SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Stein Mart, Inc.
----------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
Stein Mart, Inc.
________________
NOTICE AND PROXY STATEMENT
________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 1998
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of stockholders of Stein Mart,
Inc. will be held on Monday, May 18, 1998, at 2:00 P.M., local time, at The
Jacksonville Hilton and Towers, 1201 Riverplace Boulevard, Jacksonville,
Florida.
The meeting will be held for the following purposes:
1. To elect a Board of Directors for the ensuing year and
until their successors have been elected and qualified.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The stockholders of record at the close of business on March
16, 1998, will be entitled to vote at the annual meeting.
It is hoped you will be able to attend the meeting, but in any event, we
will appreciate it if you will date, sign and return the enclosed proxy as
promptly as possible. If you are able to be present at the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors,
James G. Delfs
Secretary
Dated: April 13, 1998
<PAGE>
Stein Mart, Inc.
1200 Riverplace Boulevard
Jacksonville, Florida 32207
_______________
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD MAY 18, 1998.
This Proxy Statement and the enclosed form of proxy are being sent to
stockholders of Stein Mart, Inc. on or about April 13, 1998 in connection with
the solicitation by the Company's Board of Directors of proxies to be used at
the Annual Meeting of Stockholders of the Company. The meeting will be held on
Monday, May 18, 1998 at 2:00 P.M., local time, at The Jacksonville Hilton and
Towers, 1201 Riverplace Boulevard, Jacksonville, Florida.
The Board of Directors has designated Jay Stein and John H. Williams, Jr.,
and each or either of them, as proxies to vote the shares of common stock
solicited on its behalf. If the enclosed form of proxy is executed and returned,
it may nevertheless be revoked at any time insofar as it has not been exercised
by (i) giving written notice to the Secretary of the Company, (ii) delivery of a
later dated proxy, or (iii) attending the meeting and voting in person. The
shares represented by the proxy will be voted unless the proxy is mutilated or
otherwise received in such form or at such time as to render it not votable.
VOTING SECURITIES
The stockholders of record entitled to vote was determined at the close of
business on March 16, 1998. At such date, the Company had outstanding and
entitled to vote 22,997,478 shares of common stock, $.01 par value. Each share
of common stock entitles the holder to one vote. Holders of a majority of the
outstanding shares of common stock must be present in person or represented by
proxy to constitute a quorum at the annual meeting.
The following table shows the name, address and beneficial ownership as of
February 27, 1998 of each person known to the Company to be the beneficial owner
of more than 5% of its outstanding common stock:
Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ---------------- -------------------- --------
Jay Stein 8,402,286(1) 36.6%
1200 Riverplace Boulevard
Jacksonville, Florida 32207
FMR Corp. 2,900,300(2) 12.5%
82 Devonshire Street
Boston, Massachusetts 02109
Baron Capital Group, Inc. 1,747,200(3) 7.5%
767 Fifth Avenue
24th Floor
New York, New York 10153
1
<PAGE>
________________________
(1) Includes 7,942,986 shares held by Stein Ventures Limited Partnership which
is 100% controlled by Mr. Stein and 450,150 shares held by the Jay and
Cynthia Stein Foundation Trust over which Mr. Stein has sole voting and
dispositive power as trustee of the Foundation.
(2) According to a Schedule 13G filed February 14, 1998, Fidelity Management &
Research Company ("Fidelity"), a wholly owned subsidiary of FMR Corp. and
an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940 along with Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp. and a bank as defined in Section 3(a)
(6) of the Securities Exchange Act of 1934 are considered "beneficial
owners" in the aggregate of 2,900,300 shares, or 12.5% of shares
outstanding of the Company's common stock, which shares were acquired for
investment purposes by certain advisory clients.
(3) According to a Schedule 13G filed February 17, 1998, Baron Capital Group,
Inc. and Ronald Baron, parent holding companies, in accordance with Section
240. 13d-1(b) (ii) (G) and BAMCO, Inc. and Baron Capital Management, Inc.,
investment advisors registered under Section 203 of the Investment Advisors
Act of 1940 along with Baron Asset Fund, an investment company registered
under Section 8 of the Investment Company Act are considered "beneficial
owners" in the aggregate of 1,747,200 shares, or 7.5% of shares outstanding
of the Company's common stock, which shares were acquired for investment
purposes by certain advisory clients.
As of February 27, 1998, all directors and executive officers of the
Company as a group owned beneficially 8,792,286 shares of the Company's common
stock, or 37.7% of the total shares outstanding. In computing the number of
shares owned beneficially by directors and executive officers of the Company as
a group, shares subject to options that are not exercisable within 60 days have
been excluded.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons owning more than ten percent of
the Company's common stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company and to furnish the Company with
copies of all such reports. To the Company's knowledge, based solely on review
of copies of such reports furnished to the Company, all Section 16(a) filing
requirements applicable to its directors, officers and greater than ten percent
beneficial owners have been complied with.
ELECTION OF DIRECTORS
At the meeting, a Board of seven (7) directors will be elected for one year
and until the election and qualification of their successors. Directors will be
elected by a plurality of votes cast by shares entitled to vote at the meeting.
The accompanying proxy will be voted, if authority to do so is not withheld, for
the election as directors of the persons named below who have been designated by
the Board of Directors as nominees. Each nominee is at present available for
election, is a member of the Board and was elected to the Board by the Company's
stockholders. If any nominee should become unavailable, which is not now
anticipated, the persons voting the accompanying proxy may in their discretion
vote for a substitute. There are no family relationships between any directors
or executive officers of the Company. Mason Allen has chosen not to stand for
reelection. Information concerning the Board's nominees, based on data furnished
by them, is set forth below.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE FOLLOWING NOMINEES. PROXIES SOLICITED BY THE BOARD WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
2
<PAGE>
<TABLE>
<CAPTION>
Year Shares of
First Company Common
Positions with the Company; Became Stock Owned
Principal Occupations During Director Beneficially as of
Name Past Five Years; Other of the February 27, 1998
Age Directorships Company(1) (% of Class)(2)
---- ------------- ---------- ---------------
<S> <C> <C> <C>
Jay Stein*# Chairman of the Board of 1968 8,402,286(3)
(52) the Company since 1989; (36.6%)
President of the Company
from 1979 to 1990;
director of American
Heritage Life Insurance
Company and Barnett Bank
of Jacksonville, N.A.,
both based in
Jacksonville, Florida and
Promus Hotel
Corporation based in
Memphis, Tennessee
John H. Williams,Jr.* President (since 1990) and 1984 328,000(4)
(60) director of the Company; (1.4%)
Executive Vice President
from 1980 to 1990;
director of SunTrust Bank,
North Florida, N.A. in
Jacksonville, Florida
Alvin R."Pete" Carpenter# Director of the Company; 1996 ---(5)
(56) President and Chief
Executive Officer of CSX
Transportation, Inc. since
1992; director of
NationsBank Corp, American
Heritage Life Insurance
Company, Regency Realty
Corporation and Florida
Rock Industries, Inc.
Albert Ernest, Jr.+# Director of the Company; 1991 25,000(4)(5)
(67) President of Albert Ernest (0.1%)
Enterprises; director of
Florida Rock Industries,
Inc., and its affiliate,
FRP Properties, Inc.,
Emerald Funds, Wickes
Lumber Company and Regency
Realty Corporation
Mitchell W. Legler# Director of the Company; 1991 12,000(4)(5)(6)
(55) sole shareholder of (0.1%)
Mitchell W. Legler, P.A.,
general counsel to the
Company since 1991;
partner of Foley & Lardner
from 1991 to 1995;
director of IMC Mortgage
Company
3
<PAGE>
Year Shares of
First Company Common
Positions with the Company; Became Stock Owned
Principal Occupations During Director Beneficially as of
Name Past Five Years; Other of the February 27, 1998
Age Directorships Company(1) (% of Class)(2)
--- ------------- ---------- ---------------
Michael D. Rose+ Director of the Company; 1997 ---(5)
(55) Chairman of Promus Hotel
Corporation; Chairman of
Harrah's Entertainment,
Inc. from 1995 to January
1997; Chairman of The
Promus Companies,
Incorporated from 1990 to
1995; Chief Executive
Officer of The Promus
Companies, Incorporated
from 1990 to 1994;
director of Ashland, Inc.,
Darden Restaurants, Inc.,
First Tennessee National
Corporation, General
Mills, Inc. and Promus
Hotel Corporation
James H. Winston+# Director of the Company; 1991 25,000(4)(5)(7)
(64) Chairman of LPMC, a real (0.1%)
estate investment firm
based in Jacksonville,
Florida, since 1979;
President of Omega
Insurance Company, Citadel
Life & Health Insurance
Company and Wellington
Investments since 1983;
director of Barnett Bank
of Jacksonville, N.A., FRP
Properties, Inc. and
Winston Hotels
________________________
<FN>
* Member of the Executive Committee, any meeting of which also must include
any one of the outside directors.
+ Member of the Audit Committee.
# Member of the Compensation Committee.
(1) Directors are elected for one-year terms.
(2) Where percentage is not indicated, amount is less than 0.1% of total
outstanding common stock. Unless otherwise noted, all shares are owned
directly, with sole voting and dispositive powers. Excludes shares subject
to options that are not exercisable within 60 days.
(3) Includes 7,942,986 shares held by Stein Ventures Limited Partnership which
is 100% controlled by Mr. Stein and 450,150 shares held by the Jay and
Cynthia Stein Foundation Trust over which Mr. Stein has sole voting and
dispositive power as trustee of the Foundation.
(4) Includes the following shares which are not currently outstanding but which
the named holders are entitled to receive upon exercise of options:
John H. Williams, Jr 325,000
Albert Ernest, Jr. 6,000
Mitchell W. Legler 6,000
James H. Winston 6,000
The shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned by
each named individual and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person.
4
<PAGE>
(5) Each outside director receives non-qualified options to purchase 4,000
shares of common stock of the Company. Options that are exercisable within
60 days are included in the shares indicated.
(6) These shares are owned by Mr. Legler and his wife as tenants by the
entirety.
(7) Includes 6,450 shares owned through corporations of which Mr. Winston is
the sole stockholder.
</FN>
</TABLE>
EXECUTIVE OFFICERS
The executive officers of the Company are:
Jay Stein Chairman and Chief Executive Officer
John H. Williams, Jr. President and Chief Operating
Officer
Michael D. Fisher Executive Vice President, Stores
Michael Remsen Executive Vice President,
Merchandising
James G. Delfs Senior Vice President, Finance and
Chief Financial Officer
For additional information regarding Messrs. Stein and Williams see the
Directors' table on the preceding pages.
Mr. Fisher joined the Company in August, 1993 as Executive Vice President,
Stores. From 1988 to 1993, Mr. Fisher was Senior Vice President of Stores for
Millers Outpost, Inc., a California based chain of apparel stores.
Mr. Remsen joined the Company in February, 1992 and served as General
Merchandising Manager over the ladies' sportswear, children's and intimate
apparel divisions prior to his promotion to Executive Vice President,
Merchandising effective August 1, 1997. From 1987 to 1992, Mr. Remsen was with
Macy's West where he served as Vice President, Merchandise Administrator for
girls, infants and toddlers upon his arrival in 1987 and was later given the
additional responsibility for boys. In 1990, he was named Administrator for
moderate sportswear.
Mr. Delfs joined the Company in May, 1995 as Senior Vice President, Finance
and Chief Financial Officer. From 1993 to 1994 he was Vice President, Chief
Financial Officer for Helzberg's Diamond Shops, Inc., a chain of jewelry stores
and from 1988 to 1992 he was Vice President, Chief Financial Officer for
Abercrombie & Fitch, Inc., a division of The Limited, Inc.
BOARD OF DIRECTORS AND STANDING COMMITTEES
Regular meetings of the Board of Directors are held four times a year,
normally in the first month of each quarter. During 1997, the Board held a total
of four regular meetings. All directors attended at least 75% of all meetings of
the Board and Board committees on which they served during 1997.
The Board of Directors has established three standing committees: an
Executive Committee, an Audit Committee and a Compensation Committee, which are
described below. Members of these committees are elected annually at the regular
Board meeting held in conjunction with the annual stockholders' meeting. The
Board of Directors presently does not have a nominating committee.
5
<PAGE>
EXECUTIVE COMMITTEE. The Executive Committee is comprised of Messrs. Stein
(Chairman) and Williams, plus any one outside director. Subject to the
limitations specified by the Florida Business Corporation Act, the Executive
Committee is authorized by the Company's bylaws to exercise all of the powers of
the Board of Directors when the Board of Directors is not in session. The
Executive Committee held no meetings during 1997.
AUDIT COMMITTEE. The Audit Committee is comprised of Messrs. Winston
(Chairman), Ernest and Rose, none of whom is an officer of the Company. Regular
meetings of the Audit Committee are held twice a year, with one meeting
scheduled in conjunction with the annual stockholders' meeting. During 1997, the
Audit Committee held two meetings. The principal responsibilities of and
functions generally performed by the Audit Committee are reviewing the Company's
internal controls and the objectivity of its financial reporting, making
recommendations regarding the Company's employment of independent auditors, and
reviewing the annual audit with the auditors.
COMPENSATION COMMITTEE. The Compensation Committee is comprised of Messrs.
Stein (Chairman), Carpenter, Ernest, Legler and Winston. The Compensation
Committee generally holds four regular meetings per year. During 1997, the
Compensation Committee held four meetings. This Committee has the responsibility
for approving the compensation arrangements for senior management of the
Company, including annual bonus compensation. It also recommends to the Board of
Directors, adoption of any compensation plans in which officers and directors of
the Company are eligible to participate. The Compensation Committee also serves
as the Option Committee and makes grants of stock options under the Company's
Employee Stock Plan.
COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS
COMPENSATION PHILOSOPHY
The Compensation Committee believes that the Company should continue to
emphasize its philosophy of rewarding performance within the Company, and of
encouraging a long-term view by all the Company's officers and other managerial
personnel.
The Company's 1997 fiscal year was again a year of considerable achievement
with the Company having increased its net income from $26 million for fiscal
year 1996 to $34.8 million for fiscal year 1997, constituting a 34% increase in
net income.
Over the last two years, the Company has moved more of its officers to
bonus formulas which are quantitatively driven applying factors which the
Company believed would positively impact the profitability of the Company. That
approach produced excellent results for 1996 and 1997 and bonuses to officers
were awarded in accordance with those formulas.
6
<PAGE>
EMPLOYEE STOCK OWNERSHIP
The Compensation Committee determined that the Company's philosophy on
focusing on long-term value through the grant of stock options and involving
employees in direct ownership of the Company's shares contributed materially to
the Company's success. The Compensation Committee noted the Company's stock
option plans and Employee Stock Purchase Plan continue to achieve an alignment
of the interests of key employees with the Company's stockholders, and continue
to provide a meaningful incentive for key employees to remain with the Company.
SENIOR EXECUTIVES
The Company achieved excellent results again for 1997. Nevertheless, in
view of the Company's bottom-up compensation philosophy, the Committee
determined that base compensation increases for the Company's Chief Executive
Officer and Chief Operating Officer should be modest with rewards for the
excellent achievement of 1997 being reflected in bonuses. More specifically, the
Committee determined:
1. Jay Stein, Chairman and Chief Executive Officer, was awarded an increase
of $45,000, bringing his total compensation to $450,000 per year. The Committee
also approved a bonus for Mr. Stein of $200,000 in view of the Company's
continued excellent performance. The Committee believed the total compensation
to be conservative for a Chief Executive Officer of a corporation with net sales
in excess of $792 million per annum and was even more conservative when compared
to other entities in the Company's peer group of retailers.
2. John H. Williams, Jr., the Company's President and Chief Operating
Officer, was awarded an increase of $45,000, bringing his total compensation to
$440,000 per year. The Committee also approved a bonus for Mr. Williams of
$200,000 in view of the Company's continued excellent performance. As is true
for the Company CEO, the Committee believed the total compensation to be
conservative for a Chief Operating Officer of a corporation with net sales in
excess of $792 million per annum and was even more conservative when compared to
other entities in the Company's peer group of retailers.
3. Michael Fisher, the Company's Executive Vice President, Stores, received
an increase in base salary of $45,000, bringing his total compensation to
$240,000. As is true in the case of the Company's Executive Vice President,
Merchandising and substantially all positions below that of Chief Operating
Officer, the Executive Vice President, Stores' bonus compensation was driven by
a quantitative formula. As a result of the application of that formula and the
Company's success for the year, the Company's Executive Vice President of Stores
was awarded a bonus of $100,000.
4. Michael Remsen, the Company's Executive Vice President, Merchandising,
received an increase in base salary of $15,000, bringing his total compensation
to $225,000. The Committee had previously established a bonus primarily driven
by quantitative factors for that position. As a result of that formula and the
Company's excellent performance over the year, Mr. Remsen was awarded a bonus of
$74,375.
7
<PAGE>
5. James G. Delfs, the Company's Chief Financial Officer, received an
increase in base salary of $20,000, bringing his total compensation to $165,000
per year. As a result of the Company's success for the year, the Company's Chief
Financial Officer was awarded a discretionary bonus of $45,000.
LONG-TERM INCENTIVE COMPENSATION
The Company has in effect Stock Option and Employee Stock Purchase Plans
for the Company's employees. The Compensation Committee believes that these
plans are a principal vehicle for motivating management to work toward long-term
growth in stockholder value. Consistent with the Company's philosophy of
providing incentives to key employees at all levels, options are awarded to a
relatively broad base of employees, down through store managers. Options have
been awarded based on positions within the Company, ability to contribute to the
Company's profitability, and prior tenure with the Company. For additional
information as to the options held by executive officers, see the Option Table
under "Executive Compensation" attached to this report.
The employee stock options reflect the Company's philosophy that officers'
and employees' incentive compensation should reflect the same long-term
interests as the Company's shareholders. To encourage continued service with the
Company, the options become exercisable ratably on the third, fourth and fifth
anniversary dates of grant. Additional increases in the value of the Company's
common stock, which benefit all shareholders, will best serve as the primary
incentive to its executive officers.
CEO COMPENSATION
The Compensation Committee's policies with respect to the Chief Executive
Officer, Jay Stein, were the same as for the Company's other executive officers
except that the application of the Company's bottom-up compensation philosophy
resulted in the compensation of the Chief Executive Officer being conservative
when compared to the Chief Executive Officers of other companies with similar
sales in the retail industry. However, in view of Jay Stein's continuing
substantial ownership of shares of the Company's common stock, the Committee
believed that Mr. Stein's primary motivation remained that of stock ownership
which is most aligned with the interest of other shareholders of the Company and
that conservative compensation continued to be appropriate under the
circumstances.
Mr. Stein is a member of the Compensation Committee. See "Certain
Transactions; Compensation Committee Interlock and Insider Participation." Mr.
Stein abstained from voting on his own compensation at the meeting of the
Compensation Committee at which the annual cash bonuses described above were
awarded.
8
<PAGE>
CERTAIN TAX MATTERS
Section 162(m) of the Internal Revenue Code, enacted in 1993, precludes a
public corporation from deducting compensation of more than $1 million each, for
its chief executive officer or for any of its four other highest paid officers.
Certain performance-based compensation is exempt from this limitation.
Compensation in the form of options under the Company's Employee Stock Plan is
exempt. Because other forms of compensation to the Company's officers are
nowhere near $1 million, the Compensation Committee does not presently have a
policy regarding whether it would authorize compensation that would not be
deductible for the Company for federal income tax purposes by reason of Section
162(m).
STEIN MART, INC.
COMPENSATION COMMITTEE
Jay Stein, Chairman
Alvin R. "Pete" Carpenter
Albert Ernest, Jr.
Mitchell W. Legler
James H. Winston
9
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to each of the
Company's executive officers whose total salary and bonus exceeded $100,000
during the year ended January 3, 1998. The Company did not grant any restricted
stock awards or stock appreciation rights or make any long-term incentive plan
payouts during the years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
----------------------------------------------------------------- ----------
Name And Other Number
Principal Annual Of All Other
Position Year Salary (1) Bonus Compensation Options Compensation (2)
------------------- ------ ---------- ---------- -------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Jay Stein 1997 $402,500 $200,000 (3) ---- $2,375
Chairman & Chief 1996 372,917 150,000 (3) ---- 4,784
Executive Officer 1995 343,750 90,000 (3) ---- 4,306
John H. Williams, Jr. 1997 $392,500 $200,000 (3) 300,000 $2,375
President & Chief 1996 361,667 150,000 (3) ---- 4,784
Operating Officer 1995 320,833 90,000 (3) ---- 4,306
Michael D. Fisher 1997 $204,375 $100,000 (3) 100,000 $1,584
Executive Vice 1996 185,625 85,000 (3) ---- 4,009
President, Stores 1995 168,750 50,000 (3) 10,000 3,226
Michael Remsen 1997(4) $166,667 $ 74,375 (3) 105,000 $2,410
Executive Vice
President,
Merchandising
James G. Delfs 1997 $146,667 $ 45,000 $47,657(6) 50,000 $1,817
Senior Vice President, 1996 138,893 35,000 26,720(6) ---- 2,271
Finance & Chief Financial 1995 96,635 (5) 15,000 25,085(6) 25,000 ----
Officer
</TABLE>
(1) Includes amounts deferred under the 401(k) features of the company's profit
sharing plan.
(2) The Company has not yet made a contribution to its profit sharing plan for
1997, and accordingly, it is not possible as of the date of this Proxy
Statement to determine the amount of Company contributions that will be
allocated to the accounts of the named executives for 1997. The amounts
shown for 1997 represent matching contributions made by the Company in 1997
for voluntary contributions made by the named executives. The amounts shown
for 1996, include a base contribution of $1,500 for Messrs. Stein, Williams
and Fisher and $679 for Mr. Delfs and a discretionary contribution of $909
to the Profit Sharing plan for Messrs. Stein, Williams, Fisher and Delfs as
well as matching contributions made by the Company to the 401(k) portion of
the plan for voluntary contributions made of $2,375 for Messrs. Stein and
Williams, $1,600 for Mr. Fisher and $683 for Mr. Delfs. The amounts shown
for 1995 include a base contribution of $1,500 and a discretionary
contribution of $496 to the Profit Sharing plan for Messrs. Stein, Williams
and Fisher as well as matching contributions made by the Company to the
401(k) portion of the plan for voluntary contributions made of $2,310 for
Messrs. Stein and Williams and $1,230 for Mr. Fisher.
(3) Excludes certain personal benefits, the total value of which was the lesser
of $50,000 or ten percent of the total annual salary and bonus for each of
the named executives.
(4) Mr. Remsen became Executive Vice President, Merchandising effective August
1, 1997. The amounts shown for 1997 represent totals for the entire year of
1997.
(5) Includes a $20,000 reporting bonus; annualized salary is $135,000.
(6) The amount shown for 1997 includes $35,441 medical claims, $10,800
automobile allowance and $1,416 miscellaneous. The amount shown for 1996
includes $4,512 medical claims, $4,751 personal use of company automobile,
$16,073 moving expense reimbursement, and $1,384 miscellaneous. The amount
shown for 1995 includes $2,725 personal use of company automobile, $21,514
moving expense reimbursement and $846 miscellaneous.
10
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1)
---------------------------------------------------
Percentage of
Total Options
Number of Granted to
Options Employees in Exercise Expiration Grant Date
Name Granted 1997 (2) Price Date Value (3)
- --------------------- ------------ ------------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
John H. Williams, Jr. 300,000 19.3% $27.625 Mar 14, 2007 $4,681,020
Michael D. Fisher 100,000 6.4% $27.625 Mar 14, 2007 $1,560,340
Michael Remsen 25,000 1.6% $27.625 Mar 14, 2007 $ 390,085
80,000 5.1% $28.50 Aug 04, 2007 $1,287,808
James G. Delfs 50,000 3.2% $27.625 Mar 14, 2007 $ 780,170
</TABLE>
- ---------------------
(1) Approximately one-third of the options become exercisable on each of
the third, fourth and fifth anniversary dates of grant. Shares
acquired upon exercise of options may be delivered in payment of the
exercise price of additional options.
(2) A total of 1,554,375 options were granted to key employees in 1997
under the Company's stock option plan, the purpose of which is to
provide an incentive to key employees who are in a position to make
significant contributions to the Company.
(3) Represents the present value at the date of grant using a variation of
the Black-Scholes option pricing model assuming a seven year expected
life, expected volatility of 0.45 and a risk-free interest rate of
6.2%.
The following table sets forth information concerning stock options
exercised by the named executives during the year ended January 3, 1998 and the
number and value of unexercised options as of January 3, 1998 held by the named
executives in the Summary Compensation Table above.
11
<PAGE>
<TABLE>
<CAPTION>
OPTION EXERCISES AND YEAR-END VALUES TABLE
Value of Unexercised
Number of Unexercised In-the-Money
Shares Options at January 3, 1998 Options at January 3, 1998
Acquired (#) ($)(2)
on Value ----------------------------------------------------------------------
Exercise Realized
Name # ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------- ------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jay Stein,
Chairman &
Chief Executive Not Not Not
Officer 0 Applicable None None Applicable Applicable
John H.
Williams, Jr.,
President &
Chief Operating
Officer 150,000 $3,854,688 325,000 300,000 $5,855,980 $0
Michael D.
Fisher,
Executive Vice
President, Not
Stores 0 Applicable 26,400 133,600 $ 184,800 $350,825
Michael Remsen,
Executive Vice
President,
Merchandising 7,000 $ 135,338 0 127,000 $0 $289,125
James G. Delfs,
Senior Vice
President,
Finance & Chief
Financial Not
Officer 0 Applicable 0 75,000 $0 $350,625
</TABLE>
- ---------------------
(1) Value realized is calculated based on the difference between the option
exercise price and the market price of the Company's Common Stock on the
date of exercise multiplied by the number of shares to which the exercise
relates.
(2) Value of unexercised in-the-money options is calculated based on the
difference between the option exercise price and the closing price of the
Company's Common Stock at January 2,1998, multiplied by the number of
shares underlying the options. The closing price on January 2, 1998 of the
Company's Common Stock as reported on The Nasdaq Stock Market [service
mark] was $25.50.
COMPENSATION OF DIRECTORS. The outside directors receive director's fees of
$10,000 per year, plus $1,500 for each meeting of the Board or any committee
thereof which they attend, and are reimbursed for out-of-pocket expenses
incurred in connection with attending meetings. Pursuant to the Company's
director stock option plan, each outside director receives non-qualified options
to purchase 4,000 shares of common stock of the Company upon becoming a
director. Approximately one-third of the options become exercisable on each of
the third, fourth and fifth anniversary dates of grant at an exercise price
equal to the fair market value of the common stock on the date of grant. A total
of 42,000 shares is reserved for issuance under this plan.
CERTAIN TRANSACTIONS; COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Audit Committee of the Board of Directors is responsible for evaluating
the appropriateness of all related-party transactions.
12
<PAGE>
Set forth below are various transactions involving the Company and members
of the Compensation Committee of the Board of Directors or their related
parties. The Board of Directors does not believe that the relationships and
transactions described below regarding members of the Compensation Committee
adversely affect the performance by the committee of its duties.
MR. STEIN. Mr. Stein serves as chairman of the Compensation Committee of
the Board of Directors and also serves as the Chairman of the Board and Chief
Executive Officer. Mr. Stein does not participate in decisions of the
Compensation Committee regarding his own compensation as an executive officer of
the Company.
Mr. Stein, Chairman of Stein Mart, Inc., serves on the Board of Directors
and is a member of the Compensation Committee of Promus Hotel Corporation, a
Company whose chairman, Michael D. Rose, serves on the Board of Directors of
Stein Mart, Inc.
MR. LEGLER. Mr. Legler is the sole shareholder of the law firm of Mitchell
W. Legler, P.A., which serves as general counsel to the Company. Legal fees
received by that firm from the Company were $42,000 for 1997.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Company's common stock with the cumulative total return on The Nasdaq Stock
Market [service mark] (U.S.) Index and The Nasdaq Stock Market [service mark]
Retail Trades Stock Index for the last five years ended January 3, 1998. The
comparison assumes $100 was invested at the beginning of the five year period in
Stein Mart, Inc. stock and in each of the indices shown and assumes reinvestment
of any dividends.
Comparison of Cumulative Total Return Among
Stein Mart, Inc., The NASDAQ Stock Market [service mark] (U.S.) Index
and The NASDAQ Stock Market [service mark] Retail Trades Stock Index
=========================================================
Stein Mart, Nasdaq Nasdaq
Date Inc. (U.S.) Retail
===============================================================================
12/31/92 100.000 100.000 100.000
12/31/93 102.212 114.790 105.521
12/31/94 67.699 112.206 96.136
12/30/95 58.407 158.688 105.908
12/28/96 103.872 195.419 126.541
01/03/98 135.398 241.266 147.865
================================================================================
13
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company has selected the firm of Price Waterhouse LLP to serve as the
independent certified public accountants for the Company for the current fiscal
year ending January 2, 1999. That firm has served as the auditor for the Company
since 1983. Representatives of Price Waterhouse are expected to be present at
the annual meeting of stockholders and will be accorded the opportunity to make
a statement, if they so desire, and to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any other matters to come before
the meeting; however, if any other matters properly come before the meeting it
is the intention of the persons designated as proxies to vote in accordance with
their best judgment on such matters. If any other matter should come before the
meeting, action on such matter will be approved if the number of votes cast in
favor of the matter exceeds the number opposed.
STOCKHOLDER PROPOSALS
Regulations of the Securities and Exchange Commission require proxy
statements to disclose the date by which stockholder proposals must be received
by the Company in order to be included in the Company's proxy materials for the
next annual meeting. In accordance with these regulations, stockholders are
hereby notified that if they wish a proposal to be included in the Company's
proxy statement and form of proxy relating to the 1999 annual meeting, a written
copy of their proposal must be received at the principal executive offices of
the Company no later than December 11, 1998. To ensure prompt receipt by the
Company, proposals should be sent certified mail return receipt requested.
Proposals must comply with the proxy rules relating to stockholder proposals in
order to be included in the Company's proxy materials.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended January 3, 1998
accompanies this proxy statement. Additional copies may be obtained by writing
to Ms. Susan Datz Edelman, the Company's Director of Stockholder Relations, at
1200 Riverplace Boulevard, Jacksonville, Florida 32207.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company
does not expect to pay any compensation for the solicitation of proxies but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expenses for sending proxy material to principals
and obtaining their proxies.
Dated: April 13, 1998.
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED.
YOUR PROMPT RESPONSE WILL BE APPRECIATED.
14
<PAGE>
STEIN MART, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS IN CONNECTION WITH
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 18, 1998
The undersigned hereby appoints Jay Stein and John H. Williams, Jr., and
each of them, with full power of substitution and revocation, as true and lawful
agents and proxies of the undersigned to attend and vote all shares of Common
Stock of Stein Mart, Inc., a Florida corporation, that the undersigned would be
entitled to vote if then personally present at the Annual Meeting of
Shareholders of Stein Mart, Inc., a Florida corporation, to be held on May 18,
1998 at 2:00 P.M., local time, at The Jacksonville Hilton and Towers, 1201
Riverplace Boulevard, Jacksonville, Florida, and at any adjournment or
adjournments thereof, hereby revoking any proxy heretofore given.
(Continued and to be signed on the reverse side)
FOLD AND DETACH HERE
15
<PAGE>
<TABLE>
<CAPTION>
This Proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. Please mark [x]
If no direction is made, this proxy will be voted FOR Proposal 1. The Board of Directors recommends a vote your vote as
FOR item 1. indicated in
this example
<S> <C>
1. Election of Directors as recommended in the Proxy Statement: Jay Stein, John H. Williams, Jr., Alvin R. "Pete" Carpenter, Albert
Ernest, Jr., Mitchell W. Legler, Michael D. Rose and
James H. Winston
FOR all WITHHOLD
nominees AUTHORITY
listed (except to vote for
as marked to all nominees INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that
the contrary) listed nominee's name in the space provided below.
[ ] [ ]
-------------------------------------------------------------------
2 Should any other matters requiring a vote of the shareholders
arise, the above named proxies are authorized to vote the same
in accordance with their best judgment in the interest of the
Company. The Board of Directors is not aware of any matter
which is to be presented for action at the meeting other than the
matters set forth herein.
Please insert the date and sign your name exactly as it appears
hereon. If shares are held jointly each joint owner should sign.
Executors, administrators, trustees, guardians, etc., should so
indicate when signing. Corporations should sign full corporate
name by an authorized officer. Partnership should sign
partnership name by an authorized Partner.
Unless the date has been inserted below, this Proxy shall be
deemed to be dated for all purposes as of the date appearing on
the postmark on the envelope in which it is enclosed. In such a
case the Proxies named above are authorized to insert the date in
accordance with these instructions.
Dated: --------------------------------------------------, 1998
-----------------------------------------------------------------
-----------------------------------------------------------------
Signature(s) of Shareholder(s)
</TABLE>
"PLEASE MARK INSIDE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
16
<PAGE>
FOLD AND DETACH HERE
[Stein Mart. Logo]
Several new Company information delivery options are now offered to
shareholders. Quarterly information is now available immediately on the day of
announcement via any of the methods below. Please use the method most convenient
for you.
1) Fax: Call 1-800-239-0927 and enter your fax number to get the latest
news release(s) faxed directly to you at no charge.
2) Computer: Visit the Stein Mart (www.steinmart.com) web site for latest
news release(s) and accompanying financial statements. You can also
e-mail [email protected] to reach the investor relations area.
3) Call (904) 346-1535 ext. 5888. You may choose to listen to a recorded
version of the news release OR you may request information to be
mailed to you directly. If you would like to continue to have
information mailed each reporting period, ask to be placed on Stein
Mart's mailing list.
Reporting dates for 1998:
April 28, 1998: Stein Mart 1Q 1998 Financial Results News Release
July 28, 1998: Stein Mart 2Q 1998 Financial Results News Release
October 27, 1998: Stein Mart 3Q 1998 Financial Results News Release
March 2, 1999: Stein Mart FY 1998 Financial Results News Release
17
