<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BROOKSTONE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE>
BROOKSTONE, INC.
17 RIVERSIDE STREET
NASHUA, NEW HAMPSHIRE 03062
May 15, 1998
Dear Stockholder:
We cordially invite you to attend our 1998 Annual Meeting of Stockholders,
which will be held at 9:30 a.m. (local time) on June 16, 1998 at the
BankBoston Conference Center, 100 Federal Street, Boston, Massachusetts.
Details of business to be conducted at the Annual Meeting of Stockholders
are given in the attached Notice of Annual Meeting and proxy statement. Please
read the proxy statement and complete, sign and return your proxy promptly in
the enclosed envelope.
We hope you will join us on June 16th for our annual meeting, but we know
that not every stockholder will be able to do so. Whether or not you plan to
attend, please return your signed proxy as soon as possible.
Sincerely,
/s/ Michael F. Anthony
MICHAEL F. ANTHONY
President and Chief
Executive Officer
<PAGE>
BROOKSTONE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 16, 1998
Notice is hereby given that the Annual Meeting of Stockholders of
Brookstone, Inc., a Delaware corporation, will be held at BankBoston, 100
Federal Street, Boston, Massachusetts on June 16, 1998 at 9:30 a.m. (local
time) for the following purposes:
1. To elect six directors to serve until the 1999 Annual Meeting of
Stockholders or until their respective successors shall be elected or
qualified;
2. To ratify the appointment of Price Waterhouse LLP as the independent
accountants to examine the financial statements of the Company and its
subsidiaries for the fiscal year ending January 30, 1999; and
3. To transact such other business as may properly come before the meeting
and any and all adjourned sessions thereof.
Only stockholders of record at the close of business on May 12, 1998 are
entitled to notice of and to vote at the Annual Meeting and any and all
adjourned sessions thereof. A list of stockholders entitled to vote at the
meeting will be open to examination by stockholders at the meeting and during
normal business hours from June 9, 1998 to the date of the meeting at the
offices of Ropes & Gray, One International Place, Boston, Massachusetts 02110.
By Order of the Board of Directors
/s/ Philip W. Roizin
PHILIP W. ROIZIN
Executive Vice President, Finance
and Administration, Treasurer and
Secretary
Nashua, New Hampshire
May 15, 1998
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
<PAGE>
BROOKSTONE, INC.
----------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 16, 1998
----------------
PROXY STATEMENT
The enclosed form of proxy is solicited on behalf of the Board of Directors
of Brookstone, Inc., a Delaware corporation (the "Company"), for use at the
1998 Annual Meeting of Stockholders (the "Annual Meeting") to be held at
BankBoston, 100 Federal Street, Boston, Massachusetts, on June 16, 1998 at
9:30 a.m. (local time) and at any and all adjourned sessions thereof. A proxy
may be revoked by a stockholder, at any time before it is voted, (i) by
returning to the Company another properly signed proxy bearing a later date,
(ii) by otherwise delivering a written revocation to the Secretary of the
Company, or (iii) by attending the Annual Meeting or any adjourned session
thereof and voting the shares covered by the proxy in person. Shares
represented by the enclosed form of proxy properly executed and returned, and
not revoked, will be voted at the Annual Meeting.
The expense of soliciting proxies will be borne by the Company. In addition
to the solicitation of proxies by use of the mails, the Company may solicit
proxies by officers, directors and regular employees of the Company in person
or by telephone or telegraph. Any officers and regular employees of the
Company who engage in any such solicitation will receive no compensation in
addition to their regular salaries. The Company will also reimburse brokers
and other persons for their reasonable charges and expenses in forwarding
soliciting materials to their principals.
In the absence of contrary instructions, the persons named as proxies will
vote for (i) the election of the nominees for director named below and (ii)
the ratification of the appointment of Price Waterhouse LLP as the independent
accountants to examine the financial statements of the Company and its
subsidiaries for the fiscal year ending January 30, 1999. The holders of
record of shares of the common stock, $.001 par value, of the Company (the
"Common Stock") at the close of business on May 12, 1998 are entitled to
receive notice of and to vote at the Annual Meeting. Each such share of Common
Stock is entitled to one vote on each matter to come before the Annual
Meeting. As of May 1, 1998, the Company had issued and outstanding 7,935,884
shares of Common Stock held by 210 holders of record.
Consistent with state law and the Company's by-laws, a majority of the
shares entitled to vote on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Annual Meeting will be counted by persons appointed
by the Company to act as tellers for the meeting. The six nominees who receive
the greatest number of votes properly cast for the election of directors will
be elected. An affirmative vote of a majority of votes properly cast is
required to ratify the appointment of Price Waterhouse LLP as the Company's
independent accountants for the fiscal year ending January 30, 1999. The
tellers will count the total number of votes cast "for" such ratification for
purposes of determining whether sufficient affirmative votes have been cast.
The tellers will count shares represented by proxies that withhold authority
to vote for a nominee for election as a director or that reflect abstentions
and "broker non-votes" (i.e., shares represented at the meeting held by
brokers or nominees as to which (i) instructions have not been received from
the beneficial owners or persons entitled to vote and (ii) the broker or
nominee does not have the discretionary voting power on a particular matter)
only as shares that are present and entitled to vote on the matter for
purposes of determining the presence of a quorum. Neither abstentions nor
broker non-votes will be counted as votes properly cast with regard to the
matter. Accordingly, such abstentions and broker non-votes will have no effect
on the outcome of voting on the election of directors or the ratification of
the appointment of independent accountants.
It is expected that this Proxy Statement and the enclosed form of proxy will
be mailed to stockholders commencing on or about May 15, 1998.
The Annual Report of the Company, including consolidated financial
statements for the fiscal year ended January 31, 1998 ("Fiscal 1997"), is
being mailed to the Company's stockholders with this Proxy Statement.
<PAGE>
ELECTION OF DIRECTORS
Unless otherwise instructed, the enclosed proxy will be voted to elect the
persons named below as directors for a term of one year expiring at the 1999
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualified. It is expected that each nominee will be able to serve,
but the proxies reserve discretion to vote or refrain from voting for a
substitute nominee if a nominee is unable to serve. Each of the following
nominees currently serves as a director of the Company. The nominees are as
follows:
NOMINEES AS DIRECTORS
Merwin F. Kaminstein, 63
Chairman of the Board
Mr. Kaminstein has been Chairman of the Board of Directors since April 1990.
From April 1990 until September 1995, Mr. Kaminstein also served as Chief
Executive Officer of the Company. From March 1988 until March 1990, he was an
independent consultant and partner at The Pyramid Companies, a retail real
estate development company. Mr. Kaminstein was President of J. Bildner & Sons,
Inc., a specialty foods retailer, from July 1987 until February 1988. From
1984 until 1987, Mr. Kaminstein was President of the Rich's department store
division of Federated Department Stores, Inc. He was President of the Filene's
and Filene's Basement department store divisions of Federated Department
Stores, Inc. from 1979 until 1984, President of the Jordan Marsh department
store division of Allied Department Stores, Inc. from 1976 until 1979, and
President of the Donaldson's department store division of Allied Department
Stores, Inc. from 1971 until 1976. Mr. Kaminstein has served as a director for
Domain, Inc., a privately-held home furnishings specialty retailer and for
Weiner's Stores, a department store chain.
Michael F. Anthony, 43
Director, President and Chief Executive Officer
Mr. Anthony has been President and Chief Executive Officer of the Company
since September 1995. From October 1994 until he assumed his current position,
Mr. Anthony served as President and Chief Operating Officer of the Company.
From 1989 to October 1994 he held various senior executive positions with
Lechter's, Inc., a nationwide chain of specialty housewares stores, including
President in 1994, Executive Vice President from 1993 to 1994 and Vice
President/General Merchandise Manager from 1989 to 1993. From 1978 to 1988 he
was with Gold Circle, which at the time was a division of Federated Department
stores, where he held various merchandising positions, including Divisional
Vice President/Divisional Merchandise Manager from February 1986 to 1989.
Mone Anathan, III, 59
Director
Mr. Anathan has been a director of the Company since December 1989. From
July 1988 through June 1997, he served as President, Treasurer and a director
of Filene's Basement Corp., an off-price specialty apparel chain. Since June
1997, he has served Filene's Basement Corp. in the capacity of Vice Chairman
of the Board of Directors and Chairman of the Executive Committee. He served
as President of the Filene's Basement division of Federated Department Stores,
Inc. from February 1984 until Filene's Basement was purchased from Federated
Department Stores, Inc. in a management-led buyout in July 1988. Mr. Anathan
is a director of Beth Israel Hospital and Harvard Pilgrim Health Care, a
health maintenance organization.
Michael L. Glazer, 50
Director
Mr. Glazer has served as President of Consolidated Stores Corporation, a
leading value retailer specializing in close-out merchandise operating
nationwide, since May 1995 and as a member of its board of directors since
June 1991. In addition to this position, Mr. Glazer has served as Chief
Executive Officer of Consolidated's toy
2
<PAGE>
division, KB Toys, the nation's largest mall-based toy retailer, since May
1996. From September 1990 to January 1995, he served as President of The
Bombay Company, Inc., a specialty retailer operating stores throughout the
United States and Canada.
Adam Kirsch, 36
Director
Adam Kirsch has been a director of the Company since August 1991. Mr. Kirsch
has been a managing director of Bain Capital, Inc. a private venture capital
firm, since April 1993, and a general partner of Bain Venture Capital, a
California Limited Partnership ("BVC") since 1990. BVC serves as the general
partner of an investment partnership which owns Common Stock of the Company.
See "Security Ownership of Certain Beneficial Owners and Management" below.
From April 1987 until June 1990, he was a principal with BVC. He also serves
as a director of each of Wesley Jessen VisionCare, Inc., a manufacturer of
contact lenses, Therma-Wave, Inc. a manufacturer and marketer of semi-
conductor capital equipment and Diagnostics Holdings, Inc., a manufacturer and
marketer of in vitro diagnostic products and services to clinical laboratories
and as a director of a number of private companies.
Robert F. White, 41
Director
Robert F. White has been a director of the Company since August 1991. Mr.
White has been a managing director of Bain Capital, Inc., a private venture
capital firm, since April 1993, and a general partner of BVC since 1987. BVC
serves as the general partner of an investment partnership which owns Common
Stock of the Company. See "Security Ownership of Certain Beneficial Owners and
Management" below. Mr. White currently serves on the board of directors of
Modus Media International Holdings, Inc., a global manufacturing and
fulfillment business, Corporate Software and Technology Holdings, Inc., a
software resale and technology services company, Totes/Isotoner, Inc., a
designer and manufacturer of men's and women's apparel and accessories and
serves as a director of a number of private companies.
BOARD RECOMMENDATION
The Board of Directors recommends a vote "FOR" each of the director nominees
listed above. Proxies solicited by the Board of Directors will be so voted
unless the stockholders specify otherwise.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of shares of Common Stock as of May 1, 1998 (unless
otherwise indicated) (i) individually by the chief executive officer and each
of the other officers (and a former officer) of the Company listed in the
Summary Compensation Table contained in this Proxy Statement (the "Named
Executive Officers") and by each director of the Company, (ii) by all
executive officers and directors of the Company as a group and (iii) by each
person known to the Company to be the beneficial owner of more than five
percent of the Company's outstanding Common Stock. Except as noted below, each
of the persons listed has sole investment and voting power with respect to the
shares indicated.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED (1)
-------------------------------------------
NUMBER OF PERCENTAGE OF
SHARES OUTSTANDING SHARES
-------------------- ----------------------
<S> <C> <C>
Bain Funds (2)................... 1,333,450 16.8%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Goldman, Sachs & Co.............. 894,200 11.3%
Goldman Sachs Small Cap Value
Fund (3)
85 Broad Street
New York, NY 10004
FMR Corp. (4).................... 880,704 11.1%
82 Devonshire Street
Boston, MA 02109
P.A.W. Capital Corp. (5)......... 594,000 7.5%
10 Glenville Street
Greenwich, CT 06831
EGS Associates, L.P. (6)......... 591,900 7.5%
Bev Partners, L.P.
Jonas Partners, L.P.
300 Park Avenue
New York, NY 10022
Dimensional Fund Advisors Inc.
(7)............................. 476,000 6.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Merwin F. Kaminstein*(8)......... 275,272 3.4%
Michael F. Anthony+*(9).......... 213,900 2.6%
Mone Anathan, III*(10)........... 18,058 **
Adam Kirsch*(11)................. 1,339,116 16.9%
Michael L. Glazer*(12)........... 8,666 **
Robert F. White*(11)............. 1,339,802 16.9%
Philip Roizin+(13)............... 6,250 **
Alexander M. Winiecki+(13)....... 41,992 **
Scott R. Ornstein+(14)........... 0 **
Steven C. Strickland+(13)........ 2,500 **
Jo-Ann B. Karalus+(13)........... 16,267 **
All directors and executive
officers as a group (11 persons)
(15)............................ 1,930,873 22.6%
</TABLE>
- --------
+ Named Executive Officer.
* Director of the Company.
** Less than 1% of the outstanding Common Stock.
4
<PAGE>
(1) Includes shares issuable pursuant to options held by the respective
person or group which are presently exercisable or may be exercised
within 60 days after the date of this Proxy Statement ("presently
exercisable stock options") as set forth below.
(2) Includes 1,245,845 shares held by Tyler Capital Fund, L.P. ("Tyler
Capital"), 83,262 shares held by BCIP Associates and 4,343 shares held by
BCIP Trust Associates, L.P. ("BCIP Trust Associates"; collectively with
Tyler Capital and BCIP Associates, the "Bain Funds").
(3) Reflects ownership based upon Amendment No. 6 to Schedule 13G dated
February 17, 1998 and filed with the Securities and Exchange Commission.
(4) Reflects ownership based upon an amended Schedule 13D dated April 13,
1998 and filed with the Securities and Exchange Commission.
(5) Reflects ownership based upon an amended Schedule 13D dated March 3, 1998
and filed with the Securities and Exchange Commission. Shares are held by
funds or managed accounts over which P.A.W. Capital Corp. or its majority
shareholder and President, Peter A. Wright, has investment discretion.
(6) Reflects ownership based upon Amendment No. 2 to Schedule D dated January
29, 1998 and filed with the Securities and Exchange Commission. Includes:
(1) 135,700 shares held by EGS Associates, L.P. ("EGS Associates"), (2)
353,137 shares purchased for discretionary accounts managed by EGS
Partners, L.L.C. ("EGS Partners"), (3) 52,450 shares held by Bev
Partners, L.P. ("Bev Partners"), (4) 38,513 shares held by Jonas
Partners, L.P. ("Jonas Partners") and (5) 12,100 shares held by Jonas
Gerstl, his wife and trusts for the benefit of their children. EGS
Associates, Bev Partners and Jonas Partners are each private investment
partnerships. EGS Partners is a registered investment adviser engaging in
the purchase and sale of securities for investment on behalf of
discretionary accounts. Mr. Gerstl is a general partner of EGS
Associates, Bev Associates and Jonas Partners and a member of EGS
Partners.
(7) Reflects ownership based upon an amended Schedule 13G dated February 6,
1998 and filed with the Securities and Exchange Commission. Dimensional
Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is
deemed to have beneficial ownership of 476,000 shares as of February 6,
1998, all of which are held in portfolios of DFA Investment Dimensions
Group Inc., a registered open-end investment company, or in a series of
the DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(8) Includes 260,272 shares issuable upon exercise of presently exercisable
stock options.
(9) Includes 212,500 shares issuable upon exercise of presently exercisable
stock options.
(10) Includes 9,058 shares issuable upon exercise of presently exercisable
stock options.
(11) Represents 1,333,450 shares held by the Bain Funds, 5,666 shares subject
to presently exercisable stock options held by each of Mr. White and Mr.
Kirsch directly and, in the case of Mr. White, 686 shares held by him
directly. See footnote (2). Bain Venture Capital, a California Limited
Partnership ("BVC") is the general partner of Tyler Capital. Each of
Messrs. Kirsch and White is a director of the Company and is a general
partner of each of BVC, BCIP Associates and BCIP Trust Associates, and,
as such, may be deemed to own beneficially shares owned by the Bain
Funds, although each of Messrs. White and Kirsch disclaim beneficial
ownership of any shares owned directly by the Bain Funds (other that
9,642 shares in the case of Mr. White and 7,416 shares in the case of Mr.
Kirsch). Messrs. Kirsch and White have the same address as the Bain
Funds.
(12) Includes 5,666 shares subject to a presently exercisable stock option.
(13) Consists solely of shares issuable upon exercise of presently exercisable
stock options.
(14) Mr. Ornstein resigned his position with the Company effective November 7,
1997. Effective May 11, 1998, Mr. Ornstein has rejoined the Company in
the capacity of Vice President, General Merchandise Manager.
(15) Includes 558,337 shares issuable upon exercise of presently exercisable
stock options. See also notes (8) through (14) to this table.
5
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
During Fiscal 1997, the Board of Directors of the Company held six meetings.
Each director attended at least 75 percent of the meetings of the Board and
the Committees of which he is a member except for Mr. Kirsch who attended 50
percent of the Board Meetings. The Company pays to all directors who are not
employees of the Company a quarterly fee of $2,500. Directors are reimbursed
for their reasonable expenses in attending Board and Committee meetings. In
addition to the quarterly fee, the 1996 Directors' Stock Option Plan (the
"Directors' Plan") provides for automatic grants of non-statutory stock
options to members of the Company's Board of Directors who are not employees
of the Company or any of its subsidiaries ("Eligible Directors"). The
Directors' Plan provides that (i) each person who was an Eligible Director on
the date of stockholder approval of the Directors' Plan (June 20, 1996) was
granted an option to acquire 10,000 shares of Common Stock, (ii) on the date
of his or her initial election or appointment to the Board, each person who
becomes an Eligible Director subsequent to the adoption of the Directors' Plan
will be granted an option to acquire 10,000 shares of Common Stock and (iii)
annually, on the day following the date of the Company's Annual Meeting of
Stockholders, each Eligible Director will be granted an option to acquire
2,000 shares of Common Stock.
The Board of Directors has a standing Audit Committee and a standing
Compensation Committee. The Board does not have a Nominating Committee.
The Audit Committee, which held one meeting during Fiscal 1997, reviews with
management and the independent public accountants the Company's annual
financial statements, the scope of the audit, any comments made by the
independent public accountants and such other matters as the Committee deems
appropriate. In addition, the Committee reviews the performance and retention
of the Company's independent accountants and reviews with management such
matters relating to compliance with corporate policies as the Committee deems
appropriate. Messrs. Anathan and White, neither of whom is an executive
officer or employee of the Company, served on the Audit Committee in Fiscal
1997.
The Compensation Committee, which held three meetings during Fiscal 1997,
administers the Company's stock option plans and cash bonus plan, reviews the
administration and performance of the Company's retirement plans and
recommends to the Board of Directors the compensation and other employment
terms of the Company's executive officers. Messrs. Anathan, Glazer and White,
none of whom is an executive officer or employee of the Company, served on the
Compensation Committee in Fiscal 1997.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information with respect to compensation paid
to or accrued on behalf of the Named Executive Officers for all services
rendered to the Company for Fiscal 1997, Fiscal 1996 and Fiscal 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION (3)
----------------------------------- ------------------
OTHER ANNUAL COMMON SHARES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION (2) UNDERLYING OPTIONS COMPENSATION (4)
- --------------------------- ----------- -------- --------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Michael F. Anthony...... Fiscal 1997 $400,000 $243,735 - 125,000 $4,455
President and Chief Fiscal 1996 $325,000 $ 42,269 $192,390(5) -- $4,133
Executive Officer Fiscal 1995 $325,314 $ 2,075 $ 58,418(6) 50,000 $2,374
Philip W. Roizin(7)..... Fiscal 1997 $210,000 $ 64,635 -- 30,000 $ 480
Executive Vice
President, Fiscal 1996 $ 31,231 $ 10,000 $ 47,219(8) 50,000 --
Finance and
Administration
Alexander M. Winiecki... Fiscal 1997 $200,000 $ 51,770 -- 25,000 $3,632
Senior Vice President, Fiscal 1996 $165,769 $ 14,297 -- 30,000(9) $3,224
Store Operations Fiscal 1995 $163,623 $ 901 -- -- $3,190
Steven C. Strickland.... Fiscal 1997 $160,000 $ 41,517 -- 25,000 $2,688
Vice President, Fiscal 1996 $135,000 $ 17,939 -- -- $ 235
Marketing Fiscal 1995 $ 55,000 $ 124 $ 46,044(10) 5,000 $ 95
Scott R. Ornstein(11)... Fiscal 1997 $130,000 $ 0 -- 30,000 $ 178
Vice President, Fiscal 1996 $140,000 $ 15,266 -- 5,000 $ 248
General Merchandise
Manager Fiscal 1995 $112,673 $ 13,930 $ 59,388(12) 20,000 $ 197
Jo-Ann B. Karalus....... Fiscal 1997 $150,000 $ 38,919 -- 15,000 $3,811
Vice President Fiscal 1996 $140,000 $ 11,796 -- 35,000(9) $2,676
Human Resources Fiscal 1995 $118,080 $ 651 -- -- $2,475
</TABLE>
- --------
(1) Payments made under the Company's Management Incentive Bonus Plan (the
"MIB Plan"), the principal performance-based cash compensation program
for executive officers of the Company, in respect of performance in
Fiscal 1997 and 1996 were, respectively, $240,000 and $39,684 to Mr.
Anthony; $63,000 and $0 to Mr. Roizin; $50,000 and $12,979 to Mr.
Winiecki; $40,000 and $16,875 to Mr. Strickland; $0 and $14,050 to Mr.
Ornstein; and $37,500 and $10,684 to Ms. Karalus. Mr. Roizin was paid a
one-time bonus of $10,000 in respect of Fiscal 1996. In addition, Mr.
Ornstein was paid a $13,500 performance bonus in Fiscal 1995. All other
amounts in this column for Fiscal 1997 and 1996 were paid to the Named
Executive Officer under the Company's Profit Sharing Plan, in which all
employees of the Company participate. Fiscal 1995 bonuses solely
represent the amount paid to the Named Executive Officer in respect of
the Profit Sharing Plan as no Named Executive Officer received a bonus
under the MIB Plan for Fiscal 1995.
(2) While each of the Named Executive Officers enjoys certain prerequisites,
such prerequisites did not, except as disclosed, exceed the lesser of
$50,000 or 10% of such officer's salary and bonus in each of the Fiscal
1997, Fiscal 1996 and Fiscal 1995.
(3) No other forms of Long Term Compensation were awarded to the Named
Executive Officers in Fiscal 1997, Fiscal 1996 and Fiscal 1995.
(4) For Fiscal 1997, Fiscal 1996 and Fiscal 1995, respectively, All Other
Compensation represents (i) the following dollar value of insurance
premiums paid by the Company with respect to term life insurance for the
benefit of each of the Named Executive Officers: Mr. Anthony--$2,590,
$2,335 and $2,269, Mr. Roizin--$480, $60 and $0, Mr. Winiecki--$1,232,
$974 and $940, Mr. Strickland--$288, $235 and $95, Mr. Ornstein--$178,
$248, and $197, Ms. Karalus--$1,411, $1,248 and $699, and (ii) the
following dollar value of contributions made by the Company to the
Company's defined contribution plan for the benefit of the Named
Executive Officers: Mr. Anthony--$1,865, $1,798 and $105, Mr. Roizin--$0,
$0 and $0, Mr. Winiecki--$2,400, $2,250 and $2,250, Mr. Strickland--
$2,400, $0 and $0, Mr. Ornstein--$0, $0 and $0, Ms. Karalus--$2,400,
$1,428 and $1,776.
7
<PAGE>
(5) Upon hiring Mr. Anthony in 1994, the Company loaned him $100,000 for the
purposes of assisting him in the relocation of his principal residence to
near the Company's headquarters in Nashua, New Hampshire. This loan did
not bear interest. In May 1996, the Company agreed to make Mr. Anthony
whole for the diminution in the value of his former residence incurred by
him at the time of his relocation to New Hampshire. To effect this
transaction, the Company (1) purchased Mr. Anthony's former residence
from him at the then-prevailing market rate, which was materially less
than the price at which Mr. Anthony had originally purchased it, (2)
forgave the $100,000 loan described above and (3) paid him an additional
amount equal to that amount which, when added to the $100,000 in loan
forgiveness, would provide him with the amount necessary to make him
whole on the loss. The Company subsequently sold Mr. Anthony's former
residence in an arms-length transaction to an un-affiliated third-party
in July 1996 at then-prevailing market rates.
(6) Includes a relocation allowance of $47,290 in Fiscal 1995.
(7) Mr. Roizin's employment with the Company commenced on December 9, 1996.
(8) Includes a relocation allowance of $39,719 in Fiscal 1996.
(9) On May 6, 1996, the Company amended 30,000 and 25,000 options held by Mr.
Winiecki and Ms. Karalus, respectively, to reduce the exercise price and
extend the vesting schedule
(10) Represents relocation expenses paid to Mr. Strickland beginning in 1995.
(11) Mr. Ornstein resigned his position with the Company effective November 7,
1997. Effective May 11, 1998, Mr. Ornstein has rejoined the Company in
the capacity of Vice President, General Merchandise Manager.
(12) Represents a relocation allowance of $29,388 and a payment in lieu of a
foregone bonus from a previous employer equal to $30,000.
The following table summarizes option grants during Fiscal 1997 to the Named
Executive Officers and the potential realizable value of such options
determined by formulas prescribed by the Securities and Exchange Commission.
The assumed rates of stock price appreciation are hypothetical; the actual
value of the options, if any, will depend on the future performance of the
Company's stock. No stock appreciation rights were granted during Fiscal 1997.
OPTION/SAR GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
POTENTIAL
REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATE OF
NUMBER OF OPTIONS STOCK PRICE APPRECIATION
SECURITIES GRANTED TO EXERCISE FOR OPTION TERM
UNDERLYING EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME OPTIONS (#) FISCAL YEAR (/SH) DATE 5% ($) 10% ($)
---- ---------- ------------ -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael F. Anthony...... 125,000(1) 35.3% $8.75 7/3/2007 $ 687,849 $ 1,743,153
Philip W. Roizin........ 30,000(1) 8.5% $8.75 7/3/2007 $ 165,083 $ 418,356
Alexander M. Winiecki... 25,000(1) 7.1% $8.75 7/3/2007 $ 137,569 $ 348,630
Steven C. Strickland.... 15,000(1) 4.2% $8.75 7/3/2007 $ 82,540 $ 209,178
Scott R. Ornstein(2).... 30,000(1) 8.5% $8.75 7/3/2007 $ 0 $ 0
Jo-Ann B. Karalus....... 15,000(1) 4.2% $8.75 7/3/2007 $ 82,541 $ 209,178
Steven C. Strickland.... 10,000(3) 1.7% $8.75 7/3/2007 $ 55,028 $ 139,452
</TABLE>
- --------
(1) One July 3, 1997, the Company granted pursuant to the 1992 Equity
Incentive Plan options to purchase up to 265,000 shares of the Company's
Common Stock to its executive officers. These options vest automatically
on July 3, 2002 or earlier if and when: (a) as to the first 20 percent of
each such grant, the closing market value of the Company's Common Stock
(the "market value") equals or exceeds $15 per share for 30 consecutive
trading days, (b) as to the second 30 percent of each such grant, the
market value equals or exceeds $20 per share for 30 consecutive trading
days and (c) as to the final 50 percent of each such grant, the market
value equals or exceeds $25 per share for 30 consecutive trading days.
(2) This option terminated in accordance with its terms upon Mr. Ornstein's
resignation from the Company.
(3) This option was granted on July 3, 1997 pursuant to the 1992 Equity
Incentive Plan and will become exercisable as follows: 2,500 shares on
July 3, 1998; 2,500 shares on July 3, 1999; 2,500 shares on July 3, 2000;
and 2,500 shares on July 3, 2001.
8
<PAGE>
The following table sets forth information with respect to (i) the exercise
of stock options by the Named Executive Officers during Fiscal 1997, (ii) the
number of unexercised options held by the Named Executive Officers as of
January 31, 1998 and (iii) the value of unexercised in-the-money options
(i.e., options for which the fair market value of the Common Stock ($11.875 at
January 30, 1998) exceeds the exercise price) as of January 31, 1998:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES ACQUIRED VALUE FEBRUARY 1, 1997 FEBRUARY 1, 1997
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Michael F. Anthony...... -- -- 212,500/212,500 $581,250/$646,875
Philip W. Roizin........ -- -- 6,250/ 73,750 $ 11,328/$173,046
Alexander M. Winiecki... -- -- 43,992/ 55,000 $506,180/$153,125
Steven C. Strickland.... -- -- 2,500/ 27,500 $ 9,687/$ 87,812
Scott R. Ornstein....... 11,250 $ 69,750 0/ 0 0/ 0
Jo-Ann B. Karalus....... 18,199 $163,505 5,434/ 47,500 $ 17,619/$128,125
</TABLE>
PENSION PLAN
The Company has a defined benefit Pension Plan qualified under Section
401(a) of the Internal Revenue code of 1986, as amended, for eligible
employees who have completed one year of service with 1,000 or more hours of
employment. In general, all employees of the Company are eligible to
participate, excluding (i) a director of the Company who is not employed by
the Company in any other capacity, (ii) any person whose compensation consists
of a retainer or a fee, and (iii) any person who is a nonresident alien. In
March 1998, the Board of Directors approved an amendment to the Pension Plan
such that no future benefits may accrue under the Plan beyond May 31, 1998. No
further years of service will be counted toward the calculation of benefits
and final average compensation rates will be curtailed as of May 31, 1998. See
"-- Report of the Compensation Committee."
The table below sets forth the estimated average annual benefits at normal
retirement to participants in the specified compensation and years-of-service
classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
COMPENSATION* 15 20 25 30 35
- ------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000................................ $23,723 $31,630 $39,538 $47,446 $52,717
150,000................................. $28,973 $38,630 $48,288 $57,946 $64,384
</TABLE>
- --------
* Based upon salary and bonuses.
Benefits under the Pension Plan are based upon years of credited service
(not in excess of 33 1/3 years) and final average compensation. A participant
earned one year of credited service for each year in which the participant
completed 1,000 or more hours of employment prior to May 31, 1998, and a
participant's final average compensation is the average of the participant's
highest five consecutive years' compensation during the participant's years of
employment completed prior to May 31, 1998. Compensation covered by the
Pension Plan for the Named Executive Officers generally corresponds with the
aggregate of base salary and bonus as reported in the Summary Compensation
Table above. For purposes of the Pension Plan, a participant's compensation is
capped at $150,000 (adjusted annually). Benefits shown are computed as a
straight life annuity with no deduction for Social Security benefits or other
offset amounts. A participant becomes vested under the Pension Plan once he or
she has earned five years of credited service.
9
<PAGE>
As of May 31, 1998, the day on which future benefits will cease to accrue,
the Named Executive Officers will have the following number of years of
credited service: Mr. Anthony--three years; Mr. Roizin--one year; Mr.
Winiecki--seven years, Mr. Strickland--two years; Mr. Ornstein--two years; and
Ms. Karalus--18 years.
EMPLOYMENT AGREEMENTS
Mr. Anthony has entered into an employment agreement with the Company
expiring upon the earliest to occur of his resignation, death, permanent
disability or incapacity or his termination by the Company with or without
cause. The agreement provides for an annual salary, participation in the MIB
Plan and any other performance based compensation programs available to the
Company's senior executives, and for certain fringe benefits, including
contributions for health and dental coverage, term life insurance in an amount
of at least $1,000,000, long term disability coverage, participation in the
Company's Pension Plan, and certain other benefits. The agreement provides
that if Mr. Anthony is terminated by the Company without cause (as defined) or
terminates his employment for good reason (as defined), Mr. Anthony is
entitled, subject to complying with certain confidentiality and noncompetition
obligations, to continued payment of his base salary and certain of his fringe
benefits until twelve months following termination of his employment, as well
as a pro rata bonus payment under the MIB Plan for the fiscal year in which
termination occurs based upon the number of days he was employed in such year.
Severance benefits are reduced by any amounts received by Mr. Anthony from
other employment during the severance period. If Mr. Anthony's employment
terminates because of his death, disability or incapacity, Mr. Anthony is
entitled to a pro rata bonus payment under the MIB Plan for the fiscal year in
which such termination occurs based upon the number of days he was employed in
such year and payments to which he is entitled under any other Company benefit
plans, including any long-term disability plan. The agreement also provides
that Mr. Anthony shall not disclose or use any confidential information of the
Company and not compete with the Company during the period of his employment
and for one year thereafter, unless Mr. Anthony's employment is terminated
without cause, in which case the noncompetition period ends upon Mr. Anthony's
termination. The agreement provides that Mr. Anthony will not recruit any
employee of the Company for employment in any other business until one year
after the termination of Mr. Anthony's employment with the Company.
Mr. Roizin and Mr. Winiecki are employed by the Company pursuant to
employment agreements providing for a base salary and participation in the MIB
Plan and various other employee benefit plans, including medical, vacation,
disability and pension. These agreements, and a Severance Agreement between
the Company and Ms. Karalus, provide for a severance benefit if the executive
is terminated for any reason other than cause consisting of base salary
continuation for 12 months following termination (subject to offset for income
earned from other employment or from self-employment).
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee is responsible for approving and recommending to
the Board of Directors the compensation of executive officers of the Company
and administers the Company's 1992 Equity Incentive Plan and Management
Incentive Bonus Plan. The Committee regularly reports on its activities to the
Board of Directors. The Committee was comprised in Fiscal 1997 of three
outside directors who are not officers or employees of the Company and who
were not eligible to participate in any of the plans or programs that the
Committee administers.
COMPENSATION PHILOSOPHY
The Company's executive compensation programs are based on the belief that
the interests of the Company's executive officers should be directly aligned
with those of the stockholders. The programs are strongly oriented towards a
pay-at-risk philosophy that ties a significant portion of overall compensation
to the financial performance of the Company. The Committee has established the
following principles to guide development of the Company's compensation
programs and to provide a framework for compensation decisions:
. provide a total compensation package that will attract the best talent to
the Company, motivate individuals to perform at their highest levels,
reward outstanding performance, and retain executives whose skills are
critical for building long-term stockholder value; and
. establish annual incentives for senior management that are directly tied
to the overall financial performance of the Company.
COMPENSATION PROGRAMS AND PRACTICES
Base Salary. Salaries of executive officers are established by the Committee
based on an executive officer's scope of responsibilities, level of
experience, individual performance and contribution to the business. From time
to time, the Company conducts salary surveys to determine whether the salaries
of its employees, including its executive officers, are in line with retailers
of similar size.
Management Incentive Bonus Plan. The Company has in effect a Management
Incentive Bonus Plan (the "MIB") under which executive officers and other key
management employees selected by the Board may receive incentive awards in the
form of cash bonuses and may under certain circumstances receive additional
awards in the form of MIB Options granted under the 1992 Equity Incentive
Plan. The purpose of the MIB Plan is to tie a significant portion of annual
pay directly to key financial results. Bonus awards are based on annual
performance criteria established by the Committee with respect to attainment
by the Company of specified levels of income from operations, as well as
performance criteria applied on an individual basis. The Company must attain a
threshold level of income from operations in order for MIB Plan participants
to be eligible for any bonus payments under the Plan. MIB Plan participants
earn awards defined in terms of percentages of their base salaries. These
percentages are determined by the Company's attainment of specified levels of
income from operations, with higher levels of income from operations resulting
in higher percentages. Unless altered by the Committee, participants
automatically receive 70% of the percentage of base salary so determined if
the Company attains the target level of income from operations and can earn
the remaining 30% based upon individual performance. Individual performance
criteria are determined by the Committee toward the beginning of each fiscal
year. In the case of executive officers other than the Chief Executive
Officer, individual performance criteria are determined after taking into
consideration the recommendation of the Chief Executive Officer.
In Fiscal 1997, the Company exceeded the threshold level of income from
operations established by the Committee in order for bonuses to be payable
under the Plan. As a result of applying the MIB Plan's formula, the Company
paid the following bonuses under the MIB Plan in respect of Fiscal 1997:
$240,000 to Mr. Anthony; $63,000 to Mr. Roizin; $50,000 to Mr. Winiecki;
$40,000 to Mr. Strickland and $37,500 to Ms. Karalus.
11
<PAGE>
The MIB Plan provides for annual limits on cash bonuses payable pursuant to
the MIB Plan equal to 75% of base salary, in the case of the Chief Executive
Officer, and 50% of base salary, in the case of other participants. Such
limitations may be changed by the Committee.
In addition, if an individual and the Company attain performance criteria in
excess of levels yielding the maximum cash bonus award payable to him or her
under the MIB Plan, the Company must either (i) award options under the 1992
Equity Incentive Plan to such individual to purchase that number of shares of
Common Stock equal to the additional bonus that would have been payable under
the MIB Plan absent the applicable cash bonus limit divided by the fair market
value of a share of Common Stock on the date of grant or (ii) award the
participant cash in an amount equal to the value of such options at the time
of grant (or a combination of such awards). In the case of options, the
aggregate of such awards for all participants can not exceed 50,000 shares
with respect to any one fiscal year. The exercise price of any such options
will be 100% (110% in the case of an incentive stock option granted to a 10%
shareholder) of the fair market value at the time of grant, and, unless
otherwise specified at the time of grant, such options become exercisable in
equal increments on each of the first through third anniversaries of the date
of grant. In Fiscal 1997, participants in the MIB Plan did not earn awards in
excess of their maximum cash bonuses.
Profit Sharing Plan and 401(k) Plan Contribution. The Company has in effect
a Profit Sharing Plan under which employees (including all of the Company's
executive officers) who are regularly scheduled to work 52 weeks per year and
have been employed by the Company for more than 90 days participate. In 1997,
employees of the Company (including the Company's executive officers) also
participated in discretionary Company contributions made to participants under
the Company's 401(k) plan. The Profit Sharing Plan provides for a bonus pool
equal to a specified percentage of net income established year-to-year by the
Board of Directors (5% for Fiscal 1997), less the amount paid by the Company
to employees as discretionary employer contributions under the 401(k) plan.
Participants receive an amount calculated on the basis of their W-2 (less
income attributable to stock option exercises, relocation expenses and the
value of Company-paid car leases) earnings equal to their pro rata share of
such bonus pool.
March 1998 Amendments to the Pension and 401(k) Plans. In March 1998, the
Company amended the Brookstone Pension Plan such that no future benefits would
accrue thereunder subsequent to May 31, 1998. Concurrently with the freezing
of the Pension Plan, the Company amended the 401(k) Plan to provide for a non-
discretionary employer matching contribution equal to four percent of each
participant's covered compensation (subject to the maximum salary level
prescribed in the Internal Revenue Code). Prior to this amendment, the Company
was permitted to make contributions to the 401(k) Plan accounts of its
employees in its sole discretion. The Company elected to make such a matching
contribution in each of the last three years in an amount equal to one-half of
the first three percent of each participant's covered compensation (subject to
the maximum salary level prescribed in the Internal Revenue Code). By freezing
the Pension Plan, making the matching contribution mandatory and increasing
such mandatory contribution to the 401(k) Plan, the Committee provided the
Company's employees with investment control over portable retirement benefits
that are not contingent upon extensive service periods. The Committee believes
that these changes have been, and will continue to be, received
enthusiastically by the Company's employees and will serve to aid in the
attraction and retention of qualified employees.
Stock Options. The Committee strongly believes that the interests of senior
management must be closely aligned with those of the stockholders. Long-term
incentives in the from of stock options provide a vehicle to reward executives
only if there is an increase in stockholder value. Stock options are granted
to executive officers and selected employees whose contributions and skills
are important to the long-term success of the Company
On July 3, 1997, the Committee granted options to purchase up to 265,000
shares of the Company's Common Stock to the Company's seven executive
officers. Each of these options vests automatically on July 3, 2002, or
earlier if and when: (a) as to the first 20 percent of each such grant, the
closing market value of the Company's Common Stock (the "Market Value") has
equaled or exceeded $15 per share for a period of 30 consecutive trading days,
(b) as to the second 30 percent of each such grant, the Market Value has
equaled or
12
<PAGE>
exceeded $20 per share for a period of 30 consecutive trading days and (c) as
to the final 50 percent of each such grant, the Market Value has equaled or
exceeded $25 per share for a period of 30 consecutive trading days.
DISCUSSION OF CORPORATE TAX DEDUCTION ON COMPENSATION IN EXCESS OF $1 MILLION
A YEAR
Internal Revenue Code Section 162(m), enacted in 1993, precludes a public
corporation from taking a deduction in 1995 or subsequent years for
compensation in excess of $1 million for its chief executive officer or any of
its four other highest-paid officers. Certain performance-based compensation,
however, is specifically exempt from the deduction limit. To date, the annual
cash compensation payable to any executive officers has not approached the $1
million threshold and is not expected to do so in the near term. In addition,
the Company's 1992 Equity Incentive Plan has been designed so that stock
options and stock appreciation rights granted under such Plan will be excluded
from the deduction limit and to provide flexibility for certain other awards
to so qualify.
Compensation Committee
Robert F. White
Mone Anathan, III
Michael L. Glazer
13
<PAGE>
PERFORMANCE GRAPH
The following stock price performance graph compares the cumulative total
return on the Company's common stock with the cumulative total return of the
Standard & Poor's Composite 500 Index and of the University of Chicago Center
for Research in Security Prices Index for NASDAQ Retail Trade Stocks from
January 29, 1994 through January 31, 1998.
[CHART APPEARS HERE]
Brookstone S&P 500 NASDAQ Retail
1/29/94 100.00 100.00 100.00
1/28/95 37.39 101.12 89.66
2/3/96 40.00 140.13 100.60
2/1/97 56.53 177.00 123.53
1/31/98 82.61 224.62 144.45
Note: The stock price performance on the graph above is not necessarily
indicative of future price performance.
RATIFICATION OF THE SELECTION OF THE COMPANY'S INDEPENDENT ACCOUNTANTS
Based upon the recommendation of the Audit Committee, the Board of Directors
has selected Price Waterhouse LLP to serve as independent accountants to
examine the financial statements of the Company and its subsidiaries for the
fiscal year ending January 30, 1999. Price Waterhouse LLP has served as the
Company's independent accountants since the fiscal year ending February 1,
1992. A representative of Price Waterhouse is expected to be present at the
Annual Meeting with the opportunity to make a statement if he or she desires
and to respond to appropriate questions.
BOARD RECOMMENDATION
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of Price Waterhouse LLP as the Company's independent accountants.
Proxies solicited by the Board of Directors will be so voted unless the
stockholders specify otherwise.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
None of the Company's directors, executive officers or stockholders
representing beneficial ownership of greater than ten percent of the Company's
outstanding common stock failed to file the necessary forms within the time
frames set forth in Section 16(a).
14
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of stockholders submitted for consideration at the 1999 Annual
Meeting of Stockholders must be received by the Company not later than March
19, 1999 in order to be considered for inclusion in the Company's proxy
material for that meeting.
The By-laws establish procedures, including advance notice procedures, with
regard to the nomination, other than by or at the direction of the Board of
Directors, of candidates for election as directors and with regard to certain
matters to be brought before meetings of stockholders of the Company. In
general, notice must be received by the Company not less than 60 days nor more
than 90 days prior to the meeting and must contain certain specified
information concerning the stockholder submitting the proposal. In addition,
the By-laws require that any such nomination of candidates for election as a
director be accompanied by a petition signed by at least 100 record holders of
capital stock entitled to vote in the election of directors, representing in
the aggregate 1% of the outstanding capital stock entitled to vote thereon.
Such procedures also authorize regulation of the order of business and conduct
of stockholder meetings, the authority of the presiding officer and attendance
at such meetings.
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the Annual
Meeting which is not referred to in the accompanying Notice of Annual Meeting.
Should any such matters be presented, the persons named in the proxy intend to
take such action in regard to such matters as in their judgment seems
advisable.
15
<PAGE>
DETACH HERE
BKS92 3
PROXY
BROOKSTONE, INC.
The undersigned, revoking previous proxies relating to these shares, hereby
acknowledges receipt of the Notice and Proxy Statement dated May 15, 1998, in
connection with the 1998 Annual Meeting of Stockholders to be held at 9:30 a.m.
on June 16, 1998, at the First National Bank of Boston, and hereby appoints
Merwin F. Kaminstein, Michael F. Anthony and Philip W. Roizin and each of them
(with full power to act alone), the attorneys and proxies of the undersigned
with power of substitution to each, to vote all shares of the Common Stock of
Brookstone, Inc. registered in the name provided herein which the undersigned is
entitled to vote at the 1998 Annual Meeting of Stockholders, and at any
adjournments thereof, with all the powers the undersigned would have if
personally present. Without limiting the general authorization hereby given,
said proxies are, and each of them is, instructed to vote or act as follows on
the proposals set forth in said Proxy Statement:
Election of all 6 directors (or if any nominee is not available for
election, such substitute as the Board of Directors may designate).
Nominees:
Merwin F. Kaminstein, Michael F. Anthony, Mone Anathan, III, Adam
Kirsch, Michael L. Glazer, Robert F. White.
SEE REVERSE SIDE. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, JUST SIGN ON THE REVERSE SIDE. YOU NEED NOT MARK ANY BOXES.
- ----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ----------- -----------
<PAGE>
DETACH HERE
BKS92 2
PLEASE MARK
VOTES AS IN
[X] THIS EXAMPLE.
THIS PROXY WHEN EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND
FOR PROPOSAL 2.
- -----------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- -----------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR WITHHELD
[_] [_]
[_] _______________________________________
For all nominees except as noted above
2. Ratify the appointment of Price Waterhouse LLP as the independent
accountants to examine the financial statements of the Company and its
subsidiaries for the fiscal year ending January 30, 1999.
- --------------------------------------------------------------------------------
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature ___________________ Date ____ Signature ___________________ Date ____
