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
[ ] 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
PAMIDA HOLDINGS CORPORATION
(Name of Registrant as Specified In Its Charter)
N/A
(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) (l) and 0-11.
(1) Title of each class of securities to which transaction applies:
...................................................................
(2) Aggregate number of securities to which transaction applies:
...................................................................
(3) Per Unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
...................................................................
(4) Proposed maximum aggregate value of transaction:
...................................................................
(5) Total fee paid:
...................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
...................................................................
(2) Form, Schedule or Registration Statement No.:
...................................................................
(3) Filing Party:
...................................................................
(4) Date Filed:
...................................................................
<PAGE>
PAMIDA HOLDINGS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1999
The Annual Meeting of Stockholders of Pamida Holdings Corporation, a
Delaware corporation, will be held on Thursday, May 20, 1999, at 8:30 a.m. at
the office of the Corporation, 8800 "F" Street, Omaha, Nebraska, for the
following purposes:
1. To elect a Board of Directors.
2. To transact such other business as properly may come before the
meeting and any adjournments thereof.
The stock transfer books of the Corporation will not be closed. The Board
of Directors of the Corporation has fixed the close of business on March 22,
1999, as the record date for determining the stockholders of the Corporation
entitled to notice of and to vote at the meeting.
Dated April 5, 1999 BY ORDER OF THE BOARD OF
DIRECTORS,
FRANK A. WASHBURN, Secretary
PLEASE MARK, SIGN, AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE ENCLOSED FOR YOUR USE. THE PROXY WILL
NOT BE USED IF YOU ATTEND THE MEETING IN PERSON AND SO REQUEST.
<PAGE>
PAMIDA HOLDINGS CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1999
This Proxy Statement is furnished by the Board of Directors (the "Board of
Directors") of Pamida Holdings Corporation (the "Corporation") in connection
with the solicitation by the Board of Directors of proxies from holders of the
Corporation's $.01 par value Common Stock ("Common Stock") for use at the 1999
annual meeting of stockholders of the Corporation to be held at 8:30 a.m. on May
20, 1999, at the office of the Corporation, 8800 "F" Street, Omaha, Nebraska,
and at any adjournments thereof (the "Annual Meeting"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. Holders of
record of Common Stock at the close of business on March 22, 1999, will be
entitled to vote at the Annual Meeting.
The mailing address of the principal executive offices of the Corporation
is 8800 "F" Street, Omaha, Nebraska 68127. This Proxy Statement and the
accompanying form of Proxy are first being sent on or about April 15, 1999, to
the holders of Common Stock.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The Board of Directors of the Corporation has fixed the close of business
on March 22, 1999, as the record date for determining the stockholders of the
Corporation entitled to notice of and to vote at the Annual Meeting.
The accompanying Proxy may be revoked by the person giving it at any time
prior to its being voted; such revocation may be accomplished by a letter, or by
a duly executed Proxy bearing a later date, filed with the Secretary of the
Corporation prior to the Annual Meeting. If a stockholder who has given a Proxy
is present at the Annual Meeting and wishes to vote in person, such stockholder
may withdraw the Proxy at that time.
On March 22, 1999, the Corporation had issued and outstanding 6,025,139
shares of Common Stock, each such share entitling the holder thereof to one vote
upon each matter to be voted upon at the Annual Meeting. An additional 1,356
shares of Common Stock in the aggregate are issuable to certain holders of
previously outstanding notes and preferred stock of the Corporation who have not
yet delivered such securities to the Corporation in exchange for the Common
Stock certificates to which they have become entitled; such shares will not be
entitled to vote at the Annual Meeting or thereafter until such certificates are
issued. Stockholders entitled to vote in the election of directors at the Annual
Meeting have cumulative voting rights in such election, and there are no
conditions precedent to the exercise of such rights. The existence of cumulative
voting rights means that a stockholder may cast a total number of votes in the
election for directors which is equal to the number of directors to be elected
multiplied by the number of such stockholder's shares; such votes may be cast
entirely for one candidate or may be distributed equally or unequally among as
many candidates as the stockholder may consider appropriate.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. Assuming that a quorum
is present at the Annual Meeting, under Delaware law and the Restated
Certificate of Incorporation of the Corporation (the "Restated Certificate"),
the six nominees for election as directors who receive the greatest number of
votes cast in the election of directors will be elected as directors.
In the election of directors, any action other than a vote for a nominee
will have the practical effect of a vote against such nominee, but only votes
cast in favor of a nominee will directly affect the outcome of the election
since the six nominees receiving the greatest number of votes will be elected.
Abstentions and broker "non-votes" are not deemed to be "votes cast" for any
purpose, but the shares involved will be counted as present and entitled to vote
for purposes of determining whether a quorum is present at the Annual Meeting. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular matter because the nominee does not have
discretionary authority to vote on such matter and has not received voting
instructions from the beneficial owner of the shares involved.
1
<PAGE>
The Restated Certificate provides that all proxies, ballots, votes, and
tabulations that identify the particular vote of holders of Common Stock shall
be confidential and shall not be disclosed except (i) to independent election
inspectors appointed by the Corporation who shall not be directors, officers, or
employees of the Corporation, (ii) as required by law, or (iii) when expressly
requested by the voting stockholder.
The following table sets forth information as to the beneficial ownership
of Common Stock of each person or group who, as of January 31, 1999, to the
knowledge of the Corporation, beneficially owned more than 5% of the Common
Stock:
Number of
Name and Shares of
Address of Common Stock Percent
Beneficial Beneficially of
Owner Owned Class
--------------------------------- ------------ -------
399 Venture Partners, Inc. (1) 907,387 15.06%
399 Park Avenue
New York, NY 10043
The Goldman Sachs Group, L.P. (2) 461,300 7.66%
Goldman Sachs & Co.
85 Broad Street
New York, NY 10004
- -------------------
(1) 399 Venture Partners, Inc. is an indirect wholly owned subsidiary of
Citigroup Inc. Information relating to the stockholdings of 399 Venture
Partners, Inc. is based upon an amended Schedule 13G filed by Citigroup
Inc. as of December 31, 1998. M. Saleem Muqaddam, a director of the
Corporation, is a Vice President of 399 Venture Partners, Inc. 399 Venture
Partners, Inc. also owns 3,050,473 shares of Nonvoting Common Stock of the
Corporation, which represent 100% of the outstanding shares of such class.
Such shares of Nonvoting Common Stock have no voting rights at the Annual
Meeting.
(2) Information relating to the stockholdings of The Goldman Sachs Group, L.P.
and Goldman, Sachs & Co. is based upon a Schedule 13G filed jointly by such
companies as of December 31, 1998.
The following table sets forth information as to each class of equity
securities of the Corporation beneficially owned as of January 31, 1999, by each
director of the Corporation, by each nominee for election as a director of the
Corporation, by the executive officers of the Corporation, and by all directors
and executive officers of the Corporation as a group:
Number of
Shares of
Common Stock Percent
Beneficial Beneficially of
Owner Owned(1) Class
------------------------ ------------ -------
L. David Callaway, III 16,500 (2) *
Stuyvesant P. Comfort 204,067 3.39%
Steven S. Fishman 187,922 (3) 3.08%
George R. Mihalko 21,075 (4) *
M. Saleem Muqaddam 20,000 *
Peter J. Sodini 1,000 *
Frank A. Washburn 34,233 (5) *
All directors and
executive officers as a
group (7 persons) 484,797 (2)(3)(4)(5) 7.90%
- ---------------------
* Less than 1% of the outstanding Common Stock.
2
<PAGE>
(1) Each person named in the table above has sole voting power and sole
investment power with respect to the shares set forth after his name,
except for the shares referred to in notes (2) and (3) as being owned or
held by the person's spouse.
(2) Mr. Callaway disclaims beneficial ownership of these shares, which are
owned by his wife.
(3) Mr. Fishman disclaims beneficial ownership of 40,000 of these shares, which
are held by his wife as custodian for their children. Mr. Fishman has the
right to acquire beneficial ownership of 82,124 of these shares pursuant to
options which are currently exercisable or become exercisable within 60
days after January 31, 1999.
(4) Mr. Mihalko has the right to acquire beneficial ownership of 9,800 of these
shares pursuant to options which are currently exercisable or become
exercisable within 60 days after January 31, 1999.
(5) Mr. Washburn has the right to acquire beneficial ownership of 21,133 of
these shares pursuant to options which are currently exercisable or become
exercisable within 60 days after January 31, 1999.
ELECTION OF DIRECTORS
At the Annual Meeting, the stockholders will elect a board of six directors
for a term extending until the 2000 annual meeting of stockholders of the
Corporation and until their respective successors have been elected and qualify.
Proxies in the accompanying form which are received by the Board of Directors in
response to this solicitation will, unless contrary instructions are given
therein, be voted by the persons named therein as proxies in favor of the six
nominees for directors listed below. The persons named as proxies reserve the
right, however, to vote such proxies cumulatively and for the election of fewer
than all of the nominees for directors but do not intend to do so unless
nominees other than those listed below are nominated at the Annual Meeting. The
Board of Directors believes that all of the six nominees listed below will be
available to serve and will serve as directors if elected; however, if any of
such nominees is not so available at the time of the election, the proxies may
be voted in the discretion of the persons named therein for the election of a
substitute nominee. The six nominees receiving the greatest number of votes at
the Annual Meeting will be elected as directors.
Set forth below is certain information as of March 1, 1999, with respect to
the nominees for election as directors of the Corporation. The information
relating to their respective business experience was furnished to the
Corporation by such persons. All of the nominees presently are serving as
directors of the Corporation, and all of the nominees have been nominated for
reelection by the Board of Directors.
Positions and
Offices with Director
Nominee Age the Corporation Since
- ---------------------------- --- -------------------------- --------
L. David Callaway, III (2) 58 Director 1994
Stuyvesant P. Comfort (1)(2) 27 Director 1994
Steven S. Fishman 48 Chairman of the Board, 1993
President, Chief Executive
Officer, and Director
M. Saleem Muqaddam (1) 52 Director 1993
Peter J. Sodini (1)(2) 58 Director 1990
Frank A. Washburn 50 Executive Vice President, 1995
Chief Operating Officer,
and Director
- --------------------
(1) Member of Compensation and Stock Option Committees.
(2) Member of Audit Committee.
Mr. Callaway is Chairman of the Board and Chief Executive Officer of
Express Messenger Systems, Inc. Previously, Mr. Callaway spent approximately 30
years with Citicorp and various of its affiliates (most recently, from 1986 to
1993, as a Vice President of Citicorp Venture Capital, Ltd.) in a variety of
corporate and investment banking assignments. An affiliate of
3
<PAGE>
399 Venture Partners, Inc., a substantial stockholder of the Corporation, is a
substantial stockholder of Express Messenger Systems Inc.
Mr. Comfort has been employed as an executive by Alchemy Partners, of
London, England, a European business investment group, since March 1999. From
March 1996 through December 1998, Mr. Comfort was employed by Microsoft
Corporation as a business development and investment analyst. He is a graduate
of the University of Pennsylvania Wharton School and the New York University
School of Law and was a private investor for several years prior to joining
Microsoft Corporation in 1996.
Mr. Fishman has served as President and Chief Executive Officer of the
Corporation and Pamida, Inc. ("Pamida") since April 1993 and as Chairman of the
Board of the Corporation and Pamida since August 1993. From 1988 to March 1993,
Mr. Fishman was employed by Caldor, Inc. as Senior Vice President and General
Merchandise Manager-Homelines. Mr. Fishman is a director of Pamida.
Mr. Muqaddam has served as a Vice President of Citicorp Venture Capital,
Ltd. and its affiliated investment companies since 1989. Previously, Mr.
Muqaddam spent 15 years with Citicorp and Citibank, N.A. in senior managerial
positions in the international corporate banking area, primarily in Europe, and
at the corporate headquarters in New York. Mr. Muqaddam is a director of
Chromcraft Revington, Inc. and Plantronics Inc.
Mr. Sodini has been employed since April 1996 as President and Chief
Executive Officer of The Pantry, Inc., an operator of convenience stores; from
February to April 1996 he was Chief Operating Officer of such company. From 1992
through 1995, Mr. Sodini served as Chief Executive Officer of Purity Supreme,
Inc., an operator of grocery supermarkets. From 1990 to early 1993, he served as
Chairman of the Board of Buttrey Food & Drug, Inc. Mr. Sodini has been
associated with the investment firm of Freeman Spogli & Co. Incorporated as a
consultant since 1988. Mr. Sodini is a director of Transamerica Income Shares
and Buttrey Food & Drug, Inc.
Mr. Washburn has served as Chief Operating Officer of the Corporation and
Pamida since March 1997, Executive Vice President of the Corporation since
September 1995, and Executive Vice President of Pamida since February 1995,
having previously served as Senior Vice President - Human Resources of Pamida
since 1993 and as Vice President - Human Resources of Pamida since 1987. Mr.
Washburn also serves as Secretary of the Corporation and Pamida. Mr. Washburn
joined Pamida's predecessor in 1965. He is a director of Pamida.
The Board of Directors met six times during the fiscal year ended January
31, 1999.
The Compensation Committee of the Board of Directors met two times during
the fiscal year ended January 31, 1999. The Committee's functions are to provide
oversight with respect to the compensation and benefit policies, plans, and
programs of the Corporation for the executive officers of the Corporation and,
to the extent not otherwise determined by contract or formal plan, to review and
recommend to the Board of Directors salaries, bonuses, and other employee
benefits and compensation for the executive officers of the Corporation. The
members of the Compensation Committee also are the members of the Stock Option
Committee of the Board of Directors; the latter Committee is responsible for the
administration of the Corporation's 1992 Stock Option Plan and 1998 Stock
Incentive Plan, including the granting of stock options and other awards
thereunder, and met two times during the fiscal year ended January 31, 1999.
The Audit Committee of the Board of Directors met two times during the
fiscal year ended January 31, 1999. The Committee's functions are to recommend
to the Board of Directors the firm to be appointed as the Corporation's
independent accountants, to review and approve the scope of the Corporation's
annual audit, to review the audit findings and recommendations of the
Corporation's independent accountants, to consult with the Corporation's
independent accountants and internal auditors concerning the Corporation's
financial controls, accounting procedures, and internal auditing function, and
to consider and review such other matters relating to the financial and
accounting affairs of the Corporation as the Committee may deem appropriate.
The Board of Directors has no Nominating Committee.
During the fiscal year ended January 31, 1999, Mr. Sodini attended fewer
than 75% of the aggregate number of meetings of the Board of Directors and the
Committees on which he serves.
4
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
ANNUAL EXECUTIVE COMPENSATION. The following table shows the annual
compensation paid by the Corporation and Pamida for services rendered during the
fiscal years ended January 31, 1999, February 1, 1998, and February 2, 1997, to
the Chief Executive Officer of the Corporation during fiscal 1999 and to each of
the persons who were executive officers of the Corporation at January 31, 1999:
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation(1) Awards
---------------------- -------------
Name and Stock Options
Principal Fiscal (Number of All Other
Position Year Salary Bonus Shares) Compensation(2)
- ------------------- ------ -------- -------- ------------- ---------------
Steven S. Fishman, 1999 $522,935 $241,957 45,000 $41,053
Chairman of the 1998 $500,050 $234,242 6,200 $40,099
Board, President, 1997 $506,973 $ - 25,800 $34,427
and Chief Executive
Officer
Frank A. Washburn, 1999 $331,588 $152,555 20,000 $24,691
Executive Vice 1998 $270,185 $128,833 3,000 $21,037
President and Chief 1997 $223,127 $ - 13,000 $16,013
Operating Officer
George R. Mihalko, 1999 $228,358 $ 56,603 15,000 $22,538
Senior Vice 1998 $207,396 $ 55,873 1,500 $18,665
President and 1997 $182,935 $ 15,000 6,500 $11,515
Chief Financial
Officer
- --------------------
(1) Perquisites and other benefits, securities, or property for any of the
named persons did not exceed the lesser of $50,000 or 10% of the total
amount of annual salary and bonus.
(2) All Other Compensation for fiscal 1999 consists of contributions by Pamida
to its 401(k) plan and 1995 Deferred Compensation Plan ($4,000 and $37,053
for Mr. Fishman, $4,000 and $20,691 for Mr. Washburn, and $4,000 and
$15,043 for Mr. Mihalko) and $3,495 of imputed interest on an interest-free
loan of $50,000 made to Mr. Mihalko during fiscal 1998. Pamida's Deferred
Compensation Plan provides for elective salary deferrals by participants
(not less than 2% and not more than 10% of base salary); Pamida matches a
participant's deferral quarterly up to 5% of base salary and credits
certain components of a participant's deferral account quarterly with an
interest equivalent at the rate of 7% per annum.
STOCK OPTIONS AND LONG-TERM INCENTIVE AWARDS. The following tables contain
information concerning stock options granted to and exercised by the executive
officers of the Corporation during fiscal 1999 and stock options held by such
executive officers at the end of fiscal 1999.
5
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C> <C> <C>
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants(1) for Option Term(2)
- ------------------------------------------------------------------- ---------------------
%of Total
Options
Options Granted to
Granted(3) Employees Exercise
(Number of in Fiscal Price Expiration
Name Shares) Year ($/Sh) Date 5% 10%
- ----------------- ---------- ---------- -------- ---------- -------- --------
Steven S. Fishman 45,000 23.7% $ 6.3125 8-25-05 $115,642 $269,495
Frank A. Washburn 20,000 10.5% $ 6.3125 8-25-05 $ 51,396 $119,776
George R. Mihalko 15,000 7.9% $ 6.3125 8-25-05 $ 38,547 $ 89,832
- --------------------
</TABLE>
(1) The options granted during fiscal 1999 were granted under the Corporation's
1998 Stock Incentive Plan (the "Plan") by the Stock Option Committee of the
Board of Directors; the members of such committee also are the members of
the Compensation Committee of the Board of Directors. Such options relate
to shares of the Common Stock and were granted with an exercise price equal
to the closing price of the Common Stock on the American Stock Exchange on
the date of the grants.
(2) The calculations are made at the 5% and 10% rates prescribed by Securities
and Exchange Commission (the "SEC") regulation and are not intended to
forecast possible future appreciation of the Common Stock. The calculations
assume the indicated annual rates of appreciation of the exercise price for
seven years on a compounded basis for all of the shares covered by the
option, minus the aggregate exercise price.
(3) These options become exercisable in four equal annual installments
beginning on August 25, 1999, subject to the terms of the Plan and the
applicable stock option agreement.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL-YEAR-END OPTION VALUES
Number of
Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
1-31-99(1) 1-31-99(2)
Number of ------------- -------------
Shares Acquired Value Exercisable/ Exercisable/
NAME on Exercise Realized Unexercisable Unexercisable
- ----------------- ---------------- -------- ------------- -------------
Steven S. Fishman 52,798 $147,619 78,484 $ 4,723
80,440 $22,838
Frank A. Washburn - - 16,533 $ 7,088
35,800 $11,475
George R. Mihalko - - 8,900 $ 3,545
24,100 $ 5,738
- --------------------
(1) All options relate to shares of the Common Stock and were granted under the
Corporation's 1992 Stock Option Plan and 1998 Stock Incentive Plan.
(2) Based upon the $3.625 closing price of the underlying Common Stock on
January 29, 1999, the last day of the fiscal year on which trading in the
Common Stock occurred, minus the option exercise price for the shares
covered by the option.
6
<PAGE>
EMPLOYMENT AND OTHER AGREEMENTS. Mr. Fishman was employed by Pamida as its
President and Chief Executive Officer, effective April 19, 1993, pursuant to an
employment agreement having a three-year term ending on April 18, 1996. On
September 22, 1995, the Corporation and Pamida entered into a new employment
agreement with Mr. Fishman which superseded the 1993 agreement except as
otherwise described in this paragraph. The term of the 1995 agreement extends
through April 18, 2001. Through April 18, 1996, Mr. Fishman was entitled to
receive a base salary at an annual rate of $450,000 (the rate for such period
provided for in the 1993 agreement); thereafter, Mr. Fishman is entitled to
receive a base salary at an annual rate of not less than $500,000 for the
remaining term of the 1995 agreement. Under the 1995 agreement, Mr. Fishman was
entitled to and did receive incentive bonuses for fiscal 1998 and 1999 based
upon the financial performance of the Corporation and its subsidiaries on a
consolidated basis and the comparable store sales performance of Pamida's
stores. The 1995 agreement requires the Board of Directors and Mr. Fishman to
agree periodically upon incentive bonus programs for Mr. Fishman for fiscal 2000
and 2001. Mr. Fishman's fiscal 2000 incentive bonus program provides for a
potential incentive bonus based upon the financial performance of the
Corporation and its subsidiaries on a consolidated basis and the comparable
store sales performance of Pamida's stores. Mr. Fishman also is entitled to
customary fringe benefits under the 1995 agreement. In the event of Mr.
Fishman's death, his base salary would continue for 90 days, and his estate
would be entitled to a pro rata portion of his incentive bonus (if any) for the
fiscal year in which his death occurs. If Mr. Fishman's employment terminates
for cause or by reason of his disability for a continuous period of six months,
then he would be entitled to his base salary to the termination date, a pro rata
portion of his incentive bonus (if any) for the fiscal year in which such
termination occurs, and (only in the case of his disability) the continuation of
certain fringe benefits until not later than his attainment of age 65. If Mr.
Fishman's employment is terminated by the Corporation or Pamida without cause
prior to a Significant Corporate Event (as defined in the 1995 agreement), then
he would be entitled to the continuation of his base salary through April 18,
2001 (less amounts which Mr. Fishman might receive from other employment), a pro
rata portion of his incentive bonus (if any) for the fiscal year in which such
termination occurs, the continuation of certain fringe benefits until the
earlier of April 18, 2001, or his receipt of such benefits from another
employer, and the equivalent of certain deferred compensation and 401(k) plan
benefits which Mr. Fishman would lose as a result of his termination without
cause. If the termination without cause occurs after a Significant Corporate
Event, then Mr. Fishman also would be entitled to receive an incentive bonus for
each of the next two 12-month periods (but not beyond April 18, 2001) in an
amount equal to the average amount of the incentive bonuses (if any) which he
received for the three fiscal years prior to the fiscal year during which such
termination occurs. Significant Corporate Events are the Corporation's ceasing
to own all of the capital stock of Pamida, the merger of Pamida into a
corporation of which the Corporation does not own a majority of the voting
shares, the merger of the Corporation into another corporation a majority of
whose voting shares are owned by persons other than the previous majority owners
of the Corporation, the acquisition by a person or group (other than 399 Venture
Partners, Inc. or its affiliates) of 30% or more of the voting shares of the
Corporation, and a stockholder vote to dissolve Pamida or dispose of all of its
property and assets. The 1995 agreement, as amended, also provides that Mr.
Fishman is entitled to at least 12 months advance notice if the Corporation and
Pamida determine not to continue his employment after the agreement expires with
at least the same base salary as in effect on April 18, 2001, and with a
substantially similar incentive bonus program and fringe benefits; in the
absence of such advance notice, Mr. Fishman would be entitled to certain
compensation through the end of a 12-month period beginning when such notice
actually is given. Mr. Fishman's current annual base salary is $525,000.
Mr. Washburn has an employment agreement with the Corporation and Pamida,
providing for his employment as Executive Vice President and Chief Operating
Officer, which became effective on March 6, 1997, and has a term of three years.
The agreement provides for a base salary at an annual rate of not less than
$275,000 and in other material respects is substantially identical to Mr.
Fishman's 1995 agreement described above. Mr. Washburn's current annual base
salary is $350,000.
Mr. Mihalko has an employment agreement with the Corporation and Pamida,
providing for his employment as Senior Vice President and Chief Financial
Officer, which became effective on March 6, 1997, and has a term of three years.
The agreement provides for a base salary at an annual rate of not less than
$210,000. In most other material respects, Mr. Mihalko's agreement is
substantially similar to Mr. Fishman's 1995 agreement described above; however,
Mr. Mihalko's agreement does not include provisions for certain bonus payments
or certain continued salary payments and benefits in the event of the
termination of Mr. Mihalko's employment for various reasons prior to the
expiration of the three-year term or without at least 12 months' advance notice.
Mr. Mihalko's current annual base salary is $230,000.
7
<PAGE>
During April 1999, Pamida entered into Retention Bonus Agreements with
Messrs. Fishman, Washburn, and Mihalko and certain other senior executives of
Pamida which provide for potential payments to such persons following the
occurrence of any one of several specified Retention Events. If a Retention
Event occurs while the executive is employed by Pamida and the executive remains
in the employ of Pamida (or a successor to the business of Pamida) for six
months after the effective date of the Retention Event, then the executive is
entitled to receive a specified retention bonus. The executive also is entitled
to receive the retention bonus if a Retention Event occurs, the executive is
employed by Pamida immediately prior to the time the Retention Event occurs, and
either upon the occurrence of the Retention Event or within six months
thereafter the executive's employment with Pamida (or a successor to Pamida's
business) is terminated without cause. Retention Events are similar to the
Significant Corporate Events described in the preceding discussion of Mr.
Fishman's employment agreement. The retention bonuses which are potentially
payable to Messrs. Fishman, Washburn, and Mihalko are $400,000, $200,000, and
$160,000, respectively.
REPORT OF COMPENSATION COMMITTEE.
(A) CHIEF EXECUTIVE OFFICER. In September 1995, the Compensation Committee
of the Board of Directors negotiated a new employment agreement with Mr. Fishman
and, in doing so, considered information gathered by the corporation's human
resources department from published sources showing the compensation of other
executives holding comparable positions in the retail industry and the various
elements of such compensation. The Committee also considered the operating
results and financial condition of the Corporation and its subsidiaries on a
consolidated basis and various accomplishments of Mr. Fishman during his tenure
as Chief Executive Officer, which began in April 1993.
Mr. Fishman's salary for fiscal 1999 was increased by the Board of
Directors at the recommendation of the Committee from the contractual minimum of
$500,000 to $525,000 based upon the Committee's evaluation of Mr. Fishman's
performance and accomplishments and information relating to the compensation of
executives holding comparable positions in the retail industry. Mr. Fishman's
current employment agreement also provided by a 1998 amendment for a potential
incentive bonus for Mr. Fishman for fiscal 1999 based upon the financial
performance of the Corporation and its subsidiaries on a consolidated basis and
the comparable store sales performance of Pamida's stores. The exact bonus
amount was to be determined by a matrix involving both the Corporation's
consolidated earnings before interest, taxes, depreciation, and amortization and
the percentage growth in comparable store sales of Pamida's stores. Because the
threshold performance requirements were satisfied for fiscal 1999, Mr. Fishman
received a bonus based upon the terms of the amended employment agreement and
such matrix.
The Stock Option Committee of the Board of Directors (composed of the same
persons who constitute the Compensation Committee) granted a stock option to Mr.
Fishman during fiscal 1999 with the objective of further aligning the interests
of Mr. Fishman with the interests of the Corporation's stockholders by providing
an incentive for him to increase stockholder value through improved performance
of the Corporation.
(B) OTHER EXECUTIVE OFFICERS. The base salaries of Messrs. Washburn and
Mihalko for fiscal 1999 were increased from their contractual minimums by the
Board of Directors at the recommendation of the Compensation Committee to
reflect increases in their respective levels of responsibility and their
accomplishment of particular assignments within their respective areas of
responsibility. The Committee also considered information relating to the
compensation of executives holding comparable positions in the retail industry.
The bonus programs for Messrs. Washburn and Mihalko for fiscal 1999 were similar
to Mr. Fishman's, and bonuses were paid to Mr. Washburn and Mr. Mihalko for such
fiscal year because the applicable threshold performance tests were met. Stock
options were granted to Messrs. Washburn and Mihalko during fiscal 1999 for the
reasons discussed in the preceding paragraph relating to the stock option
granted to Mr. Fishman.
M. Saleem Muqaddam (Chairman),
Stuyvesant P. Comfort, and Peter J. Sodini
Compensation Committee of the Board of Directors
8
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PERFORMANCE GRAPH. The following performance graph compares the yearly
percentage change in the cumulative total stockholder return on the Common Stock
with the yearly percentage change in the similar return of the S&P 500 Index and
an index of a peer group of comparable general merchandise discount store
operators, assuming the reinvestment of dividends. The peer group is composed of
the following companies: Ames Department Stores, Inc., Duckwall-Alco Stores,
Inc., Fred's Inc., Hills Stores Company, Kmart Corporation, and Shopko Stores,
Inc. The Corporation paid no dividends on the Common Stock during the periods
reflected in the graph.
[Graph comparing the five-year cumulative total return of Pamida Holdings
Corporation to the S & P 500 and a select Peer Group, assuming an initial
investiment of $100 at the end of Fiscal 1994 and reinvestment of dividends.]
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -------
Pamida $100.00 $229.17 $ 93.73 $ 75.00 $158.33 $120.83
S & P 500 $100.00 $100.53 $139.40 $176.12 $223.51 $296.13
Peer Group $100.00 $ 74.79 $ 37.41 $ 67.03 $ 73.38 $112.99
COMPENSATION OF DIRECTORS. Directors who are not employees of the
Corporation receive a monthly fee of $1,000 for serving on the Board of
Directors, $500 for each Board meeting which they attend, and $500 for each
meeting of a Board committee which they attend on a day other than the day of a
Board meeting. Directors who also are employees of the Corporation or Pamida do
not receive any additional compensation for serving as a director. All directors
are reimbursed for their out-of-pocket travel and related expenses incurred in
attending meetings of the Board of Directors and its committees.
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP served as the Corporation's independent
public accountants for the fiscal year ended January 31, 1999, and has been
selected by the Board of Directors to serve in such capacity for the current
fiscal year.
The Corporation expects that a representative of Deloitte & Touche LLP will
be present at the Annual Meeting, with the opportunity to make a statement if he
or she desires to do so, and that such representative will be available to
respond to appropriate questions.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no
other business which will be presented for consideration at the Annual Meeting.
The Company did not receive timely advance notice from any stockholder that such
stockholder intends to bring a matter before the Annual Meeting; for such
purpose, timely advance notice means notice of the particular matter at least 45
days before this year's date which corresponds to the date on which the
Corporation first mailed its proxy materials for last year's annual meeting of
stockholders. Therefore, if any matter not discussed in this Proxy Statement is
properly presented at the Annual Meeting, the persons named in the accompanying
proxy or their substitutes will have discretionary authority to vote on such
matter in accordance with their judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2000 annual meeting
of stockholders of the Corporation must be received by the Corporation not later
than December 6, 1999, for inclusion in the Corporation's proxy statement and
form of proxy relating to that meeting. If a stockholder wishes to present a
proposal for consideration at the 2000 annual meeting of stockholders of the
Corporation without having such matter included in the proxy statement of the
Corporation for such annual meeting but does not give the Corporation notice of
such matter by March 1, 2000, then the proxies solicited by the Board of
Directors for such annual meeting may confer discretionary authority on the
persons holding such proxies to vote on such matter in accordance with their
judgment. Stockholder proposals should be sent to the Secretary of the
Corporation at the principal executive office of the Corporation.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers (as defined in the applicable regulations) and directors,
and persons who own more than 10% of a class of the Corporation's equity
securities registered under such Act, to file certain reports of ownership and
changes of ownership of the Corporation's equity securities with the SEC and the
American Stock Exchange. Officers, directors, and more than 10% stockholders are
required by SEC regulation to furnish to the Corporation copies of all Section
16(a) forms which they file.
Based solely on its review of the copies of such forms submitted to it, or
written representations from certain reporting persons that no Form 5 was
required for those persons, the Corporation believes that all filing
requirements applicable to its officers, directors and more than 10%
stockholders were complied with for the fiscal year ended January 31, 1999.
10
<PAGE>
ADDITIONAL INFORMATION
The annual report of the Corporation for the fiscal year ended January 31,
1999, including financial statements, is being mailed to stockholders of the
Corporation with this Proxy Statement. Such report is not to be regarded as
proxy soliciting material or as a part of this Proxy Statement.
The cost of soliciting proxies in the accompanying form will be borne by
the Corporation. Officers and directors of the Corporation, without compensation
other than their regular compensation, also may solicit proxies either by mail,
personal conversation, telephone, or other means of communication. Upon request,
the Corporation will reimburse brokerage firms, nominees, and others for their
reasonable expenses of forwarding solicitation material to the beneficial owners
of Common Stock.
Dated April 5, 1999 BY ORDER OF THE BOARD OF
DIRECTORS,
FRANK A. WASHBURN, Secretary
11
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PAMIDA HOLDINGS CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 20, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Steven S. Fishman and Frank
A. Washburn, and each or either of them, as attorneys and proxies of the
undersigned, with full power of substitution to each of them, to vote all stock
of Pamida Holdings Corporation (the "Corporation") standing in the name of the
undersigned at the annual meeting of stockholders of the Corporation to be held
at the office of the Corporation, 8800 'F' Street, Omaha, Nebraska, at 8:30 a.m.
on May 20, 1999, and at any adjournments thereof, on the matter set forth on the
reverse side hereof and in their discretion on any other matters that properly
may come before the meeting or any adjournments thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS.
The undersigned hereby ratifies and confirms all that either of such
attorneys and proxies, or their substitutes, may do or cause to be done by
virtue hereof and acknowledges receipt of the Notice of Annual Meeting of
Stockholders of the Corporation to be held on May 20, 1999, the Proxy Statement
for such meeting, and the Annual Report of the Corporation for the fiscal year
ended January 31, 1999.
(To be Signed on Reverse Side)
[X] Please mark your vote as in this example
AUTHORITY
FOR TO VOTE
ALL NOMINEES WITHHELD Nominees: L. David Callaway, III
1. ELECTION [ ] [ ] Stuyvesant P. Comfort
OF Steven S. Fishman
DIRECTORS M. Saleem Muqaddam
For, except authority to vote is withheld for the Peter J. Sodini
following nominee(s): Frank A. Washburn
- ------------------------
______________________________ _______________________________ DATE_________
SIGNATURE OF SHAREHOLDER SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears above. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by a partner. If a
limited liability company, please sign in company name by a member or manager.
