` 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
CATHERINES STORES CORPORATION
----------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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applies:
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computed pursuant to Exchange Act Rule 0-11. (Set forth the amount
on which the filing fee is calculated and state how it was
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[ ] Check box if any part of the fee is offset as provided by
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<PAGE>
CATHERINES STORES CORPORATION
3742 Lamar Avenue
Memphis, Tennessee 38118
(901) 363-3900
__________________________________________________
NOTICE OF MEETING OF STOCKHOLDERS TO BE HELD ON
June 4, 1997
________________________
TO THE STOCKHOLDERS OF
CATHERINES STORES CORPORATION
Notice is hereby given that the Annual Meeting of Stockholders
of Catherines Stores Corporation will be held at the executive
offices of the Company, 3742 Lamar Avenue, Memphis, Tennessee, on
Wednesday, June 4, 1997 at 10:00 A.M. local time, for the following
purposes:
1. To elect two members of the Board of Directors to serve
a term of three years;
2. To ratify the appointment of independent public
accountants for the fiscal year ending January 31, 1998;
and
3. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The accompanying Proxy Statement contains further information
with respect to these matters.
Stockholders of record at the close of business on April 10,
1997 are entitled to notice of and to vote at the Annual Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE
UNITED STATES.
By Order of the Board of Directors
/s/ Stanley H. Grossman
Stanley H. Grossman
Secretary
April 25, 1997
CATHERINES STORES CORPORATION
3742 Lamar Avenue
Memphis, Tennessee 38118
(901) 363-3900
___________________________________________
PROXY STATEMENT
For Annual Meeting of Stockholders, June 4, 1997
The enclosed proxy is solicited by the Board of Directors (the
"Board" or "Board of Directors") of Catherines Stores Corporation
(the "Company"), 3742 Lamar Avenue, Memphis, Tennessee 38118, to be
voted at the Annual Meeting of Stockholders to be held on June 4,
1997, at 10:00 A.M. local time at the executive offices of the
Company, 3742 Lamar Avenue, Memphis, Tennessee, or any adjournments
thereof (the "Annual Meeting"). At the Annual Meeting, the
presence in person or by proxy of the holders of a majority of the
total number of shares of outstanding Common Stock will be
necessary to constitute a quorum.
Each nominee for Director shall be elected by a majority of
the votes cast by the holders of Common Stock, all such
stockholders being present in person or by proxy and being entitled
to vote in the election.
All shares represented by properly executed proxies will be
voted in accordance with the instructions indicated thereon unless
such proxies previously have been revoked. If any proxies of
holders of Common Stock do not contain voting instructions, the
shares represented by such proxies will be voted FOR Proposals 1
and 2. The Board of Directors does not know of any business to be
brought before the Annual Meeting other than as indicated in the
notice, but it is intended that, as to any other such business,
votes may be cast pursuant to the proxies in accordance with the
judgment of the persons acting thereunder.
Any stockholder who executes and delivers a proxy may revoke
it at any time prior to its use upon (a) receipt by the Secretary
of the Company of written notice of such revocation, (b) receipt by
the Secretary of the Company of a duly executed proxy bearing a
later date, or (c) appearance by the stockholder at the meeting and
his request for the return of his proxy.
Only stockholders of record at the close of business on April
10, 1997 are entitled to notice of and to vote at the Annual
Meeting. As of April 1, 1997, there were 7,196,656 shares of
Common Stock outstanding, each of which is entitled to one vote.
This Proxy Statement and the attached form of proxy card are first
being sent or given to stockholders on or about April 25, 1997.
OWNERSHIP OF COMMON STOCK
BY DIRECTORS,
OFFICERS AND CERTAIN BENEFICIAL OWNERS
To the best knowledge of the Company based on information
filed with the Securities and Exchange Commission and the Company's
stock records, the following table sets forth the beneficial
ownership of the Company's Common Stock as of April 10, 1997, by
(i) beneficial owners of more than five percent of the Company's
Common Stock, (ii) each director, (iii) each nominee for director
and (iv) all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
Shares of the Company's Common
Stock Beneficially Owned (1)
------------------------------
Beneficial Owner Shares Percent
- ---------------- ------ -------
<S> <C> <C>
Quest Advisory Corp.(2) 778,600 10.8
J.P. Morgan & Co. Incorporated (3) 671,200 9.3
Pioneering Management Corporation(4) 615,000 8.6
The TCW Group, Inc.(5) 566,500 7.9
Heartland Advisors, Inc.(6) 438,000 6.1
Merrill Lynch & Co., Inc.(7) 418,855 5.8
James H. Lindy (8) 7,375 *
Allen B. Morgan, Jr. (8) 42,375 *
Wellford L. Sanders, Jr. (8) 4,375 *
Elliot J. Stone (8) 6,375 *
Bernard J. Wein (9) 218,984 3.0
Stanley H. Grossman (9) 161,309 2.2
David C. Forell (9)(10) 146,177 2.0
All directors and officers as a
group (9 persons) (11) 623,170 8.2
</TABLE>
______________________________
* Less than one percent of the number of outstanding shares.
(1) As used in this table, beneficial ownership means the sole or
shared power to vote, or direct the voting of, a security, or
the sole or shared power to dispose, or direct the disposition
of a security. Except as otherwise indicated, all persons
listed above have (i) sole voting power and investment power
with respect to their shares of Common Stock, except to the
extent that authority is shared by spouses under applicable
law and (ii) record and beneficial ownership with respect to
their shares of Common Stock.
(2) The address of this shareholder is 1414 Avenue of the
Americas, New York, NY 10019
(3) The address of this shareholder is 60 Wall Street, New York,
NY 10260
(4) The address of this shareholder is 60 State Street, Boston, MA
02109
(5) The address of this shareholder is 865 South Figueroa Street,
Los Angeles, CA 90017
(6) The address of this shareholder is 790 North Milwaukee Street,
Milwaukee, WI 53202
(7) The address of this shareholder is 250 Vesey Street, New York,
NY 10281
(8) Includes 4,375 shares of Common Stock issuable upon exercise
of options granted under the 1992 Nonqualified Stock Option
Plan and the 1994 Omnibus Incentive Plan.
(9) Includes 179,850, 148,600 and 65,000 shares of Common Stock
issuable upon exercise of Management Performance Units and
options granted under the 1990 Performance Units Plan, the
1992 Nonqualified Stock Option Plan and the 1994 Omnibus
Incentive Plan for Messrs. Wein, Grossman and Forell,
respectively, all of which are currently exercisable. See
"Proposal 1-Election of Directors."
(10) Includes 1,000 shares owned by Mr. Forell's children.
(11) Includes 422,450 shares of Common Stock issuable upon exercise
of Management Performance Units and options granted under the
1992 Nonqualified Stock Option Plan and the 1994 Omnibus
Incentive Plan, all of which are currently exercisable.
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's board currently consists of seven directors,
classified in three classes. The terms of James H. Lindy and
Bernard J. Wein expire at this Annual Meeting, and they are
standing for re-election. The two directors to be elected at the
Annual Meeting will serve until the 2000 Annual Meeting of
Stockholders and until their successors are elected. The names of,
and certain information furnished to the Company by the nominees
with respect to, the nominees for election as directors, are set
forth below. If, for any reason, any of the nominees shall become
unavailable for election, the individuals named in the enclosed
proxy may exercise their discretion to vote for any substitutes
chosen by the Board of Directors, unless the Board of Directors
should decide to reduce the number of directors to be elected at
the Annual Meeting. The Company has no reason to believe that any
nominee will be unable to serve as a director.
For information concerning the number of shares of the
Company's Common Stock owned by each director, each nominee for
director, and all directors and officers as a group as of April 10,
1997, see "Ownership of Common Stock by Directors, Officers and
Certain Beneficial Owners." There are no family relationships
between any directors or executive officers of the Company.
<TABLE>
<CAPTION>
Director
Name Age Since Position with the Company
- ---- --- -------- -------------------------
<S> <C> <C> <C>
Bernard J. Wein* 56 1987 Chairman of the Board,
President, Chief Executive
Officer and Director
Stanley H. Grossman 64 1992 Executive Vice President,
Secretary and Director
David C. Forell 49 1992 Executive Vice President,
Chief Financial Officer and
Director
James H. Lindy* 59 1992 Director
Allen B. Morgan, Jr. 54 1992 Director
Wellford L. Sanders, Jr. 51 1991 Director
Elliot J. Stone 76 1991 Director
</TABLE>
______________________________
* Nominee for Director.
Bernard J. Wein was named Chairman of the Board, President and
Chief Executive Officer of the Company in December 1987.
Stanley H. Grossman has been Executive Vice President and
Secretary of the Company since December 1987.
David C. Forell has been Executive Vice President, Chief
Financial Officer and Treasurer of the Company since January 1988.
James H. Lindy is Principal of Lindy & Associates, an
architectural and planning firm in Memphis, Tennessee. Mr. Lindy
and his firm have provided extensive retail architectural design
services for numerous major corporations. His firm has performed
architectural services for the Company for over five years and has
accumulated significant knowledge concerning the location, design
and operation of the Company's stores.
Allen B. Morgan, Jr. is the Chairman of the Board and Chief
Executive Officer of Morgan Keegan, Inc., the holding company for
Morgan Keegan & Company, Inc., its stock brokerage and underwriting
subsidiary, positions he has held since 1983. He has also been
Chairman of the Board, Chief Executive Officer, employee and
director of the subsidiary since 1969. Mr. Morgan is President and
a director of Morgan Keegan Consortium, Ltd., a Tennessee limited
partnership engaged in the venture capital business.
Wellford L. Sanders, Jr. has been a member of the law firm of
McGuire, Woods, Battle & Boothe LLP since 1986.
Elliot J. Stone served as the President and Chief Executive
Officer of Jordan Marsh from 1979 to 1986, and as Chairman and
Chief Executive Officer of Jordan Marsh from 1986 until his
retirement in 1989. Mr. Stone is a management consultant.
The Board of Directors of the Company is divided into three
classes serving staggered three-year terms. Pursuant to this
Proposal 1, you are being asked to vote for the election of Messrs.
Lindy and Wein for three year terms expiring at the Annual Meeting
of the Shareholders of the Company in 2000 or upon the later
election of their successors. The terms of Messrs. Grossman and
Sanders expire in 1998. The terms of Messrs. Forell, Morgan and
Stone expire in 1999.
Directors of the Company who are not employees of the Company
or of any of its wholly owned subsidiaries are paid an annual
retainer of $15,000 plus $2,000 for each Board of Directors meeting
attended, whether in person or by teleconference. In addition, the
Company's 1994 Omnibus Incentive Plan automatically grants each
nonemployee Director options to purchase 2,500 shares of Common
Stock annually, at fair market value on the date of grant,
exercisable twenty-five percent (25%) per year. No separate
compensation is payable for participation in committee meetings,
although Directors are entitled to reimbursement for expenses
incurred in attending Board and committee meetings, including
expenses for travel, food and lodging. The Board of Directors met
four times during the fiscal year ended February 1, 1997. During
that fiscal year, each director attended at least 75% of the
meetings of the Company's Board of Directors.
Audit Committee
- ---------------
The Audit Committee is responsible for recommending the
independent public accountants for the Company and reviewing the
scope of the audit. It also reviews the report of the Company's
independent public accountants. The Audit Committee held two
meetings during the fiscal year ended February 1, 1997. Its
members for that fiscal year were Messrs. Sanders, Lindy, Morgan
and Stone.
Compensation Committee
- ----------------------
The Compensation Committee reviews and approves the salaries
of officers and (except for Mr. Lindy as to stock incentive plans)
approves the grant of stock options and other rights under the
Company's stock option and other executive compensation plans,
subject to approval by the Board. The Compensation Committee held
one meeting during the fiscal year ended February 1, 1997. Its
members for that fiscal year were Messrs. Morgan, Lindy, Sanders
and Stone.
The Board of Directors has no standing nominating committee.
Executive Compensation
- ----------------------
Cash Compensation
-----------------
The following table sets forth the cash compensation paid, as
well as certain other compensation paid or accrued, to the
Company's chief executive officer and to each other executive
officer whose aggregate cash compensation exceeded $100,000 during
the indicated fiscal years (the "Named Officers").
1996 Summary Compensation Table
<TABLE>
<CAPTION>
All Other
Name and Long-Term Compensation
Principal Position Annual Compensation Compensation ($)(1)
------------------ ------------------------- ------------ ------------
Stock
Year Salary($) Bonus($) Options(#)
---- --------- -------- ----------
(a) (b) (c) (d) (f) (i)
<S> <C> <C> <C> <C> <C>
Bernard J. Wein 1996 500,000 -- 50,000 187,123
Chairman of the Board and 1995 480,000 82,510 50,000 94,782
Chief Executive Officer 1994 385,000 -- 25,000 86,553
Stanley H. Grossman 1996 325,000 -- 20,000 125,460
Executive Vice President- 1995 315,000 43,318 20,000 116,831
Merchandising 1994 270,000 -- 20,000 111,351
David C. Forell 1996 290,000 -- 20,000 47,702
Executive Vice President- 1995 280,000 38,505 20,000 40,856
Chief Financial Officer 1994 243,500 -- 20,000 39,402
E. Glenn Irelan(2) 1996 190,000 -- 10,000 57,162
Executive Vice President- 1995 165,000 22,690 8,000 33,007
Stores/Marketing/Real
Estate 1994 -- -- -- --
B. Allen Weinstein(2) 1996 240,000 30,000 10,000 32,440
Senior Vice President- 1995 120,000 30,000 10,000 500
Merchandising 1994 -- -- -- --
</TABLE>
______________________
(1) The amounts shown include amounts contributed by the Company
for each individual under the Company's Retirement Savings and
Profit Sharing Plan. For Messrs. Wein, Grossman, Forell ,
Irelan and Weinstein the amounts include supplemental
retirement benefits in the form of executive annuities or life
insurance. For Messrs. Wein, Grossman, Forell and Irelan the
amounts include automobile allowances. For Mr. Wein, the
amount includes financial planning services. For Messrs.
Irelan and Weinstein, the amounts include temporary living
expenses.
(2) Mr. Irelan joined the Company in October 1994 and earned less
than $100,000 in that fiscal year. Mr. Weinstein joined the
Company in July 1995.
Employment Agreements
- ---------------------
The Company has Executive Employment Agreements with each of
Messrs. Wein, Grossman and Forell, (the "Executive Employment
Agreements"). Each Executive Employment Agreement prescribes a
minimum base salary, has an initial term of three years and is
automatically extended for additional one-year periods unless
either party gives notice of termination at least one year prior to
the then expiration date. No notice was given June 1, 1996,
therefore, each individual's contract was extended through June 1,
1998. In the event that the Company gives an executive notice of
its election to discontinue the Executive Employment Agreement,
then the executive is entitled to a lump-sum severance payment
equal to 200% of base salary in the case of Mr. Wein and 150% of
base salary in the case of Messrs. Grossman and Forell. In the
event that the Company terminates the employment of an executive,
including if there is a change in control, other than for cause or
if the executive terminates his employment as a result of a
material breach by the Company of any of its obligations under the
Executive Employment Agreement, then the executive shall be
entitled to receive a lump sum payment equal to (x) the sum of (a)
one-twelfth of his annual base salary in effect immediately before
such termination plus (b) one-twelfth of 100% of his target bonus
opportunity for the fiscal year in which such termination occurs,
multiplied by (y) the greater of (a) the number of calendar months
remaining in the term of the executive's employment under the
Executive Employment Agreement or (b) 24 (in the case of Mr. Wein)
or 18 (in the case of Messrs. Grossman and Forell). In the event
that an executive is entitled to severance payments as described in
the preceding two sentences, he is also entitled to the
continuation of health and insurance benefits and certain
additional retirement benefits pursuant to executive annuity and
life insurance agreements for the time period on which the
severance payment is based following the termination of employment.
Stock Options
- -------------
The following table sets forth information on stock option
grants pursuant to the 1994 Omnibus Incentive Plan during the last
fiscal year for each of the Named Officers:
Stock Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable
% of Total Value
at Assumed
Options Annual
Rates of
Granted to Exercise or Stock
Appreciation
Options Employees in Base Price Expiration for
Option Terms(3)
Name Granted(#)(1) Fiscal Year ($/Share)(2) Date 5%($)
10%($)
---- ------------- ------------ ------------ ---------- -----
------
(a) (b) (c) (d) (e) (f)
(g)
<S> <C> <C> <C> <C> <C>
<C>
Bernard J. Wein 50,000 32 9.00 3/20/06 283,003
717,184
Stanley H. Grossman 20,000 13 9.00 3/20/06 113,201
286,874
David C. Forell 20,000 13 9.00 3/20/06 113,201
286,874
E. Glenn Irelan 10,000 6.4 9.00 3/20/06 56,601
143,437
Allen Weinstein 10,000 6.4 9.00 3/20/06 56,601
143,437
</TABLE>
(1) The options are exercisable in cumulative 25% installments
commencing one year from date of grant. Vesting may be
accelerated in certain events including retirement,
disability, death and a change of the Company's ownership.
(2) Options were granted at market value at the date of grant as
determined by the Company's last quoted price on NASDAQ. The
exercise price and tax withholding obligations related to
exercise may be paid by delivery of already owned shares or by
offset of the underlying shares, subject to certain
conditions.
(3) Gains are reported net of the option exercise price, but
before taxes associated with exercise. These amounts
represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the
future performance of the Common Stock, overall stock market
conditions, as well as the optionholder's continued employment
through the vesting period. The amounts reflected in this
table may not necessarily be achieved.
The following table sets forth information concerning the
exercise of stock options during the last fiscal year and
unexercised options held as of February 1, 1997 for each of the
Named Officers:
Aggregate Stock Option Exercises and
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Held Options at
Number of at Fiscal Fiscal Year
Shares Year End End($)(2)
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized($)(1) Unexercisable Unexercisable
---- ----------- -------------- ------------- -------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Bernard J. Wein -- -- 142,350/106,250 186,138/--
Stanley H. Grossman -- -- 128,600/50,000 186,138/--
David C. Forell -- -- 45,000/50,000 --/--
E. Glenn Irelan -- -- 2,000/16,000 --/--
Allen Weinstein -- -- 2,500/17,500 --/--
</TABLE>
(1) Represents the difference between the price of the Company's
Common Stock on the exercise date less the exercise price of
the options.
(2) Represents the difference between the price of the Company's
Common Stock at February 1, 1997 less the exercise price of
the options.
Report of Compensation Committee
The Compensation Committee of the Board reviews and approves
officers' salaries, stock option grants, and other executive and
Company employee benefit plans and establishes policies relating to
employee compensation. Decisions made by the Compensation
Committee concerning executive officers' compensation are reviewed
by the full Board. Members of the Compensation Committee are
Messrs. Morgan, Lindy, Sanders and Stone (except for Mr. Lindy as
to stock incentive plans).
The objectives of the Company's executive compensation policy
are to align the interests of the stockholders and management while
motivating and retaining key employees. In order to achieve its
overall objective, the Company's executive compensation policies
combine annual base compensation, incentive bonuses based on
operating performance and long term equity-based incentives. Taken
together, the Company believes its programs will attract and retain
qualified executives who have a significant stake in the long-term
success of the Company. When appropriate, the Committee intends to
take the necessary steps to conform its compensation to the
compensation deduction cap created by Internal Revenue Code Section
162(m), which disallows a public company's deduction for top
executives' compensation in excess of $1 million, in order to
preserve full deductibility of executive compensation, consistent
with its responsibility to provide motivational and competitive
compensation which is performance-based.
The Compensation Committee attempts to set total compensation
at no less than the median level of comparable companies. Base
salaries for the Chief Executive Officer and the Company's other
senior management are determined annually by the Committee and may
be increased based on a) the contribution of the individual to the
Company, b) increases in the scope and complexity of the
individual's primary responsibilities, c) increases in the cost of
living and d) increases in competitive salaries, which factors are
subjectively weighted by the Compensation Committee.
During 1995, the Committee asked the Company to engage William
M. Mercer, Incorporated, a consulting firm specializing in employee
compensation and benefits, to make recommendations concerning the
pay and benefits of the Company's top executives. Mercer prepared
its recommendations by analyzing a group of comparable companies in
women's apparel retailing and by referring to other studies or work
done by the firm. Mercer presented its salary and benefit
recommendations to the Compensation Committee in September 1995.
As a result of the Mercer recommendations, the Compensation
Committee approved increases in the salaries of Messrs. Wein,
Grossman, Forell and Irelan to the levels shown in the 1996
Compensation Table on page 5, retroactive to the beginning of the
Company's 1995 fiscal year. This action brought the Company's
salaries to levels the Committee believes are competitive with
other women's apparel retailers.
In March 1996, the Committee approved salary increases for
Messrs. Wein, Grossman and Forell based on their performance and
changes in the cost of living. The Committee approved an increase
in Mr. Irelan's salary to reflect an increase in his
responsibility. As of the beginning of fiscal 1996, Mr. Irelan
assumed the additional responsibility of supervising the Company's
stores.
Based on the Company's 1996 fiscal year results, the Committee
concluded that Messrs. Wein, Grossman, Forell, Irelan and Weinstein
should not receive salary increases in fiscal 1997.
The Committee believes that a significant portion of the key
executives' total compensation should be performance-based. The
Committee has focused on earnings before interest, taxes,
depreciation and amortization as the performance measurement upon
which incentive compensation should be based. The Committee
believes growth in this measurement is ultimately the key
determinant of shareholder value and allows management to make
investment decisions that will provide long-term benefits to the
stockholders. Target levels for earnings before interest, taxes,
depreciation and amortization are set each year by the Committee
based on the prior year's performance. Incentive compensation
earned can be up to 75% of base salary for the Chief Executive
Officer and 60% for the other senior executives. The Committee,
also pursuant to the Mercer study, amended the Company's bonus plan
to allow for bonus to be earned for each increment in earnings
before interest, taxes, depreciation and amortization in excess of
a base. Total compensation may remain constant even if the
performance measurement is equal to prior years, depending upon the
base performance objective set by the Compensation Committee. The
Committee reserves the right to make discretionary bonuses in
unusual circumstances. No incentive compensation was earned for
fiscal 1996.
Long-term incentives are provided by the grant of stock
options and the ability to purchase stock in the Employee Stock
Purchase Plan. The purposes of these equity-based incentives are
to retain these employees and to align the long-term interests of
management with the stockholders. Stock options are granted at
market prices. Options vest over a period of time, as determined
by the Compensation Committee, which is currently four years.
Factors determining stock option grants are similar to the factors
determining increases in base pay, and the overall stock option
plan provisions were determined by comparison to other specialty
retail companies.
In March 1997, the Board of Directors of Catherines amended
the Company's stock incentive plans to (i) conform the restrictions
on the composition of the Compensation Committee members who
administer the plans both to Securities and Exchange Commission
regulations adopted in 1996 and to Internal Revenue Service
regulations, and (ii) to remove restrictions on the transferability
of new options from optionees to their immediate family members, to
trusts for the benefit of family members and to charitable
organizations.
The Company has provided all employees with the opportunity to
purchase Common Stock through the Employee Stock Purchase Plan.
Employees may contribute 1% to 10% of their gross salary to the
Plan. Quarterly, accumulated funds are used to purchase stock from
the Company at the lesser of 85% of the closing market price of the
Company's Common Stock at the first or last day of the calendar
quarters. Messrs. Wein, Grossman and Forell participate in the
Plan.
The Committee believes that the Company's overall compensation
policies are appropriate to align the interests of management and
the shareholders and to motivate and retain key executives.
Allen B. Morgan, Jr. Wellford L. Sanders, Jr.
James H. Lindy Elliot J. Stone
Company Performance
The following graph compares the cumulative total returns for
the Company, the NASDAQ Stock Market (U.S.) Index and an index of
seven (7) peer companies.
The peer group includes The Cato Corporation, United Retail
Group, Inc., Charming Shoppes, Inc., Clothestime, Deb Shops, Inc.,
The Dress Barn, Inc. and Stein Mart. This peer group index is
subject to occasional changes as the Company or its competitors
change their focus, merge or are acquired, undergo significant
changes, or as new competitors emerge.
Comparison of Cumulative Total Return
The total cumulative return on investment assumes that $100
was invested in the Company, the NASDAQ Stock Market (U.S.) Index
and the peer group index January 31, 1992 and that all dividends
were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------
1/92 1/93 1/94 1/95 1/96 1/97
<S> <C> <C> <C> <C> <C> <C> <C>
Catherines Stores Corp CATH 100 189 143 80 59 51
PEER GROUP PPEERI 100 139 97 62 38 60
NASDAQ STOCK MARKET-US INAS 100 113 130 124 175 215
</TABLE>
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
Lindy & Associates, of which Mr. Lindy is the sole proprietor,
in the twelve-month period ended February 1, 1997 was paid
approximately $160,000 in architectural fees for services provided
to the Company. Management of the Company believes that amounts
paid for the services rendered were fair in relation to the cost of
similar services available from others.
Certain Transactions
- --------------------
The Board of Directors of the Company approved a loan of
$200,000 to Mr. Forell for margin calls related to indebtedness
incurred in connection with the exercise of options to acquire
stock of the Company. The loan is pursuant to a promissory note
and is secured by a lien upon the supplemental retirement benefits
which Mr. Forell's beneficiaries are entitled to receive upon his
demise, by a right of offset against any severance payments to
which Mr. Forell might otherwise be entitled upon any termination
of his employment with the Company and a lien on stock in the
Company owned by him and/or his wife subordinated to the margin
indebtedness. The promissory note bears interest at the Company's
incremental borrowing rate, and the principal amount and interest
is due and payable not later than the earlier of Mr. Forell's
termination of employment with the Company for any reason or ten
years from the date of such borrowing. As of February 1, 1997, Mr.
Forell owed the Company approximately $216,000 in principal and
accrued interest on this loan.
Mr. Wein's wife is the sole proprietor of a company which was
paid approximately $95,000 for video production services provided
to the Company in the twelve month period ended February 1, 1997.
Management of the Company believes that amounts paid for the
services rendered were fair in relation to the cost of similar
services available from others.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Based solely on review of the copies of reporting forms
furnished to the Company, or written representations that no forms
are required, the Company believes that during 1996, all filing
requirements of its officers, directors and 10% shareholders for
reporting to the Securities and Exchange Commission their ownership
and changes in ownership of shares (as required pursuant to Section
16(a) of the Securities and Exchange Act of 1934) were complied
with, except that the Form 4s (Changes in Beneficial Ownership) of
Mr. Forell relating to transactions in October and November were
filed after the due date.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SLATE OF
DIRECTORS AS SET FORTH IN THIS PROPOSAL 1.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders at the Annual
Meeting, the Board of Directors has appointed Arthur Andersen LLP
to serve as the independent public accountants for the Company for
its current fiscal year ending January 31, 1998. Representatives
of Arthur Andersen LLP are expected to be present at the Annual
Meeting, will have the opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate
questions.
The affirmative vote of the majority of the votes cast by the
holders of the Company's Common Stock on this proposal shall
constitute ratification of the appointment of Arthur Andersen LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE CURRENT FISCAL YEAR.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
knows of no matters which will be presented for consideration at
the Annual Meeting other than the proposals set forth in this Proxy
Statement. If any other matters properly come before the Annual
Meeting, it is intended that the persons named in the proxy will
act in respect thereof in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998
Annual Meeting of Stockholders must be received by the Company no
later than December 27, 1997 and the proposals must meet certain
eligibility requirements of the Securities and Exchange Commission.
Proposals may be mailed to Catherines Stores Corporation, the
attention of the Secretary, 3742 Lamar Avenue, Memphis, Tennessee
38118.
SOLICITATION OF PROXIES AND COST THEREOF
The cost of solicitation of the proxies will be borne by the
Company. In addition to solicitation of the proxies by use of the
mails, employees of the Company, without extra remuneration, may
solicit proxies personally or by telephone or other written or
electronic media. The Company will reimburse brokerage firms,
nominees, custodians and fiduciaries for their out-of-pocket
expenses for forwarding proxy materials to beneficial owners and
seeking instruction with respect thereto.
STOCKHOLDERS MAY OBTAIN A COPY OF THE COMPANY'S FORM 10-K AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITHOUT CHARGE
(EXCEPT FOR EXHIBITS) BY WRITING TO: SECRETARY, CATHERINES STORES
CORPORATION, 3742 LAMAR AVENUE, MEMPHIS, TENNESSEE 38118.
FINANCIAL STATEMENTS MEETING THE REQUIREMENTS OF REGULATION
S-X ARE INCORPORATED BY REFERENCE AND CAN BE FOUND IN THE ANNUAL
REPORT ACCOMPANYING THIS PROXY STATEMENT AND IN THE COMPANY'S
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM
10-K.
By Order of the Board of Directors
/s/ Stanley H. Grossman
Stanley H. Grossman
Secretary
April 25, 1997
<PAGE>
CATHERINES STORES CORPORATION
3472 Lamar Avenue
Memphis, Tennessee 38118
This proxy is solicited on behalf of the Board of Directors. The
undersigned hereby appoints Stanley H. Grossman and David C. Forell
as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and vote as designated below,
all the shares of Common Stock of Catherines Stores Corporation
held of record by the undersigned on April 10, 1997 at the annual
meeting of the shareholders to be held on June 4, 1997 or any
adjournment thereof.
1. ELECTION OF DIRECTORS for the terms set forth in the Proxy
Statement.
FOR all nominees listed below WITHHOLD ALL AUTHORITY
(except as marked to to vote for all
the contrary below) nominees listed below
(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike through the nominee's name below).
James H. Lindy Bernard J. Wein
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as
the independent public accountants of the corporation.
FOR AGAINST ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
<PAGE>
(continued from other side)
This proxy, when properly executed will be voted in the manner
directed herein by the undersigned stockholder. IF NO ELECTION IS
MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign full corporate name
by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
DATED: _______________, 1997 __________________________________
Signature
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE. __________________________________
Signature if held jointly
Please indicate by checkmark if you will attend the meeting in
person _______
