<PAGE>
BRAUN'S FASHIONS CORPORATION
2400 XENIUM LANE NORTH
PLYMOUTH, MINNESOTA 55441
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 28, 1999
-------------------
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Braun's
Fashions Corporation (the "Company") will be held at 2800 LaSalle Plaza, 800
LaSalle Avenue, Minneapolis, Minnesota on Wednesday, July 28, 1999 at 3:00 p.m.
Central Time for the following purposes as more fully described in the Proxy
Statement accompanying this Notice:
1. To elect two Class 2 directors to serve on the Board of Directors for
a term of three years, and to ratify the appointment of one Class 3
director;
2. To increase the number of shares of Common Stock reserved for issuance
under the Company's 1997 Stock Incentive Plan from 450,000 to 675,000
shares;
3. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company capital
stock from 10,000,000 to 15,000,000;
4. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending February 26,
2000; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on May 28, 1999, are
entitled to notice of and to vote at the meeting or any adjournment thereof.
Your attention is directed to the accompanying Proxy Statement for the text
of the matters to be proposed at the meeting and further information regarding
each proposal to be made.
SHAREHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON IF YOU WISH.
By Order of the Board of Directors
Nicholas H. Cook
Chairman of the Board
June 18, 1999
Minneapolis, Minnesota
<PAGE>
BRAUN'S FASHIONS CORPORATION
2400 XENIUM LANE NORTH
PLYMOUTH, MINNESOTA 55441
-------------------
PROXY STATEMENT
-------------------
ANNUAL MEETING OF SHAREHOLDERS - JULY 28, 1999
INFORMATION CONCERNING SOLICITATION
AND VOTING
This Proxy Statement is furnished by the Board of Directors of Braun's
Fashions Corporation (the "Company") in connection with the solicitation of
proxies to be used at the Annual Meeting of Shareholders (the "Meeting") of the
Company to be held on Wednesday, July 28, 1999, at 3:00 p.m. Central Time, at
2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota, and at all
adjournments thereof for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Shareholders. ANY PROXY IN WHICH NO DIRECTION IS
SPECIFIED WILL BE VOTED IN FAVOR OF EACH OF THE MATTERS TO BE CONSIDERED. This
Proxy Statement and the Notice of Meeting and Proxy are being mailed to
shareholders on or about June 18, 1999.
The close of business on May 28, 1999 has been fixed as the record date for
the determination of shareholders entitled to receive notice of and to vote at
the Meeting. At that date, the Company's outstanding voting securities consisted
of 4,353,894 shares of common stock, par value $.01 per share (the "Common
Stock"). On all matters which will come before the Meeting, each shareholder or
his proxy will be entitled to one vote for each share of Common Stock of which
such shareholder was the holder of record on the record date. The aggregate
number of votes cast by all shareholders present in person or by proxy at the
Meeting will be used to determine whether a motion is carried. Thus, an
abstention from voting on a matter by a shareholder, while included for purposes
of calculating a quorum for the Meeting, has no effect on the item on which the
shareholder abstained from voting. In addition, although broker "non-votes" will
be counted for purposes of attaining a quorum, they will have no effect on the
vote.
Any Proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to its use by (i) delivering to the principal office
of the Company a written notice of revocation, (ii) filing with the Company a
duly executed Proxy bearing a later date or (iii) attending the Meeting and
voting in person.
The costs of this solicitation will be borne by the Company. The Company
will request brokerage houses and other nominees, custodians and fiduciaries to
forward soliciting material to beneficial owners of the Company's Common Stock.
The Company will reimburse brokerage firms and other persons representing
beneficial owners for their expenses in forwarding solicitation materials to
beneficial owners.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of May 20, 1999: (i) by each of the
executive officers included in the Summary Compensation Table set forth under
the caption "Executive Compensation;" (ii) by each director; (iii) by all
directors and executive officers of the Company as a group; and (iv) by each
person known to the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF SHARES
NAME BENEFICIALLY OWNED BENEFICIALLY OWNED
---- ------------------ ------------------
<S> <C> <C>
OFFICERS AND DIRECTORS
- ----------------------
Nicholas H. Cook 97,600(1) 2.2
William J. Prange 94,833(2) 2.1
Joseph E. Pennington 39,667(3) *
Ralph C. Neal 27,333(4) *
Kathryn R. Gangstee 20,200(5) *
Marc C. Ostrow 220,000(6)(7) 5.0
James J. Fuld, Jr. 157,113(7)(8) 3.6
Donald D. Beeler 25,000(9) *
Larry C. Barenbaum 22,000(9) *
5% SHAREHOLDERS
- ---------------
Benson Associates, LLC 413,500(10) 9.5
All directors and executive
officers as group (9 persons) 703,746(11) 15.3
</TABLE>
- ----------
*Less than 1%
(1) Includes 33,600 shares issuable pursuant to options granted.
(2) Includes 94,833 shares issuable pursuant to options granted.
(3) Includes 37,667 shares issuable pursuant to options granted.
(4) Includes 27,333 shares issuable pursuant to options granted.
(5) Includes 20,200 shares issuable pursuant to options granted.
(6) Mr. Ostrow's address is c/o Pennwood Capital Corporation, 477 Madison
Avenue, New York, New York 10022.
(7) Includes 10,000 shares issuable pursuant to options granted.
(8) Mr. Fuld's address is c/o James J. Fuld, Jr. Corp., 605 Third Avenue, Suite
3500, New York, New York 10158.
(9) Includes 10,000 shares issuable pursuant to options granted.
(10) The address of Benson Associates, LLC is 111 S.W. Fifth Avenue, Suite 2130,
Portland, Oregon 97204.
(11) This figure includes outstanding shares and options described in the
preceding footnotes.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Certificate of Incorporation provides that the Board of
Directors be divided into three classes of directors of as nearly equal size as
possible. The Company's Bylaws further provide that the total number of
directors will be determined exclusively by the Board of Directors. Directors
are elected for a term of three years and the terms are staggered. Larry C.
Barenbaum and Donald D. Beeler are the directors in the class whose term expires
at the Meeting. Management and the Board of Directors have nominated and
recommended that Larry C. Barenbaum and Donald D. Beeler be reelected as Class 2
directors, to hold office until the 2002 Annual Meeting of Shareholders and
until their respective successors are duly elected and qualified. Management and
the Board of Directors further recommend that the shareholders ratify the
appointment of William J. Prange as a Class 3 director to hold office until the
2000 Annual Meeting of Shareholders and until his successor is duly elected and
qualified. All of the nominees are members of the Board of Directors of the
Company and have served in that capacity since originally elected or designated
as indicated below.
There is no family relationship among the nominees or between any nominee
and any of the Company's other directors.
VOTING INFORMATION
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to elect Messrs. Barenbaum and Beeler and to ratify the
appointment of Mr. Prange. The affirmative vote of the majority of shares of
Common Stock present and entitled to vote at the Meeting is necessary to elect
each nominee. A shareholder submitting a Proxy may vote for all or any of the
nominees for election to the Board of Directors or may withhold his or her vote
from all or any of such nominees. IF A SUBMITTED PROXY IS PROPERLY SIGNED BUT
UNMARKED IN RESPECT OF THE ELECTION OF DIRECTORS, IT IS INTENDED THAT THE PROXY
AGENTS NAMED IN THE PROXY WILL VOTE THE SHARES REPRESENTED THEREBY FOR THE
ELECTION OF ALL OF THE NOMINEES. All of the nominees have agreed to serve the
Company as a director if elected. However, should any nominee become unwilling
or unable to serve if elected, the Proxy Agents named in the Proxy will exercise
their voting power in favor of such other person as the Board of Directors of
the Company may recommend. The Company's Certificate of Incorporation prohibits
cumulative voting and each director will be elected by a majority of the voting
power of the shares present and entitled to vote at the Meeting.
The table below gives certain information concerning the nominees and other
directors:
<TABLE>
<CAPTION>
NOMINEE OR CONTINUING DIRECTOR DIRECTOR
NAME AGE IN TERM SINCE
---- --- ------------------------------ --------
<S> <C> <C> <C>
Larry C. Barenbaum(1)(2)(3).......... 52 Director; nominee with term 1992
expiring in 2002
Donald D. Beeler(1)(2)............... 63 Director; nominee with term 1992
expiring in 2002
Nicholas H. Cook..................... 58 Director with term expiring in 2001 1987
Marc C. Ostrow(2).................... 53 Director with term expiring in 2001 1986
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
William J. Prange (3)................ 45 Director; nominee with term 1998
expiring in 2000
James J. Fuld, Jr.(1)................ 51 Director with term expiring in 2000 1986
</TABLE>
- ----------
(1) Member of Compensation Committee
(2) Member of Audit Committee
(3) Member of Nominating Committee
NOMINEES AND DIRECTORS
CLASS 2 NOMINEES
LARRY C. BARENBAUM has served as a director of the Company since March
1992. Since November 1991, Mr. Barenbaum has engaged in investment activities
and has provided consulting services to various companies in the specialty
retail and services industries. From 1986 to November 1991, Mr. Barenbaum was
President and Chief Executive Officer of Lawrence Jewelry Company, a fashion,
wholesale jewelry distribution company he founded in 1970. Mr. Barenbaum also
served as President of ACII Corp., a distributor of fashion accessories,
which filed under Chapter 7 of the United States Bankruptcy Code on December
26, 1996. Mr. Barenbaum also serves on the Board of Directors of Signal Bank,
United Community Bancshares Holding Company and Park National Bank.
DONALD D. BEELER has served as a director of the Company since March 1992.
Since 1986, Mr. Beeler has been Chairman and Chief Executive Officer of Snyder's
Drug Stores, Inc. ("Snyder's"), a Minneapolis-based retailer which operates a
chain of 56 stores. In addition, Snyder's operates a wholesale program, by
contract, which supplies over 800 independent retailers in the United States.
CLASS 3 NOMINEE
WILLIAM J. PRANGE has served the Company as President and Chief Executive
Officer since March 1998 and was appointed a director of the Company in
September 1998. From July 1997 through February 1998, Mr. Prange was President
and Chief Merchandising Officer and from April 1995 through June 1997, he was
Senior Vice President and General Merchandising Manager of the Company. From
April 1994 through March 1995, Mr. Prange served as Vice President and General
Merchandising Manager of the Company. From 1989 to 1994, he was President and
General Merchandise Manager of American Specialty Stores (dba the id). From 1987
to 1989, he was Vice President and General Merchandise Manager of American
Specialty Stores. From 1985 to 1987, Mr. Prange was Vice President and General
Merchandise Manager of Prange Department Stores.
CLASS 3 DIRECTOR
JAMES J. FULD, JR. has served as a director of the Company since 1986. From
November 1986 to December 1990, he served as Secretary of the Company. Since
December 1979, Mr. Fuld has been the Chairman, President and sole shareholder of
James J. Fuld, Jr. Corp., a private financial and management consulting firm.
4
<PAGE>
CLASS 1 DIRECTORS
NICHOLAS H. COOK has served the Company in various capacities since 1977.
Mr. Cook has been Chairman of the Board since January 1992, Chief Executive
Officer from December 1990 through February 1998, and a director since October
1987. From December 1990 to June 1994, he also served as the Company's President
and from February 1987 to December 1990, he was a Vice President.
MARC C. OSTROW has served as a director of the Company since 1986. From
November 1986 until November 1991, Mr. Ostrow served as Chairman of the Board
of the Company, and until December 1990, also acted as President (on an
unpaid basis) of Braun's Holding Company, Inc. From 1992 until April 1999,
Mr. Ostrow served as Chairman of the Company's Compensation Committee. Since
1979, Mr. Ostrow's principal occupation has been as Chairman, President and
Chief Executive Officer of Pennwood Capital Corporation, a private venture
capital investment and management firm.
The Company operated its business as debtor-in-possession under Chapter 11
of the United States Bankruptcy Code from July 1996 until December 1996, when
the Company's Plan of Reorganization was approved by creditors and shareholders
and was confirmed by the Bankruptcy Court. All of the nominees and directors
served as directors of the Company during this period, with the exception of Mr.
Prange. Mr. Prange was the President of American Specialty Stores (dba the id)
through March 1994. American Specialty Stores filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code in September 1994.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended February 27, 1999, the Board of Directors held
six meetings. Each director attended at least 75% of the aggregate total number
of meetings of the Board of Directors plus the total number of meetings of all
committees of the Board on which he served.
The Audit Committee recommends to the Board of Directors the selection of
independent accountants and reviews the activities and reports of the
independent accountants as well as the internal accounting controls of the
Company. The Audit Committee was comprised of Messrs. Fuld, Barenbaum and Beeler
and held two meetings during the last fiscal year. Effective April 8, 1999, the
Audit Committee is comprised of Messrs. Beeler (Chair), Ostrow and Barenbaum.
The Compensation Committee determines the compensation for executive
officers of the Company and establishes the Company's compensation policies and
practices. The Compensation Committee also grants stock options to employees of
the Company, including officers who are not directors of the Company, pursuant
to the Company's Stock Option Plan. The Compensation Committee was comprised of
Messrs. Ostrow, Barenbaum and Beeler and held [four] meetings during the last
fiscal year. Effective April 8, 1999, the Compensation Committee is comprised of
Messrs. Fuld (Chair), Barenbaum and Beeler.
On April 8, 1999, the Company formed a Nominating Committee. The purpose of
this committee is to identify and present qualified persons for election and
re-election to the Board of Directors. The committee does not intend to consider
nominees recommended by shareholders. The Nominating Committee is comprised of
Messrs. Prange and Barenbaum.
5
<PAGE>
COMPENSATION OF DIRECTORS
In fiscal 1999, the Company compensated directors who are not employed by
the Company $12,000 per year, payable quarterly, plus expenses. Committee
members also received $1,000 per year for serving on a committee and committee
chairpersons received $2,000 per year.
1998 DIRECTOR STOCK OPTION PLAN
Effective April 8, 1998, the Company established the 1998 Director Stock
Option Plan (the "1998 Director Plan"), which provides for the issuance by the
Company of a maximum of 100,000 shares of Common Stock to non-employee directors
upon the exercise of options.
The 1998 Director Plan provides for the automatic grant of non-qualified
options to purchase 5,000 shares of Common Stock, at an exercise price equal to
the fair market value of the shares in the month following each annual meeting
of shareholders, to each non-employee director. The 1998 Director Plan is
administered by the Compensation Committee. Unless previously terminated by or
with the approval of the Board of Directors, the 1998 Director Plan will
terminate on April 8, 2008. Options which expire, or are cancelled or terminated
without having been exercised, may be regranted to other non-employee directors
under the 1998 Director Plan.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 as amended (the
"Securities Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership on Form 3 and changes in ownership on
Forms 4 or 5 with the Securities and Exchange Commission (the "Commission") and
The NASDAQ Stock Market. Such officers, directors and ten percent shareholders
are also required by the Commission's rules to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
representation from certain reporting persons that no Forms 5 were required for
such persons, the Company believes that during the fiscal year ended February
27, 1999, all Section 16(a) filing requirements applicable to its officers,
directors and ten percent stockholders were complied with.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions and recommendations regarding the compensation of the Company's
executives are made by a three member Compensation Committee (the "Committee")
composed entirely of non-employee directors. The Committee has responsibility to
review, establish and change compensation programs for the Company's officers to
most accurately reflect the current needs of the Company and best measure and
reward the performances of its executives. The following is a report of the
Compensation Committee of the Company describing the compensation policies and
rationale
6
<PAGE>
applicable to the Company's executive officers with respect to the compensation
paid to such executive officers for the year ended February 27, 1999.
TO THE BOARD OF DIRECTORS:
COMPENSATION PHILOSOPHY
The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareholder
value by achieving strategic Company goals. The Committee attempts to balance
short and long-term considerations in appropriately rewarding individuals who
are responsible for the Company's profitability, growth and enhancement of
shareholder value. Compensation for executive officers consists of: (i) base
salary, (ii) an annual cash incentive award, and (iii) a long-term incentive,
through a stock option plan. The Committee strongly believes that management's
compensation should be structured to emphasize the relationship between pay and
performance by placing a portion of compensation at risk and subject to the
achievement of financial goals and objectives. Additionally, such qualitative
factors as leadership skills, planning initiatives, technical skills, and
employee development have been deemed to be important factors to take into
account in considering levels of compensation.
COMPONENTS OF COMPENSATION
BASE COMPENSATION - It is the Company's policy to pay competitive base
compensation to its executive officers, as measured against the norms for
similar positions in companies of similar size and characteristics. The
Committee annually reviews and, if appropriate, adjusts executive officers'
salaries based on an evaluation of each officer's performance as well as the
performance of the Company as a whole. In making individual base salary
recommendations, the Committee considers the executive's sustained performance
against his or her individual job responsibilities including, where appropriate,
the impact of such performance on the business results of the Company, as well
as the executive's experience, management and leadership ability and potential
for advancement, his or her compensation history and the Company's performance.
CASH INCENTIVE AWARDS - To encourage performance and to provide a direct
link with executive compensation, the Company pays annual cash bonuses in
accordance with the Braun's Management Bonus Plan (the "Plan"). Under the Plan,
bonuses are primarily based on the Company's performance as measured against the
Company's business plan. Annual pre-tax earnings targets are set by the
Committee based on the Company's pre-tax earnings budget and other objective
criteria as approved by the Committee. Actual annual incentive payments are
based upon a pre-bonus, pre-tax earnings performance formula. The Committee may
also make discretionary bonuses based on individual achievement.
LONG-TERM INCENTIVE COMPENSATION - The Committee believes that granting
stock options to executive officers and key employees provides an incentive for
them to make decisions which are in the long-term best interest of the Company.
In determining stock option grants, the Committee considers the executive's
contribution to the Company's performance and his or her anticipated future
contributions toward meeting the Company's long-term strategic goals, as well as
industry practice.
7
<PAGE>
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The base salary of William J. Prange, the Company's President and Chief
Executive Officer, under his employment agreement was $300,000 in fiscal 1999.
In accordance with the Company's bonus plan, Mr. Prange received a bonus of
$171,133 last year. In fiscal 1999, the Committee awarded Mr. Prange options to
purchase 100,000 shares of Common Stock. The Committee believes that the grant
of these options provides a substantial incentive and further aligns the
interest of senior management with shareholders.
May 15, 1999 Members of the Compensation Committee
Marc C. Ostrow, Former Chairman
Larry C. Barenbaum
Donald D. Beeler
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth, the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and the other four most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM
---------------------------------------------------------- COMPENSATION
- --------------------------------------------------------------------------------------------------------------------------------
OTHER ANNUAL AWARDS ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ( $ ) ( $ )(1) ( $ )(2) ( # )(3) ( $ )(4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas H. Cook 1999 180,417 -- -- -- 13,932
Chairman 1998 240,000 121,794 -- 10,000 6,966
1997 231,000 15,000 -- 87,800(5) 6,966
- --------------------------------------------------------------------------------------------------------------------------------
William J. Prange 1999 300,000 171,133 -- 100,000 14,736
President and Chief 1998 203,333 121,794 -- 10,000 6,341
Executive Officer 1997 165,000 10,000 -- 85,000(5) 5,963
- --------------------------------------------------------------------------------------------------------------------------------
Joseph E. 1999 175,000 114,089 -- 55,000 4,268
Pennington (6) 1998 141,667 76,121 -- 25,000 --
Executive Vice President and 1997 5,625 -- -- 25,000 --
Chief
Operating Officer
- --------------------------------------------------------------------------------------------------------------------------------
Ralph C. Neal (7) 1999 175,000 114,089 -- 45,000 3,050
Executive Vice President of 1998 156,667 76,121 -- 25,000 600
Store Operations 1997 65,967 -- -- 25,000 --
- --------------------------------------------------------------------------------------------------------------------------------
Kathryn R. Gangstee 1999 125,000 45,635 -- 15,000 1,940
Senior Vice President and 1998 100,000 22,050 -- 15,000 1,500
General Merchandising Manager 1997 80,000 7,500 -- 13,800 1,303
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Reflects bonus earned during the fiscal year.
(2) "Other Annual Compensation" includes the following, to the extent that the
aggregate amount thereof exceeds the lesser of $50,000 or 10% of the total
annual salary and bonus reported for the individual: personal benefits
received by the named individuals and amounts reimbursed the individuals
during the year for payment of taxes.
(3) On February 26, 1998, in connection with management succession agreements,
the Company accelerated the vesting schedule on 83,000 options to Mr. Cook
which had remaining vesting schedules ranging from three to five years.
(4) "All Other Compensation" includes the following amounts contributed by the
Company during the fiscal year under the Company's Retirement Savings Plan
for each of the named officers: $2,000, $2,375, and $1,997 for Mr. Prange
in 1999, 1998 and 1997, respectively, $2,000, for Mr. Pennington for 1999,
$2,000 and $600 for Mr. Neal in 1999 and 1998, respectively, and $1,948,
$1,500 and $1,303 for Ms. Gangstee for 1999, 1998 and 1997, respectively.
Life insurance premiums were paid on behalf of each named executive officer
in the amount of $13,932 for Mr. Cook, $12,736 for Mr. Prange, $2,268 for
Mr. Pennington and $1,050 for Mr. Neal in 1999, $6,966 for Mr. Cook, and
$3,966 for Mr. Prange in each of 1998 and 1997, respectively.
(5) Includes options which were repriced in June 1996, including 77,600 for Mr.
Cook and 50,000 for Mr. Prange.
(6) Mr. Pennington became employed by the Company in February 1997.
(7) Mr. Neal became employed by the Company in August 1996.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1999 to
the named executive officers:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Individual Grants
- -----------------------------------------------------------------------------------------------------------------------------------
% of
Total Options/ Potential Realizable Value
SARs at Assumed Annual Rates of
Options/ Granted to Exercise Stock Price Appreciation
SARs Employees or Base for Option Term (2)
Granted in Fiscal Price Expiration ----------------------------
Name (#) Year (1) ($/sh) Date 5% 10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas H. Cook -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
William J. Prange 100,000 32.8% 10.69 3-27-08 $672,131 $1,703,312
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph E. Pennington 55,000 18.0% 10.69 3-27-08 $369,672 $936,822
- -----------------------------------------------------------------------------------------------------------------------------------
Ralph C. Neal 45,000 14.8% 10.69 3-27-08 $302,459 $766,491
- -----------------------------------------------------------------------------------------------------------------------------------
Kathryn R. Gangstee 15,000 4.9% 10.69 3-27-08 $100,820 $255,497
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company granted 305,000 options to employees during fiscal 1999.
(2) The dollar amounts under these columns are the result of calculations at
the assumed 5% and 10% rates mandated by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the Company's stock price. The Company did not
use an alternative formula for a grant date valuation, as the Company is
not aware of any formula which will determine with reasonable accuracy a
present value based on future unknown or volatile factors. No gain to the
optionees is possible without an increase in stock price which will benefit
all stockholders commensurably.
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table above, the year-end value of unexercised options.
OPTION EXERCISES AND VALUE OF OPTIONS AT END OF FISCAL 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options At End Of In-the-Money Options
Acquired Fiscal 1999 (#) at End of Fiscal 1999 (1)
on Value ----------------------------- ------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
(#) ($)(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas H. Cook 64,000 472,800 33,600 0 $127,100 $0
- -------------------------------------------------------------------------------------------------------------------------------
William J. Prange 0 N/A 44,500 150,500(2) $235,772 $264,854
- -------------------------------------------------------------------------------------------------------------------------------
Joseph E. Pennington 0 N/A 21,667 83,333(3) $13,125 $8,750
- -------------------------------------------------------------------------------------------------------------------------------
Ralph C. Neal 0 NA 13,333 73,333(4) $43,337 $45,207
- -------------------------------------------------------------------------------------------------------------------------------
Kathryn R. Gangstee 0 NA 7,600 31,600(5) $27,400 $28,525
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated value based on market value of the Company's Common Stock on
August 6, 1998 of $10.19 less the exercise price.
(2) Of these options, 20,000 vested on 3-27-99, 28,333 will vest on 6-24-99
and 2,000 will vest on 7-17-99.
(3) Of these options, 11,000 vested on 3-27-99, and 5,000 will vest on 7-17-99.
(4) Of these options, 9,000 vested on 3-27-99, and 5,000 will vest on 7-17-99.
(5) Of these options, 5,000 vested on 3-27-99, 4,600 will vest on 6-24-99
and 3,000 will vest on 7-17-99.
10
<PAGE>
EMPLOYMENT AND OTHER AGREEMENTS
In March 1998, the Company entered into three-year employment agreements
with Messrs. Prange, Pennington and Neal (the "Employment Agreements"). The
Employment Agreements further provide for one-year automatic extensions if the
Employment Agreements are not terminated by the Company or the executive. The
Employment Agreements also provide that Messrs. Prange, Pennington and Neal are
entitled to certain severance benefits in the event that their employment is
terminated by the Company "without cause" or by such executive following a
"change of control" (both as defined in the Employment Agreements). Upon such
termination, the executive would receive his salary for one year following
notice of termination, less any cash compensation earned by the executive by
other reemployment during the period. The Employment Agreements provide for a
continuation of salary payments and other benefits thereunder in the event of
disability of the executive (reduced by any disability insurance benefits
received by such executive) or death (up to the benefit of any life insurance
policies obtained by the Company with respect to such executive). Each of the
Employment Agreements contains a covenant not to compete with the Company for
(i) the period during which they receive severance benefits in the event of
their termination by the Company "without cause" or at their election upon a
"change of control," and (ii) a period of one year in the event of their
termination for any other reason.
On February 26, 1998, the Company entered into a Management Succession and
Separation Agreement with Mr. Cook. Mr. Cook's agreement provides that he shall
continue to serve as the Company's Chairman of the Board through August 31,
1999. Mr. Cook provides consulting and other services as requested by the Board
of Directors. Mr. Cook's compensation is at an annual salary of $175,000 from
April 1, 1998 through August 31, 1999, and an annual salary of $100,000 from
September 1, 1999 through August 31, 2001.
The agreement also provided that 83,000 unvested options previously granted
to Mr. Cook became fully vested and immediately exercisable on February 26,
1998.
MANAGEMENT BONUS PLAN
Under the Braun's Management Bonus Plan (the "Bonus Plan") certain key
management employees of the Company, including all executive officers, are
eligible to receive annual bonuses. Bonuses under the Bonus Plan are based on a
comparison of targeted pre-tax earnings (as determined on an annual basis by the
Compensation Committee) to the Company's actual pre-tax earnings. In the event
that actual pre-tax earnings are less than or equal to the hurdle rate set by
the Compensation Committee from time-to-time, no bonuses are paid by the
Company. In fiscal 1999, Messrs. Prange, Pennington, Neal and Gangstee received
bonuses of $171,133, $114,089, $114,089 and $45,635, respectively.
SECTION 401(k) PLAN
Effective March 1991, the Company established the Braun's Fashions, Inc.
Retirement Savings Plan, a voluntary tax deferred retirement plan qualified
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"401(k) Plan"). Pursuant to the 401(k) Plan, eligible
11
<PAGE>
employees (employed at the Company for more than one year) may elect to
contribute up to 16% of their compensation, subject to limitations under the
Internal Revenue Code, to the 401(k) Plan. Through fiscal 1999, the Company
was permitted to make discretionary matching contributions of up to 50% of
the first 6% of the participant's pre-tax contributions. Effective March 1,
1999, the Company amended the 401(k) Plan to allow for fixed quarterly
Company matching contributions of 50% of the first 3% of the participant's
pre-tax contributions and 25% of the next 3% of the participant's pre-tax
contributions. Matching contributions vest at a rate of 25% per year. Neither
employee nor Company contributions to the 401(k) Plan are taxable to the
employee until such amounts are distributed to the employee, and Company
contributions are tax deductible by the Company at the time of contribution.
The Company made a contribution for fiscal 1999 in the amount of $67,362,
including $2,000 on behalf of Mr. Prange, Mr. Pennington and Mr. Neal and
$1,948 on behalf of Ms. Gangstee.
12
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COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company since [February 27], 1994 to the cumulative total
shareholder return over such period of (i) the Nasdaq Stock Market (U.S.
Companies) index and (ii) the Nasdaq Retail Trade index. The information
contained in this graph shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission, nor shall such information
be incorporated by reference into any future filing under the Securities Act or
the Exchange Act, except to the extent that the Company specifically
incorporates it by reference into any such filing.
[INSERT GRAPH]
13
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PROPOSAL TWO
PROPOSAL TO INCREASE THE NUMBER OF SHARES
AUTHORIZED UNDER THE 1997 STOCK INCENTIVE PLAN
GENERAL
On April 8, 1999, the Company's Board of Directors adopted, subject to
shareholder approval, an amendment to the Company's 1997 Stock Incentive Plan
(the "1997 Incentive Plan") increasing the number of shares of Common Stock
authorized for issuance under the 1997 Incentive Plan by 225,000 shares to an
aggregate of 675,000 shares. The Board of Directors believes that stock options
have been, and will continue to be, an important compensation element in
attracting and retaining key employees. As of the record date for the Meeting,
149,000 shares of Common Stock remained available for future grants of stock
options under the 1997 Incentive Plan.
SUMMARY OF 1997 INCENTIVE PLAN
The purpose of the 1997 Incentive Plan is to aid the Company in maintaining
and developing management personnel capable of assuring the future success of
the Company, to offer such personnel incentives to put forth maximum efforts for
the success of the Company's business and to afford such personnel an
opportunity to acquire a proprietary interest in the Company. All key employees
of the Company are eligible to receive awards under the 1997 Incentive Plan. The
1997 Incentive Plan terminates in 2007, and no awards may be made after such
date. However, unless otherwise expressly provided in the 1997 Incentive Plan,
any option granted may extend beyond the termination date of the 1997 Incentive
Plan.
The 1997 Incentive Plan permits the granting of: (a) stock options,
including "Incentive Stock Options" meeting the requirements of Section 422 of
the Code ("Incentive Stock Options") and (b) stock options that do not meet such
requirements ("Nonqualified Stock Options"). The 1997 Incentive Plan is
administered by the Company's Compensation Committee (the "Committee"). The
Committee has the authority to establish rules for the administration of the
1997 Incentive Plan; to select the key persons to whom options are granted; to
determine the number of shares of Common Stock covered by such options; and to
set the terms and conditions of such options. Determinations and interpretations
with respect to the 1997 Incentive Plan are in the sole discretion of the
Committee, whose determinations and interpretations are binding on all
interested parties. The Committee may delegate to one or more officers the right
to grant options with respect to individuals who are not subject to Section
16(b) of the Securities Act.
The exercise price per share under any stock option cannot be less than
100% of the fair market value of the Company's Common Stock on the date of the
grant of such option. Determinations of fair market value under the 1997
Incentive Plan are made in accordance with methods and procedures established by
the Committee. For purposes of the 1997 Incentive Plan, the fair market value of
shares of Common Stock on a given date is (i) the last sales price of the shares
as reported on The NASDAQ Stock Market, if the shares are then being quoted on
The NASDAQ
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<PAGE>
Stock Market or (ii) the closing price of the shares on such date on a national
securities exchange, if the shares are then being traded on a national
securities exchange.
No option granted under the 1997 Incentive Plan may be assigned,
transferred, pledged or otherwise encumbered by the individual to whom it is
granted, otherwise than by will, by designation of a beneficiary, or by laws of
descent and distribution. Each option is exercisable during such individual's
lifetime, only by such individual, or, if permissible under applicable law, by
such individual's guardian or legal representative. If any shares of Common
Stock subject to any options are not purchased or are forfeited, the shares
previously used for such options become available for future grants under the
1997 Incentive Plan.
If any dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up,
combination, repurchase, or exchange of shares of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
shares of Common Stock or other securities of the Company, or other similar
corporate transaction or event affects the shares of Common Stock so that an
adjustment is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the 1997
Incentive Plan, the Committee shall proportionately adjust (a) the number and
type of shares (or other securities or property) which thereafter may be made
the subject of options, (b) the number and type of shares (or other
securities or property) subject to outstanding options, and (c) the exercise
price with respect to any option. The Committee may correct any defect,
supply any omission, or reconcile any inconsistency in the 1997 Incentive
Plan or any option agreement in the manner and to the extent it shall be
deemed desirable to carry the 1997 Incentive Plan into effect.
The Board of Directors may amend, alter or discontinue the 1997 Incentive
Plan at any time, provided that shareholder approval must be obtainable for any
change that (i) absent such shareholder approval, would cause Rule 16b-3 as
promulgated by the Securities and Exchange Commission under the Securities Act,
to become available with respect to the 1997 Incentive Plan; (ii) requires the
approval of the Company's shareholders under any rules or regulations of the
National Association of Securities Dealers, Inc. or any securities exchange
applicable to the Company; or (iii) requires the approval of the Company's
shareholders under the Internal Revenue Code (the "Code") in order to permit
Incentive Stock Options to be granted under the 1997 Incentive Plan.
The following is a summary of the principal federal income tax consequences
generally applicable to options under the 1997 Incentive Plan. The grant of an
option is not expected to result in any taxable income for the recipient. The
holder of an Incentive Stock Option generally will have no taxable income upon
exercising the Incentive Stock Option (except that a liability may arise
pursuant to the alternative minimum tax), and the Company will not be entitled
to a tax deduction when an Incentive Stock Option is exercised. Upon exercising
a Nonqualified Stock Option, the optionee must recognize ordinary income equal
to the excess of the fair market value of the shares of the Common Stock
acquired on the date of exercise over the exercise price, and the Company will
be entitled at that time to a tax deduction for the same amount. The tax
consequences to an optionee
15
<PAGE>
upon a disposition of shares acquired through the exercise of an option will
depend on how long the shares have been held and upon whether such shares were
acquired by exercising an Incentive Stock Option or by exercising a Nonqualified
Stock Option. Generally, there will be no tax consequences to the Company in
connection with disposition of shares acquired under an option, except that the
Company may be entitled to a tax deduction in the case of a disposition of
shares acquired under an Incentive Stock Option before the applicable Incentive
Stock Option holding periods set forth in the Code have been satisfied.
Special rules apply in the case of individuals subject to Section 16(b) of
the Securities Act. In particular, under current law, unless a special election
is made pursuant to the Code, shares received pursuant to the exercise of a
stock option may be treated as restricted as to transferability and subject to a
substantial risk of forfeiture for a period of up to six months after the date
of exercise. Accordingly, the amount of any ordinary income recognized, and the
amount of the Company's tax deduction, may be determined as of the end of such
period. Common Stock acquired under the 1997 Incentive Plan may only be
re-offered or resold under an effective registration statement, under Rule 144
or under another exemption from the registration requirements of the Securities
Act of 1933, as amended.
BOARD RECOMMENDATION AND SHAREHOLDER VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE 1997
INCENTIVE PLAN. The affirmative vote of a majority of the shares of Common Stock
present and entitled to vote at the Meeting on this item of business is
necessary to approve the proposal. Proxies solicited by the Board of Directors
will, unless otherwise directed, be voted to approve the proposal. Shares held
by persons who abstain from voting on the proposal and broker "non-votes" will
not be voted for or against the proposal. Shares held by persons abstaining
and broker "non-votes" will be counted in determining whether a quorum is
present for the purpose of voting on the proposal.
PROPOSAL THREE
ADOPTION OF AMENDMENT TO
INCREASE THE NUMBER OF AUTHORIZED SHARES
Article IV of the Company's Certificate of Incorporation provides that the
aggregate number of shares of all classes of stock which the Company shall have
authority to issue is Ten Million (10,000,000) shares: Nine Million (9,000,000)
shares of Common Stock and One Million (1,000,000) shares of Preferred Stock.
Upon management's recommendation, the Board of Directors recommends to the
shareholders that Article IV of the Company's Certificate of Incorporation be
amended to increase the number of authorized shares of Common Stock to Fourteen
Million (14,000,000) shares, thereby increasing to Fifteen Million shares
(15,000,000) the aggregate number of shares of all classes of stock which the
Company shall have authority to issue. No shareholder of the Company has any
preferential, preemptive or other rights of subscription to any
16
<PAGE>
shares of the Company allotted or sold or to be allotted or sold, or to any
obligations or securities convertible into stock of the Company.
Of the Nine Million (9,000,000) shares of the Company's Common Stock now
authorized for issuance, 4,353,894 shares were issued and outstanding as of May
28, 1999, and an additional 912,027 shares of Common Stock were reserved for
issuance pursuant to the Company's stock option plans and 368,000 shares were
held as treasury shares. This leaves the Company with only 3,366,079 authorized
but unissued, unreserved, and uncommitted shares of Common Stock, not held as
treasury stock, available for issuance. Management and the Board of Directors
believe that it is desirable to increase the number of authorized shares of
Common Stock available for issuance as recommended to enable the Company to
finance its business through issuance and sale of shares of Common Stock, for
issuance in respect of stock dividends that may subsequently be declared, for
issuance in respect of acquisition opportunities which may subsequently become
available (management knows of none as of the date hereof), for issuance in
respect of employee stock option plans and for general corporate purposes.
Accordingly, the Board of Directors recommends adoption by the shareholders
of the following amended Article IV of the Certificate of Incorporation.
ARTICLE IV
FOURTH: The total number of shares of all classes of
Stock that the Corporation shall have authority to issue is
fifteen million (15,000,000) shares, of which (a) one
million (1,000,000) shares shall be undesignated preferred
stock having a par value of $.01 per share (the "Preferred
Stock"), and (b) fourteen million (14,000,000) shares shall
be common stock with the par value of $.01 per share (the
"Common Stock"). Notwithstanding the foregoing, the
Corporation shall not issue nonvoting equity securities,
whether in the form of Common Stock or other equity
securities.
The holders of shares of Common Stock shall have one (1) vote for each
share of Common Stock held of record on each matter submitted to the holders of
shares of Common Stock.
It should be noted that the additional shares of Common Stock could be used
to dilute the percentage stock ownership of persons seeking to obtain control of
the Company. In this sense, the proposal to increase the number of authorized
shares of Common Stock may have an anti-takeover effect.
BOARD RECOMMENDATION AND SHAREHOLDER VOTE REQUIRED
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ADOPT THE
AMENDMENT TO INCREASE THE NUMBER OF SHARES UNDER THE COMPANY'S CERTIFICATE OF
INCORPORATION. The affirmative vote of a majority of the shares of Common Stock
present and entitled to vote at the Meeting on this item of business is
necessary to approve the proposal. Proxies solicited by the Board of Directors
will, unless otherwise directed, be voted to approve the proposal. Shares held
by persons who abstain from voting on the proposal and broker "non-votes" will
not be voted for or against the proposal. Shares held by persons abstaining
and broker non-votes will be counted in determining whether a quorum is
present for the purpose of voting on the proposal.
PROPOSAL FIVE
RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors selected the accounting firm of
PricewaterhouseCoopers LLP to serve as its independent auditor for the fiscal
year ending February 26, 2000. PricewaterhouseCoopers LLP has audited the
Company's financial statements since the fiscal year ended March 2, 1991. A
proposal to ratify the appointment for the current year will be presented at the
Meeting. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting. They will have an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions
from shareholders.
BOARD RECOMMENDATION AND SHAREHOLDER VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITOR. Ratification of the selection requires
the affirmative vote by a majority of the shares of Common Stock present or
represented at the Meeting. Shares held by persons who abstain from voting on
the proposal and broker "non-votes" will not be voted for or against the
proposal. Shares held by persons abstaining and broker non-votes will be
counted in determining whether a quorum is present for purposes of voting on
the proposal. If the appointment is not ratified by the shareholders, the
Board of Directors is not obligated to appoint other auditors, but the Board
of Directors will give consideration to such unfavorable vote.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's next
annual meeting of shareholders must be received by the Company at its office
located at 2400 Xenium Lane North, Plymouth, Minnesota 55441 on or before
January 31, 2000 to be considered for inclusion in the Company's proxy statement
and form of proxy relating to such meeting.
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<PAGE>
OTHER MATTERS
A copy of the Company's Annual Report on Form 10-K for the year ended
February 27, 1999, is included with this Proxy Statement.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting in accordance with the directions
given. In voting by proxy in regard to the election of the two Class 2 directors
to serve until the 2002 Annual Meeting of Shareholders and the election of the
one Class 3 director, shareholders may vote in favor of the nominees or withhold
their votes as to the nominees or withhold their votes as to specific nominees.
With respect to other items to be voted upon, shareholders may vote in favor of
the item or against the item or may abstain from voting. Shareholders should
specify their choices on the enclosed Proxy. Any Proxy in which no direction is
specified will be voted in favor of each of the matters to be considered.
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement and is not aware that any
other matters will be presented for action at the Meeting. Should any other
matters be properly presented, the person named in the enclosed form of Proxy
will vote the Proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the Proxy.
By Order of the Board of Directors,
Nicholas H. Cook
Chairman of the Board
June 18, 1999
Minneapolis, Minnesota
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<PAGE>
PROXY
BRAUN'S FASHIONS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS--JULY 28, 1999
The undersigned hereby appoints William J. Prange and Andrew K. Moller, and
each of them, with full power of substitution as proxies and agents (the "Proxy
Agents") in the name of the undersigned, to attend the Annual Meeting of
Shareholders of Braun's Fashions Corporation (the "Company") to be held at 2800
LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota on Wednesday, July 28,
1999 at 3:00 p.m. Central Time, or any adjournment thereof, and to vote the
number of shares of Common Stock of the Company that the undersigned would be
entitled to vote, and with all the power the undersigned would possess, if
personally present, as follows.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD authority
(except as marked to the contrary). to vote for all nominees listed below.
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
<CAPTION>
CLASS 2 NOMINEES CLASS 3 NOMINEE
------------------------------------------- -------------------------------------------
<S> <C> <C>
LARRY C. BARENBAUM WILLIAM J. PRANGE
DONALD D. BEELER
2. PROPOSAL TO INCREASE THE NUMBER OF SHARES UNDER THE 1997 STOCK INCENTIVE PLAN FROM
450,000 TO 675,000 SHARES.
/ / FOR / / AGAINST
3. PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES TO 15 MILLION.
/ / FOR / / AGAINST
4. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP as the Company's
independent auditors for the Company's current fiscal year.
/ / FOR / / AGAINST
5. In their discretion, the Proxy Agents are authorized to vote on such other business as
may properly come before the meeting or any adjournment thereof.
<CAPTION>
1.
<S> <C>
<S> <C>
2.
/ / ABSTAIN
3.
/ / ABSTAIN
4.
/ / ABSTAIN
5.
</TABLE>
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED TO THE COMPANY WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
PLEASE DATE AND SIGN the enclosed proxy exactly as the name(s) appears
herein and return promptly in the accompanying envelope. If the shares are held
by joint tenants or as community property, both shareholders should sign.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Receipt of Notice of Annual Meeting of Shareholders, Annual Report on Form
10-K for the year ended February 27, 1999 and Proxy Statement dated June ,
1999 is hereby acknowledged by the undersigned.
<TABLE>
<S> <C>
Dated: , 1999
----------------------------------
Signature
----------------------------------
Name, typed or printed
----------------------------------
Tax identification or social
security number
<CAPTION>
<S> <C>
----------------------------------
Signature
----------------------------------
Name, typed or printed
----------------------------------
Tax identification or social
security number
</TABLE>
