: May 29, 1996
HAROLD'S STORES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 28, 1996
The following information is furnished in connection with the
1996 Annual Meeting of Shareholders of Harold's Stores, Inc. (the
"Company") which will be held on Friday, June 28, 1996, at 2:00
p.m., local time, at the Holiday Inn, 1000 N. Interstate Drive,
Norman, Oklahoma, and at any adjournment or adjournments thereof,
and will be mailed on or about May 29, 1996 to the holders of
record of Common Stock as of the record date.
The record date for determining shareholders entitled to notice
of, and to vote at, the Annual Meeting has been fixed as the
close of business on May 1, 1996. On that date, the Company had
4,965,245 shares of Common Stock outstanding. Each outstanding
share of Common Stock is entitled to one vote on all matters
presented at the Annual Meeting.
The enclosed proxy for the Annual Meeting is being solicited by
the Company's Board of Directors and is revocable at any time
prior to the exercise of the powers conferred thereby. The cost
of the solicitation of proxies in the enclosed form will be borne
by the Company. In addition to the use of the mail, proxies may
be solicited by personal interview, telephone, or facsimile, and
by banks, brokerage houses and other institutions. Nominees or
fiduciaries will be requested to forward the solicitation
material to their principals and to obtain authorization for the
execution of proxies. The Company will, upon request, reimburse
banks, brokerage houses and other institutions, nominees and
fiduciaries for their reasonable expenses in forwarding proxy
material to their principals.
Unless otherwise directed in the accompanying form of proxy, the
persons named therein will vote FOR the election of the eleven
director nominees and FOR the proposal to amend the Company's
Certificate of Incorporation to increase the authorized number of
shares of Common Stock. Any shareholder returning the
accompanying proxy may revoke such proxy at any time prior to its
exercise by (a) giving written notice to the Company of such
revocation, (b) voting in person at the Annual Meeting or (c)
executing and delivering to the Company a later dated proxy.
Written revocations and later dated proxies should be sent to
Harold's Stores, Inc., Post Office Drawer 2970, Norman, Oklahoma
73070.
ANNUAL REPORT
The Company's Annual Report to Shareholders, covering the fiscal
year ended February 3, 1996, including audited financial
statements, is enclosed. No part of the Annual Report is
incorporated in this Proxy Statement or is deemed to be a part of
the material for the solicitation of proxies.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of May
1, 1996 by (i) each nominee for election as a director, (ii) the
Company's chief executive officer and its four other most highly
compensated executive officers, (iii) all executive officers and
directors of the Company as a group, and (iv) all those known by
the Company to be beneficial owners of more than five percent of
the Company's Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership(1)
Beneficial Owner Number Percentage
of Shares of Class
DIRECTORS AND CERTAIN EXECUTIVE OFFICERS:
<S> <C> <C>
Harold G. Powell 513,003 (2)(3)(4) 10.3%
765 Asp, Norman , OK 73069
Rebecca Powell Casey 750,678 (3)(4)(5)(6) 15.0%
4525 McKinney, Dallas TX 75205
H. Rainey Powell 468,060 (3)(4)(7) 9.4%
765 Asp., Norman, OK 73609
Kenneth C. Row 11,556 (4) *
Janet F. Firth 6,754 (4) *
James R. Agar 10,986 (4) *
Michael T. Casey 294,846 (3)(4)(5) 5.9%
4525 McKinney, Dallas, TX 75205
Robert B. Cullum, Jr. 5,995 (4) *
Lisa Powell Hunt 364,813 (3)(4)(8) 7.3%
3940 Marquette, Dallas, TX 75225
W. Howard Lester 4,725 (4) *
Gary C. Rawlinson 9,962 (4) *
William F. Weitzel 9,454 (4) *
All Directors and Executive Officers 2,461,774 (9) 48.5%
as a Group (14 people)
OTHER BENEFICIAL OWNERS OF MORE THAN
5% OF THE COMMON STOCK
The Security National Bank and Trust Company of Norman, 638,943 (10) 12.9%
as Trustee
200 East Main, Norman, OK 73069
Inter-Him N.V. 379,937 7.7%
Prof. Kernkampweg 8a
Post Office Box 3361, Curacao, Netherlands Antilles
_____________________
* Less than one percent.
(1) This table is based upon information supplied by officers,
directors and principal shareholders and applicable Schedules 13D
13G filed with the Securities and Exchange Commission. Unless
otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes
that each of the shareholders named in this table has sole voting
and investment power with respect to the shares indicated as
beneficially owned. The percentage of ownership for each person
is calculated in accordance with rules of Securities and Exchange
Commission without regard to shares of Common Stock issuable upon
exercise of outstanding stock options, except that any shares a
person is deemed to own by having a right to acquire by exercise
of an option are considered outstanding solely for purposes of
calculating such person's percentage ownership.
(2) Included in this amount are 273,865 shares held by The
Security National Bank and Trust Company of Norman ("Security"),
as Trustee of the Elizabeth M. Powell Trust A, over which Harold
G. Powell possesses a general power of appointment exercisable at
his death. Such shares are also included in the beneficial
ownership of Security. Mr. Powell may also be deemed to have
shared voting power over 365,078 shares held by Security, as
trustee of Elizabeth M. Powell Trust B, which are not included in
the number of shares indicated as beneficially owner by Mr.
Powell.
(3) Pursuant to a Shareholder's Agreement, effective August 18,
1987, Harold G. Powell, Rebecca Powell Casey, H. Rainey Powell,
Lisa Powell Hunt, Michael T. Casey and Security have agreed to
vote the Common Stock held by them in accordance with the
decision of those holding a majority of the shares of Common
Stock subject to the Agreement. Such group of shareholders may
be treated as the beneficial owners of 2,756,478 shares, or
approximately 54.7% of the outstanding Common Stock. Except as
otherwise stated above, each named person's beneficial ownership
set forth above excludes the ownership of other members of such
group.
(4) Includes shares with the named individuals have the right to
acquire by exercise of stock options granted under the Company's
1993 Performance and Equity Incentive Plan, which are currently
exercisable as follows: Harold G. Powell - 21,318, Rebecca
Powell Casey - 23,028, H. Rainey Powell - 17,948, Kenneth C. Row
- - 8,265, Janet F. Firth - 5,345, James R. Agar - 4,725, Michael
T. Casey - 4,725, Robert B. Cullum, Jr. - 4,725, Lisa Powell Hunt
- - 4,725, W. Howard Lester - 4,725, Gary C. Rawlinson - 4,725, and
William F. Weitzel - 4,421.
(5) Michael T. Casey and Rebecca Powell Casey are husband and
wife. The beneficial ownership of each spouse excludes the
shares held by the other. Mr. and Mrs. Casey disclaim beneficial
ownership of the other's shares.
(6) Included in this amount are 91,068 shares which are held by
Ms. Casey as custodian for the benefit of her minor children.
(7) Included in this amount are 60,712 shares which are held by
Mr. Rainey Powell as custodian for the benefit of his minor
children. Not included are 59,231 shares of Common Stock held by
Mr. Rainey Powell's wife, over which Mr. Rainey Powell disclaims
beneficial ownership.
(8) Included in this amount are 73,411 shares which are held by
Ms. Hunt as custodian for the benefit of her minor children. Not
included are 30,356 shares of Common Stock held by Ms. Hunt's
husband, over which Ms. Hunt disclaims beneficial ownership.
(9) Includes 115,630 shares which the directors and the executive
officers as a group have the right to acquire by exercise of
stock options granted under the Company's 1993 Performance and
Equity Incentive Plan which are currently exercisable.
(10) All shares are held in its capacity as trustee. Of such
total, 273,865 shares are also included in Harold G. Powell's
beneficial ownership.
</TABLE>
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors of the Company, pursuant to the provisions
of the Company's Certificate of Incorporation and Bylaws, has
established an eleven-member Board of Directors, and has
nominated all of the current directors for re-election by the
shareholders at the Annual Meeting. If elected, the director
nominees will hold office until the next annual meeting and until
their successors are duly elected and qualified.
The Company's Board of Directors meets quarterly. During fiscal
1996, all directors attended at least 75% of the meetings of the
Board of Directors and the committees on which they served. All
of the nominees for re-election named below have indicated their
intent to serve if elected. If any nominee for a position on the
Board of Directors of the Company is unable to stand for election
for any reason, the proxy holders named in the proxy are expected
to vote for the substitute nominee in that position designated by
the Board of Directors or, if one is not so designated, are
expected to consult with the Board of Directors of the Company in
determining how to vote the shares they represent.
Nominees
The nominees for election as directors of the Company are as
follows:
Name Age Director Since
Harold G. Powell 72 1987
Rebecca Powell Casey 44 1987
H. Rainey Powell 42 1987
Kenneth C. Row 31 1993
James R. Agar 64 1987
Michael T. Casey 47 1988
Robert B. Cullum, Jr. 47 1993
Lisa Powell Hunt 40 1987
W. Howard Lester 60 1995
Gary C. Rawlinson 54 1987
William F. Weitzel, PhD 59 1989
The following is certain biographical information relating to
each nominee-director:
Harold G. Powell, the founder of the Company, has been Chairman
of the Board of the Company since its organization in 1987, and
was Chief Executive Officer from 1987 to 1992. Prior to 1987, he
was Chief Executive Officer and/or Chairman of the Board of
Directors of each of the predecessor corporations through which
the Company's business was conducted. Mr. Powell opened the
first Harold's clothing store at the Norman, Oklahoma location in
1948.
Rebecca Powell Casey was appointed Chief Executive Officer of the
Company in 1992, and prior to that time had been President from
1987 to 1988, and Executive Vice President - Merchandise and
Product Development from 1989 to 1991. Ms. Casey has been
employed by the Company in various managerial positions since
1977. Ms. Casey is a daughter of Harold G. Powell and the wife
of Michael T. Casey.
H. Rainey Powell has been Chief Financial Officer of the Company
since 1987. Mr. Powell was appointed President and Chief
Operating Officer in 1992. Mr. Powell has been employed by the
Company and its predecessors in various managerial positions
since 1978. Mr. Powell is the son of Harold G. Powell.
Kenneth C. Row was appointed Executive Vice President of the
Company in 1992. Prior to that time and since 1988, Mr. Row was
Vice President - Marketing of the Company. Mr. Row has been
employed by the Company and its predecessors in various
managerial positions since 1986.
James R. Agar is President of Agar, Inc. and Advisory Director of
Agar, Ford, Jarmon and Muldrow Insurance Agency. He serves as
Chairman of the Special Real Estate Committee and serves on the
Audit, Strategic Planning and Compensation Committees.
Michael T. Casey has served as Chairman of the Board of Grand
Prairie State Bank, Texas, a privately held bank, since 1989, and
is President of Casey Bancorp, Inc. Prior to and since that
time, Mr. Casey has been engaged in investments and banking. He
previously served as a Senior Vice President of the Company from
1989 until 1991. Mr. Casey currently serves on the board of
directors of several other privately held banking organizations
in metropolitan Dallas, Texas, including North American
Bancshares and American Bank of Texas. Mr. Casey is the husband
of Rebecca Powell Casey.
Robert B. Cullum, Jr. is a partner of Fairway Capital Partners,
Ltd and Wayfair Capital Partners, Ltd, both of which are
privately held real estate investment partnerships based in
Dallas, Texas. Mr. Cullum was involved for 30 years in the
supermarket industry with Cullum Co., Inc. Presently, he is
actively engaged in real estate development with Wayfair Capital
Partners, Ltd. and Fairway Capital Partners, Ltd. He also serves
on the Board of Directors of Randall Food Markets, Inc., a
privately held corporation. He serves on the special Real Estate
Committee and the Audit Committee.
Lisa Powell Hunt is engaged in investments and was formerly
employed by The First Boston Corporation as a registered
institutional sales executive from 1980 to 1984. Ms. Hunt is the
daughter of Harold G. Powell.
W. Howard Lester has been Chairman and Chief Executive Officer of
Williams-Sonoma, Inc. since 1978 and is a director of The Good
Guys, Inc.
Gary C. Rawlinson is a shareholder-director of the law firm of
Crowe & Dunlevy, A Professional Corporation and has been
affiliated with such firm and its predecessor since 1968, which
firm serves as general counsel to the Company. Mr. Rawlinson
serves as Chairman of the Audit Committee and serves on the
Compensation and Strategic Planning Committees.
William F. Weitzel, PhD has served as Professor of Business
Administration at the University of Oklahoma since 1983, and as a
Director of the College of Business Administration's Skills
Enhancement Program since 1986. Mr. Weitzel is President of
William Weitzel, Inc., a management consulting organization. Mr.
Weitzel serves as Chairman of the Compensation Committee and the
Strategic Planning Committee, and serves on the Audit Committee
and Special Real Estate Committee.
Committees
The Company's Board of Directors has an Audit Committee,
Compensation Committee, Strategic Planning Committee and a
Special Real Estate Committee. Each of these committees is
comprised of three outside directors.
The Audit Committee's functions include reviewing internal
controls and recommending to the Board of Directors the
engagement of the Company's independent certified public
accountants, reviewing with such accountants the plan for and
results of their audit of the consolidated financial statements
and determining the independence of such accountants. The Audit
Committee met twice during fiscal 1996.
The Compensation Committee's function is to evaluate and
recommend changes in compensation for all executive officers and
certain other key personnel, and the creation and implementation
of employee benefit plans and special employment and consulting
agreements. The Compensation Committee met once during fiscal
1996.
The Strategic Planning Committee's function is to review the
comprehensive plan developed by management stating how the
Company will accomplish its mission and objectives. The
Strategic Planning Committee did not hold any meetings during
fiscal 1996.
The Special Real Estate Committee's functions include the review
and analysis of any significant real estate leasing or purchase
transactions. The Special Real Estate Committee did not hold any
meetings during fiscal 1996.
The Board of Directors does not have a nominating committee. The
entire Board performs this function and evaluates and recommends
nominees for election to the Board of Directors.
Director Compensation
Non-employee directors of the Company receive $1,000 for each
full Board and $500 for each standing committee meeting attended.
In addition, under the Company's 1993 Performance and Equity
Incentive Plan, each incumbent non-employee director received on
the date of the Company's 1995 Annual Meeting of Shareholders an
option grant to purchase 4,500 shares of Common Stock of the
Company and, while serving as a director, will received
additional option grants to purchase 1,500 shares of Common Stock
as of the date of each subsequent annual meeting of shareholders.
Any new non-employee director will receive
under the Company's 1993 Performance and Equity Incentive Plan an
initial option grant to purchase 4,500 shares of Common Stock
upon election to the Board of Directors and, while serving as a
director, will receive additional option grants to purchase 1,500
shares of Common Stock as of the date of each subsequent annual
meeting of shareholders. All directors of the Company are
entitled to a discount on their clothing purchases off the retail
price before markdowns and promotional discounts.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who
beneficially own more than 10% of the Company's Common Stock to
file with the Securities and Exchange Commission and the American
Stock Exchange initial reports of ownership and reports of
changes in ownership of Common Stock of the Company. Officers,
directors and greater than 10% beneficial owners are required by
regulations of the Securities and Exchange Commission to furnish
to the Company copies of all Section 16(a) reports they file.
Based solely on review of the copies of such reports furnished to
the Company and written representations that no other reports
were required during the fiscal year ended February 3, 1996, to
the Company's knowledge all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10%
beneficial owners during the fiscal year ended February 3, 1996
were complied with on a timely basis.
PROPOSAL 2:
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has approved and recommends that the
shareholders adopt an amendment to Article FOURTH of the
Company's Certificate of Incorporation which would increase the
number of authorized shares of Common Stock from 7,500,000 shares
to 25,000,000 shares (the "Authorized Stock Amendment"). The
Authorized Stock Amendment will not increase or otherwise affect
the number of authorized shares of preferred stock which may be
issued by the Company.
As of May 1, 1996, in addition to 4,965,245 shares of Common
Stock issued and outstanding, an additional 996,248 shares of
Common Stock were reserved for issuance pursuant to awards
granted or that may be granted in the future under the Company's
1993 Performance and Equity Incentive Plan, 152,877 shares were
reserved insurance pursuant to the Company's 1993 Employee Stock
Purchase Plan and 460,000 shares were reserved for issuance in
connection with a public offering of the Company's Common Stock
pursuant to a Registration Statement on Form S-2 filed with the
Securities and Exchange Commission. Therefore, as of May 1,
1996, there were a total of 6,574,370 shares of Common Stock
either issued and outstanding or reserved for issuance out of a
total of 7,500,000 authorized shares of Common Stock, leaving a
total of 925,630 shares of Common Stock remaining available for
subsequent issuance or reservation. There are currently no
shares of preferred stock outstanding.
The authorization of a greater number of shares than is currently
authorized by the Certificate of Incorporation will not
materially affect any substantive rights, powers or privileges of
holders of Common Stock. The Common Stock does not have
preemptive rights.
The Board of Directors believes that the increased number of
authorized shares of Common Stock contemplated by the proposed
Authorized Stock Amendment is desirable to make additional
unreserved share of Common Stock available for issuance or
reservation without further shareholder authorization, except as
may be required by law or by the rules of the American Stock
Exchange. The Company does not have any current plans or
intentions to issue any of the additional authorized shares of
Common Stock or any preferred stock. However, the Board of
Directors believes that having such additional shares authorized
and available for issuance or reservation will allow the Company
to have greater flexibility in considering potential future
actions involving the issuance of stock, including public or
private sales of Common Stock, business combinations, and stock
dividends or splits. If additional shares are available,
transactions dependent upon the issuance of additional shares
would be less likely to be undermined by delays and uncertainties
occasioned by the need to obtain shareholder authorization prior
to the consummation of such transactions. The availability of
additional shares for issuance without subsequent shareholder
authorization would also permit the Company to avoid expenses
which may be incurred in obtaining shareholder authorization
through special shareholders meetings in the future.
The Authorized Stock Amendment is not being advanced as a result
of any known effort by any party to accumulate the Company's
securities or to obtain control of the Company by means of a
merger, tender offer, proxy solicitation in opposition to
management or otherwise, and is not viewed as part of an "anti-
takeover" strategy. However, the authorization to issue the
additional shares of Common Stock would nonetheless provide
management with additional capacity, among other things, to
frustrate the efforts of parties seeking to obtain Board
representation or a controlling interest in the Company through
the issuance by existing management of securities to others who
are friendly or desirable to management. Accordingly, the
Authorized Stock Amendment would strengthen the position of
management and might make the removal of management more
difficult, even if such removal would be generally beneficial to
the Company's shareholders.
The issuance of additional shares of Common Stock may have a
dilutive effect on earnings per share and on the equity and
voting power of existing holders of Common Stock. It may also
adversely affect the market price of the Common Stock. Although
there can be no assurances, in the event additional shares are
issued in transactions whereby favorable business opportunities
are provided or whereby additional working capital is obtained,
the market price of the Common Stock could be favorably affected.
In order for the Authorized Stock Amendment to be approved, the
holders of a majority of the shares entitled to be voted at the
Annual Meeting must vote "for" the Authorized Stock Amendment.
See "Voting."
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AUTHORIZED STOCK AMENDMENT.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
The executive officers of the Company are as follows:
NAME PRINCIPAL POSITION
Harold G. Powell Chairman of the Board of Directors
Rebecca Powell Casey Chief Executive Officer
H. Rainey Powell President and Chief Operating and Financial Officer
Kenneth C. Row Executive Vice President
Janet F. Firth Vice President - Ladies Merchandise Manager
Linda L. Daugherty Vice President and Controller
Jeffrey T. Morrell Vice President - Stores
The executive officers of the Company are elected by the Board of
Directors and serve as its discretion. The following is a brief
description of the business background of each of the executive
officers who are not also directors of the Company. For
biographical information concerning Harold G. Powell, Rebecca
Powell Casey, H. Rainey Powell, and Kenneth C. Row, see "Election
of Directors - Nominees."
Janet F. Firth has served as Vice President - Ladies Merchandise
Manager of the Company since 1987. Prior to that time, Ms. Firth
was employed by the Company and its predecessors in various
managerial capacities since 1984.
Linda L. Daugherty has served as Vice President and Controller of
the Company since 1994. Prior to that time, Ms. Daugherty was
employed by the Company and its predecessors in various
managerial capacities since 1980.
Jeffrey T. Morrell has served as Vice President - Stores of the
Company since 1993. Prior to that time, Mr. Morrell was employed
in various managerial capacities since 1990.
Executive Compensation
The following table sets forth information with respect to the
chief executive officer and the other most highly compensated
executive officers of the Company and its subsidiaries as to whom
the total annual salary and bonuses for the year ended February
3, 1996 exceeded $100,000 (hereafter referred to as the "named
executive officers").
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Fiscal Year Annual Compensation Securities Underlying All Other
Name and Principal Position Ended Salary(1) Bonus Options (#)(2) Compensation(3)
<S> <C> <C> <C> <C> <C>
Rebecca Powell Casey 1996 $220,000 $90,000 - $ 1,990
Chief Executive Officer 1995 180,000 70,000 49,823 1,416
1994 180,000 30,292 - 1,583
Harold G. Powell 1996 $180,000 $40,000 - $27,120
Chairman of the Board 1995 180,000 29,000 47,798 26,110
1994 180,000 21,748 - 26,385
H. Rainey Powell 1996 $160,000 $65,000 - $ 2,855
President and Chief Operating 1995 140,000 48,000 39,242 1,898
and Financial Officer 1994 140,000 25,632 - 843
Kenneth C. Row 1996 $125,000 $24,000(4) - $ 719
Executive Vice President 1995 100,000 26,000(4) 27,720 752
1994 100,000 17,000 1,271 738
Janet F. Firth 1996 $91,500 $17,000(4) - $ 2,949
Vice President - Ladies' 1995 83,500 11,000 20,375 2,249
Merchandise Manager 1994 83,500 8,000 1,271 1,671
(1) Personal benefits provided by the Company to each of the
named executive officers do not exceed 10% of total annual salary
and bonus reported for the named executive officer and are not
included in this total.
(2) Reflects adjustments made to the number of securities
underlying the options pursuant to the antidilution provisions of
the applicable option agreements as a result of a five percent
and a ten percent stock dividend paid by the Company subsequent
to the date of grant of the options.
(3) Includes contributions made by the Company to the Tax Savings
Retirement Thrift Plan and Employee Stock Purchase Plan on behalf
of the named executive officer and deferred compensation of
$25,000 per year payable to Harold G. Powell.
(4) Includes bonus awards of Common Stock granted to the named
executive officer pursuant to the Company's 1993 Performance and
Equity Incentive Plan. The stock bonuses paid to Kenneth C. Row
in fiscal 1995 and 1996 consisted of shares having a market value
on the date of the award of $2,000 and $4,000, respectively. The
stock bonus paid to Janet F. Firth during fiscal 1996 consisted
of shares having a market value of $3,000 on the date of the
award.
</TABLE>
No stock options were granted by the Company to the named
executive officers during the fiscal year ended February 3, 1996.
The following table provides information with respect to the
named executive officers concerning the exercise of options
during the fiscal year ended February 3, 1996 and unexercised
options held as of February 3, 1996.
<TABLE>
Option Exercises And Year-End Valuation Table
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options At
Options at Fiscal Year-End(#) Fiscal Year End ($)
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Rebecca P. Casey - - 19,928 29,895 53,468 $80,210
Harold G. Powell - - 19,118 28,680 51,295 76,951
H. Rainey Powell - - 15,698 23,544 42,118 63,170
Kenneth C. Row - - 6,815 22,176 23,888 68,868
Janet F. Firth - - 5,345 16,301 19,324 50,623
</TABLE>
Employment Agreements
The Company has an employment agreement with Harold G. Powell,
the Chairman of the Board of the Company, which continues until
January 31, 1998. Pursuant to this agreement, Mr. Powell is paid
an annual salary of $180,000 plus a performance bonus in an
annual amount to be determined by the Compensation Committee
after the results of operations covered by the employment
contract have been calculated and deferred annual compensation of
$25,000. Subject to certain terms, at the end of the agreement,
Mr. Powell's employment will be converted to that of part-time
consultant for a period of ten years at an annual salary of
$50,000.
The Company also has employment agreements with Rebecca Powell
Casey, the Chief Executive Officer of the Company, and H. Rainey
Powell, the President and Chief Operating and Financial Officer
of the Company, which terminate on January 31, 1998. Rebecca
Powell Casey's agreement provides annual compensation of $220,000
plus an annual performance bonus. H. Rainey Powell's provides
for annual compensation of $160,000 plus an annual performance
bonus. Neither of these contracts provide for deferred
compensation or part-time consultant positions after the
termination dates of such contracts.
Compensation Committee Interlocks and Insider Participation
During fiscal 1996, the Compensation Committee of the Board of
Directors was composed of three non-employee directors, James R.
Agar, Gary C. Rawlinson and William F. Weitzel. None of the
members of the Compensation Committee has ever been an officer of
the Company or its subsidiaries. During fiscal 1996, none of the
Company's executive officers served as a director or member of
the compensation committee of another entity in which any member
of the Company's Compensation Committee or any other director of
the Company was an executive officer.
Gary C. Rawlinson, a director of the Company and a member of the
Compensation Committee, is a shareholder - director of the law
firm of Crowe & Dunlevy, A Professional Corporation, which
provides legal services to the Company.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the
"Committee") establishes the general compensation policies of the
Company, including specific compensation levels for the Company's
executive officers, and administers the Company's 1993
Performance and Equity Incentive Plan and other employee
incentive plans. The components of the Company's executive
officer compensation program and the basis on which fiscal year
1996 compensation determinations were made by the Compensation
Committee with respect to the executive officers of the Company,
including the named executive officers, are discussed below.
The Compensation Committee generally believes that the total cash
compensation of its executive officers should be similar to the
total cash compensation of similarly-situated executives of peer
group public companies within the apparel and accessories stores
industry. Further, a significant portion of the complete
compensation package should be tied to the Company's success in
achieving profit, cash flow, and Company growth.
A competitive base salary is considered vital to support the
continuity of management. The Compensation Committee has
established the base salaries of the Company's executive officers
based in part on a survey of executive compensation paid by local
and national retail companies. This survey was compiled for the
Compensation Committee by The Wyatt Company and others in fiscal
1995. The Compensation Committee also considers the experience,
capability and overall performance of the each executive officer,
as well as the competitive marketplace for executive talent, in
establishing base salaries.
The Compensation Committee's goal in establishing the composition
and amount of executive compensations is to motivate, reward and
retain creative management talent which will accomplish the
Company's objectives of increasing the Company's profitability
and the basis for the value of its Common Stock. During the
fiscal year ended February 3, 1996, this goal was fostered
through awards to certain of its named executive officers of base
salary increases and annual cash and stock bonuses as reflected
in the Summary Compensation Table set forth elsewhere herein.
As discussed elsewhere herein, the Company has employment
agreements with its three primary executive officers Harold G.
Powell, Rebecca Powell Casey and H. Rainey Powell. These
agreements were entered into effective as of the beginning of
fiscal 1996 and establish their base salaries as constant through
the duration of the agreements which terminate on January 31,
1998. The base salary of the other named executive officers was
established based primarily upon analysis of the surveys
described above and the Company's historical profitability. The
Company believes that the officers' cash bonuses should be tied
to the Company's success in achieving near-term results. Cash
bonuses are based on a bonus pool determined by the Compensation
Committee. The Compensation Committee's primary goal in
determining annual cash bonus awards is to tie bonus awards to
the performance of the Company.
The Committee intends to reward long-term strategic management
practices and enhancement of shareholder value through the award
of stock options and other stock based awards under the Company's
1993 Performance and Equity Incentive Plan. The objective of
equity based compensation is to more closely align the interest
of the executive officers with those of the shareholders. The
ultimate value of the awards will depend on the continual success
of the Company, thereby creating a continuing incentive for
executive officers to perform long after the initial grant. No
stock options were awarded to executive officers during the
fiscal year ended February 3, 1996. However, the Compensation
Committee believes that the total executive compensation in
future years will include equity-based incentive compensation,
such as stock options and stock bonuses.
We believe that the Company has an appropriate compensation
structure which properly rewards and motivates its executive
officers to build stockholder value.
William F. Weitzel, Chairman
James R. Agar
Gary C. Rawlinson
Shareholder Return Performance Graph
The following graph presented in accordance with the requirements
of the Securities and Exchange Commission shows the cumulative
total stockholder return on the Company's Common Stock over the
last five fiscal years as compared to the returns of the American
Stock Exchange Market Value Index (the "Broad Market Index") and
the peer group selected by the Company (the "Peer Group"). This
peer group includes The Gap, Inc., The Limited, Inc., Merry-Go-
Round and other apparel and accessories stores.
The graph assumes an investment of $100 at the beginning of the
five-year period on February 1, 1991, and quarterly reinvestments
of dividends.
Compare 5-year Cumulative Total Return
Among Harold's Stores, Inc. AMEX Market Index and MG Group Index
Fiscal Year Ending
Company/Index 1991 1992 1993 1994 1994 1996
Harold's Stores, Inc. 100 139.29 220.02 247.52 330.03 400.32
Peer Group 100 161.71 154.43 132.05 106.54 109.78
Broad Market Index 100 123.29 121.08 144.58 126.18 161.74
RELATED PARTY TRANSACTIONS
The Company leases its Norman, Oklahoma store and certain related
facilities from a corporation, the shareholders of which consist
of Harold G. Powell and his spouse. The lease has a term of 12
years ending on April 30, 2008 and provides for annual rental
equal to 4% of gross sales with no fixed minimum rental, plus
utilities and certain property taxes. Prior to May 1, 1996, the
Company leased these facilities under several related leases
from a corporation, the shareholders of which include the wife
of Harold G. Powell, and from certain trusts, the beneficiaries
of which are Mr. Powell, his children and other members of his
family. These prior leases were restructured effective May 1, 1996
following the death of the mother of Harold G. Powell into the
master lease described above. The prior leases contained "percentage
rent" provisions similar to the provision described above in
connection with the current master lease, and the restructuring did
not result in any increase in the percentage of gross sales payable
by the Company as rent. During the fiscal year ended February 3, 1996,
the Company made aggregate rental payments of approximately $140,000,
pursuant to the prior leases.
The Company leases a 10,000 square foot office building used as a
men's and ladies' buying office in Dallas, Texas, and a warehouse
and distribution facility located in Norman, Oklahoma. The
lessors of these facilities are two limited partnerships whose
partners are Michael T. Casey, Rebecca Powell Casey, Lisa Powell
Hunt, Harold G. Powell and H. Rainey Powell, all of whom are
shareholders and directors of the Company. The term of the
warehouse and distribution facilities lease is 10 years
commencing December 1, 1992. Rent payments are $64,000 per year
payable in monthly installments plus utilities and property
taxes. The buying office lease was amended and restated effective
April 1, 1996, among other things, to extend the term of the
lease in order to ensure the long-term availability of the
facilities on financial terms deemed acceptable by the Company.
The term of the amended and restated lease is 16 years commencing
April 1, 1996, resulting in an extension of approximately 11
years from the initial term of the lease. Lease payments under
the amended and restated lease will be $158,000 per year payable
in monthly installments, plus utilities and property taxes,
through March 31, 2000. This amount equals the annual rent that
would have been payable by the Company through the original term
of the lease prior to its amendment and restatement. After March
31, 2000, annual rental payments will increase according to a
fixed schedule set forth in the lease. During the fiscal year
ended February 3, 1996, the Company made aggregate rental
payments of $158,000 pursuant to the buying office lease.
In the opinion of management, the terms of the lease agreements
are fair and reasonable and at least as favorable to the Company
as would be reasonably expected from an unrelated third party
operating properties of equal quality in similar locations at the
time of their execution. The above lease agreements were
approved by the Special Real Estate Committee, comprised of three
outside directors, and the Board of Directors, of the Company
prior to the execution of such leases.
Michael T. Casey, a director of the Company, provided real estate
consulting services to the Company during the preceding fiscal
year for which he was paid $46,500. Such consulting services
included the evaluation of perspective new retail store locations
and lease negotiation.
VOTING
The election of each director at the Annual Meeting will be by
plurality vote. The affirmative vote of the holders of a
majority of the Common Stock entitled to vote at the Annual
Meeting will be required to approve the proposed Authorized Stock
Amendment. Any other matters properly brought before the Annual
Meeting will be decided by a majority of the votes cast on the
matter, unless otherwise required by law.
The office of the Company's Secretary appoints an inspector of
election to tabulate all votes and to certify the results of all
matters voted upon at the Annual Meeting. Neither the corporate
law of the State of Oklahoma, the state in which the Company is
incorporated, nor the Company's Certificate of Incorporation or
Bylaws have any specific provisions regarding the treatment of
abstentions and broker non-votes. It is the Company's policy to
count abstentions or broker non-votes for the purpose of
determining the presence of a quorum at the meeting. Abstentions
will be treated as shares represented at the Annual Meeting for
determining results on actions requiring a majority vote but will
not be considered in determining results of plurality votes.
Shares represented by proxies returned by brokers where the
broker's discretionary authority is limited by stock exchange
rules will be treated as represented at the Annual Meeting only
as to such matter or matters voted on in the proxy. Shares
represented by limited proxies will be treated as represented at
the meeting only as to such matter or matters for which authority
is granted in the limited proxy.
Because directors are elected by a plurality vote rather than a
majority of the shares entitled to vote or a majority of the
shares present in person or represented by proxy at the Annual
Meeting, proxies marked "withhold authority" with respect to any
one or more nominees will not affect the outcome of the nominee's
election unless the nominee receives no affirmative votes or
unless other candidates are nominated for election as directors.
However, since the approval of the Authorized Stock Amendment
requires the affirmative vote of the holders of a majority of the
shares entitled to vote at the Annual Meeting, the failure to
return a proxy or vote at the Annual Meeting or the return of a
proxy marked "abstain" with respect to the Authorized Stock
Amendment will be the same as a negative vote.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors, as recommended by the Audit Committee,
has selected KPMG Peat Marwick LLP to serve as the Company's
independent certified public accountants for the fiscal year
ending February 1, 1997. They have been the auditors of the
accounts of the Company since 1987. Representatives of KPMG Peat
Marwick LLP are expected to be present at the Annual Meeting,
with the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
The Board of Directors will consider proposals of shareholders
intended to be presented for action at the Annual Meeting of
Shareholders. According to the rules of the Securities and
Exchange Commission, such proposals shall be included in the
Company's Proxy Statement if they are received in a timely manner
and if certain requirements are met. For a shareholder proposal
to be included in the Company's Proxy Statement relating to the
1997 Annual Shareholders' Meeting, a written proposal complying
with the requirements established by the Securities and Exchange
Commission must be received at the Company's principal executive
offices located at 765 Asp, Norman, Oklahoma 73069 no later than
January 30, 1997.
OTHER MATTERS
The Company does not know of any matters to be presented for
action at the meeting other than those listed in the Notice of
Meeting and referred to herein. If any other matters properly
come before the Annual Meeting, it is intended that the proxy
solicited hereby will be voted in accordance with the
recommendation of the Board of Directors.
Copies of the Annual Report of Harold's Stores, Inc. to the
Securities and Exchange Commission on Form 10-K may be obtained,
without charge to the shareholders, by writing Harold's Stores,
Inc., Shareholder Relations, Post Office Box 2970, Norman,
Oklahoma 73070-2970.
FRONT
PROXY HAROLD'S STORES, INC.
765 Asp Avenue, Norman, Oklahoma 73069
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF HAROLD'S STORES, INC.
The undersigned hereby appoints H. Rainey Powell and Linda
Daugherty, or any one of them, each with the power to appoint his
or her substitute, as proxies, and hereby appoints and authorizes
them to represent and vote as designated below, all the shares of
Common Stock, held of record by the undersigned on May 1, 1996,
at the Annual Meeting of Shareholders of Harold's Stores, Inc.
(the "Company") to be held at the Holiday Inn, 1000 N. Interstate
Drive, Norman, Oklahoma, at 2:00 p.m. on Friday, June 28, 1996,
and at any adjournment thereof.
1. ELECTION OF DIRECTORS
________FOR all nominees _____WITHHOLD AUTHORITY
listed below to vote for all nominees
(except as marked to below
the contrary below)
Harold G. Powell, Michael T. Casey, Rebecca Powell Casey,
H. Rainey Powell, Gary C. Rawlinson, Lisa Powell Hunt,
James R. Agar, William F. Weitzel, Kenneth C. Row,
Robert B. Cullum, Jr., W. Howard Lester
2. Proposal to amend the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock.
____FOR _____AGAINST ____ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or
any adjournment thereof.
BACK
IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED IN ITEM 1 AND FOR THE PROPOSAL DESCRIBED
IN ITEM 2.
Please sign exactly as name appears below.
When shares are held as joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee, or
guardian, please give full titles as such.
If a corporation, please sign full corporate
name by President or other authorized
officer. If a partnership, please sign
partnership name by authorized person.
Date:__________________________, 1996
___________________________Signature
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
APPENDIX TO PROXY STATEMENT OF HAROLD'S STORES, INC.
CONTAINING SUPPLEMENTAL INFORMATION REQUIRED TO BE
PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION
The following is information required to be provided to the
Securities and Exchange Commission in connection with the
Definitive Proxy Materials of Harold's Stores, Inc., (the
"Company") in connection with the Company's 1996 Annual
Meeting of Shareholders. This information is not deemed to
be a part of the Proxy Statement and will not be provided to
shareholders in connection with the Proxy Statement.
1. The Company's definitive Proxy Materials were distributed
to the shareholders on and after May 30, 1996.
