<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
VENTURE STORES, 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:
- --------------------------------------------------------------------------------
(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 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(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> 2
[VENTURE LOGO]
VENTURE STORES, INC.
2001 East Terra Lane
O'Fallon, Missouri 63366-0110
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------------
The Annual Meeting of Shareholders of Venture Stores, Inc., a Delaware
corporation (the "Company"), will be held at the Stouffer Renaissance Hotel,
9801 Natural Bridge Road, St. Louis, Missouri on Friday, June 20, 1997 at 9:30
a.m., Central Daylight Time, to consider and act upon the following matters:
1. Election of two directors, each to serve until the Company's 2000 Annual
Meeting of Shareholders and until their successors are duly elected and
qualified;
2. Ratification of the appointment by the Company's Board of Directors of
Arthur Andersen LLP as the Company's independent auditors for the fiscal
year ending January 31, 1998; and
3. Such other matters as may properly come before the meeting and all
adjournments and postponements thereof.
Shareholders of record at the close of business on April 23, 1997 are
entitled to notice of and to vote at the meeting and all adjournments and
postponements thereof. A complete list of the shareholders entitled to vote will
be available for inspection by any shareholder, for any purpose germane to the
meeting, at the meeting site on the day of the meeting and at the Company's
Corporate Office, 2001 East Terra Lane, O'Fallon, Missouri 63366-0110, during
the ten-day period preceding the meeting.
By Order of the Board of Directors
Russell E. Solt
RUSSELL E. SOLT
Secretary
O'Fallon, Missouri
April 29, 1997
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE, EVEN
IF YOU EXPECT TO ATTEND THE MEETING. A RETURN ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR YOUR CONVENIENCE. IF FOR
ANY REASON YOU DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME PRIOR TO
THE CLOSE OF BALLOTING.
<PAGE> 3
VENTURE STORES, INC.
2001 EAST TERRA LANE
O'FALLON, MISSOURI 63366-0110
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 20, 1997
------------------------------
GENERAL INFORMATION
This proxy statement is furnished to owners of the common stock of Venture
Stores, Inc. (the "Company") in connection with the solicitation by the Board of
Directors of proxies for use at the Annual Meeting of Shareholders to be held on
June 20, 1997, and at all adjournments and postponements thereof, for the
purposes set forth in the attached notice. This proxy statement and the enclosed
proxy card are first being sent or given to shareholders on or about April 29,
1997.
Management knows of no matters to be presented at the meeting other than as
mentioned below. However, if any matter not specifically set forth in the
foregoing notice of meeting properly comes before the meeting, it is intended
that the persons named as proxies in the accompanying proxy card will vote
thereon in their discretion.
Owners of outstanding common stock of the Company ("Common Stock") of
record at the close of business on April 23, 1997 (the "Record Date") are
entitled to notice of and to vote at the meeting. Shareholders representing a
majority of the outstanding shares must be present or represented by proxy at
the meeting for there to be a quorum for the conduct of business. As of the
Record Date, there were 18,268,961 shares of Common Stock issued and
outstanding. Each owner of Common Stock is entitled to cast one vote for each
share owned on each matter to be acted upon at the meeting.
Shares will be voted as instructed in the accompanying proxy card on each
matter submitted to shareholders. Shares represented by proxies indicating
"Withhold" authority to vote for one or both nominees will be counted as present
for purposes of determining a quorum but as not voted for the nominee(s) for
which voting authority is withheld. Shares represented by proxies indicating
"Abstain" as to a matter will be counted as present for purposes of determining
a quorum and as entitled to vote with respect to that matter. Abstentions will
have the effect of a vote "Against" the item. Shares voted by a broker on a
routine matter or matters (such as the election of directors or ratification of
auditors) but as to which the broker indicates it lacks authority to vote on
non-routine matters will be counted as present for purposes of determining a
quorum and as entitled to vote, and voted, with respect to the routine
matter(s), but not entitled to vote, and not voted, with respect to the
non-routine matter(s). Shares as to which a broker indicates it lacks authority
to vote on any matter, or shares which the broker does not vote, will not be
counted as present for purposes of determining a quorum.
ELECTION OF DIRECTORS
(ITEM (A) ON THE ACCOMPANYING PROXY CARD)
The Company's Restated Certificate of Incorporation and By-laws provide
that the Board of Directors shall be divided into three classes (Class I, Class
II and Class III), each consisting as nearly as possible of one-third of the
total number of directors. The directors generally serve for a term of
approximately three years, with the term of one class of directors expiring each
year. With respect to the current Board of Directors, the term of Class I
directors expires at the 1997 Annual Meeting, the term of Class II directors
expires at the 1998 Annual Meeting and the term of Class III directors expires
at the 1999 Annual Meeting.
Two Class I directors are to be elected at the 1997 Annual Meeting. The two
nominees receiving the greatest number of votes cast shall be elected as
directors to serve for a term of three years (expiring at the
<PAGE> 4
2000 Annual Meeting) and until their successors are duly elected and qualified.
These two directors, together with the four directors whose terms continue
beyond this year's Annual Meeting, will comprise the Board of Directors.
The size of the Board of Directors was increased from six to seven
directors effective June 3, 1996. Kimberly A. Delsing, one of the Class I
nominees, was elected by the Board of Directors effective June 3, 1996 to fill
the new position. Effective with the retirement of Robert L. Berra as a director
on June 20, 1997, the size of the Board of Directors will be decreased from
seven to six directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE LISTED DIRECTOR NOMINEES. THE PERSONS NAMED AS PROXIES ON THE ACCOMPANYING
PROXY CARD INTEND TO VOTE ALL SHARES REPRESENTED BY DULY-EXECUTED PROXY CARDS
RECEIVED BY SUCH PERSONS IN FAVOR OF THE CLASS I NOMINEES LISTED BELOW, UNLESS
VOTING AUTHORITY IS WITHHELD.
Both nominees have indicated their willingness to serve as directors if
elected. If a nominee becomes unavailable for any reason before the meeting
(which is not anticipated), the Board of Directors may, in its discretion,
reduce the size of the Board or designate a substitute nominee. The persons
named as proxies on the accompanying proxy card may, in their discretion, vote
any shares represented by duly-executed proxy cards for such substitute
nominee(s), unless voting authority is withheld.
NOMINEES AND CONTINUING DIRECTORS
The following information is provided as of April 10, 1997 with respect to
each nominee and other director whose term of office continues after the Annual
Meeting:
CLASS I -- TO BE ELECTED FOR TERMS ENDING IN 2000
JAMES H. FERSTL, Director Since 1996. Age 54. Executive Vice President of the
Company since August of 1995. Vice President and General Merchandise
Manager for Gottschalk's Department Stores, Inc., a central California
regional department store, from 1987 to August of 1995.
KIMBERLY A. DELSING, Director Since 1996. Age 45. President and Chief
Executive Officer of The Delsing Group, consultants for the development
of concepts and brands for the skincare, beauty and fashion industries,
from January 1997 to present. President and Chief Executive Officer of
H(2)O Plus, a manufacturer and retailer of skincare and beauty products,
from 1996 to January 1997. President and Chief Executive Officer of
Elizabeth Arden, a manufacturer and distributor of skincare and beauty
products, from 1994 to 1996. President and Chief Executive Officer of
Calvin Klein Cosmetics, a manufacturer and distributor of skincare and
beauty products, from 1990 to 1994.
CLASS II -- TO CONTINUE IN OFFICE UNTIL 1998
H. EDWIN TRUSHEIM, Director Since 1990. Age 69. Retired. Chairman of the Board
of General American Life Insurance Company ("General American"), a
mutually owned company serving both individuals and groups with life and
health insurance as well as pension plans and administrative services,
from 1988 to 1995. Chief Executive Officer of General American from 1981
to 1992. Director of the Federal Reserve Bank of St. Louis from 1987 to
1992. Chairman of the Board of the Federal Reserve Bank of St. Louis from
1990 to 1992. Director of General American, Angelica Corporation, Laclede
Gas Company, RehabCare Corporation and Reinsurance Group of America.
ROBERT N. WILDRICK, Director Since 1995. Age 53. President and Chief Executive
Officer of the Company since April of 1995. Chairman of the Board since
January of 1996. Corporate Executive Vice President for Merchandising and
Sales Promotion and Chief Merchandising Officer of Belk Stores Services,
Inc. ("Belk"), a group of family and management-owned retail department
stores, from 1991 to April of 1995. Corporate Senior Vice President of
Belk from 1982 to 1991. Director of Jos. A. Bank Clothiers, Inc.
2
<PAGE> 5
CLASS III -- TO CONTINUE IN OFFICE UNTIL 1999
TIMOTHY F. FINLEY, Director Since 1996. Age 53. Chairman of the Board, Chief
Executive Officer and a director of Jos. A. Bank Clothiers, Inc. from
August 1990 to present. Chairman of the Board of The Finley Group, Inc.,
a business crisis management group, since 1985. Director of Cole National
Corporation and Pic 'N Pay.
LAWRENCE J. YOUNG, Director Since 1990. Age 52. Chairman of Angelica
Corporation ("Angelica"), a textile linen supplier and manufacturer and
marketer of uniforms, since 1990. Chief Executive Officer of Angelica
from 1989 to present. President and a director of Angelica since 1988.
Director of Boatmen's National Bank of St. Louis, N.A.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held six meetings during the fiscal year ended
January 25, 1997 and took action by unanimous written consent without a meeting
on one occasion. Each director attended at least 75% of the aggregate of (i) the
total number of meetings of the Board of Directors held while the director held
such office, and (ii) the total number of meetings held by all committees of the
Board on which the director served during the periods that the director served.
The standing committees of the Board of Directors include the Audit
Committee, the Executive Compensation and Development Committee and the
Nominating Committee.
AUDIT COMMITTEE. The Audit Committee is comprised of Messrs. Finley,
Trusheim and Young (Chairman). The Audit Committee met four times during the
most recent fiscal year. The functions of the Audit Committee include
recommending to the Board of Directors the selection of the Company's
independent public accountants, reviewing the independence of and proposed
arrangements with the independent public accountants, including the scope of the
examination, the proposed fees and the advisability of the independent public
accountants making specified studies as to other auditing and non-auditing
matters, reviewing the results of the audit for each fiscal year and reviewing
the scope and results of the Company's internal audit program. The Committee met
privately, at each meeting during the most recent fiscal year, with the
independent public accountants and with the Company's Director -- Internal Audit
and Shortage Control to review their respective opinions and functions as they
relate to the Company's internal controls.
EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE. The Executive
Compensation and Development Committee is comprised of Ms. Delsing and Messrs.
Berra, Finley and Trusheim (Chairman). The committee met two times during the
most recent fiscal year and took action by unanimous written consent without a
meeting on one occasion. The functions of the committee include considering and
recommending to the Board of Directors the salaries and bonuses of the person(s)
holding the offices of Chairman of the Board and President and the overall
compensation policies of the Company, determining the cash bonuses payable to
the Company's other executive officers and approving the annual merit increases
in the salaries of such executive officers, granting stock options and other
stock-based incentives to the Company's executive officers, advising management
on other executive compensation matters as requested and reviewing and
monitoring management development efforts to assure development of a pool of
individuals for adequate and orderly management succession (other than
successors to the person(s) holding the offices of Chairman of the Board and
President, for which the Nominating Committee has responsibility).
NOMINATING COMMITTEE. The Nominating Committee is comprised of Ms. Delsing
and Messrs. Young and Berra (Chairman). The Nominating Committee met once during
the most recent fiscal year. The functions of the Nominating Committee include
recommending to the Board of Directors nominees for directors, nominees for the
successor(s) to the person(s) holding the offices of Chairman of the Board and
President whenever there is a vacancy in either of those offices and nominees
for chairpersons and members of all committees of the Board. The Nominating
Committee considers suggestions as to nominees for election as directors from
any source, including any shareholder. Recommendations for nominations must be
submitted in writing to the Company's Secretary, 2001 East Terra Lane, O'Fallon,
Missouri 63366-0110 not later than
3
<PAGE> 6
February 15th of the year in which the meeting is to be held, and must include
the following information: (i) the name, age, business address and residence
address of the person to be nominated; (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of common stock
of the Company which are beneficially owned by such person, (iv) any other
information relating to such person that is required to be disclosed in the
solicitation of proxies pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended, and (v) a written consent from such person to serve as
a director if elected.
DIRECTOR COMPENSATION
Non-management directors are paid an annual retainer fee of $25,000, plus
$2,000 for each Board meeting attended, $1,500 for each committee meeting
attended and $1,000 for each telephonic Board or committee meeting attended.
Under the Company's Retainer Stock and Option Plan, non-management directors
must use their annual retainer fee to purchase shares of Common Stock, which
vest over a 12-month period and are subject to restrictions on transferability.
In addition, under this plan each non-management director receives an annual
option to purchase 2,000 shares of Common Stock at an exercise price equal to
the fair market value on the date of grant, subject to the terms and conditions
set forth in the plan. The Company also has a Restricted Stock Plan for
Non-Management Directors under which newly elected non-management directors
receive 1,000 shares of Common Stock, which vest over a five-year period and are
subject to restrictions on transferability. The Company also has a retirement
plan under which certain non-management directors who retire from the Board
after age 67 with at least five years of service as a director are entitled to a
retirement benefit. The plan was amended in 1996 to provide that only persons
who were vested under the plan as of May 24, 1996 are eligible for benefits
under the plan. The retirement benefit is equal to 10% of the annual retainer in
effect at the time of retirement (but not more than $20,000) for each year of
service as a director (not to exceed 10 years), except that any director whose
term commenced in 1990 and who serves until the mandatory retirement age of 72
and has not then attained at least 10 years of service will be deemed to have
attained 10 years of service at retirement. Benefits are payable for the life of
the director or, if shorter, for the number of years that the director served on
the Board (not to exceed 10 years). Management directors receive no compensation
or fees for service as directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the compensation in each of the last three fiscal
years of the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------- --------------------------------------------------
AWARDS
-----------------------------
RESTRICTED SECURITIES
FISCAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($) OPTIONS/SARS(#) COMPENSATION($)(1)
--------------------------- ------ --------- -------- ---------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Wildrick 1996 $683,333 $300,000(2) $1,960,156(3) -0- $ 7,400
Chairman of the Board 1995 514,583 100,000(4) 368,750(3) 175,000(5) 86,733
(Since January 31, 1996), 1994 N/A N/A N/A N/A N/A
President & Chief Executive
Officer
James H. Ferstl 1996 308,333 175,000(6) 452,344(3) -0- 1,442
Executive Vice President- 1995 112,821 25,000(7) -0- 30,000(5) 630
Chief Merchandising 1994 N/A N/A N/A N/A N/A
Officer
Russell E. Solt 1996 262,500 100,000(2) 376,955(3) -0- 816
Executive Vice President- 1995 40,865 40,750(8) 16,250(3) 20,000(5) 130
Finance & Administration 1994 N/A N/A N/A N/A N/A
Peter A. Mihaltian 1996 237,500 75,000(2) 339,561(3) -0- 1,395
Executive Vice President- 1995 151,731 25,000(9) -0- 30,000(5) 495
Information Technology 1994 N/A N/A N/A N/A N/A
and Operations
Eugene Caldwell 1996 182,083 50,000(2) 268,994(3) -0- 747
Senior Vice President- 1995 172,125 -0- -0- 20,000(5) 2,459
Chief Financial Officer 1994 159,221 26,000(10) -0- 4,000(5) 2,341
</TABLE>
- ------------------------------
(1) The amounts set forth in the "All Other Compensation" column consist of an
$82,173 payment by the Company in 1995 for a third party purchase of Mr.
Wildrick's former residence, in accordance with the Company's executive
relocation program, and the following items:
<TABLE>
<CAPTION>
COMPANY TERM
CONTRIBUTIONS LIFE
TO PROFIT INSURANCE
SHARING PLAN PREMIUMS
------------- ---------
<S> <C> <C> <C>
R.N. Wildrick 1996 $ -0- $7,400
1995 N/A 4,560
1994 N/A N/A
J.H. Ferstl 1996 -0- 1,442
1995 N/A 630
1994 N/A N/A
R.E Solt 1996 -0- 816
1995 N/A 130
1994 N/A N/A
P.A. Mihaltian 1996 -0- 1,395
1995 N/A 495
1994 N/A N/A
E. Caldwell 1996 -0- 747
1995 1,875 584
1994 1,875 466
</TABLE>
(2) Discretionary bonuses paid in fiscal 1996.
(Footnotes continued on following page.)
5
<PAGE> 8
(3) Dividends on such shares are payable as and when declared by the Company's
Board of Directors on shares of Common Stock generally. All shares granted
in 1996 vest five years from the date of grant, with accelerated vesting if
certain share price objectives are met. See "Report of the Executive
Compensation and Development Committee on Executive Compensation --
Stock-Based Incentives," below. As of January 25, 1997 (the end of fiscal
1996) Mr. Wildrick held a total of 415,625 shares of restricted stock
(including 81,250 vested shares), with a market value of $1,039,063 on such
date, Mr. Ferstl held a total of 75,750 shares of restricted stock
(including 10,125 vested shares), with a market value of $189,375 on such
date, Mr. Solt held a total of 68,438 shares of restricted stock (including
8,750 vested shares), with a market value of $171,095 on such date, Mr.
Mihaltian held a total of 58,770 shares of restricted stock (including
9,507 vested shares), with a market value of $146,925 on such date, and Mr.
Caldwell held a total of 45,046 shares of restricted stock (including 6,021
vested shares), with a market value of $112,615 on such date.
(4) Guaranteed minimum bonus for fiscal 1995 pursuant to Mr. Wildrick's
employment agreement.
(5) All such options were canceled and surrendered to the Company in
conjunction with the grant of shares of restricted stock to the executive
officers on February 28, 1996. See "Ten-Year Option/SAR Repricings" table
and "Report of the Executive Compensation and Development Committee on
Repricing of Options," below.
(6) Includes guaranteed minimum bonus for fiscal 1996 of $25,000 pursuant to
Mr. Ferstl's employment agreement, and $150,000 discretionary bonus paid to
Mr. Ferstl in fiscal 1996.
(7) Guaranteed minimum bonus for fiscal 1995 pursuant to Mr. Ferstl's
employment agreement.
(8) Signing bonus paid in conjunction with Mr. Solt's initial employment by the
Company.
(9) Guaranteed minimum bonus for fiscal 1995 pursuant to Mr. Mihaltian's
employment agreement.
(10) Guaranteed minimum bonus for fiscal 1994.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
The following table contains information with respect to long-term cash
awards granted, contingent upon the Company's financial performance, to the
named executive officers during the most recent fiscal year under the Company's
Executive Incentive Compensation Plan.
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER
PERIOD UNTIL ESTIMATED FUTURE PAYOUTS UNDER
MATURATION NON-STOCK PRICE BASED PLANS
OR PAYOUT ---------------------------------------------
NAME (FISCAL YEARS) THRESHOLD($)(1) TARGET($)(2) MAXIMUM($)
- ---- -------------- --------------- ------------ ----------
<S> <C> <C> <C> <C>
Robert N. Wildrick 1996-1998 $143,000 $286,000 $429,000
James H. Ferstl 1996-1998 24,600 49,200 73,800
Russell E. Solt 1996-1998 20,500 41,000 61,500
Peter A. Mihaltian 1996-1998 18,450 36,900 55,350
Eugene Caldwell 1996-1998 14,637 29,274 43,911
</TABLE>
- ------------------------------
(1) Threshold values are based on one-third of the maximum values.
(2) Target values are based on two-thirds of the maximum values.
The actual amounts earned, if any, under the awards set forth above will be
determined based on the Company's compound earnings per share growth and average
return on net assets during the performance periods as compared with the goals
for these performance criteria. Threshold, target and maximum awards are
determined based on percentages of each executive's base salary rate immediately
prior to the beginning of the performance period (see "Report of the Executive
Compensation and Development Committee on Executive Compensation -- Bonuses --
Long-Term Cash Bonuses," below).
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to the named executive officers during the
fiscal year ended January 25, 1997.
6
<PAGE> 9
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
No unexercised stock options were held by the named executive officers as
of January 25, 1997, and no stock options were exercised by the named executive
officers during the most recent fiscal year.
OTHER COMPENSATION ARRANGEMENTS
EMPLOYMENT AGREEMENTS. Each of the named executive officers has an
employment agreement with the Company. Each of the agreements requires that the
executive officer devote his undivided time and attention during customary
business hours to the Company's business and refrain from engaging in any
competing business during the term of the agreement.
The agreement with Mr. Wildrick provides for a stated base salary, with
increases at the discretion of the Executive Compensation and Development
Committee, subject to the approval of the Company's Board of Directors, and
expires on April 30, 2000.
The agreements with Messrs. Ferstl, Solt and Caldwell provide for stated
base salaries, subject to increases based on annual performance reviews, and
expire on April 30, 1998. Mr. Mihaltian resigned his position with the Company
effective January 27, 1997.
SEVERANCE AGREEMENTS. Each of the named executive officers (other than Mr.
Mihaltian) has a severance agreement with the Company. The agreements provide
that the executives would become entitled to benefits under the agreements if
(i) a "Change in Control" of the Company occurs, and (ii) the executive is
actually or constructively terminated other than for cause or disability or,
with respect to Mr. Wildrick, during the 180 days following such Change in
Control, the executive determines in good faith that, as a result of the Change
in Control, the executive is unable to execute his duties effectively and
thereafter terminates his employment during the term of the agreement. A "Change
in Control" is generally defined in the agreements as (i) the acquisition by any
person of beneficial ownership of securities representing 50% or more of the
combined voting power of the Company's outstanding securities, (ii) certain
changes in the composition of the Company's Board of Directors during any period
of two consecutive years, or (iii) approval by the shareholders of certain
mergers or consolidations of the Company with another company, a plan of
liquidation of the Company or an agreement for the sale of all or substantially
all of the Company's assets.
The severance agreements provide for a lump sum severance payment equal to
the product of three times the sum of (i) base salary at the time of termination
or, if greater, base salary immediately prior to the Change in Control, plus
(ii) target bonus. Each agreement also provides 36 months of continued medical
and life insurance benefits (in addition, Mr. Wildrick would receive benefits
under the Company's postretirement life and medical insurance plans). The
agreement with Mr. Wildrick provides for a "tax gross-up" payment in the event
that the above-mentioned payments are subject to excise taxes under Section 4999
of the Internal Revenue Code of 1986, as amended.
RETIREMENT PLANS. The Company has a noncontributory retirement plan (the
"Retirement Plan") covering substantially all associates who are at least 21
years of age and are paid for 1,000 or more hours per year and an unfunded
supplementary retirement plan (the "Supplementary Plan") covering, generally,
associates whose compensation in a calendar year is equal to at least twice the
amount of "wages" then subject to the payment of Social Security taxes.
7
<PAGE> 10
The following table shows the estimated aggregate annual benefits payable
upon retirement (assuming a retirement in 1996 at age 65) for persons in
specified compensation and years of service classifications covered by the
Retirement Plan and the Supplementary Plan.
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL -------------------------------------------
EARNINGS 10 15 20 25 OR MORE
-------- -- -- -- ----------
<C> <C> <C> <C> <C>
$ 200,000 $ 40,000 $ 60,000 $ 80,000 $100,000
300,000 60,000 90,000 120,000 150,000
400,000 80,000 120,000 160,000 200,000
500,000 100,000 150,000 200,000 250,000
600,000 120,000 180,000 240,000 300,000
700,000 140,000 210,000 280,000 350,000
800,000 160,000 240,000 320,000 400,000
900,000 180,000 270,000 360,000 450,000
1,000,000 200,000 300,000 400,000 500,000
</TABLE>
Benefits under the Retirement Plan are generally based on the associate's
years of service and career pay (.9% of each year's pay, plus .6% of each year's
pay above the average Social Security wage base, as defined in the plan). With
respect to service prior to 1990, however, benefits are generally based on the
associate's average pay during the period 1984 through 1988 (.7% of average pay
times credited service before January 1, 1990, plus .6% of average pay above the
1990 average Social Security wage base times such credited service). Benefits
under the Supplementary Plan are based on the associate's years of service and
final three years' "average annual compensation" (2% of average annual
compensation multiplied by years of service with the Company up to a maximum of
25 years). The Supplementary Plan was amended in 1995 to permit the award of
additional periods of service to plan members and, in conjunction with his
employment by the Company, Mr. Wildrick was awarded three additional years of
service pursuant to this amendment. Covered compensation under both plans
includes salary and annual and long-term bonuses. The Retirement Plan was
amended in 1995 to suspend further benefit accruals after 1995.
The Supplementary Plan provides that, during the five-year period following
a "Change in Control" (as defined in the Supplementary Plan) of the Company, any
participant who is at least 50 years old on the date of a Change in Control who
is actually or constructively terminated by the Company other than for cause
will be deemed to have retired at age 55 with the greater of five years or
actual years of service under the plan with "average annual compensation" (as
defined in the Supplementary Plan) determined as the greater of such amount at
(i) the date of the Change in Control, or (ii) the date of termination of
employment. In addition, benefits would not be forfeitable following a Change in
Control.
Benefits are payable in the form of a monthly straight life annuity or in
certain other actuarially equivalent forms. To the extent payable under the
Supplementary Plan, the amounts shown in the preceding table would be reduced by
amounts payable under the Retirement Plan, primary Social Security benefits, the
annuity value of the maximum potential Company contributions under the Company's
Profit Sharing Plan and by certain other amounts. Notwithstanding the foregoing,
the minimum benefit under the Supplementary Plan is the amount which would be
payable under the Retirement Plan and the Company's Profit Sharing Plan,
determined without regard to any statutory limits, less the benefits actually
payable under those plans. The executive officers named in the compensation
tables above had, as of December 31, 1996, the following respective years of
service and average annual compensation (as defined in the Supplementary Plan):
Robert N. Wildrick, 4 years ($763,542); James H. Ferstl, 1 year ($475,000);
Russell E. Solt, 0 years ($0.00); Peter A. Mihaltian, 1 year ($331,250); and
Eugene Caldwell, 14 years ($196,166).
8
<PAGE> 11
REPORT OF EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
ON EXECUTIVE COMPENSATION
The Executive Compensation and Development Committee (the "Committee") of
the Board of Directors recommends the salary and cash bonuses payable to the
Company's Chief Executive Officer to the full Board of Directors for final
approval. In addition, the Committee reviews and determines all stock-based
incentives payable to the Chief Executive Officer. The Committee also reviews
and determines all cash bonuses and stock-based incentives payable to the
Company's other executive officers and approves the annual merit increases in
salary for such officers. The Committee is comprised solely of independent,
non-management directors.
EXECUTIVE COMPENSATION PHILOSOPHY
The Company's executive compensation program is designed to attract,
motivate, reward and retain talented executives and to align management's
interests with those of the Company's shareholders by linking a significant
portion of each executive's total compensation to Company performance. These
objectives are accomplished through the following practices:
-- Ensuring that the Company's overall compensation program is competitive
with those provided by comparable retailers.
-- Rewarding executives for Company performance which exceeds specific
annual financial goals.
-- Rewarding executives for Company performance which exceeds specific
long-term goals for the compound growth rate of earnings per share and
average return on net assets.
-- Providing incentives for executives to contribute to the growth of
shareholder value through the granting of long-term, stock-based
incentives.
COMPENSATION COMPONENTS
The Company's executive compensation program currently consists of the
following components: salary, annual and long-term bonuses under the Company's
Executive Incentive Compensation Plan (the "EICP"), discretionary bonuses and
stock-based incentives. The Committee reviews the Company's executive
compensation program annually and compares it with the compensation programs of
comparable retailers as reflected in nationally-recognized surveys and in
publicly available reports. In 1996, the Committee began using the Hewitt
Management Compensation Services Division's Retail Management Compensation Study
(the "MCS Survey") as its primary benchmark of industry compensation practices.
The MCS Survey provides more focused information on mass merchants of similar
size to the Company and includes more companies in "turn-around" situations than
other commercially available surveys, but does not include any of the companies
in the S&P Retail Composite Index. The Committee generally attempts to set the
components of executive compensation so that total compensation and each
component thereof (salary, target bonuses and present value of stock-based
incentives) are at approximately the 50th percentile relative to compensation
paid for similar positions at comparable retailers. The Committee believes,
however, that actual compensation paid to the Company's executive officers for
1996 exceeded the 50th percentile level objective, due primarily to the
discretionary cash bonuses and restricted stock grants discussed below.
SALARY. The salary for the Company's Chief Executive Officer initially is
set pursuant to a negotiated employment agreement, subject to increases at the
discretion of the Board of Directors. In recommending increases in salary for
the Chief Executive Officer, the Committee considers the salaries paid to
individuals in similar positions at comparable retailers as reflected in the MCS
Survey and in publicly available reports. The Committee reviews the salary of
the Company's Chief Executive Officer annually. Any changes in salary generally
are based on the individual's performance, the Company's performance (as
measured by earnings per share and return on average net assets), and changes in
the salary levels for similar positions at comparable retailers. In making
salary recommendations with respect to the Company's Chief Executive Officer,
the Committee exercises its considered judgment and discretion based on the
foregoing factors and takes into account relevant external factors, such as
overall economic trends and competitive developments. No specific
9
<PAGE> 12
weight is assigned to each factor and no specific formula is applied to arrive
at the Committee's recommendation.
In November of 1996, the Committee reviewed the salary of Mr. Wildrick,
Chief Executive Officer of the Company, and considered the following factors:
projected 1996 salary and total compensation levels for similar positions at
comparable retailers (based on the 1996 MCS Survey and publicly available
reports); the extent to which the Company's repositioning program depended on
the efforts of the Chief Executive Officer; the likely impact on the Company if
he were to resign; and the estimated compensation that the Company would have to
offer to attract and retain a qualified successor. Based on the foregoing and,
in particular, the Committee's desire to ensure that the Chief Executive
Officer's total compensation package is competitive with those being offered to
the Chief Executive Officers of other mass merchants in "turn-around"
situations, the Committee recommended (and the Board of Directors subsequently
approved) a 30.8% increase in the Chief Executive Officer's salary, effective
December 1, 1996.
The initial salaries for other executive officers are also set pursuant to
negotiated employment agreements, subject to increases based upon annual
performance reviews. In November of 1996, the Committee approved increases in
the salaries of such executive officers, effective December 1, 1996, based upon
the Chief Executive Officer's recommendations. In determining the recommended
increases, the Chief Executive Officer evaluated each executive's overall job
performance in 1995 and 1996 and exercised his considered judgment and
discretion. He took into account, among other things, the results obtained by
each executive, relevant external factors, such as changes in the overall
economic climate and competitive developments, the extent to which the Company's
repositioning program depended on the efforts of the executive, the likely
impact on the Company if the executive were to resign, and the estimated
compensation that the Company would have to offer to attract and retain a
qualified successor. The Committee reviews the process annually and may modify
the process from time to time to ensure that the Company maintains a competitive
position among comparable retailers while maintaining internal equity.
BONUSES. A significant portion of each executive officer's total potential
compensation consists of cash bonuses under the EICP, which generally are
directly linked to Company performance.
Annual Cash Bonuses. The annual bonus component of the EICP provides
executive officers the opportunity to earn additional cash compensation if the
Company achieves or exceeds annual performance goals. For 1996 and prior years,
the annual performance goals have consisted of an earnings goal and, in
addition, for the Chief Executive Officer, a goal for return on average net
assets (as defined in the plan), which is weighted equally with the earnings
goal. The amount of each bonus that may be earned is determined by the Committee
at the time the goals are set. With respect to the Chief Executive Officer,
partial payments are made if only one of the performance goals is met. For 1996,
potential bonuses ranged from 11% of salary, if the threshold goals were
attained, to 21% of salary, if the target goals were attained, to a maximum of
32% of salary, if the maximum goals were achieved. No bonuses generally are
payable if the threshold goals are not attained. At the beginning of each fiscal
year, the Committee establishes the annual performance goals at which the
threshold and maximum bonuses are payable. The goals are established based on an
evaluation of the prior year's actual results and growth potential for the
current year in light of actual and anticipated economic and competitive
conditions. The threshold goals represent the Committee's considered judgment of
the minimum acceptable growth objective, whereas the maximum goals are based on
the Committee's determination of significant, but realistically achievable,
improvement over the prior year's results. The midpoint between the threshold
and maximum goals represents the target goal. For 1996, earnings goals were
based on earnings per share.
Because the Company did not achieve the threshold goals in 1996 for
earnings per share or return on average net assets, no annual bonuses were
earned by executive officers for 1996 under the EICP, however, in accordance
with a negotiated employment agreement entered into in conjunction with his
employment by the Company, one executive officer was guaranteed a bonus for 1996
in the amount of $25,000. This guaranteed bonus is reflected in the Summary
Compensation Table, above.
Long-Term Cash Bonuses. The long-term bonus component of the EICP provides
executive officers the opportunity to earn additional cash compensation if the
Company achieves or exceeds certain performance
10
<PAGE> 13
goals during long-term performance periods. For the long-term performance period
commencing in 1996 (and for all previous long-term performance periods), the
long-term performance goals have consisted of compound earnings per share growth
and average return on net assets. The two performance criteria are weighted
equally, and partial payouts are made if only one of the performance goals is
met. A long-term performance period generally consists of three consecutive
fiscal years, with a new long-term performance period beginning each year. The
Committee establishes at the beginning of each performance period the
performance levels at which the threshold and maximum bonuses are payable. The
threshold goals represent the Committee's considered judgment of the minimum
acceptable long-term growth objective, whereas the maximum goals are set at a
level representing, in the Committee's opinion, superior long-term performance
within the retail industry. The midpoint between the threshold and maximum goals
represents the target goal. No bonuses are payable if the threshold goals are
not achieved.
The amount of each bonus that may be earned is determined by the Committee
at the time the goals are set. For the Chief Executive Officer, the range for
long-term bonuses for the performance period 1994-1996 was from 15% to 44% of
his starting salary, after application of the EICP's provisions which reduce
potential bonuses due to the fact that he was employed by the Company for only
22 months during the 3-year performance period. For all other executive
officers, for the performance period 1994-1996, the range for long-term bonuses
was from 3% to 23% of salary, after application of the EICP's proration
provisions.
Because the Company did not achieve the threshold goals for compound
earnings per share growth or average return on net assets for the 1994-1996
performance period, no long-term bonuses were earned by executive officers for
such period.
STOCK-BASED INCENTIVES. In addition to salary and annual and long-term cash
bonuses, the Company's executive compensation program includes stock-based
incentives, such as stock options and restricted stock, which are designed to
motivate key executives to perform in a manner that will increase the long-term
market value of the Company's Common Stock by providing them with the
opportunity to share in increases in stock value. The Committee believes that
the use of such incentives is in the best interests of the Company and its
shareholders.
On March 7, 1996, the Company's Board of Directors amended the 1992 Long
Term Performance Plan (the "LTPP"), which amendment was approved by the
Company's shareholders at the 1996 Annual Meeting, to allow for the
implementation of a restricted stock program for key executives. The executives
who participate in this program, including the Chief Executive Officer and all
of the other executive officers named in the Summary Compensation Table above,
have surrendered all of their outstanding stock options in return for grants of
restricted stock under the new program. In February of 1996, the Committee
granted 325,000 shares of restricted stock to the Chief Executive Officer and
varying amounts of restricted stock to each of the other named executive
officers (all contingent on Board and shareholder approval of the amendment). In
November of 1996, the Committee granted an additional 40,625 shares of
restricted stock to the Chief Executive Officer and varying amounts of
restricted stock to each of the other named executive officers. These grants are
reflected in the Summary Compensation Table, above, and vest in four equal
installments based on the attainment of specified share price objectives ($6.00,
$9.00, $12.00 and $15.00 per share, as to the initial grants, and $9.00, $12.00,
$15.00 and $18.00 per share, as to the grants made in November 1996), but not
later than five years from the date of grant. The number of shares granted to
each executive officer was determined on both occasions by the Committee in the
same manner and based on the same factors that were considered in determining
the executive officers' base salary increases, as discussed under "Salary"
above, and, in particular, the Committee's desire to keep the senior management
team intact during the critical repositioning of the Company. The new program of
discretionary grants has replaced annual option grants as the Company's primary
long-term, stock-based incentive program.
DISCRETIONARY BONUSES. In addition to administering the on-going components
of the Company's executive compensation program described above, the Committee
or, with respect to cash bonuses to the Chief Executive Officer, the full Board
of Directors, may from time to time approve certain discretionary cash bonuses
intended to incentivize and retain key executive officers. In November of 1996,
the Committee recommended (and the Board subsequently approved) the payment of a
cash bonus to the Chief Executive
11
<PAGE> 14
Officer, in the amount of $300,000, and the Committee approved cash bonuses to
each of the other executive officers, in varying amounts. These bonuses are
reflected in the Summary Compensation Table, above. The amount of each such
bonus was determined by the Committee in the same manner and based on the same
factors that were considered in determining the executive officers' base salary
increases, as discussed under "Salary" above, and, in particular, the
Committee's desire to keep the senior management team intact during the critical
repositioning of the Company.
OTHER PROGRAMS. In addition to the above-described programs for executives,
the Company has an incentive plan in which approximately 232 management
associates participate. Participating associates are eligible to receive annual
cash awards under this plan based on the attainment of certain measures of
performance. The maximum awards range from approximately 10% to 32% of salary.
None of the Company's executive officers participate in this plan.
The Company also maintains a 401(k) profit sharing plan which permits
voluntary associate contributions of up to 15% of pay (subject to certain
limitations for "highly compensated" associates). All eligible executive
officers, and approximately 43% of all eligible full-time associates,
participate in this plan. The plan provides for a discretionary Company matching
contribution, which ranges from 0% to 100% of each associate's contributions up
to 5% of pay. Company matching contributions are determined by the Committee
based, in part, on the Company's performance and are invested in Company Common
Stock, linking the interests of shareholders and associates throughout the
Company.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee's policy is to maximize the deductibility for Federal income
tax purposes of compensation paid to its executive officers, to the extent this
objective is compatible with the overall goals of the Company's executive
compensation program and in the Company's best interests. The Committee may,
however, elect to forego deductibility of certain executive compensation
payments if such action is, in the opinion of the Committee, necessary or
appropriate to further the goals of the Company's executive compensation program
or otherwise in the Company's best interests. With respect to the restricted
stock grants and discretionary cash bonuses discussed above, the Committee has
been advised that compensation attributable to such awards will not constitute
"performance-based" compensation for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder and thus may
not be deductible by the Company to the extent an individual executive's
non-performance-based compensation in a fiscal year exceeds $1 million. In the
Committee's opinion, however, the substantial benefits to the Company of these
awards, which are designed primarily to retain and incentivize key executives
and to further align the interests of management and the shareholders, justify
the loss of deductibility with respect to certain compensation expenses.
EXECUTIVE COMPENSATION AND
DEVELOPMENT COMMITTEE
H. Edwin Trusheim, Chairman
Robert L. Berra
Kimberly A. Delsing
Timothy F. Finley
12
<PAGE> 15
REPORT OF THE EXECUTIVE COMPENSATION AND DEVELOPMENT
COMMITTEE ON REPRICING OF OPTIONS
On February 28, 1996, the Executive Compensation and Development Committee
(the "Committee") of the Board of Directors approved grants of restricted stock
to each of the named executive officers, which grants are reflected in the
Summary Compensation Table, above. These grants were contingent upon approval by
the Company's Board of Directors and shareholders of an amendment to the
Company's 1992 Long Term Performance Plan, which approvals were subsequently
obtained in 1996. As a condition of the restricted stock grants, the Committee
required that all Company stock options then held by the recipients be canceled
and surrendered to the Company.
The grants of restricted stock were intended to provide performance and
retention incentives to key executives, whose efforts are essential to the
Company's repositioning as a family value store. The factors considered by the
Committee in determining the number of shares of restricted stock granted to
each executive officer, including the Chief Executive Officer, are discussed in
the Report of the Executive Compensation and Development Committee on Executive
Compensation, above.
The following table contains information concerning the stock options
canceled and surrendered to the Company as of February 28, 1996 as a condition
to the grant of shares of restricted stock:
TEN-YEAR OPTION/SAR REPRICINGS TABLE
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK AT PRICE AT REMAINING AT
OPTIONS/SARS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT($)(1) AMENDMENT($) PRICE($)(2) AMENDMENT
---- ---- ------------ --------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Wildrick 2/28/96 100,000 $5.625 $10.8125 N/A 9 yrs., 2 mos.
Chairman of the Board 2/28/96 75,000 5.625 3.8125 N/A 9 yrs., 8 mos.
(Since January 31, 1996)
President & Chief
Executive Officer
James H. Ferstl 2/28/96 5,000 5.625 5.9375 N/A 9 yrs., 6 mos.
Executive Vice President- 2/28/96 25,000 5.625 3.8125 N/A 9 yrs., 8 mos.
Chief Merchandising
Officer
Russell E. Solt 2/28/96 20,000 5.625 3.3125 N/A 9 yrs., 9 mos.
Executive Vice President-
Finance & Administration
Peter A. Mihaltian 2/28/96 5,000 5.625 9.8750 N/A 9 yrs., 3 mos.
Executive Vice President- 2/28/96 25,000 5.625 3.8125 N/A 9 yrs., 8 mos.
Information Technology
and Operations
Eugene Caldwell 2/28/96 750 5.625 31.1250 N/A 1 yr., 2 mos.
Senior Vice President- 2/28/96 750 5.625 17.9063 N/A 2 yrs., 2 mos.
Chief Financial Officer 2/28/96 4,000 5.625 23.4375 N/A 8 yrs., 2 mos.
2/28/96 20,000 5.625 3.8125 N/A 9 yrs., 8 mos.
</TABLE>
- ------------------------------
(1) Based on the closing price of a share of Common Stock on February 28, 1996,
the date of grant of the replacement restricted stock. The grants of
restricted stock and the related surrender and cancellation of options were
both conditioned upon Board and shareholder approval of an amendment to the
Company's 1992 Long Term Performance Plan, which approvals were obtained on
March 7, 1996 and May 24, 1996, respectively.
(2) Options were surrendered in return for grants of restricted stock.
EXECUTIVE COMPENSATION AND
DEVELOPMENT COMMITTEE
H. Edwin Trusheim, Chairman
Robert L. Berra
Kimberly A. Delsing
Timothy F. Finley
13
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Wildrick served, during fiscal 1996, and currently serves as a director
of Jos. A. Bank Clothiers, Inc. ("Jos. A. Bank"). Mr. Finley, who is a member of
the Company's Executive Compensation and Development Committee, was, during
fiscal 1996, and currently is an executive officer of Jos. A Bank.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock to the cumulative total return of the S&P 500 Index and the S&P
Retail Composite Index (based on an initial investment of $100 and assuming
reinvestment of dividends) from February 3, 1992, the first trading day in the
Company's 1992 fiscal year, through the end of the Company's most recent fiscal
year.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD VENTURE STORES, S&P RETAIL S&P 500 INDEX
(FISCAL YEAR COVERED) INC. COMPOSITE
<S> <C> <C> <C>
02/03/92 100.00 100.00 100.00
01/30/93 94.76 119.36 110.58
01/29/94 85.21 115.04 124.82
01/28/95 49.58 106.53 125.48
01/27/96 19.56 114.87 174.01
01/25/97 10.30 137.12 219.84
</TABLE>
14
<PAGE> 17
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding each person
known to the Company to be the beneficial owner of more than five percent of the
Company's Common Stock.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES CLASS(1)
- ---------------- --------- ----------
<S> <C> <C>
Strong Capital Management, Inc. 1,131,450(2) 6.19%
100 Heritage Reserve
Menomonee Falls, WI 53105
Dimensional Fund Advisors 1,141,879(3) 6.25%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
</TABLE>
- ------------------------------
(1) Based on 18,268,961 shares issued and outstanding as of April 23, 1997.
(2) Based on a Schedule 13G, dated February 13, 1997, filed by Strong Capital
Management, Inc. ("Strong Capital") and Richard S. Strong, Chairman of the
Board and the principal shareholder of Strong Capital, with respect to
shares owned by one or more of Strong Capital's investment advisory clients.
Strong Capital has reported that it has sole voting power with respect to
736,850 of such shares and has sole investment power with respect to all
1,131,450 of such shares. Strong Capital and Mr. Strong disclaim beneficial
ownership of all 1,131,450 shares.
(3) Based on a Schedule 13G, dated February 5, 1997, filed by Dimensional Fund
Advisors Inc. ("Dimensional") with respect to shares owned by one or more of
Dimensional's investment advisory clients. Dimensional has reported that it
has sole voting power with respect to 768,500 of such shares and has sole
investment power with respect to all 1,141,879 of such shares. Dimensional
disclaims beneficial ownership of all 1,141,879 shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of April 10, 1997, regarding
the beneficial ownership of the Company's Common Stock by each director and
nominee, each of the executive officers named in the Summary Compensation Table
and all of the Company's directors, nominees and executive officers as a group.
As of April 10, 1997, none of such directors, nominees, or executive officers
was the beneficial owner of any depositary shares representing the Company's
cumulative convertible preferred stock.
<TABLE>
<CAPTION>
NUMBER PERCENT OF SHARES
NAME OF BENEFICIAL OWNER OF SHARES OUTSTANDING(1)
- ------------------------ --------- -----------------
<S> <C> <C>
Robert N. Wildrick 415,625(2) 2.28%
James H. Ferstl 75,750(3)
Robert L. Berra 9,761(4)
Kimberly A. Delsing 4,978(5)
Timothy F. Finley 7,947(6)
H. Edwin Trusheim 10,155(4)
Lawrence J. Young 9,755(4)
Eugene Caldwell 48,151(7)
Peter A. Mihaltian 10,382
Russell E. Solt 68,438(8)
Directors, Nominees and
Executive Officers as a
Group (10 persons) 660,942(9) 3.62%
</TABLE>
- ------------------------------
(1) Other than Mr. Wildrick, no nominee, director or named executive officer
owns more than 1% of the outstanding shares of the Company's Common Stock.
Each nominee, director and executive officer has
(Footnotes continued on following page.)
15
<PAGE> 18
sole voting and investment power with respect to the shares reported in the
table. Includes shares subject to options exercisable on or before June 9,
1997.
(2) Includes 334,375 shares of restricted stock issued under the Company's 1992
Long Term Performance Plan. All such shares are subject to certain
restrictions on transferability and are subject to forfeiture.
(3) Includes 65,625 shares of restricted stock issued under the Company's 1992
Long Term Performance Plan. All such shares are subject to certain
restrictions on transferability and are subject to forfeiture.
(4) Includes 1,800 shares issued under the Company's Restricted Stock Plan for
Non-Management Directors. All such shares are subject to certain
restrictions on transferability. Also includes 6,005 shares issued under the
Company's Retainer Stock and Option Plan for Non-Management Directors. All
such shares are subject to certain restrictions on transferability. Also
includes 1,450 shares subject to options.
(5) Includes 1,000 shares issued under the Company's Restricted Stock Plan for
Non-Management Directors. All such shares are subject to certain
restrictions on transferability and are subject to forfeiture. Also includes
3,478 shares issued under the Company's Retainer Stock and Option Plan for
Non-Management Directors. All such shares are subject to certain
restrictions on transferability and 290 shares are subject to forfeiture.
Also includes 500 shares subject to options.
(6) Includes 1,000 shares issued under the Company's Restricted Stock Plan for
Non-Management Directors. All such shares are subject to certain
restrictions on transferability and 800 of such shares are subject to
forfeiture. Also includes 5,447 shares issued under the Company's Retainer
Stock and Option Plan for Non-Management Directors. All such shares are
subject to certain restrictions on transferability. Also includes 500 shares
subject to options.
(7) Includes shares credited to Mr. Caldwell's account in the Company's Profit
Sharing Plan as of December 31, 1996, the voting of which is directed by Mr.
Caldwell. Also includes 39,025 shares of restricted stock issued under the
Company's 1992 Long Term Performance Plan. All of such restricted shares are
subject to certain restrictions on transferability and are subject to
forfeiture.
(8) Includes 59,688 shares of restricted stock issued under the Company's 1992
Long Term Performance Plan. All of such restricted shares are subject to
certain restrictions on transferability and are subject to forfeiture.
(9) Includes shares credited to the account of one executive officer in the
Company's Profit Sharing Plan as of December 31, 1996, the voting of which
is directed by such officer.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM (B) ON THE ACCOMPANYING PROXY CARD)
Upon recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP, independent public accountants, as auditors of
the Company for the fiscal year ending January 31, 1998, subject to ratification
by the shareholders at the Annual Meeting. A member of the firm of Arthur
Andersen LLP will be present at the meeting to make such statements as that firm
may desire and to answer any appropriate questions from shareholders. If the
appointment of Arthur Andersen LLP is not ratified by the shareholders, the
Board of Directors will appoint other independent auditors whose employment for
any period subsequent to the 1998 annual meeting of shareholders will be subject
to ratification by the shareholders at that meeting.
THE AFFIRMATIVE VOTE OF THE OWNERS OF A MAJORITY OF THE SHARES PRESENT OR
REPRESENTED BY PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED FOR
APPROVAL OF THIS ITEM.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ITEM (B). THE
PERSONS NAMED AS PROXIES ON THE ACCOMPANYING PROXY CARD INTEND TO VOTE ALL
SHARES REPRESENTED BY DULY-EXECUTED PROXY CARDS RECEIVED BY SUCH PERSONS FOR
ITEM (B) IF NO INSTRUCTIONS ARE GIVEN.
16
<PAGE> 19
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers ("Reporting Persons") to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of the Company's equity securities. To the
Company's knowledge, based solely on its review of the copies of such reports
furnished to the Company with respect to the most recent fiscal year and written
representations that no other reports were required, all Section 16(a) filing
requirements applicable to Reporting Persons were complied with, except that one
Form 4, to report one purchase transaction, was filed five days late by Timothy
F. Finley.
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of the Company.
The expenses of solicitation of proxies hereunder will be paid by the Company.
Proxies may be solicited by directors, officers and associates of the Company
(personally, by mail, facsimile, telegraph, telephone or other means) from or
through registered holders, nominees and others acting as principals and as
intermediaries. The Company may reimburse persons holding shares in their names
or those of their nominees for their expenses in sending proxy cards and
materials to principals. In addition, the Company has retained D.F. King & Co.,
Inc. to assist in the solicitation of proxies for a fee of $6,500, plus
out-of-pocket expenses. Any shareholder giving a proxy may revoke it at any time
prior to the close of the balloting by giving written notice of revocation to
the Company, addressed to Russell E. Solt, Secretary, Venture Stores, Inc., 2001
East Terra Lane, O'Fallon, Missouri 63366-0110.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN
AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. YOUR COOPERATION IN GIVING THIS MATTER
YOUR IMMEDIATE ATTENTION IS APPRECIATED.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholder proposals which are intended to be presented at the 1998 Annual
Meeting of Shareholders must be received at the principal executive offices of
the Company on or before December 30, 1997 for inclusion in the Company's proxy
statement and proxy card for such meeting. A shareholder wishing to bring before
any meeting a proposal or other business which is not included in the Company's
proxy statement and proxy card must comply with the notice procedures set forth
in the Company's By-laws, which generally require that prior written notice be
given to the Company's Secretary within 15 days after the date on which the date
of the meeting is disclosed to the public. A copy of the relevant provisions of
the Company's By-laws will be furnished to any shareholder upon written request
addressed to the Company's Secretary.
BY ORDER OF THE BOARD OF DIRECTORS
Russell E. Solt
Russell E. Solt
Secretary
17
<PAGE> 20
RECYCLED PAPER WITH A MINIMUM
OF 10% POST CONSUMER WASTE
(LOGO)
<PAGE> 21
[VENTURE LOGO]
April 29, 1997
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held at 9:30 a.m., Central Daylight Time, on Friday, June 20, 1997 at the
Stouffer Renaissance Hotel, 9801 Natural Bridge Road, St. Louis, Missouri.
The enclosed notice of meeting and proxy statement describe in detail the
matters to be voted on at the meeting. In addition to the formal business
matters to be brought before the meeting, we will report on the Company's
operations and answer shareholder questions. If you plan to attend in person,
please check the box on the proxy card below and an admission card will be sent
to you.
Even if you plan to attend the meeting, we encourage you to promptly sign,
date and return your proxy card in the enclosed postage-paid envelope.
Sincerely,
Robert N. Wildrick
Robert N. Wildrick
Chairman of the Board,
President and Chief
Executive Officer
DETACH PROXY CARD HERE
To vote your shares for both of the listed nominees, please mark the FOR
box in item (a). To withhold voting for both of the nominees, please mark the
WITHHOLD box. If you do not wish your shares voted FOR one nominee, please mark
the EXCEPTION box and enter the name of the exception in the space provided.
MANAGEMENT RECOMMENDS A VOTE FOR ITEMS (A) AND (B).
FOR WITHHOLD EXCEPTION
(a) Election of Directors: James H. Ferstl
and Kimberly A. Delsing
Exception______________________________ [X] [X] [X]
_______________________________________
FOR AGAINST ABSTAIN
(b) Ratification of the appointment
of Arthur Andersen LLP as
independent auditors [X] [X] [X]
<TABLE>
<S><C>
If you plan to attend the annual [X] Address change and/or [X]
meeting, please mark here. comments please mark here.
The shares represented hereby will be voted as
specified. If no specification is made, such shares
will be voted FOR the election of both of the
nominees, FOR item (b), and in the proxies' discretion
on any other matter that may properly come before the
meeting.
Please sign name(s) exactly as shown on this card. If
signing in a representative capacity, please indicate.
Date____________________________________, 1997
______________________________________________
______________________________________________
Signature(s)
</TABLE>
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [X]
<PAGE> 22
[VENTURE LOGO]
VENTURE STORES, INC. PROXY
ANNUAL MEETING OF SHAREHOLDERS - JUNE 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder whose signature appears on the reverse side of this card
hereby appoints each of Robert N. Wildrick, Russell E. Solt and Eugene Caldwell
as proxy, each with full power of substitution, to represent and vote all the
shares of common stock of Venture Stores, Inc. which the undersigned
shareholder is entitled to vote at the Annual Meeting of Shareholders of the
Company, and at all adjournments and postponements thereof, upon all subjects
that may properly come before the meeting, including the matters described
in the Notice of Annual Meeting and Proxy Statement dated April 29, 1997,
subject to the directions indicated on the reverse side of this card. IF NO
DIRECTIONS ARE GIVEN, AND THIS CARD IS SIGNED AND RETURNED, THE PROXIES WILL
VOTE FOR THE ELECTION OF BOTH DIRECTOR NOMINEES AND FOR ITEM (b), AND IN
PROXIES' DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF BOTH DIRECTOR
NOMINEES AND FOR ITEM (b) LISTED ON THE REVERSE SIDE OF THIS CARD.
This card also constitutes your voting instructions for any and all full
shares held of record by The Bank of New York for your account in the Company's
Dividend Reinvestment Plan.
Please sign on the reverse side of this card and return it promptly in the
enclosed return envelope.
VENTURE STORES, INC.
P.O. BOX 11278
NEW YORK, N.Y. 10203-0278
<PAGE> 23
[VENTURE LOGO]
April 29, 1997
Dear Fellow Associate:
Enclosed you will find the 1996 Annual Report and the Proxy Statement for
the 1997 Annual Meeting of Shareholders.
After you have read the enclosed materials, we encourage you to complete
the voting instruction card below and promptly return it in the enclosed,
postage-paid envelope. The Bank of New York, the Plan's trustee, cannot disclose
your voting instructions.
Sincerely,
Robert N. Wildrick
Robert N. Wildrick,
Chairman of the Board,
President and Chief
Executive Officer
DETACH VOTING INSTRUCTION CARD HERE
To vote your shares for both of the listed nominees, please mark the FOR box in
item (a). To withhold voting for both of the nominees, please mark the WITHHOLD
box. If you do not wish your shares voted FOR one nominee, please mark the
EXCEPTION box and enter the name of the exception in the space provided.
MANAGEMENT RECOMMENDS A VOTE FOR ITEMS (A) AND (B).
FOR WITHHOLD EXCEPTION
(a) Election of Directors: James H. Ferstl
and Kimberly A. Delsing
Exception __________________________________ [X] [X] [X]
____________________________________________
FOR AGAINST ABSTAIN
(b) Ratification of the appointment
of Arthur Andersen LLP as
independent auditors [X] [X] [X]
<TABLE>
<S> <C>
Address change and/or
comments please mark here. [X]
Please sign exactly as your name appears hereon. The
shares represented hereby will be voted as specified.
If no specification is made, such shares will be
voted FOR the election of both nominees, FOR item
(b), and in the Trustee's discretion on any other matter
that may properly come before the meeting. If this card
is not received by The Bank of New York, the Trustee, on
or before June 14, 1997, the Trustee will vote such
shares in the same proportion as the other shares held
by the Trustee are voted pursuant to instructions
received from other participants in the Profit Sharing
Plan.
Date________________________________________ , 1997
____________________________________________
Signature of Participant
</TABLE>
PLEASE SIGN, DATE AND RETURN THE VOTING INSTRUCTION CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [X]
<PAGE> 24
[VENTURE LOGO]
CONFIDENTIAL VOTING INSTRUCTIONS TO
THE BANK OF NEW YORK AS TRUSTEE UNDER
THE VENTURE STORES, INC. PROFIT SHARING PLAN
I hereby instruct the Trustee to vote all shares of common stock of Venture
Stores, Inc. represented by units credited to my account in the Venture Common
Stock Fund of the Profit Sharing Plan as of February 28, 1997 (the latest
practicable Valuation Date) at the Annual Meeting of Shareholders of the Company
on June 20, 1997, and at all adjournments and postponements thereof, upon the
matters described in the Notice of Annual Meeting and Proxy Statement dated
April 29, 1997 as directed on the reverse side of this card, and to vote in its
discretion upon such other business as may properly come before the meeting. IF
NO DIRECTIONS ARE GIVEN, AND THIS CARD IS SIGNED AND RETURNED, THE TRUSTEE WILL
VOTE FOR THE ELECTION OF BOTH DIRECTOR NOMINEES AND FOR ITEM (B), AND IN THE
TRUSTEE'S DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF BOTH DIRECTOR
NOMINEES AND FOR ITEM (B) LISTED ON THE REVERSE SIDE OF THIS CARD.
Please sign on the reverse side of this card and return it promptly in the
enclosed return envelope.
VENTURE STORES, INC.
P.O. BOX 11278
NEW YORK, N.Y. 10203-0278
